Cicolini v Dare & Ors [2002] QSC 281

State Reporting Bureau |20oi]osc as\ Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. "revised copiEsTssuED* State Reporting Bureau Date ^ / ^j/ D ~y~___ _ SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WHITE J No 6073 of 2002 SHARYN LOUISE CICOLINI and TRACEY JOY DARE AND PHILLIP ARTHUR HENNESSEY and NATIONAL AUSTRALIA BANK LIMITED (ABN 12004 044 937) Applicant First Respondent Second Respondent BRISBANE ..DATE 21/08/2002 JUDGMENT WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings.1 1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 8 -- 21082002 T3/HMH25 M/T 1/2002 (White J) HER HONOUR: The National Australia Bank, the second respondent in the principal proceedings, seeks the appointment by the Court pursuant to Section 246 of the Supreme Court Act 1995 of receivers and managers in respect of property the subject of securities held by it, namely, the King Junction Station which is situated in Far North Queensland; the assets of Sharyn Louise Cicolini, the applicant, in the principal proceedings the subject of a registered Bill of Sale and the management of and receipt of the income from cattle on the King Junction Station and otherwise the subject of a stock mortgage. The bank also seeks certain Mareva orders. 1 10 20 Mr Freeburn, for Mrs Cicolini, contends that it is neither just nor convenient that receivers and managers should be appointed by the Court at the behest of the National Australia Bank . 30 Mrs Cicolini has received an offer to buy King Junction Station with certain chattels and cattle and wishes to do so. She has brought an application for orders that the property may be sold and for other ancillary relief. 40 The National Australia Bank appointed Tracey Joy Dare and Phillip Arthur Hennessey under the securities on the 14th of May 2002. The following day Justice Jones in Cairns on ex parte application, as I understand it by Mrs Cicolini, restrained the receivers and managers from entering on to the property because there were contested issues in respect of the 2 JUDGMENT 60 -- 2 of 8 -- 21082002 T3/HMH25 M/T 1/2002 (White J) facts giving rise to the entitlement to appoint the receivers. Interlocutory orders were made on the 20th of May. It is proposed that there be Court appointed receivers not to circumvent the order of Justice Jones, which could be varied on application but so that the receivers would be independent of the parties who were engaged in litigation. 10 Mrs Cicolini borrowed money from the National Australia Bank at its Atherton branch dealing with Mr Peter Anderson, its Agribusiness manager to purchase King Junction Station. The negotiations commenced in or about December 2001. In support of her application for finance Mrs Cicolini certified inter alia that she owned a large number of valuable cattle - some 2,180 - on Thymania Station then owned by her. The value of this stock was said to be 1.544 million dollars. The brand for Thymania is C5X. Mr Anderson says the value of that stock was crucial to the decision to approve the funding sought by Mrs Cicolini. The amount approved by the NAB to Mrs Cicolini was 2.6 million dollars. On 7 March 2002 Mrs Cicolini executed a stock mortgage over all livestock, a mortgage over King Junction Station and Thymania Station and a Bill of Sale over all fittings and chattels at King Junction Station for the benefit of the NAB. 40 50 Detectives from the Stock Squad spoke with Mr Anderson about missing cattle associated with Mr and Mrs Cicolini. On the 3 JUDGMENT 60 -- 3 of 8 -- 28th of April 2002, in a conference with Mr and Mrs Cicolini and their then solicitor Mr John Hill at the bank, Mrs Cicolini advised that there were no cattle connected with the purchase of King Junction Station, save for those which passed in the sale from the previous owner, Mr R Walmsley, to Mrs Cicolini. Since then the material reveals that Mrs Cicolini and her husband have given a number of different accounts of the "missing" cattle, their movements and their numbers. Mr Freeburn has suggested that there may have been some confusion about what was asked for and/or said to Mr Anderson. Although these are findings for the trial an appreciation of them will govern this application. There is no or little evidence which supports Mrs Cicolini 's various assertions that there were in the vicinity of 2,000 head of cattle on Thymania which could have been moved to King Junction Station in the months in question. Indeed, the material suggests deliberate fabrication and in affidavits sworn by Mr and Mrs Cicolini on more than one occasion. On 5 June 2002 a limited inspection of King Junction Station was ordered by the Court to ascertain if the Thymania or C5X cattle were on King Junction Station. On 5 July 2002 Justice Muir ordered a full inspection which the mustering supervisor, Mr Mylrea, indicates will be completed this weekend. 21082002 T3/HMH25 M/T 1/2002 (White J) 1 10 20 30 40 50 4 JUDGMENT 60 -- 4 of 8 -- 21082002 T3/HMH25 M/T 1/2002 (White J) On his information there are no cattle with the C5X brand who ' could reasonably have been on Thymania (or, indeed, anywhere else) when Mrs Cicolini certified that there were approximately 2,000 to the NAB. There is some evidence of over-stamping existing brands, including the "RW" brand of the 10 previous owner with C5X and a number of calves have been so branded. The affidavit of Sarah Moore containing Mr Mylrea's evidence was filed by leave this morning. Mrs Cicolini has been unable to respond to it but she left the property when the muster started some time ago and there is no suggestion that Mr Mylrea is anything other than independent and a veterinarian has also sworn to some cross-branding seen on the first visit. 30 A number of new-born calves need care as do the cattle which presently are being looked after by the musterers. A manager on the property is essential. That is agreed by both sides. There are implied allegations of neglect of the welfare of the cattle at the hands of Mr and Mrs Cicolini. There are also some counter-accusations. All chattels and movables on the property have been removed allegedly by Mrs Cicolini, including batteries for the agricultural machinery and a satellite dish. 40 50 The latter were in the sale inventory from Mr Walmsley. Mr Cicolini, however, says that those taken belonged to him. Mrs Cicolini gave undertakings to the Court on the 20th of May 5 JUDGMENT 60 -- 5 of 8 -- 2002 not to deal with the cattle and, subsequently, in respect of the property after an auction had been appointed by her in July . She gave a second mortgage to her present solicitors over the property notwithstanding the terms of the security. It is alleged that Mrs Cicolini has impermissibly dealt with 98 head of cattle from King Junction Station by selling them at Gracemere near Rockhampton. The owner of the cattle is shown as Nicky Reed. Mr Cicolini deposes that they were given to her on the 21st of March 2002 in payment for money loaned to Mrs Cicolini in December 2001. As at the 21st of March 2002 the cattle belonged to the NAB. Mrs Reed has not been able to be located to serve her with this application because the NAB seeks a Mareva order against her property to the extent that it represents the proceeds of sale of those cattle and her bank accounts. The further matter which I referred to at beginning of these reasons was the intended sale of King Junction Station. Mrs Cicolini ' s solicitors have produced an offer which, when signed, will presumably become the contract for the sale of King Junction Station for $2million which includes some cattle and chattels. Mrs Cicolini wishes this contract to proceed to settlement. Mr Crowe, for the NAB, raises concerns about a contract in the 21082002 T3/HMH25 M/T 1/2002 (White J) 1 10 20 30 40 50 6 JUDGMENT 60 -- 6 of 8 -- terms of the document exhibited to the solicitors letter. It is for purchase by one Evan Bowen and, perhaps, Carritz Pty Ltd. It is unclear whether it will be Mr Bowen, alone, or Mr Bowen and the company which are proposed as the purchasers. The contract, "Is subject to and conditional upon the purchaser receiving necessary funds from the USA to settle this contract within 30 days from date hereof". There is no provision for a deposit. By clause 2.1, the seller, who is described as Mrs Cicolini agrees that the buyer "Is able to live on the property free of board and lodging from the contract date until settlement is affected." That date is 30 days from the contract date "Or as agreed between the parties". This is not an attractive contract for the NAB, although there is no quarrel with the price. However, that amount will not necessarily clear the indebtedness to the bank. Mrs Cicolini is not presently in default as to repayments under the loans. Money received from the sale of Thymania has been put to reduction of the loan debt. The default is in the alleged fraudulent representation about the value of the security. In that regard, it is worth noting that the offer to purchase King Junction Station is for "all branded cattle, approximately 2,800, plus weaners and calves" and the brands include ZU5 and 4RW but no C5X. The contract of sale with 21082002 T3/HMH25 M/T 1/2002 (White J) 7 JUDGMENT 1 10 30 40 50 80 -- 7 of 8 -- 21082002 T3/HMH25 M/T 1/2002 (White J) Mr Walmsley included 3,000 head of cattle, although Mrs 1 Cicolini is in dispute with Mr Walmsley over numbers. Mrs Cicolini proposes that a David Goodrich, the son of the real estate agent on the proposed sale, be the manager of King Junction Station pending final handing over, and that he should be the manager on her behalf and behalf of Mr Bowen, the proposed buyer. Mr Goodrich has some experience which would not disqualify him from being a manager of such a large property. His apparent connection to Mrs Cicolini, however, does. There is a serious concern about the honesty of Mrs Cicolini, which causes reservations about her continued involvement in any way in the property secured to the NAB. There can be no confidence, in light of the history, that she would not deal inappropriately with the property. The receivers and managers proposed by the NAB are independent and under the control of the Court. They can appoint a manager to the property to take over from the musterers and protect the assets. If Mr Bowen is a bona fide purchaser, 40 then he can negotiate with the receivers and managers, and the sale will not be lost. 10 20 30 Mrs Cicolini should provide details of the sale of cattle since taking over King Junction Station since no authorisation for the sale of any cattle has been sought or given by the NAB. Counsel can provide a draft order. JUDGMENT 60 -- 8 of 8 --