Australian Securities & Investments Commission v Troy & Ors [1999] QSC 267

Reporting Bureau 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. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION Mt,JIR J No 5481 of 1999 REVISED COPfES ISSUED State Reporting Bureau Date ,z~1 ~I AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant and MALCOLM BARTLEY TROY and IVAN ALFRED CLARKE and CALIFORNIA INTERNATIONAL (FAR EAST) LIMITED BRISBANE .. DATE 23/07/99 JUDGMENT 1 First Respondent Second Respondent Third Respondent II Flllllr. The Law Courts. Ceor!.!c Street. Brishallc. O. ·WOO TelephollC: (07) 3247 43('() F:t.x: r(7) 3247 5532 -- 1 of 8 -- 230799 T12/AW20 M/T 5102/99 (Muir J) HIS HONOUR: The applicallt is the Australian Securities and Investment Commission wh:.ch by Notice of Motion filed on 11 June 1999 sought amongst other things an order that - "pursuant to section 1323 of the Corporations Law Malcolm Bartley Troy:- 10 (i) be prohibited from leaving Australia without the consent of the Court: (ii) deliver up to the Court all current passports held by him." Mr Troy is the respondent to the application. I will not deal at length with the past history of the matter. It will suffice to say that the respondent gave an undertaking in relation to the use of his passp~rt which undertaking has 30 now lapsed. Section 1323 of the Corporations Law enables the Court to make inter alia an order requiring a person to deliver up his passport and to prohibit such person from leaving 40 Australia without the consent of the Court in prescribed circumstances. It is a pre-condition to the making of such an order that the Court consider: . ..~. " .. it necessary or desirable to do so for the purpose of protecting the interests of a person (in this 50 section called an 'aggrieved person') to who the person referred to in [specified paragraphs] is liable, or may be or become liable, to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for securities, future contracts or other property .. )1 2 JUDGMENT 60 i .1 • I -- 2 of 8 -- ) 230799 T12/AW20 M/T 5102/99 (Muir J) The authorities established a general "principle" if that is - the right expression that "under Australian law the right of a person to have a passport and to move freely in and out of Australia has a high priority. II See e. g. the observations of Young J in Corporate Affairs Commission (NSW) v Prime Commodities Pty Ltd (1987) 11 ACLR 584 and Australia Securities and Investments Commission v Ivey (1998) 29 ACSR 391 . Of course whether or not an order ought be made in the circumstances before me depends on whether the applicant has satisfied the requirements imposed by the statutory provision. 10 20 If such pre-conditions are met a discretion is enlivened as 30 to whether the orders ought be made. In exercising that discretion the Tribunal must act judicially. It is conceded by Mr Roney, who appears for the respondent, that there is a triable issue as to the preconditions to the 40 making of the order under section 1323 save for the condition that the Court consider it necessary or desirable to make the orders for protecting the interests of the persons referred to in the section. Mr Roneyls argument, in broad terms, is that there is no evidence which shows the respondent to be more than a person with some association with the scheme for defrauding investors revealed in the affidavit material and no evidence 3 JUDGMENT 50 60 -- 3 of 8 -- 230799 T12/AW20 M/T 5102/99 (Muir J) which shows that he has any .3.ccess to funds obtained as a - result of the scheme (with t:le exception of a sum of $50 , 00 0 in the possession of the app.Licant) or any control over scheme monies. He submits "that aggrieved persons II within the meaning of that expression in the section will be just as well off whether or not the respondent remains in Australia or not. He argues that his client has mounted a strong case for showing the existence of a severe and long-standing heart condition in need of treatment and a desire on the part of his client to obtain treatment in the United states which is not readily available in Australia. In view of the conclusion I have reached I will not dwell at length on the circumstances which lead me to conclude that the requirements of section 1323(1) have been satisfied. short it is that the general preconditions for the application of section 123 have been fulfilled. In 10 c 30 c 40 If the respondent is prosecuted or if civil proceedings are c= brought against him then there is a possibility that a large sum or sums may be recoverable from him and/or that he may be liable to substantial fines or other penalties. The prospects of recovery of moneys from the respondent will 50 obviously be much greater if he remains in the jurisdiction than if he resides in a foreign country and his movements are unfettered. 4 JUDGMENT· 60 -- 4 of 8 -- 230799 T13/RB28 M/T 5102/99 (Muir J) At the moment investigations are still at a preliminary stage, and although it seems that no particular inquiries have been directed to the renpondent it cannot be said that the investigative process will not disclose the necessity or desirability of attempts by the regulatory authority to seek further assistance or information from the respondent. 10 A matter which concerns me particularly is the clear evidence of the respondentls long-standing heart condition. Mr Egan, for the applicant, contends that I should be somewhat sceptical as to the genuineness of the respondentls 20 recently found desire to travel to the United states for treatment. Affidavit material has been put before me which was aimed at casting doubt on the usefulness of the treatment which the respondent is now investigating. 30 The material also suggests that in so far as aspects of that treatment may provide benefit, such treatment is capable of being had in Australia. I have difficulty with the notion that a person in the position of the respondent should not 40 be able to pursue avenues of treatment even though they may not regarded as mainstream or might even be considered II fringe ll by reputa~l~ I?r~cti tioI1 ers.;. .~ His position is a fairly dire one and persons in that :;0 position can hardly be expected to subscribe only to orthodox medical views. Such persons may look for different and even Ilmiracle ll cures. What does concern me more is the possibility which the material discloses that the respondent 60 5 JUDGMENT -- 5 of 8 -- 230799 T13/RB28 M/T 5102/99 (Muir J) at this stage is doing no mQ~e than making tentative - inquiries with a view to pr~)erly informing himself or alternatively making tentati'Te appointments with a view to deciding whether or not to take up such appointments. He has applied for admission to a clinic in Boston and awaits written acceptance of his application for admission. The point of the admission thus far is simply to inquire as to his suitability for treatment. It may be that his suitability for treatment could readily be ascertained in this country. 10 20C= It may also be the case, that with a little further inquiry aided by the material which the respondent has now been given by the applicant, that a suitable course or courses of treatment could be obtained here. Even if the respondent is 30 admitted to treatment in Boston the material does not indicate when it might be that any such treatment is likely to be given. In those circumstances, it seems to me that the balance of convenience rests with the applicant and I ought grant injunctive relief. Before formally making orders though, I should observe if it 40 is not apparent from what I have already said, that I am not 50 lacking in sympathy for the respondent's position. I will be in Chambers for the next two weeks and I propose after making orders to adjourn this matter to a date to be 6 JUDGMENT 60 c c c -- 6 of 8 -- 230799 T14/RK21 M/T 5102/99 :Muir J) fixed to be brought on the g:_vingof two days' notice and to - direct that if it is brought on within the next two weeks, that it be brought back befo::e me. One consideration which I think is quite relevant, is the role which the respondent played in the scam which the evidence seems to disclose existed. If in truth he was only a minor player, then it seems 10 unlikely at his stage in life that he would wish to flee the 20 country and not face the consequences of his acts - assuming that, at the end of the day, he will be prosecuted and convicted. As far as I can tell, the material before me thus far does 30 little to pinpoint the alleged overall role of the respondent in the scheme. I order that until further or other order, the respondent Malcolm Bartley Troy - (a) be prohibited from leaving Australia without the consent of the Court; (b) deliver up any current passport held by him to the Court; I order that the application be adjourned to a date to be fixed, to be brought on by two days' notice in writing, by either party to the other. 7 JUDGMENT 40 50 60 -- 7 of 8 -- 230799 T14/RK21 M/T 5102/99 (Muir J) I order that the costs of an,l incidental to today I shearing - be reserved. 10 c 30 c 40 50 60 8 JUDGMENT -- 8 of 8 --