Legal counsel for Melbourne property spruiker Henry Kaye made an unprecedented move yesterday in the Federal Court seeking a confidentiality order on transactions between the 'get-rich-quick' promoter and business associates.
Kaye’s Queens Counsel Garry Bigmore surprised Federal Court judge Justice Merkel during the directions hearing by seeking to suppress information regarding transactions made between Kaye and a number of parties including Les Smith’s, LAS Investment, and finance broker Australian Finance Direct.
Bigmore claimed the information about the transaction could be “fatal to the empire” and as a result Kaye’s empire could fold if the information was made public.
Bigmore said the transactions between the parties namely Australian Finance Direct (AFD), LAS and Kaye contain commercially sensitive material.
Bigmore said the three parties are currently refinancing projects with a number of Kaye’s companies and it was important the commercially sensitive information not be made available to the public.
Bigmore said as a consequence of the information being made available to the public could see the “transactions or deal will fall through”.
Justice Merkel was not persuaded by Bigmore’s argument and rejected the submission.
Justice Merkel stated that “this sort of transaction was what excited ASIC to initiate an investigation into the financial activities of Kaye’s treasury company Property Corporate Services”.
“Give me a good reason as to why it shouldn’t be made available to the public,” said Justice Merkel. “I am not convinced or persuaded with the commercial sensitivity reason.”
“This document has been tendered as an exhibit to the court and what is available to the court is available to the public.
“National Investment Institute (NII) gave a statutory undertaking which made no provisions to suggest that confidentiality was an issue that will affect the contraventions being investigated.”
LAS is currently seeking to firm up a $50 million “charge” over monies controlled by PCS and Kaye’s development companies.
Justice Merkel said the LAS charge on PCS would “freeze out all unsecured creditors until all monies owed to LAS is all paid out.”
“Mr. Kaye has left people high and dry. Mr. Kaye is not in the position to complain how it has put him in an awkward position,” Justice Merkel stated.
Kaye can conduct normal day-to-day business, however, Justice Merkel stipulated Kaye cannot dispose of any assets.
Justice Merkel said Kaye’s counsel were welcome to put a separate suppression application to the Federal Court before the resumption of the hearing on December 15.
