Australian Competition & Consumer Commission v Chaste Corporation Pty Ltd

REASONS FOR JUDGMENT 1 This is an urgent application for interim orders by the Australian Competition and Consumer Commission ("the ACCC") against Peter Clarence Foster. Mr Foster was made the fourth respondent to proceedings brought by the ACCC against Chaste Corporation Pty Ltd and others by orders made by Drummond J on 16 September 2002. The material before me suggests that Mr Foster will be arriving in Australia within the next 24 hours. The ACCC has sought interim orders as set out in pars 1 to 12 of the notice of motion, leave of which I granted to file today. Those paragraphs provide: "1. Pending further or other order Peter Clarence Foster, the fourth respondent, be restrained from leaving Australia. 2. Peter Clarence Foster, the fourth respondent, deliver his passport forthwith to the District Registrar of the Federal Court, Brisbane. 3. Peter Clarence Foster, the fourth respondent, be restrained from removing from the jurisdiction or from disposing of, mortgaging, charging, assigning or otherwise dealing with assets wheresoever situate in which he has an interest, either legal or beneficial and whether the interest is held directly or through an agent, nominee or servant as at the date of making this order including: (a) any bank accounts; (b) real property except to pay money or transfer or assign assets to the Official Liquidators of Chaste Corporation Pty Ltd. 4. Up to and including noon on 5 February 2003, notwithstanding the preceding orders, the fourth respondent shall be entitled to draw and expend from a bank account or other source the identity of which shall first be notified by him to the applicant's solicitors: (a) a sum not exceeding $500 per week for ordinary living expenses; (b) a sum not exceeding $2000 for reasonable legal expenses; (c) such further sums as the applicant's solicitor may from time to time agree in writing save that nothing in subparagraphs (a) to (c) requires any third party to inquire as to the purpose for which any sum drawn by the fourth respondent is in fact used. 5. The fourth respondent shall file and serve, within seven days of the date of service of this order on him or, if such day is not an ordinary business day, the first business day thereafter, an affidavit which sets out full details as at the date of this order as to: (a) the name and address of any bank, building society or other financial institution anywhere in the world at which there is an account in his name, or under his control, together with the number of such accounts, the account name if not in his name alone and the balance therein; (b) the name and address of any person or persons indebted to him and the amount of the debt or debts owed by such persons; (c) an itemised inventory of any assets or property, whether real or personal, owned or controlled by him or in respect of which he has an interest setting out the nature, location and value of the assets or property and the nature and extent of the interest held by him; (d) an itemised inventory of any assets or property, whether real or personal, in which any company trust or other entity controlled by him, or in which he has an interest; (e) in respect of any of the real or personal property referred to above, whether it has been given as security for any debt, and if so, the nature of the security and the debt so secured; (f) a list of all receipts and the amount and date thereof received by or for the benefit of either him or Jillian Foster, the fifth respondent from Chaste Corporation Pty Ltd. 6. The applicant shall make its best endeavour to serve this order personally on the fourth respondent as soon as possible. 7. The applicant shall serve these orders on the fourth respondent by sending them by email to the address or . 8. Service of the application and supporting affidavits be abridged to such time as the Court deems fit. 9. This motion be returnable instanter, and service of the motion be abrogated on the grounds appearing in the accompanying letter of urgency. 10. The further hearing of this motion be adjourned to a date to be fixed by the Court, at which time the applicant may move the Court for an order that the fourth respondent's passport be returned to him provided that he first pay to the District Registrar a surety in such sum as the Court considers appropriate to ensure his compliance with such orders as the Court may subsequently make in these proceedings; for an order that the hearing be expedited and for such other orders as the Court deems appropriate in the circumstances. 11. Such further or other interlocutory orders as the Court considers appropriate. 12. Liberty to apply on 24 hours notice. 2 In the course of submissions, I raised with Mr Simon Couper, Senior Counsel for the ACCC, my diffidence as to the Court's power to grant, in particular, the relief claimed in pars 1 and 2 of the motion. It was asserted on behalf of the ACCC that s 23 of the Federal Court of Australia Act 1976 (Cth) is sufficiently wide to permit the making of such orders, even on an ex parte and interim basis. I am far from satisfied that s 23 extends so far. 3 Insofar as the relief claimed in pars 3 and 4 is concerned, it is accepted that there is no fresh material concerning any dissipation of assets subsequent to 16 September 2002 when Mr Foster was joined as a party to these proceedings. Orders in the nature of "Mareva" injunctions in my opinion require, as the foundation of the Court's jurisdiction to grant such orders, evidence establishing objectively a threatened dissipation of assets. Even if it be the case that the material before me provides a basis for thinking that Mr Foster has been involved in wide-scale dishonest activity, I have difficulty in seeing that material provides a foundation for concluding that there is threatened a dissipation of assets, such as to ground the relief claimed in pars 3 and 4. This is the tentative view I hold on the material presently before me. 4 The relief claimed in par 5, which is in the nature of discovery of assets, is truly ancillary to the "Mareva-type" orders sought in par 3, with a qualification contained in par 4. 5 In respect of all of the matters sought by the notice of motion, I decline to make any order at this stage, except to order that: (1) The notice of motion filed today by leave, and the material relied on by the ACCC in support, be served personally on Peter Clarence Foster as soon as possible. (2) The notice of motion be adjourned for mention in the Federal Court of Australia at 10.15 am, 3 February 2003.