10 As I have mentioned, it is now agreed that from February 1997 until March 1998 the first respondent in fact received nearly $25.5 million in commission from Dexter rather than the $20 million or so I mentioned in [28] of my earlier reasons. In those reasons I placed significant weight on the absence of any evidence from the first or ninth respondents explaining what had become of a very large part of this sum of $25.5 million and on the trustee's inability to identify its fate from the information then available to him. I took that aspect of the evidence then before me into account not only in refusing to qualify the restraints I then imposed in respect of the first and ninth respondents to give them access to the frozen assets to meet their legal and other expenses, but also in concluding to the relevant level of cogency that there was a risk that unless restrained, the first, tenth, eleventh and twelfth respondents (of which the ninth respondent has at all relevant times been sole director) would so act to deal with their assets as to frustrate enforcement of any judgment the trustee might obtain against them.
11 Although the Mareva restraint has been in place since May 2000, and although the trustee filed his notice of motion seeking to extend that restraint on 17 January, it was not until 21 February, the day before the hearing, that the present respondents filed their motion seeking access to the frozen assets for the purpose of meeting their expenses. Importantly, they did not initially file any material to throw any light upon the issue on which I place such importance in my judgment of May 2000, viz, what had become of the very large amount of the $25.5 million that the trustee has not been able to identify.
12 When this matter was raised in argument on 22 February, the first response of senior counsel for the respondents was to say that the trustee has now conducted extensive public examinations including examination of the ninth respondent and now has the documents of the first and ninth to twelfth respondents and there is no evidence of any assets held by any of these respondents apart from those the subject of the orders of 31 May that could generate the moneys they need to meet their expenses. When I suggested that it was for the respondents as claimants for a variation to the Mareva injunctions to show that they needed access to the frozen assets to meet their expenses, counsel then sought an opportunity to file further evidence, something done on Friday, 23 February.
13 As to the trustee's application with respect to the ninth respondent's two properties, it appears from the material before me now that between 26 March 1996 and 17 April 1997 the ninth respondent procured the discharge of a mortgage to an arm's length third party over her Anstead property by paying it $345,000 from moneys she obtained from the first respondent from moneys it in turn obtained from Dexter by way of commissions. It further appears that between 26 March 1996 and 3 February 1997 the ninth respondent also procured the release by the same third party of a mortgage over her Brookfield property by paying $175,000 which she raised by way of loan from the Bank of Queensland secured by a mortgage she then granted to the Bank over that property and by the further payment of $51,820 from moneys she obtained from the first respondent from moneys it in turn obtained by way of commissions from Dexter. It further appears that she made at least twelve monthly repayments of $1,331 to the bank in respect of this mortgage, again, from moneys she obtained from the first respondent.
14 The trustee accordingly seeks orders in the action that the ninth respondent holds both these properties on trusts he is entitled to enforce for the benefit of the estate to the extent that the original third party mortgages over both properties were discharged with moneys the ninth respondent obtained from the first respondent and to the further extent, in relation to the Brookfield property, that she expended moneys in paying amounts due under the Bank of Queensland mortgage from moneys she also received from the first respondent.
15 In May last in the context of dealing with the trustee's claim for Mareva relief, I held that he had an arguable case that he was entitled under s 120 the Bankruptcy Act to avoid the transfer by Dexter to the first respondent of almost the whole of the commission moneys paid to that respondent from February 1997. I also held that the trustee had an arguable case against each of the ninth, tenth, eleventh and twelfth respondents, that properties which they purchased with moneys obtained from the first respondent (whose only substantial business was its agency relationship with Dexter) after January 1997 were also impressed with either a resulting or a constructive trust in favour of the first respondent which the trustee could enforce against them.
16 I exempted the ninth respondent's properties at Anstead and Brookfield now sought to be made subject to Mareva restraint on the ground that the evidence before me did not reveal any basis upon which the trustee would be entitled to the equitable relief now sought against the ninth respondent in respect of those two properties, given that they had been purchased by the ninth respondent in 1994. The evidence now before me in relation to these two properties indicates that the trustee has an arguable case against the ninth respondent in respect of them on the same basis which I accepted he had shown in May last in respect of the properties of the ninth to twelfth respondents which I then made subject to the Mareva orders.
17 I so concluded whether or not the moneys which it appears the ninth respondent received from the first respondent from Dexter commission moneys were at all times the first respondent's moneys or whether they were received by her by way of loan from the first respondent. See [11], [12], [13] and [15] of the reasons I gave in May last. At the hearing on 22 and 23 February last, it was not disputed, otherwise than on two particular bases, that the trustee has now made out a case, in accordance with the principles I referred to in [6] of my reasons of 31 May 2000, for a Mareva restraint over the ninth respondent's Anstead and Brookfield properties to the extent set out above.
18 These two bases are, first, that an intention to use frozen assets to meet ordinary expenses does not give rise to such a risk of dissipation of assets as can justify Mareva relief or continued Mareva relief and, secondly, it was said a question has arisen as to the worth of the trustees undertaking as to damages given in connection with the Mareva restraints obtained and sought.
19 This first submission by the respondents can be accepted. The principle is sometimes put on the basis that a Mareva injunction cannot be used to give the applicant security in respect of an as yet unliquidated claim, that its sole legitimate object is to prevent a respondent, pending final adjudication, from disposing of assets where the respondent's object in doing that is to abuse the process of the Court by ensuring that, if the applicant is successful in the litigation, its judgment will be an empty one. It is plain that even in a case in which a Mareva restraint is justified it can never extend to prevent a respondent from having access to its own assets to the extent necessary to meet legitimate expenses such as ordinary living and business and legal expenses.
20 But at least where, as here, a Mareva restraint is imposed only on part of the assets of a respondent in an action, the respondent who seeks a relaxation of the restraint has an evidentiary onus, if not a full persuasive onus to show that it has no other assets beyond those covered by the injunction to which it can resort to meet the expenses in question. In A v C (No 2) [1981] 2 All ER 126, Robert Goff J held that on an application to vary a Mareva injunction that had been granted over part only of a respondent's assets to permit the payment of legal costs of the action out of the assets the subject of the restraint, that it was not enough for the respondent to merely state that it owed money to someone but had instead, to show that it did not have any other assets available out of which the expenses could be paid. Rogers J took the same approach in Australian Iron & Steel Pty Ltd v Buck [1982] 2 NSWLR 889 at 890. See also Clark Equipment Credit of Australia Ltd v Como Factors Pty Ltd (1988) 14 NSWLR 552 at 568 to 569.
21 In this case the significance of the present respondent's failure to explain what has become a very large part of the $25.5 million received by the first respondent in commissions between February 1997 and March 1998 was emphasised by me in the reasons I gave when I granted the Mareva injunctions in May last in respect of part only of the respondent's assets for refusing to qualify those injunctions so as to give those respondents access to the frozen assets to meet any of their expenses.
22 The trustee has limited means only of ascertaining what has become of this very large sum which the first respondent received in the short period of thirteen months or so while under the sole control of the ninth respondent. It is true that the trustee has conducted public examinations of the ninth respondent and others including her accountant and financial adviser, and that, earlier this month, he received from the respondents their financial records, some in electronic form, records which he says in the short time available he has not yet been able to examine in detail. In these circumstances it is, I think, a matter of practical necessity for the present respondents and in particular the ninth respondent to show that no significant portion of the large part of $25.5 million received by the first respondent from Dexter, which the trustee has been unable as yet to identify, remains accessible either as cash or other property to any of these respondents. Only by doing that will the present respondents now be able to say that the frozen assets, and in the case of the ninth respondent her properties at Anstead and Brookfield, do comprise the totality of the assets upon which they have to rely to meet the expenses they have referred to.
23 In the affidavit material filed on behalf of the first and ninth to twelfth respondents on 23 February last directed to this issue, nothing more is said about what has happened to this large sum than that all receipts by the first respondent of commission moneys from Dexter and all disbursements by the first respondent from those moneys are properly recorded in the first respondent's accounting records recently provided to the trustee.
24 Mr Corbett, who at his wife's request, on 17 January 2001 replaced her as sole director of the first, tenth, eleventh and twelfth respondents, says that an examination of these records "will show how the funds paid out of Anscor's bank accounts have been disposed of". He also says "neither I nor any of the first, tenth, eleventh or twelfth respondents have the funds to meet the various expenses" referred to in the respondents' material. Mrs Corbett in her recently filed material deposed to the truth of the matters set out in her husband's affidavit. She also says she was not asked any questions in the course of her examination under s 81 the Bankruptcy Act on what has become of the commission moneys received by Anscor Pty Ltd from the Wattle Group, and that it was not suggested to her in the course of that examination that there were funds received by Anscor from the Wattle Group that were unaccounted for. The respondents' solicitor, Mr Saunders, in an affidavit sworn on 23 February, also deposes to the fact that the respondents' external accountant, Mr Atchison, and their financial adviser, Mr McAuley, were not questioned during the examination about what had become of the commission moneys received by the first respondent from Dexter "save for some specific payments" and that it was not put to either of those persons that there were funds received by the first respondent from Dexter "that were unaccounted for".
25 The question of present importance, however, is not so much whether the disbursements from Anscor's account of the entirety of the commission moneys received by it from Dexter after February 1997 are all recorded in its records, but rather whether any of the first, tenth, eleventh and twelfth respondents and, in particular, the ninth respondent has access to any of this money or other assets, apart from the assets the subject of the orders of 31 May 2000.
26 Given the very large amount of moneys in question, the application of which the trustee has not been able to identify in the limited time available to him, I am not prepared to accept the general assertions of the respondents as taking the question of whether the ninth respondent, in particular, has access to assets comprising or generated from the large amount of moneys received by the first respondent from Dexter, the application of which the trustee has not been able to account for.
27 On 26 June 2000, I ordered that Pacific International Asset Management Limited (PIAM) be joined as thirteenth respondent. No Mareva injunction has been issued to it. PIAM's relationship with the first and ninth to twelfth respondents is dealt with at some length in my reasons of 31 May. The evidence before me indicates that on 26 March 1998, ie, at the time Dexter's investment scheme collapsed, PIAM transferred $1.155 million of moneys it then received from the first respondent into its Brisbane account and from that account to an account in Singapore. PIAM is represented by the same solicitors who are representing the first and ninth to twelfth respondents in this action.
28 Trustee's counsel submits that in defending the trustee's claims against it, the issues PIAM is interested in litigating are relevantly the same as those which the first and ninth to twelfth respondents have to make out to defeat the trustees claim on them. PIAM disputes the making by Dexter to the first respondent of payments within s 120 and it disputes the entitlement of the trustee to trace into various assets of the ninth, tenth, eleventh and twelfth respondents such of those moneys as were received by the first respondent from Dexter. The trustee accordingly submits that only one set of costs will be incurred by the first and ninth to twelfth respondents and PIAM in this action and that, given the $1.155 million that PIAM received from the first respondent and moved offshore to Singapore in early 1998, there is good reason for thinking that that particular respondent has assets which it can properly apply in meeting the expenses of defending the action against it, a defence of which the first and ninth to twelfth respondents can take advantage.
29 But, notwithstanding the submission by trustee's counsel as to the thirteenth respondent being in the position to run a defence to the trustee's claims in the present action, which will inure for the benefit of the first and ninth and twelfth respondents, that consideration of itself can at most provide a reason for limiting the variation sought by the first and ninth and twelfth respondents to the orders of 31 May 2000 so as to leave the thirteenth respondent to fund the defence in the present action. It is no answer of itself to the respondents' claim that they need access to the frozen assets to meet the other expenses not associated with this action which they have identified.
30 In his affidavit filed on Friday last, Mr Corbett says of this $1.155 million received by PIAM, that in the period from about June 1998 through to early 2000 these moneys have been spent in the following manner: