Donald Wilfred De Boer & Ors v John Ernest Williams

Supreme Court of NSW|2004-04-23|Before: Einstein J

CITATION : Donald Wilfred De Boer & Ors v John Ernest Williams [2004] NSWSC 351 HEARING DATE(S) : 22/04/04, 23/04/02 JUDGMENT DATE : 23 April 2004 JURISDICTION: Equity Division JUDGMENT OF : Einstein J DECISION : Mareva injunction ordered on basis of varied form of the usual undertaking as to damages.

CATCHWORDS : Equity - Practice and procedure - Injunctions - Interlocutory proceedings in the nature of a Mareva injunction - Undertaking as to damages - Principles - Whether special circumstances shown for relieving plaintiff from obligation to proffer the usual undertaking as to damages Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 Allen v Jambo Holdings Ltd [1980] 1 WLR 1252 Attorney-General v Albany Hotel & Co [1896] 2 Ch 696 F Hoffmann-La Roche & Co AG & OIS v Secretary for Trade and Industry [1975] AC 295 Chisholm v Rieff (1953) 2 FLR 211 Cooper v Smyth (1883) 4 LR (NSW) Eq 39 CASES CITED : Graham v Campbell (1878) 7 Ch D 490 Kerridge v Foley (1968) 70 SR (NSW) 251 New Cap Reinsurance Corp (Bermuda) Ltd v Chase Manhattan Bank (No 2) [1999] NSWSC 808 [BC9904586] Smith v Day (1882) 21 Ch D 421 Southern Tableland Insurance Brokers Pty Ltd (in liq) v Schomberg (1986) 11 ACLR 337 Szentessy v Woo Ran (Aust) (No 1) Pty Ltd (1985) 65 ACTR 98 Third Chandris Shipping Corporation v Unimarine S A [1979] QB 645 Donald Wilfred De Boer (First Plaintiff) PARTIES : Helen Louise De Boer (Second Plaintiff) Mark Henry Williams (Third Plaintiff) John Ernest Williams (Defendant) FILE NUMBER(S) : SC 2432/04 COUNSEL : Mr C Simpson (Plaintiffs) No appearance SOLICITORS : Djekovic, Hearn & Walker (Plaintiffs)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Friday 23 April 2004 ex tempore Revised 29 April 2004

2432/04 Donald Wilfred De Boer & Ors v John Ernest Williams JUDGMENT The Notice of Motion 1 There is before the court an application for a Mareva injunction restraining the defendant from selling, encumbering or otherwise dealing with his interest in the property situate at 67 Margaret Crescent South Dubbo, being the whole of the land in Folio identifier 24/246712. A further application is pursued in the Notice of Motion for an order that the defendant file and serve a verified list of all assets to which he has title or which are under his control. 2 The difficulty posed at the commencement of the application concerned the fact that the first two plaintiffs, who at that time were the only plaintiffs, were not prepared to proffer the usual undertaking as to damages. Hence the question which was raised when the matter came first before the Court, concerned whether, in the particular circumstances then before the court, the proper exercise of the relevant discretion was to grant or to withhold the subject claim to injunctive relief. There is substantial authority for the proposition that an undertaking as to damages should, except in special circumstances, be required in every case of an interlocutory injunction. What however is meant by the term "special circumstances"? Is an application for Mareva injunctive relief such an extraordinary remedy that only very special circumstances would dictate a proper exercise of the discretion in terms of granting that relief in the absence of the proffering of the usual undertaking as to damages? The proceedings 3 The background to the proceedings concerns the deceased, Mr Herbert Henry Williams, who died on 10 November 1993 appointing his nephew Mr John Ernest Williams, who is the defendant, as executor and trustee of the will of the deceased made on 5 November 1993. By that will the deceased left his house property to his son Mr Mark Henry Williams and devised and bequeathed the residue of his estate to his trustee upon trust to sell, call in and convert the same into money and from the proceeds to pay funeral and testamentary expenses and to invest the same and to pay the income there from to his son. The trustee was authorised to advance to Mr Mark Williams any part or parts of the capital sum for his welfare, such advances to be made in the absolute discretion of the trustee and on the death of Mr Mark Williams, any trust funds which might remain were to pass to those persons entitled under the rules of intestacy to the estate of the son of the deceased. 4 Probate was granted by the Court to the defendant on 14 December 1993. 5 The defendant remained trustee of the estate until 13 February 2004 when the court ordered the first two plaintiffs to be substituted for him and ordered that the defendant deliver up to the solicitors of the then plaintiffs, relevant documents and records relating to or touching upon his administration of the estate. That order followed an earlier order of 10 November 2003 by this Court [made in proceedings 5128 of 2003] that within 28 days of service of that order the defendant verify, file and pass accounts in the Probate Office of the Registrar in respect of the administration of the estate of the deceased from 14 December 1993 up to that point in time and an associated order that the defendant personally pay the costs of those proceedings to date. 6 The evidence before the Court is that Mr Mark Williams was born in 1967 and was an only child. His father was a grazier and his mother was not in paid employment. His mother died in 1977 and after her death Mr Mark Williams continued to live with the defendant. 7 The evidence is that the sale of the deceased's house property was completed on 7 April 1994 and that the proceeds were paid to Mr Mark Williams. 8 The evidence then travels through the attempts by Mr Mark Henry Williams to contact the defendant between that time and the present. It includes the following:

"11. In early 1994 I decided to move to Sydney. I was unable to find employment in Dubbo and felt that I may have more success in this endeavour in the city. I arranged to sell the property 1 Pozieres Street, Dubbo. That sale was completed on 7 April 1994 and I received an amount of $51,162.50 plus the balance of the deposit which would have been somewhere between $1,000 - $2,000.

At about the time the house was sold I had a discussion with the Defendant whom I called "Jack". In this Affidavit where I have quoted direct speech I have used words having the same effect as those spoken. I said: "What about the other money".

He replied: "look, as far as I am concerned I can get you a cheque for the whole amount now".

I said: "why don't I give you my bank account details and you can arrange to have the interest paid in every so often."

He said: "all right, I'll put the interest in every quarter."

I then provided him with my bank account details. 13. After a period which I recall was several months I contacted Jack by telephone at his home. I said "the interest is not going into my account, what's happening?". He said: "I haven't got around to it. I have been extremely busy with work, I'll do it when I get time."

I recall a few more months passed without receipt of any interest. Around Christmas time 1994 I decided to travel to Dubbo to see my family and to see Jack at the same time. I telephoned him a few days before I was due to go to see if he would be able to see me. I travelled by train to Dubbo and met him at a café where his wife worked. I do not recall the name of the café however I recall it was in Bourke Street, Dubbo. I said: "What's happening with the money? I haven't been getting the interest, its not going into my account." He said: "I've still gotta get around to that. I'll write you a cheque for whatever you need."

At that time I was uncertain as to my entitlements. I did not know that I was entitled to the interest and thought that any payment to me would be at Jack's discretion. I therefore asked for a modest amount which I thought that he would be more likely to approve. My recollection is that Jack wrote out and gave me a cheque for $500.00. I then asked him how much interest was earned on the money over a year. He said "about $4,000.00."

Jack went on to say "I want to speak to Joan Richardson (my father's former solicitor) about signing the whole lot of the money over to you."

After this I contacted Jack by telephone every few months. Generally I was able to get him at home. Approximately 12 months after the visit referred to in the preceding paragraph I decided to travel to Dubbo to see my family and to speak to Jack. I had previously telephoned him and told him that I was coming to Dubbo and asked if we could meet at the café. We had a meeting at the café.

I said: "I'm still not getting the interest payment. Can't you arrange to have them paid into my account?"

He said: "I'll have to speak to the solicitor and the bank about having the payments made to you automatically."

"I have got something to tell you about the estate. I borrowed $32,000 from the estate to pay for a block of land near Western Planes Zoo. I want to build a shed and home. When the home is finished I will sell my place in Margaret Crescent and pay the money back with interest." He then mentioned the name of the road upon which the block was located however I cannot recall it at this time.

He then went on: "I have also taken out another $5,000 for a deposit on a block of land for you".

I am not aware of any land being purchased for me from the trust fund nor have I been provided with any evidence that the amount of $5,000 was withdrawn from the fund for this purpose.

He then went on: "its all right, I have spoken to my accountant, he said it is fine so long as it is paid back with interest". I said: "who is this accountant?".

He replied: "he's a bloke I've known for years, he's in Wellington."

I asked him a couple of more time for the accountant's name and address. The only response I received was as set out in the preceding paragraph.

He did not provide the accountants name or address. To the best of my recollection I did not discuss this loan transaction with him again. 18. I recall that it was about this time that I requested Jack to provide me with bank statements for social security purposes. Exhibited to me at the time of swearing this Affidavit and marked "MHW1" is a series of bank statements which I believe comprise the statements relating to my Trust Fund. Copies of statements numbered 5 to 16, 18 to 29 inclusive were given to me by Jack and apart from this I have not received any other information from him in relation to the administration of my late father's estate.

I was not aware of my legal entitlements to my father's estate. Jack was a prominent member of our Church and was a person I believed was a devout Christian. I trusted him and I relied upon him to look after this money for me. I did not consent to or approve the loan transaction. I was not consulted about it.

After the discussion referred to in the preceding paragraphs I began to have difficulty in contacting Jack by telephone. I had a mobile phone number and his home phone number. If I rang at home generally I got the answering machine and I would leave a message. Sometimes I would speak to his wife or children. Generally, they informed me that Jack was: (a) away on a selling trip or; (b) busy or; (c) away working. 21. Initially, Jack would return my calls. As time progressed I had more and more difficulty in contacting him by telephone. Apart from the occasion set out in paragraph 24 the last time I was able to speak to him by phone was in or about February 2001.

I travelled to Dubbo by train roughly every twelve months. On those occasions I saw Jack and would get some money from him. I cannot recall exactly how much Jack paid to me during my visits to Dubbo. I believe that the total was between $5,000 to $6,000. Apart from the statements referred to paragraph 18 above, I have not received any other information in relation to the administration of my late father's estate.

In early 2001 I attempted on several occasions to speak to Jack by telephone over a period of a couple of weeks. I left messages on his answering machine. I do not recall being able to speak to his wife or children. I left a message to the effect that I required an update on the bank accounts for Centrelink purposes. I travelled by train to Dubbo on 1 March 2001. A true copy of my ticket is annexed and marked "B". I usually stayed at Youth Hostels Australia when I was in Dubbo. After getting off the train I went to the Youth Hostel and attempted to telephone Jack at home. There was no answer and no answering machine. I tried his mobile which I found was disconnected. I then walked to his house in Margaret Crescent and spoke to his daughter Claire. Claire said: "Dad's away on business. He will be back in a couple of days."

I said: "Can you give him a message. Could you ask him to call me in Sydney."

I then returned to the Youth Hostel and then returned to Sydney on 4 March 2001. I did not hear from Jack in that period. 24. About the middle of 2002 I telephoned Jack's sister Barbara who lives near by. I told her my telephone number and asked her to pass a message to Jack to call me about the estate. I did not hear from him.

In March 2003 I was advised I needed dental work which would cost $3,000. I had about $5,000 in the bank at that time however my preference was to ask Jack for the money as I did not want to severely deplete my savings. At about that time I spoke to my cousin Helen. I said: "I'm trying to get a new mobile number for Jack, have you seen him?"

I said: "I need to speak to him but I can't contact him at home."

She said: "I'll be seeing him soon, I'll get his number and call you back."

Helen called me back within a couple of days. She said: "Jack bought me a load of wood. I spoke to him about you and he has given me his mobile number."

She then gave me the number. I tried to contact him using the mobile number later that day without success. I called the next day and spoke to him. I said: "What's happening about dad's estate and my money."

I had heard that Jack and his wife had separated. I said "I've heard about your divorce, I'm sorry to hear about your troubles."

I then said: "Jack, I need $3,000 for some dental work. Can you arrange to deposit this amount in my bank account."

I then provided him with my bank account particulars. He said: "Alright, I'll put it in."

No funds were deposited in my bank account as I requested. I have not had any communication from Jack since that phone call. I attempted to contact Jack by telephone after this conversation. I was unable to reach him at home. When I attempted, the telephone would ring off. His mobile phone was switched off on each occasion I attempted to contact him. After this discussion I attempted to contact him 2 or 3 times a week. I did so until I instructed my solicitor in June of this year." 9 Thereafter Mr Mark Williams' solicitor communicated on several occasions between June 2003 and the middle of September 2003 with either the solicitors who had acted for the defendant in relation to the estate or with the defendant. Broadly speaking these letters conveyed the concern of Mr Mark Williams as to the balance of the estate which his solicitors indicated in the correspondence they understood to consist of moneys in current accounts and on deposit totalling approximately $106,000. They made the point in their letter of 19 June 2003 that apart from an amount of $5,000 their client had not received any distribution of the capital or income from the fund and that this, coupled with difficulties in contacting the defendant, was causing Mr Mark Williams great concern. They sought detailed information as to the present whereabouts of the trust moneys and contact details for the defendant and contact details for any accountant involved in the administration of the trust account and a copy of the defendant's solicitors trust ledger and controlled monies ledgers in relation to any estate funds handled by those solicitors. 10 They were informed by the former solicitors for the defendant on 11 July 2003 that all moneys received by those solicitors in connection with the estate had been accounted for by the solicitors to the defendant in 1994 and that their file had then closed. 11 A similar letter to that written to the former solicitors for the defendant was then sent to the defendant on 16 July 2003 and no response or acknowledgement having been received, a follow-up letter was written on 7 August 2003. 12 Then by letter addressed to the defendant of 16 September 2003 the solicitors for Mr Mark Williams advised that he had instructed that the defendant had apparently appropriated the sum of $32,000 from the trust fund on or about 11 May 1995 and applied this money towards the purchase of property. Their instruction they indicated, was that the transaction was without their client's knowledge or consent and that neither the solicitors nor their client had ever been provided with any evidence that the moneys were repaid nor interest paid upon it. The solicitors asserted that this was a serious breach of the defendant's duties as trustees exacerbated by his failure to deal with requests for information concerning the trust fund. They sought within a very short time detail of this and other matters, threatening that unless a proper response was received they would make application to seek the removal of the defendant as trustee of the estate and the appointment of a new trustee, and an account of profits and costs on an indemnity basis. Needless to say none of these requests were complied with, leading to the orders earlier referred to being made by the Court. 13 The evidence is that on 6 April 2004 Mr Mark Williams' solicitor received the original of a number of bank statements from the Dubbo Office of Legal Aid New South Wales following communications between the solicitor and a solicitor at the Dubbo office. 14 The statement of claim in these present proceedings was filed on 15 April 2004 and alleges, inter alia: · that the defendant has neglected to file income tax returns for the trust for the years dating 1994 and 2003; · that the son of the deceased has received payments of interest from the moneys of the trust account totalling approximately $5,000 since the establishment of the trust in 1994; · that the defendant has withdrawn moneys from the trust account and applied the moneys to his own use in breach of his trust, in particular the allegation being that he withdrew the sum of $32,000 from the trust account on or about 11 May 1995 and made other withdrawals from the trust account after 11 May 1994 and 12 April 2000 totalling $75,225.74 which were not passed to Mr Mark Williams; · that on 15 May 1995 the defendant used the withdrawal sum of $32,000 to purchase a particular parcel of land as a joint tenant with his wife for the sum of $90,000 and thereafter on 8 February 2002 resold that land for the sum of $143,000; · that on 26 June 2002 the defendant closed the trust account and that the balance of the funds did not pass to Mr Mark Williams; · that with the exception of the amount of $5,000 none of the capital sums withdrawn from the trust account have been received by the beneficiary of the trust. 15 The statement of claim seeks an order that the defendant restore the trust funds by payment of the plaintiffs of the sum of $107,225.74; an order that the defendant make good any loss caused by his breach of trust; an order that the proceedings be referred to a Master to determine the quantum of any loss caused by the defendant's breach of trust, injunctive relief and costs. 16 There is also evidence before the Court that with the exception of the provision of the bank statements already referred to, the defendant has not complied with orders made by the Court on 10 November 2003 and 13 February 2004. The solicitor for the plaintiffs has given evidence that in relation to the trust account he has not seen statements for the period from 11 May 2000 up to the present time and that from his examination of the bank statements it appears that the defendant used a cheque book in relation to its operation of the account, but that he has not been provided with the cheque butts or with any material to indicate the purpose of the payments made from that fund. The solicitor has further given evidence that he has not received any accounting or taxation records in relation to the defendant's administration of the trust fund. 17 There is evidence before the Court of the purchase by transfer dated 15 May 1995 by the defendant and Ms Marina Beverly Williams of a property being Folio Identifier 1/249414 and of a sale by the defendant and Ms Williams of that land for $143,000 by an undated transfer. That matter has already been referred to. 18 The further evidence before the Court includes evidence that a property at 67 Margaret Crescent, Dubbo is believed to be the defendant's residence being the land contained in Folio identifier 24/246712 and further evidence that insofar as the solicitor for Mr Mark Williams is aware, the defendant does not own any other property New South Wales. It is convenient at this point in time to make the point that the affidavit of service of Mr David John Budd made on 20 April 2004 attests to the service on 19 April 2004 upon the defendant personally at 67 Margaret Crescent, South Dubbo of a letter from the plaintiffs' solicitors of 16 April 2004, short minutes of order, notice of motion, statement of claim, affidavit of Mr Stephen Michael Hearn sworn 15 April 2004, affidavit of Mr Stephen Michael Hearn sworn 15 April 2004 and affidavit of Mr Mark Henry Williams sworn 6 April 2004. 19 The defendant did not appear on the return of the notice of motion. Counsel for the then two plaintiffs indicated that whilst Mr Mark Williams was prepared to himself proffer the usual undertaking as to damages to the Court, the then first two plaintiffs were not prepared to proffer that undertaking. The Court has been informed that the first plaintiff is an accountant practising in Hornsby and that the second plaintiff is a schoolteacher who lives in the Dubbo. Apparently, as the Court was informed, the reason why those two plaintiffs were not prepared to proffer the usual undertaking as to damages concerned their inability to be certain that in the particular circumstances, the trust property would be recovered, or if recovered at all, would be recovered in an amount sufficient to protect them from the possible adverse consequences which might flow from the grant of the Mareva injunction sought.

Dealing with the case 20 Meagher, Gummow and Lehane, Equity Doctrines and Remedies 4th Edition, [eds R Meagher, D Heydon and M Leeming] make the point at [21-410] that "almost as a matter of course, a court will decline to grant an interlocutory injunction unless the plaintiff undertakes to the court to abide by any order the court may later make if it turns out that the injunction should not have been made… if no undertaking can be given, no injunction will issue… the importance of an undertaking is immense, as in the absence of an undertaking, a defendant who is ultimately victorious at the final hearing has no recourse to recover the damages he may have incurred from complying with an interlocutory injunction… in the Supreme Court of New South Wales, Part 28 Rules 7 of the Rules, the 'usual undertaking as to damages' is so defined as to include persons who are not parties to the suit. The court will, in an appropriate case, require that an undertaking as to damages be properly secured. There are very few exceptions to the requirement that an undertaking be given… normally it is the price a plaintiff has to pay for the grant of an interlocutory injunction" [emphasis added]. The authors continue to suggest that possible exceptions include "when the plaintiff makes out an unarguable case of fraud (which, at an interlocutory stage, must be rare) and where a plaintiff's poverty prevents him from tendering a meaningful undertaking". 21 In Southern Tableland Insurance Brokers Pty Ltd (in liq) v Schomberg (1986) 11 ACLR 337 Young J (as Young CJ in Eq then was) traced the history of undertakings as to damages. The judgment includes the following passage:

"Counsel have taken me through the history of undertakings as to damages. In Smith v Day (1882) 21 Ch D 421 at 424 Jessel MR said that such undertakings were invented by Knight-Bruce LJ when Vice Chancellor, but as Kriewaldt J pointed in Chisholm v Rieff (1953) 2 FLR 211 at 214, this is just not so and it would appear that Jessel MR was giving an extempore judgment in a case where he had not called upon counsel for the respondent and did not do the same research as Kriewaldt J did. There have been examples, as Kriewaldt J points out, from 1824 onwards. The reason for requiring an undertaking to be given is, of course, that over and above damages which may be payable as a matter of law, the grant of an interlocutory injunction may occasion parties and non-parties damages, which, unless the court takes an undertaking, may not be able to be recovered and it is the price of a person obtaining the boon of an interlocutory injunction that he undertakes to the court to make good any damage that has been suffered by anybody as a result of that boon. Indeed, it has been the invariable practice for over one hundred years in this court and for longer in England to require such an undertaking. This is made abundantly clear from English cases as Smith v Day, to which I have already referred, Graham v Campbell (1878) 7 Ch D 490, Attorney-General v Albany Hotel & Co (1896) 2 Ch 696, F Hoffmann-La Roche & Co AG & OIS v Secretary for Trade and Industry [1975] AC 295, and in this country Cooper v Smyth (1883) 4 LR (NSW) Eq 39, Kerridge v Foley (1968) 70 SR (NSW) 251 at 255, Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249, especially per Aickin J at 260-1 and Gibbs J at 311.

All the formulations of the practice of requiring the plaintiff to give an undertaking as to damages have expressed the practices as subject to an exception. In Kerridge v Foley , Sugarman JA spoke of the undertaking as to the price of the injunction, at 255, and recognised that: "An undertaking as to damages should, except in special circumstances, be required in every case of an interlocutory injunction." That is a judgment of the Court of Appeal, which is binding on me." [at 340] 22 Southern Tableland concerned proceedings commenced by an insolvent company in liquidation and its liquidator. The plaintiffs sought an interlocutory injunction but their counsel was instructed to give only an undertaking by the company as to damages limited to the assets of the plaintiff without any undertaking being offered by the liquidator. 23 Young J accepted that there had been examples of proceedings where interlocutory relief had been ordered where no undertaking had been given. And as Austin J pointed out in New Cap Reinsurance v Chase Manhattan (No 2) [1999] NSWSC 808 [BC9904586], one example is where the plaintiff is impecunious and supported by legal aid and seeks a Mareva injunction order as in Allen v Jambo Holdings Ltd [1980] 1 WLR 1252 and Szentessy v Woo Ran (Australia) Pty Ltd (1985) 65 ACTR 98. Another example as Austin J points out, is provided by cases where interlocutory injunctions have been granted at the suit of a liquidator without any requirement that the liquidator give a personal undertaking as to damages 24 Young J continued in [at 341]:

"What then are special circumstances within the meaning of the exception to the general requirement? Although many judges and authors speak of the exception , I do not know of any case where it has been reported that a judge has found that special circumstances exist so that an undertaking should not be given. As this is a matter of practice and procedure, with the consent of the parties I did speak to some other judges of this Division and they were not able to bring any illustrations to mind, nor have I had any personal experience of one. Spry in the third edition of his Equity Remedies at p 465 says that the circumstances where it is not just and reasonable that an undertaking should be given are extremely rare." [emphasis added] 25 At 342 Young J turned to examine the particular circumstances where a Mareva injunction was sought adding:

"So far I have considered this case without reference to the fact that the present case involves a Mareva injunction. It seems to me that there is a lot to be said whatever the rule is as to undertakings as to damages in, what I might call ordinary applications for interlocutory injunction, it is likely to be even rarer for there to be a case where it is proper to grant a Mareva injunction without an undertaking as to damages. It must be remembered that in Third Chandris Shipping Corp v Unimarine S A [1979] QB 645 at 668-9 Lord Denning MR went through the guidelines that must be considered by courts before granting a Mareva injunction and he said at the last of his guidelines: "The plaintiff must, of course, give an undertaking in damages…in a suitable case this should be supported by a bond or security: And the injunction only granted on it being given, or undertaken to be given."

"As far as I am aware, no court has ever departed from those words and it is a strong guide that because a Mareva injunction is such an extraordinary remedy in every case an undertaking in damages is required, though it may be wise to again point out that as with all remedies by way of injunction it is discretionary, so that it is just perhaps possible that even in a Mareva injunction a court may think it proper not to take such an undertaking, but I will leave that situation until it occurs." [emphasis added] 26 It seems to me that these expressions of the relevant practice and procedure are entirely correct and require to be followed in terms of the principled approach to the grant of a Mareva injunction. No matter how difficult the particular circumstances may be, it is always quintessentially necessary for the Court to take into account the fact that the giving of the usual undertaking as to damages is the price paid by the plaintiffs for obtaining the very significant relief constituted by the grant of an interlocutory injunction and most particularly by the grant of a Mareva injunction. Not only does the extraction of such an undertaking enure to protect the defendants to the proceedings, but at least in the State of New South Wales, the undertaking enures for the benefit of non-parties who may be very significantly affected by the order in a fashion by definition often, indeed usually, not able to be foreseen at the time the Court pronounces the order. Undertakings from non-parties 27 I further note that Young J in Southern Tableland at 343 adverted to the acceptance by the Court of undertakings from non-parties putting the matter as follows:

"Although occasionally the court does accept undertakings from non-parties, there are very real doubts as to whether a court should do so, where the court cannot be satisfied that an independent lawyer has properly advised the non-party as to all the consequences involved."

Third plaintiff joined 28 At the commencement of the adjourned hearing today of the subject application, following a discussion with the Court, counsel for the then plaintiffs obtained instructions and has now sought and procured from the Court an order joining Mr Mark Williams as a third plaintiff. 29 Mr Mark Williams by the plaintiffs' counsel, is content to give to the Court the usual undertaking as to damages. 30 My own view is that it would be proper to make the Mareva injunctive order which is now sought in the following circumstances:

If the usual undertaking as to damages is offered to the Court by Mr Mark Williams; 2. If Mr Mark Williams further undertakes to the first two plaintiffs to indemnify them against any liability which they may incur by reason of their giving to the Court a limited undertaking as to damages in the form which is referred to below; 31 The Court would then vary, insofar as the first two plaintiffs only are concerned, the form of the usual undertaking as to damages to be given by them to the Court and to take in, if this can be offered, an undertaking by those first two plaintiffs limited to the actual amount ultimately received by those first two plaintiffs from Mr Mark Williams pursuant to the last mentioned indemnity, if called upon. 32 If those forms of undertaking are able to be procured and are proffered to the Court then the proper exercise of the Court's discretion will be to grant the Mareva order which is sought in the notice of motion. 33 It seems to me that the appropriate course is to permit the counsel for the now three plaintiffs to obtain instructions in that regard and if the instructions come forward then I would be disposed to order that the defendant be restrained from selling, encumbering or otherwise dealing with his interest in the property situated at 67 Margaret Crescent, South Dubbo being the whole the land in Folio Identifier 24/246712. 34 It does seem to me that the order should expressly include leave granted to the defendant to move to discharge the Mareva injunctive order for such reasons as the defendant may be advised, if any.

I certify that paragraphs 1 - 34 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 23 April 2004 ex tempore and revised 29 April 2004

      Susan Piggott
      Associate
      29 April 2004

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