Patterson v BTR Engineering

REASONS FOR JUDGMENT There are three motions before the Court. The applicant, by a notice of motion which was filed on 19 September 1997, seeks a Mareva injunction against the respondent, a foreign corporation, in relation to a chose in action situated in Australia. The other two motions (one by each party) relate to the question of security for costs. In each case the notice of motion is dated 8 May 1998 and was filed on that day. The applicant seeks to vacate an order made on 7 April 1997 under which the applicant has provided security in the sum of $50,000 for the respondent's costs; the respondent resists that motion and, by its own motion, seeks further security in the sum of $70,000. Claim For Mareva Relief It is necessary to describe, very briefly, the parties and the proceeding. The applicant is incorporated in New South Wales; its shareholders and directors are Mr Isaac Reches and his wife Mrs Yael Reches. The respondent is incorporated in Israel. It does not carry on business in Australia and there is no evidence that it (as opposed to a subsidiary: see below) has property here. It is, on the evidence, a very substantial corporation and a profitable one. It manufactures and supplies equipment to the Israeli defence forces and the defence forces of a number of other countries. By a written agreement entered into in November 1990, the respondent appointed the applicant its non-exclusive agent for Australia. In essence, the applicant was to promote and market the respondent's products to the Australian Defence Forces and, if sales were made, it was entitled to a commission. The initial term of the agreement was a little over one year; there was provision for renewal, by written agreement, and for termination by notice for cause. It is common ground that the agreement was renewed for a period ending on 31 December 1992. The applicant asserts, though the respondent denies, that the respondent by reason of certain conduct is to be taken as having extended the agreement to 31 December 1994; the respondent says that after 31 December 1992 the parties continued to carry on business on the footing of the agreement but upon the basis that, after 31 December 1992, it was terminable on reasonable notice. The applicant claims that the respondent purported to terminate the services of the applicant under the agreement on 7 April 1994 and thereby repudiated the agreement, the repudiation being accepted by the applicant; the respondent says that it terminated the agreement by oral notice, the termination being effective from 12 June 1994. It seems to be common ground that the applicant provided services, under the agency agreement, which at least played a part in the respondent's success in obtaining contracts, or sub-contracts, for the provision of services and equipment to the Australian Defence Forces as part of what was described as "Project Parakeet". It is common ground that special arrangements were made as to the rate (which was to be less than the standard rate) at which, and the basis on which, the applicant was to receive commission in respect of Project Parakeet. There are disputes as to the surrounding circumstances: in particular, the applicant asserts, but the respondent denies, that representations were made to the applicant, on behalf of the respondent, to the effect that the agency agreement would continue on foot long enough (the applicant says, until December 2002) to enable the applicant to recoup the difference between the rate of commission payable to it for Project Parakeet and commission at the rate at which, but for the special arrangements, it would have been payable. The respondent denies the alleged representations. It is unnecessary for present purposes to consider in more detail the applicant's claims and the respondent's defence. The applicant seeks relief under s 87 of the Trade Practices Act 1974 (Cth), damages under s 82 of that Act, damages as on repudiation of the agency agreement accepted by the applicant and what are described as equitable compensation and restitution. I need not at this stage identify with precision the causes of action (in addition to those arising under the Trade Practices Act and for breach of contract) on which the applicant relies. It should, however, be said that the applicant does not claim - it would, of course, be inconsistent with its claim to have accepted a repudiation of the agency agreement - that commission continued to fall due after (on the applicant's case) the agency agreement was discharged; but, of course, the applicant's claims include one for damages calculated, in part, by reference to an unperformed obligation to pay commission. It is common ground for the purposes of the motion that the only relevant property in Australia is a chose in action: rights under a sub-contract dated 22 March 1994, between British Aerospace Australia Defence Industries Pty Ltd ("British Aerospace") and the respondent, for the provision of goods and services for Project Parakeet. The respondent's rights under that sub-contract have, as a result of a corporate reorganisation, been transferred to a subsidiary of the respondent, Tadiran Com. Ltd. The respondent, however, accepts that, if Mareva relief were otherwise appropriate, it should not be withheld simply because a subsidiary of the respondent, rather than the respondent itself, is entitled to the rights against British Aerospace - particularly to receive payments - under the sub-contract. British Aerospace is incorporated in Australia and carries on business here. It is to be regarded as resident in Australia. Clause 1.3 of the sub-contract provides that it "is subject to and construed in accordance with the laws for the time being in force in the Australian Capital Territory"; it provides also that the courts of the Territory have jurisdiction to entertain actions in respect of the sub-contract. There is provision, in clause 23.7, for the submission of disputes to arbitration, the arbitration to take place in Canberra " in accordance with the laws of the Australian Capital Territory". There can be no doubt, in my view, that the rights and claims of Tadiran Com. Ltd, under the sub-contract, are to be regarded as property situated in Australia. Payments under the sub-contract are made progressively as "milestones" are reached; there is also provision for what are described as adjustment payments. It is common ground for the purpose of the motion that as at 31 March 1998 an amount of about US$3,668,000 remained to be paid under the sub-contract (out of a total value of US$26,335,000); performance of the obligations of the respondent (or Tadiran Com. Ltd - it does not matter which) is expected to be complete by the end of this year. Payment of monies due by British Aerospace is provided for in clause 3.6.1 as follows: Payment of claims shall be made by electronic transfer of funds to the Contractor's account at: UNION BANK OF SWITZERLAND 8021 ZURICH BAHNHOFSTRASSE 45 SWITZERLAND TADIRAN LTD. ACC. NO. 630.124.60Q or as otherwise advised by the Contractor. In those circumstances, the substance of the relief sought is an order which will produce the consequence that, under clause 3.6.1, British Aerospace is required to pay money falling due under the sub-contract to an account within Australia and will require it to be held there pending the final determination of these proceedings. An initial condition of the grant of Mareva relief is that the applicant demonstrate what is described by Gleeson CJ in Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321 as "a prima facie cause of action" against the respondent. Because the respondent did not suggest that that requirement was not met, it is not necessary to consider its precise content. Nor is there any issue about the likelihood of removal of assets from the jurisdiction. Removal is practically certain: not in the sense that the local situation of the contractual rights will change but in the sense that, during the next seven months or so, their fruits will be received outside the jurisdiction so that, by the end of that period, the rights will have been fully satisfied. It is not suggested, however, that in any other sense the respondent is likely to take steps to make itself "judgment proof" or that it is not a "reputable foreign company, accustomed to paying its debts": Barclay-Johnson v Yuill [1980] 1 WLR 1259 at 1265 per Sir Robert Megarry V-C. The evidence is that the respondent is a large and profitable corporation: its sales during the year ended 31 December 1997 totalled US$1,112,900,000; at the end of that year it had current assets of US$698,300,000, working capital of US$299,800,000 and shareholders' equity of US$383,300,000. Equally, the arrangements under which British Aerospace discharges its obligations under the sub-contract were made quite independently of this case; and there is nothing outside the ordinary course in a contractual arrangement under which (in the absence of a contrary direction) a foreign contracting party is to receive payment outside Australia. Additionally, Israel can hardly be said to be a place where the enforcement of a judgment is likely to be unusually difficult. Its superior courts are among those listed in the schedule to the Foreign Judgments Regulations. That means that a money judgment of any of those courts may be registered under s 6(1) of the Foreign Judgments Act 1991 (Cth) and may, subject to the various exceptions and qualifications which that Act provides, enforce the judgment as if it were a judgment of the court in which it is registered: s 6(7). More importantly for present purposes, inclusion in the schedule to the regulations required (s 5(1)) that the Governor-General be satisfied that substantial reciprocity of treatment would be assured in relation to the enforcement in Israel of money judgments given in all Australian superior courts. Thus it may be inferred, and the parties accepted, that a money judgment in favour of the applicant in this proceeding could be registered in a superior court in Israel and (no doubt subject to similar exceptions and qualifications to those under the Australian Act) enforced as a judgment of that court. The applicant has sought an undertaking by the respondent not to oppose registration in the appropriate court in Israel of any judgment which the applicant obtains in this proceeding; the respondent has refused to give any such undertaking. Accordingly, this case raises, in a striking way, a question which does not seem to have been directly confronted in any reported case: whether it is appropriate to restrain a respondent which is a foreign corporation from removing or depleting its sole asset within Australia, in circumstances where: (a) the removal or depletion is in the ordinary course of business, (b) the respondent is a major and profitable corporation with very substantial assets, particularly current assets, (c) there is nothing to suggest that the respondent is likely to "default": that is, to decline to pay a judgment debt and to resist, other than by grounds properly available to it under the law, enforcement of a judgment against it, and (d) the respondent resides, and principally carries on its business, in a jurisdiction where enforcement is possible under a reciprocal regime for the registration of judgments. As the applicant conceded, English authority suggests that in circumstances such as those Mareva relief is unlikely to be granted. The early cases speak of the risk, against which a plaintiff should be protected, of the removal of assets not simply from the jurisdiction but, in practical terms, from the reach of creditors. Thus, for example, in Chartered Bank v Daklouche [1980] 1 All ER 205 at 210, Lord Denning MR said, in relation to the facts of that case: The law should be that there is jurisdiction to grant a Mareva injunction, even though the defendant may be served here. If he makes a fleeting visit, or if there is a danger that he may abscond or that the assets or monies may disappear and be taken out of the reach of the creditors, a Mareva injunction can be granted. That seems to me to be this very case. Here is this Ł70,000 lying in a bank in England which can be removed at the stroke of a pen from England outside the reach of the creditors. In Third Chandris Shipping Corporation v Unimarine SA [1979] QB 645, Mustill J, at first instance, said (at 654, 655): There are undoubtedly ways in which the defendants may rebut the evidence. They may point to the existence of valuable tangible assets abroad in places where English judgments or awards can be enforced. The defendants have not sought to do this, which is not surprising since their particular type of business does not require an investment in property, equipment or other assets. The defendants can also seek to rebut the presumption by producing a balance sheet, which shows large cash or investment balances; or a profit and loss account, demonstrating a consistently profitable business; all with a view to showing that it will not be necessary or worth his while for him to default on an adverse judgment. The defendants ..... have not done this in the present case. On appeal, Lord Denning MR said ([1979] QB at 669): The mere fact that the defendant is abroad is not by itself sufficient. No one would wish any reputable foreign company to be plagued with a Mareva injunction simply because it has agreed to London arbitration. But there are some foreign companies whose structure invites comment. We often see in this court a corporation which is registered in a country where the company law is so loose that nothing is known about it - where it does no work and has no officers and no assets. Nothing can be found out about the membership, or its control, or its assets, or the charges on them. Judgment cannot be enforced against it. There is no reciprocal enforcement of judgments. It is nothing more than a name grasped from the air, as elusive as the Cheshire Cat. In such cases the very fact of incorporation there gives some ground for believing there is a risk that, if judgment or an award is obtained, it may go unsatisfied. The judgment of Lawton LJ is scarcely less colourful. His Lordship put the matter, at 671, 672, in this way: There must be facts from which the Commercial Court, like a prudent, sensible commercial man, can properly infer a danger of default if assets are removed from the jurisdiction. For commercial men, when assessing risks, there is no commercial equivalent of the Criminal Records Office or Ruff's Guide to the Turf. What they have to do is to find out all they can about the party with whom they are dealing, including origins, business domicile, length of time in business, assets and the like; and they will probably be wary of the appearances of wealth which are not backed up by known assets. In my judgment the Commercial Court should approve applications for Mareva injunctions in the same way. Its judges have special experience of commercial cases and they can be expected to identify likely debt dodgers as well as, probably better than, most business men. ...... Default is most unlikely if the defendant is a long established, well known foreign corporation or is known to have substantial assets in countries where English judgments can easily be enforced either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or otherwise. ...... Similarly, in Barclay-Johnson at 1265, Sir Robert Megarry V-C said: In addition to establishing the existence of a sufficient risk of removal of the defendant's assets, the plaintiff must satisfy certain other requirements. ...... One is that it must appear that there is a danger of default if the assets are removed from the jurisdiction. Even if the risk of removal is great, no Mareva injunction should be granted unless there is also a danger of default. A reputable foreign company, accustomed to paying its debts, ought not to be prevented from removing its assets from the jurisdiction, especially if it has substantial assets in countries in which English judgments can be enforced. The applicant relied strongly on a passage in Hadid v Lenfest Communications Inc. (1996) 67 FCR 446 at 449 which, counsel submitted, accurately reflected the state of binding Australian authority on the principles governing the grant of Mareva relief. I had referred, in the judgment in that case, to two considerations relevant to the grant of relief, one being the risk (on the evidence) that a respondent would remove assets from the jurisdiction and the other being the "respectability" of the respondent and the likelihood of "default". Then, in the passage on which counsel particularly relied, I said this, at 449: I think the question of the respectability and likely default of the respondent appears to be, although theoretically separate, in practical terms part of the question relating to risk for the reason that the authorities seem to me to suggest two things. First, where there is indeed an apparently imminent risk that a respectable foreign corporation will remove from the jurisdiction substantially all of its assets there, Mareva relief may, in the absence of countervailing discretionary considerations, be thought appropriate. Where, however, the evidence as to immediate or imminent risk is not particularly strong then it seems to me that the likelihood of "default" weighs in the balance, so that Mareva relief is likely to be refused against a "respectable" foreign corporation unlikely to "default". The suggestion was that what is there contemplated is a single composite test rather than two hurdles which, in order to succeed, an applicant must surmount successively. It was submitted - and it must be confessed that the passage in Hadid offers some encouragement to the submission - that where it is clear that a foreign respondent is likely to remove its assets from the jurisdiction, Mareva relief is likely to be appropriate even if the respondent is "a respectable foreign corporation". But the ex tempore judgment in Hadid must be read in the context of the findings of fact, particularly of the finding that there was a relatively slight risk of disposal and removal of the respondent's Australian assets. The facts here are significantly different and the tentative language used in Hadid ("may, in the absence of countervailing discretionary considerations, be thought appropriate") should not be taken as laying down a governing principle or sub-rule. In truth, it is dangerous and inappropriate, in my view, to speak in terms of tests, hurdles or rules. Mareva relief is discretionary, the discretion being exercised by reference to considerations the relevance of which is suggested by the purpose for which the relief is granted. In Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 622, 623, Deane J, with whom the other members of the court agreed, said: Initially, injunctive orders to preserve assets were made to prevent a non-resident defendant from removing assets from the territorial limits of a court's jurisdiction so as to frustrate the effectiveness of any judgment that might be obtained: ... . In due course, it was perceived that a general interlocutory power to make orders preventing a defendant from disposing of his assets so as to defeat any judgment obtained in an action was an incident of the substantive jurisdiction to entertain the action and was not confined to the case where the defendant was a non-resident. That general power has been held to encompass an order requiring the disclosure by a defendant of his assets .... ; an order for the delivery up (to a named solicitor) of designated assets which were not specifically in issue in the proceedings ... ; and, an order restraining a local company from disposing of or dealing with assets which were outside the jurisdiction at least where they had been within the jurisdiction when the action commenced; ..... . Arguably, it extends to the making of an ancillary order after judgment to protect the efficacy of execution: .... . As a general proposition, it should now be accepted in this country that "a Mareva injunction can be granted ..... if the circumstances are such that there is a danger of [the defendant's] absconding, or a danger of the assets being removed out of the jurisdiction or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the plaintiff, if he gets judgment, will not be able to get it satisfied" : per Lord Denning M.R., Rahman (Prince Abdul) v. Abu-Taha [1980] 1 W.L.R. 1268, at p.1273; [1980] 3 All E.R. 409, at p.412 ... In Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30 at 35, Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ described the Mareva injunction as "the paradigm example of an order to prevent the frustration of a court's process". In Patterson, at 321, 322, Gleeson CJ emphasised both the discretionary nature of the remedy and its purpose: The remedy is discretionary, but it has been held that, in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant's absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied. In the present case, in my view, no serious risk is apparent that the court's process is likely to be frustrated unless the injunction sought is granted or that the applicant, if it obtains a judgment, will not be able to have it satisfied unless money belonging to its subsidiary is retained in Australia. The respondent, on the evidence, is a large and prosperous corporation, incorporated in a country which has reciprocal arrangements with Australia for the enforcement of judgments; it is a corporation, on the evidence, which has extensive dealings with governments and their instrumentalities, both domestically and abroad; it has ample means readily to satisfy any judgment which the applicant might obtain in these proceedings. It bears, on the evidence, none of the hallmarks of a likely "defaulter". It is true, of course, that if the respondent were not to discharge its liability under a judgment obtained by the applicant, the applicant would have to seek satisfaction by proceeding on the judgment abroad, no doubt by seeking to register it in Israel. That would involve some trouble and expense additional to that which would be incurred in enforcing a judgment against property in Australia. No evidence was tendered of the provisions of Israeli law for the registration of foreign judgments; but, given the substantial reciprocity requirements of the Australian Act, I infer that the requirements of Israeli law for the registration and enforcement of an Australian judgment are not substantially more onerous to the judgment creditor than are the provisions of Australian law as they apply to the registration and enforcement of a judgment of a superior court of Israel. The applicant pointed to two circumstances as suggesting that the respondent might well refuse to pay any damages awarded to the applicant and might also resist attempts by the applicant to register its judgment in Israel. One such circumstance was that the respondent has ceased paying commission to the applicant; the other was that the respondent has declined to undertake not to oppose registration in Israel of a judgment favourable to the applicant. The former of those two circumstances is in my view of no weight: the respondent's case is that no commission is owing because it lawfully terminated the agency agreement (and the applicant's own case is, of course, that it accepted a repudiation of that agreement). In those circumstances it would be surprising indeed if the respondent had not ceased to pay commission; and the applicant's position in that respect is not improved if, as the evidence suggests, the respondent has in fact paid commission for a period longer than, on its case, it was obliged to. On the lack of an undertaking not to oppose registration, the applicant relied on Anthony & Sons Pty Ltd v Basilan Lines Inc. (Scott J, Supreme Court of Western Australia, 28 May 1997, unreported) where Scott J, in discharging a Mareva injunction previously granted, took into account the fact that the foreign defendant had deposited a sum in a trust account in Australia, to abide the outcome of the proceeding. But given what I infer to be the limited grounds available on which registration might be imposed, I do not think it would be right to draw any adverse inference from the respondent's refusal, in effect, to waive its right to rely on those grounds. The refusal should not be taken as indicating that the respondent is likely to seek to avoid discharging its obligations under a judgment properly and regularly obtained and not, for instance, stayed pending appeal. For those reasons, in my view the evidence does not disclose circumstances in which Mareva relief is appropriate, having regard to the nature and purpose of that relief; and, accordingly, the relief sought is refused.

Security for Costs On 7 April 1997 I made, by consent, an order that the applicant provide security for costs in the sum of $50,000. That security was provided. The evidence is that its source was a loan made to the applicant by Mr and Mrs Reches' daughter. The respondent now seeks further security of $70,000. The applicant seeks to have the order of 7 April 1997 vacated and resists the application for further security. Mr and Mrs Reches have, however, offered to provide to the respondent personal guarantees by way of security for any costs awarded against the applicant and have offered to support their guarantees by securities over certain personal property listed in an affidavit of Mr Reches. A valuation of one of those items is in evidence, valuing that item at $50,000. A number of the other items are listed in the schedule to an insurance policy, a copy of which is in evidence, in which their aggregate value is stated as $83,956. The remaining items are paintings and sculptures which, according to Mr Reches' affidavit, have an insured value of $90,250; those items, however, are not listed or separately valued in the material before me. Thus, on Mr Reches' evidence, the total value of the property offered by way of security is some $224,000. Mr Reches' evidence is that the property offered as security is unencumbered. Accounts of the applicant are in evidence. It is not disputed that the applicant is to be regarded, for the purposes of these motions, as impecunious. Senior counsel for the applicant made submissions concerning a number of the well known discretionary considerations which are taken into account on motions of this kind. Particularly, he submitted that this is a case where the applicant's impecuniosity results from the conduct, on the part of the respondent, of which the applicant complains: he referred particularly to Sir Lindsay Parkinson & Co. Ltd v Triplan Ltd [1973] 1 QB 609 and Lynnebry Pty Ltd v Farquhar Enterprises Pty Ltd (1977) 3 ACLR 133. Where, however, liability is strongly in dispute and where those who stand to benefit, should the applicant succeed, are in a position to provide security, the importance of that matter, as a discretionary consideration, is I think significantly diminished. For that reason I do not think it is necessary for me to examine in detail a further question, agitated in submissions, whether the applicant should be regarded as having been impecunious irrespective of the respondent's conduct (or to consider the relevance of that, if it should be so). The applicant submitted also that the application for security should be regarded as oppressive because of two matters referred to earlier in these reasons: the refusal to give an undertaking not to resist registration in Israel of a judgment favourable to the applicant and the cessation of payments of commission under the agency agreement. For reasons already given, however, I am not prepared to regard either of those matters as oppressive for these purposes. It was then submitted that a simple order for security should not be made as it would stultify the proceeding, particularly in circumstances where persons standing behind the applicant have offered to provide a secured undertaking to pay the respondent's costs if the applicant is ordered to do so. The more usual approach is, I think, that if persons standing behind an impecunious corporate applicant, and likely to benefit from its success in the litigation, are in a position to provide security, then an order for security will be made against the applicant: see, for example, Bell Wholesale Co. Ltd v Gates Export Corp. (1984) 2 FCR 1; Pasdale Pty Ltd v Concrete Constructions (1995) 59 FCR 446; PS Chellaram & Co. v China Ocean Shipping Co. (1991) 65 ALJR 642. The evidence in this case suggests that the cash resources available to the directors and shareholders of the applicant, apart, presumably, from their ability to sell the items of personal property to which I have referred, are very limited. In those circumstances, I think, the substantial question is whether the court should regard a secured undertaking of the kind offered a satisfactory substitute for security of the more usual kind. If one assumes that the valuations for insurance purposes may err on the side of optimism, there is nevertheless a considerable margin between the value of the items of property and the amount of the additional security sought. It appears to be accepted that there will be no particular difficulty in creating an effective security over the items of property. In those circumstances I see no reason why what is offered should not be regarded as acceptable security. I do not think, however, that it is appropriate to make an order that security in that form be provided. The appropriate order, in my view, is that the applicant provide for security in the amount sought by the respondent (no argument was directed to the amount, and on the evidence $70,000 seems to me a reasonable amount) but on the basis that the obligation to provide that security will be regarded as satisfied if there are provided by the applicant: (a) a guarantee by Mr and Mrs Reches of the payment by the applicant of any costs which the applicant is ordered to pay to the respondent in this proceeding; and (b) a mortgage or charge, securing the applicant's obligations under that guarantee, of the items of personal property referred to in paragraph 10 of the affidavit of Isaac Reches affirmed on 11 May 1998, each in a form agreed by the respondent or approved by the court. An order in that form would leave it open, should there be any issue about the adequacy or appropriateness of the form of the security, or as to the value of the property or its custody or safe keeping, to have those matters considered and determined by the court on an application for approval of the security. The particular circumstances to which the applicant referred do not persuade me that this is an appropriate case for releasing, unconditionally, the security already given any more than they persuade me that no additional security is appropriate. It is said also that circumstances have changed since April 1997 in that: The Applicant's financial situation has not over time been alleviated by other circumstances and is now more obviously caused by the conduct of the Respondent complained of in these proceedings. That seems to me a circumstance of little weight. If, in the first place, the conduct of the respondent caused the impecuniosity of the applicant, it is not entirely easy to see why that is somehow more so because subsequent attempts to relieve that impecuniosity have been unsuccessful. The significant change in circumstances since April 1997 is the offer by Mr and Mrs Reches of the secured guarantee, and the substantial question is whether it is appropriate that the court permit the substitution of that secured undertaking for the security previously given. This, I think, is not an altogether easy question. All the authorities indicate that the discretion of the court, in relation to security for costs, is a broad one. Two matters, I think, are particularly relevant to the question to be decided here. One is that the security offered is likely, upon realisation, to yield a sum significantly greater than the amount of the existing security ($50,000) plus the amount of the new security sought ($70,000). The other factor, however, is that a cash security is plainly more advantageous, because it is more readily realisable, than a guarantee supported by a mortgage of personal property. I think some cash security should be retained. On the other hand, given the value of the property to be mortgaged, I am inclined to think that the amount of the cash security might appropriately be reduced to $25,000. The order I propose to make, therefore, is that the order for security of costs made on 7 April 1997 be vacated, conditionally upon the provision of security comprising $25,000 in cash together with the guarantee and mortgage or charge referred to above. The applicant should, within fourteen days after delivery of these reasons, file and serve on the respondent short minutes of the orders appropriate to give effect to these reasons. If the form of the orders is not agreed, either party may apply through my associate to have the matter listed for further argument. There should be the usual stay pending the provision of the further security.

The respondent has succeeded on the motion for Mareva relief and the parties have enjoyed mixed success on the other motions. I shall hear counsel on the question of costs. If necessary the matter may be listed for that purpose by arrangement with my associate; alternatively it may be dealt with when the matter is next before the court. I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane

Counsel for the Applicant: M.J. Slattery QC M J Walsh

Solicitor for the Respondent: Marshall Marks Kennedy