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[2001] VSC 313
mixed. Interlocutory Mareva-style restraining order made against Dominion Capital Pty Ltd: until final hearing or further order, restrained from selling, assigning, transferring or disposing of any assets...
1 cited instrument linked from this judgment.
The court granted an interlocutory Mareva-style restraint against the defendant company, Dominion Capital, preventing disposal of assets except in the ordinary course and allowing legal costs up to $75,000 per week, because the defendant consented and its balance sheet suggested undisclosed liabilities. The application to extend Mareva relief to director Peter Voss failed: a director acting in the company's name does not hold company assets in his own right for the purposes of the Cardile test, and a mere potential personal cause of action against the director (e.g. under the Trade Practices Act) does not attract third-party Mareva relief.
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1,798 words · generated 25/07/2026
Pico Holdings commenced proceedings by writ (9 July 2001) seeking repayment under two promissory notes totalling US$2.2 million against Dominion Capital Pty Ltd (paras 2, 19). An interlocutory summons sought Mareva-type restraints on dealing with assets, both against the defendant company and against two directors, Peter David Voss and Katherine Mary Voss (paras 2, 10, 13). The plaintiff abandoned the application against Katherine Voss (para 13). Beach J had previously made an interlocutory restraint on 1 August 2001 (reported in the judgment at para 5), later varied, which limited legal expenditure to $150,000 per week; Dominion offered to consent to a similar order (paras 5, 16, 19). Bongiorno J, after hearing argument, made an interlocutory restraint against Dominion, restraining disposal of assets except in the ordinary course and permitting payment of reasonable legal costs up to $75,000 per week, conditional on Pico’s undertaking as to damages (paras 19-20). The court dismissed the application to make a Mareva order against director Peter Voss (paras 23-45).
Two distinct questions drove the decision: (1) whether interlocutory Mareva relief should be made against the defendant company; (2) whether that relief should extend to a director as a third party.
Relief against the company: Dominion consented to an order in terms similar to the earlier Beach J order, and the court observed that the defendant’s balance sheet “appears, on its face, to be less than frank as to its liabilities” and showed an apparently undisputed liability on one promissory note (para 19). Consent, combined with those indicia and the usual undertaking as to damages, persuaded the court that interlocutory asset restraint was appropriate. The court exercised its discretion to impose a $75,000 per week cap on legal costs, less than the earlier $150,000 cap, as a reasonable limit (paras 19-20).
Relief against the director, Peter Voss: The plaintiff relied on the High Court’s two-limb formulation in Cardile v L.E.D. Builders Pty Ltd, which the court quoted (para 23). Bongiorno J carefully analysed the two limbs and concluded that neither was engaged by the facts.
First limb (third party holds or exercises a power of disposition over assets or claims/expectancies of the judgment debtor): the court concluded a director, when disposing of company property in the company’s name, does so as the company, not as a third party exercising a power of disposition in his own right. Similarly, being a large creditor did not give the director power over company claims and expectancies for Cardile purposes (paras 30, 33).
Second limb (some process enforceable by courts may be available to oblige the third party to disgorge property or otherwise contribute to the judgment debtor’s funds): the court read the second limb as concerned with assets of the potential judgment debtor which a third party holds and which could be reclaimed by court-enforceable processes (for example, by a liquidator or trustee). A mere potential accessory cause of action against the third party, in this case a possible Trade Practices Act claim arising from an allegedly false representation in a promissory note, did not amount to the type of proprietary control or recoverable property envisaged by Cardile’s second limb (paras 36, 39, 42). Hence the application against Voss failed (para 45).
Before: Cardile (High Court) set out the modern test for third-party Mareva relief: a court may grant such relief where either (1) the third party controls assets, including claims and expectancies, of the potential judgment debtor, or (2) court-enforceable processes could later oblige the third party to disgorge assets to the judgment debtor (para 23). Jackson (Deane J) provided the concept of preventing a defendant from disposing of assets (including claims and expectancies) to frustrate a judgment, a strand of authority informing the first limb (para 23).
After: Bongiorno J applied Cardile, but drew a clear line as to its reach in company-director contexts. The decision emphasises that a director acting in the company name does not, by that act, become a third party in the sense of holding or exercising rights over company assets for Cardile’s first limb (paras 30, 33). It also clarifies that the second limb is directed to third-party control of assets which can be recovered by the company’s representative via court processes; a mere potential personal claim against the third party (for example an accessory Trade Practices Act cause) is not sufficient (paras 36, 42). In sum, the case narrows (or at least clarifies) the circumstances in which directors can be subjected to third-party Mareva relief where the plaintiff’s case is chiefly about company indebtedness and possible personal claims against directors.
Para 19: "It seems to me ... balance sheet ... less than frank ... appropriate that a Mareva order should broadly go ... with a monetary limit of $75,000 per week."
Para 30: "A director of a company, when he disposes of the property of the company in the company name, does so as the company itself, not as a third party ..."
Para 42: "What the High Court was getting at ... a court could restrain a third party ... where subsequently ... the liquidator ... could effectively use the processes of the courts to regain possession of assets removed ..."
Para 45: "Accordingly, it seems to me that on neither ground ... does Mr Pearce succeed ... For those reasons the claim in respect of Mr Voss will be dismissed."
This decision will be directly relevant where:
By contrast, the decision is less likely to aid plaintiffs who can show that a third party actually holds assets that belong to the company, or holds assets that could be recovered by a liquidator, receiver or trustee, classic second-limb Cardile scenarios (para 42).
This judgment applies Cardile’s two-limb formulation and delineates its operation in company-director contexts. Later courts assessing third-party Mareva applications involving company officers will look to the distinction drawn here: whether the third party is truly holding or controlling company assets (or holds assets that can be compelled to be disgorged by court-enforceable processes) rather than merely being a person against whom a personal claim might be advanced. If subsequent decisions seek to freeze directors, they will need evidence of proprietary control, equitable title, or a realistic route for a liquidator/receiver to reclaim assets, mere creditor status or disputed representations will normally be insufficient (paras 30, 36, 42).
Note: This deep dive confines itself to the reasoning of Bongiorno J in Pico; it does not catalogue or invent subsequent case law beyond the judgment’s text.
Proof threshold for second limb: The court treated a potential personal cause of action as insufficient for the second limb. How close does a plaintiff need to come to demonstrating that a third party actually holds assets recoverable by a liquidator before the second limb is engaged? The judgment indicates more than a bare personal claim is required (paras 36, 42), but does not set precise evidentiary thresholds.
Director-as-conduit scenarios: The court held a director acting in the company’s name acts as the company (para 30). But in cases where a director channels company assets into personal accounts or where the director has diverted identifiable company assets into their own name, the decision leaves open how the Cardile test applies when there is arguably a convertive act giving the director proprietary control.
Interaction with statutory causes: The court noted possible Trade Practices Act accessory liability but found it irrelevant to Cardile’s limbs (paras 39, 42). There remains a question as to whether specific statutory schemes creating proprietary remedies or civil penalties could change the analysis if they create enforceable proprietary consequences against third parties.
Quantification and caps: The court imposed a $75,000 weekly cap on legal costs as part of the interlocutory order (para 19). There are open questions about principles for setting such caps, for example, whether courts should apply uniform principles or evaluate business size, litigation complexity, or other factors.
Undertaking as to damages: The court ordered relief on the usual undertaking as to damages (para 19). The adequacy and enforceability of such undertakings against foreign plaintiffs or plaintiffs with limited assets could raise practical issues in enforcement.
Conclusion: Pico clarifies that third-party Mareva relief against directors is not easily obtained merely because they are creditors or made representations; plaintiffs must demonstrate third-party control of assets of the potential judgment debtor or that those assets are the kind recoverable by court-enforceable processes (paras 30, 42, 45). The case therefore provides a useful analytical template for practitioners assessing the prospects of freezing orders against company officers.
"Until further order the defendant, whether by itself or its servants or agents, shall be restrained from disposing of or dealing with any of its assets other than in the ordinary course of its business and from meeting legal expenses and save to a maximum of $150,000 per week".
That order was made on 1 August and varied on 15 August to the form which I have just recited.
Until the final hearing and determination of this proceeding or further order, the defendant, whether by itself or by its servants or agents, shall be and is hereby restrained from selling, assigning, transferring or disposing of any of its assets other than for the bona fide payment of its arm's length creditors in the ordinary course of business, or for the payment of reasonable legal costs incurred to a maximum total of $75,000 per week.
"What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasis the word 'may', be appropriate, assuming the existence of other relevant criteria and discretionary factors in circumstances in which; (1) the third party holds, is using or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including 'claims and expectancies', of the judgment debtor or potential judgment debtor or, (2) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor pursuant to which, whether by appointment of the liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor."
The phrase "claims and expectancies", which appears in this passage, is derived from a judgment of Deane J in Jackson v. Sterling Industries Ltd[2]. Reference to Deane J's judgment in that case makes it clear that the first part of the principle expounded by the High Court in Cardile relates to property which belongs to the potential judgment debtor. In Jackson's case (which was a case involving the jurisdiction of the Federal Court to grant Mareva relief generally and in particular its jurisdiction to require the payment of money into court pending the determination of proceedings) Deane J said in respect of the purpose of an order for the preservation of a defendant's assets pending judgment:
"It is to prevent a defendant from disposing of his actual assets (including claims and expectancies) so as to frustrate the process of the court by depriving the plaintiff of the fruits of any judgment obtained in the action."
Mr Pearce argued that Mr Voss' relationship to the company and the fact that he was a creditor of the company in a very large amount placed him in the position of being a third party who exercised or was exercising a power of disposition over or was otherwise in possession of assets (including claims and expectancies) of the potential judgment debtor. However, it seems to me this proposition misconceives the first principle enunciated by the majority in Cardile.
Pico Holdings Inc
Dominion Capital Pty Ltd [2001] VSC 313
Interlocutory Mareva-style restraining order made against Dominion Capital Pty Ltd: until final hearing or further order, restrained from selling, assigning, transferring or disposing of any assets other than bona fide payment of arm's length creditors in ordinary course of business, or payment of reasonable legal costs incurred up to a maximum total of $75,000 per week, on the usual undertaking as to damages. Application for Mareva relief against Peter David Voss dismissed; application against Katherine Mary Voss not pressed and dismissed (paras 19-20, 45).