Plaintiff v Defendant

3 In order to be granted a Mareva injunction the plaintiff must show firstly that it has a good arguable case, and secondly that there is a risk that the defendant will either remove its assets from the jurisdiction or dissipate them in such a manner that if the plaintiff succeeds at trial the plaintiff will thereby be deprived of the fruits of any such judgment. I need do no more than refer to the often quoted judgment of Sir John Young CJ in Glenwood Management Group Pty Ltd & Anor v Mayo & Anor.[1]

4 In this case Mr Halse, who appeared on behalf of the defendant, realistically conceded that the first limb of the test postulated in Glenwood Management has been made out, that is, that the plaintiff has a good arguable case. The real issue was whether the second limb, that is, a risk of dissipation in the manner I have described, has been made out.

5 In his affidavit in support, Mr Hutson, the loss prevention area co-ordinator of the plaintiff, has simply sworn that he believes there is a real danger the defendant will deal with her assets in a way which will prevent the plaintiff from recovering any judgment against her. The major assets of the defendant are, it seems, a tenancy in common in equal shares in two properties in the metropolitan area.

6 Mr Halse contends that the material proffered by the plaintiff is insufficient to satisfy the test required, that is, to show that there is a real risk of dissipation of assets. In anticipation of that submission, Mr Trichardt, who appeared on behalf of the plaintiff, has drawn my attention to the cases in which it is now well established that where at this interlocutory stage the plaintiff is able to show that it has made out a prima facie case of serious dishonesty involving diversion of moneys from proper channels, it may in the appropriate case thereby establish an inference that there is a real risk of dissipation of assets by the defendant. I refer to Patterson v BTR Engineering (Aust) Ltd,[2] Victoria University of Technology v Wilson,[3] Uniflex (Australia) Pty Ltd v Warren David Hanneybel.[4] As Templeton J remarked in Deputy Commissioner of Taxation (Cth) v Robertson Jnr,[5] "the wrongdoing established at this interlocutory stage against the defendant may, inter alia, show that the defendant may not be the kind of person who unless restrained would preserve his assets so they might be available to a judgment creditor".

7 It is, of course, to be understood that at this stage the plaintiff does not need to prove, on the balance of probabilities, that the defendant will remove her assets or dissipate them. Rather, the plaintiff must show, on the requisite standard, that there is a real risk that the defendant will do so. I refer again to the judgment of Redlich J in Victoria University of Technology v Wilson.[6]

8 The defendant has not filed any material in opposition to this application. As I stated, she accepts through her counsel that the plaintiff has made out a good arguable case. In the absence of any material, I am entitled to accept the proposition advanced on behalf of the plaintiff that not only has the plaintiff established a good arguable case, but that it has established such a case of serious dishonesty and wrongdoing by an employee to whom it entrusted specific responsibilities over an eight-year period. The question then is whether I can thereby infer sufficiently that there is a real risk of dissipation of assets by the defendant, unless she is restrained, which might thereby deprive the plaintiff of its fruits of the judgment if it gains it.

9 In my view, there are features pointed out by Mr Trichardt which do establish such a real risk. Firstly, of course, it is a case of serious dishonesty. Secondly, it was serious dishonesty that did not simply occur on one occasion but occurred in a calculated manner over a lengthy period of time. In relative terms, the amounts taken were quite large in total. The defendant has only partially admitted her wrongdoing and has made no offer of compensation and no offer to otherwise secure repayment of what she owes to the plaintiff, even the amount that she simply admits that she owes, which I think is $55,000. Finally and importantly, the defendant has not filed any affidavit in opposition to the inference that if she were not restrained she would not dissipate her assets.

10 The materials, particularly the nature of the wrongdoing which has been established before me, do give rise to an inference which I do draw that there is such a risk. The failure of the defendant to file material in support adds strength to the drawing of that inference and makes it more likely than not, in my view, that there is a real risk of dissipation in a manner which may be protected by a Mareva injunction.

11 In those circumstances, and subject to the proffering of an appropriate undertaking by the plaintiff, I am prepared to make orders in the manner which were pronounced on 15 February, and also subject, of course, to any matters of detail which Mr Halse may wish to draw my attention to.

12 First, Mr Trichardt, do you on behalf of your client give the undertakings as to damages?

MR TRICHARDT: That is correct, Your Honour. I have prepared an order which is similar to the one that Your Honour made on the 15th, last Tuesday, on an interim basis. The only differences, Your Honour will notice in paragraphs 1, 2 and 3 of the order, where it was changed previously to today's date. It is now to the end of the hearing and determination or further order. Those are the only changes. And then previously in paragraph 3(a) Your Honour changed it to $400, so that was picked up again in this order.

HIS HONOUR: That was on an interim basis to secure matters for a week or perhaps under a week.

MR TRICHARDT: I'm merely pointing out - and then in 3 there is no specific provision made for any legal costs, and I presume my learned friend would raise that as well. This is just a draft similar to the one on an interim basis. I will take instructions also on the weekly amount.

HIS HONOUR: Mr Halse, in terms of the detail of the order?

MR HALSE: I had a brief discussion with my friend before we came on, Your Honour, and I was endeavouring to have inserted in 3 a paragraph (c) relating to reasonable legal expenses.

HIS HONOUR: I think that would be necessary. Do you also need legal expenses in relation to the criminal matter or is it just legal expenses in relation to this?

MR HALSE: Both, yes, there's two proceedings on foot, and at the present point in time single legal practitioners are acting, but if it is done in a general sense that might cover it. The other aspect of concern that I raised lest there be any misunderstanding, Your Honour, and it might well be covered within the order itself, that the properties, or at least the property that she is residing in at the present point in time has a mortgage on it and there is a direct salary payment and a direct mortgage debit that is in operation. I would have thought that the order is broad enough that that system to be in place does not offend the order, and I raised it with my friend and I take it there was no objection to the - - -

HIS HONOUR: Do you wish to have a clause inserted to protect that, to ensure your client does not get into trouble by discharging part of the mortgage, or meeting her mortgage commitments? Is that your concern?

MR HALSE: Yes, Your Honour. I don't know whether it does need it in there. I am happy to have raised it, and if it's -

HIS HONOUR: It is a matter for you. Mr Trichardt may respond to that in a moment, but it is a matter for you two really as to whether you wish to have a clause in the order protecting your client from - - -

MR HALSE: If there is something that covers the existing mortgage payments.

HIS HONOUR: You could put that into 3, couldn't you?

HIS HONOUR: You really want (c) reasonable legal expenses.

HIS HONOUR: And (d), you will need to put some detail into that. It may be you two could put your heads together and actually formulate the exact terminology of these exceptions, and then if they are agreed I can sign off on them, rather than me trying to settle it in running with you now. Mr Trichardt, what do you say about weekly expenses, (a)?

MR TRICHARDT: Perhaps if I discussed that with my friend, Your Honour.

HIS HONOUR: Yes. I would be sympathetic to an increase in that, a sensible increase on that, so that your client can live in the next year or so. Reasonable legal expenses and the mortgage would seem to me to be appropriate requests, Mr Trichardt. Do you argue against either of them?

MR TRICHARDT: No, Your Honour. I think, because of the serious nature of a Mareva order, my learned friend and I should formulate it.

HIS HONOUR: I think that is right. I think you two should put your heads together and formulate it. You will find me here ready to sign an order at some stage as you so desire. I notice costs are reserved. That seems to be correct to me. Thank you both, gentlemen.

1. [1] [1991] VicRp 45; [1991] 2 VR 49.
2. [2] (1989) 18 NSWLR 319 at 325, per Gleeson CJ.
3. [3] [2003] VSC 299 at [33].
4. [4] [1998] WASC 259.
5. [5] [2000] WASC 42 at [41].
6. [6] at [36].