Australian Competition and Consumer Commission v Top Snack Foods Pty Ltd

[1999] FCA 1830

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Top Snack Foods Pty Ltd [1999] FCA 1830

PRACTICE AND PROCEDURE – terms of Mareva injunction – specific trust assets not identifiable

Australian Competition Consumer Commission v Collings Construction Co Pty Limited (Supreme Court of New South Wales, 2 July 1997, unreported)  discussed

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v

TOP SNACK FOODS AND ORS

NG 782 OF 1996

TAMBERLIN J
SYDNEY
15 DECEMBER 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 782 OF 1996

BETWEEN:

AUSTRALIAN COMPETITION & CONSUMER COMMISSION
APPLICANT

AND:

TOP SNACK FOODS PTY LTD
(ACN 064 180 801)
FIRST RESPONDENT

GEORGE MANERA
SECOND RESPONDENT

NICHOLAS KRITHARAS
THIRD RESPONDENT

SELINA MANERA
FOURTH RESPONDENT

ADWAY HOLDINGS PTY LTD
(ACN 054 201 857)
FIFTH RESPONDENT

NICK KRITHARAS HOLDINGS PTY LTD
(ACN 054 663 464)
SIXTH RESPONDENT

JUDGE:

TAMBERLIN J

DATE OF ORDER:

15 DECEMBER 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Gatsios Holdings Pty Ltd (ACN 076 177 869), whether by itself, its servants, agents or otherwise howsoever, be restrained until 16 July 2000 or until further order of the Court:

(a)from:

(i)selling, assigning, charging, mortgaging, encumbering or otherwise dealing with or disposing of; or

(ii)causing or permitting to be sold, assigned, charged, mortgaged, encumbered or otherwise dealt with or disposed of; or

(iii)taking any steps (including, but not limited to, the entering into of any agreement) to sell, assign, charge, mortgage, encumber, or otherwise deal with or dispose of; or

(iv)advertising for sale

the properties known as Lots 1 and 3 in Strata Plan 51691 at Hurlstone Park, New South Wales, registered in Folio Identifier Numbers 1/51691 and 3/51691 respectively; and

(b)       from

(i)removing from the jurisdiction, selling, assigning, charging, mortgaging, encumbering or otherwise dealing with or disposing of; or

(ii)causing or permitting to be removed from the jurisdiction, sold, assigned, charged, mortgaged, encumbered or otherwise dealt with or disposed of; or

(iii)taking any steps (including but not limited to the entering into of any agreement) to remove from the jurisdiction, sell, assign, charge, mortgage, encumber, or otherwise deal with or dispose of; or

(iv)      advertising for sale

any other assets held by it as trustee for the KN Trust within the jurisdiction of this Court, including but not limited to any monies in the following bank account:

National Australia Bank (Rockdale) Business Cheque Account, Gatsios Holdings Pty Ltd

apart from amounts totalling no more than $200 per week to be used for the sole purpose of the education, maintenance and support of the infant beneficiaries of the KN Trust.

2.The First, Third and Sixth respondents and Gatsios Holdings Pty Limited pay the Applicant’s costs of the application for Mareva orders which were heard in Court on 2 and 26 August 1999.

3.Liberty is reserved to Gatsios Holdings Pty Limited to apply on three days notice for relaxation of order 1 as to any asset.

The Court Notes that:

1.The applicant by its Counsel undertakes to the Court to expeditiously pursue proceedings for recovery of the judgment debt against the assets of the KN Trust.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 782 OF 1996

BETWEEN:

AUSTRALIAN COMPETITION & CONSUMER COMMISSION
APPLICANT

AND:

TOP SNACK FOODS PTY LTD
(ACN 064 180 801)
FIRST RESPONDENT

GEORGE MANERA
SECOND RESPONDENT

NICHOLAS KRITHARAS
THIRD RESPONDENT

SELINA MANERA
FOURTH RESPONDENT

ADWAY HOLDINGS PTY LTD
(ACN 054 201 857)
FIFTH RESPONDENT

NICK KRITHARAS HOLDINGS PTY LTD
(ACN 054 663 464)
SIXTH RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	15 DECEMBER 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. Having heard the parties in relation to this matter I am satisfied that there will be undue difficulty, and perhaps an onerous situation, with considerable ensuing uncertainty, if a Mareva order is made in terms restraining the disposition of any assets, regardless of whether they are assets of the KN Trust or not; albeit that there is a relaxation envisaged by Counsel for the Australian Competition & Consumer Commission (“the ACCC”), whereby Gatsios could apply to the Court for relaxation of the blanket restriction on disposition of any asset. 

2. The fact that specific property cannot be designated as trust property, does raise the difficulties which were adverted to in the judgment of Bainton J, referred to in the course of submissions, in the case of Australian Competition Consumer Commission v Collings Construction Co Pty Limited (Supreme Court of New South Wales, 2 July 1997, unreported).

3. The sanction to enforce the orders sought is by way of contempt, and as his Honour points out in the above case, this is a severe remedy and there must be certainty in specifying property the subject of the restraint.  Even civil contempt is regarded as so serious by the Courts as to require the Court’s satisfaction on the criminal standard.  It would be an extremely unsatisfactory situation where the specific trust assets are not specifically known or identifiable, to restrain a third party from disposing of non-trust assets subject to applications to the Court.

4. Accordingly, I am persuaded that the appropriate order is in the form of order 7 in the draft orders handed up by the applicant, with the excision of the words in paragraph (b): “or any other assets in which it has an interest, either legal or equitable, and whether the interest is held directly or indirectly through an agent, nominee or servant, as at the date of making of this Order”.  The rest of that order can stand so that orders 7(a) and (b) are the orders which I consider are appropriate and I make those orders accordingly.

5. I also make orders 2 and 3 in the draft orders handed up by the applicant, and note that order 3 reserves liberty to Gatsios Holdings Pty Ltd to apply for relaxation if any difficulty arises in relation to the working out of the orders.

6. I note, and make the orders on the basis of, the undertaking by the ACCC to expeditiously pursue proceedings for recovery of the judgment debt against the assets of the KN Trust. 

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:             27 January 2000

Counsel for the Applicant:	I D Faulkner
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondents:	L A Muston
Solicitor for the Respondents:	Conway Leather Shaw
Date of Hearing:	15 December 1999
Date of Judgment:	15 December 1999