Bruzzese v Taylor

[2002] VSC 126

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

No. 7644 of 2000

LEAH BRUZZESE	Plaintiff
V
PAMELA JOAN TAYLOR DAVID ALAN TAYLOR	Defendants

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JUDGE:	Bongiorno J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 January 2002
DATE OF JUDGMENT:	18 January 2002
CASE MAY BE CITED AS:	Bruzzese v Taylor
MEDIUM NEUTRAL CITATION:	[2020] VSC 126

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Equity – Asset Preservation Order – Discovery in aid of order – s 85(1) Constitution Act 1975 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. M C Gunst QC with Mr. T Seccull	Maurice Blackburn Cashman
For the First and Second Defendants	Mr. T North	Dibbs Barber Gosling

HIS HONOUR:

1. This action was commenced by writ on 16 November 2000 when the plaintiff filed a statement of claim in which she sought damages from Pamela Joan Taylor and David Alan Taylor in respect of alleged abuse amounting to battery and assault, committed upon her by them in the early 1970s.

1. It is unnecessary to detail the claims made other than to say that they are serious allegations of serious assaults which the plaintiff alleges have left her with continuing personal injuries.

1. The defendants have delivered a defence in which the plaintiff's claim is disputed.  They also rely upon the Statute of Limitations.

1. On 13 December last year, after many interlocutory steps had been taken in the action and, indeed, after a date had been fixed for trial, the plaintiff applied to Beach, J. ex parte for orders in the nature of asset preservation orders, sometimes called Mareva injunctions or Mareva orders.

1. His Honour made orders which included not only asset preservation orders but also orders for discovery in the sense that he ordered each of the defendants and another person, Michael Ann Cronin, to make affidavits prior to 10 January 2002 setting out each of their assets, and in the case of Cronin setting out financial information relating to various trusts, a company of which she was the sole director, being the relevant trustee.  In particular I am referring to orders 6, 7 and 8 of Beach, J's order.

1. His Honour also reserved liberty to apply to all parties on the giving of 72 hours' notice.

1. A condition of Beach, J's order was an undertaking by the plaintiffs to cause a summons claiming interlocutory relief, returnable on 20 December 2001 to be issued by four o'clock on 13 December.  A summons was in fact issued, returnable on 20 December.  That summons did not include orders in the nature or applications for orders in the nature of the discovery orders made ex parte by His Honour.  Mr Gunst explained this omission in terms that in fact the orders had already been made, that they stood of their own force and did not require a summons to support them.

1. On 20 December the matter again came before the Court on what has been pointed out by both counsel was the second last day of the 2001 legal year.  On that occasion counsel for the defendants, (who was not counsel who appeared before me), consented to variations of His Honour's order, the most substantial of which was that the summons filed on 13 December should be adjourned to 25 January 2002 for hearing by the judge then sitting in the Practice Court.  There were orders made for affidavits in opposition to the plaintiff's application to be filed by 21 January by or on behalf of the defendants and Michael Ann Cronin and the company which she controlled, Cronlake Pty Ltd.

1. The variations to His Honour's order of 13 December do not mention the matters to which I have referred relating to discovery.  Those orders were left intact and of full force and effect.

1. The defendants, by summons filed 14 January 2002, have sought an extension of time, in respect of paragraphs 6, 7 and 8 of His Honour's order for the provision of the affidavits to which I have referred, to a date 14 days after the Court's determination of the summons dated 13 December; that is to say, 14 days after the summons which is now due for hearing next Friday, 25 January.

1. This matter came before the Practice Court yesterday and was referred to me in this court today for hearing.  Mr T. North, who appeared for the defendants and what might be called, for convenience, the third parties, indicated that he pressed only paragraph 1 of the relief sought in that summons, that is to say, an extension of time for the delivery of the affidavits referred to in Beach, J's order, and did not press other applications referred to in the summons for the release of certain money otherwise affected by the asset preservation order.

1. In effect the defendants seek to postpone the provision of any affidavit as to their assets and the assets of entities with which they might be said to be associated until the question of the Mareva injunction itself has been determined.  It must be remembered that at this time the defendants have not had the opportunity, or at least have not taken the opportunity, of contesting the granting of the asset preservation order as it was granted by Beach, J on 13 December.

1. In effect Mr North says the extension that he seeks to orders 6, 7 and 8 to a date 14 days after the determination of the summons of 13 December would mean that if the Mareva order was not granted then the orders made by Beach, J as to discovery would be unnecessary and would fall.  I am not sure about that, but in any event in light of the decision I have reached, it seems unnecessary to go into that question further.

1. The application for an extension of time is not made by Mr North in the ordinary way, that is to say, by seeking an indulgence because of some inability of a party to comply with an order of the court.  Here the extension of time is said to be justified by reference to the fact that the Mareva or asset preservation orders should never have been granted in the first place.  True it is that Beach, J granted those orders, interlocutory in form rather than interim in form, but of course they were always subject to further order, and he specifically reserved liberty to apply in respect of them.

1. Mr North's argument is, in essence, that no assets of the defendants which it is sought to affect by the asset preservation order have been demonstrated by the plaintiff to have been removed from a position where they might be available in respect of any subsequent judgment, nor is there any evidence which would justify the granting of the asset preservation order generally.  In particular he points to the inadequacy, from an evidentiary point of view, of the material proffered by the plaintiff, and in particular the vice that some of it suffers from, namely, that of being hearsay and, in some cases, compounded hearsay.

1. Whilst there might be some merit in that argument were I determining now the question of whether there should be an asset preservation order, I put it to one side as it seems to me the question of the extension of time cannot really be determined on the basis of whether the original asset preservation order ought or ought not have been made.  Rather, the question of whether the defendants should be required to give discovery of their assets in anticipation of the ultimate determination as to whether there should be an interlocutory asset preservation order is the question which needs to be determined to determine whether the extension of time should be granted.

1. The matter is able to be approached by determining whether, if the plaintiff had come to this Court today, without the order of Beach, J on 13 December, would this Court have been inclined to grant the order for discovery in anticipation of an application on 25 January for an order for an asset preservation order. 

1. That discovery can be granted in aid of a Mareva injunction I think cannot be doubted.  Tamberlin, J of the Federal Court in Australia Competition & Consumer Commission v. Top Snack Foods Pty Ltd & Ors[1] said:

"In the present case I am satisfied that the Court has power to order the third respondent to make the affidavit sought regardless of whether or not a Mareva injunction is sought.  The information sought is clearly relevant to any subsequent application that may be made for a Mareva injunction.  In the present case, the applicant fears dissipation, transfer or disposal of assets and wishes to see if there are any other assets which may be disposed of. 

The primary question for determination is whether there are any reasonable grounds for such a belief which would enliven the power. 

The underlying principles which justify the grant of a Mareva injunction are capable of applying with equal force in an appropriate case to the type of affidavit sought by the applicant.".

[1](unreported, 16 May 1997)

1. Again, in a case which long predates what might be said to be the current law on asset preservation orders but is nevertheless apposite, Hospital Products v. Ballabil Holdings Pty Ltd[2], Rogers, J, dealing with the question of discovery in aid of a Mareva injunction said at 669:

"An affidavit of discovery of assets may be ordered in every case where the information in such affidavit will further the court's purpose in defeating such a stratagem."

[2][1984] 2 N.S.W.L.R. 662

1. His Honour was referring to the possibility of removing assets out of the jurisdiction.  His Honour went on:

"It merely serves to confuse detail with principle to speak of repatriation of assets or reversal of transactions. The object must remain throughout to prevent disposal of assets in furtherance of the illegitimate aim of making oneself judgment proof and of stultifying the order of the court. Whatever needs to be done to achieve that objective, the court has power to order as part of its inherent jurisdiction. Whatever the Supreme Court Act 1970, s.23, may mean, it certainly stands as a fount of power to make orders in aid of the exercise of the court's jurisdiction: cf Rajski v. Computer Manufacture & Designs Pty Ltd [1982] 2 N.S.W.L.R. 443 at 448.".

1. The equivalent of s.23 Supreme Court Act 1970 (NSW) is s.85(1) Constitution Act 1975.

1. As I have said, His Honour was speaking long before the High Court decision in Cardile v. LED Builders Pty Ltd[3] but it seems to me that nothing in that case renders anything His Honour said inapplicable.

   [3](1999) 198 C.L.R. 380

1. Finally, in England, and again in a case which long predates Cardile, the Court of Appeal dealt with the question of discovery in relation to Mareva injunctions in terms that whilst the power to order discovery might not be exercised to find out whether a defendant has breached a Mareva injunction, it can certainly be exercised to secure the objective of the Mareva injunction, that is to say, the prevention of the removal of assets from a position where they might be available for a subsequent judgment.

1. Accordingly, it seems to me that if the plaintiff had come to this Court today seeking an interlocutory order in the nature of discovery, she would have been able to make such application, subject, of course, to the facts upon which such an application should be based.

1. There are a number of assertions made by the plaintiff regarding the defendants' alleged dissipation or removal of assets from beyond her reach as a prospective judgment creditor.  It is sufficient for present purposes to deal with only one such asset, the Piper Aztec aeroplane.  There is sufficient material before the Court to enable an inference to be drawn that on 5 December last year a Piper Aztec aeroplane was transferred to someone having an address identical to the defendants.  Even without having recourse to the highly suspicious transactions involving a number of trusts there is sufficient material to require the defendants to go on oath as to their assets in accordance with the orders made by Beach, J.

1. Accordingly, having regard to the power to extend time contained in the rules to which Mr North has referred and the discretion residing in the court to make or withhold such an order, it seems to me to be inappropriate that such an order should be made in this case, holding as I do that the plaintiff would have been entitled to make an application for such an order at this stage and would have been successful had she done so.

1. The order having been already made by Beach, J. there is no need for me to entertain the notion further.  This court will not circumvent that order at this stage by granting the defendants and the third parties an extension of time to a point beyond which they say they would not be required to comply with the order in any event.

1. Accordingly, the application for an extension of time is dismissed. 

1. Upon a subsequent oral application being made by Mr North for the defendants and the third parties for a stay of Beach, J's order pending the determination of an application to be brought by him pursuant to the liberty to apply reserved in that order, such application is refused on the same grounds as I have already indicated I refused the application for an extension of time.