Caboche v Southern Equities Corp Ltd - [2001] SASC 55

CABOCHE & ORS v SOUTHERN EQUITIES CORP LTD & ORS

[2001] SASC 55

Full Court: Olsson, Duggan and Williams JJ

1................ OLSSON J......... I agree that this appeal must be dismissed, for the reasons expressed by Williams J.

2................ DUGGAN J....... In my view the appeals should be dismissed. I agree with the reasons of Williams J.

3................ WILLIAMS J.... These are appeals from decisions of a single Judge of this Court firstly, with respect to a Mareva order (extending to strangers to the action) and secondly with respect to an order requiring three personal defendants to file affidavits listing their current assets. The orders were entered by Debelle J on 3 November 2000 upon an application instituted by the respondent England on 11 February 2000.

The appellants Carindale Land Corporation (“CLC”), Fairoak Pty Ltd (“Fairoak”), Topsfield Pty Ltd (“Topsfield”) and Hastings Finance Pty Ltd (“Hastings Finance”) are not parties to the action and the appeals raise a question as to the extent of the Court’s jurisdiction to make an assets preservation order which restrains strangers to the action from dealing with their assets. The appeals also put in issue the Court’s powers to require Ms Caboche and Messrs Craig Bond and John Bond on oath to disclose their assets before any liability has been proved against them.
The appellants Craig Bond, John Bond and Delores Caboche are defendants (with others) to this action which has been brought by Mr England as liquidator of Southern Equities Corporation Ltd (“SECL”) (formerly Bond Corporation Holdings Ltd) in respect of the defendants’ alleged participation in a series of fraudulent transactions whereby works of art owned by SECL and its subsidiary Bond Corporation Pty Ltd, have been taken from their rightful owners. Mr England is seeking to recover the art works and damages. To date his efforts have enabled him to take possession of a portrait of Captain Cook (which has subsequently been sold by Mr England for $5.4 million). The liquidator is still proceeding with claims involving a further twelve paintings and damages and interest - in all upwards of $10 million.
The order under appeal restrains the appellants CLC, Fairoak, Topsfield and Hastings Finance Finance (together with Messrs Bond and Ms Caboche and a solicitor Mr Redmond), from dealing (except to a limited extent) with CLC or its assets. Mr England contends that if the action is successful the property in question should be available to satisfy a judgment against Mr Craig Bond who is the beneficial owner of the shares in CLC. The assets preservation (or Mareva) order was made upon the footing that there is a risk of a dissipation of assets which represent the interest of Mr Craig Bond in CLC (and in particular some land situated at Carindale). The orders were made against Ms Caboche and Mr John Bond upon the basis that they are directors of all companies bound by the order. Mr Craig Bond was a director of Carindale until 2 August 1994. The order…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] SASC 55
Decision Date: 8 March 2001

CaseChat Overview and Summary

The case of Caboche v Southern Equities Corp Ltd involves appeals by several parties against orders made by Debelle J in relation to Mareva orders and asset disclosure. The appellants include Carindale Land Corporation, Fairoak Pty Ltd, Topsfield Pty Ltd, Hastings Finance Pty Ltd, Craig Bond, John Bond, and Delores Caboche. The orders were made in a legal action brought by Mr. England as liquidator of Southern Equities Corporation Ltd against the appellants, alleging participation in fraudulent transactions involving the sale of art works and other damages. The appeals question the extent of the Court's jurisdiction to make Mareva orders against strangers to the action and to require disclosure of assets before any liability is proved.

The court had to decide whether the Mareva orders against the appellants were justified and whether the orders requiring the disclosure of assets were proper. The legal issues centered around the conditions necessary for granting Mareva orders against non-parties, as established in Cardile v LED Builders Pty Ltd, and the Court's power to order the disclosure of assets as an aid to the framing of Mareva orders. The court found that the appellants had exercised a power of disposition over assets of the judgment debtor and that the affairs of the actual or potential judgment debtor and the non-parties were closely intermingled. The court also found that the order for affidavits was justified as it was ancillary to the Mareva order and in aid of the discovery process.

The court dismissed the appeals, holding that the Mareva orders and the asset disclosure orders were properly made. The court found that the appellants' activities posed a risk of asset dissipation and that the orders were necessary to prevent the frustration of the court's processes. The court emphasized that the orders were not altering the status quo but were aimed at preserving the assets to satisfy any judgment obtained against Craig Bond.

Orders