Capital Performance International Inc v Jenkins

The case of Capital Performance International Inc v Jenkins was heard in the Federal Court of Australia. The plaintiff, Capital Performance International Inc, sought a Mareva order against the defendant, Jenkins, to prevent the dissipation of assets pending the resolution of the underlying dispute over breach of contract and associated damages. The plaintiff argued that Jenkins had engaged in conduct that endangered the enforcement of any potential judgment against him. The court was tasked with determining the appropriate circumstances under which substituted service of a Mareva order could be ordered.

The primary legal issue before the court was whether substituted service of a Mareva order could be ordered and, if so, at what stage in the proceedings this should occur. The plaintiff contended that substituted service should be permitted at the initial application stage, while the defendant argued that such an order should only be made once a Mareva order had been substantively granted. The court had to consider the balance between the need to effectively freeze assets and the principles of procedural fairness, particularly the right to be heard.

In its decision, the court held that substituted service of a Mareva order could indeed be ordered, but it should not be done at the initial application stage. The court emphasised that the initial application should focus on whether there was a strong prima facie case for the grant of the order. If such a case was made out, the court would then consider the appropriate method of service, including substituted service, once the order was substantively granted. The court concluded that this approach safeguarded procedural fairness and ensured that the defendant had an opportunity to respond to the allegations before any drastic measures were taken against their assets.

The court ordered that the application for a Mareva order would proceed without substituted service at the initial stage. If the plaintiff succeeded in establishing a prima facie case, the court would then consider the appropriate method of service, including substituted service, in the context of the substantive application. The court's ruling provided clarity on the procedural steps involved in obtaining a Mareva order and underscored the importance of procedural fairness in such sensitive matters.