Chacos v Dijan

In Chacos v Dijan, the Federal Court of Australia was called upon to decide a matter concerning the grant of a Mareva-type injunction to prevent the dissipation of assets. Chacos sought the injunction against Dijan, seeking to freeze assets to secure a judgment debt. The assets in question were held in a lawyer's trust account. The primary issue before the Court was whether a prima facie case had been made out to justify the grant of an injunction, despite procedural defects in the notice of motion. The Court had to determine the appropriate test to apply in such circumstances and whether the injunction could be granted on a limited basis.

The Court held that a prima facie case could be established if the applicant could demonstrate that the respondent had assets that could be used to satisfy a likely judgment debt, and that there was a real risk of the respondent dissipating those assets. In this instance, the Court found that Chacos had demonstrated such a risk. Despite the defects in the notice of motion, the Court was willing to grant the injunction on a limited basis, restricting it to the assets held in the lawyer's trust account. The Court emphasised that the injunction was not intended to prevent the respondent from accessing funds necessary for their livelihood but rather to secure the judgment debt.

In conclusion, the Court found that a Mareva-type injunction could be granted despite procedural defects in the notice of motion, provided that the applicant could demonstrate a prima facie case. The injunction was limited to the assets held in the lawyer's trust account, ensuring that the respondent could still access necessary funds. The Court's decision underscores the importance of demonstrating a real risk of asset dissipation to secure a judgment debt while also considering the respondent's ability to maintain their livelihood.