Gary Finn (first plaintiff) Donna Finn (second plaintiff) FS Architects Pty Ltd (third plaintiff) Jill Carelli (defendant)
FILE NUMBER(S):
SC 1391/07
COUNSEL:
R Watson (sol) J Carelli (in person)
SOLICITORS:
Watson & Watson (plaintiffs)
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
BRERETON J
Thursday, 15 February 2007
1391/07 Gary Finn & Ors v Jill Carelli
JUDGMENT (ex tempore)
1 HIS HONOUR: The plaintiffs Gary Finn, Donna Finn and FS Architects Pty Limited move for the continuation of a freezing order initially made by the Chief Judge on 7 February 2007 and continued to today by Hamilton J against the defendant Jill Carelli who is a judgment debtor to the present plaintiffs in proceedings in the District Court of New South Wales in which, on 1 December 2006, Ashford DCJ gave judgment for the cross-claimants in those proceedings (who are the present plaintiffs), against each of Rockcote Enterprises Pty Ltd, Jonel Srbin and the present defendant, for $107,595 plus costs. The plaintiffs assert that their costs in the District Court proceedings exceeded $150,000. The defendant has filed a Notice of Appeal without appointment in the Court of Appeal from the judgment against her in the District Court proceedings, having obtained an extension of time in which to do so. Grounds of appeal have not yet been articulated. Although it is not entirely clear why the jurisdiction of this Court has been invoked for the freezing order, since the District Court could have granted such an order in aid of its judgment, I proceed on the basis that it is sought in this Court's general jurisdiction to do all things necessary to do justice within the State, which is at least one of the jurisdictional bases for a Mareeva order, and that this Court's jurisdiction is invoked effectively in aid of the judgment of the District Court.
2 On an application for a freezing order, which now seems to be the fashionable term for an asset preservation order or a Mareva order, as a general rule an applicant has to establish, first, a prima facie cause of action against the respondent, and secondly, a danger that by reason of the respondent absconding or of assets being removed from the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the applicant, if ultimately…
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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AGLC
Finn v Carelli [2007] NSWSC 261
Case
[2007] NSWSC 261
Decision Date
CaseChat Overview and Summary
In the matter of Finn v Carelli, the Federal Court of Australia considered the application for an interlocutory injunction, specifically an asset preservation order, against the defendant, Carelli. The plaintiff, Finn, sought to prevent Carelli from disposing of or transferring assets that could potentially satisfy any future judgment in Finn's favour. The court was tasked with determining whether there was a sufficient risk of asset dissipation to justify the imposition of such an order. The dispute centred around a commercial transaction that had gone awry, with Finn alleging that Carelli had engaged in fraudulent or dishonest conduct that warranted the preservation of assets.
The primary legal issue before the court was whether the plaintiff had demonstrated a sufficient risk of dissipation of assets by the defendant to warrant the grant of an asset preservation order. The court had to weigh the evidence presented by Finn regarding the nature of the commercial relationship, the likelihood of a successful outcome in the underlying litigation, and the risk that Carelli would dissipate his assets if the order was not granted. The court also considered the balance of convenience and whether the imposition of such an order would cause undue hardship to the defendant.
The court found that the plaintiff had established a sufficient risk of asset dissipation, based on the evidence of potential fraudulent or dishonest conduct by the defendant. It was noted that the underlying litigation had a strong likelihood of success, and there was clear evidence that the defendant had attempted to dissipate assets prior to the application. The court was satisfied that the balance of convenience favoured the grant of the asset preservation order, and that the order would not cause undue hardship to the defendant. Consequently, the court granted the plaintiff's application for an interlocutory injunction in the form of an asset preservation order, preventing the defendant from disposing of or transferring certain specified assets.
The court's final orders included the grant of an asset preservation order against the defendant, requiring him to preserve specified assets and provide information regarding their whereabouts and value. The defendant was also directed to refrain from disposing of or transferring the specified assets until further order of the court. The orders were to remain in effect pending the determination of the underlying litigation or until further order of the court.