Gemstone Corporation of Australia Limited v Rosario Grasso and Star Corporation Limited No. SCGRG 92/219 Judgment No. 4273 Number of Pages 3 Injunctions

[1993] SASC 4273

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA PERRY J

CWDS
Injunctions - Mareva injunction - application by the plaintiff for the perpetuation of a Mareva injunction after the plaintiff had failed at the trial but had lodged an appeal refused - held that given the draconian nature of such an injunction, success by the defendant at the trial should normally lead to its dissolution. Derby and Co Ltd and Ors v Weldon and Ors (No 1)
(1989) 1 All ER 469, considered.

HRNG ADELAIDE, 16 November 1993 #DATE 16:11:1993
Counsel for appellant:     Mr M. Blue with him
   Mr P. O'Sullivan
Solicitors for appellant:    Fisher Jeffries
Counsel for respondent:     Mr S. Lane
Solicitors for respondent: Randle and Taylor

ORDER
Application dismissed.

JUDGE1 PERRY J In this matter I pronounced judgment on 29 October 1993, during the course of which I ordered that the plaintiff's claim against the defendant, Rosario Grasso, be dismissed. 2. The plaintiff obtained a judgment against the second defendant, Star Corporation Pty Ltd in liquidation, to the extent of the monies due on the call on the shares referred to in the judgment. 3. As long ago as 30 October 1992, Judge Anderson made an order in the nature of a Mareva injunction restraining the disposal of assets not only by the defendant Rosario Grasso, but also by his wife and a company Oiflats Pty Ltd. Although his wife and Oiflats were not defendants, I have no doubt that in a proper case the jurisdiction to make an order in the nature of a Mareva injunction extends to third parties, at least when they are what could be loosely described as related parties in a position to deal with assets which might possibly be the subject of execution. 4. The Mareva injunction pronounced by Judge Anderson remained effective until trial. However, when I pronounced judgment, Mr Lane for the defendant Rosario Grasso sought the discharge of it. That course was resisted by counsel for the plaintiff who indicated that an appeal might be brought. 5. I stood the matter over and extended the injunction to 5 pm on Monday 15 November 1993, which was just outside the appeal period, to see whether an appeal was to be brought and, if so, to enable the question of the extension of the Mareva injunction or its discharge to be addressed further. 6. An appeal having been instituted by notice of appeal filed on 12 November 1993, Mr Blue for the plaintiff now contends that the injunction should be extended until the determination of the appeal. 7. He argues that the situation is one in which the normal tests upon which interlocutory relief is considered should apply, that is to say, whether or not the plaintiff had made out a prima facie case, and whether on the balance of convenience the order should go. 8. It is true, of course, that in cases involving a Mareva injunction the first limb of the test is sometimes put on the basis of whether or not the plaintiff has a "good arguable case"; see Derby and Co Ltd and Ors v Weldon and Ors (No.1) (1989) 1 All ER 469. The expression "good arguable case" has likewise been applied in Australian courts in the context of Mareva injunctions. 9. Whether it is put as a requirement to demonstrate a "prima facie" case, or a "good arguable case", the ordinary test cannot now apply, as those words are intended to be construed in the context of a case which is not yet tried, and in this case, the trial is now over. Clearly, the situation must be different after a trial when the plaintiff has been unsuccessful. The Court is no longer dealing with an interlocutory injunction pending a hearing. At that stage the Court has to assess the strength of the case and the defence to it, without the benefit of the extended hearing which occurs at the trial. 10. After the trial, the trial judge is in a position to assess the matter in the light of the decision which has been made. 11. While a grant of further relief of the kind sought is not precluded by the entry of judgment, it would be an unusual case indeed in which a Mareva injunction is perpetuated after trial, where the plaintiff has been unsuccessful. Indeed, Mr Blue for the plaintiff has not been able to refer to any authority in which such an order has been made. 12. A Mareva injunction is, of its very nature, a draconian measure. It is only issued when there is a very clear basis for it. Whatever Mr Grasso's motives may be with respect to his assets, it seems to me that he now comes to Court with the benefit of a judgment in his favour. 13. In my opinion this tilts the balance of convenience firmly in his direction, irrespective of the gravity and complexity of the matters which are raised in the notice of appeal. It would to be wrong, in the circumstances of this particular case, for me to exercise a discretion in favour of perpetuating the injunction. 14. The application that I do so is dismissed to the intent that the order of Judge Anderson is dissolved as from now. 15. The plaintiff will pay the costs of the first defendant, that is Rosario Grasso, of and incidental to the application dated 15 November 1993 including the appearances before me yesterday and today.