Megna v Marshall

[2005] NSWSC 1302

CITATION:	Megna & anor v Marshall & anor [2005] NSWSC 1302
HEARING DATE(S):	15 November 2005
JUDGMENT DATE :	15 November 2005
JUDGMENT OF:	Brereton J

CATCHWORDS:	EQUITY – Remedies – Injunctions – Asset Preservation Order
LEGISLATION CITED:	Defamation Act 1974 (NSW), s 7A Family Law Act 1975 (Cth)
CASES CITED:	Patterson v BTR Engineering Australia Ltd (1989) 18 NSWLR 319 Frigo v Culhaci (NSWCA, 17 July 1998)
PARTIES:	Michael Megna (first plaintiff) Russell James Lloyd (second plaintiff) David John Marshall (first defendant) Richard Martin Tory (second defendant)
FILE NUMBER(S):	SC 10261/04
COUNSEL:	D Marshall (in person) (first defendant) S A Kerr (second defendant) A Radojev (for Mrs Marshall)
SOLICITORS:	Osborne Bricknell Howell (second defendant) Thurlow Fisher (for Mrs Marshall)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BRERETON J

Tuesday 15 November 2005

10261/04 Michael Megna v David John Marshall & Ors

JUDGMENT (ex tempore)

1 HIS HONOUR: By Notice of Motion filed in Court pursuant to leave granted by Whealy J on 14 November 2005, David John Marshall, who is the first defendant in the substantive proceedings, seeks an order that Richard Martin Tory, who is the second defendant in those proceedings, be restrained from selling, transferring and encumbering, offering as security, or lodging or causing to be lodged any caveat, or otherwise dealing with any type of interest in any property which he may own, including that at 29 St George's Crescent, Drummoyne in the State of the New South Wales, until any judgment debt in favour of the plaintiff against the second defendant in the proceedings has been satisfied or until further order of the Court.

2 The substantive proceedings are brought by Michael Megna against David John Marshall and Richard Martin Tory for damages for defamations said to have been published by the two defendants. A trial pursuant to Defamation Act 1974 (NSW) s 7A has proceeded before a jury over a period of some 15 days, at the conclusion of which the jury returned a verdict finding that both defendants had published the matters complained of, and that imputations, alleged by Mr Megna to have been conveyed by the matters complained of, were in fact conveyed and were defamatory of Mr Megna. Mr Tory has filed a holding appeal, and the matter is to return before the Registrar next Wednesday, 23 November for further directions as to the defamation proceedings.

3 No costs order has yet been made in respect of the s 7A trial, but it is envisaged that Mr Megna will seek such an order when the matter returns before the Court. It is self-evident from the duration of the defamation trial that any costs order will be substantial, and it is also self-evident that both defendants are now significantly at risk of a judgment for damages against them.

4 In those circumstances, the second defendant, Mr Tory, proposes to file a cross-claim for contribution against the first defendant, Mr Marshall, and has filed a motion claiming an injunction in the nature of an asset preservation order against Mr Marshall. He did so in circumstances that evidence has emerged which suggests that Mr Marshall has entered into a financial agreement under the Family Law Act 1975 (Cth) with his wife, dealing with at least some of his assets. That motion is, on the application of Mr Tory, to be adjourned to a date next week, while steps are taken to obtain a copy of the financial agreement.

5 Meanwhile, Mr Marshall has filed the motion to which I have referred, also claiming an asset preservation order, in his case against the second defendant, Mr Tory. He moved on that motion today, and tendered in support of it only two letters, being, in effect, requests by his wife's solicitors addressed to the solicitors for the second defendant, suggesting that Mr Tory, who had sought an undertaking from Mrs Marshall not to deal with her assets, should himself give an equivalent undertaking, and asserting that he had declined to give any such undertaking.

6 As those requests were not made by or on behalf of Mr Marshall, who could conceivably have a claim for contribution against Mr Tory, but instead by his wife Mrs Marshall, who is but a potential respondent to an application to set aside the financial agreement, it is difficult to see why any inference should be drawn from the failure to proffer any such undertaking, as it was sought by a person who was not entitled to it. Moreover, the mere fact that an undertaking was sought and not given is not evidence that there is a risk of dissipation. Mr Marshall puts that there is just as much risk of Mr Tory dealing with his assets as there is of Mr Marshall dealing with his own, but there is positive evidence, relating to the financial agreement, that Mr Marshall has dealt with his assets, while there is no such evidence so far as Mr Tory is concerned.

7 While I would accept that Mr Marshall, at least potentially when any costs order is made in the substantive proceedings, or when any judgment for damages is given, may well have a viable claim for contribution against Mr Tory, at least sufficiently arguable to support the grant of interlocutory relief, including an asset preservation order, I am unable to be satisfied on the evidence that Mr Marshall put before me that there is any sufficient risk of dissipation of Mr Tory's assets to warrant the making of an asset preservation order, having regard to the observations of Court of Appeal in Patterson v BTR Engineering Australia Ltd (1989) 18 NSWLR 319 and in Frigo v Culhaci (NSWCA, 17 July 1998).

8 Moreover, Mr Marshall was not prepared to offer the usual undertaking as to damages and, in the context of an application for an asset preservation order, failure to offer such an undertaking is almost inevitably practically fatal, as it is here.

9 Accordingly, Mr Marshall's motion, filed 14 November 2005, is dismissed with costs.

10 So far as concerns the motion filed in Court by Mr Tory on 14 November 2005, I adjourn the motion to 22 November 2005 at 9.45am before me. I grant leave to the applicant/second defendant to issue subpoenas returnable on 21 November 2005 addressed to David John Marshall and/or Shirley Irene Marshall and/or Thurlow Fisher Solicitors for production of the financial agreement referred to in caveat registered number A888764J lodged by or on behalf of Shirley Irene Marshall in respect of the land comprising folio identifier 1/250661 and dated 2 November 2005, and/or referred to in the letter from Thurlow Fisher to Osborne Bricknell Howell, dated 9 November 2005, together with any files, notes or other documents relating thereto. I abridge time for service of such subpoena to 4pm on 16 November 2005.

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