Mercator Property Consultants Pty Ltd v Christmas Island Resort Pty Ltd

[1998] FCA 1414

FEDERAL COURT OF AUSTRALIA

EQUITY- injunctions- Mareva injunction- whether appropriate to grant- whether risk of assets being removed from jurisdiction.

Beach Petroleum NL v Johnson [1993] 11 ACLC 75, applied
Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 668, applied

MERCATOR PROPERTY CONSULTANTS PTY LTD (ACN 008 737 022) v CHRISTMAS ISLAND RESORT PTY LTD (ACN 009 160 123) AND ORS
WG 3017 of 1998

R D NICHOLSON J
PERTH
20 OCTOBER 1998

NO QUESTION OF PRINCIPLE

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WG 3017 of 1998

BETWEEN:

MERCATOR PROPERTY CONSULTANTS PTY LTD
(ACN 008 737 022)
Applicant

AND:

CHRISTMAS ISLAND RESORT PTY LTD
(ACN 009 160 123)
First Respondent

ROBBY SUMAMPOW, JOKKY HIDAYAT,
KWIK SOEN HOEK and HERMAN TJAHAJDI GANI
Second Respondents

JUDGE:	R D NICHOLSON J
DATE OF ORDER:	20 OCTOBER 1998
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

A.On the applicants motion dated 15 October 1998 and upon having given and filed the usual undertaking as to damages

1.   The first named second respondent be restrained up to and including the conclusion of the hearing of this application or until further order, by itself its servants or agents from removing, or causing, or permitting, to be removed from the jurisdiction, or selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of its assets, including but not limited to:

(a)shares in Christmas Island Resort Pty Ltd; and

(b)debt owed by Christmas Island Resort Pty Ltd.

B.There be liberty to all parties to apply on giving 48 hours written notice to the other parties.

C.A copy of this Order is to be served on the first named second respondent, by delivery by private agent, to his address on the ASIC record.

D.The costs of the motion be costs in the cause.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NO QUESTION OF PRINCIPLE

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WG 3017 of 1998

BETWEEN:

MERCATOR PROPERTY CONSULTANTS PTY LTD
(ACN 008 737 022)
Applicant

AND:

CHRISTMAS ISLAND RESORT PTY LTD
(ACN 009 160 123)
First Respondent

ROBBY SUMAMPOW, JOKKY HIDAYAT,
KWIK SOEN HOEK and HERMAN TJAHAJDI GANI
Second Respondents

JUDGE:	R D NICHOLSON J
DATE:	20 OCTOBER 1998
PLACE:	PERTH

EX TEMPORE REASONS FOR JUDGMENT

HIS HONOUR:  A notice of motion brings before the court ex parte an application for a Mareva injunction.  It is directed to the first-named second respondent and would restrain him from removing from the jurisdiction, disposing of and/or dealing with his assets resident within the jurisdiction.  Included particularly would be shares in the first respondent and the debt owed by the first respondent. 

The basis on which the court should approach the question of a Mareva injunction has been set out in the following passage in the reasons of von Doussa J in Beach Petroleum NL v Johnson [1993] 11 ACLC 75 at 77:

“The Mareva injunction power was considered by the Court of Appeal of New South Wales in Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319. At p. 321-322, Gleeson CJ said:

‘The remedy is discretionary, but it has been held that, in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie case against the defendant, and secondly, a danger that, by reason of the defendant’s absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.’ 

The requirement as to the need to establish the relevant danger was expressed by the Chief Justice in the terms used by Lord Denning MR in Prince Abdul Rahman bin Turki al Sudairy v Abu-Taha [1980] 1 WLR 1268, at 1273, in a passage which was subsequently quoted with approval by Street CJ in Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 3 ACLC 220 at 225; (1985) 1 NSWLR 155 at 160 and by Deane J in the High Court in Jackson v Sterling Industries Limited (1987) 162 CLR 612 at 623.

I propose to apply the test formulated by Gleeson CJ.

It will be noted that it is not necessary for the applicants to show an active intent on the part of the respondent to defeat the applicants from recovering judgment.  It is enough if the applicants establish that, in the absence of relief, there is a danger that assets will be dealt with in a way which will prevent the applicants recovering the judgment.”

There is evidence before me that establishes that the first-named second respondent does have assets in the jurisdiction. 

The general guidelines in respect of Mareva injunctions were originally stated by Lord Denning MR in Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 668. The first requirement is that there should be full and frank disclosure and there is nothing to lead me to think that is not the case here. Secondly, there must be particulars of the claim by the applicant against the defendant. That is a matter which appears from the evidence, including the first affidavit of Mr Woodmore sworn on 3 July 1998. Thirdly, it is necessary that there should be grounds for believing that there are assets within the jurisdiction and I have already expressed my satisfaction as to that. Fourthly, there should be some grounds for believing that there is a risk of the assets being removed before the judgment or award is satisfied. The mere fact that the defendant to the application is abroad is not of itself sufficient.

Relying on the affidavits of Mr Woodmore and in particular on his second affidavit sworn on 19 October 1998, I am satisfied there is a risk that the first‑named second respondent may deal with his remaining assets in the jurisdiction in a way that may prevent the applicant from being able to satisfy any judgment or order made in his favour either in relation to final orders to be made by this court or in relation to any orders to be made relating to the applicant's claim in the Supreme Court of Western Australia.  This latter is a reference to proceedings commenced by the applicant in the Supreme Court of Western Australia for specific enforcement of a contract with the first‑named second respondent for the sale of shares in the first respondent for the sum of $5.1 million.  It is the intention of the applicant to pursue final orders for the purchase of those shares by the first-named second respondent.

I also rely upon the affidavit of Mr J.A.L. Herbert sworn on 25 September 1998.  There is evidence that the first-named second respondent is owed $100,000,000 by the first respondent after the first-named second respondent paid out debts owing by the first respondent.  There is further evidence that if the first respondent were to proceed to liquidation the estimated return to creditors would be less than five cents in the dollar.  It follows that the debt owed by the first respondent to the first-named second respondent is appropriately described as a further asset of the first‑named second respondent.  It is that which, along with his shares in the first respondent, is the only asset of the first-named second respondent in the jurisdiction.

There is also evidence that the first-named second respondent is involved in dealings with others which could involve the purchase of his shares in the first respondent.  It is not necessary to canvass the details of the evidence supporting that.  It is sufficient to say that it founds an inference that the first‑named second respondent may assign any personal entitlements of his in the jurisdiction to satisfy arrangements made with others.  It is appropriate therefore in all the circumstances to conclude, as I have done, that there is the requisite evidence of risk.  It is compounded and supported by the fact that the first‑named second respondent, although having been given adequate opportunity to do so, has not appeared before this court to be heard on substantive matters.

The fifth requirement stated by Lord Denning in Third Chandris was the giving of an undertaking in damages and such an undertaking has been given by the applicant.

For these reasons I consider it is appropriate that the injunction should issue.  There is a good arguable case and a real risk that if the injunction is not granted the defendant to it will remove or dissipate the relevant assets to which I have referred.  Accordingly, I propose to make orders in the form of the second minute of draft orders handed to me in court.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice R D NICHOLSON

Associate:

Dated:             

Counsel for the Applicant:	M J McPhee
Solicitor for the Applicant:	Michell Sillar McPhee
Counsel for the Second Respondent:	No appearance
Solicitor for the Second Respondent:	None on record
Date of Hearing:	20 October 1998
Date of Judgment:	20 October 1998