Myer Stores Pty Ltd v Conforto

[2000] VSC 382

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 5979 of 2000

MYER STORES PTY. LTD.	Plaintiff
v.
SANDRA GRACE CONFORTO	Defendant

---

JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 AUGUST 2000
DATE OF JUDGMENT:	28 AUGUST 2000
CASE MAY BE CITED AS:	MYER STORES v. CONFORTO
MEDIUM NEUTRAL CITATION:	[2000] VSC 382

---

CATCHWORDS:      Mareva injunction – Serious risk defendant will dissipate her assets if not restrained – Risk to be inferred from circumstances giving rise to cause of action.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	A.R. Young	Phillips Fox
For the Defendant	S. Gillespie-Jones	Digala & Associates

HIS HONOUR:

1. On 4 July 2000, Byrne, J. acceded to an application by the plaintiff, Myer Stores Ltd, and granted a Mareva injunction against the defendant, Sandra Grace Conforto, restraining the defendant from dissipating her assets.  That injunction has been extended by the order of Warren, J. made on 11 July 2000, the order of Gillard, J. on 25 July 2000 and orders that I have made on 8 and 22 August respectively.

1. I now have before me an application by the plaintiff for the extension of those orders to the trial of the proceeding or further order.

1. The plaintiff's case is a particularly strong one.  It establishes that between 1984 and February 2000 the defendant has misappropriated sums of money in excess of $200,000 from the plaintiff whilst in the employ of the plaintiff.

1. Counsel for the defendant does not take issue with the fact that the plaintiff has an arguable case:  indeed, in my opinion it can properly be said it has a strong case.  What he contends, however, is that there is no evidence from which it can be inferred that unless the defendant is restrained in the manner sought she will dissipate her assets, and during the course of his submissions this morning he has referred me to a number of authorities touching upon the matter.

1. I have given consideration to the principles referred to in those cases;  they date back now over many years.  However, in this case I consider that the nature of the plaintiff's claim against the defendant is such that one is justified in inferring that unless the defendant is restrained in the manner sought there is a real risk that she may dissipate her assets.

1. The principles applicable in such a case were considered by the Court of Appeal of New South Wales in Patterson v. BTR Engineering (Aust) Ltd and Others (1989) 18 NSWLR 319. In that case Gleeson, C.J. said, at p.325:

"In particular, I consider that Giles J was correct in      taking the view that the evidence as to the nature of the scheme in which the appellant was allegedly involved, which established a prima facie case against him, was such as to justify the conclusion that there was a danger that the appellant would dispose of assets in order to defeat any judgment that might be obtained against him and that such danger was sufficiently substantial to warrant the injunction.  There is no reason in principle why the evidence which is relevant to the first of the issues earlier referred to might not also have a bearing on the second, and this will especially be so where the prima facie case that is made out against a defendant is one of serious dishonesty involving diversion of money from its proper channels.  The present is not a case in which a plaintiff who claims simply to be an unsecured creditor seeks to prevent a dissipation of assets which have no particular connection with the claim in question.  This is a case in which the plaintiff claims that the defendant, making use of a corporation controlled by him, fraudulently misappropriated a large sum of money which, if it is still under the control of the appellant, would be quite likely to constitute, directly or indirectly, the bulk of his assets.  As Giles J held, the nature of the scheme in which, on the evidence to date, the appellant appears to have engaged, is such that it is reasonable to infer that he is not the sort of person who would, unless restrained, preserve his assets intact so that they might be available to his judgment creditor."

At p.326, Meagher, J.A. said:

"          To obtain such an injunction a plaintiff must prove two ingredients:  first, that he has a prima facie case against the defendant, and secondly, that there is some risk of a dispersal by the defendant of his assets so as to defeat the value of the plaintiff's victory if he ultimately wins.  Normally proof of the first ingredient alone will not suffice;  normally one cannot infer a risk of dissipation of assets from the mere fact that the plaintiff has a prima facie cause of action.  In normal circumstances this is particularly so in cases like the present, where there is no evidence at all what the defendant's assets are.  However, in exceptional cases (of which the present is unfortunately one) one can infer the existence of the latter ingredient partly or wholly from proof of the former.  This may well be the situation in all cases where the plaintiff's prima facie case against the defendant involves proof of gross dishonesty.  This was the view apparently taken by Vincent J in Pearce v. Waterhouse [1986] VR 603 at 607."

1. In my opinion the behaviour of the defendant in the present case, and based, of course, purely on the material presently to hand, is such as to justify the court inferring that if the defendant is not restrained in the manner sought by the plaintiff she may well dispose of her assets, or some of them - assets which the evidence may ultimately demonstrate were purchased by the defendant with money misappropriated from the plaintiff.

1. Further, the balance of convenience in this case is such as, in my opinion, to justify the granting of the order.  There is no evidence that any real hardship will be caused to the defendant if she is restrained in the manner sought.  On the other hand, if the defendant did dissipate her assets as the plaintiff fears she may, it is unlikely that the plaintiff would be able to recover the fruits of its judgment in the event it is successful at trial.

1. In these circumstances, the necessary undertakings having been given, I propose to make orders in accordance with the minutes of order submitted to me by counsel for the plaintiff, save for one exception.  I can see no reason why the matter should now be further adjourned.  The form of the order is such as to provide that it runs to the trial of the proceeding.  I shall instead reserve liberty to the parties to apply, and they may do that on notice to each other in the event that any problem arises hereafter.

---