Oaklex P/L & Feros v Quilare P/L

Oaklex P/L and Theodore John Feros commenced proceedings against Quilare P/L, Corporate Broking Services P/L, EagleChart P/L, and several individuals seeking a Mareva injunction. The action arises from the sale of shares in the first defendant by the first plaintiff without the second plaintiff's knowledge or approval, who was a director of both companies at the time. The second plaintiff resigned as a director shortly after the transaction, alleging he was misled about his role in the company. The defendants include companies that held the majority of shares in the first defendant and directors of both the first defendant and the first plaintiff.

The legal issues before the court included whether the applicants could establish a prima facie case for a Mareva injunction and if the defendants had provided sufficient evidence to rebut the risk of dissipation of assets. The applicants argued that without the injunction, the funds from the sale of the first defendant's business would be dissipated, making recovery of damages impossible. The defendants contended that the applicants had not met the stringent requirements for such an injunction and that the proceeds could be managed without risk of dissipation.

The court found that the applicants had established a prima facie case for the injunction and that the defendants had not provided satisfactory evidence to rebut the risk of dissipation. The absence of a clear decision on how the proceeds would be used heightened the risk of dissipation. The court noted that while the defendants had proposed investments that promised significant returns, they were unable to disclose specific details due to commercial confidentiality. This lack of transparency reinforced the applicants' concerns about the potential dissipation of assets. The court granted the injunction, allowing the defendants to pay secured and unsecured creditors but restraining them from dealing with the proceeds in any other manner.

The court ordered the first to fifth defendants to pay the first and second plaintiffs' costs of and incidental to the motion. The injunction terms were specified to restrain the defendants from dealing with the proceeds of the sale, subject to certain exceptions for creditor payments. The court also granted liberty to apply for further orders.