Warea Pty Ltd v Waterloo Industries Pty Ltd (t/as Deltrite Financial Services & Ors)

[1986] FCA 14

IN THE FEDERAL COURT OF AUSTRALIA	1
OUEENSLAND DISTRICT REGISTRY	) QLD G6 of 1986
GENERAL DIVISION	)

BETWEEN: WAREA PTY. LTD.

First Applicant

STRIPE LIMITED

Second Applicant

AND: WATERLOO INDUSTRIES PTY. LTD. trading as

Deltrite Flnanclal Services

First Respondent

AND : WILLIFM LEONARD ARMSTRONG

Second Respondent

AND: LISA N. VIRBA

Third Respondent

FJID : ROBERT WAYNE COLLINS

Fourth Respondent

DATE OF HEARING: 24 JANUARY 1986

DATE JUDGMENT	DELIVERED :	24 JANUARY	1986
COUNSEL :

. for the applicants appearing Mr. A.J.H. Morris instructed

parte ex by Cooper, Grace & Ward.

D.T. O'BRIEN

ASSOCIATE TO PIEJCUS J.

24 JMJUARY 1986

C A T C H W O R D S

TRADE PRACTICES - mlsleading conduct - Mareva injunction.

Trade Practices Act 1974, 5 . 5 2

WAREA PTY. LTD. & ANOR.

v . WATERLOO INDUSTRIES PTY. LTD. trading

as Deltrite Flnancial Servlces & ORS.

QLD. G6 OF 1986

PINCUS J.

BRISBANE

24 January 1986

ItJ THE FDERAL COURT OF AUSTRALIA	)
QUEENSLAND DISTRICT REGISTRY	) QLD G6 of 1986
GENERAL DIVISION	)

BETWEEN: WAREA PTY. LTD.

First Applicant

STRIPE LIMITED

Second Applicant

AND :	WATERLOO INDUSTRIES PTY. LTD. trading	as
Deltrite Financial Services

First Respondent

AND: WILLIAM LEONARD ARMSTRONG

Second Respondent

AND: LISA N. VIRBA

Third Respondent

AND : ROEERT WAYNE COLLINS

Fourth Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	24 JANUAP.Y 1986
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The flrst respondent be restrained until 5 p.m. on

the 3rd day of February 1986 or untll further order

from:

(a)	Selling, disposing or charglng or otherwlse encumbering or dealing with any real property
held by it in the State of Queensland or

elsewhere in Australia;

(b)	Withdrawmg any moneys from any bank account
being moneys to which it 1 s beneficially

entltled:

(c) Disposing of or otherwlse deallng with any

other asset to which it is beneficially

entitled.

2. Order that the second respondent be restrained

until 5 p.m. on the 3rd day of February 1986 or

until further order from:

Sellmg, disposing or charging or otherwise encumbering or dealinq wlth any real property

held by him in the State	of	Queensland	or
elsewhere in Australia;

Withdrawlng any moneys from any bank account

being moneys to which he is beneflcially

entitled other than an amount (not exceeding

$200.00 per day) in the ordinary course of

business or for personal or domestic purposes;

Disposing of or otherwise dealinq with any

other asset to which he is beneficlally

entitled other than assets (havlng a total

value not exceeding $200.00 per day) in the ordinary course of business or for personal or dornestlc purposes.

NOTE:

Settlement and entry of orders is dealt with In Order 36

of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

QUEENSLAND DISTRICT REGISTRY ) QLD G6 of 1986

DIVISION GENERAL )

BFTWEEN : W I L R E A PTY . Lm-.

First Applicant

STRIPE LIMITED

Second Applicant

AND :

WATERLOO INDUSTRIES PTY. LTD. trading as

Deltrite Financlal Servlces

First Respondent

AND: WILLIAM LEONARD ARMSTRONG

Second Respondent

A N D : LISA N. VIRBA

Third Respondent

AND : ROBEXT NAYNE COLLINS

Fourth Respondent

PINCUS J. 24 January 1986

EX TEMPORE REASONS FOR JUDGMENT

This is an appllcation for a Mareva injunction in which

the applicants assert that they have been mlsled or defrauded by

the respondents, or some of them. The evldence shows that the case for the appllcants is that they invested a substantial sum of money, m excess of $200,000, in what was supposed to be a

money-making scheme involving Eurobonds. The money which has

been put in has not been repaid, although promises to pay	It have
been made.

.

2 .

More alarmingly,, there was said to be a bank called the

Caribbean Bank of Credit Limited involved on the respondent’s

side and the applicants now suspect no such bank exlsts. They

base that susplcion on information obtalned from the Fraud Squad,

which is investigating the matter, and also on the circumstance

that the bank is said to have no physical office but merely telex

and fax addresses, which one would think to be an unusual

positlon for a genuine bank to be in.

The evldence before me 1 s such as to ralse a prima facie

case, if not of fraud, at least of conduct falling within 5 . 5 2 of

the Trade Practlces Act. As Mr. Morrls on behalf of the

applicants says, it is not necessary for the appllcants to allege

fraud in order to succeed In ralsing a prlma facle case

sufflclent for the purposes of 5 . 5 2 , but the fact that there 1 s

some evldence of fraud seems to me to be of particular importance

in conslderlng whether there	1 s the necessary degree of risk of
removal of assets.

The question whether there is sufficient evldence of

such a rlsk has rather troubled me, but I am satisfled on the

whole that a rlsk of such magnitude has been shown as to justlfy

the grant of a Mareva injunction.

The only reported case which I have noted m which such

an inlunction has been granted in this court 1s Hiero Pty. Ltd.

v. Somers (1983) 47 A.L .R . 605, but I have no doubt there have

been other such cases and there is no reason to doubt the court’s

jurisdiction to grant such injunctions.

.

3 .

The precise order which should be made has been

discussed with counsel and it will be noted that it contains a

limited provision for expenditure in the ordinary course of busmess or for personal or domestic purpcses. A monetary limit

has been placed upon such expenditure largely because, in the

circumstances of this case, it might be argued to be well wlthin

the ordinary course of business of the relevant respondents to

shift large sums of money from Australia to other countries.

Further, there is such an element of uncertainty in the meanlng

of the expression "ordinary course of business" in the facts of

this case as to make it desirable to give a degree of preclslon

to the limltation of the order by imposing	a monetary limit on
such expenditure; the limlt 1s $200 per day.

In summary, the appllcants have shown a prima facie case

under s . 5 2 of the Trade Practlces Act, with more than a

suggestion of fraud, and I am satisfled that their case is of

sufflcient strength to grant an m~unction	for a short perlod in
the first Instance.