CATCHWORDS Trade Practices - application for damages - interlocutory application for order to prevent dissipation of assets by respondent. Injunction - power of Court to order Mareva type injunction - implied power - Order for payment or giving of security to Court in sum of $3 million - whether court should have made such an interlocutory order - privilege against self incrimination - failure of court to obtain an undertaking as to damages. Federal Court of Australia Act 1976 33.23 and 32 Trade Practices Act 1974 ss.80 and 87 ON APPEAL FROM A SINGLE JUDGE OF THE RAL CO EF AUSTRALIA ~ JOHN WILLIAM JACKSON v STERLING INDUSTRIES LIMITED NO. G 194 of 1986 BOWEN C.J., WOODWARD & JACKSON JJ. SYDNEY iS OCTOBER 1986 IN THE FEDERAL COURT ) OF AUSTRALIA ) NEW SOUTH WALES REGISTRY ) ) GENERAL DIVISION No. G 194 of 1986 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA ; BETWEEN: JOHN WILLIAM JACKSON Appellant AND STERLING INDUSTRIES LIMITED (Receivers and Managers Appointed) Respondent CORAM: Bowen C.J., Woodward and Jackson JJ. DATE: \S October, 1986. PLACE: Sydney MINUTE OF ORDER THE COURT ORDERS THAT: 1. The application for leave to amend the notice of appeal be refused. 2. The appeal be dismissed. 3. John William Jackson pay to Sterling Industries Limited its costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. ee ee en nT es at. « IN THE FEDERAL COURT ) OF AUSTRALIA ) No. G 194 of 1986 NEW SOUTH WALES REGISTRY ) GENERAL DIVISION ) QN APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: JOHN WILLT. JACKSON a" Appellant AND LING fT IES LIMITED (Receivers and Managers Appointed) Respondent COURT: Bowen C.J., Woodward and Jackson JJ. ' DATE: 15 October, 1986. PLACE: Sydney REASONS FOR JUDGMENT BOWEN C.J. This is an appeal against interlocutory orders made on 23 April 1986 in proceedings brought by Sterling Industries Limited ("Sterling") against John William Jackson and other parties. Mr Jackson on 2 May 1986 obtained leave to appeal. The course of proceedings and a reference to the facts are set forth in the reasons for judgment of Woodward J. I shall not repeat them except so far as may be necessary in stating my reasons. Asante enennaneteal Akh mimi atime nn dt en etn Mette memento The principal argument advanced by Counsel for Mr Jackson in this appeal was that the Federal Court had no jurisdiction to grant an injunction of the type which has come to be known as a Mareva injunction and that the orders made against Mr Jackson which were of this type were therefore invalid. The development of this type of relief in the United Kingdom and the progress of its development in various States in Australia is set forth in some detail in the reasons for judgment of Woodward J. Again I find no reason to recapitulate. The argument for Mr Jackson was that the Federal Court had no jurisdiction to grant a Mareva injunction, whether pursuant to s.23 of the Federal Court of Australia Act 1976 or otherwise. ' So far as s.23 is concerned it was submitted that the statutory power conferred by that section is only ancillary to the right to vindicate known legal or equitable rights. While I can understand this proposition in relation to a court which deals wholly or principally with the vindication of know legal or equitable rights I have difficulty in discerning its relevance to a court which is established as is the Federal Court of Australia. Section 19 of the Federal Court of Australia Act provides as follows: "19. (1) The Court has such original jurisdiction as is vested in it by laws made by the Parliament. (2) The original jurisdiction of the Court includes any jurisdiction vested in it to hear and determine appeals from decisions of persons, authorities or tribunals other than courts." It will be seen that Parliament is providing not only for the exercise of jurisdiction defined by its laws which were being passed concurrently with the Federal Court of Australia Act but also for the exercise of jurisdiction which might be conferred at any time in the future. The nature of such future jurisdiction was, of course, as yet undetermined. To enable such a court to perform its functions effectively the Parliament provided further, in s.23, as follows: "23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue or direct the issue of, writs of such kinds, as the Court thinks appropriate." Leaving on one side the word "matters" in the phrase "matters in which it has jurisdiction" which might be said in constitutional law to have become a term of art, the words used in s.23 are plain words which should be given their ordinary meaning. Clearly Parliament designed them to speak for the present and for the as yet undetermined future. It is difficult to see any justification for reading down the words 30 as to restrict the powers to these which might be held to be the limits of exercise of powers of, say, an English court differently constituted. Section 23 deals with the power of the Court to make various types of orders, once it has jurisdiction. It is not a section conferring jurisdiction on the Court in the narrow sense. _At the same time as the Legislature passed the Federal Court of Australia Act, it conferred jurisdiction on the Court under the Trade Practices Act 1974. This included jurisdiction which would have been unknown to an English court concerned with property and the vindication of legal and equitable rights. I refer to the jurisdiction to hear and determine an application for an injunction by "any ... person" claiming that a corporation has in trade or commerce engaged in conduct that is misleading or deceptive or likely to mislead or deceive. Such an applicant before the Federal Court does not have to have any particular interest (Phelps v Western Mining Corporation Ltd (1978) 20 A.L.R. 183). Any person may enliven the Court's jurisdiction to enable it to grant an injunction which will protect the public in their capacity of consumers from being misled or deceived. Any attempt to read down the words of s.23 by reference to the jurisdiction and powers of some court of a different system or some court exercising a different type of jurisdiction appears to me to be misconceived. In enacting s.23 Parliament plainly meant what it said. It provided: (1) There must be a "matter in which it , has jurisdiction". (ii) The court may in relation to such matter make orders. (111) The orders it may make are orders of such kinds "as the court thinks appropriate." A ee neat te eee en sitter netn | Clearly the Court is not to act arbitrarily or capriciously, but equally clearly, because the section relates to matters which are or may in the near or distant future be within the jurisdiction of the Court by virtue of a law passed by the Parliament, the words used in s.23 are not to be limited by reference to the doctrines of some other system. Help and guidance may often be obtained from seeing howa wise mind operating in a 'different system has dealt with a particular problem which arises before this Court but a general reading down of the plain words of s.23 is another matter. In my view Ellicott J was correct in holding in Heiro Pty Ltd v Somers (1983) 47 A.L.R. 605 that the Federal Court, in a case where the conditions prescribed by 3.23 were satisfied, had power to order an injunction of the type known as a Mareva injunction. We were referred in argument to Thomson Australian Holdings Pty Limited v Trade Practices Commission (1981) 148 C.L-R. 150. At the time when this case was decided, 11 September 1981, the jurisdiction of the Federal Court to grant injunctions restraining contraventions of Part IV and V of the Trade Practices Act was closely circumscribed. The Court could "grant an injunction restraining a person from engaging in conduct that constitutes or would constitute" a contravention of a provision of Part IV or Part V. It was held that similar limitations mt ww en a tee tere er applied to its acceptance of undertakings. The terms of s.80(1) were so specific that they excluded the use of the powers conferred by 3.23 of the Federal Court of Australia Act. Section | 80(1) as it stood at that time was the Court's exclusive charter to grant injunctions restraining contraventions of the Trade Practices Act. It was said to be inconsistent with the power in 8.23 to grant such relief as the Court thought "appropriate". Parliament moved to remedy the situation by passing Act No. 39 of 1983. As the Attorney-General (Senator Evans), in his second reading speech, referring to old s.80(1) (Hansard, Senate, 18 May 1983 Vol. S.98 p.551) said:- "This power is seriously inadequate. First it merely enables the Federal Court to enjoin a person from doing that which he is already under a legal obligation not to do. Secondly, the Federal Court's power effectively to prevent repetition of the conduct is restricted - in proceedings for breach of an injunction it could be necessary to prove all the elements of a contravention (including, where applicable, the effect on competition). Thirdly, - the Federal Court is not able to make orders corrective of the results of the contravention (except in the case of corrective advertising provided for section 8(A)." The amendment Act substituted anew s.80(1). The new s.80(1) provided that "at the Court was satisfied that a person had engaged or was proposing to engage in conduct that constituted or would constitute a contravention of Part IV or V (i.e. if the Court had jurisdiction in the matter) the Court might "grant an injunction in such terms as the Court determines to be appropriate". I suppose it could still be said that s.80(1) is the Court's charter to grant injunctions to restrain contraventions of the Trade Practices Act. But it isa different charter. Provided the Court has jurisdiction in the matter, it may now make restraint orders in appropriate practical terms to deal with the particular circumstances. Indeed, the charter in s.80(1) is no longer inconsistent with s.23 of the Federal Court of Australia Act. The Legislature has enabled the two provisions to operate in harmony. In. answering the argument of Counsel for Mr Jackson that the Federal Court had no power to order a Mareva type injunction some reliance was also placed by Counsel for Sterling upon the terms of s.87 of the Trade Practices Act. It was submitted that s.87 might also be relied on as a source of power to grant such an injunction. In particular reference was made to s.87(1A) which is as follows: "(1A) The Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this sub-section) in contravention of a provision of Part V, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a Person who was involved in the contravention (including all or any of the orders mentioned in sub-section (2)) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage." anette ate me ne Antal I have difficulty with the notion that a Mareva type injunction designed to prevent frustration of some final order of the Court falls within the description of an! order which will "compensate" the applicant for loss or damage'or an order which will "prevent or reduce" loss or damage. When a Mareva injunction is granted the relief is directed not at compensating the applicant nor is it directed at preventing or! | reducing his Lops or damage. Rather, where compensation is in question, it is | directed to ensuring that if a court does make anorder for compensation in respect of loss or damage the enforcement of the court's order will not be frustrated. | | In a practical sense the granting of a Mareva injunctign may operate in aid of an applicant by rendering it more likely such an applicant will recover the whole or part of y compensation which may ultimately be awarded by the court. It s not directed towards compensating that person. i \ As at present advised, it appears to me that the trial Judge did not have power under s.87(1A) of the Trade Practices Act to make the Mareva order that he did. Counsel for Mr Jackson, in dealing with the question whether the Federal Court had power to grant a Mareva injunction "otherwise" than pursuant to 38.23 of the Federal Court of Australia Act, argued that the Court being established by Statute rs et ne ne en elt ee ee he ee ermens sen Ren eteteneelee en Reeteeete ney ate ae me had no inherent jurisdiction. The argument regarding the existence or non-existence of inherent jurisdiction is an awkward one to fit into a Federal system. The High Court has its jurisdiction conferred upon it by Statute, namely by the Constitution and by Acts of the Parliament; the Federal Court of Australia is constituted by an Act of the Parliament, namely the Federal Court of Australia Act and has jurisdiction conferred on it by various Acts of the Parliament; the Supreme Court of New South Wales as formerly established as the superior court of record in New South Wales was continued by the Supreme Court Act, 1970 (NSW) (8.22) and that Act conferred upon the Supreme Court all jurisdiction which might be necessary for the administration of Justice in New South Wales (s.23). Although the Supreme Court ef New South Wales is spoken of as a court of "general jurisdiction" and the statutory establishment of the court is referential, the fact is that the jurisdiction conferred on that court by Statute is necessarily subject to subtraction due to constitutional limits and to additions e.g. by the Judiciary Act 1903, in away not usually associated with courts of general jurisdiction in a unitary State. In relation to a statutory court such as the Federal Court it is wise to avoid the use of the words "inherent jurisdiction". Nevertheless a statutory court which is expressly given certain jurisdiction and powers must exercise that jurisdiction and those powers. In doing so it must be taken to be given by implication whatever jurisdiction or powers may be necessary for the exercise of those expressly conferred. The implied power for; example to prevent abuse of its process, is similar to, if not identical with, inherent power. : i | Federal furtstscy ion, may in a particular field, be t exercisable by the High rt, the Federal Court, the Supreme ' Court of a State or the § reme: Court of a Territory. Where the same Federal jurisdtction|| is concurrently conferred upon the Pederal Court and invested in a State Supreme Court, it would certainly be odd if the one could grant an ancillary order such as a Mareva injunction and the other could not, if this distinction was based on P theory of "inherent" power derived from the courts of a unitary systen. js | The existence of ;/the power is one thing, the question whether it should be exer ised 'in the particular case and in a particular way is another. |The making of the particular order on the 23rd April 1986 in th present case was attacked on various | grounds. It was submitted (that th Federal Court had no power to order the payment into court of asum of money. It was argued that since a breach of the order} would constitute a contempt of court for which the court might c mmit a contemnor to prison, it would be tantamount to the rerintroduction of the "debtors prison" concept. I would hesitate to hold that where judgment had i ' been entered for payment of! mony} a mandatory injunction for the i i Pte aN nt Ait Lae ee enneteanes an nines yet item Aten telat ee tenet Rel ae A hen RO Re BN Re imprisonment. However, that question does not, in my view, arise in the present case. In my opinion, the Court has power pending the hearing and determination of a claim even for unliquidated damages to order money to be paid into Court, if in the particular circumstances the administration of justice requires it and it is considered appropriate by the Court. It should be pointed out that one remedy for breach of the Court's order is sequestration of the assets of the contemnor. Another ground of attack was that compliance with the order would give to Sterling security for the payment of any judgment it might recover and thereby work an injustice to other possible creditors of Mr Jackson. In my view this argument misconstrues the order made and its effect as against other creditors. The order was made on the 23rd April 1986 and it required compliance not later than 2.30 p.m. on the 2nd May 1986. At the time the order was made the trial was fixed to commence thereafter and was said to be estimated to last 3 weeks. In the form of application for the injunction several orders were sought. Order 1 sought payment in "as security for the payment of any verdict and/or costs". However, this claim was abandoned upon the basis that the Court had no power to order or would not order ."security" in that sense. Order 2 simply sought payment into Court of a money sun. This was the order which, in his reasons \ for judgment, the learned .trial Judge decided should be made. However, when the minute of order came to be settled objection "e ' 12. j was raised on behalf of Mr Jackson that payment into Court of §3 million in cash in the circumstances disclosed by the evidence might be gelf-incriminating. An attempt was then made to find a form of order which would be more flexible or permit Mr Jackson to give to the Court security in the sum of $3 million should he so choose in a form other than cash. In the result, orders were made in the form which is before us namely: "1. The Second Respondent (i.e. Mr Jackson) provide security in the sum of $3,000,000 in such manner and form as the parties may agree or, in default of agreement, the Court or its Registrar may approve. 2. The time for compliance with order number 1 shall be not later than 2.30 p.m. on Friday 2nd May, 1986." Security in the sense in which the word is used in the above order permits Mr Jackson to give to the Court security for the payment of the sum of $3 million instead of paying it in in the form of cash. It was not intended to revert to the abandoned claim for security for payment of any verdict and/or costs. It is true that an order for security for costs is intended to provide security for payment of the costs. The order in the present case is directed to a different purpose. It is not designed to give the applicant security in the sense of a preference or priority over other creditors. Rather it is directed to enabling Mr Jackson to provide security te the Court for payment of $3 million as a more flexible order than an order to pay into Court that sum in cash. For example, if Mr Jackson became bankrupt a et etd AAR tA A APR NRA A RAE ond So AS EON eR ome HRD meee An nee, Rete otter Abad eat Mens theme en om « ' 13. after paying the money into Court the Trustee would be entitled to approach the Court in respect of the payment out of the money. Sterling would not have any preference or priority over other creditors in such a case. Counsel for Sterling did not assert, indeed he strongly disavowed, that the order made by the learned trial Judge would give his client any preference or priority over other creditors in relation to any sum or security given to the Court. The order was designed to prevent Mr Jackson, to the extent of $3 million, dealing with what the evidence suggested were very considerable assets in such a way as to frustrate any order the Court might make when the matter came to trial and was determined. In a sense Sterling, by its position of being able to approach the Court for an order, might be said to have some practical advantage. It would at least be amongst the vigilant not the indolent, but it would not have any preference or priority over other creditors. In my view, the orders 1 and 2 made by the trial Judge were an appropriate exercise of power in the circumstances then before hin. What then occurred has created a situation which was not envisaged at the time the order of the 23rd April 1986 was made. In fact Mr Jackson consented to judgment in the sum of $3.25 million in terms of settlement dated 27th April 1986. Orders giving effect to this were made by Neaves J on the 29th April nt = 2 ne ape at a e ' 14. 1986 and 'these orders were entered on the 30th April 1986. Mr Jackson, perhaps alert to the position I have outlined above regarding a lack of any preference or priority in Sterling in the event of bankruptcy, on the 30th April 1986 filed his debtor's | petition in bankruptcy. The Registrar in Bankruptcy has not yet accepted this petition. Indeed there exists at the present time an injunction restraining the Registrar from accepting it pending determination of this appeal. One curious result is that due to Mr Jackson's prompt consent to judgment and the entry of those orders, the Mareva injunction granted on the 23rd April 1986 has ended up, contrary to the expectation when it was made, as an obligation to comply with an order to give security for payment into Court of the sum of $3 million ata date later than the final order in the proceedings. It might have been thought that upon the making of the final orders in the proceedings the interlocutory order should have been dealt with expressly and should presumably have been discharged. However, Counsel for Mr Jackson expressly declined to argue before us that the interlocutory order had expired or was spent or had merged in the final orders. Instead he adopted a common position with Sterling that the interlocutory order continued on foot after final judgment. Indeed, in the proceedings relating to the application for an injunction to restrain the Registrar from accepting Mr Jackson's debtor's petition a consent order was made by Beaumorit J. on the lst May 1986, staying the interlocutory orders until the 5th May 1986. On the 5th May 1986, on the application of Mr Jackson, an order was made by Burchett J, (in the proceedings for the injunction restraining the Registrar from accepting the debtor's petition), for an order further extending the time for compliance with the order of the 23rd April to 4 p.m. onthe 6th May 1986 and somewhat amplifying the expression of the terms of the order. Had the application seeking the giving to the Court of security for payment of the sum of $3 million into Court been made after the entry of final judgment and put forward on the basis it would operate in aid of execution, it would in ny opinion, have been inappropriate to make any such order. However, by the action of Mr Jackson in consenting to final judgment before the time for compliance with the interlocutory order had arrived, the position has been created that that is the only way in which the interlocutory order could now operate, if, as is put to us as common ground, it is still on foot. I should add that compliance with the interlocutory order did not take place by the date fixed by the order as varied, namely 6th May 1986. Proceedings for contempt of court have been commenced in respect of this non-compliance but have been adjourned pending the hearing of this appeal. Counsel for Mr Jackson sought leave to amend his grounds of appeal by adding a ground that the trial Judge did not take ' 16. | | I ' from Sterling an undertaking as to damages when deciding to grant 4 | . the Mareva type injunction which he did on 23rd April 1986. The granting of leave was opposed by Counsel for Sterling. We heard argument but reserved our decision on leave until we had had an opportunity of nearihg argument on the substantive appeal. |ho, i ' We should - rule on the question of leave. In my view, leave should be refused. i | It was common ground that the absence of the undertaking aid not go to the jurisdiction ef the trial Judge to make the orders which he dial on 23rd April 1986. But it was argued to be 1 it an error by him in t e exercise of his discretion and a powerful reason for setting his orders aside. After delivering his reasons for judgment the trial Judge adjourned the proceedings to enable short minutes of order to be brought in and discussed. There was ample opportunity for colnsel for Mr Jackson to raise this question but he aid not de so. Immediately it was raised here, Counsel for Sterling offered to give any necessary undertaking. Be that as it may, it is perhaps not surprising that Counsel for Mr Jackson did not raise the question of the undertaking before the trial Judge, when regard is had to the fact that Mr Jackson | consented to final judgment for $3.25 million in terms of | settlement dated 27th April 1986. As I have said, the failure to take an undertaking as t damages is not a matter going to jurisdiction. In the circumstances I am of opinion that leave to | i \ \ 4 : 17. amend the grounds of appeal by adding this ground should be refused. I may add that had I been of the view that leave should be granted, I would have concluded that no ground had been made out upon this basis for setting aside the learned trial Judge's orders of the 23rd April, 1986. Finally it was argued by Counsel for Mr Jackson that compliance with the injunction would or might have provided evidence of guilt in certain criminal proceedings pending against Mr Jackson and the trial Judge should have refused to make the orders of 23rd April 1986 upon the ground they would or might require him to incriminate himself. In my view, there is no substance in this argument. The form which Order 1 of 23rd April 1986 took was to enable Mr Jackson to give security to the Court in the sum of $3 million. The order did not require him to resort to moneys which were the subject of the criminal charge and, on the evidence before the trial Judge, Mr Jackson had at material times access to or control of other funds greatly in excess of the moneys, (of the order of $4.5 million,) the subject of the criminal charge. In the result, it is my opinion that the appeal should be dismissed with costs. I certify that this and the preceding pages are a true copy of the Reasons for Juogiei i ne 'vin of his Honour the Chief Judge, Sir Nigel Bowen Dateas (5 Octoler 1186. IN THE FEDERAL COURT OF AUSTRALIA ) | NEW SOUTH WALES DISTRICT REGISTRY ) No. G194 of 1986 ) : GENERAL DIVISION i) ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA l JOHN WILLIAM JACKSON Appellant t and STERLING INDUSTRIES LIMITED (Receivers & Managers Appointed) Reseefuent COURT: Bowen CJ, Woodward and Jackson JJ. | DATE: (5 October 1986 PLACE: Sydney REASONS FOR JUDGMENT WOODWARD J. | This is an appeal, by leave, from an interlocutory order | of Sheppard J in proceedings brought by the respondent to this ' appeal, Sterling Industries Ltd ('Sterling') against a number of parties, including the appellant, John William Jackson. The order : the subject of the appeal required Mr Jackson to "provide security in the sum of $3,000,000 in such manner and form as the patties | may agree or, in default of agreement, the Court or its Registrar | may approve". |! \ -2- This order was sought! and made as a deliberate extension of the more usual type of 'Mareva' injunction, designed to prevent the removal of assets from the jurisdiction or their dissipation by a defendant before judgment can be given. In exercising the discretion to make such an order, which his Honour found he had power to do, he referred to "the very extraordinary and unusual circumstances of the case" and "the systematically and blatently fraudulent conduct" of Jackson. The order is challenged by counsel appearing for Mr Jackson on several grounds. In the first place, it is said that the Federal Court has no jurisdiction to grant 'Mareva' injunctions of any sort. Secondly, it is argued that the order made cannot be justified by reference to 'Mareva' principles, because it does not relate to specific assets and amounts to pre-trial attachment. Thirdly, it is said that the order should have been refused because compliance with it would tend to incriminate Mr Jackson in connexion with a criminal charge which be faces. Finally, counsel sought leave to add a further ground of appeal, based on the fact that no undertaking as to damages was taken from Sterling at the time the interlocutory order was made. The Court reserved its decision as to whether this amendment should be allowed, but permitted the point to be argued. The facts of the case are fully set out in Sheppard ' J's reasons for judgment. It is sufficient for me to summarize ! the bi main points upon which his Honour relied in making the order. > i | The action in which the order has been made is founded upon 8.52 of the Trade Practices Act 1974. The accrued Jurisdiction of the Court is also invoked by a claim for fraud. me claims arise from a transaction in which a company controlled by Jackson sold two taverns to Sterling for a price of $2,850,000. The takings, and thus the profitability, of the taverns were alleged to have been greatly overstated in negotiations before the sale. His Honour found, for the purposes of the application for injunctions, that there were good prospects of Sterling's action succeeding, at least against Mr Jackson and his company, and of judgment being given in a sum of the order of $3,000,000. Apparently Mr Jackson was pessimistic about his chances of successfully defending the action because, in about July 1985, he obtained advice about ways of divesting himself of his assets, and then proceeded to put that advice into effect. Eventually this process came to the notice of Sterling, which sought orders from the Court. In the event, an undertaking was given on behalf of Mr Jackson, on12 November 1985, that neither he nor his company would dispose of their assets before the hearing of the action was concluded. Sterling alleges that this undertaking has been breached, and proceedings for contempt of court have been initiated but deferred. At about the same time that the undertakings were given, Jackson arranged for another of his companies, Jackson Holdings Ltd, to borrow $4,300,000 from two finance companies. The money was placed in a bank account in the names of two more companies controlled by Jackson. It was! later delivered in cash to Jackson fu | i 1f r t himself, whb first placed it in safe deposit boxes, then later withdrew it/ all.) So | much is not disputed. Jackson apparently claims that! he next paid the whole sum, anda little more, to a confidence trickster from whom he believed he was buying diamonds, ! which turned out to be cubic zirconia. "| ; ' itis story was not believed by the police, to whom he reported the alleged swindle, and he has been charged with the ' I fraudulent |misappropriation of the $4,300,000 from his company. Sheppard J! Found ; for the purposes of the application, that i} " Jackson''s account iof the swindle was false, and that it should he inferred "pe he still had control of the money or of assets which represent t- t t! I { wever, because of an argument put to him on the subject of jincrimination, his Honour chose not to make an order referring directly to the amount of $4,300,000. He relied instead upon evidence t t Jackson controlled assets of at least 100,04 before he began to dissipate them, and acting on the : | assumption that! {from one source or another, Jackson should be ! able to regain control of $3,000,000, ordered that that amount be paid into court ' or satisfactory security for such an amount be provided. His Honour took into account the fact that, if the security were arr, ged through a bank, there would be no evidence available as to t e source of any funds backing such security, and Py therefore no diff culty in relation to incrimination would arise. 1 q ' | / Hiis Hohour held, after considering the relevant 1 5 authorities, that he had power to make the order sought and 'that P| | | t ' Fy 1 ' 7 Ir his discretion should be exercised in favour of its making. He delivered his reasons for judgment on 23 April 1986. Later on that day, keter' counsel had had an opportunity to study the reasons and make submissions about the form of orders, his Honour made the order appealed against along with a number of others. Most of these do not concern us, but order 2 read, 'the time for compliance with order number 1 shail be not later than 2.30 p.m. on Friday 2nd May 1986". ! \ t note that at this stage no undertaking as to damages was offered by Sterling, sought by the respondents to the action, or required by the Judge. This may well have been an oversight on the part of' all concerned. The usual undertaking had been given | i! at the tim in November 1985 when Mr Jackson and his company i undertook npt to dispose of assets. The Full Court was assured by senior counsel for Sterling that it has at ali times been willing to give suph an undertaking. The matter was one which could readily havt been jarranged if it had been raised at the time of his Honour {s judgnent er by way of liberty to apply (which his Honour expressly, | reserved). There is no suggestion that any damage has been suffered as a result of the making of the order, which has not been complied with. In these circumstances, I think it is far too late to raise the issue in the course of this appeal hearing, and leave to amend the notice of appeal should be refused. i ! t dec: | erent occurred after the orders were entered on 24 April which co mplicate the history of the case, although they are not the subject of appeal to this Court. On 28 April the hearing of the principal action was due to begin. Negotiations took place between the parties and, on 29 April, the Court (Neaves J) made orders by consent giving judgment for Sterling against four respondents, including Mr Jackson and his company, in the sum of $3,250,000 with costs. This judgment was entered on 30 April. The next day, Mr Jackson and other respondents sought leave to appeal against the interlocutory order of Sheppard J and, by consent, an order was made by Beaumont J extending the time for compliance with Sheppard J's order to 5 May 1986. It is to be noted that, although the intention of the parties was clear enough, the strict terms of the order they agreed to could be read as simply deferring the operation of the whole order until 5 May, when one order would have come into force requiring an action to be performed by 2 May - clearly an impossibility. However, I have no doubt that the parties and the Court intended that order 2, quoted above, should be amended to read "5 May 1986" instead of "2.30 p.m. on Friday 2nd May 1986". On 2 May a Full Court granted leave to appeal, but refused to stay Sheppard J's order. However, on 5 May the Court (Burchett J) extended the time for compliance with Sheppard J's order to 4 p.m. on 6 May 1986. His Honour also amended the form of order 1 to make more specific the means by which security might be given. There has been no appeal from that order and it is not before this Court. The argument before us raised directly the question of the jurisdiction of the Federal Court to grant injunctions of the Mareva kind. As that question has not come before a Full Court of this Court before, it is desirable that I set out in some detail the history and development of the Mareva injunction, both in the United Kingdom and Australia. The Mareva Injunction in the United Kingdom Much has been said and written about the Mareva injunction since it first appeared in the common law jurisdictions in 1975. (For a general survey of the law, see Ms Hetherington's compilation entitled Mareva Injunctions (1983, Law Book Co), De Spry's Equitable Remedies (3rd ed at pp.491-503) and the articles at (1983) 11 ABER 187, (1985) 13 ABLR 236 and (1985) 59 ALJ 22). Mareva relief in its present form is, by and large, the product of the judicial creativity of the English Court of Appeal, led by the innovative Master of the Rolls, Lord Denning. The injunction was originally granted without prior notice to freeze domestic bank accounts of defendants who were ship charterers resident out of the jurisdiction: see Nippon Yusen Kaisha v Karageorgis C1975] 3 All ER 282 and Mareva Companion Naviera SA v International Bulk Carriers SA £19753 2 Lloyds Rep. 509, the latter case, of course, lending its name to the form of injunction under consideration. To obtain a Mareva injunction, it seemed necessary for the plaintiff to establish that the injunction was necessary for the enforcement or protection of a legal or equitable right or interest, that the defendent was a foreigner + t domiciled out of the jurisdiction, and that there was a reasonable apprehension that assets within the jurisdiction would be removed from the jurisdiction. Since 1975, Mareva relief has become increasingly popular with English litigants, and its use has been extended well beyond its original confines. Despite the strong dissent of Lord Denning in Chief Constable of Kent v ¥ C1983] QB 34, it appears that the Mareva injunction will still only be granted where there is a pre-existing cause of action against the defendant (see particularly the judgment of Donaldson LJ at 45). However, the Court of Appeal (led again by Lord Denning) has done away with the distinction between foreign and domestic residents, holding, first, that a Mareva injunction will extend to foreign residents temporarily within the jurisdiction, (Chartered Bank v Daklouche £1980] 1 All ER 205) and then that it will extend to local residents (Prince Abdul Rahman Bin Turki Al Sudairy v Abu-Taha £19803 3 All ER 409). The position has now been clarified by 3.37(3) of the Supreme Court Act 1981 (UK), which provides that the power of the High Court "eee to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the High Court, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as cases where he is not, domiciled, resident or present within that jurisdiction." Lord Denning has also held that the Mareva injunction "extends to cases where there is a danger that the assets will be dissipated in this country as well as by removal out of the jurisdiction" (Z Ltd v A-Z and _ AA-LL £19823 QB 558 at 571, and see also CBS United Kingdom Ltd v Lambert C1983] 1 Ch. 37). This development has continued in England in recent years. Mareva injunctions have been granted in personal injury actions (Allen v Jambo Holdings Ltd £1980] 2 All ER 502) and in matrimonial causes (Z Ltd v A-Z and AA-LL (above). They may apply to assets held by third parties, such as banks (see Z Ltd v A-2 and AA-LL, above and the article by Tyree, "Mareva Injunctions: The Third Party Problems" (1982) ABLR 375), and may be combined with ancillary orders requiring the defendant to discover on oath details of assets held (see A.J. Bekhor & Co Ltd v Bilton £1981] 1 QB 923 and C.B.S. United Kingdom Ltd v Lambert (above). Mareva injunctions have also been granted after final judgment in aid of execution (Stewart Chartering Ltd v C_& 0 Management SA, The Venus Destiny (19803 1 All ER 718, and Orwell Steel (Erection and Fabrication) Ltd v Asphalt and Tarmac (UK) Ltd £19853 3 All ER 747). Most recently, English courts have made orders, in support of a Mareva injunction, restraining a defendant from leaving the jurisdiction (Al. Nahkel for Contracting and Trading Ltd v Lowe £19861] 1 All ER 729 and Bayer AG v Winter & Ors [£1986] 1 All ER 733). Developments in Australia These developments have not escaped the attention of Australian litigants and cour'ts, although there have been varying judicial opinions as to whether state courts do have the power to make such orders. il j - 10 - In New South Wales, the views of single judges of the Supreme Court differed. Mareva injunctions were ordered by Sheppard J (whilst his Honour was then a judge of the Supreme Court of New South Wales) in Balfour Williamson (Australia) Pty Ltd v Douterluingne £1979] 2 NSWLR 884, and by Rogers J in Turner v Sylvester £19813 2 NSWLR 295. However, Powell J had refused a Mareva injunction on jurisdictional grounds in Ex parte B.P. Petroleum Co (Libya) Ltd; Re Hunt £1979] 2 NSWLR 406. The matter was not settled until the Court of Appeal delivered its decision upholding the jurisdiction to grant Mareva relief in Riley McKay Pty Ltd v McKay £19821 1 NSWLR 264. In Victoria, Harris J accepted in Praznovsky v Sablyack C1977] VR 114 that the Supreme Court of that state had jurisdiction to grant an interlocutory injunction restraining a defendant from disposing of his assets. That conclusion was doubted by Ormiston J in Deputy Commissioner of Taxation v Rosenthal (1984) 79 FLR 143. However, his Honour's views were apparently not shared by the other judges sitting on the Full Court in that case, where the Court upheld a decision of O'Bryan J (reported at £19853 2 ATC 4,031) discharging a Mareva injunction granted earlier by another judge of that Court, Tadgell J. Since then, Mareva injunctions have been ordered in at least one case by the Supreme Court of Victoria (Commonwealth of Australia v Janstenberger, unreported decision of Southwell J of 3 October 1985), and the jurisdiction was not questioned in two other cases (Blackwood Hodge (Aust) Pty Ltd v Raymond Offshore Constructors (Overseas) Ltd, unreported decision of Nathan J of 28 June 1985 | -11- and Williams v Easton-Bond, unreported decision of Southwell J of 17 oktober 1985), although in both those cases Mareva injunctions were refused on discretionary grounds. L I ' I Is ' , "In South Australia the Full Court of the Supreme Court, originally denied jurisdiction to grant such relief (Pivovaroff v Chernabaeff (1977) 16 SASR 329). 'That decision was overruled by a ———— later decision of the same court, constituted by five judges, in i] Devlin v Collins (1984) 37 SASR 98. | The position is similar in other states. Mareva injunctions have been granted in Queensland (Hunt v BP Exploration Co (Libya) Ltd (1980) 54 ALJR 205 and Bank of New Zealand v Jones £19821 Qd R 466), and Western Australia (Sanko Steamship Co Ltd v Commodities (A'Asia) Pty Ltd £1980] WAR 51). They have also been| ordered in the Australian Capital Territory (Barisic v Topic (1981) 37 ACTR 1), and in this Court on at least two occasions, 'Ltd v Somers (1983) 47 ALR 605 (Ellicott J), and Warea |: Pty Ltd v (Hater o_Industries Pt Ltd (unreported decision of Pincus J ot 24 January and 4 March 1986). 1 enerally speaking, courts in this country have shown little rel ctance in exercising this newly acquired power. Nor have they |been slow to test the boundaries of its operation. Rogers J in'the Supreme Court of NSW in Australian Iron & Steel Pty Ltd v. uck £1982] 2 NSWLR 889 adopted the view expressed by Lord Dennidg MR in Z Ltd v A-Z and AA-LL that the jurisdiction to grant a Mareva injunction applies to cases where there is a danger that azseks within the jurisdiction will be dissipated. In a hh - 12 - Hospital Products Ltd v Balilabil Holdings Pty Ltd (1984) 2 NSWLR 662, the same judge broke fresh ground in holding that the Supreme Court of NSW may grant an injunction to restrain a New South Wales company from disposing of or dealing with assets that are outside the jurisdiction. That decision was later upheld by the Court of Appeal: see £19853 1 NSWLR 155. The order made by Sheppard Jin the case before us involved an even greater extension of the Mareva principle, and it involved a step which, his Honour openly admitted, was unsupported by direct authority. However, before I turn to a consideration of the scope of the orders made by Sheppard J in this case, it is necessary to deal with the question of this Court's jurisdiction to grant an injunction of the Mareva kind. Jurisdiction to Grant a Mareva Injunction Although it appears settled that English and New Zealand courts, and the Supreme Courts of the Australian states, have jurisdiction to grant Mareva relief, there has been a good deal of debate as to the basis for that jurisdiction. In the first Mareva cases, Nippon Yusen Kaisha and Mareva Companion Naviera, the English Court of Appeal relied on s.45 of the Supreme Court of Judicature (Consolidation) Act 1925 (UK) ("the Consolidation Act") as providing jurisdiction to make the injunctions there ordered. In the former case, Lord Denning MR said, "There is no reason why the High Court or this court should not make an order such as is asked for here. It is warranted by s.45 of the Supreme Court of Judicature (Consolidation) Act 1925 which -13- says the High Court may grant a mandamus or injunction or appoint a receiver by" an interlocutory order in all cases in which it appears to the court to be just or convenient so to do." This view was repeated by Lord Denning in the Pertamina case (Rasu Maritima SA v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara £1978] QB 644 at 659-60. In his article at (1985) 59 ALJ 22 at 23, Mr Martin points out the irony of a court relying on legislation that had been in force (in one form or another) since 1873, to overcome a problem caused largely by modern technological developments which make it possible to transfer funds and assets around the globe "almost instantaneously. In addition, there is authority for the proposition that 3.45 is restricted to matters of procedure, and does not confer any new or increased jurisdiction; see The North London Railway Company v The Great Northern Railway Company (1883) 11 QBD 30 and Riley McKay Pty Ltd v McKay, (above) at 269. These factors may have contributed to a shift by English courts away from reliance on 3.45 of the Consolidation Act, to an emphasis on the court's inherent jurisdiction to prevent frustration of its orders, as a basis for granting Mareva relief: see Ira Ministry of Defence v Arcepey Shipping Co SA; The Angel Bell £19813 1 QB 65 and Stewart Chartering Ltd v C_& 0 Managements SA (above). The jurisdiction was put beyond doubt with the introduction of 3.37 of the Supreme Court Act 1981 (UK), which replaced s.45 of the Consolidation Act, and which empowers the High Court to grant a final or interlocutory injunction, including - 14 - t 1 eae bo AF Aa an injunction restraining a party from removing or pealing with assets, "in all cases in which it appears to the court to , be just f and convenient to do so": see A.J. Bekhor & Co Ltd v Bilton (above) and C.B.S. United Kingdom Ltd v Lambert (above). In Australia, the position, which is conveniently summarised in the decision of the New South Wales Court of Appeal decision in Riley McKay Pty Ltd (above) at 268-9, is|less certain. In that case, the Court, comprising Street CU, Hope JA and Rogers AJA, examined the operation of s.66(4) of the Supreme Court Act 1970 (NSW) - the equivalent of s3.45(1) of the Consolidation Act. It recognized that the Supreme/ Court Act is | the earlier not concerned solely with procedure, but it bowed English authorities which held that the precurser 'of 3.45(1) of the Consolidation Act did not confer any new jor increased jurisdiction. The Court also considered s.23 of the Supreme Court Act : l and the inherent jurisdiction of the Court. on| $.23,| which ! provides "The Court shall have all jurisdiction which may be necessary for the administration of justice in N Ww South Wales", the Court said, ry "It may be that there is some aifferenke between this provision and the inherent jurisdiction of the court but we doubt it! and £ there is, it would seem to be irrelevant for present purposes. The court exercises from time to time a great many powers which are not the} subject of any explicit statutory provision or rule, the exercise being based generally on the court' inherent powers. As it seems to us, those powe) 3 are recognized and exercised because \they lare | - 15 - necessary for the administration of justice in New South Wales! On this view s.23 confirms the existence of the Court's inherent powers but does not increase then. However the inherent jurisdiction could not exceed what is necessary for the administration of justice, and the jurisdiction conferred by the section would not be less than the inherent jurisdiction." After dealing with the jurisdictional arguments raised by Powell Jin Ex parte BP Exploration Co (above), the Court | concluded | "... that jurisdiction does exist and that it derives from the Supreme Court Act, 3.23, or from the Court's inherent power. The basis of jurisdiction is founded on the risk that the defendant will so deal with his assets that he will stultify and render ineffective any judgment given by the Court in the plaintiff's action, and thus impair the jurisdiction of the Court and render it impotent properly and effectively to administer justice in New South Wales. ... Assuming that the jurisdiction is exercised with due caution, it seems to us that it is necessary for the administration of justice in this State that the court should have power to prevent a defendant who would otherwise have assets to satisfy a judgment from setting the court and its procedures at naught by making sure that its judgment will be a mere brutum fulmen. The whole sense and purpose of the inherent powers, as well as the powers which s.23 confers, are to ensure the effective administration of justice." . The decision of the Court of Appeal tentatively gives s.23 no greater role than to express in statutory form the Supreme Court's inherent jurisdiction. Whilst authority for the proposition that Mareva relief is within the power of a court \ exercising general jurisdiction, the case has! no direct a f application to a court of statutory jurisdiction,: such as the Federal Court. | - 16 - The jurisdiction of the South Australian Supreme Court was fully discussed in Devlin v Collins (above). In Pivovaroff v Chernabaeff (above), a Full Court of that Court, presided over by Bray CJ, had held that s.29(1) of the Supreme Court Act 1935 (SA), the equivalent provision of s.45 of the Consolidation Act, was "purely a machinery section" (at 339) and did not confer any jurisdiction to issue injunctions which the Court did not have without that section. In Devlin v Collins a Full Court consisting _of five judges (King CJ, Zelling, Jacobs, White & Cox JJ) disagreed, holding that the Supreme Court did have jurisdiction to grant Mareva relief. King CJ, with whom Jacobs and Cox JJ agreed, held that "the inherent jurisdiction of the Court to protect the integrity and effectiveness of its processes provides a sufficient basis for the jurisdiction". In addition, he noted that 3.29(1) operated to confer * .2- @& statutory power on the court to grant interlocutory injunctions at least in circumstances in which the court would grant the injunction «,art from the section. It seems to me that the power to grant interlocutory injunctions conferred by s.29(1) cannot be narrower than the power derived from the court's inherent jurisdiction. If, as I think, the inherent jurisdiction enables the grant of such an injunction, s.29(1) must also authorize it. It provides an immediate statutory warrant for a power to be found ultimately in the inherent jurisdiction of the court" (at 100). This approach is similar to that which found a relationship to exist between the inherent jurisdiction of the Supreme Court of New South Wales and s.23 of the Supreme Court Act 1970 (NSW) in Riley & McKay Pty Ltd v McKay (above). However, it po -17- wilt be, noted that it differs substantially from the Court of Appeal' 5 conelusions on the New South Wales equivalent of s.45(1) | the Consolidation Act. "| Zelling J was prepared to hold that the South Australian on reme Court had jurisdiction under both its inherent isdiction and s.29(1). White J did not find it necessary to | ts { iy i} J decide ; 'Whether the statutory power was sufficient, relying ultimately on the Court's inherent jurisdiction. However, he did comment Nhat $.29(1) should not be narrowly construed simply for historical reasons. i . Again, the decision in Devlin v Collins must be J ' stinguished insofar as the Federal Court is a court of limited jurisdiction only. F abvar | Court to grant Mareva relief has been considered is the cision of Ellicott J in Hiero Pty Ltd v Somers (above). In that h th case, Ellicott J reiterated (at 612) that the by "gravamen of the jurisdiction is the consequence >| that the respondent's threatened action, if it ' occurred, would stultify any order the court might '| make in favour of the applicant". . He went on to conclude that ! 1 ft "The source of the court's jurisdiction, in my H opinion, in relation to all aspects of the | applicant's claim, is to be found in s.23 of the i; Federal Court of Australia Act. In relation to the { i | applicant's claim under the Trade Practices Act, it is to be found in that section and in s.87 of the Trade Practices Act. It is not supported by any inherent jurisdiction". ~~ —_ - 18 - Section 23 provides that "the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue or direct the issue of writs of such kinds, as the Court thinks appropriate". With respect, I agree with the conclusions reached by Ellicott J, both that this Court does have power to grant relief of a Mareva kind, and that such power is supported by s.23 and not by any "inherent jurisdiction" of the Court. Because the Federal Court cannot look to any such inherent jurisdiction, it is necessary and appropriate to interpret 3.23 broadly enough to make the Court's work effective. The Federal Court is of course a court of statutory jurisdiction, such jurisdiction arising from the Commonwealth Constitution, which empowers the federal Parliament to vest the judicial power of the Commonwealth in such federal courts as it creates (s.71) and to define tke extent of that jurisdiction (3.77). The Fede Court of Australia Act 1976 does not of itself vest jurisdiction in the Court but provides that the Federal Court "shall have such original jurisdiction as is vested in it by the Parliament" (s.19). Hence, in the case before us, the jurisdiction of this Court is attracted by the Trade Practices Act 1974. Claims for relief under Part VI of that Act are made for alleged breaches of 3.52. Under s.86, such actions are to be heard exclusively in the Federal Court (save for the exception therein referred to). A t - 19 - It is therefore strictly inaccurate to speak of the Federal Court's "inherent jurisdiction" in the sense that that expression is applicable to the Supreme Courts of the states. Support for that view can be found in the recent decision of Toohey J in Hughes v Western Australian Cricket Association (Inc) (unreported decision of 30 May 1986) and the decision of the Full Court of this Court in Parsons v Martin (1984) 58 ALR 395 at 401. That is not to say, however, that the Federal Court is restricted to exercising only those powers that are expressly granted to it by statute. For it is a necessary consequence of the creation of a superior court of record that it have the ability to exercise all those powers necessary to ensure the administration of justice in those cases that correctly come before it. That is what s.23 of the Federal Court Act seeks to do. In Parsons v Martin the Court said at 401, "In our opinion a court exercising jurisdiction conferred by statute has powers expressly or by implication conferred by the legislation which governs it. This is a matter of statutory construction. We are of opinion also it has in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred". That view was adopted by Toohey J in Hughes v Western Australian Cricket Association (Inc), in a decision which considered the power of the Federal Court to issue a subpoena for the production of documents in advance of a hearing. His Honour said, - 20 - "Neither the Federal Court of Australia Act nor the Federal Court Rules gives a Judge of that Court a blanket power to make orders where no express provision is to be found in the Act™ or Rules. Nevertheless a Judge has, in the words of Parsons v Martin, such powers as are incidental and necessary to the exercise of the jurisdiction or the powers conferred on him by the Act or by the Rules. In my view, where it appears to the Court to be in the interests of justice and the proper and expeditious conduct of a proceeding that a person produce documents before the date of hearing of the application, such a power exists. It arises by implication from the broad procedural scope of s.23 and also of the Rules, in particular the powers given to the Court by 0.27 to control the issue of subpoenas and the circumstances in which documents are produced. And it arises incidentally and necessarily to the exercise of the powers that s.23 and 0.27 confer. It is nota matter of the inherent jurisdiction of the Court." Support for this view also comes from the judgment of the Full Court in Australian Builders Construction Employees and Builders' Labourers' Federation v Commonwealth of Australia (1981) 37 ALR 470, where the Court considered its power to restrain public hearings of a Royal Commission which allegedly interfered with deregistration proceedings brought in the Federal Court. Deane J said, *I entertain no doubt that this court possesses & general power to restrain, by injunction, an unauthorized actual or threatened interference with the course of the administration of justice in proceedings before it. If it is necessary to find an independent statutory grant of such jurisdiction in the case of a superior court created pursuant to Ch III of the Constitution, jurisdiction in that regard is to be found in the provisions of s.31(1) and s.23 of the Federal Court of Australia Act 1976 when read in the combined context of s.24 of the Judiciary Act 1903 and cases defining the power to punish contempt possessed by the Supreme Court of Judicature of England at the commencement of that Act". - 21 - This is not a case where the Court seeks to exercise "a blanket power to make orders where no express provision is to be found in the Act or Rules". The Court has been specifically vested with wide powers to make orders. Por example, Order 24 provides that in urgent cases, the Court may grant an injunction or an order preserving property on the application of a person who intends to commence proceedings. Order 35 r 1 provides that "the Court may, at any stage of any proceedings, on the application of any party, pronounce such judgment or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that order in any originating process". Further, once jurisdiction is attracted under the Trade Practices Act, the Court has very wide powers to make orders, including the payment of damages (s.82), directing a party to disclose information or publish advertisements (s.80A), and granting injunctions "in such terms as the Court determines to he appropriate" (3.80). The Trade Practices Act This brings me to another point that was not discussed in detail in argument before us, but arose in the decision of the High Court in Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 37 ALR 66, which was adverted to by Ellicott 7 in Hiero Pty Ltd v Somers. In Thomson's case, the High Court examined the power of the Federal Court to accept undertakings o: grant injunctions in an action brought under the Trade Practices Act, where the conduct restrained by the i ' t - 22 - undertaking/injunction would not have been in contravention of the Act. It is useful to set out the following extract from the majority judgment of Gibbs Cd, Stephen, Mason & Wilson JJ, which appears at 72-74, "The Federal Court of Australia Act sets up the Federal Court and arms it with certain powers, eg ss 22 and 23. But generally speaking, and apart from $.32, the Act does not invest the court with jurisdiction. It leaves it to the Parliament to do so by other statutes (s 19). This the Parliament has done by other statutes, such as the Trade Practices Act. When a specific statute which invests the court with jurisdiction in matters of a particular class does so in such a way as to limit the power of the court to grant relief of a particular kind, there is no basis for transcending that limitation by recourse to the general provisions of the Federal Court of Australia Act. The provisions of that Act, correctly understood, do not empower the court to grant injunctions restraining, or relating to, contraventions of the Trade Practices Act in situations falling outside the boundaries drawn by ,8 80 of that Act. Section 22 of the Federal Court of Australia Act is a 'Judicature Act' provision, designed to ensure that the court can grant relief which is appropriate to both legal and equitable claims and to avoid multiplicity of proceedings. Its effect is to enable the court to dispose of all rights, legal and equitable, in the one action, so far as that is possible; scs, for example, The James Westoli £1905] P 47; McGowan v Middleton (1883) 11 QBD 464 at 468; Searle v Choat (1884) 25 Ch D 723 at 727: see now Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 55 ALJR 120; 33 ALR 465. It does not confer authority to grant an injunction in circumstances where a plaintiff has no case for relief by way of injunction under the general law or by statute. So also with s 23; it arms the court with power to make all kinds of orders and to issue all kinds of writs as may be appropriate, but it does not provide authority for granting an injunction where there is otherwise no case for injunctive relief." In Hiero Pty Ltd v Somers, Ellicott J said, "Whilst bearing in mind the comments of the High Court in Thomson's case (1981) 37 ALR 66, this section plays an important role in defining the powers of the court in all matters" within its - 23 - jurisdiction. It should not be given a narrow interpretation. The Federal Court is established by the Act to exercise, inter alia, original jurisdiction vested in it by Parliament in respect of matters arising under laws of the Parliament. It is consistent with the object and purpose for which the court was established that it should have all the powers necessary for it to do justice in exercising the judicial power of the Commonwealth in matters over which it has jurisdiction. In my opinion, the section is wide enough to empower the court to make an interlocutory order which would ensure that a respondent did not so act as to deprive an applicant unfairly of the fruits of any judgment the applicant might obtain in a matter. Such an order, it seems to me, is clearly one which the court could consider 'appropriate' in dealing with matters over which it has jurisdiction. The 'appropriateness' of it is confirmed by the approach adopted by other courts in similar circumstances." I would agree with Ellicott J that Thomson's case does not narrow the power of this Court to grant Mareva injunctions. In the present case the injunction was ordered not as a consequence of a breach of the Trade Practices Act, but as a result of Jackson's deliberate and premeditated attempts unfairly to avoid the consequences of an order of this Court. T also note in passing that the practical effect of the decision in Thomson's case has been significantly reduced by 1983 amendments to s.80 of the Trade _ Practices Act, which make clear the Court's power to grant appropriate injunctions once it is satisfied that a contravention of Part IV or Part V of the Act has occurred or is proposed. I am therefore satisfied that the Court has the jurisdiction to grant a Mareva injunction, and that it was clearly appropriate to do so in this case. There was uncontradicted - 24 - evidence that the respondent was trying to divest himself of ali his assets in order to frustrate a likely judgment against him in favour of the applicant. The trouble taken by the respondent clearly indicated his own views about his prospects of successfully defending the action. The Ordering of Security The final issue to determine is whether, in ordering Jackson to provide security for the sum of $3,000,000, Sheppard J stretched the Mareva principle to an impermissible length, and acted outside the powers of the Court. That view was pressed on us by counsel for the appellant, who argued that the order in this case extended beyond the scope of the Mareva injunction and amounted to a form of pre-trial attachment, which has for long been considered unacceptable by the Courts. Reliance was placed on a number of cases including Lister & Co v Stubbs (1890) 45 Ch.D land Cretanor Maritime Co Ltd v Irish Marine Management Ltd C1978] 1 WLR 966. In Ninemia Maritime Corp v Trave Schiffahrtsqeselischaft mbH and Co_ KG; The Niedersachsen £1984] 1 All ER 398 (a case which was not cited in argument before us), Kerr Ld, speaking on behalf of the Court of Appeal, said, in answer to submissions that the Court ought to require defendants to provide security for claims which appear to the Court to be well founded, "In our view all these submissions go much tco far in the light of the authorities and are indeed wholly inconsistent with the origin and development of this jurisdiction. The machinery of the Mareva injunction is extremely useful in appropriate cases. But, as the law stands, this jurisdiction cannot be invoked for the purpose of providing Plaintiffs with security for claims, even when - 25 - these appear likely to succeed (we are speaking generally and not with reference to this case), and even when there is no reason to suppose that an order for an injunction, or the provision of some substitute security by the defendants, would cause any real hardship to the defendant" (at 419). The principle underlying this statement of the law was urged upon Sheppard J, but he held, and in my opinion rightly, that it did not apply to the facts as he found then. | i} It is important to understand the manner in which his Honour was using the word "security" in his judgment and in the order. He had rejected a submission from the applicants that Mr Jackson be required to provide security for judgment, in the sense of making available a fund over which the applicants would have automatic rights should they ultimately obtain judgment. It is clear that such an order could not have been made. His Honour recognized that the ordinary Mareva injunction operates against the person to whom it is directed. It does not affect the ownersuip of any moneys or goods to which it relates, or otherwise provide the party seeking it with any benefit in the form of a preference over other possible creditors. Its sole purpose is to attempt to ensure that certain assets of a defendant or respondent, which might otherwise pass out of the jurisdiction or be dissipated, are frozen so as to be available to satisfy, at least in part, execution pursuant to a judgment which is likely to .- be given. That is what was intended to occur upon compliance with the order in this case. There is authority supporting the practice adopted by some defendants who provide security, in the form of money or a bank guarantee, in order to obtain the release of assets frozen by a Mareva injunction - see the decisions of Lord Denning MR in Rasu Maritima SA v Perusahaan (above), at 662 and the Third Chandris Shipping Corporation v Unimarine SA £19793 QB 645. However, Sheppard J acknowledged the paucity of authority dealing with the question of the delivery up of non-specific moneys pursuant to a Mareva injunction. That is not particularly surprising, as the law relating to Mareva injunctions is still in its infancy. In Riley McKay Pty Ltd v McKay, the Court of Appeal said at 276, "As has been made clear by judgments in England, the jurisdiction is still the subject of development on a case by case basis. It is, accordingly, undesirable to undertake the fornulation of general tests or boundary-lines which might, in their very generality, preclude or distort the useful development of this new remedy". In the Court of Appeal in Ballabil Holdings Pty Ltd v Hospital Products Ltd, Glass JA said, in response to submissions that Mareva injunctions should not extend to foreign assets, "There is however a more fundamental answer which is based upon the manner in which the common law evolves. Whenever a doctrine or principle is extended or developed it comes about because the factual situation under consideration stands outside the scope of the doctrine or principle as presently defined". I believe the circumstances of the present case were extreme enough to warrant the extension of the Mareva principles made by the novel order granted here. The judge at first instance was faced with a situation in which the purpose of the respondent - to frustrate the probable judgment of | the Court - had been | { largely accomplished. There were no adequate assets which could be made the subject of a normal Mareva injunction. However, his Honour thought it highly likely that the refpendent had dissipated \ his fortune in such a way that all or most of it was still subject to his practical control. fo: His Honour might have decided that it was too late - the } respondent had succeeded in his unmeritorious design, and there | was nothing further the Court could do to assist the applicant. He chose, however, to act on his belief that the respondent still had access to the necessary moneys and to order him to bring them into Court. It was, of course, open to he respondent to show that he had genuinely lost control of his assets and could not comply with the order. "| The gloss which his Honour placed! on the order, enabling the respondent to give security rather 'maf pay moneys into court, was designed to overcome any suggestion of 'self-incrimination (as explained earlier in these reasons); I think it did so effectively and that there is no substance in the |ground of appeal which seeks to argue otherwise. The reference to security did not ] affect the essential nature of the order or ha e the effect of offering the applicant the possibility of, prefe ence over other ckeditors. In my view the course followed by his Honour was open to him in the exceptional circumstances of this case. ji oh | 1 \ | I faink an order that moneys be paid into court or security given, which is expressly made pursuant to the Mareva principles, San be distinguished from an order for payment into court as a condition for leave to defend (In re Ford, Ex parte The Trustee £19003 2 QB 211) or avoluntary payment into court pursuant to | rules of court (In _re Gordon, Ex parte Navalchand | C18973 2 QB 516, W.A. Sherratt Ltd v John Bromley (Church | Stretton) Ltd £19853 1 QB 1038). Where Mareva principles are applied, the intention is merely to require the person to whom the injunction is directed to hold certain assets or, as in this case, to bring them out of hiding and put them ina safe place, so that they will be preserved pending the completion of litigation or further order of the Court. Where payment into court is made a condition of leave to defend, an amount is required to be paid "to abide the event" (Ford's case, above, at 213). The "event" will determine title to that money. Similarly a voluntary payment into court is made by way of an offer in satisfaction of the plaintiff's claim. "It is in effect a conditional payment to the plaintiff" (Gordon's case, above, at 520). Such cases differ from Mareva cases because they involve the provisional satisfaction of the plaintiff's claim rather than the preservation within the jurisdiction of certain of the defendant's assets. \ I would, for reasons given earlier, refuse the appellant leave to amend his notice of appeal to raise a fresh ground relating to the lack of the usual undertaking by the applicants. I would dismiss the appeal with costs. So far as the future of Sheppard J's order (as since amended) is concerned, I accept that a Mareva injunction which takes effect before judgment will continue to apply after judgment until further order, and that such an injunction can be given in aid of execution in appropriate cases. But I have serious doubts whether such an order, intended to take effect before judgment, should be permitted to take effect for the first time after judgment and in aid of execution. However this question was not before us, and the case is such an extraordinary one that I prefer not to express a concluded view on the matter. The question whether, in the events which have occurred, the order should be discharged, will have to be dealt with on motion. I certify that this and the twenty-eight (28) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon Mr Justice Woodward ssociate Dated: 15 October 1986 IN THE FEDERAL COURT OF AUSTRALIA } NEW SOUTH WALES DISTRICT REGISTRY ) No. G194 of 1986 ) GENERAL DIVISION BETWEEN JOHN WILLIAM JACKSON Appellant AND: STERLING INDUSTRIES LIMITED (RECEIVERS & MANAGERS APPOINTED) Respondent CORAM: BOWEN C.J-, WOODWARD AND JACKSON JJ. DATE: 1S OCTORER 1996. PLACE: SYDNEY REASONS FOR JUDGMENT JACKSON J.: The orter which is the subject of this appeal was made by Sheppard J. on 23rd April 1986 in proceedings in which the present respondent sued for damages for contravention of s.52 of the Trade Practices Act 1974, for orders pursuant to s.87 of that Act and for relief in the exercise of the accrued jurisdiction of the Court. At the time when the order was made, the proceedings were listed for trial on 28th April 1986. The causes of action to which I have referred were alleged in the amended Statement of Claim to arise in connection with the sale to the respondent of two licensed premises. One was the New York Tavern which had been sold by NIM Services Pty Limited for $1,850,000.00 and the other was the Market Square Tavern which had been sold by the appellant for $1,000,000.00. The appellant was at all material times a director of NIM Services Pty Limited and that company was a respondent to the proceedings. Each agreement was alleged to have been made on 8th May 1984 and completed on 15th May 1984. As the primary judge said in his Reasons for Judgment, the essence of the respondent's case was that it was misled as to the profitability of the two taverns because it relied upon records provided to it of bankings made to the credit of the vendors' accounts when they were carrying on the businesses. It was claimed that those bankings were not the actual takings, considerable additions to them having been made from sonreses other than the businesses of the taverns. These facts were not substantially in issue before the primary judge and he said:- "The case which the applicant makes is that in those circumstances it ought to be inferred that the first respondent and those acting for it, namely the second, third and fourth respondents, intended a purchaser such as the applicant, to think that the bankings were the takings. In the absence of any statement to the contrary, this is what such a purchaser would be led to believe. I£ these facts be established, it would seem to me, that, to say the least, the applicant has good prospects of success in its claim. Having considered the whole of the evidence which there is on the question and also the submissions of counsel which did not include any submissions on this part of the case, I have no hesitation in saying that the applicant has established, on the material which is before me, that it has good prospects of obtaining a judgment against the first and second respondents and, possibly the third and fourth respondents as well, in the sum of approximately $3,000,000, the damages figure being based upon the prices at which the applicant subsequently sold the two taverns." The orders made by Sheppard J. included orders that:- *1.— The Second Respondent provide security in the sum of $3,000,000 in such manner and form as the parties may agree or, in default of agreement, the Court or its Registrar may approve. 2. The time for compliance with order number 1 shall be not later than 2.30 p.m. on Friday 2nd May, 1986. 3. The security provided in compliance with order number 1 hereof is not to be released except by the consent of the parties or the further order of the Court." It is Order 1 which is the subject of the appeal. These orders were made in circumstances when on the evidence before him His Honour had found, as he was plainly entitled to, that the applicant's conduct:- "..- establishes, not only his intention, but also his determination, to deprive the applicant of the benefit of the judgment it expects to recover." and had found also that the appellant was "determined to avoid | the consequences of judgment if he possibly can". The trial did not proceed as a contested hearing, however, because so far as concerns the parties to this appeal, the matter was compromised on 29th April 1986 on terms which provided for a consent judgment in the amount of $3,250,000.00 and costs in favour of the respondent against NIM Services Pty Limited, the appellant and others. In accordance with the terms of settlement Neaves J., before whom the matter was listed for trial, gave judgment on that day for the respondent against the parties I have mentioned in the agreed amount of $3,250,000.00 and costs. There was no mention in the terms of settlement of the effect which the compromise, and consequent judgment, might have on the order requiring the provision of security in the sum of $3,000,000. The appellant expressly declined to advance any argument that the order of Sheppard J. had ceased to have effect after the entry of judgment, and I shall proceed on the assumption that it is correct. After the judgment was given by Neaves J. a consent order was made on Ist May 1986 by Beaumont J. staying the order of Sheppard J. until 5th May 1986 and on 5th May 1986 Burchett J. made an order extending the time for compliance to 4.00 p.m. on 6th May 1986. I should also mention that on 2nd May 1986 the Court had given the appellant leave to appeal from Sheppard J.'s order, the Court reserving to the respondent liberty to apply to t have the grant of leave to appeal rescinded at the hearing of the appeal, by reason of the events subsequent to the making of the order by Sheppard J.. The respondent did not apply to have the a eee es re leave to appeal rescinded. The issues argued in support of the appeal were in essence four, namely:~ (a) that there is no jurisdiction in the Court to grant a Mareva injunction; (b)} that if there is such a jurisdiction the order should not have been made because it was a form of pre-trial attachment or preferred the respondent to the appellant's other unsecured creditors; (c) that the order should not have been made because compliance with it would tend to incriminate the appellant; and (d) that the order should be set aside because no undertaking as to damages was given by the respondent. I shall deal with those contentions in that order, noting that the last of them was sought to be added as a ground at the hearing of the appeal when the Court, reserving its decision on the question whether leave to amend should be granted, heard full argument on the issue. JURISDICTION TO MAKE THE ORDER As I have said, the order which is the subject of the appeal is that the appellant "provide security in the sum of $3,000,000" and that order was treated by the parties (both before Sheppard J. and before us), and by Sheppard J., as a form of "Mareva injunction", it being recognized by His Honour that:- "the question here is whether the relief, which has become known as a Mareva injunction, should nevertheless extend to the making of an order for the giving of security in an appropriate case". The validity of the parties' assumption that the order fell within the concept of a Mareva injunction is a matter which I shall discuss below, but I shall turn first to the argument that the Court has no jurisdiction to grant any type of Mareva injunction in proceedings such as these. The possible sources of power to grant such injunctions are:- (a) s.23 of the Federal Court of Australia Act 1976; (b) ss. 80 and 87 of the Trade Practices Act 1974; and (c) the Court's incidental powers. The first such source, s.23, is in the following terms:- "23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate." ed The "matters in which it has jurisdiction" referred to in 8.23 are matters in which (see s.19(1)) jurisdiction is vested in the Court by an enactment of the Commonwealth. The} jurisdiction in relation to those matters includes the jurisdiction conferred by the operation of s.32(1) of the vederal Court of Australia Act in relation to associated matters of federal jurisdiction, and also includes the Court's accrued jurisdiction in relation to the non-federal issues which may arise as part of a "matter" (Fencott v. Muller (1983) 152 C.L-R. 570 and Stack v. 'Coast Securities (No. 9) Proprietary Limited (1983) 154 C.L.R. 261). In relation to the matters in which it has jurisdiction the Court by s.23 has power ta make "orders of such kinds .. as the Court thinks appropriate" and it is clear, in my view, that a narrow construction should not be given to the ambit of the power so conferred. In the first place the jurisdiction which may be vested by enactments to which s.19(1) refer? is potentially limited only by the limits of Commonwealth legislative power under s.77(i) of the Constitution. In those circumstances one would expect s.23 to be intended to give wide powers to make orders appropriate to a wide variety of circumstances, some as yet unforeseen, which may arise. Secondly, it is unlikely that in the exercise of the jurisdiction conferred in relation to associated matters, and in relation to non-federal matters, that the Court's powers are to be in any way more limited than would be the powers of the Supreme Court of a State exercising either yo bed tenet ena em eet rater eden aa invested federal jurisdiction or non-federal jurisdiction as the case might be. Thirdly there is nothing in the terms of s.23 to suggest that the "orders" contemplated by s.23 are only orders of a kind which might have been made by other courts (for example, by the Supreme Court of a State) prior to the establishment of the Federal Court, or which might now be made by other courts in the exercise of their statutory and inherent powers. The short fact is, in my view, that the requirement of 8.23 is simply that the order be one which the Court, in the light of the nature of the particular jurisdiction which it is being called on to exercise and in the light of the particular facts before it, """thinks appropriate". The power, of course, is one to be exercised judicially. In these circumstances it requires little persuasion to adopt the view that one of the orders which the Court might "think appropriate" in proceedings in which a claim for damages is made is a Mareva injunction. The Mareva injunction, albeit in its early formulation, was a known type of interlocutory order at the time of the establishment of the Federal Court (Nippon Yusen Kaisha v. Karageorgis [1975] 1 W.L.R. 1093 and Mareva Compania Naviera S.A. v.- International Bulkcarriers S.A. [1975] 2 Lloyd's Rep. 509) and the potential for its development was obvious. The Federal Court was not limited by such constraints as might be thought to be attracted by the use of earlier forms of words such as those found in s.18 of the Supreme Court of Judicature Act 1873 (Imp.) and its analogues empowering courts to grant interlocutory injunctions 2 » 2 | whenever it was "just or convenient" to do so (see Mayfair Trading Co. I Pty Ltd. v. Dreyer (1958) 101 C,L.R. 428 at 454), but s.23 used a deliberately new form of empowering vords. Further, as the Reasons for \ Judgment of Woodward J. in this} case show, there are now numerous instances both in Australian jurisdictions and elsewhere where courts have thought the grant of a Mar va injunction appropriate in circumstances where the plaintiff claims no more than debt or damages. Finally, it would seem a curiot construction of s.23 if, despite the absence of any expressed limit bn its terms, the Federal Court could not grant a Mareva injunction in respect of the claims in the accrued jurisdiction in the present cage althaugh such an order might be made by the Supreme Court of New south Wales' ('Rile McKay Pty Ltd v. McKay [1982] 1 N.S.W.L.R. 264) or the Supreme Court of Queensland (Bank of New zealand v. Jones [1982] Od. R. 466), the courts in which the claims under the general law would mos Likely have been litigated if they had i mou not been added to the claims under the Trade Practices Act. As will be apparent from the foregoing remarks, my view is that the Court, hr reason of s.23, has power to grant Mareva injunctions when it thinks it appropriate to do|'so. tn this regard I agree with the { views of Ellicott J. in Hiero Pty Ltdjv. Somers (1983) 47 A.L.R. 605. I turn then to consider the pr visions of the Trade Practices Act, the proceedings having been commgnced in the Court pursuant to its provisions. ' i $.80(1) of that Act dea | ' specifically with the Court's power to t | Igrant injunctions in respect "4 actua er potential contraventions of ] ee. the Act, and s.80(2) confers a power to grant an interim injunction _™pending determination of an application under sub-section (1)." The 'present proceedings, however, were not proceedings where an injunction was claimed as final relief and thus s.80(2) has no relevant application. i1 | ' Of more significance, nodever, is s.87 of the Act which confers 1 ' 'on the Court power to make orders of various kinds in the circumstances | there relevant. In this regard 's.87(1) provides that:- ! | "(1) Without limiting the generality of section 80, where, in a proceeding instituted under, ... this Part, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another perso that was engaged in ... in contravention of a provision of .Part ... V, the Court may, whether or not it grants|an injunction under section 80 or makes an order under sectiion 80A or 82, make such order or orders as it thinks appropriate against the person who engaged in the conduct or] a person who was involved in the contravention (including all or'any of the orders mentioned in sub~section (2) of this section) if the Court considers that the order pr orders concerned will compensate the first-mentiioned person in whole or in part for the loss or damage ori will prevent or reduce the loss or damage." | ' \" It will be seen that the 'power, to make an, order under s.87(1) exists if the Court considers. that the order either:- (a) will compensate, in whole pr in part, for the loss or damage; or (b) will prevent or reduce the| loss or damage. oly fl I do not doubt that the grant ° a Mareva injunction is likely to have the effect that te is more likely that there will | -l]l]- be money or property available to pay whatever loss or damage is held to have occurred, and I do not doubt that the grant of a Mareva injunction may well have the effect of preventing or reducing the possibility that the damages awarded will not be paid. To say that, however, does not mean that the Mareva injunction itself, the "order" to which s.87(1) refers, prevents or reduces the "loss or damage". The same applies to the alternative requirement of s.87(1), namely that the order "compensate" for the loss or damage. "Compensation" prima facie means "recompense for loss" (Nelungaloo Pty Ltd v. The Commonwealth (1948) 75 C.L.R. 495 at 571 and Re Melden Homes No. 2 Pty Ltd's Land [1976] Qd. R. 79 at 81). A Mareva injunction does not provide any recompense for loss, but simply increases the possibility that a judgment for that loss will be satisfied. In Hiero Pty Ltd v. Somers (supra) Ellicott J. (at 612-613) took a different view saying that it was open to the Court under s.87(1) to make an interlocutory order designed to ensure that an applicant or a person who had suffered loss and damage would in fact be able to recover the amount of any damage found by the Court to have been suffered and that it was an order of a type which could properly be said to "compensate" the applicant or the person suffering damage. I am unable, for the reasons expressed earlier, to agree with this view. Similar observations apply to s.87(1A) which uses terms relevantly similar to those of s.87(1). an nnd tenn beinnn Ree nen enenetiteeN tenn antennas apmnentiZtt ian nenttennteannenaententn tele neeeen n nine cone Sven atheete tennant rttaNe st SINAN oe — -12- I should also note in passing that s.87A(1), however, does give a specific power to grant a Mareva injunction at the instance of the Minister or the Commission but the present application was not so made and in any event s.87A(6) provides that:- "(6) Nothing in this section affects the powers that the Court has apart from this section." It is unnecessary to consider a further question, namely whether s.87 permits the grant of interlocutory orders, although the references in e.g. s.87(1) to preventing or reducing the loss or damage suggest that the orders which may he made include interlocutory orders. One matter with which I should deal, however, is the suggestion that s.23 of the Federal Court of Australia Act could have no relevant application in the light of the decision of the High Court in Thomson Australian Holdings Pty Ltd v. Trade Practices Commission (1980-1981) 148 C.L.R. 150. In that case Gibbs C.J., Stephen, Mason and Wilson JJ. held (at 162) that s.80 of the Trade Practices Act in its then form:- ".e. constitutes the Federal Court's exclusive charter to grant injunctions restraining, or relating to contraventions of the Trade Practices Act." and (ibid.) that:- "The inference is irresistible that Parliament looked upon s.80 as a complete and comprehensive statement of the circumstances in which injunctions might be granted in respect of relief sought under the Trade Practices Act." It seems apparent enough from the judgment at 165 that those remarks were limited to final, rather than interlocutory, relief and that in consequence in a matter in which relief is sought in respect of contravention of the Trade Practices Act, an interlocutory injunction may be granted, although it is not an injunction specifically contemplated by that Act. In this case, in any event, the claims in the accrued jurisdiction brought into play the powers under s.23. . I might say that I have referred to Thomson Australian Holdings Pty Ltd v. Trade Practices Commission (supra) on the assumption that the principle of the decision continues to apply notwithstanding the very significant amendments to s.80 since that decision. The terms of those amendments, and in particular of those to s.80(1), are such that it must be regarded as very doubtful whether such a principle could now be regarded as applicable. It {is unnecessary in the circumstances to consider whether the Court's incidental powers would justify the grant of a Mareva injunction. It follows from the foregoing that the ground on which the existence of jurisdiction was challenged, namely that the Court may not grant any Mareva injunction, should fail. SHOULD THE ORDER HAVE BEEN MADE? The argument advanced is that, accepting the force of the remark of Glass J.A. in Ballabil Holdings Pty Limited v. Hospital Products Limited [1985] 1 N.S.W.L.R. 155 at 164 that of necessity the extension or development of a doctrine or principle - such as that relating to the Mareva injunction - will require a redefinition of the earlier doctrinal basis, the order actually made yet went beyond the bounds of the concept of Mareva injunctions. Accepting, as the argument does, the possibility of some redefinition of the relevant doctrinal basis, I yet have some difficulty in adopting the view that the order made by His Honour can be described as an example of a Mareva injunction. I take that view because the Mareva injunction, speaking generally, is an injunction which restrains a defendant from dealing with assets so as to remove them from the reach of the plaintiff and thereby render any future judgment fruitless and barren (Riley McKay Pty Ltd v. McKay (supra) at 267). One of the aspects of it which has been emphasized frequently is that it is relief in personam and is not intended to give rise to a situation where the party in whose favour it is granted, if successful in the proceedings, will become a secured creditor of the party against whom the order is made. See A.J. Bekhor & Co. Ltd v. Bilton {1981] 1 Q.B.e 923 at 942, Searose Ltd. v. Seatrain (UK) Ltd [1981] 1 =-15- All E.R. 806, The Marie Leonhardt [1981] 3 All E.R. 664, The Eleftherios [1982] 1 All E.R. 796, Iraqi Ministry of Defence ve Arcepey Shipping Co. S.A. [1981] 1 Q.B. 65 at 71-72 and Cretanor Maritime Co. Ltd. v. Irish Marine Management Ltd [1978] 1 W.L.R. 966. In the present case the order made by His Honour provided in terms for the giving of security, a security which could only have been for the payment of any judgment in favour of the respondent. It is true to say that His Honour had not made another order sought by the respondent, namely an order for payment into Court of the sum of $3,000,000, but that was only because of a desire to avoid a suggestion that such an order would require the appellant to incriminate himself. His Honour said in this regard that the general thrust of the argument for the appellant was:- *".. that a payment into court by Mr Jackson pursuant to an exder that he do so will cause him to do an act which may tend to incriminate him." but that:- ".. what I think does overcome the argument is the fact that the applicant does not seek the payment in of any specific money in the sense of it being identified with the $4.3 million of which Mr Jackson took delivery. What is wanted is a payment of $3 million or satisfactory security in lieu thereof. Really it is the latter which is sought. If an order is to be made, I think that is the form which it should take." Elsewhere in his judgment he said that:- ".. the question here is whether the relief, which has become known as a Mareva injunction, should nevertheless extend to the making of an order for the giving of security in an appropriate, case." fi / He also treated the situation as comparable to that obtaining where a party is ordered to give security for costs or for the amount of a judgment which 'Js the subject of an appeal. In such cases, however, where security is given or money is paid into court, either voluntarily (as an offer in satisfaction of a claim, with or without a denial of liability) | ty or involuntarily (as a compliance with a condition of leave to defend) the effect of the provision of security is to make the party in whose favour it 1s) given a secured creditor if the party I ordered to provide the secumity later becomes bankrupt or, if a company, goes into liquidatiion. ' '| Thus in Ex parte Banner, In re Keyworth (1874) L.R. 9 Ch. App. 379 money had been paid into court as a condition of leave to defend and to "abide the levent.F It was held that the defendant's trustee in banktuptcy was not entitled to the money on the bankruptcy but that the money belonged to the party who was successful in the litigation. In re Gordon, Ex parte Navalchand [1897] 2 9.B. 516 is + pleading case in the field and | Vaughan Williams J. there held that where money had been paid into court with a denial of liability the plaintiff became a | secured creditor in the =e of the defendant, Saying at 519-520:- ; ' "As to the money paid into court with a denial of liability, I take it that the plaintiff, though out of time to accept in satisfaction the sum paid in, would, apart from bankruptcy, be entitled to get an order to withdraw his reply, and to give notice accepting the money paid in in satisfaction. I see nothing in the bankruptcy proceedings to prevent his so doing. But if he does this, he of course would not be entitled to prove for any balance of the debt. If, on the other hand, the plaintiff does not elect to take the money out of court in satisfaction, I think that his proper course is to tender a proof in bankruptcy for the full amount of his claim. Then, if the proof is admitted, or partially admitted, as the case may be = rejected, I understand, it will not be - the issue in the action will in my opinion have been determined, and an order may be made in the action in the Queen's Bench Division for the payment of the money out of court to the proper party, according to the result of the application to prove. It is quite true that in Maple & Co. v. Shrewbury the Court of Appeal decided that no order could be made for payment out of the money until the action had been tried or disposed of - that is, so long as the question of liability remained in any way undetermined; but I think that, in the case of an action for a mere money demand, it has been disposed of and the liability determined so soon as the proof has been dealt with in the bankruptcy. The Court of Bankruptcy is the proper Court to determine the question of liability in such a case; and {I am clearly of opinion that if the proof is admitted, or to the extent to which it is admitted, the plaintize is a secured creditor by reason of the payment nto court. The money paid into court, even with a plea denying liability, has become subject to the plaintiff's claim by the act of the defendant, who thereby agrees that the sum paid in shall remain in court subject to the conditions of Order XXII., r.6. It is not a question of execution at all, but of the effect of a conventional charge. It is in effect a conditional payment to the plaintiff. The money is to be the money of the plaintiff if he succeeds in establishing his title to it: In re Moojen. If the plaintiff's proof is admitted in full, he can amend his proof immediately on the admission by deducting from his proof the amount of security which thereupon accrues to him by reason of his right to take the money out of court; or, if the proof is admitted for a less amount than the money in court, he can withdraw his proof, and consent to an order that the balance shall be paid out to the trustee." (Emphasis added) Those decisions were followed by Wright J. in In re Ford, Ex parte The Trustee [1900] 2 Q.B. 211. See too In re A Debtor, Ex parte Petitioning Creditors (1932) 101 L.J. Ch. 372, Ex parte Bouchard, In re Moojen (1879) 12 Ch.D. 26 and the decision of the Court of Appeal in Dessau v. Rowley [1916] W.N.238. In Australia Harvey C.J. in Eq. followed In re Gordon (supra) in Re Lapstone Inn Limited (1931) 48 W.N. (N.S.W.) 237 and in Victoria the correctness of the decisions to which I have referred was sought to be put in issue in Commercial Banking Co. of Sydney Ltd v. Colonial Financiers of Australia Pty Ltd (1972) 20 F.L.R. 220. It is clear enough in the latter case that Lush Je, the only member of the Full Court to deal with the question, preferred the view that a charge was created, although he did not find it necessary to arrive at a concluded view. See at 225-226. Dessau v. Rowley (supra) and the other cases which I have mentioned had not been referred to the Court of Appeal in Peal Furniture Co. Ltd. v. Adrian Share (Interiors) Ltd [1977] 1 W.L.R. 464. In that case, the Court of Appeal, inconsistently with the earlier cases, treated a plaintiff as an unsecured creditor after money had been paid into court in respect of his claim. See per Shaw L.J. at 468 and Roskill L.J. at 469. The conflict between the two decisions of the Court of Appeal was resolved against Peel Furniture Co. Ltd. v. Adrian Share (Interiors) Ltd (supra), however, and in favour of Dessau v. Rowley (supra) and the other cases to which I have referred in W.A. Sherratt Ltd v. John Bromley (Church Stretton) Ltd [1985] 1 9.B. 1038. As Robert Goff L.J. there said (at 1057) :- -19- "It is plain that there is an established line of authority eee that a plaintiff is treated as a secured creditor to the extent of money paid into court, whether that money has been paid in involuntarily, i.e. as a condition of defending the action, or voluntarily." There seems to me no reason to treat the-principles referred to in these cases as not applicable to an order of the nature made by Sheppard J.. The use of the term "security" to describe the obligation of the appellant tends in that direction, and the fact that the "security" so provided was not to be dealt with other than by consent of the parties or in accordance with the order of the court leads to the same conclusion. I am thus of the view that the effect of the order, if complied with, was to make the respondent a secured creditor of the appellant in the amount of any damages which might be awarded to it at the trial. As I have said earlier, the decisions on Mareva injunctions have gone out of their way to emphasize that the person in whose favour the Mareva injunction is granted does not become a secured creditor if the person against whom it is granted becomes bankrupt or, if a company, goes into liquidation. That view was reaffirmed by the Court of Appeal in Ninemia Maritime Corporation v. Trave Schiffahrtsgesellschaft mbH & Co. KG (The Niedersachsen) [1984] 1 All E.R. 398 where Kerr L.J., speaking for the Court, said at 419:- "Finally, he submitted, in effect, that the grant of Mareva injunctions should be greatly extended generally, so as to align the practice in this country jwith what he claimed to be the position in other jurisdictions, of requiring defendants to provide security for claims which appear to the court to be well-founded, unless the defendants show some sufficient reason why this should not be done. In our view all these submissions go much too far in the light of the authorities and are indeed wholly inconsistent with the origin and development of this jurisdiction. The machinery of the Mareva injunction is extremely useful in appropriate cases. But, as the law stands, this jurisdiction cannot be invoked for the purpose of providing plaintiffs with security for claims, even when these appear likely to succeed (we are speaking generally and not with reference to this case), and even when there is no reason to suppose that an order for an injunction, or the provision of some substitute security by the defendants, would cause any real hardship to the defendant." In the argument before us reliance was placed by the respondent, however, on the decision of the Court of Appeal in C.B.S. United Kingdom Ltd v. Lambert [1983] 1 Ch. 37 as showing the possible width of Mareva injunctions. In that case the defendants were ordered to deliver up three cars to the plaintiff's solicitors pending the resolution of the proceedings. The question whether it was inappropriate to make the order because the effect of compliance with it would have been to make the plaintiff a secured creditor of the defendants was not discussed in the judgments in the Court of Appeal, and I cannot regard the decision as assisting in the resolution of this case. It will be seen from the remarks which I have so far made that I do not regard Sheppard J.'s order as one which is within the species which to date has been described for convenience as the Mareva injunction. It seems to me simply to be a case where = -21~ a person in the position of a respondent was ordered to give security for a judgment yet to be obtained, the security not being given to satisfy a condition, such as the grant of leave to defend on condition that security for all or part of the amount claimed be paid into court or otherwise provided. The question whether a defendant could be ordered to give security was directly at issue in Lister & Co. v. Stubbs (1890) 45 Ch.D. 1 where Cotton L.J. said at 13:- "IT know of no case where, because it was highly probable that if the action were brought to a hearing the plaintiff could establish that a debt was due to him from the defendant, the defendant has been ordered to give security until that has been established by the judgment or decree. See too his Lordship's remarks at 14 where he recognized, as is also the position here, that the case against the defendant appeared to be strong. Further, not only have defendants not been ordered to give security for the possible judgment prior to its entry, but also there is the established rule that a person in the position of a defendant in proceedings will not be ordered to give security for costs. See Accidental and Marine Insurance Company v. Mercati (1866) L.R. 3 Eq. 200, Willey v. Synan (1934) 54 C.L.R. 175 at 179-180, 184-185 and Re Travelodge Australia Ltd (1978) 21 A.C.T.R. 17 at 18-19. The theory underlying the latter rule is that since the defendant is merely exercising his right to defend himself no order for gecurity should be made (Banque du Rhone i S.A. v. Fuerst Da Lawson Ltd, Promat S.A. (Third Parties) [1968] tj , 2 Lloyd's Rep. 153). Whether the principle as to security for costs is one of law or, as Reynolds J.A. thought in Stanley-Hill v. Kool [1982] 1 N.S.WJL. R. 460 at 464, no more than an indication that to order a defendant to provide security for costs will almost tnvpietabiy | be a wrong exercise of discretion, perhaps remains to be resolved. | ; te The originally; perceived ambit of the decision in Lister & Co. ve. Stubbs (supra) has béen eroded by the decisions on Mareva injunctions. The pr neiple of that case is also subject toa '| qualification as to grant of leave to defend on condition, and perhaps subject fo) to beher qualifications. Nonetheless the principal thrust ! the decision, namely that in an action seeking no more than award of damages or the payment of a simple debt, the defe ant wil not be ordered to provide security before judgm nt, hag remained, as Ninemia Maritime tt Corporation v. tt shows. It may be that in th ! Trave senift tsgesellschaft mbH & Co. KG (supra) future the development of the exercise of the jurisdictio | or statutory change, will lead to a situation where the orders : are made. It is my view, hc fan and longstanding principle: | Hae in a personal action security the nature presently in question ever, that there is an underlying will not be ordered for the' if obtained, except in patio amount of the judgment yet to be if circumstances where provision is made by statute or tulle of 'ddurt. Whether that be so as a matter of law or as stating the manner in which the jurisdiction will almost always be exercised does not seem to me to matter. It may be said that such a view means that a person can dispose of assets with impunity and render a judgment fruitless, but apparent non-compliance with an "ordinary" Mareva injunction, as was said to have occurred here, can be adequately dealt with by proceedings for contempt, particularly in circumstances where there is real doubt whether the divestiture of assets was not just a sham. I should also add that I am not motivated to reach that conclusion which I have by a particular concern that orders of the court should not alter the position of the party in whose favour an order is made vis a vis other creditors. A person is not prohibited from creating security interests in favour of one creditor to the potential disadvantage of others. It is the usual reason why securities are taken. It may also be, of course, that in many circumstances the creation of such a security would be void in a subsequent bankruptcy against the trustee by reason of s.122(1) of the Bankruptcy Act 1966, as in- Commercial Banking Co. of Sydney Ltd v. Colonial Financiers of Australia Pty Ltd (supra)). It follows from the foregoing that in my view the order in question should not have been made. SELF-INCRIMINATION i It is no doubt strictly unnecessary to deal with this ground (and the next) in the light of the view which I expressed above but it seems convenient to do so, however, since they are dealt with in judgments of the other members of the Court. The argument on this ground is that the nature of the order was such that to pay $3,000,000.00 into court in compliance with it would cause the appellant to do an act which might incriminate him. As the primary Judge said, however, compliance with the order might be achieved in a number of ways, as by the provision of a bank guarantee, not involving any relationship between the $4,300,000.00 which the appellant was alleged to have concealed or misappropriated. In any event the primary Judge was satisfied, and it was not challenged before us, that:- *..- on the evidence the sum of $4.3 million is by no means the only sum of money which it may be accepted Mr Jackson has, or has control of. His applications to the finance companies towards the end of last year showed, as I have earlier said, that the Jackson interests had assets exceeding in value some $11 million." I think that there is no substance in the ground. UNDERTAKING AS TO DAMAGES It is plain, to my mind, that leave to appeal on this ground should be refused. It is normal, of course, to require that an undertaking as to damages be given as a condition of the grant of a Mareva injunction (see Z Ltd. v. A-Z and AA-LL [1982] - + 4 Hee 1 Q.B. 558 at 577) and assuming that the order presently in question was one in respect of which it was appropriate to "require an undertaking as to damages as a condition of its grant - a matter as to which it is unnecessary to express a concluded view - it is yet clear that the absence of such an undertaking does not go to to jurisdiction. Further the order was not one made immediately upon delivery of the primary Judge's reasons for judgment. Instead the primary Judge after delivering those reasons adjourned the proceedings for a time to enable the parties to discuss the forms of order appropriate to effectuate the decision. The appellant did not then ask His Honour to require the grant of such an undertaking and, when the issue was first raised, i.e. before us, the undertaking was offered. In these circumstances the leave sought should be refused. CONCLUSION In my opinion:- (a) leave to amend the notice of appeal should be refused; and (b) the appeal should be allowed with costs. | certify that this and the Aueukpfe (24) preceding pages are a true copy of the ; Reesons for Judament herein of his Honour x . Mr. Justice Tachseu ; Associate O