EARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTH WALES [1992] NSWCA 62

EARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTH WALES

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, MAHONEY and MEAGHER JJA 23 July 1992, 26 October 1992 [1992] NSWCA 62

INJUNCTIONS — Mareva injunctions — grounds for — existence of prima facie cause of action — suit for recovery of public moneys allegedly overpaid — funds allegedly overpaid as a result of fraudulent submission of dockets for hire of earthmoving and like equipment — inquiry by Independent Commission Against Corruption — evidence given by employee of companies concerning systematic presentation of false claims — evidence inadmissible in criminal proceedings against

such employee — whether witness would in fact give such evidence in civil proceedings — whether judge erred in having regard to such employee's evidence before ICAC — whether evidence inadmissible as hearsay — whether Mareva

injunction should be set aside by Court of Appeal — held: (1) The evidence given by the witness before the ICAC Inquiry was admissible, although hearsay; (2) Such evidence sustained the interlocutory injunctions granted by the judge against the original company and directors thereof upon the basis that it established a serious issue to be tried. INJUNCTIONS — Mareva injunctions — proof of cause of action against company — change of company structures — proof of involvement of original company in fraudulent dealings with government agency creation of new company to continue business with agency — continuation of directors — no proof of fraud after establishment of new company on the part of that company or its officers or employees as such — whether Mareva injunction wrongly granted against new company and should be dissolved — held: (Mahoney and Meagher JJA; Kirby P dissenting): It was open to the primary judge to infer that, notwithstanding the establishment of the new company, the fraud of the old company and its officers was infectious and carried on into the new company's business — appeal dismissed.