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. Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Patterson v BTR Engineering (Aust) Ltd and Ors (1989) 18 NSWLR (CA) applied. Independent Commission Against Corruption Act 1988, s26, s37, and s38. Kirby P This appeal, by leave earlier granted, concerns a challenge to Mareva injunctions ordered by Cole J in the Commercial Division of the Supreme Court. Claim to recover overpaid moneys The State Rail Authority of New South Wales (SRA) sought the injunctions as ancillary to proceedings brought by it against two corporations and six individuals. The corporations are Earthline Constructions Pty Ltd (Earthline) and Nuline Constructions Pty Ltd (Nuline). The individuals include three members of the Davies family (Phillip, Ian and Gregory) who controlled the two corporations. Collectively, Earthline, Nuline and the three Messrs Davies are the appellants. Other individuals sued in the proceedings were formerly officers of SRA. They were not served with the documents in this Court. Upon the return of the appeal they were not present and their names were, by order of the Court, removed from the proceedings. The SRA's summons, as amended, claimed various declarations concerning the alleged breaches by the corporations and individuals named of fiduciary and other duties owed by them to SRA. The summons sought consequential orders 2 UNREPORTED JUDGMENTS that each of the parties sued account to the SRA for all moneys, benefits, profits, etc derived by reason of their conduct in breach of such duties. Claims were also made for damages, equitable compensation, interest and costs. The claims arise, relevantly, out of alleged dealings between SRA and the appellants from about June 1989 until 1992. It seems that following the Coledale disaster, SRA took urgent steps to repair potential geophysical faults adjoining its operations. For this purpose, amongst others, it engaged Earthline. From Earthline was hired plant and equipment for the performance of earthworks in which SRA was interested. This arrangement continued until 21 December 1991 when Earthline ceased hiring plant and equipment to SRA for its activities. On approximately that day, SRA commenced hiring plant and equipment from Nuline. Nuline was in many ways, a mirror image of Earthline. The new company was established on 1 November 1991, when it was first registered. Its directors were the same persons who had controlled Earthline. The purpose of the business was the same, namely, earthmoving and plant hire. The shareholders were common. The circumstances surrounding the establishment of Nuline were left to inference by the evidence called before Cole J. However, it was proved that on 9 November 1991 a warrant was issued, executed on 11 November 1991, against Earthline as part of an investigation by the Independent Commission Against Corruption (ICAC) into a suspected conspiracy and fraudulent behaviour of Earthline and its officers, employees and others relating to the hire of equipment by Earthline to SRA. It was suggested that, in these circumstances, it was open to Cole J to draw the inference that Nuline was established as the successor to Earthline as soon as the hot breath of the ICAC investigation was felt by the latter. Certain matters were not in dispute before Cole J. They included the fact that the Davies family controlled the activities of Earthline and of Nuline and that, in the time of their respective associations, SRA had paid Earthline slightly more than $7 million and slightly more than $1 million to Nuline for the hire of plant and equipment. Put shortly, the SRA case was that there had been substantial over-payments for such hire and equipment, estimated to amount to approximately $2,500,000. The techniques used for securing the over-payments allegedly included deliberately false claims for equipment billed, although the equipment was: (a) shown by dockets to have been operating at the relevant time on different sites; (b) shown by dockets to have been driven by the same driver in different places at the same time; or (c) in fact inoperative and being repaired at that time. This Court is not concerned, except indirectly, in the final establishment of the claims, any more than Cole J was. In the nature of an application for protection by a Mareva injunction, an urgent hearing ex parte took place before Cole J on 27 May 1992. It was triggered by word coming to the attention of SRA that steps were being taken to sell a substantial quantity of the assets of the two corporations. The fear was expressed that such sales would constitute a dissipation of the funds from which, it was hoped, SRA would recoup the substantial losses of its own funds procured by the suggested systematic scheme for over-payments. On 28 May 1992, upon the evidence placed before him, Cole J granted Mareva injunctions against the appellants. Part of the evidence placed before his Honour was the transcript of testimony given before ICAC by a witness, Ms Diane UAARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTHS WALES (Kirby P) (Kirby P) Sweeney. She performed a wide range of duties for Earthline. She worked as site secretary during 1988 and 1989. But she also drove trucks and performed a wide range of other duties. In her functions as site secretary for Earthline, Ms Sweeney was involved in the filling out of dockets which were then submitted to SRA for payment, and indeed paid. Cole J derived from Ms Sweeney's recorded testimony the conclusion that she had completed the information on many of the plant hire docket forms at the direction of Mr Philip Davies who instructed her regarding the hours to be inserted in the dockets. His Honour also concluded that Mr Philip Davies also instructed Ms Sweeney to insert the operators signature on the dockets, which she did. On other occasions, in respect of certain sites, Ms Sweeney was instructed by Mr Davies to "make up" operators' signatures. That also she did. In addition to creating false signatures, also at Mr Davies' instruction, she created the names of fictitious operators. She was instructed to fill out a docket for each machine every day, whether it was working or not. She was also instructed by Mr Philip Davies to keep the docket books with her to prevent inspection. When a machine was operating on an SRA site, Ms Sweeney signed the operator's name. It was not suggested that this summary by Cole J of the effect of Ms Sweeney s transcript evidence was inaccurate. It appears to be fully justified by the transcript of her evidence before the ICAC which has also been placed before this Court. Needless to say, that evidence, if repeated in the SRA's action against the appellants would, together with the dockets themselves, constitute a most significant part of the SRA's case. Objections to the evidence The objections to the Mareva injunctions granted by Cole J, as argued in this Court, came down to the contentions that Cole J erred in acting upon the evidence of Ms Sweeney, having regard to the way in which, and purposes for which, that evidence was obtained and the likelihood, as it was put, that such evidence would not be available to support the SRA's case at the trial. Additionally, it was argued that Cole J erred in granting the Mareva injunction against Nuline for it was argued that there was no evidence at all to warrant a conclusion that Nuline was involved in any fraudulent activities of the kind just described, in the inter-mingling of its funds with those of Earthline or in the dissipation of Earthline's assets. Various other grounds of challenge to the Mareva injunctions were foreshadowed; but these were not argued. The ultimate challenge presented was as I have now described it. Applicable principles In approaching the challenges to the Mareva injunctions ordered by Cole J, it is appropriate to recall the applicable legal principles by which the contentions of the parties must be assessed: 1. The orders made were interlocutory to the substantive claim brought by SRA against the appellants. Furthermore, the orders were made in a matter of practice and procedure, viz the discretionary exercise of the trial court's powers, including under Pt36 R4 SCR. The nature of the proceedings in this Court, therefore, invoke the well established rules of restraint which are observed by this Court in reviewing such interlocutory orders. See In re the Will of FB Gilbert (Decd) (1946) 46 SR (NSW) 318 (FC), 323. See also Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc and Anor (1981) 148 CLR 170, 177; 55 ALJR 548 (HC) 550; 35 ALR 625 (HC) 629; 4 UNREPORTED JUDGMENTS 2. It is inherent in their nature that applications for interlocutory injunctions generally, and Mareva injunctions in particular, will often have to be made at very short notice, often ex parte, in circumstances of great urgency and reliant upon incomplete and imperfect evidentiary material. Yet, unless then granted, the substantive proceedings may be rendered futile, the rights of parties might be lost forever and the law rendered ineffective to defend and advance interests which could, with more time, be proved to the hilt. As they have developed in this country, I do not share the reservations about Mareva injunctions which are expressed in the reasons of Meagher JA. I am aware of the controversy which surrounded the acceptance of the remedy in this jurisdiction and elsewhere. See eg Jackson (above) 637 and the literature there cited. Properly used and conserved, the remedy is a vital part of the armoury of the administration of justice to defend the utility of the system of justice which might otherwise fall victim to circumvention and frustration. Rahman (Prince Abdul) v Abu-Taha [1980] 1 WRL 1268 (CA), 1273. 3. A pre-condition to the provision of an injunction is the obligation of the applicant to demonstrate that, at the final hearing, there will be a serious issue to be tried on the relevant factual matters. Only if that is shown can the applicant demonstrate a warrant for the disturbance by the court of rights which the persons affected would otherwise enjoy (relevantly) to dispose of, and deal with, their assets as they see fit. Castlemaine Tooheys Ltd and Ors v The State of South Australia (1986) 161 CLR 148, 154; Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 (SC) at 534; and 4. Whatever doubt previously existed concerning the availability in Australia of the Mareva injunction, to prevent the abuse of the process of the court by frustration of its remedies, that doubt has now been removed by decisions of the High Court of Australia and of this Court. See Jackson v Sterling Industries Ltd (1987) 162 CLR 612; cf Riley McKay Pty Ltd v McKay and Anor [1982] 1 NSWLR 264 (CA) at 276; Patterson v BTR Engineering (Aust) and Ors (1989) 18 NSWLR 319 (CA). The tests to be applied have been stated in a number of cases. They are collected by Gleeson CJ in Patterson (above) at 323f. They include consideration of whether there is "a real risk" that the applicant may be deprived of a remedy by reason of the steps being taken by others "to ensure that [assets] are no longer available" to satisfy a judgment, if later recovered. The foregoing general principles were not in dispute. It is their application to the facts of this case which was contested. The evidence of a protected transcript The first contention of the appellants was that Cole J erred in taking into account Ms Sweeney's testimony as disclosed in the transcript of the ICAC inquiry which was placed before him. Initially, an objection was raised upon the basis of the requirements and consequences of the Independent Commission Against Corruption Act 1988 (the ICAC Act). But those arguments have not troubled this Court. Instead, the appellants urged that the transcript should have been rejected as hearsay; that it was inherently unlikely that Ms Sweeney would give evidence at the trial; and, for reasons of fundamental principle, testimony given for the purpose of an ICAC inquiry should not be regarded as a complete or proper foundation for so drastic an order as the Mareva injunctions binding on the appellants. UAARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTH: WALES (Kirby P) (Kirby P) Clearly, the transcript was hearsay evidence. It was a record of out-of-court statements made by Ms Sweeney extraneous to the present proceedings upon which the appellants could not cross examine her. However, there is abundant authority that, subject to compliance with applicable Rules of Court, hearsay evidence is admissible in interlocutory proceedings. See eg D Davis and Co Ltd v Grafonola Ltd (1924) 24 SR (NSW) 458 (FC) 460; Epitoma Pty Ltd v Australasian Meat Industry Employees' Union and Ors [No 2] (1984) 54 ALR 730 (FFC) 733. See also Pt36 R4 SCR. The evidence of Ms Sweeney in this case had a quality which much hearsay evidence, regularly admitted in analogous circumstances, does not have. It was received at a formal inquiry before an Assistant Commissioner of the ICAC. It was taken on oath. It was adduced after warning had been given to Ms Sweeney in the terms of the ICAC statute (s37). In respect of such evidence, the appellants had enjoyed before the ICAC an opportunity to cross examine Ms Sweeney. I can therefore see no proper basis for this objection concerning the form of the evidence of Ms Sweeney relied on by Cole J. Next, it was argued that the evidence should not have been taken into account by his Honour because of the "high probability" that it would not be available to the SRA at a trial of its civil claim against the appellants. This argument was advanced upon the footing that Ms Sweeney's evidence tended, if accepted, to show that she had been a co-conspirator with the Messrs Davies in any conspiracy of the kind alleged by SRA. Cf R v Jackson (1987) 11 NSWLR 318 (SC), 322. It showed (so it was argued) that she had acted in a common purpose with them to breach various fiduciary duties owed by them. Cf Tripodi v The Queen (1961) 104 CLR 1, 7. In respect of the evidence before the ICAC Assistant Commissioner, Ms Sweeney was afforded the protection of a declaration made pursuant to s38 of the ICAC Act. That section states: "38 The Commissioner or person presiding at the hearing may declare that all or any classes of answers given by a witness or that all or any classes of documents or other things produced by a witness will be regarded as having been given or produced on objection by the witness, and there is accordingly no need for the witness to make an objection in respect of each such answer, document or other thing." By virtue of s37(3), in the circumstances in which she gave her evidence, Ms Sweeney was protected against the use of such evidence against her but only in the terms of that subsection: "37(3) An answer made, or document or other thing produced, by a witness at a hearing before the Commission is not (except as otherwise provided in this section) admissible in evidence against the person in any civil or criminal proceedings or in any disciplinary proceedings." Whereas s37(3) of the ICAC Act would render Ms Sweeney's admissions and statements before the ICAC inquiry inadmissible in a criminal prosecution of her, the same would not be so of like evidence given in the civil proceedings brought by the SRA against the appellants. That would not be evidence, within the subjection against the person. Hence it would not be protected. Without the special statutory protection provided by the ICAC Act the inference was inescapable (so it was put) that Ms Sweeney would not give evidence in the court proceedings which would tend to incriminate herself. She would resort to a claim for protection against self-incrimination which would have to be accorded to her. This would deprive the SRA of her evidence at the trial. Being virtually certain 6 UNREPORTED JUDGMENTS to be so deprived, Cole J should not (as it was put) have taken such evidence into account in affording the interlocutory relief which he gave the SRA against the appellants. There is some force in this argument. Cole J himself concluded that it was unlikely that, in the SRA's civil action, Ms Sweeney would give evidence, equivalent to that which she gave before the ICAC. Although the application for Mareva injunctions rested upon the footing of the material properly placed before the judge for that purpose it would obviously be appropriate for the judge to take into account the possibility that such evidence would not be available at the trial. If, for example, the evidence were essential and, although available in some form in the interlocutory proceedings would not be available at the trial, the judge would be obliged to discount such evidence and to consider the application without it. This is because the interlocutory relief sought is provided to aid "some existing legal or equitable right". It is not, as such, an alternative source of rights, distinct and separate from the right sued upon. See Pivovaroff v Chernabaeff (1978) 16 SASR 329; Ex parte BP Exploration Co (Lybia) Ltd; Re Hunt [1979] 2 NSWLR 406 (SC), 410. On the other hand, the possibility, even the likelihood, that the same evidence would not be available at a trial is not necessarily fatal to its use in an interlocutory application, as for a Mareva injunction. The question which is then before the judge is whether, on the relevant facts proved, there is a serious issue to be tried at a final hearing of the dispute between the parties. If the available evidence makes it clear that evidence exists to establish such a serious issue to be tried, the judge will be authorised to provide the relief. This is because, in the very nature of such applications, the applicant for relief will rarely be in a position, in the exigencies, to assemble all of the available facts and the best evidence. Necessarily, such applications must generally be considered upon materials hastily gathered, sometimes in inadmissible form and in much less detail than would be adduced at the final hearing of the substantive cause. To insist upon perfection at such an interlocutory phase would, in many cases, result in the denial of relief. It could frustrate the utility of the litigation. Generally, if it is demonstrated on the materials adduced, that there is a serious issue to be tried, it will be preferable to afford relief for a short term, thereby protecting the processes of the court. The subject of the order may be protected to the fullest extent of the court's powers by an expedited return of the proceedings, by securing an undertaking as to damages and by making detailed orders for the filing of evidence in proper form. There is, in any case, no certainty that Ms Sweeney would refuse to give evidence in the civil proceedings as the appellants assert. There was some exploration in argument of whether, in respect of such proceedings in which an agency of the Crown was involved, the Attorney General would afford Ms Sweeney an indemnity against prosecution for any relevant evidence which she gave. It would be unusual, if not wholly exceptional, for such an indemnity to be granted in respect of evidence given in civil proceedings. But it would certainly be open to the Attorney-General to do this. The recoupment of moneys to the public purse, the earlier extraction of relevant evidence under compulsion before ICAC and the apparent subordination of Ms Sweeney (according to her own evidence) to the Messrs Davies could provide a basis for such an indemnity to be afforded in this case. However that may be, it should not be assumed that Ms Sweeney would not give evidence. Indeed, even if she were exposed to the risk of prosecution, having earlier provided her evidence before ICAC, she might prefer to make a "clean breast" of her involvement and rely upon such UAARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTH WALES (Kirby P) (Kirby P) cooperation either for submissions made at the threshold of the prosecutor's discretion or, if charged and convicted, as evidence of contrition and cooperation with the authorities to be taken into account on penalty. Cf R v Ellis (1986) 6 NSWLR 603 (CCA) at 604; R v Perez-Vargas (1988) 8 NSWLR 559 (CCA); R v Heard otherwise known as Summers (1987) 11 NSWLR 46 (CCA), at 48. It is important to note that, under s37(3) of the ICAC Act, the evidence given to the ICAC, in circumstances such as Ms Sweeney's evidence was, is not... "admissible in evidence against the person in any civil or criminal proceedings..." That means that the evidence given before the Commission by Ms Sweeney cannot be admitted against her. But it is available, if relevant and otherwise admissible, to be used against the Messrs Davies and their companies. In a like way, the evidence of Mr Philip Davies can be admitted against all appellants other than himself. Similarly for Mr Ian Davies. The evidence of the Messrs Davies before the ICAC inquiry could be used against Earthline (and if relevant Nuline) upon the basis that the witness were employees of the companies with authority to make admissions on their behalf. Thus, the mere fact that these witnesses, including Ms Sweeney, gave evidence before the ICAC which cannot be used against themselves does not immunise such evidence from use against other parties to the alleged conspiracies. The circumstances of this case demonstrate the limited utility of the protection afforded by s37(3) of the ICAC Act. Finally, Ms Sweeney's evidence, having been procured by the ICAC inquiry, may independently afford leads to SRA by which to help it to prove its case quite outside her testimony. The dockets to which she referred are, for the most part, available to SRA. Some of the dockets will, on their face, demonstrate false claims. They will do so, for example, by showing that the same operator, named in the docket, was allegedly present in different p.laces at the same time or that equipment, shown to be used, was otherwise shown to be out of service. Although Ms Sweeney's evidence would undoubtedly facilitate the proof of the SRA's claims (and some claims might be lost without it) it is by no means clear that SRA would be incapable of establishing its case without Ms Sweeney. In my view, there was sufficient evidence to support the Mareva injunctions ordered against the appellants other than Nuline, based primarily upon Ms Sweeney's evidence. I should record that the appellants also objected to the use of Ms Sweeney's evidence before the ICAC on a point of principle. With reference to Cave J's observations in In re Brunner (1887) 19 QBD 572 (QB) at 573, it was contended that evidence provided for the ICAC's purposes should not be relied upon, being given for a purpose entirely different from SRA's recovery of civil damages. There is also some force in this point. Self-evidently, testimony given for one purpose (eg proof of "corrupt conduct" under the ICAC Act) will be directed to an issue which is not precisely the same as those raised in SRA's civil action against the appellants. The ICAC evidence will be at once over inclusive and under inclusive, the objects of the two legal proceedings being different. On the other hand, in the present case, there is a sufficient coincidence between the "corrupt conduct" which was the target of the ICAC inquiry and the causes of action sued upon by SRA in the Supreme Court. That coincidence renders unconvincing the complaint made on the basis of Brunner. In other circumstances, the point would be good; but not here. Claim against the new company 8 UNREPORTED JUDGMENTS That leaves only the objection to the issue of the Mareva injunction against Nuline. There was no doubt that Mr Philip Davies and Mr Ian Davies controlled Nuline. Accordingly, the evidence which they gave before the ICAC inquiry would be admissible against Nuline in respect of any relevant actions or statements as its officers or employees as such. But that corporation was a separate legal entity. There was no explicit evidence as such against it. It was left to speculation that Nuline was in some way the recipient of property or other benefits from Earthline; or that there was some mingling of funds or contamination of Nuline's affairs. The SRA asserted that the conspiracies giving rise to its claims against the appellants existed between November 1989 and November 1991. The evidence before Cole J was to the effect that Nuline was not incorporated until November 1991. It did no business with SRA until December 1991, ie outside the period of the alleged conspiracy. It is therefore scarcely surprising that there was no evidence that Nuline was involved in a conspiracy - its operations fell outside the period which SRA itself alleged. Ultimately, the basis for the inference was nothing more than the temporal sequence of the establishment of Nuline and the involvement in it of the same directors and controllers who had allegedly been involved in the fraudulent conduct of Earthline and its officers. Ihave hesitated over this argument. I have done so influenced by the restraints which exist upon appellate interference in such interlocutory orders and from a recognition of the necessarily attenuated evidence often involved in securing them. On the other hand, such orders are not immune from review. If it is shown that they are made in error or over-reach what is necessary for their purpose, an appellate court will resolutely set them aside. See eg Jackson (above). It was said that the Court should infer that fraud is infectious. The fraud of Earthline and its officers had infected Nuline. It was urged that a tracing exercise would be necessary. But the provision of a Mareva injunction is always a serious step to take. It has the potential to cause very great dislocation to the party affected. It is not available simply for the asking. Nor should it be granted because of mere suspicions voiced without proof. The claim against Earthline was well and truly established so as to sustain the order which Cole J made against that company. But there was no such proof against Nuline, in law an entirely different entity. There was only suspicion and speculation. This does not justify the drastic step of providing a Mareva injunction against Nuline. Very little evidence of its involvement in the allegedly fraudulent activities would have been required by me to rope Nuline into the injunction properly made against Earthline and the other appellants. But the total lack of evidence of fraudulent conduct by Nuline or its officers and employees as such, in my respectful view, required that the claim for a Mareva injunction against Nuline should have been dismissed. Orders The result is that I have concluded that the appeal should be allowed in respect of the Mareva injunction issued by Cole J against Nuline. The orders should, to that extent, be dissolved forthwith. The SRA should be ordered to pay Nuline's costs. But the orders against the other appellants should stand. The appeals against those orders should be dismissed with costs. Mahoney JA Given the existing law in relation to Mareva injunctions, I am not satisfied that the judgment of Cole J involved appealable error. I agree with the judgment of Meagher JA and generally with his reasons. UAARTHLINE CONSTRUCTIONS PTY LTD v STATE RAIL AUTHORITY OF NEW SOUTH WALES (Meagher JA) (Meagher JA) My mind has wavered in relation to the position of Nuline Constructions Pty Ltd. But it has been accepted that that company has, as it has been described, taken over the business of Earthline Constructions Pty Ltd and, in the context established in the present proceeding, there is, in my opinion, an arguable case against it sufficient, within the existing law as to Mareva injunctions, to warrant the order made by Cole J on 4 June 1992. I would dismiss the appeal with costs. Meagher JA This is an appeal against a Mareva injunction granted by Cole J on 28 May 1992 ex parte and continued by him after a hearing inter partes on 4 June 1992. Despite my doubts as to the legitimacy of Mareva injunctions, their existence must now, after the decision of the High Court in Jackson v Station Industries Ltd (1987) 162 CLR 612, albeit inexplicably, be taken to be established. The relevant facts may be summarised as follows: the respondent State Rail Authority of New South Wales ("SRA") conducts some of its activities by hiring equipment to perform earthworks. Until 21 December 1991 SRA hired plant and equipment from the appellant Earthline Constructions Pty Limited ("Earthline"), and after that date, from the appellant Nuline Constructions Pty Ltd. The latter company was not registered until 1 November 1991. It is scarcely coincidental that its date of registration took place eight days before a search warrant against Earthline was issued by the Independent Commission Against Corruption, which was executed on 11 November 1991. Nor, on the evidence as it stands at the moment, is it surprising that the activities of Earthline and Nuline attracted the attention of the Commission. As matters now stand, evidence having been given by the respondents SRA only, and none having been led from any of the appellants, it would seem that Earthline has been robbing SRA of substantial monies for many years. The amount of money involved is at least a sum between two million dollars and three million dollars. The method of swindling was easy: Earthline simply presented, and was paid, multiple invoices for each item of hiring. There is ample evidence of this, much of it being documentary. Earthline was a company controlled and operated by three brothers, Messrs Philip, Ian and Gregory Davies. Messrs Philip and Ian are both undischarged bankrupts. These facts were not disputed by any of the appellants. The directors of Earthline are a Mr Michael Bruce Wearing, who happens to be a brother-in-law of the Messrs Davies and Mrs Mary Andrew Davies, who is the mother of the Messrs Davies. Nuline has the same shareholders and directors as Earthline. It was formed, as has been narrated, when news of Earthline's fraud was about to become known. It operates from the same premises. It is, as was conceded, controlled and operated by the same persons. It is known from the records of Earthline and Nuline that "on about 21 December 1991, Earthline ceased hiring plant and equipment to SRA and its activities were taken over by Nuline." On this state of affairs, unsurprisingly, it was conceded that SRA had made out a Prima facie case against Earthline and Mr Philip Davies. Whilst not expressly conceded, no argument was put in opposition to the contention that a prima facie case against was also made against Messrs Ian and Gregory Davies. On these concessions, material findings of fact were made, and Mareva injunctions granted against both companies and all officers and controllers of the companies. 10 UNREPORTED JUDGMENTS Such a result leaves few points for the appellant to argue, and in fact only two were pressed seriously. I might refer to them as the "Miss Sweeney" argument and the "Nuline" argument. The "Miss Sweeney" argument is this: Much of the strength of the admitted prima facie case against the appellants depends on the evidence of a Miss Sweeney, an employee of Earthline. Her evidence is particularly valuable for explaining the nature and effect of the documentary evidence. It was submitted that it is highly unlikely she will give evidence at a final hearing because to do so would involve massive self incrimination. Therefore, it is said, the evidence justifying a Prima facie case is evidence of a markedly transient kind. This novel argument should be rejected, and for the following reasons: (a) There is no reason why we should assume Miss Sweeney will not give evidence at a final hearing, or speculate about the claims that she will or will not; (b) We have no means of knowing whether or not the same evidence can or cannot be supplied by some other person or persons; (c) We do not know whether the Crown intends to grant Miss Sweeney immunity from prosecution if she gives evidence; and (d) Much of the evidence seems capable of proof merely by the tender of documents. The "Nuline" argument is more substantial. It is said that there is no evidence that that Company has been guilty of fraudulent invoicing, and this is true; it is said that there is no evidence that it has acquired any of the assets of Earthline, and this is true; and it is said that there is no evidence of an immediate threat by Nuline to dispose of any assets which it has. In some circumstances these arguments would dictate that the injunction against Nuline should be dissolved, that is if the case against Nuline stood alone and if there were no evidence of fraud. However, where there is an overwhelming case of fraud against Earthline, where Nuline is conceded to be a mere continuation of Earthline, where the same persons control both companies, where Nuline has taken over Earthline's business, and where no factor suggests that the method of business between SRA and Nuline differs from that between SRA and Earthline, the possibility - at least for present purposes - that the fraud is infectious is strong enough to warrant including Nuline in the persons enjoined. The appeal should be dismissed with costs. Appeal dismissed with costs. Counsel for the Appellant: R Toner/L McCallum, Instructed by: Crichton-Browne Crossley Counsel for the Ist Respondent: BJ Gross QC/AJ Martin, Instructed by: Clayton Utz Counsel for the 2nd Respondent: M Murray (Solr) for the Official Trustee in Bankruptcy of the Estate of Philip Davies and Ian Davies Counsel for the Intervenor (CAC): SF Stretton