REID v HOWARD [1993] NSWCA 231

REID v HOWARD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

MAHoNney JA, HANDLEY JA and SHELLER JA

13 May 1993

[1993] NSWCA 231

Mahoney JA, Handley JA and Sheller JA. This is an application by a defendant for leave to appeal from orders made by Hodgson J on 25 March and by Powell J on 6 April. The Court generally does not give reasons in applications for leave to appeal but the circumstances of the present case are unusual and we will therefore give brief reasons.

The claimant practised as a chartered accountant in various partnerships between 1976 and 1987 but in 1987 he left his then partnership and thereafter until March this year he was a sole practitioner. The opponents are former clients. It appears from a written statement which the claimant made and signed on legal advice and which was given to the police that from the middle of 1987 onwards he misappropriated funds entrusted to him by the opponents for investment and management on their behalf. According to his statement he did so not only to meet his business and living expenses but also to fund investments for his own benefit. It appears that he may have misappropriated sums in excess of $2 million from the variousopponents. The investments are said to have been unsuccessful and it certainly appears, prima facie, that substantial sums belonging to the opponents have been lost. It is evident that the claimant is insolvent.

On receipt of this statement the police obtained and executed a search warrant in relation to the claimant's business premises and seized all his business papers. Criminal proceedings have not yet been commenced against him.

The first opponents on becoming aware of the claimant's misappropriations commenced proceedings in the Equity Division to protect their right to trace the misappropriated funds into his assets. On 24 March Hodgson J as duty judge granted ex parte a Mareva injunction directed to the claimant, and appointed a receiver of some of his assets. On 25 March following service on the claimant these orders were continued and the receivership was extended to the whole of his property. Hodgson J also made an order in aid of the Mareva injunction that required the claimant on or before 30 March 'subject to any claim for privilege against self incrimination' to serve an affidavit on the plaintiffs setting out the assets which he owned or which were directly or indirectly under his control and particulars of their acquisition.