JFT CONSTRUCTIONS PTY LTD v WELLS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, PRIESTLEY and MEAGHER JJA 11 April, 11 April 1994 [1994] NSWCA 155 PRACTICE and PROCEDURE — injunctions — Mareva injunction — alleged fraud and theft by employee — presentation of cheques with blank spaces for increase of amount — application for Mareva injunction directed to employee and his banks — purpose to prevent transfer or use of funds derived from fraud upon employer — primary judge (Giles J) refuses injunction — holds that there is a lack of proof of assets to which injunction might attach — summons for leave to appeal and motion for Mareva injunction support thereof — argued that inference available from proof of fraud that fund exists derived from fraudulently obtained sums — held: (Kirby P; Priestley JA and Meagher JA concurring): (1) The point argued on the summons for leave to appeal had sufficient merit to require the grant of immediate relief and adjournment of the summons to the next summons return date when opponent would have the opportunity of attending; (2) Mareva injunction issued, upon the giving of the usual undertakings as damages. NATURE OF JURISDICTION: Motion for Mareva injunction as ancillary to summons for leave to appeal from Commercial Division of the Supreme Court (Giles J) ORDERS Orders in the nature of Mareva injunctions issued in accordance with short minutes of orders handed to the Court. Kirby P On 19 May 1993 the claimant, JFT Constructions Pty Ltd, employed one Kerry Licardu Wells as a book-keeper. Part of Mr Wells' duties was to present cheques for signature to the managing director of the claimant, Mr Joseph Toth. Mr Wells had control of the cheque books and of wages books, the bank statement books and other financial records of the claimant. It is alleged that Mr Wells presented cheques to Mr Toth for signature which contained a space which, it is claimed, Mr Well utilised to increase the amount of the cheque as, for example, from $600 to $4,600 by the addition of the words "four thousand" in the space provided. The claimant came to believe that this fraud was being perpetrated upon it. It caused photographic copies of the presented cheques to be taken. It then compared the cheques, as presented to its bank, with the photocopy, the cheque butt and the invoice presented for the cheque. These, it is claimed, revealed the fraud of Mr Wells. The police became involved during this process of checking. It has since appeared that Mr Wells has been earlier convicted of several offences of fraud. Indeed, when these proceedings were first before the Supreme Court in the Commercial Division before Giles J and later before Mahoney JA in the Court of Appeal on Friday last, the claimant was then in custody. The evidence before the Court today reveals that, over the weekend, he has been released from custody and is now at large, presumably on bail. The hearing before the Court today has proceeded ex parte. The Court has not yet heard Mr Wells. It makes no final determination of the allegations made against him. However sufficient evidentiary material has been placed before the Court to give the strong colour of credibility to the allegation made by the claimant. 2 UNREPORTED JUDGMENTS The formal process which involves the jurisdiction of the Court of Appeal is a summons for leave to appeal from the order of Giles J. His Honour refused to grant the claimant a Mareva injunction directed to Mr Wells and his banks. The Court has been taken to the reasons given by Giles J for declining to provide the claimant with the relief sought. In the course of those reasons Giles J referred to the authority of this Court in Patterson v BTR Engineering (Aust) Ltd and Ors (1989) 18 NSWLR 319 (CA), 331. He reminded himself, quite correctly, of the serious nature of the application which was before him. However, he declined to grant the relief sought on the basis that it had not been shown sufficiently that there were assets which were in danger of being expended by Mr Wells to the loss of the claimant. The claimant asserts that, in so proceeding, Giles J ignored the inference which was available from the pool of the very large amounts of cash which it is alleged the claimant secured by the procedures of fraud which I have described. The total sum is said to be at least $89,000. The claimant asserts that the total is, in fact, or may be considerably more. The claimant sought interim relief over the weekend from Mahoney JA on last Friday afternoon. His Honour declined to provide relief. However, he ordered that the proceedings be returned before this Court at the beginning of the motion list today. They were so returned. To save a double hearing the proceedings were referred to the Court, when it assembled as a Full Court. It has been so dealt with by us with priority. The claimant by its counsel gives to the Court undertakings which are usual in proceedings of this kind as to any damage which the opponent may thereby suffer. It has provided short minutes of orders which follow the usual form. Sufficient has been shown to warrant the grant of immediate relief to the claimant. The point to be argued in the summons for leave to appeal appears to have sufficient merit to require that this Court proceed today with the ancillary relief. The Court will hear the substantive summons on the first available return date in the summons list, on Monday next, 18 April 1994. On that occasion the opponent, Mr Wells, will have an opportunity of answering the contentions which the claimant will then advance. The orders which I propose are that the Court make the orders in the short minutes of order which have been handed to the Court by counsel for the claimant together with an additional order: 6. Grant leave to the claimant to issue and serve subpoenas this day addressed to the named persons. The costs of the motion before the Court today will be costs in the motion which, in accordance with the short minutes of orders, will be returned before the Court on Monday 18 April 1994. Priestley JA I agree. Meagher JA I also agree. KIRBY P: Such are the orders of the Court. Orders in the nature of Mareva injunctions issued in accordance with short minutes of orders handed to the Court. Representation: Counsel for the Claimant: A S Martin Counsel for the Opponent: Not represented. URJ JFT CONSTRUCTIONS PTY LTD v WELLS (Meagher JA) Solicitors for the Claimant: Clayton Utz Solicitors for the Opponent: Not represented.