First Netcom Pty Ltd v Telstra Corp Ltd [2000] FCA 1269

First Netcom Pty Ltd v Telstra Corp Ltd [2000] FCA 1269

The court cannot impose as a condition subsequent (i.e., retrospectively) a requirement for security for an undertaking as to damages after a grant of interlocutory relief. Such a condition can only be imposed as a condition precedent to the grant of the injunction. Asset preservation orders (Mareva orders) are permissible to preserve assets to discharge liabilities arising under undertakings as to damages, but such orders do not give priority in insolvency unless expressly stated.

Jurisdiction
Australia
Judgment Date
08 September 2000
Procedural Posture
Appeal / Full Court of the Federal Court of Australia; on Appeal From a Single Judge
Outcome
Orders of the primary judge set aside and varied; new orders made concerning restraining First Netcom from dealing with assets pending further order and the staying of the cross-claim.
Legal Topics
['interlocutory Injunctions' 'undertaking as to Damages' 'security for Undertaking as to Damages' 'mareva Orders' 'asset Preservation' 'priority in Insolvency' 'case Management' 'usual Undertaking as to Damages']
['equity' 'civil Procedure'] ['interlocutory Injunctions' 'undertaking as to Damages' 'security for Undertaking as to Damages' 'mareva Orders' 'asset Preservation' 'priority in Insolvency' 'case Management' 'usual Undertaking as to Damages']

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Procedural Posture

Appeal / Full Court of the Federal Court of Australia; on Appeal From a Single Judge

Legal Issues

  1. 1 ['Whether security for a contingent liability under an undertaking as to damages can be ordered retrospectively' 'Whether a condition of an injunction requiring security may be imposed retrospectively' 'Whether asset preservation orders (Mareva orders) give priority to the successful applicant in the event of bankruptcy or winding up' 'Proper form and sanction for orders requiring security for undertakings as to damages']

Ratio Decidendi

The court cannot impose as a condition subsequent (i.e., retrospectively) a requirement for security for an undertaking as to damages after a grant of interlocutory relief. Such a condition can only be imposed as a condition precedent to the grant of the injunction. Asset preservation orders (Mareva orders) are permissible to preserve assets to discharge liabilities arising under undertakings as to damages, but such orders do not give priority in insolvency unless expressly stated.

Court Disposition

Orders of the primary judge set aside and varied; new orders made concerning restraining First Netcom from dealing with assets pending further order and the staying of the cross-claim.

Orders

  • ['Orders 1 and 2 made on 17 March 2000 by Einfeld J be set aside;' "Order 1 made on 4 May 2000 by Einfeld J be varied by deleting the words 'and the payment by the respondent of security for an undertaking as to damages given on 26 June 1997 in the amount of $400,000';" 'Upon Telstra Corporation Ltd giving the usual...