L.E.D. Builders Pty Ltd v Eagle Homes Pty Ltd [1997] FCA 826

L.E.D. Builders Pty Ltd v Eagle Homes Pty Ltd [1997] FCA 826

Mareva injunctions may be granted against third parties, notwithstanding no pre-existing cause of action against them or proprietary interest in the assets, where those third parties are under common control with the judgment debtor, have participated in asset movement designed to frustrate satisfaction of judgment, and there is a real risk of dissipation. The primary judge erred in holding that a proprietary interest was necessary and in not inferring risk of dissipation from the facts—thus, appellate intervention was warranted.

Jurisdiction
Australia
Judgment Date
22 August 1997
Procedural Posture
Application for Leave to Appeal and Appeal / Appeal From a Decision Refusing Mareva Relief Against Third Parties
Outcome
Appeal allowed; leave to appeal granted.
Legal Topics
['mareva Injunction' 'third Party Mareva Relief' 'abuse or Frustration of Court Process' 'appellate Procedure' 'interlocutory Orders']
['practice and Procedure' 'injunctions' 'equity'] ['mareva Injunction' 'third Party Mareva Relief' 'abuse or Frustration of Court Process' 'appellate Procedure' 'interlocutory Orders']

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Procedural Posture

Application for Leave to Appeal and Appeal / Appeal From a Decision Refusing Mareva Relief Against Third Parties

Legal Issues

  1. 1 ['Whether a Mareva injunction can be granted against third parties not subject to a pre-existing cause of action by the applicant.' 'Whether it is necessary that the respondent (debtor) have a proprietary interest in the third party’s assets for Mareva relief to be granted.' 'Whether the risk of dissipation or frustration of judgment by third parties under common control justifies Mareva orders.']

Ratio Decidendi

Mareva injunctions may be granted against third parties, notwithstanding no pre-existing cause of action against them or proprietary interest in the assets, where those third parties are under common control with the judgment debtor, have participated in asset movement designed to frustrate satisfaction of judgment, and there is a real risk of dissipation. The primary judge erred in holding that a proprietary interest was necessary and in not inferring risk of dissipation from the facts—thus, appellate intervention was warranted.

Court Disposition

Appeal allowed; leave to appeal granted.

Orders

  • ['Leave to appeal be granted.' 'The appeal be allowed, with costs.' 'Order made at first instance on 25 June 1997 dismissing the notice of motion for orders against Ultra Modern Developments Pty Ltd, Paul Cardile and Lucy Cardile be set aside.' 'The matter be remitted to a single Judge of the Court for further...