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Paul Cardile and Ors v Led Builders Pty Ltd

[1999] HCA 18

(Decision by: Gaudron J, McHugh J, Gummow J, Callinan J)

Paul Cardile and Ors
vLed Builders Pty Ltd

Court:
High Court of Australia

Judges:
Gaudron J
McHugh J
Gummow J
Callinan JKirby J

Legislative References:
Business Names Act 1962 (NSW) - The Act
Conveyancing Act 1919 (NSW) - s 37A
Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") - s 23
Copyright Act 1968 (Cth) - s 115(2)
Trade Practices Act 1974 (Cth) - s 80
Family Law Act 1975 (Cth) - s 114
Workplace Relations Act 1996 (Cth) - s 170NG
Proceeds of Crime Act 1987 (Cth) - Div 2 of PtIII
Crown Lands Act 1929 (SA) - The Act
Conveyancing Act 1919 (NSW) - s 37A
Bankruptcy Act 1966 (Cth) - s 120; s 121; s 122
Corporations Act 2001 (Cth) - s 486A; s 588FA; s 588FB; s 588FC; s 588FD; s 588FE; s 588FF; s 598

Case References:
A J Bekhor & Co Ltd v Bilton - [1981] 2 WLR 601; [1981] 2 All ER 565
Abella v Anderson - [1987] 2 Qd R 1
Ascot Investments Pty Ltd v Harper - (1981) 148 CLR 337
Australian Marketing Development Pty Ltd v Australian Interstate Marketing Pty Ltd - [1972] VR 219
Australian Trade Commission v Film Funding & Management Pty Ltd - (1989) 24 FCR 595
BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd - (1976) 51 ALJR 254; 12 ALR 363
Ballabil Holdings Pty Ltd v Hospital Products Ltd - (1985) 1 NSWLR 155
Bank of Queensland Ltd v Grant - [1984] 1 NSWLR 409
Bass v Permanent Trustee Co Ltd - [1999] HCA 9 at [89]
Bathurst City Council v PWC Properties Pty Ltd - (1998) 72 ALJR 1470; 157 ALR 414
Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd - [1981] AC 909
Bristol City Council v Lovell - [1998] 1 WLR 446; [1998] 1 All ER 775
Byrne v Australian Airlines Ltd - (1995) 185 CLR 410
CSR Ltd v Cigna Insurance Australia Ltd - (1997) 189 CLR 345
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd - [1993] AC 334
Colbeam Palmer Ltd v Stock Affiliates Pty Ltd - (1968) 122 CLR 25
Commissioner of Taxation v Murry - (1998) 72 ALJR 1065; 155 ALR 67
Commonwealth v Verwayen - (1990) 170 CLR 394
Corporate Affairs Commission v Bradley - [1973] 1 NSWLR 382
Dalgety Wine Estates Pty Ltd v Rizzon - (1979) 141 CLR 552
Deputy Commissioner of Taxation v Winter - (1988) 92 FLR 327
Doulton Potteries Ltd v Bronotte - [1971] 1 NSWLR 591
Evans v Buchanan - 555 F 2d 373 (1977)
Fejo v Northern Territory of Australia - (1998) 72 ALJR 1442; 156 ALR 721
Galaxia Maritime SA v Mineralimportexport - [1982] 1 WLR 539; [1982] 1 All ER 796
Garden Mews-St Leonards Pty Ltd v Butler Pollnow Pty Ltd - (1984) 9 ACLR 91
Gibbs v David - (1875) LR 20 Eq 373
Gilford Motor Co v Horne - [1933] Ch 935
Gilfoyle Shipping Services Ltd v Binosi Pty Ltd - [1984] 2 NZLR 742
Giumelli v Giumelli - [1999] HCA 10
Glover v Walters - (1950) 80 CLR 172
Grassby v The Queen - (1989) 168 CLR 1
Hannam v Lamney - (1926) 43 WN (NSW) 68
Harris v Beauchamp Brothers - [1894] 1 QB 801
cf Soinco SACI v Novokuznetsk Aluminium Plant - [1998] QB 406
Hatton v Car Maintenance Co Ltd - [1915] 1 Ch 621
Heavener v Loomes - (1924) 34 CLR 306
High v Bengal Brass Co and Bank of NSW - (1921) 21 SR (NSW) 232
Hughes v Metropolitan Railway Co - (1877) 2 App Cas 439
Hunt v BP Exploration Co (Libya) Ltd - [1980] 1 NZLR 104
ICI Australia Operations Pty Ltd v Trade Practices Commission - (1992) 38 FCR 248
In re Judiciary and Navigation Acts - (1921) 29 CLR 257
Industrial Equity Ltd v Blackburn - (1977) 137 CLR 567
Iraqi Ministry of Defence v Arcepey Shipping Co SA - [1980] 2 WLR 488; [1980] 1 All ER 480
Iraqi Ministry of Defence v Arcepey Shipping Co SA - [1981] QB 65
Jackson v Sterling Industries Ltd - (1987) 162 CLR 612
Jago v District Court (NSW) - (1989) 168 CLR 23
Jones v Lipman - [1962] 1 WLR 832; [1962] 1 All ER 442
Knight v F P Special Assets Ltd - (1992) 174 CLR 178
LED Builders Pty Ltd v Eagle Homes Pty Ltd - (1996) 35 IPR 215
LED Builders Pty Ltd v Eagle Homes Pty Ltd - (1996) 70 FCR 436
LED Builders Pty Ltd v Eagle Homes Pty Ltd - (1997) 78 FCR 64
LED Builders Pty Ltd v Eagle Homes Pty Ltd (No 4) - (1997) 38 IPR 107
Lister & Co v Stubbs - (1890) 45 Ch D 1
Mareva Compania Naviera SA v International Bulkcarriers SA ("The Mareva") - [1975] 2 Lloyd's Rep 509
Marine Atlantic Inc v Blyth - (1993) 113 DLR (4th) 501
Mason CJ in Jackson v Sterling Industries Ltd - (1987) 162 CLR 612
Mercantile Group (Europe) AG v Aiyela - [1994] QB 366
Mercedes Benz AG v Leiduck - [1996] AC 284
Mills v Northern Railway of Buenos Ayres Co - (1870) LR 5 Ch App 621
Morgan v DPP - [1970] 3 All ER 1053
National Australia Bank Ltd v Bond Brewing Holdings Ltd - (1990) 169 CLR 271
National Australia Bank Ltd v Bond Brewing Holdings Ltd - [1991] 1 VR 386
National Provincial Bank of England v Thomas - (1876) 24 WR 1013
Ord Forrest Pty Ltd v Federal Commissioner of Taxation - (1974) 130 CLR 124
PCS Operations Pty Ltd v Maritime Union of Australia - (1998) 72 ALJR 863; 153 ALR 520
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] - (1998) 72 ALJR 873; 153 ALR 643
Patterson v BTR Engineering (Aust) Ltd - (1989) 18 NSWLR 319
Pickering v Liverpool Daily Post and Echo Newspapers Plc - [1991] 2 AC 370
Radio Corporation of America v Rauland Corporation - [1956] 1 QB 618
Rahman (Prince Abdul) v Abu-Taha - [1980] 1 WLR 1268; [1980] 3 All ER 409
Richardson v Cummins - (1951) 15 ABC 185
Re East Ex parte Nguyen - (1998) 73 ALJR 140; 159 ALR 108
Ex parte Enrobook Pty Ltd - (1996) 142 ALR 87
Riley McKay Pty Ltd v McKay - [1982] 1 NSWLR 264
Robinson v Pickering - (1881) 16 Ch D 660
SCF Co Finance Ltd v Masri - [1985] 1 WLR 876; [1985] 2 All ER 747
Seaward v Paterson - [1897] 1 Ch 545
Z Ltd v A-Z and AA-LL - [1982] QB 558
See Jackson v Sterling Industries Ltd - (1986) 12 FCR 267
Sheldon v Metro-Goldwyn Pictures Corp - 309 US 390 (1940)
Siskina v Distos Compania Naviera SA - [1979] AC 210
South Carolina Insurance Co v Assurantie Maatschappij "De Zeven Provincien" NV - [1987] AC 24
TSB Private Bank International SA v Chabra - [1992] 1 WLR 231; [1992] 2 All ER 245
Tait v The Queen - (1962) 108 CLR 620
Ex parte Australian Builders' Labourers' Federation - (1957) 100 CLR 277
Third Chandris Shipping Corporation v Unimarine SA - [1979] 3 WLR 122; [1979] 2 All ER 972
Thomson Australian Holdings Pty Ltd v Trade Practices Commission - (1981) 148 CLR 150
United States v Village of Airmont - 839 F Supp 1054 (1993)
Vereker v Choi - (1985) 4 NSWLR 277
Warman International Ltd v Dwyer - (1995) 182 CLR 544
Winter v Marac Australia Ltd - (1986) 6 NSWLR 11
Z Ltd v A-Z and AA-LL - [1982] QB 558
re Symon: Public Trustee v Symon - [1944] SASR 102

Hearing date:
Judgment date: 6 May 1999

Decision by:
Gaudron J
McHugh J
Gummow J
Callinan J

[1] This appeal raises a question whether an order identified as a Mareva injunction or order may be granted against a third party to proceedings in circumstances in which that party has not been shown to have an interest in the assets or funds (with one possible exception) of the potential judgment debtor.

The proceedings in the Federal Court

[2] It appears that, on 1 July 1993, Eagle Homes Pty Ltd ("Eagle Homes"), the business of which was housing construction, declared a dividend of $400,000 in favour of Mr and Mrs Cardile and that the dividend was paid by book entry crediting their loan accounts. There is some dispute as to precisely when the dividend was declared and paid. Mr and Mrs Cardile were the only shareholders of Eagle Homes and controlled it in all relevant senses. In October 1993, the respondent, LED Builders Pty Ltd ("LED"), commenced proceedings in the Federal Court against Eagle Homes for infringement of LED's copyright in certain building plans. On 7 December 1994 LED commenced further Federal Court proceedings against Eagle Homes for copyright infringement.

[3] On 22 May 1995, Ultra Modern Developments Pty Ltd ("Ultra Modern") was incorporated. Mr and Mrs Cardile also controlled that company. On 6 June 1995, Eagle Homes registered the name "Eagle Homes" under the Business Names Act 1962 (NSW) ("the Business Names Act"). On the same day, Ultra Modern became the registered proprietor of that name. In October 1995, Ultra Modern obtained a builder's licence. Ultra Modern has since that time carried on a business of building houses in accordance with new plans. Eagle Homes continues to construct houses but in accordance with earlier plans which are likely to become commercially obsolete. In the conduct of their respective businesses, both companies use the business name "Eagle Homes".

[4] The infringement actions were heard together between 4-8 March 1996. In 1996, as appears from the balance sheet for the year ended 30 June 1996, a dividend of $800,000 was declared by Eagle Homes and some $658,977.12 of that dividend was actually paid to, or applied for the benefit of, Mr and Mrs Cardile.

[5] On 29 July 1996, Davies J gave judgment in both infringement proceedings in favour of LED [1] and orders were made on 27 August 1996. His Honour gave declaratory and injunctive relief and made orders against Eagle Homes for delivery up and payment of LED's costs to date. Orders were also made for the taking of interlocutory steps before LED made its election between damages and an account of profits. On 13 November 1996, Lindgren J delivered reasons for judgment upon a dispute with respect to those interlocutory steps [2] . LED elected for an account of profits and judgment upon the taking of the account is presently reserved in the Federal Court. The liability of Eagle Homes in money terms thus remains to be quantified. This is an important consideration for that branch of the litigation now before this Court.

[6] On 23 December 1996, Whitlam J made certain interim orders against Eagle Homes which restricted dealings with its realty. Later, on 25 June 1997, Emmett J dealt with motions for what he identified as Mareva orders by LED against Eagle Homes and Ultra Modern and Mr and Mrs Cardile [3] . In the second motion, LED also sought an order for the joinder of Ultra Modern and Mr and Mrs Cardile as respondents in the action. Emmett J declined to make the orders sought by this second motion. His Honour referred to various prospective actions against those whose joinder was sought, including avoidance proceedings which might be brought under s37A of the Conveyancing Act 1919 (NSW) ("the Conveyancing Act"), on the footing that the declaration and payment of dividends by Eagle Homes, as well as the assumption of its business by Ultra Modern, were undertaken with the intention to defraud creditors and that an alienation of property was involved.

[7] Emmett J drew the inferences that the declaration and payment of both dividends had been prompted by a desire to remove assets from Eagle Homes which otherwise would be available to satisfy a judgment in favour of LED. However, his Honour said that there was no evidence to suggest that Mr and Mrs Cardile might depart the jurisdiction or that they had made any attempt to dispose of assets out of the jurisdiction. Emmett J continued [4] :

"The most that can be said by LED is that, since Mr and Mrs Cardile have been prepared in the past to engage in transactions of the nature described above, there is reason to think that they may do the same in relation to the assets of Ultra Modern or may dispose of their own assets. It is said that they might be disposed to take such steps in order to avoid the prospective claims that might be made against them by a liquidator of Eagle Homes if judgment is given in favour of LED or to avoid the consequences of an order under s37A if proceedings were taken under that provision by LED.
If I were to conclude that those claims were in danger of being extinguished in some way or otherwise being jeopardised by non-action on the part of those in control of Eagle Homes, that might be a reason for granting additional relief against Eagle Homes. For example, that could be a justification for the appointment of a liquidator provisionally to Eagle Homes with power to commence proceedings for orders in the nature of Mareva injunctions against Mr and Mrs Cardile and Ultra Modern. Alternatively, a receiver might be appointed to the cause of action, with power to apply for Mareva orders, to ensure that it is preserved [5] . However, I am not satisfied at present that the claims, if they exist, are in jeopardy. Indeed, the causes of action, for the most part, have not even yet arisen."

[8] Emmett J said that the authorities supported the making of Mareva orders directly against a third party where the claim against that party was in respect of specific property in which the defendant had asserted a proprietary interest. His Honour then stated [6] :

"The question is whether Eagle Homes has control over or access to the assets of Ultra Modern or Mr and Mrs Cardile such that the proceeds of the sale of those assets could be applied in discharge of any judgment against Eagle Homes. There must be evidence to support a conclusion that there is a danger that the assets of the prospective respondents, which might otherwise be available to satisfy a judgment in favour of LED against the Eagle Homes, will not be available.
The bases for suggesting that assets of the prospective respondents might be available to satisfy a judgment in favour of LED are those outlined above. There is no other basis for contending that Eagle Homes has any interest in the assets of the prospective respondents. As I have indicated, questions of whether their assets will be available to satisfy any judgment will depend upon the outcome of proceedings on causes of action as between Eagle Homes and the prospective respondents which, for the most part, have not yet arisen. It is inappropriate for those questions to be litigated in these proceedings, particularly at the stage which these proceedings have now reached."

[9] Emmett J expressed his conclusions in this way [7] :

"As I have indicated, I have concluded that an inference can be drawn that the declaration of the dividends and the run down of the business of Eagle Homes has been motivated by a desire to limit the funds available to meet a judgment in favour of LED. It may well be that, if an application such as that presently before me had been brought earlier, relief would have been granted which prevented the declaration of a dividend or the transfer of the business name. ...
...
If there were any evidence that the prospective causes of action which have been foreshadowed as being available to Eagle Homes are being prejudiced in any way, it would be appropriate for further relief to be given, eg the appointment of a receiver. That relief is not presently sought and, on the present evidence, I would not be disposed to make any further orders against Eagle Homes. However, I would be prepared to entertain, on short notice, any further application which LED wished to bring against Eagle Homes if there is evidence that any prospective cause of action is in jeopardy.
I do not consider that, on the material before me, LED has made out a case for Mareva orders against any of the prospective respondents. In those circumstances, it is pointless making orders, at this stage, that they be joined as parties to the proceedings. Accordingly, I propose to dismiss the notice of motion for joinder and for Mareva orders against them."

[10] LED sought leave to appeal to the Full Court of the Federal Court. The Full Court (Beaumont, Branson and Tamberlin JJ) granted leave to appeal, allowed the appeal and set aside the orders of Emmett J dismissing the second motion [8] . The matter was remitted to a single judge for determination in accordance with the reasons for judgment of the Full Court.

[11] In the Full Court, LED relied upon a passage from a judgment of Hope JA (with whom Glass and Priestley JJA agreed) in Coxton Pty Ltd v Milne [9] :

"Without attempting to define or to limit the extent of the exception, the necessary circumstances [for the grant of a Mareva order] will exist when the affairs of a defendant sued by a creditor for an alleged debt and of the third party against whom the injunction is sought are intermingled, the alleged debtor and the disposition of its assets are effectively controlled, de jure or de facto, by the third party, the debtor's assets will be insufficient to meet the debt, the creditor, although having no vested or accrued cause of action against the third party, may become entitled to have recourse to the third party or his assets to meet his debt, and there is a danger that the third party will send his assets abroad or otherwise dispose of them."

[12] In the course of their joint judgment, Beaumont and Branson JJ said [10] :

"On the undisputed facts, Mr and Mrs Cardile control both Eagle [Homes] and Ultra [Modern]. Having regard to his Honour's finding as to the earlier involvement of Mr and Mrs Cardile in the disposition of assets by Eagle [Homes], we do not consider that it was open to his Honour to conclude, if he did so conclude, that there is no risk that assets will be disposed of by Ultra [Modern], at the direction of Mr and Mrs Cardile, with a view to abusing or frustrating the Court's process. In those circumstances, the Court should intervene to prevent any such abuse or frustration. To that end, Ultra [Modern] should be temporarily restrained from disposing of its assets, subject to the usual exceptions so that, for example, it may make a disposition in the ordinary course of its ordinary business. Mr and Mrs Cardile should be similarly enjoined. LED will, of course, be required to give the usual undertaking as to damages.
We must add that, with all respect, we cannot accept, as the primary judge appears to suggest, that it is an ingredient of the Mareva jurisdiction that the debtor has a specific proprietary interest in the third party's assets (see, for example, Mercedes Benz AG v Leiduck [11] where ... Lord Mustill emphasises that Mareva relief takes effect in personam only and distinguishes tracing and other such remedies protecting proprietary rights). It is sufficient, for present purposes, that the assets of the defendant and the third parties are 'mixed up' and 'controlled', in the sense explained by Kiefel J in Tomlinson [v Cut Price Deli Pty Ltd [12] ].
It is true, as has been seen, that in the exercise of the Mareva injunction, the position of innocent third parties needs to be treated with caution and with due regard to their legitimate interests. But it could not be suggested, and is not suggested, that these third parties were innocent. Neither Mr nor Mrs Cardile gave evidence, and the findings of Davies J and of the primary judge that they, and their companies, had embarked upon a scheme aimed at frustrating the Court's process are not, and could not be, challenged.
We must further say that we cannot agree with the approach, apparently taken here by the primary judge, that the relevant question is to be looked at, in effect, in terms of the grant of final relief on a substantive cause of action. This is no more than interlocutory relief. At the jurisdictional level, the only real questions for the primary judge were first, whether there was a serious question to be tried as to whether assets presently under the control of Ultra [Modern] and Mr and Mrs Cardile could be available to satisfy a judgment against Eagle [Homes] in favour of [LED], and secondly, whether there was a danger of such assets being dealt with by Eagle [Homes], or the prospective respondents, so that the Court's process would be frustrated."

[13] The third member of the Full Court, Tamberlin J, was also of the opinion that the relief sought by LED should be granted. His Honour held that the power to order a Mareva injunction is purposive, designed to prevent frustration of the court's processes, and is unconstrained by the submission advanced by the appellants that an injunctive order against a third party to the proceedings should not lie where the third party does not hold a proprietary interest in the assets [13] .

[14] The matter was remitted to the primary judge and, as a result of orders made by Emmett J on 22 August 1997 and 26 August 1997, there is presently in force, until further order, an order, made upon LED giving the usual undertaking as to damages [14] that Ultra Modern "by itself, its directors, officers, employees, agents or otherwise", and Mr and Mrs Cardile be restrained:

"from disposing of or dealing with any of their money, property or other assets, other than for the following purposes:

(a)
to enable them to pay and to continue to pay the reasonable legal expenses of defending these proceedings and any appeal therefrom;
(b)
to protect the copyright of [Eagle Homes'] housing plans (other than plans relating to these proceedings) by the commencement and prosecution of proceedings against infringement of the same;
(c)
to commence and prosecute any other proceedings which [Eagle Homes] may be advised to bring;
(d)
to defend any other proceedings that may be brought against [Eagle Homes];
(e)
to meet [Eagle Homes'] taxation liabilities;
(f)
to comply with the statutory requirements to which [Eagle Homes] is subject;
(g)
to meet [Eagle Homes'] normal accountancy fees;
(h)
to pay ordinary and proper business expenses bona fide incurred by [Ultra Modern]; and
(i)
to pay the ordinary living expenses of Paul Cardile and Lucy Cardile".

The appeal to this Court

[15] In this Court, the appellants, Mr and Mrs Cardile and Ultra Modern, seek orders vacating those made by the Full Court and on remission by Emmett J on 22 and 26 August 1997, and an order reinstating the original order of Emmett J. To the extent that an order is necessary, the appellants have special leave to appeal against the orders of Emmett J made on 22 and 26 August 1997.

[16] The grounds of appeal, beyond which, it must be said, the argument ranged, are as follows:

"1. The [Full Court of the Federal Court] did not have jurisdiction to grant Mareva injunctions against the [appellants] at the suit of [LED]:

a.
where there was no cause of action maintainable by [LED] against them; and
b.
in respect of property [in] the hands of the [appellants] not available to [LED] to satisfy a judgment which [LED] might in future obtain against Eagle Homes ('the debtor').

2. The [Full Court of the Federal Court] erred in interfering with the order made by Emmett J at first instance refusing Mareva relief and in granting Mareva relief at the suit of [LED] over the property of the [appellants] in respect of a prospective judgment against the debtor where:

a.
there was no cause of action at the suit of [LED] against the [appellants];
b.
the debtor had no proprietary interest in the property in the hands of any or all of the [appellants];
c.
property of the [appellants] would not be available to [LED] to satisfy a judgment which [LED] might in the future obtain against the debtor;
d.
there was no evidence that the [appellants] would or were likely to dispose of their property in circumstances that might constitute an abuse of process; and
e.
a material matter erroneously taken into account by the [Full Court of the Federal Court] in exercising its discretion against the [appellants] was the declaration by the debtor of dividends out of its profits, the lawfulness of which declaration was not put in issue."

[17] The appellants' principal contentions are that they have not been shown to have been, or prospectively to be, a recipient of any property of Eagle Homes; even assuming a power to make an order against the corporate appellant, that order must be confined in operation to assets of Eagle Homes in the hands of Ultra Modern and subject to execution on a judgment in favour of LED; and that neither s23 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") [15] , s115(2) of the Copyright Act 1968 (Cth) [16] , s37A of the Conveyancing Act [17] , nor any of its analogues or similar provisions in the Corporations [18] or Bankruptcy [19] laws, provide a proper basis for the orders made by the Full Court of the Federal Court and then by Emmett J in favour of LED.

[18] Subject to the view that we should take in relation to the business name "Eagle Homes" and the dividends paid to the personal appellants, we would accept what the appellants put in relation to the factual situation: that the appellants have not (with one exception) been shown to have come into possession of any of Eagle Homes' property and that there is no evidence that they are about to do so.

[19] The heart of the reasoning of Beaumont and Branson JJ is to be found in part of the passage that we have already quoted where their Honours held it was not open to Emmett J:

"to conclude, if he did so conclude, that there is no risk that assets will be disposed of by Ultra [Modern], at the direction of Mr and Mrs Cardile, with a view to abusing or frustrating the Court's process".

[20] Ultra Modern is entitled to dispose of assets that it owns or has lawfully acquired. To dispose of its own assets, without more and when no substantive proceedings have been taken against it, cannot be said to be an abuse or frustration of the court's process in respect of litigation between other parties.

[21] The only assets that have been shown to be in contention here are the dividends declared and paid by Eagle Homes which served temporarily to reduce, but not entirely eliminate, a debt owed by Eagle Homes to Mr and Mrs Cardile, the business name "Eagle Homes" and possibly goodwill attached to the business name "Eagle Homes".

[22] We will deal with the dividends first. There was no evidence that Mr and Mrs Cardile were mere conduits for the transmission to Ultra Modern of the funds, received by them by way of dividends, and accordingly no order on account of them should have been made in respect of Ultra Modern.

[23] The next part of the reasoning of Beaumont and Branson JJ is that, there being a risk that Ultra Modern might dispose of its assets to abuse or frustrate the court's process because it has the same controllers (Mr and Mrs Cardile) as Eagle Homes, that risk must be eliminated by the grant of a Mareva order.

[24] Ultra Modern has not been shown to own or hold, or have the power of disposition over, any property of Eagle Homes nor in any way at all to owe any obligations or debts to that company (save perhaps for the business name "Eagle Homes" which we set aside for separate consideration later). The evidence does not in our opinion go so far as to establish, even on a prima facie basis, that Ultra Modern is in possession of, or using, Eagle Homes' goodwill. It is not suggested that Eagle Homes, or a liquidator of it, or anyone else, would have any entitlement to set aside any transaction between Eagle Homes and Ultra Modern or to follow or trace any assets passing from the former to the latter. There have been no transactions between the companies and no assets have passed between them.

[25] None of the authorities cited to this Court went so far as to support an order of the width of that made in the Full Court. As the argument proceeded upon the grounds of appeal to which we have referred, several matters became apparent. One was that the English authorities appear to have developed to a stage where what is identified as the Mareva injunction or order lacks any firm doctrinal foundation and is best regarded as some special exception to the general law. Another was that, whilst it is undesirable that asset preservation orders of the Mareva variety be left as a sui generis remedy with no doctrinal roots, the term "injunction" is an inappropriate identification of that area of legal discourse within which the Mareva order is to be placed. The third was the point encapsulated in the joint judgment of this Court in CSR Ltd v Cigna Insurance Australia Ltd [20] :

"The counterpart of a court's power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion".

The integrity of those processes extends to preserving the efficacy of the execution which would lie against the actual or prospective judgment debtor [21] . The protection of the administration of justice which this involves may, in a proper case, extend to asset preservation orders against third parties to the principal litigation. This appeal concerns the identification of such proper cases.

[26] In Jackson v Sterling Industries Ltd [22] , Deane J referred to the armoury of a court of law and equity to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction. By this means, the risk of the stultification of the administration of justice is diminished. Once the source of power is recognised, then, whatever may be the limitations with respect to inferior courts [23] , in the case of the Federal Court the power will be seen to be comprehended by the express grant in s23 of the Federal Court Act. In National Australia Bank Ltd v Bond Brewing Holdings Ltd [24] , Mason CJ, Brennan and Deane JJ described as mistaken any proposition that Mareva relief could only be obtained against the defendant to an action if there were a positive intention to frustrate any judgment. However, the presence in s23 of the expression "as the Court thinks appropriate" points to the requirement to develop principles governing the exercise of the power in such a fashion as to avoid abuse. This need, as indicated above, is at the heart of the present appeal. Meeting that need is not facilitated, and may be impeded, by continued attempts to force what has become known as the Mareva order into the mould of interlocutory injunctive relief as administered under that description by courts of equity.

The remedy of injunction

[27] In that regard, further reference should now be made to the development of the injunctive remedy, to the strain placed upon it by its use to identify new statutory remedies and to its misapplication to identify either the nature of or the juridical foundation for the Mareva order.

[28] The term "injunction" is used in numerous statutes to identify a particular species of order, the making of which the law in question provides as part of a new regulatory or other regime, which may be supported by penal provisions. Notable examples in statutes presently in force nationally are found in s80 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"), s114 of the Family Law Act 1975 (Cth), s1324 of the Corporations Law (Cth) and s170NG of the Workplace Relations Act 1996 (Cth). These provisions empower courts to give a remedy in many cases where none would have been available in a court of equity in the exercise of its jurisdiction, whether to protect the legal (including statutory [25] ) or equitable rights of the plaintiff, the administration of a trust for charitable purposes, or the observance of public law at the suit of the Attorney-General, with or without a relator, or at the suit of a person with a sufficient interest.

[29] In these situations, the term "injunction" takes its content from the provisions of the particular statute in question [26] . In other laws, for example Div 2 (s43-s65) of PtIII of the Proceeds of Crime Act 1987 (Cth), where the term "restraining order" is used, remedies having some characteristics of injunctions as understood in courts of equity are given their own particular statutory designation [27] .

[30] With respect to the power of a court of equity [28] , it is appropriate, for present purposes, to bear in mind several matters. First, not all mandatory orders are injunctive in nature. An order for the return of a specific chattel or the restoration of a fund to the party entitled to it is not an injunction as ordinarily understood [29] . Nor is the injunction the only interlocutory remedy which should be supported by an undertaking as to damages [30] . Secondly, the contempt power extends to third parties who, whilst not themselves bound by an order, so conduct themselves as to obstruct the course of justice [31] . Thirdly, the injunctive remedy is still the subject of development in courts exercising equitable jurisdiction. Thus, whilst once there may have been an absolute requirement that, negative covenants aside, before an injunction might be granted in aid of a legal or statutory right, the right must be proprietary in nature, in modern cases, including, in this Court, Bradley v The Commonwealth [32] , there has been no advertence to such a requirement. Again, in this Court, the view once taken that an injunction should issue to restrain breach of a negative stipulation, without weighing the usual discretionary considerations, has been discounted as an overstatement [33] . The use of the anti-suit injunction, at least if granted in aid of contractual rights and obligations, is another example of development of traditional doctrine [34] .

[31] However, in England, it is now settled by several decisions of the House of Lords [35] that the power stated in Judicature legislation - that the court may grant an injunction in all cases in which it appears to the court to be just and convenient to do so - does not confer an unlimited power to grant injunctive relief. Regard must still be had to the existence of a legal or equitable right which the injunction protects against invasion or threatened invasion, or other unconscientious conduct or exercise of legal or equitable rights [36] . The situation thus confirmed by these authorities reflects the point made by Ashburner that "the power of the court to grant an injunction is limited by the nature of the act which it is sought to restrain" [37] .

[32] Further, the injunction remains a discretionary remedy in a particular sense of that term. In Bristol City Council v Lovell, Lord Hoffmann observed [38] :

"The reason why an injunction is a discretionary remedy is because it formed part of the remedial jurisdiction of the Court of Chancery. If the Chancellor considered that the remedies available at law, such as damages, were inadequate, he could grant an injunction to give the plaintiff more effective relief. If he did not think that it was just or expedient to do so, he could leave the plaintiff to his rights at common law. The discretion is therefore as to the remedy which the court will provide for the invasion of the plaintiff's rights."

[33] Whilst s23 of the Federal Court Act empowers the Federal Court to make "orders of such kinds, including interlocutory orders ... as the Court thinks appropriate", the Federal Court is not thereby authorised to grant injunctive relief where jurisdiction is acquired under another statute which provides an exhaustive code of the available remedies and that code does not authorise the grant of an injunction [39] . Nor does s23 provide authority for the granting of an injunction where, whether under the general law or by statute, otherwise there is no case for injunctive relief [40] . In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] [41] , the Federal Court entertained the common law claims in conspiracy either in the accrued jurisdiction or as an associated matter within the meaning of s32 of the Federal Court Act.

[34] In delivering the advice of the majority of their Lordships in Mercedes Benz AG v Leiduck [42] , Lord Mustill outlined the development over 20 years of the remedy associated with the orders made in Mareva Compania Naviera SA v International Bulkcarriers SA [43] . His Lordship observed that [44] :

"[a]midst all the burdensome practicalities theory has been left behind."

Lord Mustill went on to outline three rationalisations which could be found in the English authorities, all of them unsatisfactory. One, later discredited by the House of Lords' decisions to which reference has already been made, was that the statutory power in Judicature systems to grant injunctive relief where just or convenient was relatively unlimited. Another was that, although framed as an injunction, the relief was a species of attachment, giving the claimant some rights of a proprietary nature in the assets in question and some advantage over other creditors of the defendant. Whilst not going that far in legal form, Mareva orders restricting dealings with assets do have characteristics of injunctive relief to enforce what are known in commerce as negative pledge agreements. However, the rationale of the Mareva order as a species of pre-judgment attachment has been discredited by authorities which Lord Mustill collected [45] . That left, in his Lordship's view, the Mareva injunction as "a special exception to the general law" [46] .

[35] In the Mareva case itself, Lord Denning MR had classified relief as injunctive on the footing that it went in aid of a legal right, namely the right of the plaintiff to be paid the debt owing, even before the establishment of that right by the getting of judgment for it [47] . However, as Bray CJ observed in Pivovaroff v Chernabaeff [48] , such a position was foreclosed by the long-standing decision of Lord Hatherley LC in Mills v Northern Railway of Buenos Ayres Company [49] . That decision had been taken as settled authority for the proposition, expressed by Joyce [50] :

"A simple contract creditor of a company (having no mortgage or other security, and not having taken out execution) cannot sustain a bill to restrain the company from dealing with their assets as they please, on the ground that they are diminishing the fund for payment of his debt".

The remedies sought in Mills had included an injunction to restrain the payment of any dividend to shareholders until provision had been made for paying the creditor's debt. There had been prima facie evidence that the plaintiff was a creditor and had been unpaid for years [51] . Thus, the plaintiff had made out, at least at the interlocutory level, the existence of his legal right. However, there being no security for the debt, the right was not, as then was considered important, proprietary in nature. Moreover, the contractual right itself would, on recovery of judgment, merge in the judgment. The substance of the relief sought by the plaintiff was anticipatory relief in aid of those rights that would at that later stage attach to the judgment debt.

[36] However, to deny injunctive relief in those circumstances did not mean that in comparable situations the court was powerless. In Australia, it has since been determined by the Appeal Division of the Supreme Court of Victoria [52] and assumed by this Court [53] that circumstances may arise in which the appointment of a receiver of the assets of a company which is not expressly alleged to be insolvent may be justified in pending litigation even on the application of a plaintiff who claims to be an unsecured creditor. Other examples were given by Emmett J in a passage of his judgment set out earlier in these reasons.

[37] Further, there may be an equity which supports the appointment of a receiver (or the retention of a receiver appointed at an interlocutory stage) as part of the machinery for effecting final relief [54] . Such a receiver is not appointed merely because, in the circumstances of the case, this would be a more convenient mode of obtaining satisfaction of a judgment than the usual modes of execution provided by the common law or by statute [55] .

[38] Nevertheless, in speaking for the Court of Appeal in Harris v Beauchamp Brothers [56] , Davey LJ emphasised that, in a suit by a judgment creditor "to impeach an assignment or conveyance as fraudulent upon creditors", the court would, as ancillary to the principal relief sought in a proper case, appoint a receiver to preserve the property until the hearing of that impeachment suit. Davey LJ also indicated that, if a defendant threatened and intended fraudulently to make away with assets which otherwise might be taken in execution, the court would interfere [57] . On the other hand, execution of a judgment might be enjoined on equitable grounds which could not have been entertained as a defence to the action in which the judgment was recovered [58] .

[39] Finally, before judgment and in cases of an equitable debt or demand, courts of equity (and this Court in aid of its diversity jurisdiction [59] ) may, by order in the nature of a writ of ne exeat colonia, prevent a defendant quitting the country without giving adequate bail or security. Dixon J in Glover v Walters said that the order is made where [60] :

"real ground appears for believing that the defendant is seeking to avoid the jurisdiction or for apprehending that if the defendant is allowed to depart the plaintiff will lose his debt or be prejudiced in his remedy". [61]

[40] In these various ways, the courts developed doctrines and remedies, outside the injunction as understood in courts of equity, to protect the integrity of its processes once set in motion. The Mareva order for the preservation of assets should be seen as a further development [62] . There is no harm in the use of the term Mareva to identify that development, provided the source of the remedy is kept in view when considering the form of the remedy in each particular case. An anterior question will be whether there is another interlocutory remedy among those considered above which will be suitable to meet the case in hand but be less extensive in scope.

The doctrinal basis of the Mareva order

[41] In Australia, that view of the matter has been urged for many years [63] . It is seen in the most recent statement of principle in this Court concerning the jurisdiction of the Federal Court to grant a Mareva order. In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3], in their joint judgment, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ said [64] :

" Interlocutory relief
The powers of the Federal Court under s23 of its Act are powers 'to make orders of such kinds, including interlocutory orders, as it "thinks appropriate"', as Deane J noted in Jackson v Sterling Industries Ltd [65] . He added:
'Wide though that power is, it is subject to both jurisdictional and other limits. It exists only "in relation to matters" in respect of which jurisdiction has been conferred upon the Federal Court. Even in relation to such matters, the power is restricted to the making of the "kinds" of order, whether final or interlocutory, which are capable of properly being seen as "appropriate" to be made by the Federal Court in the exercise of its jurisdiction.'
One limitation on the powers of the Federal Court to grant interlocutory injunctions is that those powers must be exercised for the purpose for which they are conferred. In a later passage of the judgment of Deane J in Jackson v Sterling Industries Ltd [66] , his Honour said a power to prevent the abuse or frustration of a court's process should be accepted 'as an established part of the armoury of a court of law and equity' and that 'the power to grant such relief in relation to a matter in which the Federal Court has jurisdiction is comprehended by the express grant to that Court by s23 of the Federal Court of Australia Act'. But, his Honour observed [67] , orders must be framed 'so as to come within the limits set by the purpose which [the order] can properly be intended to serve'. The Mareva injunction is the paradigm example of an order to prevent the frustration of a court's process [68] but other examples may be found [69] . The moulding of an interlocutory injunction must depend upon the circumstances of each case. As Brennan J observed in Jackson v Sterling Industries Ltd [70] :
'A judicial power to make an interlocutory order in the nature of a Mareva injunction may be exercised according to the exigencies of the case and, the schemes which a debtor may devise for divesting himself of assets being legion, novelty of form is no objection to the validity of such an order.'
The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked [71] . The Federal Court had jurisdiction to make interlocutory orders to prevent frustration of its process in the present proceeding."

[42] Subject to two matters to which we shall come, this passage should be accepted as a correct statement of principle. The first matter is that, in that passage, the attention of the Court was directed to orders against parties to the proceedings and against whom final relief was sought. In that situation, the focus is the frustration of the court's process. If relief is available against non-parties, the focus must be the administration of justice. The second matter is that, to avoid confusion as to its doctrinal basis, it is preferable that references to "Mareva orders" be substituted for "injunctions".

[43] In Australia, for many years, Mareva orders have been made in aid of the exercise of the specific remedies provided for execution against judgment debtors. Such orders are not interlocutory as they may operate after the recovery of final judgment, yet they are impermanent in the sense that they preserve assets and assist and protect the use of methods of execution and do not substitute for them [72] . In respect of their operation after, as well as before, the making of orders for final relief, the Mareva order should, in general, be supported by an undertaking as to damages.

[44] Here, Ultra Modern and Mr and Mrs Cardile are third parties in respect of LED's action against Eagle Homes. The effective exercise of the jurisdiction in such litigation may call for asset preservation orders against third parties who may hold or otherwise be interested in (in the sense we explain further in these reasons) assets of the judgment debtor or potential judgment debtor or who may be obliged to contribute to the property of such a judgment debtor to help satisfy the judgment.

Third parties

[45] In this litigation, as has been mentioned, final judgment on LED's claim against Eagle Homes for a money sum is still pending. The appellants correctly submit that the statement of principle in Patrick Stevedores provides no basis for the making of an order against a non-party such as Ultra Modern which is not answerable or liable in some way to a party (plaintiff or defendant) in a proceeding where judgment has not been obtained or execution recovered, or not holding, controlling or capable of disposing of the property of a party in that proceeding. This proposition, negative in character, should be accepted.

[46] In its response here and in the Full Court of the Federal Court, LED relies on a decision of Kiefel J in Tomlinson v Cut Price Deli Pty Ltd [73] . There, her Honour referred to the making of orders in aid of an injunction "where the third party has become mixed up in the [challenged] transaction" [74] . In using that language, her Honour was no doubt conscious of the reference to the intermingling of affairs by Hope JA in Coxton Pty Ltd v Milne [75] and by Hoffmann LJ in Mercantile Group (Europe) AG v Aiyela [76] to the wife of the judgment debtor becoming "mixed up" in the arrangements of the judgment debtor. But in the application before her Honour there was a large body of evidence to support a strongly arguable case that the third party had used, and was using, the property and business of the potential judgment debtor in order to prevent access to them by the applicant. And again, in Aiglon Ltd v Gau Shan Co Ltd [77] , there was evidence of a quite different kind and quality as to asset stripping in favour of a non-party from that which has been adduced here.

[47] These cases were not mere cases of a mixing or intermingling of affairs and are distinguishable from this case. In using expressions such as "mixing" or "intermingling", their Honours and his Lordship were doing no more than describing the deliberate blurring, and attempts at the transferring, of property rights and interests that the evidence in those cases established on a sufficient basis for the grant of the relief. There was nothing novel in that approach to determination of the appropriate remedy [78] .

[48] LED's stance in this appeal is that it is not essential that the court's processes in support of which the Mareva relief is sought be confined to those set in motion upon a cause of action. That followed, it is submitted, from a passage in the speech of Lord Mustill in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [79] , to which Hoffmann LJ referred in Mercantile Group (Europe) AG v Aiyela [80] in holding that the wife of the judgment debtor should be restrained from disposing of assets although no action had been brought against her. Lord Mustill said that the right to an interlocutory injunction which is incidental to, and dependent on, the enforcement of a substantive right usually, although not invariably, takes the shape of a cause of action. However, we do not think that his Lordship was suggesting that an order might be made against a non-party not amenable in some way ultimately to some coercive process requiring it to disgorge, or in some other way to participate in the satisfaction of, a judgment against a party.

[49] LED argues that its substantive rights are the final injunctive orders already made by Davies J against Eagle Homes following the determination of the issue of liability upon LED's actions for copyright infringement. Even if this be accepted for present purposes, LED still has the problem, which in our opinion the evidence does not resolve in its favour, of showing that recourse may be had to the appellants to satisfy LED's prospective money judgment against Eagle Homes.

[50] As LED submits, the development of this ancillary jurisdiction to grant Mareva orders has been an evolving process and the courts have approached the different factual situations as they have arisen "flexibly". There is a temptation to use the term "flexible" to cloak a lack of analytical rigour and to escape the need to find a doctrinal and principled basis for orders that are made. There are significant differences between an order protective of the court's process set in train against a party to an action, including the efficacy of execution available to a judgment creditor, and an order extending to the property of persons who are not parties and who cannot be shown to have frustrated, actually or prospectively, the administration of justice. It has been truly said that a Mareva order does not deprive the party subject to its restraint either of title to or possession of the assets to which the order extends [81] . Nor does the order improve the position of claimants in an insolvency of the judgment debtor [82] . It operates in personam [83] and not as an attachment. Nevertheless, those statements should not obscure the reality that the granting of a Mareva order is bound to have a significant impact on the property of the person against whom it is made: in a practical sense it operates as a very tight "negative pledge" species of security over property, to which the contempt sanction is attached. It requires a high degree of caution on the part of a court invited to make an order of that kind. An order lightly or wrongly granted may have a capacity to impair or restrict commerce just as much as one appropriately granted may facilitate and ensure its due conduct.

[51] We agree with the tenor of what was said with particular respect to Mareva relief before judgment by the Court of Appeal of New South Wales (Mason P, Sheller JA, Sheppard AJA) in Frigo v Culhaci [84] :

"[A Mareva order] is a drastic remedy which should not be granted lightly. ...
A [Mareva order] is an interlocutory order which, if granted, imposes a severe restriction upon a defendant's right to deal with his or her assets. It is granted at the suit of a plaintiff whose status as a creditor is in dispute and who need not be a secured creditor. Its purpose is to preserve the status quo, not to change it in favour of the plaintiff. The function of the order is not to [85]
'provide a plaintiff with security in advance for a judgment that he hopes to obtain and that he fears might not be satisfied; nor is it to improve the position of the plaintiff in the event of the defendant's insolvency'. ...
Many authorities attest to the care with which courts are required to scrutinise applications for [Mareva orders]. The leading decision in this State is Patterson v BTR Engineering (Aust) Ltd [86] ."

[52] Another reason, unfortunately rarely adverted to in the cases, for care in exercising the power to grant a Mareva order is that there may be difficulties associated with the quantification and recovery of damages pursuant to the undertaking if it should turn out that the order should not have been granted. These matters were the subject of discussion by Aickin J in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [87] . A further question to which a Mareva order gives rise is the identification of the events to trigger its dissolution or an entitlement to damages. So far as this is possible, some attention to that question should be given at the time that the order is framed in the first instance.

[53] Discretionary considerations generally also should carefully be weighed before an order is made. Has the applicant proceeded diligently and expeditiously? Has a money judgment been recovered in the proceedings? Are proceedings (for example civil conspiracy proceedings) available against the third party? Why, if some proceedings are available, have they not been taken? Why, if proceedings are available against the third party and have not been taken and the court is still minded to make a Mareva order, should not the grant of the relief be conditioned upon an undertaking by the applicant to commence, and ensure so far as is possible the expedition of, such proceedings? It is difficult to conceive of cases where such an undertaking would not be required. Questions of this kind may be just as relevant to the decision to grant Mareva relief as they are to a decision to dissolve it. These are matters to which courts should be alive. As will appear, they are matters which should have been considered by the Full Court in this case.

[54] We have indicated our acceptance of a negative proposition put by the appellants. However, we consider that the general proposition for which the appellants contend - that the grant of Mareva relief against the third party should be limited to cases in which the third party holds or is about to hold or dissipate or further dissipate property beneficially owned by the defendant in the substantive proceedings - is too narrowly expressed. Nevertheless, it will be a rare case in which Mareva relief will be granted if such a situation does not exist.

[55] We do not accept an example suggested by LED as an answer to the appellants' general proposition. LED contends that, if the appellants' proposition be correct, a third party to whom a defendant makes a fraudulent gift to render useless the judgment against him would be immune from Mareva relief, whereas a third party trustee would not, because the third party taking the fraudulent gift would have no right in law or in equity to retain it. The former would be amenable to a claim pursuant to s37A of the Conveyancing Act, or process by a trustee in bankruptcy, or a liquidator, and susceptibility to that process may in our opinion be sufficient to support the grant of Mareva relief. The fact that such relief takes effect in personam, and may be distinguished from an equitable or other proprietary remedy such as tracing, does not mean that the availability of such remedies is irrelevant to a consideration whether that relief should be granted. Indeed the contrary is the case. The availability of a proprietary remedy may, in our opinion, in some cases be sufficient to constitute a substantive right in aid of which Mareva relief in personam might go.

[56] The matters referred to above show that the general power of superior courts which is comprehended by the express grant in s23 of the Federal Court Act is a broad one. But, as the statements of Deane J in Jackson v Sterling Industries Ltd [88] make clear, orders made pursuant to that section (and under the general power) must be capable of properly being seen as appropriate to the case in hand.

[57] What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word "may", be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which:

(i)
the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies" [89] , of the judgment debtor or potential judgment debtor; or
(ii)
some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.

[58] It is that principle which we would apply to this case. Its application is a matter of law, although discretionary elements are involved.

The present case

[59] We return to the facts to make some observations about the only item of property which, it can safely be said, was found by the primary judge to have been made available to Ultra Modern by Eagle Homes. That is the business name "Eagle Homes". There can be no real doubt that Ultra Modern is using that name in the conduct of its business of building homes. However the fact that Ultra Modern may have obtained access to and may be using that name for the purpose of its business, without any payment to Eagle Homes, does not make it accountable or liable to Eagle Homes or any liquidator of it for all of its profits. Plainly the business name does have value. However, just how much value it has, and the extent to which it is a factor in the making of profits by Ultra Modern, can be no more, at this stage, than a matter of conjecture and hardly can be a basis for the making of a Mareva order in respect of all of the property of Ultra Modern. It occurred to us during argument that some limited form of Mareva relief against Ultra Modern in respect of the business name might be appropriate and LED submits in the alternative that it was entitled to that relief.

[60] LED submits that the evidence, supported by concurrent findings, showed that the business of Eagle Homes was acquired by Ultra Modern without any consideration or as part of an exercise in asset stripping by Eagle Homes in favour of Ultra Modern. We do not read the judgments at first instance or in the Full Court in this way and, indeed, we do not regard the evidence as being capable, even on a prima facie basis, of showing this to be so. The evidence is that Eagle Homes is continuing to construct homes on the basis of older or pre-existing plans which it is entitled to use and that Ultra Modern is, in effect, carrying on a new business using plans which have been prepared more recently. The evidence does not show, save to the extent that the use of the business name "Eagle Homes" may attract goodwill away from Eagle Homes, that Ultra Modern is actually utilising goodwill which in reality belongs to Eagle Homes nor that it is carrying on the business of Eagle Homes by using the name in such a way as to pass off its business as that of Eagle Homes.

[61] Registration of the name in compliance with the Business Names Act does not confer any right to do so [90] . Registration satisfies the statutory obligation (under penalty) upon those who do not carry on business under their own name to provide a means whereby their identity and whereabouts readily may be ascertained [91] . Registration itself does not provide a basis for, or a defence to, a passing-off action or a claim of contravention of s52 of the Trade Practices Act [92] . The goodwill built up by Ultra Modern using Eagle Homes would be an asset of Ultra Modern [93] . That goodwill may be "shared" with the other company [94] but there is no evidence here of any sharing agreement to compensate Eagle Homes for the use of the name "Eagle Homes" and any goodwill associated with it.

[62] For the reasons we have given, there was an error in principle [95] in the grant of Mareva relief against Ultra Modern in the form ordered after the Full Court decision.

[63] Any orders in substitution of those made by Emmett J on remission by the Full Court of the Federal Court should focus upon the use by Ultra Modern of the name "Eagle Homes" in its business. There is no case at this stage for an order which would have the effect of bringing its use of the business name to an end or otherwise limiting its use, as if Eagle Homes had obtained injunctive relief in a passing-off action against Ultra Modern. However, Ultra Modern should be restrained from attempted dispositions by it of the goodwill attached to that name. The value of the goodwill of Ultra Modern which is attached to its use of the business name may affect the value of the concurrent goodwill of Eagle Homes. That status quo would be affected by any supervening disposition from Ultra Modern into other hands.

[64] We come now to the personal appellants. There is, we think, a prima facie case that the payment to them of, or the crediting of them with, the dividends was a non-commercial exercise and was, as Emmett J found, done with a view to limiting the funds available to meet a judgment in favour of LED.

[65] LED submits that it has a reasonably arguable case that the declaration and payment of the dividends in that situation are caught by s37A of the Conveyancing Act and that such a case provides a substantive right to support Mareva relief against the personal appellants. The expression "alienation of property" which is used in the section does not immediately strike one as apt to apply to the declaration and payment of a dividend. However, it has been held that, for the purpose of s37A and its equivalents, "alienation" is a parting with property and includes a parting with some interest in the property [96] .

[66] Mayo J in In re Symon: Public Trustee v Symon said of the meaning to be given to the word "alienation" as used in the Crown Lands Act 1929 (SA) [97] :

"'Alienation' denotes the act, or series of acts, of alienating, and takes place whenever the owner of land, or of an interest therein, so acts as to divest himself of his interest or some lesser interest, and to vest the same in another person (Lang v Castle [98] ). Not every agreement that relates to property is necessarily an alienation or an undertaking to alienate. If all that is to be made over is a mere personal right, and not in the nature of property, there will, I apprehend, be no alienation".

[67] Alienation is the transfer of value from one person to another [99] . It is usually understood as applying only to a transfer of property effected by the action of the transferor, as distinct from a transfer by involuntary operation of law [100] .

[68] Money, as property, is clearly susceptible of transfer or alienation as is any other property. The declarations of the dividends (which appear to have been final not interim dividends) gave rise to debts payable by the company to the shareholders [101] . The alienation of property was made by the company in discharging its indebtedness to the shareholders. Here, LED has to show a reasonably arguable case on legal as well as factual matters. This we think it does with respect to the application of s37A to the dividends. This is subject to some qualifications as to amount, which we will consider shortly.

[69] But, in any event, the principle which we think appropriate has application here on another basis. The balance sheet of Eagle Homes discloses that, at the time of declaration of dividends, and as a result of the payment or crediting of the dividends (the occurrence of which counsel for the appellants did not and could not seriously dispute), the company appeared to have insufficient funds to meet the likely judgment debt. A liquidator, probably appointed on the initiative of LED but acting on behalf of all creditors, would be entitled to pursue and recover those funds [102] .

[70] It is appropriate therefore that some order be made with respect to the personal appellants requiring them effectively to hold and to keep unencumbered assets up to a value which is at least reasonable in all of the circumstances. A court, in granting interlocutory relief, should generally grant the minimum relief necessary to do justice between the parties [103] . And it should specify the circumstances in which the order will cease to operate. Moreover, where, as here, the rights and obligations of Mr and Mrs Cardile with respect to their property can only be finally determined in proceedings under s37A of the Conveyancing Act, consideration should have been given to the order being made subject to an undertaking that those proceedings would be commenced. In these respects, the Full Court erred.

[71] The amount appropriate to provide that minimum relief is not clear. Various possible judgment debts were referred to in argument but none approached $1.2 million, the sum of the two dividends. It should be remembered that this relief is incidental to the presently incomplete exercise by the Federal Court of its jurisdiction to determine the balance of the remedies sought by LED against Eagle Homes, namely that for payment of a money sum. Difficult questions often arise in the determination of an account of profits derived from copyright infringement [104] . Further, no attention was paid to the possible incidence of income tax payable by Eagle Homes or the personal appellants on the dividends in their hands.

[72] On any view, $1.2 million or any similar sum seems an excessive amount for Mr and Mrs Cardile to be bound to hold under a Mareva order. However, this Court has no means of knowing precisely what sum should be substituted. Judgment on the taking of the accounts is likely to be given soon, at which time perhaps the sum could be adjusted. Alternatively, on proper evidence, the personal appellants may apply to the Federal Court for a dissolution of the injunction to the extent that the amount which it secures is excessive. Presently, this Court should not vary the amount except to reduce it to $1,058,977.12 to accord with the sum of the amounts demonstrably actually received by Mr and Mrs Cardile.


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