FEDERAL COURT OF AUSTRALIA

Consolidated Constructions Pty Ltd v Bellenville Pty Ltd

[2002] FCA 1513 

PRACTICE AND PROCEDURE – interlocutory orders – Mareva type – asset preservation order – respondent developer incorporated for single purpose development comprising acquisition, major refurbishment ($23 million) and sale of building – paid up capital of $2 – claim by builder for substantial damages for misleading or deceptive conduct – developer sold building before practical completion – developer intended to disburse proceeds to its two shareholders – developer had no other assets – whether necessary to prove purpose to frustrate any judgment which builder might obtain – principles applicable – discretionary considerations.

Jackson v Sterling Industries Ltd (1987) 162 CLR 612 referred to

Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 followed

National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 referred to

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 applied

Glenwood Management Group Pty Ltd v Mayo (1991) 2 VR 49 referred to

Northcorp Ltd v Allman Properties (Australia) Pty Ltd [1994] 2 Qd R 405 referred to

Hayden v Teplitzky (1997) 74 FCR 7 referred to

Beach Petroleum NL v Johnson (1992) 9 ACSR 404 referred to

CONSOLIDATED CONSTRUCTIONS PTY LTD v

BELLENVILLE PTY LTD & ORS

W 283 of 2002

CARR J

4 DECEMBER 2002 

PERTH

THE COURT ORDERS THAT:

1.         Until further order, the first respondent in whatsoever capacity, be restrained by itself, its directors, officers, servants and agents (including its solicitors) and otherwise howsoever from:

(a)        transferring, alienating or otherwise dealing with or disposing of or directing the payment of; or

(b)        causing or permitting to be transferred, alienated or otherwise dealt with or disposed of or directed,

three million dollars ($3,000,000) of the unencumbered amount of the proceeds of the sale of the property consisting of 2 adjacent titles namely Lots 1103 and 1104 on Plan 27831 (Certificates of Title Volume 2216 Folio 92, and Volume 2216 Folio 91) (“the property”) in the possession, custody or control of the first respondent in whatsoever capacity pursuant to the contract dated 30 June 2002 of sale and purchase of the property in which CPT Manager Limited ABN 37 054 494 307 as Trustee of the Centro David Jones Sub-Trust is the purchaser of the property, or any other contract of sale and purchase (including without limitation any put and call option) of the property or any part thereof.

2.         The costs of this application be reserved pending the hearing and determination of application No W302 of 2002.

3.         There be liberty to any party to apply upon seven days written notice to the other parties. 

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

INTRODUCTION

1                     This is an application for an asset preservation order of the Mareva type.  An interim set of such orders was made on an ex parte basis on 2 October 2002.  Those orders, slightly amended, were extended by consent on 9 October 2002 to enable the laying down of a timetable for certain procedural steps and the hearing of the application to take place at a time convenient to the parties and to the Court.  The question is whether the first respondent should be ordered not to dispose of an amount of $5 million out of the proceeds of sale by it of a property in the central business district of Perth. 

factual and procedural background

2                     The applicant is a building company.  The first respondent is a company, with a paid up capital of $2, which was incorporated for the purpose of acquiring the adjoining properties which now comprise the site of the “David Jones” store in Perth, to refurbish and expand the then existing store on that site and to sell the completed property. 

3                     On 26 June 2000, the applicant and the first respondent entered into a contract (“the Contract”) whereby the applicant agreed to carry out the requisite building works for a fixed lump sum guaranteed maximum price of $23,198,470. 

4                     The applicant has instituted separate proceedings relating to the Contract against the first respondent and others in this Court.  I shall refer to those proceedings as “the Principal Application”. 

5                     In the Principal Application the applicant claims damages from the first respondent and others for losses which it claims to have incurred by entering into and performing the Contract.  At this stage the applicant estimates its loss to be $5.15 million. 

6                     The applicant claims recovery of those damages on the basis that its loss was incurred by the misleading or deceptive conduct of the first respondent (including conduct by persons acting on its behalf), contrary to s 52 of the Trade Practices Act 1974 (Cth) (“the Act”).  The essence of the factual background to the applicant’s claims against the first respondent can be distilled as follows.

7                     Before the Contract was executed, an incorporated project manager known as Project Planning and Management (WA) Pty Ltd (“PPM”) acting on behalf of the then registered owner of the site, Aherns Holdings Pty Ltd and thereafter acting on behalf of the first respondent, supplied the applicant with certain information relating to the existence of asbestos in the building which was to be refurbished (“the Building”).  That information is said to have included the representation that the Building was “a pre-asbestos building” and that there was relatively little asbestos “in the project”. 

8                     During the tendering process, PPM also referred the applicant to an “Asbestos Report” prepared by a company known as MPL Group Pty Ltd (“the MPL Abestos Report”) which, in summary, stated its findings as follows:

·          there was a small amount of asbestos in a hard form identified in specific areas in the Building;

·          the asbestos thus identified was such that it would either be left in situ or that its condition could be monitored; and

·          the asbestos was not in a form which required immediate removal by experts or which restricted access to any portion of the Building. 

9                     There were specific terms in the Contract which precluded the applicant from being entitled to any increase in the contract sum, or any extension of the time by which practical completion was to be attained, or making any claim against the first respondent whether in contract, negligence, in equity, or otherwise, arising out of any inaccuracy as to the quantities, type, or location of asbestos as identified in the tender documents or the MPL Asbestos Report.  There is evidence that these terms were negotiated between the respective solicitors for the applicant and the first respondent over a period of some months before the Contract was executed. 

10                  In the course of performing the Contract the applicant found not only substantially more asbestos in the Building than it had expected or allowed for, but also limpet or fibrous asbestos in large quantities, which required immediate removal and which restricted access to the Building for significant periods of time. 

11                  The applicant has estimated that, of its total losses, an amount of approximately $1 million is attributable to the problems which arose in relation to removal of asbestos. 

12                  In the Principal Application the applicant claims its total loss (as mentioned above, presently quantified at about $5.15 million) on the basis that but for the misleading conduct of the first respondent and its agents, it would not have entered into the Contract. 

13                  The applicant has also brought claims in the Principal Application of misleading or deceptive conduct by PPM, MPL Group Pty Ltd and Aherns Holdings Pty Ltd, together with a claim in negligence against MPL Group Pty Ltd in relation to a survey of the Building and the preparation of the MPL Asbestos Report.  It is not necessary for the purposes of the present application to refer further to those claims. 

the basEs upon which the applicant seeks the asset preservation order and the respondentS resist the making of such an order

14                  The applicant says that it has a good arguable case against the first respondent in the Principal Application and that, unless the asset preservation order is made, it will be unable to recover judgment against the first respondent if it were successful in that application because that company would, due to the proposed conduct of its shareholders (described below), have no assets against which to execute. 

15                  The first respondent is what may be described as a special purpose joint venture vehicle.  One of its shares is owned by a company called Manabrook Pty Ltd (“Manabrook”), which is the second respondent to this application.  There is only one shareholder in Manabrook, a company called MAB Corporation Pty Ltd (“MAB”), which is the third respondent to this application.  The issued shares in MAB are held equally by a Mr Andrew Buxton and Mr Michael Buxton.  The other share in the first respondent is owned by Babcock & Brown Transactions Pty Ltd (“Babcock”), which is the fourth respondent in these proceedings.  I shall refer to the respective corporate groups which are beneficially interested in the first respondent as being the Buxton and the Babcock groups respectively.  Centro Properties Limited, the fifth respondent, is the purchaser of the land on which the Building has been constructed.  It was joined as a party to this application at a time before settlement of the sale of the Building (I have assumed that settlement has taken place), but has taken no part in the proceedings. 

16                  It is common ground that the first respondent was formed only for the purposes described in paragraph [2] above and that once the Building was on-sold the profits earned on that venture were to be distributed immediately by way of dividends in equal shares to the Buxton and Babcock groups respectively.  That is, it is common ground that unless the order which is sought in this application is made, the first respondent will not have any assets to satisfy any judgment which the applicant may obtain against it in the Principal Application. 

intent or purpose

17                  The first to fourth respondents (whom I shall describe as “the respondents”) submitted, in their written submissions, that a Mareva order may only be made where the integrity of the judicial process (including execution of a judgment) is being abused by conduct the purpose of which is to put assets out of reach in the event of judgment being obtained against it. 

18                  The respondents contended that the applicant had to demonstrate that the first respondent’s conduct was:

·          calculated to have the tendency to frustrate the Court’s process;

·          part of a scheme devised for divesting itself of assets;

·          undertaken with the intention that should the applicant obtain judgment it will be a barren judgment;

·          a dealing with assets in a manner designed to thwart the applicant in its efforts to have any judgment satisfied; or

·          such that a propensity to shift assets, apparently to defeat a judgment, had already been manifested.

19                  Accordingly, so it was put, as the first respondent was dealing with its assets and conducting its business in the same manner as it would if Court proceedings had not been commenced, there was no basis upon which to make an asset preservation order.  To do so would be to pre-judge the applicant’s claim and to provide security to it when it was not a secured creditor. 

20                  It is convenient at this stage to deal briefly with the tail end of that submission.  The authorities are quite clear that an asset preservation order will not, and should not, provide any security in the sense of priority over the rights of any other unsecured creditor whether contingent or otherwise: Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 618-619.  If an asset preservation order is made in this matter, there will be no question of it conferring any security rights upon the applicant.  Rather, it will be to restrict the first respondent’s rights of disposal of its property, subject to all the safeguards which the authorities also show are required to limit, so far as is consistent with the interests of justice, that intrusion upon what would otherwise be the first respondent’s rights. 

21                  The applicant says that the respondents’ propositions are stated too narrowly and that it is not necessary to prove purpose or intention to dispose of assets to prevent satisfaction of judgment.  It is sufficient in this case, so the applicant submits, to point to the effect of the conduct. 

my reasoning on the question of intent or purpose

22                  I do not accept the respondents’ submissions.  I think that they are against the weight of authority. 

23                  In what I think was the first case in which the New South Wales Court of Appeal considered whether there was jurisdiction to grant a Mareva order, Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264, at p 276 there was reference to the alternatives of intent and effect:

“It [the jurisdiction] is directed to dispositions … which are intended to frustrate, or have the necessary effect [my emphasis] of frustrating, the plaintiff in his attempt to seek through the Court a remedy for the obligation to which he claims the defendant is subject.”

24                  In National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at 277, Mason CJ, Brennan and Deane JJ described the view that a Mareva injunction cannot be obtained in the absence of a positive intention to frustrate a judgment, as a mistaken view.  In doing so their Honours cited Jackson at 623.  That observation was referred to with apparent approval by four members of the High Court in Cardile v LED Builders Pty Ltd (1999) 198 CLR 394. 

25                  Other decisions to like effect include Glenwood Management Group Pty Ltd v Mayo (1991) 2 VR 49 (Young CJ); Northcorp Ltd v Allman Properties (Australia) Pty Ltd [1994] 2 Qd R 405 at 407 (Court of Appeal); Beach Petroleum NL v Johnson (1992) 9 ACSR 404 at 405-406 (von Doussa J) and Hayden v Teplitzky (1997) 74 FCR 7 at 17 (Lindgren J). 

26                  There are some fairly recent cases which, as Lindgren J pointed out in Hayden, do not conform with this line of authority.  His Honour cited some of those cases.  In its written submissions, the respondents referred to other cases in which it was suggested that proof of an intention or purpose to prevent recovery of the judgment was required.  In my view, the weight of authority is against that proposition.  My conclusion on this point is that the Court has jurisdiction and power in the present case, subject to weighing all the other relevant factors, to grant an asset preservation order once it is shown that the first respondent intends to do acts (to declare and pay dividends) which will have the effect of rendering any judgment obtained by the applicant in the Principal Application ineffective. 

27                  In oral argument Mr C G Colvin SC, senior counsel for the respondents, said that his client was content not to “burden me” with having to determine in this matter whether, as a matter of jurisdiction, it was necessary to show an intention to dissipate assets for the purpose of frustrating a judgment.  Rather, he submitted that the circumstances of the particular structure being used and the knowledge of that structure by all parties, went to the exercise of the discretion whether or not to continue the Mareva orders.  Nevertheless, in view of the respondents’ written submissions, I thought that it was appropriate to deal briefly with the jurisdictional point.  It would seem to be a jurisdictional point because the only substantive order sought in this application is a Mareva order. 

the ordinary course of business

28                  The respondents have adduced evidence that the Buxton and Babcock groups, in their ordinary course of business, set up single-purpose entities whose profits are distributed in the form of dividends immediately at the conclusion of each project.  The respondents submit that as this conduct would have been engaged irrespective of whether these proceedings had been commenced, then no asset preservation order should be made. 

my reasoning on this point

29                  I do not accept this submission.  The proposition derogates from the underlying purpose of asset preservation orders of the Mareva type, i.e. to prevent the abuse of process of the Court by the frustration of its remedies, regardless of how that is brought about.  As Brennan J observed in Jackson v Sterling Industries Ltd at 621, the schemes which a debtor may devise for divesting himself of assets are “legion”. 

30                  That is not to say that the ordinary course of the respondents’ business is irrelevant.  It is a relevant factor, as Mr Colvin submitted in oral argument, to the exercise of the Court’s discretion.  In particular, it is relevant when assessing the degree to which the making of an asset preservation order would intrude on the carrying on of their business.  The authorities show that such orders are moulded to interfere as minimally as possible with the carrying on of a business of a party against whom such an order is made.  In the case of an individual, similar concerns are recognised by provision being made for ordinary living expenses and the like.  The difference here, as I see it, is that the Buxton and Babcock groups want to bring the first respondent’s business to an end and take all of its assets, by way of dividends, at a time before its legal rights and obligations have been finally determined.

is there a serious question to be tried?

31                  On the current state of authorities, although the High Court in Cardile recommended that asset preservation orders of the Mareva type not be described as injunctions, it is still necessary for a court to make an assessment of whether there is a serious question to be tried and, so far as may be possible, to assess the strength of an applicant’s case.  In this matter the relevant case is the Principal Application. 

32                  Nearly all of the evidence in relation to the Principal Application comes from the applicant whose affidavit evidence at this stage remains largely unchallenged, in the sense that no affidavits alleging contrary facts have been filed.  But Mr Neil McLennan, Senior Development Manager of MAB, who is also the Development Manager of the first respondent, has sworn an affidavit in opposition to the motion.  Mr McLennan, in part of his affidavit, gives particulars of a claim by the first respondent against the applicant for liquidated damages under the Contract of at least $5,420,000 said to have been incurred by delays on the applicant’s part in achieving practical completion. 

33                  Mr McLennan’s affidavit shows what the first respondent contends is the position as at 18 October 2002 in relation to achieving practical completion of the building works.  He explains that practical completion has been delayed by 271 days.  The rate of liquidated damages provided for in the contract is $20,000 per calendar day. 

34                  It would appear from affidavits filed on its behalf that the applicant has claimed extensions of time amounting to a total of 272 days.  The applicant has claimed $4,300 per day for delay costs.  Some, but not all of the extensions of time claimed relate to the removal of asbestos.  These claims and other claims deposed to by the applicant’s officers, which are disputed by the first respondent are said to amount in total to $4,034,106.  According to Mr McLennan’s affidavit, PPM as the Superintendent under the Contract, which it will be recalled is the second respondent in the Principal Application, has decided that the applicant should only be entitled to an extension of time of 9.75 days.  As this is less than the provisional delay period of 20 days, the position of the first respondent and the Superintendent is that the applicant is not to be allowed any extensions of time.   

35                  Thus, by way of rough approximation, if the first respondent is wholly successful in relation to its claim for liquidated damages, presumably by way of cross-claim in the Principal Application, or by way of arbitration, it will recover about $5.4 million.  If the applicant is wholly successful in establishing its claims then it will recover about $4 million.  As Mr M J Badman deposes in paragraph 28 of his affidavit, the applicant’s projected loss on the Contract of $5.15 million will be reduced by the extent to which it is successful in relation to those claims, but will be increased to the extent that the first respondent is successful in recovering liquidated damages. 

36                  There is no basis upon which I can assess the relative strengths of the respective claims in relation to liquidated damages, extensions, delay costs and the like under the Contract.  The best that I can do is to note the approximate range of possible outcomes. 

37                  The applicant’s main affidavit in relation to the Principal Application was sworn by Mr Andrew Peppercorn, its Managing Director.  That affidavit runs to some 536 paragraphs and, as might be expected, gives a very detailed and precise recitation of the applicant’s case. 

38                  In my view, it is quite clear that the applicant has established that there is a serious question to be tried on the issue of misleading or deceptive conduct as between the applicant and the first respondent.  The representations about the limited presence of asbestos (on which the claims are largely based) were in writing and there does not seem to be any dispute that they were made.  The applicant’s evidence about the actual extent of the asbestos which was found in the Building and the problems which that caused has not been challenged in these proceedings.  However, there are disputes between the parties (considered immediately below) which go to the issue of liability.  I do not find it possible, at this stage, to form any assessment of the strength of the applicant’s case other than to say that, on a prima facie basis, it has substance.  I return below to the issue of damages in the Principal Application. 

39                  There were two other matters which Mr Colvin advanced in relation to the merits of the Principal Application. 

40                  First, he submitted that there was a real issue as to the first respondent’s responsibility for what took place before 15 December 1999 when it took over the role of Principal (from Aherns Holdings Pty Ltd) in the negotiations which led to the execution of the Contract.  Mr Colvin pointed out that there was no allegation that the first respondent itself had made any representations about the asbestos in the Building. 

41                  I acknowledge that this is a hurdle which the applicant faces.  However, I do not see it as an insurmountable problem.  The evidence is that as early as 7 September 1999, Mr Andrew Buxton of MAB was being kept in touch with the post-tender negotiations.  On that date PPM asked the applicant to let it know what allowance it would require to the tender price for a guaranteed maximum price in respect of asbestos removal or hazardous material.  The applicant may well, at trial, be able to persuade a court that the conduct of the first respondent from 15 December 1999, taken in the context of the representations which had been made earlier by PPM (which became its project manager) and, in particular, its conduct leading up to the execution of the Contract may in all the circumstances have amounted to misleading or deceptive conduct. 

42                  Next it was submitted on behalf of the first respondent that the applicant’s claim for damages amounting to about $5 million was based on the premise that, but for the misleading or deceptive conduct, it would never have entered into the Contract, as Mr Peppercorn had sworn.  Mr Colvin submitted that the evidence did not support the proposition that the issue about asbestos was a “make or break point”.  He referred me to paragraph 112 of Mr Peppercorn’s affidavit which is to the effect that if the applicant had been aware of the problems relating to friable asbestos, it would have qualified its tender.  I note also paragraph 56 of Mr Peppercorn’s affidavit which gives an indication of the keenness of the applicant to win this Contract.  On the other hand, as Mr M W Odes QC, who with Mr A N Siopis SC appeared for the applicant, submitted, there is room for an inference that had the applicant qualified its tender, the first respondent would have rejected the qualification and the Contract would not have been entered into. 

43                  I accept Mr Colvin’s submission that I should take into account and make some allowance for the possibility that the applicant will not be able to make good its claim for the total loss. 

the PROFFERED guarantees

44                  The parties have adduced evidence in relation to guarantees proffered on behalf of the first respondent.  MAB, which it will be recalled is the third respondent to this application and owns, through Manabrook, half the shares in the first respondent, and Aimtree Pty Ltd, a company within the Babcock group, have made an offer jointly and severally to guarantee payment of up to $5 million of any judgment obtained by the applicant against the first respondent in the Principal Application.  The offer was made initially during negotiations between the parties on the basis that the guarantees would be granted in return for a discharge of the Mareva orders which were made on an interim basis.  The applicant did not accept that offer.  

45                  At the hearing I raised with Mr Colvin the question how the offer of the guarantee was said to be relevant to the question which I had to decide, namely, whether to extend the Mareva orders further. 

46                  Mr Colvin submitted that, to the extent that I may have been concerned that the arrangements of the Buxton and Babcock groups were designed to defeat the judgment, the offer of the guarantees was inconsistent with that strategy.  It was an indication of bona fides.  I was told that the offer of the guarantees remained open.  I was invited to take the offer into account, when exercising the Mareva jurisdiction, as changing the context.  The change was said to be a circumstance where at least half of the principal interests in the first respondent was prepared to extend a guarantee. 

47                  The applicant filed evidence and made submissions to the effect that the guarantees was of no great worth.  On the evidence which has been put before the Court, I think that there is considerable substance in that submission.  The evidence shows that MAB is the trustee of a unit trust.  The balance sheet of that trust shows an excess of $10 million of assets over liabilities.  However, current assets of the trust consist mainly of “Receivables” of $56.4 million.  Note 3 to that balance sheet shows that of that amount $50.07 million is due from “associated entities”.  No indication is given about the identity of the associated entities nor is there any indication of the recoverability of the amounts owing by them.  Trade debtors are shown at $1.06 million but trade creditors are $1.38 million, a difference of some $300,000.  Note 6 to the balance sheet shows that there are current liabilities of $49.56 million payable to other associated entities or other related bodies corporate.  Note 10 to the balance sheet shows contingent liabilities of $161 million, although I take into account the respondents’ evidence that at settlement of the sale of the Building this either will be or has been reduced to $73.5 million.  The statement of operations of the trust for the year ended 30 June 2001 shows the relatively modest profit of $58,725, but again I take into account the profit for the year ended 30 June 2002 of $1.335 million.  Nonetheless, the picture is far from clear, in terms of assessing the value of a guarantee from MAB.

48                  So far as Aimtree Pty Ltd is concerned, its total assets are said to be $84.16 million.  The financial report indicates very sizeable “investments” ($60.36 million) in three companies, but with no detail about the nature or liquidity of those investments.  However, its income is shown as only $100,696 with a net profit of $86,261.  A receivable of $23.70 million from “Bayloft” is shown, again without any other detail.  Current liabilities amount to $68.34 million compared to current assets (which include the “investments”) of $60.46 million. 

49                  In my view, the respondents have not put sufficient financial information before the Court for me to make any assessment about the worth of the proffered guarantees. 

50                  Furthermore, I have a conceptual difficulty with the relevance of the guarantees.  It seems to me to fly in the face of the policy of a Mareva order.  That policy is not to provide any security to a litigant, but to prevent assets from being divested in such a manner as to frustrate the Court’s process. 

51                  In so far as the proffered guarantees are said to be relevant to the intentions of the respondents, I think that, in view of my ruling that it was not necessary to establish intention or purpose, the proffered guarantees are largely irrelevant. 

52                  However, the offer may constitute some evidence of the respondents’ bona fides.  As such it cannot be excluded totally as a relevant factor in the exercise of my discretion.  However, I give it very little weight. 

The undertaking as to damages

53                  The applicant has filed the usual undertaking as to damages.  The respondents raise, as a perceived problem, the quantification of their damages if the first respondent is successful in the Principal Application and the respondents call up the applicant’s undertaking. 

54                  The respondents have adduced evidence that the Buxton and Babcock groups would normally receive the $5 million concerned as dividends, would reinvest those moneys and make substantial returns.  Figures of 30%, 50%, and indeed up to 100% per annum have been referred to in the affidavits filed on behalf of the respondents. 

55                  Rather than being a factor in favour of the respondents, I would regard those percentage rates of return as an indication of the risks upon which the moneys in issue will be ventured if the Mareva orders are not extended.  That risk is material to the prospect of the applicant, through a liquidator, tracing moneys which may have been paid away as dividends. 

56                  The respondents’ point is that the applicant’s potential liability under the undertaking for damages could amount to several million dollars, and there is no evidence of its financial backing.  I take that factor into account, but I consider that the argument has been overstated.  The respondents would of course be under a duty to mitigate their losses.  In assessing such mitigation it would be necessary to enquire about what might have been the prospects of obtaining alternative sources of finance and the rate of interest applicable. 

a further discretionary matter

57                  Mr Colvin submitted that another relevant factor in the exercise of the discretion was the fact that the applicant was aware, or ought to have been aware, of the structure by which, through the first respondent, the Buxton and Babcock groups organised this development and the applicant should not be seen to be complaining when what was planned all along was about to occur.

58                  In reply, Mr Odes submitted that a significant change had occurred.  That change was the fact that, while the building works were progressing, the first respondent had sold the building and was about to distribute all of the proceeds.  Mr Odes said that while the building was unsold there was no reason to take any action.  His client could execute against the property.  But the building was sold while his client was still working on it.  That was, as he put it, “a horse of a different colour”. 

59                  I accept the force of Mr Odes’ submissions on this point.  There was a significant change in the commercial relationship between the parties which was brought about by the sale of the building before the building works had been completed and the Contract wound up.

Conclusion

60                  After weighing all of the above factors, I have come to the conclusion that the Mareva order should be extended until further order, but that the amount involved should be adjusted downwards.  I have spent some considerable time trying to assess what amount is “… at least reasonable in all of the circumstances” – see Cardile at 409.

61                  In my view, it would be appropriate for the figure to be reduced to $3 million.  There will be orders accordingly.

Associate:

Dated:              4 December 2002