Case: Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618
Outcome: considered
In Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622 the High Court observed that a prima facie case is made out where, if the evidence remains as it is , there is a probability that at the trial of the action the plaintiff will succeed. How strong the probability needs to be depends upon the nature of the rights asserted and the likely practical consequences of the order for sales. 12 The protection afforded by a preservation order to an applicant is a substantial encroachment on the basic right and freedom of the respondent to deal with his or her property. Practice Note 23 emphasises this point when it states that the purpose of the order is to prevent abuse of process and not to provide security in respect of the judgment. The restraint must be regarded as an extraordinary remedy because it restricts the right to deal with property even before judgment. This level of interference confirms the necessity of the person seeking the freezing order to provide sufficient oral or documentary evidence of his or her prima facie case. The mere making of allegations in correspondence or the assertion of a case in a Statement of Claim is not of itself, in my view, sufficient to make out a good arguable case. This is especially so where, as in the present case, there is a denial of the allegations both in correspondence and in the pleaded Defence. 13 In my view, at the time of this application for an asset preservation order, sufficient evidence has not been adduced by the applicants to establish a prima facie case. There are serious shortcomings in that evidence which has been adduced. By way of illustration, there is no evidence that the works being performed on the hospital were "unauthorised" by the New South Wales Department of Health or the local Council. There is no evidence that the hospital did not comply with fire safety requirements or that they could not be lawfully and safely occupied. As to the questions of causation, there is no evidence of damage being suffered as a result of the work allegedly being unauthorised. Nor is there any evidence as to the feasibility or cost of reinstatement. These are matters central not only to the applicants' claim but also to any consideration of whether they have a prima facie case. In the absence of such evidence, the Court is left with only bare allegations in correspondence and the Statement of Claim, the general circumstances of the case, some relevant documents, and a chronology of events unassisted by any evidence from persons familiar with the facts. 14 The applicants seek to rely on the certificate given by their solicitor under s 347 of the Legal Profession Act 2004 (NSW) ("the Act ") to the effect that there are reasonable grounds for believing, on the basis of provable facts and a reasonably arguable view of the law, that the claim for damages in the proceeding has reasonable prospects of success. In my view, such a certificate does not advance the applicants' case for several reasons. First, the certifying solicitor is not able to give any evidence as to the factual basis for the allegations since the certificate is no doubt given on the basis of instructions by a client which are then used to formulate the allegations in the Statement of Claim. There is no indication of what claims were made by the solicitor as distinct from his or her client. Secondly, the certificate is directed to satisfying a minimum requirement for the filing of the claim in a court (see s 347(2) of the Act ) and not directed to establishing the soundness of the allegations. It is concerned to prevent the filing of hopeless, vexatious or scandalous accusations. Thirdly, the certificate cannot prove that facts alleged have occurred or that any opinion or evidence is sound it purports only to verify the facts alleged. 15 Accordingly, on the meagre material before me, I cannot find that there is sufficient evidence to constitute a prima facie case. In light of this conclusion, there is no need for me to consider at length whether there is a danger of the respondents disposing of or removing their assets so that a prospective judgment may not be fully satisfied. I only note that I am not satisfied that, in all the circumstances, there is any such danger in this case. Although an applicant for a freezing order need not go so far as to show that the respondent formulated a plan or expressly or impliedly threatened to dispose of its assets, it must at least adduce evidence showing an appreciable or real risk or danger that the respondent will do so. In my view, that threshold has not been met in the present case. In light of these conclusions, the application for the preservation order must fail. 16 The applicants' application for an asset preservation order is therefore dismissed with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin J. Associate: Dated: 12 September 2007 Counsel for the Applicants: W G Muddle Solicitor for the Applicants: Bruce Stewart Dimarco Counsel for the Respondents: S Climpson Solicitor for the Respondents: Bull Son &amp; Schmidt Date of Hearing: 4 September 2007 Date of Judgment: 12 September 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1410.html