Bank Triumphs in Mareva Injunction Challenge: Mistaken Account Freeze Lifted
Introduction
In Janvier & Domas [2024], the Federal Circuit and Family Court of Australia addressed a contentious Mareva injunction mistakenly freezing accounts belonging to a third party. Justice McGuire navigated complex allegations of financial impropriety, balancing procedural caution with the rights of third-party entities. The decision underscores the court’s commitment to evidentiary rigor and protecting uninvolved parties.
Facts and Issues
Facts:
- The Injunction: On 4 September 2024, ex parte orders were made to freeze two bank accounts purportedly belonging to the wife, Ms. Domas.
- Third-Party Involvement: B Bank, after investigating the accounts, determined that the frozen accounts belonged to another person with the same name and date of birth as the wife.
- Application: B Bank applied for the Mareva injunction to be lifted concerning the mistakenly frozen accounts.
Issues:
- Were the frozen accounts held by the wife or an unrelated third party?
- Did B Bank provide sufficient evidence to justify lifting the injunction?
- Was the husband’s opposition to lifting the injunction supported by substantive evidence?
Application of Law
Mareva Injunction Principles:
- A Mareva injunction is a discretionary remedy requiring a high standard of evidence due to its significant implications.
- Cardile v LED Builders Pty Ltd (1999) establishes that third parties should not be adversely impacted unless necessary to protect judicial processes.
Standard of Proof:
- Section 140 of the Evidence Act 1995 (Cth) requires decisions to be made on the balance of probabilities, taking into account the seriousness of the allegations.
Judgment Analysis
Reasoning:
- Bank’s Investigation: B Bank’s affidavit detailed a thorough investigation, including different postal addresses, email addresses, phone numbers, passport and driver’s license information, and observably distinct signatures (paragraphs [9]-[12]).
- Husband’s Argument: The husband relied on suspicion and inference, failing to present substantive evidence linking the wife to the accounts (paragraphs [20]-[21]).
- Balancing Interests: Justice McGuire emphasized the gravity of mistakenly freezing a third party’s accounts, citing the high caution required when granting Mareva injunctions. The court concluded that the evidence supported B Bank’s claim of mistaken identity and lifted the injunction (paragraphs [22]-[24]).
Orders:
- The Mareva injunction was discharged concerning the third-party accounts.
- Documents produced by B Bank relating to the mistaken accounts were ordered to be destroyed.
Precedents Cited:
- Cardile v LED Builders Pty Ltd (1999): Caution in impacting third parties under injunctive orders.
Take-Home Lesson
This case illustrates the importance of thorough evidence when seeking or opposing Mareva injunctions. Courts prioritize protecting third parties from undue harm while ensuring judicial processes remain effective and fair.
