....Unaffected by a Worldwide Freezing Order, a defendant would be free to move assets surreptitiously to a jurisdiction not covered by the order...
[T]he Full Court’s requirement is inconsistent with the evident purpose of r 7.32, restricting the power in a manner that would significantly impair its capacity to protect the Federal Court’s process, including by granting urgent relief. Such a requirement would render the power largely impotent to protect the Court’s process from frustration by defendants who are able to secrete their assets or move them almost instantaneously across international borders. Unaffected by a Worldwide Freezing Order, a defendant would be free to move assets surreptitiously to a jurisdiction not covered by the order... 22 In dissent, Edelman J recognised the commerciality of the majority position but held that the Court’s power to issue a freezing order has territorial limitations.23 His Honour noted that freezing orders were, by their nature, draconian tools and should not be used without good reason.24 His Honour also stressed that courts cannot be taken to act in vain, implying that the global scope of the freezing order in this case would be a mere brutum fulmen.25
Conclusion Global freezing orders may be severe in their consequences, and there is some force to Edelman J’s dissent. However, so too are the consequences of allowing international actors to exploit their foreign networks, and the jurisdictional veils between legal systems, to the detriment of Australian judgment creditors. Recent case developments concerning extraterritorial freezing orders
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demonstrate their considerable value to cross-border commercial litigation. The dissents in both Broad Idea and Huang serve to illustrate the jurisdictional difficulties inherent in dealing with orders having extraterritorial effect. Jurisdictional issues aside, there is also a live question as to how courts can (and should) exercise their discretion in circumstances where there is no realistic possibility of enforcing a judgment in the foreign jurisdiction.26 Despite the observed difficulties, the majorities of both the Privy Council and High Court have chosen to adopt a pragmatic approach to the development of legal jurisprudence consistent with the ever-evolving global village in which we live.
EndNotes *
Consultant, Bennett + Co and Senior Lecturer, University of Western Australia.
** Principal Associate, Bennett + Co. 1 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, [80] (Cardile). 2 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1, [43]; Deputy Commissioner of Taxation v Huang [2021] HCA 43. 3 See Cardile (1999) 198 CLR 380, [40]. 4 See, eg, eg, Cardile (1999) 198 CLR 380; Z Ltd v A-Z and AA-LL [1982] 1 QB 558 (CA). 5 See generally Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (LexisNexis Butterworths, 2nd ed, 2008) ch 6. 6 Worldwide freezing orders have “long since ceased to be exceptional”: Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24, [20], quoted in Deputy Commissioner of Taxation v Huang [2021] HCA 43, [28]. See Babanaft International Co SA v Bassatne [1990] 1 Ch 13 (CA); Republic of Haiti v Duvalier [1990] 1 QB 202 (CA); Derby & Co Ltd v Weldon [1990] 1 Ch 48 (CA); Derby & Co Ltd v Weldon (Nos 3 and 4) [1990] 1 Ch 65 (CA). 7 Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24 , [11], citing Gerb Van Weelde Scheepvaart Kantoor BV v Homeric Marine Services (“The Arabele”) [1979] 2 Lloyd’s Rep 117.
8 See generally Pitel and Valentine, ‘The Evolution of the Extra-Territorial Mareva Injunction in Canada: Three Issues’ (2006) 2(2) Journal of Private International Law 339; Douglas, ‘Extraterritorial Injunctions Affecting the Internet’ (2018) 12(1) Journal of Equity 34. 9 ie, the panel comprising the Privy Council. 10 Eastern Caribbean Supreme Court Civil Procedure Rules 2000. 11 Siskina (Owners of cargo lately laden on board) v Distos Cia Naviera SA (“The Siskina”) [1979] AC 210; Mercedes Benz AG v Leiduck [1996] AC 284. 12 And other jurisdictions where courts have inherited the equitable powers of the former Court of Chancery, including superior courts of Australia. However, it is also useful to note that, in Australia, freezing orders are understood as being made in exercise of inherent or implied powers, not equitable jurisdiction; see Cardile (1999) 198 CLR 380, [40] (see further discussion below). 13 Broad Idea [2021] UKPC 24, [1]; [3] (Lord Leggatt). 14 Broad Idea [2021] UKPC 24, [101] (Lord Leggatt). 15 Broad Idea [2021] UKPC 24, [102] (Lord Leggatt). 16 Eg, the Foreign Judgments Act 1991 (Cth). 17 Deputy Commissioner of Taxation v Huang [2019] FCA 2122. 18 Deputy Commissioner of Taxation v Huang [2019] FCA 1537. 19 Deputy Commissioner of Taxation v Huang [2019] FCA 2122. 20 Deputy Commissioner of Taxation v Huang [2019] FCA 1728. 21 Huang v Deputy Commissioner of Taxation (2020) 280 FCR 160, [43]; Huang v Deputy Commissioner of Taxation (No 2) [2020] FCAFC 160. 23 Deputy Commissioner of Taxation v Huang [2021] HCA 43, [26]. 23 See Deputy Commissioner of Taxation v Huang [2021] HCA 43, [33]–[34], [46]. 24 Huang at [34] (Edelman J), citing Jaken Properties Australia Pty Ltd v Nauman [2020] NSWSC 2554, [44]. 25 Deputy Commissioner of Taxation v Huang [2021] HCA 43, [40]. 26 See, for example, the observations of Lord Leggatt in Broad Idea at [102].
