How judges shape the law : the Mareva injunction

Abstract

"The development of the law relating to Mareva injunctions is an example of the flexibility and adaptability of the common law - the judge-made law. Although judges adopt the fiction that the new law has been "found" (that is, that it was always there, but has only been revealed by the diligent application of the courts), the reality is that the judges have moulded the law, albeit based on long-standing principles, to evoke a new remedy to meet a newly-found deficiency in the old law.

Prior to 1975 the only pre-judgment remedy avail.able in New Zealand affecting the property of a debtor was contained in Rule 314 of the Civil Code of Procedure. Australia and England had no equivalent to Rule 314. In those jurisdictions therefore the creditor simply could not prevent a debtor transferring his assets out of the jurisdiction before judgment.

Now in 1983 in England, Australia and in New Zealand the creditor may apply to the court for an order restraining the defendant from taking assets out of the jurisdiction or otherwise dealing with them pending the outcome of a suit. It is an order designed to stop defendants dissipating or otherwise dealing with their assets thereby rendering a future judgment practically futile.

In 1975 in two decisions the Court of Appeal in England held that an injunction would be granted to restrain the foreign defendants from removing their assets out of the jurisdiction since there appeared to be a danger that they might do so in order to avoid the consequence of judgment in the pending claim. These two decisions represent the beginnings of a judge-made law.