Huwazan v Feizi-Sobbi

1. [1]

   The Court had before it today an application for a freezing or similar order and I have been asked to make – and will shortly make – an order by consent for the quarantining in a solicitor’s trust account of the net proceeds of sale of property which is completing today.

2. [2]

   The defendants seek their costs of today.

Procedural history

1. [3]

   The statement of claim was filed on 24 November 2025 suing on a loan agreement.

2. [4]

   On 19 February 2026, the defendant filed a notice of motion seeking summary dismissal on the basis that the claim was statute-barred.

3. [5]

   On 10 March 2026, the Court ordered the plaintiffs to serve a proposed amended statement of claim by 17 March 2026. This did not occur.

4. [6]

   Although the plaintiffs did not file an amended statement of claim in accordance with the orders made on 10 March 2026, the plaintiffs through their newly retained counsel indicated before me this morning an intention to file and serve an amended statement of claim asserting a constructive trust and equitable lien.

Completion of sale of property and the plaintiffs’ notice of the sale

1. [7]

   The catalyst for the application for a freezing order is the impending sale of property in Cecil Park. The settlement of the property is due to take place at 1.30pm today. The plaintiffs approached me as duty judge late yesterday afternoon seeking freezing orders over the defendants’ property. Upon learning that the completion was not anticipated until 1.30pm today, I stood the matter over to 10am today. By late morning, the parties had agreed as to the substantive disposition of the matter, that is, the consent order I will shortly make.

2. [8]

   The evidence before me discloses that the plaintiffs had notice for some time of the proposed sale of property.

3. [9]

   The plaintiffs lodged a caveat over the property on 10 February 2026.

4. [10]

   On 25 February 2026, the defendants lodged a lapsing notice. The plaintiffs made no application to extend the caveat and the caveat was removed on or before 30 March 2026.

5. [11]

   The defendants' solicitor wrote to the plaintiffs' solicitor (as well as the separate firm named as the plaintiffs' solicitor on the plaintiffs' caveat) informing them that the sale would occur on 1 April 2026.

6. [12]

   In addition, according to the affidavit of the first plaintiff before me, the plaintiffs live next door to the property being sold. The first plaintiff says he was told in November 2025 that the defendants were planning to sell the property.

7. [13]

   In those circumstances, I need to proceed on the basis that the plaintiffs had ample notice of the proposed sale of the property, and yet made no application to the Court until late in the day before settlement was due to occur.

Plaintiffs’ response regarding delay

1. [14]

   The plaintiffs say the following about delay:

2. [15]

   First, the plaintiffs draw attention to evidence from their process server suggesting that the defendants were avoiding service before the statement of claim was served. As to that, I do not accept I can draw an inference from that about what would have happened between the lawyers had the question of freezing orders or some other quarantining of the proceeds had been raised earlier than yesterday.

3. [16]

   Next, the plaintiffs draw attention to the fact that if there had been an application made to extend the lapsing notice, that may have itself involved incurring the costs of a hearing before a duty judge. I do accept that, in circumstances where I can infer on the material before me and what happened today that had an application been brought earlier to extend the caveat, such proceedings would have been resolved along the lines of they have in fact been resolved.

4. [17]

   The plaintiffs draw my attention to the affidavit evidence of the defendants’ solicitor suggesting that an undertaking that would have been offered would have included a carve-out for legal costs. However, the plaintiffs candidly acknowledged that the order that I will shortly make leaves scope for legal costs to be paid out, should that be agreed between the parties or an order of the Court.

5. [18]

   The plaintiffs’ counsel said further that, while with the benefit of hindsight sending a letter and asking for net sale proceeds to be preserved might have been a step the plaintiffs could have taken, it was not the only step they could have taken. The plaintiff’s counsel draws attention to the breakdown of the relationship between the parties.

6. [19]

   While I accept that that was not the only step that could have been taken, the failure to take any step earlier than yesterday afternoon, especially in circumstances where both parties are represented in the litigation, means that I think a costs order is appropriate.

7. [20]

   Accordingly, I make the following orders:

   1. (1)

      By consent and until further order of the Court, the net proceeds of the sale of 280 Cecil Road, Cecil Park NSW on 1 April 2026 after distribution of the amounts listed in paragraphs 8a-8h of the affidavit of Majed Kheir affirmed 1 April 2026 are to be held on trust by Kheir Lawyers.

   2. (2)

      The plaintiffs to pay the defendants’ costs of the application before me.