Gordon v Glowberth Pty Ltd

This is an application by the first defendant, Glowberth Pty Ltd, to discharge ex parte freezing orders made by me as duty judge on 20 September 2023 in favour of the plaintiff, Jerry Gordon, which were subsequently varied and extended by consent and without admission by me on 22 September 2023.

At the heart of all of the issues in the proceedings is a property known as 258 Sackville Ferry Road, Sackville North, New South Wales (Sackville Property). During relevant times, Glowberth was the owner of the Sackville Property and Mr Gordon was resident at the Sackville Property as tenant.

The proceedings have involved repeated appearances before duty judges of this court, between which times the pleadings have been filed.

On 20 September 2023, Mr Gordon commenced the proceedings by filing the summons in court before me as duty judge. As well as abridging the time for service of the summons on Glowberth, the form of the freezing orders which were made ex parte by me on 20 September 2023 (with effect up to and including 22 September 2022) were as follows:

These freezing orders were varied inter partes by me on 22 September 2023 by consent and without admission to operate until further order and with the addition of the following sub-paragraphs to order 6 made on 20 September 2023:

In this judgment, I will refer to orders 5 and 6 made on 20 September 2023, as varied on 22 September 2023, together as the Freezing Orders.

On 22 September 2023, it was specifically noted in the orders made that on any application by the defendant to vacate or vary the Freezing Orders, the plaintiff will have the onus.

On 10 October 2023, Mr Gordon filed the statement of claim, the principal relief sought being an order that Glowberth pay Mr Gordon the amount of $360,000 as a debt due to him and damages for breach of contract arising from the terms of a residential tenancy agreement dated 22 May 2014 between Glowberth as landlord and Mr Gordon as tenant. It is alleged that Glowberth breached its obligations under special conditions contained in the tenancy agreement (which provided that Mr Gordon would have the right of first option to purchase the Sackville Property and that any net sale proceeds received for the Sackville Property in excess of $750,000 would be divided equally between them) after it entered into a contract of sale for the Sackville Property for $1,470,000 with a third party. The amount of the debt ($360,000) was calculated by dividing the difference between $1,470,000 and $750,000 ($720,000) by two.

On 18 October 2023, the proceedings came before Henry J, at which time procedural orders were made for the filing of pleadings and any application by Glowberth to vacate or vary the Freezing Orders, which included the notation that Mr Gordon would have the onus on any such application.

On 2 November 2023, Glowberth filed the defence and statement of cross-claim.

The defence specifically raised the issue of Mr Gordon becoming bankrupt on or around 2 July 2015, being an undischarged bankrupt until about 2018, and presently being a discharged bankrupt.

In the defence, while admitting the tenancy agreement, Glowberth denied that the parties intended to be bound by the special conditions. Glowberth said that if there was such an intention, it was predicated on an oral agreement made prior to the execution of the tenancy agreement, the terms of which were that Mr Gordon was to reside at the Sackville Property for no more than 12 months. It was alleged that within that time, Mr Gordon was granted the opportunity to undertake and complete a development and construction of the Sackville Property involving its subdivision at his own expense and, if he performed those obligations, he would be offered the first right to purchase the Sackville Property.

The cross-claim alleged repeated breaches by Mr Gordon of the tenancy agreement in relation to the Sackville Property, consisting in his failure to pay rent, following which, on 14 March 2023, orders were made by the New South Wales Civil & Administrative Tribunal (NCAT) for the termination of the tenancy agreement and possession to be given to Glowberth on 14 March 2023. Mr Gordon was then refused leave to appeal by the appellate division of NCAT on 5 September 2023. The cross-claim seeks judgment in favour of Glowberth against Mr Gordon in the sum of $364,800, being the alleged amount of unpaid rent from 22 May 2014.

On 20 November 2023, the proceedings were before Lindsay J, at which time orders were made that:

At the hearing on 20 November 2023, it was noted that there were questions arising as to the standing of Mr Gordon to bring the proceedings. Glowberth contended that by virtue of s 27 of the Bankruptcy Act 1966 (Cth) the court had no jurisdiction to entertain Mr Gordon’s claims and that further consideration should be given as to whether the proceedings should be cross-vested to the Federal Court of Australia.

On 23 November 2023, Mr Gordon filed the amended statement of claim (ASOC). In addition to an order that Glowberth pay Mr Gordon the amount of $360,000 as a debt due to him, in the ASOC Mr Gordon amended the relief sought by seeking damages against Glowberth for breach of contract or judgment for debt, or alternatively, an order that Glowberth pay to the Official Trustee such amount as is found to be payable.

In the ASOC, Mr Gordon also sought a declaration that the special conditions in the tenancy agreement remained valid and in effect as at 23 June 2023, and a declaration that upon completion of the contract of sale of the Sackville Property, Glowberth is obliged to pay Mr Gordon the sum of $720,000.

At the conclusion of the ASOC, Mr Gordon pleads that:

In the ASOC, Mr Gordon states, in the alternative, that if (contrary to his position) the causes of action in the ASOC vested in the Official Trustee, then Glowberth is liable to pay the Official Trustee the amounts claimed in the ASOC.

On 24 November 2023, Mr Gordon also filed the defence to cross-claim, in which Mr Gordon alleges that Glowberth represented that the lease under the tenancy agreement was only for the purposes of obtaining finance, and that Glowberth would not enforce any claim for rent, on which representations Mr Gordon relied to his detriment (to the knowledge of Glowberth), resulting in Glowberth now being estopped from claiming rent from him.

In his defence to the cross-claim, Mr Gordon also pleads that any claim for rent due for the period 22 May 2014 to 1 November 2017 is statute-barred by the Limitation Act 1969 (NSW), and claims a set-off pursuant to s 23 of the Civil Procedure Act 2005 (NSW).

At the hearing, Mr Gordon relied on the following evidence:

At the hearing, Glowberth relied on the following evidence:

The Official Trustee did not rely on any evidence.

Mr C Wood with Mr V Misra appeared for Mr Gordon instructed by Laliotis Xuereb Lawyers. Mr D Allen appeared for Glowberth instructed by Avondale Lawyers. Mr C McMeniman appeared for the Official Trustee instructed by the Australian Government Solicitor.

The legal principles relating to the discharge of freezing orders and the making of new ones are not in dispute. They are helpfully summarised in Tyche Asset Management Pty Ltd v Flyland Development Group Pty Ltd [2021] NSWSC 1283, by Henry J at [37]-[42] as follows:

Freezing orders should, in general, be supported by an undertaking as to damages: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18, Gaudron, McHugh, Gummow and Callinan JJ at [43], Kirby J at [122]. In an interlocutory setting, there is no inflexible rule that a plaintiff should be denied interlocutory relief if it cannot offer a meaningful undertaking: Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279, Katzman J at [69], citing Caravelle Investments Ltd v Martaban Ltd (1999) 95 FCR 85; [1999] FCA 1505 Finkelstein J at [25].

There were numerous issues raised at the hearing. I have set out below the parties’ submissions in relation to each of these issues and my determination of them.

Glowberth says that at the time Mr Gordon applied for the Freezing Orders, he knew that the date of the tenancy agreement was 22 May 2014 and that he had been made bankrupt on 2 July 2015. Glowberth submits that these were material facts which were not disclosed by Mr Gordon and which provide a basis for the discharge of the Freezing Orders, applying the following principles expressed in Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540; [1988] FCA 557 by Davies, Gummow and Lee JJ at 543:

Mr Gordon says that even if there was non-disclosure of material facts at the time the Freezing Orders were sought, the principles stated in Town & Country and in Baycolt Investments v Raynard [2002] WASC 11 by Pullin J at [36] make it clear that:

Mr Gordon said that if I was minded to discharge the Freezing Orders for non-disclosure, he forthwith applied for freezing orders in the same terms.

The date of the tenancy agreement was disclosed as a material fact at the hearing on 20 September 2023 through the specific reference to it in the affidavit of Mr Gordon sworn 20 September 2023 and a copy of the tenancy agreement in the exhibit to that affidavit which became evidence on the application for the Freezing Orders.

The fact of the bankruptcy of Mr Gordon was, however, a material matter which should have been disclosed by Mr Gordon at the time he applied for the Freezing Orders on 20 September 2023 and the variation of those orders on 22 September 2023. It was clearly a material matter, especially because it is now a central factual matter in the ASOC and the defence. It is telling that in the affidavit of Mr Gordon sworn 20 September 2023 he refers to a conversation with Phillip De Parma about Mr De Parma becoming a bankrupt and Mr Gordon referring to the potential effects of it.

Applying the principles set out in Town & Country above and those summarised in Tyche at [38]–[39], because of the non-disclosure of Mr Gordon’s bankruptcy on or around 2 July 2015, I consider that the Freezing Orders must be discharged.

However, applying the same principles in Town & Country and those stated in Tyche at [40], Mr Gordon has applied forthwith for freezing orders in the same terms as the Freezing Orders and therefore it is appropriate that I consider whether orders should be made afresh in those terms.

Whether I should do so depends on my determination of the other issues raised on the application, to which I will now turn.

Glowberth submits that Mr Gordon must prove that he has standing to bring the proceedings because the tenancy agreement was made on 22 May 2014 and he was made bankrupt on 2 July 2015. Glowberth says that standing is a mandatory precondition to the exercise of the court’s discretion that Mr Gordon has a legal right to protect, relying on Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 (although no particular passage was cited in submissions).

Glowberth also relied on the following passages from Samootin v Shea [2010] NSWCA 371, Campbell JA (with whom Beazley and Hodgson JJA agreed) at [63]-[65], [67]-[70], [74], [86]-[88] and [95] saying:

Glowberth also points to the confirmation of these principles from Samootin in Garrett v GEL Custodians Pty Ltd [2012] NSWCA 197, Allsop P (as his Honour then was, Macfarlan JA agreeing) at [9] saying:

In short, the argument of Glowberth is that the tenancy agreement is dated 22 May 2014 and upon the bankruptcy of Mr Gordon on 2 July 2015, all property of Mr Gordon vested with the Official Trustee (by operation of ss 5 and 58 of the Bankruptcy Act), including all causes of action arising from the tenancy agreement, and the discharge of Mr Gordon’s bankruptcy on 24 July 2018 did not cause that property to revert to Mr Gordon.

Glowberth says that on this application I am seized with sufficient information to decide whether Mr Gordon has standing because before me I have the essential facts, being the chose in action sued upon, the date of the bankruptcy, and the date of discharge from bankruptcy.

Glowberth also submits that because there is a serious issue as to whether Mr Gordon had standing to obtain the Freezing Orders, it provides a further basis on which the Freezing Orders should be discharged. Given that I have already determined that the Freezing Orders should be discharged and am now focused on whether further freezing orders should be made, the question for me is whether the continued issue in relation to standing is a basis on which I should decline to make further freezing orders.

Glowberth argued that Mr Gordon admits that he had a chose in action before he was made bankrupt by reference to the special conditions to the tenancy agreement, which state:

Glowberth says that these provisions must be read together, with cl 2 especially indicating that the chose in action for breach of cll 2 and 3 must have arisen 12 months after 22 May 2014, before the bankruptcy of Mr Gordon on 2 July 2015, because Mr Gordon had the right to approach the court for specific performance of those obligations. Glowberth submits that cl 5 of the special conditions provides at least part of the consideration given for the promises in cll 2 and 3, and there was nothing inchoate, but there was an accrued right to seek performance of the option in the tenancy agreement at least a year after it was entered, if not upon the date it was entered.

In support of these submissions, Glowberth referred to Beneficial Finance Corp Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510, Young J at 523-524 stating:

Mr Gordon submits that the issue of standing is not one on which I can make a final determination on an interlocutory basis, particularly in light of the way in which the ASOC now pleads the case as one which is brought by Mr Gordon or, in the alternative, as one in which he seeks a declaration on a matter in which he has an interest, being whether the amount is owing to the Official Trustee. Mr Gordon submits that he simply needs to show whether he has a good arguable case to meet the first enquiry for determining whether freezing orders are appropriate as a matter of discretion.

Mr Gordon says that where the right that is the subject of a proceeding by a former bankrupt is inchoate or depends upon an event that may never happen, it is neither property nor after-acquired property for the purposes of the Bankruptcy Act and therefore does not vest in the Official Trustee at the date of bankruptcy. He submits that the tenancy agreement was entered into on 22 May 2014, when Mr Gordon was not bankrupt, and there had been no breach of the tenancy agreement at the time that he was made bankrupt on 2 July 2015 and, therefore, the cause of action on which he now sues did not exist at the date of bankruptcy and nor did it exist before he was discharged from bankruptcy on 24 July 2018 because the breach only happened in June 2023, when Glowberth entered into the contract of sale with a third party.

Mr Gordon says that whatever rights had accrued to him under the tenancy agreement by the date of his bankruptcy were definitely rights that vested in the Official Trustee, but it is not the correct analysis to say that the whole of the tenancy agreement vests because the authorities speak about the property being a “chose in action”. He draws a distinction between, for example, a chose in action that entitled Mr Gordon as a tenant to be given peaceful and quiet enjoyment and possession of the Sackville Property (which, if infringed, would sound in damages and have vested in the Official Trustee), and the inchoate rights that existed for him under the tenancy agreement, which did not become a chose in action until it was breached in June 2023.

Mr Gordon says that the argument he wishes to make at the final hearing, for which he says he has a good arguable case before me, is that there is a set of events that need to come to pass, which may never come to pass, for those inchoate rights to come into existence, and then those rights, once they accrue, are not property that devolved upon Mr Gordon as a bankrupt before he was made bankrupt or in the period before his bankruptcy was discharged.

The authorities to which Mr Gordon primarily referred are as follows:

Mr Gordon said that while he had not been able to find any decision which squarely deals with the proposition advanced by him, and there appeared to be a dearth of authority on the question of an inchoate right, on the basis of the above authorities, it appears to be eminently an arguable case on the law that the uncrystallised right of Mr Gordon might never accrue to him and, therefore, was not property that devolved upon him within the period of his bankruptcy.

Mr Gordon says that the construction point which is raised against him —involving the reading together of cll 2, 3 and 4 of the special conditions — is misconceived because the case that Mr Gordon advances does not rely on any breach of cl 2, and that in a rising market it is hard to see how that breach could ever cause loss. Mr Gordon said there may have been a completely hopeless cause of action in 2014 to sue for non-existent damages for the failure to sell on time, but Mr Gordon does not advance that case, the Official Trustee did not advance that case, and it is not the cause of action with which Mr Gordon ultimately invites this court to engage.

Mr Gordon says that the fact a cause of action may have accrued does not infect the proposition that stands at the root of the way that he seeks to characterise the inchoate right that subsequently turned into a cause of action. Mr Gordon says that he does not advance a case that this was an option and the evidence, which Mr Gordon accepts, reveals that there was no interest in land in the present case. Mr Gordon says that the special conditions to the tenancy agreement, properly construed, do not contain an option to purchase because, if they did, such an offer would fail for want of certainty, because there is no price at which the option is to be exercised and it is simply a right of first refusal with no interest in land.

I note that the Official Trustee also made submissions in support of the view that if Glowberth is liable in respect of the causes of action pleaded in the ASOC, that liability is either to Mr Gordon or the Official Trustee and that those matters can only be dealt with at a final hearing. The Official Trustee submitted that these issues are particularly difficult to resolve at an interlocutory hearing and there were differences in the authorities about the proper approach.

The Official Trustee referred to the decision in Barwick v Goodridge [2011] NSWSC 1233; 255 FLR 245, where Black J at [16]–[19] determined that a view would be formed as to the bankruptcy trustee’s title to relevant property in advance of the final hearing, even though the issue before the court was an interlocutory one.

The Official Trustee also submitted that there is an active debate over the extent to which s 27 of the Bankruptcy Act provided exclusive “jurisdiction in bankruptcy” to the Federal Court to the exclusion of this court, referring to Re Galtari Pty Ltd (in liq) [2018] NSWSC 917 where Gleeson JA at [24]–[34] outlined the various authorities on the point. In light of the view I have formed, I do not consider that it is necessary for me to add to that debate.

In my view, the question of the proper characterisation of the rights or expectancies of Mr Gordon as at the date of his bankruptcy and during the period of it is not one on which I can make a final determination when I am dealing with the matter on an interlocutory basis. My task is to determine whether there is a good arguable case and to my mind there is in the present case, which ultimately goes to the standing of Mr Gordon. Despite the invitation of Glowberth, I am not satisfied that this is a question that I can determine on a final basis when I do not have the benefit of all of the facts before me that might emerge at a final trial on which many of the arguments rehearsed before me will be based. For that reason, I am not satisfied that I am in a position to make a ruling that Mr Gordon has no standing and, therefore, I cannot determine that the proceedings are incompetent in the sense described in Samootin.

I am fortified in my view by the fact that the claims made in the ASOC are expressed in the alternative, seeking a declaration that Glowberth either has to pay Mr Gordon or has to pay the Official Trustee. Mr Wood referred to the decision in QBE Insurance (Aust) Ltd v Lois Nominees Pty Ltd [2012] WASCA 186 in which clients sued a bankrupt solicitor for negligence and the insurers refused to indemnify the solicitor, resulting in proceedings being commenced by the clients against the insurer seeking a declaration that the insurer was liable to indemnify the solicitor. The question for the court was whether the declaration sought had any utility. Newnes JA (with whom Murphy JA agreed) at [208] said:

Mr Gordon says that, similarly, he has an arguable claim to the declaration that he seeks because he has a sufficient interest in its outcome and that suffices for “present purposes”, being the interlocutory context in which I am making this determination.

I am satisfied that on an interlocutory basis there is a good arguable case as to whether Mr Gordon is entitled to such a declaration on the basis that Mr Gordon has a sufficient interest, because it is not hypothetical and it is not something in which he has no interest.

Glowberth says that in the ASOC, Mr Gordon pleads both a liquidated claim in the amount of $360,000 and an unliquidated claim, both of which cannot be reconciled with each other. Glowberth submits that the liquidated claim is based on the Sackville Property being sold to a third party and the unliquidated claim is based on Mr Gordon exercising an option to purchase, both of which cannot succeed. It is said that the unliquidated claim is not properly pleaded and not supported by evidence because there is no material to prove that Mr Gordon was actually in a position to purchase the Sackville Property. Glowberth asserts that there is certainly no evidence substantiating the quantum of the Freezing Orders in the sum of $1,363,000 and no application has been made for freezing orders to support the liquidated claim.

Glowberth summarises its position in this way: if the Sackville Property is worth $1.47 million and Mr Gordon has the money to purchase it but does not, he still has his $1.47 million and, therefore, does not suffer any loss unless the Sackville Property is actually worth more than $1.47 million. The pleading is that the Sackville Property was worth more than $1.47 million, but there is no evidence to support that proposition.

Glowberth underlines this point by the lack of material in response to a notice to produce dated 21 September 2023 that was served on Mr Gordon seeking copies of:

The two documents produced by Mr Gordon in response to the notice to produce were from the Commonwealth Bank in relation to an account held in Mr Gordon’s name, which indicate that he had an account balance of $1,978.95 as at 1 October 2023. From this production, I am safely able to infer that Mr Gordon has no other assets held in any bank accounts, has not lodged any tax returns or received any notices of assessment for the financial years 2021, 2022, and 2023, and did not apply for any finance for the purchase of the Sackville Property in the relevant period. It does not tell me anything else about the financial position of Mr Gordon.

Glowberth uses the same absence of material regarding the financial position of Mr Gordon to argue that the inference is available that he would not be able to financially stand behind the undertaking as to damages he is required to give as a price for obtaining freezing orders.

Mr Gordon says that his unchallenged evidence is that from 23 June 2023, he has been ready, willing and able to buy the Sackville Property for $1.5 million and had earlier been prepared to buy it for $2.5 million. He accepts that his evidence will have to be augmented at the final hearing, including by valuation evidence to support the value he says the Sackville Property had.

I note that Mr Gordon also pleads in ASOC at [14] that if Glowberth had offered to sell or provided Mr Gordon with the opportunity to purchase the Sackville Property on similar terms to those contained in the contract of sale on 23 June 2023, he would have purchased the Sackville Property and was ready, willing and able to do so.

In those circumstances, I consider that on an interlocutory hearing of this sort, I am able to conclude that Mr Gordon has a good arguable case concerning his allegation that he would have purchased the Sackville Property and was ready, willing and able to do so, but will need to support that case through proper evidence at the final hearing. This will be evidence as to the value of the Sackville Property and his ability to purchase it, all of which are matters for the final hearing, not an interlocutory one. His failure to produce that evidence at an interlocutory hearing before me does not provide a proper basis for refusing him freezing orders.

On the evidence before me, I am also not in a position to determine that Mr Gordon would not be able to support the undertaking as to damages that he has given. In any event, there is no inflexible rule that a person unable to support an undertaking as to damages should be refused interlocutory relief.

As a matter of discretion, I am not prepared to deny freezing orders to him based on the argument that he could not purchase the Sackville Property when he asserts in unchallenged evidence by affidavit that he was ready, willing and able to purchase the Sackville Property for $1.47 million in June 2023.

Glowberth submits that:

Glowberth says that this provides a discretionary reason not to grant freezing orders in favour of Mr Gordon because he is disobeying an order of the court.

Mr Gordon argues that the evidence before me at the interlocutory hearing is that he does not physically remain in possession of the Sackville Property but, to the contrary, he has been forcibly removed and some of his chattels remain on the Sackville Property, which he is doing his best to remove (although he has a lot of his belongings there).

I am not prepared to refuse Mr Gordon any freezing orders on the argued basis that he remains in possession of the Sackville Property and is disobeying an order of the court. I do not consider that the evidence establishes that fact, but rather demonstrates that there is a difference of opinion between the two parties over whether Mr Gordon has or has not removed all of his belongings.

Glowberth argued that there is no demonstrable danger of dissipation of assets by Glowberth, and that all it was doing was selling the Sackville Property, about which there was no secret because an element involved in the sale was having Mr Gordon evicted from the Sackville Property. Glowberth submitted that the orders of NCAT on 14 March 2023 meant that the tenancy agreement was terminated immediately, giving rise to an arguable issue estoppel in favour of Glowberth. In support of this proposition, Glowberth referred to Lambidis v Commissioner of Police (1995) 37 NSWLR 320, Priestley JA at 332 (with whom Kirby P at 323-324 and Powell JA at 337 agreed) saying:

Glowberth conceded that such an estoppel would be something that had to be determined at a final hearing and it would certainly be something that would go to the balance of convenience because it is a strong argument available to Glowberth.

Mr Gordon countered this argument by referring to the decision of the Appeal Panel of NCAT, Gordon v Glowberth Pty Ltd [2023] NSWCATAP 253 at [47], which states:

I think this is an answer to the issue raised by Glowberth before me.

The essential issue about the dissipation of assets is one which Glowberth did not squarely confront. Mr Gordon relied on precisely the same argument about the danger of dissipation of assets which had previously been put at the hearing before me on 20 September 2023. The point made by Mr Gordon is a short one.

Glowberth is the trustee of the De Prima Family Trust. The balance sheet for the De Prima Family Trust demonstrates that as at 30 June 2020, it had amounts owing to its beneficiaries of $2,471,942.50, as part of total non-current liabilities of $3,054,749.60. If there is a distribution that has been declared by the De Prima Family Trust in favour of the beneficiaries but not paid, it becomes payable as a debt, in which case there is a reasonable basis for believing that if the proceeds of sale of the Sackville Property are paid to Glowberth, the beneficiaries of the De Prima Family Trust might pay it to themselves.

Mr Gordon says that this risk is reinforced by Glowberth’s failure to provide documents in response to the notice to produce dated 20 September 2023 served on Glowberth by Mr Gordon which sought the production of the following documents:

On 15 November 2023, Glowberth appeared at the Return of Subpoena list at this court and stated that there was nothing to produce in answer to the notice to produce. In those circumstances, Glowberth says that the available inference is that the position regarding amounts owing to the beneficiaries of the De Prima Family Trust is the same as that which was stated in the 30 June 2020 balance sheet.

I agree that Mr Gordon has demonstrated that there is a danger that Glowberth’s assets might be disposed of, dealt with or diminished in value such that any judgment or prospective judgment of the court in favour of Mr Gordon would be wholly or partly unsatisfied in the sense described in Tyche.

As for the monetary limit of the proposed freezing orders, Mr Gordon says that he is owed a debt of $360,000 and damages of at least $1.03 million because he was prepared to buy the Sackville Property for $2.5 million, and he was not given that opportunity to exercise his right of first refusal in relation to the current sale of the Sackville Property at $1.47 million. Glowberth says he cannot recover both.

In my determination, I consider that there is an arguable basis on which Mr Gordon can seek both the amount of the debt and damages. For those reasons, any freezing order should maintain a monetary limit of $1,363,000.

Glowberth says that if the freezing orders are to be made, then they should allow Glowberth to pay their reasonable legal costs and not be limited to $2,000 per week as restricted in the Freezing Orders. I agree that such an amendment should be made.

For the reasons expressed above, I am of the view that the Freezing Orders should be discharged and in their place a new form of freezing orders made, subject to the amendment to the exception for the payment of reasonable legal expenses.

The parties are to provide my Associate with agreed short minutes (which also deal with costs) within 7 days reflecting the reasons above, failing which I will make orders in chambers.