Hacer Group NSW Pty Ltd v Mona Vale 3 Pty Ltd as Trustee for Mona Vale 3 Unit Trust (No 2)

On 8 December 2023, I made a freezing order restraining the defendant from diminishing its assets up to an unencumbered value of $525,000.

I also ordered that by 14 December 2023 the defendant provide the plaintiff with details of its assets and its most recent available draft or final financial statements or management accounts.

The order was made ex parte, although the solicitor for the defendant, Mr Jury, was in court at the time. In that regard, I recorded in my reasons that:

I found that there was a serious question to be tried that the parties had entered into an agreement, one element of which was that the defendant would pay the plaintiff $500,000 within 60 days of the achievement of practical completion of the relevant development, or the issue of an occupation certificate in relation to that development.

I also found:

I stood the matter over for directions to 2 February 2024.

On 2 February 2024, Mr Jury applied to set aside the freezing order on the basis that the statement that I had made in the judgment, that the defendant had exchanged contracts to sell the six apartments it still held, was not correct, and that there was no evidence before me, on 8 December 2023, that that statement was correct.

I dismissed the defendant’s application to set aside the freezing order and made orders extending it, together with other orders necessary to progress the matter, including an order that the defendant comply with the order I made on 8 December 2023 that it provide the plaintiff, by 14 December 2023, with the information to which I have referred at [2] above.

These are my reasons for dismissing the application.

On the application to discharge the freezing order, Mr Jury adduced no evidence that, in fact, it was not correct to say that the defendant had “exchanged contracts” to sell the six apartments it still retained. However, argument proceeded upon the basis that the defendant could establish that that was the position.

The evidence before me on 8 December 2023 included evidence from the plaintiff’s solicitor, Mr Mathew Stulic, on information belief, that the plaintiff was concerned that the defendant:

Mr Stulic did not contend that the defendant had exchanged contracts in relation to those “remaining lots”.

On 8 December 2023, there was also before me evidence of a letter sent by the plaintiff’s solicitor to the defendant’s solicitor on 16 November 2023, in which it was stated, under the heading “Dissipation of Assets”:

The defendant’s solicitor did not reply to that letter.

Mr Langshaw first approached me as duty judge on 7 December 2023, on which occasion I granted the plaintiff leave to file and serve the Summons and supporting affidavits on short notice.

In his written submissions, Mr Langshaw said, referring to the plaintiff’s solicitor’s letter of 16 November 2023, to which I have referred:

During the course of the application on 7 December 2023, Mr Langshaw and I had this exchange:

It was on the basis of that exchange that I made the statement in the judgment that the defendant had “exchanged contracts” in relation to the remaining units held by it.

In those circumstances, Mr Jury submitted that the freezing order should be set aside on the basis of what he described as “non-disclosure”.

Mr Jury referred to the familiar authorities concerning the obligation of candour on the making of an ex parte application, including the following statement by Gageler J in Aristocrat Technologies Australia Pty Ltd v Allam: [2]

In my opinion, there is no relevant non-disclosure by Mr Langshaw such as would warrant setting aside the freezing order.

Mr Langshaw said, in response to my enquiry, that it was “our understanding” that the defendant had exchanged contracts in relation to the six units it retained, referring immediately to his instructing solicitor’s letter of 16 November 2023, to which I have referred. In that letter, the plaintiff’s solicitor stated they assumed that the defendant had entered contracts for sale and invited the defendant’s solicitor to correct any incorrect assumptions. The defendant’s solicitor did not do so leading, reasonably in my opinion, to the plaintiff’s legal team, including Mr Langshaw, to assume that contracts had been exchanged.

It is true that the suggestion that the defendant had actually exchanged contracts to sell the remaining six units in the development bespoke an urgency to grant ex parte relief that would have appeared less pressing had Mr Langshaw told me that the plaintiff did not actually know whether the defendant had exchanged contracts in relation to those units; but assumed they had based on the defendant’s solicitor’s failure to respond to the 16 November 2023 letter.

However, I doubt that I would have come to any different decision concerning the granting of ex parte relief had Mr Langshaw addressed me in those terms.

In any event, as I have said, Mr Jury was present when I delivered the ex tempore judgment, albeit without formally appearing in the proceedings.

Further, Mr Jury was present when I granted the plaintiff leave to apply on short notice in relation to the ex parte freezing order that I made.

Nonetheless, Mr Jury’s firm did not enter an appearance in the proceedings until 25 January 2024.

Further, the defendant has not yet complied with my order that it provide the plaintiff with the financial information to which I have referred.

In all those circumstances, I was not persuaded that the freezing order should be discharged.

In the result, I made the following directions: