Application for Injunctive Relief Refused in Commercial Litigation Case

The court refused the claimant's application for injunctive relief, finding insufficient evidence of a risk that a judgment would be unsatisfied due to the disposal or diminution of the defendant's assets.

Supreme Court New South Wales

Medium Neutral Citation: [NAME] v [NAME] [2019] NSWSC 373 Hearing dates: 29 March 2019 Decision date: 05 April 2019 Jurisdiction: Equity - Commercial List Before: Stevenson J Decision: Application for injunctive relief refused Catchwords: CIVIL PROCEDURE – interim preservation – detention, custody or preservation of property – freezing order – whether risk of dissipation exists – whether prospective judgment will be unsatisfied by reason of assets of debtor being diminished in value Legislation Cited: Limitation of Actions Act 1958 (Vic) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Finn v Carelli [2007] NSWSC 261 Frigo v Culhaci [1998] NSWCA 88 [COMPANY] v [COMPANY] (1985) 1 NSWLR 545 In the matter of C & L [COMPANY] [2012] NSWSC 676 In the matter of [NAME] [2019] NSWSC 336 [NAME] v [NAME] mbH & Co K G The Niedersachsen [1984] 1 All ER 398 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 [NAME] v [NAME]; Seyedabadi v Samimi [2013] NSWCA 279 Category: Procedural rulings Parties: [NAME] (First Plaintiff/Applicant) [COMPANY] as trustee for the [COMPANY] (Second Plaintiff/Applicant) [COMPANY] as trustee for the [COMPANY] (Third Plaintiff/Applicant) [COMPANY] as trustee for the [COMPANY] (Fourth Plaintiff/Applicant) [NAME] (First Defendant/Respondent) [COMPANY] (Second Defendant/Respondent) [COMPANY] (Third Defendant/Respondent) [COMPANY] (Fourth Defendant/Respondent) [COMPANY] (Fifth Defendant/Respondent) [NAME] (Sixth Defendant/Respondent) [COMPANY] (Seventh Defendant/Respondent) [COMPANY] (Eighth Defendant/Respondent) [COMPANY] (Ninth Defendant/Respondent) [COMPANY] (Tenth Defendant/Respondent) [COMPANY] (Eleventh Defendant/Respondent) Representation: Counsel: [redacted] [NAME] with [NAME] (Defendants/Respondents)

Solicitors: [redacted] [NAME] (Defendants/Respondents) File Number(s): [NAME] 2019/71329

Judgment 1. The first plaintiff, [NAME], is the mother of the first defendant, [NAME].

2. During submissions, counsel referred to the parties by their given names. I shall do the same. I intend no disrespect. 3. [NAME]'s husband and [NAME]'s father, died in 1996. 4. [NAME] established a large waste and landfill business, the assets of which were run by a number of corporations which operated as trustees of family trusts.

5. In 2007, those assets were sold for some $170 million and the net sale proceeds paid to the second, third and fourth plaintiffs ("the [NAME]").

6. At all material times, [NAME] was a director and the sole shareholder of the [NAME].

7. From prior to 2007 until September or October 2018, [NAME] was also a director of the [NAME]. The constitutions of the [NAME] require that resolutions of directors be unanimous.

8. By a series of resolutions made in FY 2007, each purporting to be a "Resolution of Directors", [NAME] purported to resolve, on behalf of the [NAME], that the income of the relevant trusts – some $200 million – be distributed to him or companies with which he is associated - the second to twelfth defendants. 9. [NAME] did not know of or participate in these resolutions.

10. I will call the $200 million distribution the "Impugned Sum". 11. [NAME] claims to have only discovered these matters in September or October 2018, at which time she caused [NAME] to be removed as a director of the [NAME]. 12. [NAME] claims that the distributions made to [NAME] and the other defendants were made in the absence of any decision by the [NAME], and were effected by [NAME] for the sole purpose of enriching himself and without proper consideration of how the [NAME]' powers to distribute income should have been exercised in the circumstances.

13. Had no such resolutions been passed, the income of the relevant trusts would have passed to [NAME] in the case of two trusts, and to capital in the case of the third trust. 14. [NAME] claims that in these circumstances: 1. [NAME] breached the fiduciary duties he owed the [NAME] and also became a person liable for the breaches of trust which occurred; 2. [NAME]'s related entities, who received the distributions, are liable as [NAME]'s alter egos and on various other accessorial bases; 3. [NAME] and his related entities took possession of the Impugned Sum as constructive trustees and are liable to account for the Impugned Sum and any assets or property derived from it; and 4. alternatively [NAME] and his related entities are liable to pay equitable compensation.

1. Against that background, [NAME], by Notice of Motion filed on 8 March 2019, seeks orders restraining [NAME] and the other defendants from disposing of, or dealing with or diminishing the value of: 1. any assets "to the extent those assets represent" the Impugned Sum or are assets acquired or profits "derived consequent upon receipt of" the Impugned Sum; 2. seven identified properties (two in Victoria and five in Queensland) and a share and managed fund portfolio, upon the basis that those properties and assets were acquired using the Impugned Sum or the proceeds of assets acquired using the Impugned Sum; and 3. any assets up to the unencumbered value of $200 million.

1. During argument, I indicated that I would not make an order in the terms set out at [15(a)]. Such an order would require [NAME] to make a judgment as to whether a particular asset was one which "represented" part of or was "derived consequent upon receipt" of the Impugned Sum in order to ascertain whether or not sale of an asset would involve him acting in breach of the order. As I discuss below, by reason of the number of asset sales and purchases [NAME] and his related entities have engaged in since 2007, that could be an very difficult task. It is not one that, on pain of being in breach of the Court's order, would be just to impose on [NAME]. 2. [NAME], who appeared with [NAME] for [NAME] submitted that the object of the order set out at [15(b)] was to: "…preserve the property the subject of the dispute – being any remaining portion of the funds distributed, and assets acquired and profits derived by the defendants with the distributed funds that have already been spent. This is the property the plaintiffs say is held on trust for them. It should be protected and preserved so that it can be transferred to them, as beneficial owners, in the event they are successful at final hearing".

1. The order set out at [15(c)] is a conventional freezing order directed to preventing the Court's processes being frustrated or inhibited: Uniform Civil Procedure Rules 2005 (NSW) rr 25.11 and 25.14.

2. The matters that must be demonstrated to justify a freezing order have been stated in many cases.

3. A convenient summary is that of McColl JA in [NAME] v [NAME]; Seyedabadi v Samimi [2013] NSWCA 279 at [72] to [75]: "72 The question whether there is a danger that any judgment obtained …, or that already obtained, will be wholly or partly unsatisfied because the owner's assets might be disposed of, dealt with or diminished in value (UCPR 25.11; 25.14(4)(b)) reflects the general law concepts again developed in accordance with Mareva injunctions, that the applicant must demonstrate 'a danger that by reason of the defendant's … assets being … disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied': Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 (at 321 - 322) per Gleeson CJ. 73 In Ninemia Maritime [Corporation v [NAME] mbH & Co K G The Niedersachsen [1984] 1 All ER 398] (at 406), in a passage effectively approved in Frigo v Culhaci [[1998] NSWCA 88] (at p 8), Mustill J discussed the nature of the evidence the applicant for a freezing order should adduce as follows: 'It is not enough for the plaintiff to assert a risk that the assets will be dissipated. He must demonstrate this by solid evidence. This evidence may take a number of different forms. It may consist of direct evidence that the defendant has previously acted in a way which shows that his probity is not to be relied on. ... Or ... the plaintiff may be able to found his case on the fact that inquiries about the characteristics of the defendant have led to a blank wall. Precisely what form the evidence may take will depend on the particular circumstances of the case. But the evidence must always be there...' … 74 It is not necessary for an applicant to show that the respondent has a positive intention of evading a judgment, and it is sufficient to show that the course on which the respondent proposes to embark is, objectively speaking, calculated to have that effect: Finn v Carelli [[2007] NSWSC 261] (at [4]). As Brereton J added: 'It is important to bear in mind that the jurisdiction to make orders of this type was never intended simply to enable a plaintiff or judgment debtor to obtain security for its judgment in advance of execution, but was firmly founded on the jurisdiction of the Court to prevent abuses of its process by preventing a defendant or judgment debtor from embarking on a course of conduct which would have the effect of defeating the Court's jurisdiction. It also needs to be borne in mind that the mere fact that a judgment may not be satisfied for reasons of impecuniosity does not mean that there is an abuse of process. Indeed, it has been pointed out on several occasions that the prospect of impending insolvency is not a reason to grant a Mareva injunction [[COMPANY] v [COMPANY] (1985) 1 NSWLR 545, 558].' … 75 Finally, in determining whether a freezing order should be made, the Court must take into account any discretionary considerations, including the balance of convenience." 1. [NAME] also seeks that [NAME] serve an asset disclosure affidavit.

2. During argument, I indicated that I would first decide whether to grant any of the injunctions sought by [NAME] and would consider thereafter the question of an asset disclosure affidavit.

Decision 1. I am not persuaded that I should make any of the injunctive orders sought by [NAME].

Is there a serious question to be tried? Good arguable case? 1. [NAME] does not dispute that the relevant distributions were made by him alone and without reference to [NAME].

2. On the face of it, [NAME] purported to pass single director resolutions on behalf of the [NAME]. 3. [NAME] claims that she was unaware of the distributions and that [NAME] represented to her that, after the debts of the [NAME] were discharged, the net proceeds of sale were modest and were to be shared between [NAME] and [NAME]'s two daughters ([NAME]'s sisters). As a result, [NAME] contends, she and her two daughters received only $5 million each. [NAME] contends that she has only recently discovered the true position. 4. [NAME] submitted: "In short, the plaintiffs say that [NAME] has misappropriated virtually all of the proceeds of the sale [of the business]. The distributions were the result of breaches of fiduciary duty [[NAME]] owed to the [[NAME]] and in breaches of trust effected by him". 1. [NAME] nor [NAME] gave evidence on the application. Each of their solicitors swore affidavits setting out their client's position, on information and belief. 2. [NAME]'s solicitor gave such evidence that in 2001 [NAME] and [NAME] had a conversation, in the presence of their accountant, [NAME], in which [NAME] said: "I want control and ownership of the business to go to [NAME], who can run it and take on the debts and [[NAME]'s daughters] can get everything from my estate". And that [NAME] said words to the effect: "I understand." And [NAME] said words to the effect: "Ok". 1. [NAME]'s solicitor also gave evidence, again on information and belief, from: 1. [NAME] that [NAME] left the day to day management and decision making in respect of the [NAME] to [NAME] and that [NAME] was solely responsible for the day to day operations of the business and its acquisitions and expansion during the 10 year period from 1997 to 2007; and 2. [NAME] and [NAME] that between 1997 and 2017 they observed [NAME] "attend all meetings in relation to the effective transfer of control and beneficial ownership of the [COMPANY]" and that during meetings that [NAME] attended after the 2007 sale there were conversations to this effect: "[NAME]: [[NAME]], from the proceeds of the sale, do you think a gift of $5 million for [NAME] and [NAME] would be appropriate? [[NAME]]: Yes, I think so, [NAME]. and [NAME]: [NAME], I want to give you $5 million from the sale proceeds. [NAME]: Oh no, [NAME]. You take the money and do what you want with it. It's yours. You earned it. [NAME]: Look, I've done really well out of this, better than I could imagine, and I want to give $5 million to you, [and [NAME]'s daughters]. [NAME]: Well, okay [NAME]. If its for the girls as well. Thank you." 1. [NAME] has sworn an affidavit in which he corroborates the conversation set out at [29].

2. In that affidavit, [NAME] also gave this evidence: "A meeting was held at [COMPANY] on 26 May 2009 between myself and [[NAME]], [[NAME]] was in attendance. The meeting lasted for 3 hours which was unusually long because it involved the following agenda items: (a) The litigation which was occurring between [[NAME]] [and [NAME]'s daughters] against [NAME], their former financial planner; (b) The personal returns of [[NAME]] and [[NAME]]; (c) review, discussion and presentation of financial reports, income tax returns, trust distribution minutes; (d) Discussion of the various investments of [[NAME]] with [NAME], her financial advisor; and (e) a review of each of the Second, Third and Fourth Plaintiffs activities. (f) The conversation that took place was along the lines of: [[NAME]]: 'The financial reports and tax returns show the distribution of funds from the sale proceeds in 2008 to the various group entities. It is important that you understand this information to sign all the necessary tax returns.' [NAME]: '[[NAME]] do you understand everything and do you have any questions for [[NAME]][?]' [NAME]: 'Yes I understand and [NAME] is able to do what he likes with the sale proceeds as it was his business and we received $5,000,000 which was very generous'." (Emphasis added.) 1. [NAME]'s solicitor swore an affidavit, on information and belief from [NAME], stating that [NAME] "specifically" denies the matters to which [NAME] has deposed.

2. As a list response is yet to be filed, the legal consequences said to flow from these alleged conversations is not yet articulated. [NAME], who appeared with [NAME] for [NAME], submitted that the conversations, if established, would amount to the appointment of [NAME] as Managing Director of each of the [NAME] pursuant to provisions in the company constitutions, such as cl 19.2 of the constitution of the second plaintiff. [NAME] submitted that the conversations give rise to an estoppel.

3. On the other hand, [NAME] submitted that: "The evidence therefore establishes the existence of serious questions to be tried. On the face of the trust documents and records those questions are answered in favour of the plaintiffs. It is only the allegations of fact now made by [NAME] about oral assurances or statements by [NAME], being alleged assurances and statements not recorded in any document produced by [NAME], and being allegations that are denied by [NAME], that stand between the plaintiffs and their success in the proceeding".

1. This submission appears to accept that, if the conversations to which [NAME] has deposed, and to which it appears that [NAME] will also depose, are established, this would be a matter which would "stand between the plaintiffs and their success in the proceeding".

2. Of course, I am not in any position to make an assessment as to what finding the Court will make about whether these conversations occurred.

3. To make out a case for a freezing order, [NAME] must show a "good arguable case" being one "more than barely capable of serious argument, and yet not necessarily one which the judge believes to have better than 50 percent chance of success": per Mustill J in Ninemia Maritime, cited with approval by McColl JA in [NAME] v [NAME] at [69].

4. I am satisfied that [NAME] has such a "good arguable case". There is also a serious question to be tried as to whether the conversations took place and as to their significance.

5. But the task ahead for [NAME] includes establishing that [NAME]'s and [NAME]'s recollection of these conservations should not be accepted.

Were any of the current assets of [NAME] or his related entities acquired using the Impugned Sum? 1. [NAME] asserts a constructive trust over any assets acquired by [NAME] and his related entities using the Impugned Sum. Thus, as I have set out, [NAME] seeks, as one alternative, an order restraining [NAME] from dealing with the seven identified properties and the share and managed fund portfolio to which I have referred at [15(b)] above.

2. There is no direct evidence that any of those properties was purchased using the Impugned Sum.

3. One of those properties is located at Harkaway in Victoria. That property was purchased by [NAME] and his former wife in January 2006, the year before the sale of the business. A new residence was built there from around 2008 to 2010. There is no evidence of the cost of constructing that residence. [NAME]'s former wife transferred her interest in that property to [NAME] as part of their divorce settlement.

4. In about June 2007 [NAME] caused the third defendant, [COMPANY], to purchase the [COMPANY] for $44 million. [NAME]'s solicitor has sworn an affidavit in which he infers from the consideration shown on the transfer and the amount of borrowing recorded on the relevant mortgage that the third defendant "must have had its own funds of $9 million" to complete the purchase.

5. In September 2010 [NAME] purchased a property at Mermaid Beach in Queensland for $10 million. That is [NAME]'s current principal place of residence.

6. In August 2017, [COMPANY], a company which is not currently a defendant, purchased a property in Miami in Queensland. There is no evidence of the price for which that property was purchased. The evidence suggests that [NAME] is currently causing that property to be developed.

7. In November 2017 [NAME] bought two apartments at Southbank in Melbourne for $3.15 million. There is no evidence as to what funds [NAME] used to acquire those properties.

8. The third defendant sold the Byron Bay Hotel in February 2018 for some $68 million. There is no evidence of what the third defendant has done with the proceeds.

9. In April 2018, another company, [COMPANY], also not a defendant, purchased a motel and two properties at Mermaid Beach in Queensland. The evidence suggests that [NAME] is proposing to develop those two sites into a high rise development from which he hopes to realise some $20 million.

10. Finally, in May 2018 [NAME] purchased another property at Palm Beach in Queensland for $1.75 million. The evidence suggests [NAME] proposes to spend a further $5.5 million on that property for "improvements" in the hope of realising some $9.5 million on sale.

11. In addition to this real estate, [NAME] asserts a constructive trust over [NAME]'s share and managed funds portfolio. That portfolio is set out in a [COMPANY] "Portfolio Valuation" and valued at some $17.2 million as at 19 March 2019. The earliest "Initial Purchase Date" of the investments in the portfolio is December 2017, some 10 years after the distribution of the Impugned Sum. 12. [NAME] submitted that the temporal sequence in which the real property acquisitions took place suggest that, at final hearing, [NAME] will be able to trace the Impugned Sum into some or all of them.

13. In my opinion, a high degree of speculation is involved in that proposition. The evidence suggests that [NAME] owned properties and had access to funds prior to the 2007 sale of the business. The evidence, although far from complete at this stage, suggests that [NAME] has made many successful, and some unsuccessful, investments since then. He has also had a property settlement with his former wife.

14. It is by no means clear to me that [NAME] will be able to establish that all or any of the assets now owned by [NAME] and his related entities were acquired with the Impugned Sum.

15. As for the portfolio of shares and managed funds, my attention has not been drawn to any material which could cast light on any connection between it and the distribution of the Impugned Sum in FY 2007. 16. [NAME] emphasised that [NAME] has remained "silent" as to how the acquisition of these properties was funded. But faced with [NAME]'s application for injunctive relief, [NAME] had no obligation to give any explanation about these matters.

17. In any event, [NAME], through her legal representatives, has served on [NAME] and his related entities a series of notices to produce. Many documents have been produced. There was no suggestion before me that there had been any failure by [NAME] or his related entities to produce documents in response to those notices.

18. It may be that, at the final hearing of these proceedings, [NAME] will be able to show that all or some part of the Impugned Sum was used to purchase one or more of the properties to which I have referred or, in the case of the Harkaway property, to fund the construction of the new residence on that property in 2008 and 2009.

19. In that sense, there is a serious question to be tried as to whether, to adopt [NAME]' words, [NAME] can "prove a fund or property which is comprised of the traceable proceeds of the impugned payments".

20. However, the temporal sequence of the real property acquisitions does not alone, in my opinion, provide any basis for predicting, with any confidence, what prospects [NAME] has of making out that proposition.

Risk of dissipation 1. [NAME] submitted that the risk that [NAME] will dissipate assets that he, and his associated corporate entities, have acquired is "acute".

2. I see no basis upon which I could come to this conclusion. 3. [NAME]'s first submission was that "the risk is evident from the defendants' ongoing refusal to provide a candid and meaningful explanation as to how any of the distributed funds have been applied".

4. But [NAME], faced with the very serious allegations made against him in these proceedings, has no obligation to give any explanation and, as I have said, has responded to all of the notices to produce that [NAME] has caused to be served. 5. [NAME] submitted that: "The defendants' protestation that it will take time to undertake and provide a full account cannot begin to explain why [NAME] has not provided a meaningful overview of the key assets he has acquired with the funds. While he may not presently be able to account for every dollar and cent, he must know how he has spent the money and significant uses he has made of it".

1. That submission assumes that [NAME], faced with [NAME]'s application, was obliged to provide the "meaningful overview" for which [NAME] contended.

2. In any event, through his solicitor, [NAME] has given an account of the assets that he and his related entities have acquired.

3. I cannot infer from the nature of [NAME]'s response to this application that there is an "acute" risk that he will dissipate his assets.

4. On the contrary, the evidence suggests that [NAME] is, through corporate entities that he controls, engaging in a redevelopment of two of the properties to which I have referred. It may be, as [NAME] submitted, that those redevelopments are at an early stage. But the fact that they are underway suggests that [NAME] is intent on acquiring and developing property, rather than dissipating it. 5. [NAME] emphasised that [NAME] has refused to give any undertaking to [NAME] or to the Court not to deal with assets owned and controlled by him. However, as [NAME] pointed out, it is well established that failure by a party in [NAME]'s position to offer such an undertaking is not sufficient to grant an application for a freezing order: for example see Ward J, as her Honour then was, in In the matter of C & L [COMPANY] [2012] NSWSC 676 at [201]. 6. [NAME] also submitted that the evidence showed that [NAME] "lives an expensive lifestyle" and engages in the "expensive personal pursuit" of being a "semi-professional" racing car driver.

7. Assuming these matters are true, I cannot see what light they cast on the likelihood that [NAME] will cause his assets to be dissipated. As [NAME] submitted, it appears that [NAME] is a wealthy man and can afford to engage in "expensive personal pursuits".

8. Finally, [NAME] drew my attention to the recent decision of [NAME] in In the matter of [NAME] [2019] NSWSC 336. 9. [NAME] was dealing with an application to set aside a decision made by a Registrar that each party should pay their own costs of proceedings which sought to set aside two creditors' statutory demands. His Honour dismissed the application to review the Registrar's decision. 10. [NAME] submitted that the effect of his Honour's decision was that "[NAME] cannot be relied upon to handle finances, books and records correctly", that "[NAME] has made signed declarations…which he now claims are not even true" and that "[NAME] is someone who is prepared to obfuscate and 'hold back' information, and only deployed at a time of his choosing, rather than when he ought to".

11. Assuming that that is a fair description of his Honour's findings, and assuming (without making any finding about this) that [NAME] could be criticised for engaging in the conduct the subject of his Honour's findings, I cannot see how this points to an "acute risk" that, faced with [NAME]'s application, he will seek to dissipate his assets.

Limitation 1. An issue will arise in these proceedings as to whether [NAME]'s claims are out of time. 2. [NAME] submitted that it is likely that the law of Victoria will govern the parties' rights, and drew attention to s 21 of the Limitation of Actions Act 1958 (Vic) which provides for a six year limitation for "an action by a beneficiary to recover trust property in respect of any breach of trust" other than in the case of "fraud or fraudulent breach of trust".

3. I am not in any position to make any assessment, now, of what prospects [NAME] has of showing that [NAME]'s action is out of time.

4. It does arise out of events which occurred some 15 years ago but as [NAME] submitted, fraud is alleged in the Commercial List Statement and equitable remedies are sought which may not be susceptible to be defeated on the basis of statutes of limitation.

5. I can form no view about these matters at the moment and do not consider that they weigh in the balance.

Delay 1. [NAME] submitted that: "It was only on 15 October 2018 that [NAME] became aware of her rights and of [NAME]'s misappropriation of the proceeds of the sale [of the assets of the business]. [NAME] became aware of her rights she immediately took steps to protect them. Up to that point she had been proceeding on the basis of a misrepresentation made to her by [NAME] in 2007 as to the quantum of sale proceeds available for distribution".

1. That submission is based on evidence, given on information and belief by [NAME]'s solicitor that: "c. [NAME] was involved for a few years after the death of [[NAME]] in the management of the [COMPANY], however, within approximately 5 years, due [to] her trust in [NAME]…as her son, she became less involved in the [COMPANY]; d. [NAME] would often tell [NAME] that the business was 'under pressure', that 'things were tight', 'there are a lot of expenses' and that 'the business has a lot of debt to pay off'; e. [NAME] was aware of the total sale price for the [COMPANY] in early 2007, [NAME] did not appreciate that the [COMPANY] would realise over one hundred million dollars from the sale for the reasons given below; f. In or about early 2007, [NAME]…told [NAME] that he would sell the [COMPANY] to [NAME]'s company (then called [NAME]); g. From the sale of the [COMPANY], [NAME] told [NAME] that she [and [NAME]'s daughters] would receive $5 million each from the sale of the [COMPANY] and [NAME] considered this to be an extremely large amount of money; h. It was only after [NAME] obtained the trust deeds and the financial accounts from [COMPANY] did she appreciate that the quantum of the net proceeds of sale received from the [COMPANY] sale and that the money was being held on trust for the beneficiaries which included herself which was not until the week commencing 15 October 2018."

1. I find it difficult to know what to make of this evidence.

2. It appears to show that [NAME] accepts that she knew of the sale price of the [COMPANY] in early 2007 ($170 million) but that she did not understand how much money would be "realised" or "received" from the sale.

3. The material does not point to the conclusion that [NAME], in terms, misrepresented to [NAME] what funds were available from the sale of the [COMPANY]. Rather, it suggests that [NAME] simply stated how much [NAME], and his sisters "would receive", namely $5 million, being an amount that [NAME] considered to be "an extremely large amount of money".

4. More importantly, the material also does not reveal what it was in October 2018 that prompted [NAME] to "obtain the trust deeds and financial accounts from [COMPANY]" and thereby come to "appreciate" how much had been realised from the 2007 sale of the business and that such funds were "being held on trust" for her. [NAME] receive advice from someone that she should look at these documents? [NAME] make some observation of [NAME]'s conduct that caused her to enquire about these matters? If so, what was it? And why was it that these enquiries were made only after some 11 years from the sale? None of this is explained.

Balance of convenience 1. The form of order sought by [NAME] directed to specific parcels of real estate is subject to a "carve out" such that the order would not prevent: 1. the sale of any of those properties for fair market value; 2. the payment from such proceeds of the reasonable costs and expenses of sale and any third party debt; 3. dealing with the Mermaid Beach and Miami properties "for the purposes of carrying on in its ordinary course the development of those properties"; and 4. the disposal or dealing with any property on giving seven days' notice.

1. As I have mentioned, [NAME], through one or other of his corporate entities, is in the process of developing the Mermaid Beach and Miami properties.

2. The proposed "carve out" may go some way to ameliorating the impact of an injunction directed to those, and indeed the other named properties. [NAME] would face the prospect of having to respond, no doubt urgently, were [NAME] to act within the proposed seven days' notice period and seek to prevent him from disposing of property.

3. No such "carve out" is proposed in relation to the proposed order restraining [NAME] and his related entities from dealing with any assets up to an unencumbered value of $200 million. Such an order would very likely adversely affect [NAME]'s current development activities.

Value of [NAME]'s undertaking as to damages 1. [NAME] is prepared to give the usual undertaking as to damages. [NAME]'s only asset is a property in Victoria worth in the vicinity of $1.5 million. 2. [NAME] submitted that [NAME]'s undertaking "is not of sufficient worth" as "it is likely that any damage suffered by [NAME] in respect of his real property holdings would well exceed [[NAME]'s] assets". 3. [NAME] responded by submitting that it was most unlikely that [NAME] would suffer damage exceeding $1.5 million were orders made as sought.

4. I am not able to come to any conclusion as to what quantum of damage [NAME] might suffer by reason of being restrained as [NAME] proposes.

5. I do, however, conclude that the value of [NAME]'s undertaking as to damages may well be insufficient to meet the damage the making of the proposed orders may cause [NAME] to suffer.

Conclusion 1. I find the matter to be finely balanced, but have concluded that I should decline to make any of the orders sought by [NAME].

2. I have set out at [16] why I would not make the first of the orders proposed by [NAME] directed to assets that "represent" the Impugned Sum or assets acquired "consequent upon" receipt of the Impugned Sum.

3. I am not persuaded to make either of the other orders sought, being an injunction directed to the preservation of nominated properties and assets or a freezing order.

4. This is for a number of reasons.

5. The first is that I am not persuaded [NAME] has shown that there is a sensible risk that, unrestrained, [NAME] will dissipate his assets (see [61] to [76] above).

6. The second is that I am not persuaded that an adequate explanation has been given by [NAME] for the delay in bringing this application (see [82] to [87] above).

7. The third is the speculative nature of [NAME]'s prospects of tracing the Impugned Sum into any of the real property [NAME] and his related entities now own, let alone into [NAME]'s share and managed funds portfolio (see [52] to [54] above).

8. The fourth is the nature of the forensic task [NAME] faces in making out her case on liability. I accept that there is a serious question to be tried that [NAME] acted without authority when purportedly passing the directors' resolutions leading the making of the Impugned Sum. But [NAME]'s success in that regard seems likely to depend on establishing, amongst other things, that [NAME]'s recollection of the conversations to which I have referred, and to which he has put his oath, should not be accepted. Although I cannot predict, and express no view about, [NAME]'s prospects in that regard, it represents a stark potential barrier to her success in the proceedings.

Conclusion 1. [NAME]'s Notice of Motion of 8 March 2019 should be dismissed. 2. I will hear submissions as to costs and on the question of whether I should order [NAME] to serve an asset disclosure affidavit.

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Amendments 05 April 2019 - Formatting corrected 22 February 2023 - Typographical error in [3] (year) corrected DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 February 2023