711 Hogben Pty Ltd v Tadros

[2022] NSWSC 1085

Supreme Court

New South Wales

Medium Neutral Citation:

711 Hogben Pty Ltd v Tadros [2022] NSWSC 1085

Hearing dates:

10 August 2022

Decision date:

10 August 2022

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Plaintiff’s Notice of Motion dismissed; defendant’s costs of the hearing of the motion awarded on an indemnity basis

Catchwords:

CIVIL PROCEDURE – freezing order – whether danger that prospective judgment will be wholly or partly unsatisfied by reason of assets of debtor being deliberately diminished in value – whether there would be utility in freezing order – where proposed exceptions to freezing order likely to be enlivened

Cases Cited:

711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 697

711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1238

711 Hogben Pty Ltd v Tadros [2016] NSWCA 244

711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1683

711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd (No 2) [2016] NSWSC 1754

711 Hogben Pty Ltd v Anthony Tadros [2018] NSWSC 628

711 Hogben Pty Ltd v Tadros [2021] NSWSC 1463

Category:

Consequential orders

Parties:

711 Hogben Pty Ltd (Plaintiff/Cross-Defendant/Applicant)
Anthony Tadros (First Defendant/Cross-Claimant)
Sharon Tadros (Second Defendant/Cross Claimant)
George Tadros (Third Defendant/Cross-Claimant/Respondent)
Dennis Bluth (Fourth Defendant)

Representation:

Counsel:
M Sheldon with M Thompson (Plaintiff/Cross-Defendant/Applicant)
M W Young SC (Third Defendant/Cross-Claimant/Respondent)

Solicitors:
One Group Legal (Plaintiff/Cross-Defendant/Applicant)
Finn Roache Lawyers (Defendants/Cross-Claimants/Respondent)

File Number(s):

2015/330101

EX TEMPORE JUDGMENT (REVISED)

1. The lengthy history of these proceedings is set out in previous judgments of the Court, including judgments by me, Hammerschlag and Beech-Jones JJ, as their Honours then were, and the Court of Appeal. [1]

   1. 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 697 (Stevenson J); 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1238 (Stevenson J); 711 Hogben Pty Ltd v Tadros [2016] NSWCA 244 (Meagher and Leeming JJA); 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd [2016] NSWSC 1683 (Beech-Jones J); 711 Hogben Pty Ltd v Tadros; Tadros v 711 Hogben Pty Ltd (No 2) [2016] NSWSC 1754 (Beech-Jones J); 711 Hogben Pty Ltd v Anthony Tadros [2018] NSWSC 628 (Hammerschlag J); 711 Hogben Pty Ltd v Tadros [2021] NSWSC 1463 (Stevenson J).

2. The proceedings are now set down for final hearing before Hammerschlag CJ in Eq for three days commencing 29 August 2022.

3. The third defendant, Mr George Tadros, owns a property at Roselands as joint tenant with his wife. Mr Tadros caused that property to be placed on the market in early May of this year. There has been a sales campaign conducted by a real estate agent, but no sale has yet been affected.

4. By Notice of Motion, filed in court on 5 August 2022, the plaintiff applies for a freezing order for the "Relevant Amount" being $1.4 million with a number of "Exceptions", including: living expenses, Mr Tadros's legal expenses (that is, all his legal expenses), bona fide business expenses and the like. The exception also proposes that Mr Tadros be at liberty to exchange contracts to sell the Roselands property provided that he pays the "proposed relevant amount" into court "within one hour of settlement".

5. As is well-known, freezing orders are available to prevent frustration or inhibition of the court's processes by seeking to meet the danger that a judgment, or in this case a prospective judgment, will be wholly or partly unsatisfied.

6. I will assume, as I understand it is common ground for today's purposes, that the plaintiff has an arguable case on an accrued or prospective cause of action.

7. I am not satisfied, however, that the circumstances show that the fact that the Roselands property is on the market bespeaks a danger that any judgment the plaintiff may recover will be unsatisfied.

8. In any event, I see no utility in making the order.

9. Mr Tadros has advice from an arm's length real estate agent that the likely sale price to be achieved for the Roselands property will be in the order of $1.2 million; less than was originally being asked.

10. From the proceeds of sale of the property, Mr and Mrs Tadros must discharge a mortgage to Westpac Banking Corporation under which some $921,500 is owing; they will also have to discharge a writ on the title to Pioneer Credit Solutions Pty Ltd, which will involve expenditure in the order of $73,000. In addition, there will be the cost of the sale, including an agent's commission, in the order of $28,500. It seems likely, therefore, that the surplus on the sale will be in the order of $175,000 to $200,000.

11. The unchallenged evidence from Mr Tadros is that he has outstanding legal expenses associated with these proceedings in the order of $425,000 and that his legal advisors estimate the expenses for the hearing will be in the order of $170,000; a total of some $595,000.

12. Thus, the proposed exceptions to the proposed freezing order are bound to be enlivened as the net legal expenses, past and future, will easily exceed the likely proceeds. In those circumstances I see no utility in making a freezing order.

13. Mr Sheldon, who appeared for the plaintiff, submitted that nonetheless the Notice of Motion should not be dismissed with costs because of enquiries made by his instructors on 26 July 2022 of Mr Tadros's solicitors concerning the proposed sale and the seeking, by the plaintiff's solicitors, of an undertaking that $1 million from the proceeds of sale be paid into court.

14. Mr Tadros's solicitors responded promptly to that enquiry stating their instructions were that the reason the property was being sold was so that Mr Tadros and the other cross-claimants could pay their legal expenses.

15. It is true that that response did not include any statement to the effect that there will be no utility in making the order, because of the kind I have found.

16. Nonetheless, I do not consider that the failure of Mr Tadros to give the undertaking sought should have the consequence that the usual course should not be followed; that is, that the plaintiff should pay the costs of this application.

17. My order is that the plaintiff's Notice of Motion filed 5 August 2022 is dismissed with costs.

18. I heard short argument as to indemnity costs of today.

19. I order that the costs of today (not the costs incurred prior to today) be on an indemnity basis.

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Endnote

Decision last updated: 12 August 2022