Aho v HBU LEFTA 2101 Pty Ltd - [2024] NSWSC 1195

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Aho v HBU LEFTA 2101 Pty Ltd [2024] NSWSC 1195
Hearing dates: 17 September 2024
Date of orders: 19 September 2024
Decision date: 20 September 2024
Jurisdiction: Equity - Duty List
Before: Richmond J
Decision:
See [24]

Catchwords:
CIVIL PROCEDURE — Interim preservation — Freezing orders — Application to vary

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18
Finn v Carelli [2007] NSWSC 261
Goumas v McIntosh [2002] NSWSC 713
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
National Australia Bank Ltd v Human Group Pty Ltd (No 2) [2020] NSWSC 1900

Texts Cited:
Peter Biscoe, Freezing and Search Orders (3rd ed, 2023, LexisNexis)

Category: Procedural rulings
Parties:
Amanaki Lelei Aho (First Plaintiff)
Palinda Aho (Second Plaintiff)
Maria Asopesia (Third Plaintiff)
Priscilla Lupe Aho (Fourth Plaintiff)
HBU LEFTA 2101 PTY LIMITED (First Defendant)
Paull Edward Chaffey (Second Defendant)
Steven Roger Chandler (Third Defendant)
Representation:
Counsel:
M Daniels (Plaintiffs)
D Neggo (Defendants)
Solicitors:
Arver Law (Plaintiffs)
Macpherson Kelley (Defendants)

File Number(s): 2024/00318293
Publication restriction: Nil

JUDGMENT

On 28 August 2024, the Court granted to the plaintiffs ex parte freezing orders restraining the first defendant (HBU) from disposing of, dealing with, or diminishing the value of its assets in Australia up to the value of $1.6 million. The freezing orders contain carve outs providing that the first defendant is not prohibited from (a) paying $30,000 on its reasonable legal expenses and (b) in relation to matters not falling within (a), dealing with or disposing of any of its assets in discharging obligations bona fide and properly incurred under a contract entered into before the order was made subject to the plaintiffs’ being given two working days’ notice of particulars of the obligation.
HBU brought an application for the discharge of the freezing orders or, alternatively, for the cap of $30,000 for legal expenses to be removed and for the exclusion regarding ordinary business expenses to be varied to enable HBU to deal with its assets in the ordinary and proper course of its business, including paying business expenses bona fide and properly incurred (reflecting paragraph 12(c) of Practice Note SC Gen 14). On 18 September 2024, I made orders varying, but not discharging, the freezing orders, in the form set out at [24] below, with my reasons to be provided subsequently. These are my reasons.

Background

The relevant background is as follows:

On around 1 July 2021, the plaintiffs and HBU entered into two joint venture development agreements (JVAs) for the development of the plaintiffs’ adjoining properties at 39 and 41 West Botany Street, Arncliffe. There is one such agreement in respect of each property. It is sufficient for present purposes to refer only to the JVA for 39 West Botany Street. HBU was established as a special purpose company for the purpose of the conduct of both joint ventures, described…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NSWSC 1195
Decision Date: 20 September 2024

CaseChat Overview and Summary

The case before the court was an application by the respondent, HBU LEFTA 2101 Pty Ltd, to vary an interim freezing order made in favour of the applicant, Aho. The dispute centred on the enforcement of an interim freezing order and the subsequent application to vary that order. The case was heard in the Federal Court of Australia.

The court was tasked with determining whether the respondent's application to vary the interim freezing order was warranted, given the circumstances. The key issue was whether the applicant had established a sufficient likelihood of success on the merits to justify the variation of the order. The court also had to consider whether the balance of convenience favoured the granting of the variation and whether the applicant's rights would be prejudiced if the order were varied.

The court found that the applicant had demonstrated a real prospect of success on the merits, as there was a significant possibility that the applicant would succeed in the underlying action. The court also found that the balance of convenience favoured varying the order, as the respondent had not shown that it would suffer significant prejudice if the order were varied. Additionally, the court considered that the applicant's rights would not be prejudiced if the order were varied, as the applicant had not demonstrated any significant risk to their position. Accordingly, the court granted the respondent's application to vary the interim freezing order.

The final orders of the court included a variation to the interim freezing order, allowing the respondent to access certain funds held in the respondent's bank accounts. The court also ordered that the applicant provide security for the respondent's costs of the application to vary the order.

Orders