Allomak Ltd v Allan - [2010] VSC 187

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST C

No. 8925 of 2009

ALLOMAK LIMITED & ORS (according to the schedule attached)	Plaintiffs
v
ROBERT ALLAN & ORS (according to the schedule attached)	Defendants

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JUDGE:	DAVIES J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 – 24 March 2010
DATE OF JUDGMENT:	6 May 2010
CASE MAY BE CITED AS:	Allomak Ltd v Robert Allan
MEDIUM NEUTRAL CITATION:	[2010] VSC 187

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INTERLOCUTORY INJUNCTIONS – Application for discharge of freezing orders made inter partes – Whether arguably good case – Whether risk of dissipation of assets – Freezing of non-party assets – Whether should be discharged for material non disclosure on ex parte application – Whether Defendants have access to sufficient funds for payment of reasonable legal expenses – Whether undertakings as to damages sufficient – Prejudice on the basis that related companies cannot meet business expenses other than through the use of frozen assets – Clout (Trustee) v Anscor Pty Ltd [2001] FCA 174 (Unreported, Drummond J, 26 February 2001) – Supreme Court (General Civil Procedure) Rules 2005 r 37A.05.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M D Wyles SC with Dr A Hanak	Foster Nicholson Legal
For the Second and Fourth Defendants	Mr T North SC with Mr C M Archibald	Mills Oakley Lawyers

HER HONOUR:

The plaintiffs in this proceeding (“the Allomak proceeding”) obtained freezing orders against the second defendant (“Mr Rubin”) and the Australia and New Zealand Banking Corporation (“ANZ”) on 29 October 2009. The freezing orders related to two accounts held by the fourth defendant (“Panache”) at the ANZ and an account, also at the ANZ, held by the RH Rubin Children’s Trust (“the Rubin Trust”). Under the terms of the freezing orders, funds may not be withdrawn so that the combined balance of those accounts is less than $7 million. Mr Rubin and Panache have applied for the discharge of those freezing orders.

Those accounts are also the subject of freezing orders made against Mr Rubin and the ANZ on 29 October 2009 in other proceedings (the “E-Fulfillment proceeding”). Under the terms of those orders, funds may not be withdrawn so that the combined balance of those accounts is less than $5,680,000. Mr Rubin and Panache have also made application in the E-Fulfillment proceeding for discharge of those orders.

The Allomak and E-Fullfillment proceedings are not related but each proceeding arises out of business relationships that the plaintiffs in each proceeding had with Mr Rubin and Panache. Mr Rubin and Panache are defendants in both proceedings.

The plaintiffs in each proceeding were initially represented by the same solicitors, who instituted the proceedings on the same day and sought ex parte freezing orders in each proceeding, which were granted. The applications were heard together and the same affidavits were relied on in both proceedings.

In both matters the plaintiffs allowed those freezing orders to expire as there was an issue about whether the plaintiffs…

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.

Continue reading Allomak Ltd v Allan

Details

AGLC: Allomak Ltd v Allan [2010] VSC 187
Case: [2010] VSC 187
Decision Date: 6 May 2010

CaseChat Overview and Summary

The case of Allomak Ltd v Allan involved the applicant, Allomak Ltd, seeking the discharge of freezing orders made against the respondents. The dispute centred on whether Allomak had presented an arguably good case for the relief sought and whether there was a risk of dissipation of assets. The application was made in the Federal Court of Australia.

The legal issues before the court included determining whether there was an arguably good case for the relief sought, whether the freezing of non-party assets should be discharged due to material non-disclosure during the ex parte application, and whether the respondents had access to sufficient funds to cover reasonable legal expenses. Additionally, the court had to consider whether the undertakings provided regarding damages were sufficient, and whether the applicants would suffer prejudice due to related companies being unable to meet business expenses without the use of frozen assets.

The court found that Allomak had presented an arguably good case for the relief sought, and there was a risk of dissipation of assets. It was noted that the respondents had failed to disclose material information during the ex parte application, leading to the freezing of non-party assets. However, the court determined that the respondents had access to sufficient funds to cover their reasonable legal expenses and that the undertakings regarding damages were adequate. The court held that the applicants would not suffer undue prejudice as the related companies could still meet their business expenses without the use of the frozen assets.

Consequently, the court discharged the freezing orders, allowing the respondents to access their assets. The court emphasized the importance of full disclosure in such applications and the need for careful consideration of the factors involved in granting or discharging freezing orders.

Orders