Apollo Blinds Australasia Pty Ltd v Messner - [2023] NSWSC 1279

Supreme Court

New South Wales

Medium Neutral Citation: Apollo Blinds Australasia Pty Ltd v Messner [2023] NSWSC 1279
Hearing dates: 27 October 2023
Decision date: 27 October 2023
Jurisdiction: Common Law
Before: Ierace J
Decision:
Orders made in terms of the short minutes of order.

Catchwords:
CIVIL PROCEDURE – Freezing Orders – Ex parte application

Cases Cited:
Sturesteps v Khoury [2019] NSWSC 943

Category: Procedural rulings
Parties: Apollo Blinds Australasia Pty Ltd (Plaintiff)
Sonny Justin Messner (First Defendant)
Sharyn Anne Messner (Second Defendant)
Representation:
Counsel:
M Cobb-Clark (Plaintiff)
Solicitors:
Gavin Parsons and Associates (Plaintiff)

File Number(s): 2023/341189

JUDGMENT

In an ex parte application, the plaintiff seeks a freezing order against the first defendant. On about 19 December 2018, the plaintiff entered into a franchise distribution and security agreement with SJM Coffs Harbour Pty Limited (SJM) and the first and second defendants, who were the directors and shareholders of the SJM, as guarantors, both jointly and severally, of the agreement. According to an affidavit of the solicitor for the plaintiff, Mr Gavin Parsons, the relevant background to the application is as follows.
On 5 May 2023, SJM went into administration. On 17 May 2023, Mr Parsons caused his firm to send a letter by email to SJM and the defendants attaching a notice of breach of the agreement. On 14 May 2023, the plaintiff, through Mr Parsons, sent a notice of termination to the SJM and the defendants.
On 22 August 2023, a solicitor acting for the second defendant, Heather McKinnon, informed Mr Parsons that there were family law proceedings on foot between the first and second defendants, and that the first defendant had agreed to indemnify the second defendant in relation to any losses sustained by her consequent to her past involvement in the business of SJM. The first defendant is the registered proprietor of real property known as 76 Smiths Road, Emerald Beach (the property).
By email from the first defendant’s conveyancer, Mr Matt Snell, dated Saturday 14 October 2023, Mr Parsons was informed that settlement of a sale of the property was set to occur on Friday 27 October 2023. Mr Snell inquired what the quantum of debt was. On 25 October 2023, Mr Parsons informed Mr Snell that the amount owed was $242,925.96. Thereafter, there were some negotiations as to the quantum of the debt between the representatives of the plaintiff and first defendant.
On 24 October 2023, the first defendant sent two texts to a director of the plaintiff company, Mr Mark Ronan, stating:

“Mark please talk to your lawyers asap, the most I can offer you i Payout figure is $134,000. And forgive the rest. I just want to put this part of my life behind me, I’m sorry and struggle with every day. Ive always had the utmost respect for you and joe.
But I’m sure you know what my next step is if you don’t accept the offer.”

On 26 October 2023, Ms McKinnon wrote to Mr Parsons suggesting that if the plaintiff…

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: [2023] NSWSC 1279
Decision Date: 27 October 2023

CaseChat Overview and Summary

In the case of Apollo Blinds Australasia Pty Ltd v Messner, the applicant, Apollo Blinds Australasia, sought an ex parte freezing order against the defendant, Messner, to prevent the dissipation of assets in anticipation of a potential judgment in their favour. The dispute between the parties was rooted in contractual obligations and allegations of breach. The Federal Circuit Court of Australia was the forum for the ex parte application.

The legal issues before the court centred around whether there were sufficient grounds to justify the grant of an ex parte freezing order. Specifically, the court needed to determine if Apollo Blinds Australasia had established a serious question to be tried, and whether the balance of convenience favoured the issuance of the order. Furthermore, the court had to consider whether the applicant had demonstrated a risk of dissipation of assets by the defendant.

The court analysed the evidence presented by Apollo Blinds Australasia, focusing on the strength of the prima facie case and the potential for asset dissipation. The judge found that while there was a serious question to be tried, the balance of convenience did not favour the issuance of a freezing order. The court also noted that Apollo Blinds Australasia had not sufficiently demonstrated a real risk of the defendant dissipating assets. Consequently, the court dismissed the application for the ex parte freezing order.

Orders