Atlanta Building Pty Ltd v Abela

[2024] NSWSC 1193

Supreme Court

New South Wales

Medium Neutral Citation:

Atlanta Building Pty Ltd v Abela [2024] NSWSC 1193

Hearing dates:

26 July 2024, 2 and 23 August 2024

Date of orders:

20 September 2024

Decision date:

20 September 2024

Jurisdiction:

Equity - Commercial List

Before:

McGrath J

Decision:

Application to set aside notice to produce dismissed (see [6] and [72]–[73])

Application for freezing orders refused against second defendant; liberty granted to the plaintiff to apply as to the form of any proposed freezing order against the first defendant (see [107])

Catchwords:

CIVIL PROCEDURE — interim preservation — freezing orders — burden of proof not discharged —good arguable case against defendants — no solid evidence of risk of dissipation of assets by second defendant — evidence of a substantial diminution in value of first defendant’s assets — uncertain utility of narrow form of freezing order sought against first defendant — HELD — motion dismissed with liberty to apply in respect of relief sought against first defendant

CIVIL PROCEDURE — evidence — notice to produce — application to set aside — orders in Family Court proceedings sought — legitimate forensic purpose of documents — confidentiality protected by non-publication order — HELD — notice to produce motion dismissed

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56, 59

Court Suppression and Non-Publication Orders Act 2010 (NSW), s 7

Family Law Act 1975 (Cth), ss 114Q, 114S

Uniform Civil Procedure Rules 2005 (NSW), rr 21.10, 21.11, 25.11, 25.12, 34.1

Cases Cited:

Acquasun Pty Ltd v Coverdale Ram Pty Ltd [2000] NSWSC 1146

Azzi v Volvo [2006] NSWSC 283

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18

Finn v Carelli [2007] NSWSC 261

Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142

Frigo v Culhaci [1998] NSWCA 88

Jackson v Sterling Industries Ltd (1987) 162 CLR 612; [1987] HCA 23

KR Properties Global Pty Ltd (t/as AK Properties Group) v Kazzi [2024] NSWCA 141

Lake v Crawford (No 2) [2010] NSWSC 419

Mercedes Benz AG v Leiduck [1996] AC 284

Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG “The Niedersachsen” [1983] 1 WLR 1412; [1984] 1 All ER 398

Overdean Developments Pty Ltd v Garslev Holdings Pty Ltd (No 2) [2020] NSWSC 745

Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319

PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1; [2015] HCA 36

Samimiv Seyedabadi [2013] NSWCA 279

Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145

Tomasetti v Brailey [2012] NSWCA 6

Tugrul v Tarrants Financial Consultants Pty Ltd (No 5) [2014] NSWSC 437

Turner v Universal Home Loans Pty Ltd [2004] NSWSC 936

TZ Ltd v ZMS Investments Pty Ltd [2010] NSWSC 196

Texts Cited:

Practice Note SC Gen 14

Category:

Procedural rulings

Parties:

Atlanta Building Pty Ltd (Plaintiff)
David Abela (First Defendant)
Rebecca Amos (Second Defendant)

Representation:

Counsel:
M Klooster and M Waters (Plaintiff)
No appearance (First Defendant)
A Butt (Second Defendant)

Solicitors:
Yates Beaggi Lawyers (Plaintiff)
No appearance (First Defendant)
Cornwalls (Second Defendant)

File Number(s):

2023/00111376

Publication restriction:

Nil

JUDGMENT

INTRODUCTION

1. There are two interlocutory applications to be determined by me in these proceedings.

2. The first is an application by the plaintiff, Atlanta Building Pty Ltd, by notice of motion filed 28 June 2024 for freezing orders and asset disclosure orders under rr 25.11 and 25.12 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) against the defendants, David Abela and Rebecca Amos (freezing orders motion).

3. The second is an application by Ms Amos by notice of motion filed 26 July 2024 for an order pursuant to r 34.2 of the UCPR or the court’s inherent jurisdiction setting aside or relieving her from compliance with a notice to produce dated 14 July 2024 issued by Atlanta and addressed to her (notice to produce motion).

4. The applications are made in the context of proceedings involving a dispute in which Atlanta seeks to recover amounts alleged to be owing to it by the defendants under a contract for building works at a property jointly owned by the defendants, located in Bangalow, New South Wales (Bangalow Property).

5. Mr Abela did not appear at any of the hearing days of the applications, including after he was called outside court.

6. I determined the notice to produce motion during the hearing on 26 July 2024 by dismissing it and allowing Atlanta to call on its notice to produce. My reasons for doing so are set out below.

7. For the reasons set out below, I have also determined that the freezing orders motion should be dismissed.

RELEVANT FACTS

The parties and the Contract

8. Atlanta is a licensed builder, undertaking high-value custom residential building work in the Northern Rivers region of New South Wales, primarily in Byron Bay.

9. On about 19 August 2019, Atlanta and the defendants (who were married to each other at that time and who are the registered proprietors of the Bangalow Property as joint tenants) entered into a building contract for the construction of a new dwelling and swimming pool at the Bangalow Property for a fixed price of $2,699,258.10 (Contract).

10. In about December 2019, Atlanta commenced works at the Bangalow Property. It issued several payment claims as it completed different stages of work and was paid progress claims for these claims by the defendants during 2019–2020.

11. In about May 2020, the defendants separated.

12. Atlanta and the defendants then fell into dispute over the payment for the works under the Contract.

13. In February 2021, urgent proceedings were commenced in the Federal Circuit and Family Court of Australia by Mr Abela against Ms Amos relating to the payment of amounts owing by them to Atlanta.

14. On 24 February 2021, Mr Abela’s former solicitors (Kenna Teasdale Lawyers) sent a letter to Atlanta’s former solicitors (Stuart Garrett Lawyers) advising that urgent Family Court proceedings had been commenced to facilitate payment of Atlanta’s outstanding tax invoice dated 24 December 2020 and requesting that Atlanta hold any action in abeyance pending the outcome of the application.

15. On 19 March 2021, Kenna Teasdale Lawyers sent a letter to Stuart Garrett Lawyers informing Atlanta that pursuant to the relevant Family Court orders made by consent on 16 March 2021, Mr Abela was required not to take any further steps to authorise Atlanta to continue construction on the Bangalow Property, Ms Amos had signed the necessary authority to the National Australia Bank (NAB) for payment of $202,444 to Atlanta and agreement had been reached for the next stage payment to proceed and thereafter be paid upon completion.

16. On 20 August 2021, Atlanta issued a termination notice terminating the Contract.

The proceedings

17. On 7 June 2023, Atlanta commenced these proceedings by filing a summons together with a technology and construction list statement claiming damages for breaches of the Contract (including interest on late payments, unpaid delay payments and loss of profits) or alternatively under a quantum meruit for the value of the building services and materials provided by Atlanta to the defendants. Atlanta has quantified its claim for delay costs, a final progress payment, interest and loss of profits at a total amount of $694,976.59.

18. The contentions in the list statement allege, amongst other things, the following:

1. On around 3 December 2019, Atlanta commenced work on the Bangalow Property ([C7.1]).

2. Between November 2019 and December 2020, Atlanta issued seven payment claims for the works it had completed in the amount of $1,349,521.07 and received payments from the defendants totalling $1,226,195.89 ([C7.2]).

3. Between December 2019 and July 2020, Atlanta issued six payment claims for additional works and received payments from the defendants totalling $54,767.00 in complete satisfaction of those claims ([C7.3]).

4. On 20 August 2020, the defendants instructed Atlanta to cease all works (first delay) ([C7.4](a)).

5. On 20 October 2020, the defendants instructed Atlanta to recommence all works and Mr Abela was given authority to provide instructions to Atlanta on behalf of the defendants ([C7.4](b)).

6. During the period from 8 February 2021 to 1 April 2021, Atlanta again ceased to carry out all works (second delay) ([C7.5]).

7. By about February 2021, the defendants were no longer able to cooperate in all matters with Atlanta and no longer had the financial resources necessary to perform their obligations under the Contract, as they became involved in proceedings in the Family Court in early 2021, with consent orders made by the Family Court on 16 March 2021 ([C10]).

8. On 9 April 2021, Atlanta issued invoices for the delay costs arising from the first delay and the second delay (delay invoices) ([C7.6]).

9. On 19 August 2021, Atlanta issued a suspension notice with the effect of suspending the works ([C11.1]).

10. On 20 August 2021, Atlanta issued a termination notice terminating the Contract ([C11.2]).

11. On 1 September 2021, Atlanta issued its final progress claim in the amount of $212,411.72, which remains unpaid ([C9]).

19. On 28 August 2023, Ms Amos filed her technology and construction list response (Amos list response) in which she states, amongst other things:

1. The defendants separated during May 2020 ([A4]).

2. If any payments made under the Contract were late (which she denied) Atlanta repeatedly accepted them and by its conduct made an election to treat timely payments as non-essential, waived any entitlement to termination on the basis of late payment and is estopped from asserting any entitlement to termination on the basis of late payment ([C10(f)(iii)]).

3. Between 20 October 2020 to 20 December 2020, the parties agreed to terminate the Contract and that, in substance, there would be a new contract between Atlanta and Mr Abela on the same terms and conditions as the Contract ([C10](f)(iv)).

4. Further or alternatively, Atlanta is estopped from making any claims for any loss or damage from Ms Amos because from 20 October 2020 or 20 December 2020 there was a mutual assumption that the terms of the relationship with Atlanta were that Mr Abela took over control and responsibility of the build and all costs and liabilities in relation to it and Atlanta is estopped from departing from that position ([C10](f)(v)).

20. Importantly, in the Amos list response, Ms Amos denies the allegations that by about February 2021, the defendants were no longer able to cooperate in all matters with Atlanta and no longer had the financial resources necessary to perform their obligations under the Contract, as they became involved in proceedings in the Family Court in early 2021, with consent orders made by the Family Court on 16 March 2021 ([C10](a)–(d)).

21. In [A5] of the Amos list response, Ms Amos contends that she:

... exited from the Project to avoid conflict as part of a property settlement between [the defendants] in the concurrent Family Law proceedings.

22. On 7 September 2023, Mr Abela filed his technology and construction list response (Abela list response) in which he states, amongst other things:

1. In issuing the delay invoices, Atlanta failed to comply with the terms of the Contract regarding the procedure for making payment claims and therefore those invoices are not due and payable ([C7.6]).

2. Atlanta was not entitled to issue the final tax invoice on 1 September 2021 and that invoice did not constitute a progress claim within the meaning of the Contract ([C9]).

3. The defendants did have the financial resources necessary to perform their obligations under the Contract by about February 2021 ([C10.3]).

4. Atlanta was not entitled to terminate the Contract ([C11.2]).

5. Atlanta did not validly terminate the Contract on 20 August 2021 ([C23.1]).

6. Mr Abela remains ready, willing and able to perform the Contract ([C23.5]).

7. Mr Abela is entitled to a set-off against any amount for which he is found liable to Atlanta in the amount of damages and/or debts owed to him by Atlanta as claimed in his cross-claim (see below).

23. On 7 September 2023, Mr Abela filed his technology and construction list cross-claim statement in which he seeks an order that Atlanta specifically perform the Contract by completing the works and seeks the return of the deposit of $140,000.

24. On 10 November 2023, Atlanta filed its technology and construction list reply in response to the Amos list response, in which it denies that Ms Amos is no longer a party to the Contract and denies the alleged estoppel against it.

25. On 15 November 2023, Atlanta filed its technology and construction list reply in response to the Abela list response in which it claims an estoppel against Mr Abela.

26. Atlanta claims that it has incurred legal and expert costs and disbursements in the proceedings in excess of $400,000.

Family Court orders

27. On 9 May 2024, the Family Court made orders in proceedings between the defendants (Family Court orders), including orders about the distribution of their real property following their separation. During the hearings on 26 July 2024 and 23 August 2024, I made non-publication orders under s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) in relation to redacted forms of the Family Court orders (suppression order). As a result, I have only set out the general effect of the parts of the Family Court orders dealing with the defendants’ real property interests, which are as follows:

1. Ms Amos has an interest in four properties, being the Bangalow Property, a property located in Toorak, Victoria (Toorak Property), a property located in Euroa, Victoria (Euroa Property) and a property located in Swan Street, Cremorne, Victoria (Swan Street Property).

2. Two of the properties are to be sold, being the Bangalow Property and the Swan Street Property, and the Euroa Property has been sold.

3. Ms Amos is to receive 100% of the net proceeds of sale of the Euroa Property.

4. Ms Amos is to receive 100% of the net proceeds of sale of the Bangalow Property and the Swan Street Property, unless the net proceeds exceed a specified amount, in which case Ms Amos will receive 70% of the net proceeds and Mr Abela will receive the remaining 30%.

5. Mr Abela is to transfer his interest in the Toorak Property to Ms Amos.

6. Mr Abela has sole ownership of one property in Church Street, Cremorne, Victoria (Church Street Property).

7. Mr Abela will indemnify Ms Amos for all claims, demands and judgments by or on behalf of Atlanta pursuant to or arising from the Contract, identified proceedings in the NSW Civil and Administrative Tribunal (NCAT proceedings), these proceedings and all legal costs in respect of the NCAT proceedings and these proceedings.

Sale of the Bangalow Property

28. On 27 May 2024 at 2:17pm, the solicitors for Ms Amos, Cornwalls, sent an email to the solicitors for Atlanta, Yates Beaggi Lawyers (YBL), stating that the Bangalow Property would “shortly be put on the market for sale”. The email was copied to John Dela Cruz of Contracts Specialist, the solicitor for Mr Abela at the time. I infer that the sale of the Bangalow Property was to occur pursuant to the Family Court orders.

Correspondence concerning freezing orders

29. On 27 May 2024 at 2:24pm, YBL sent an email to Cornwalls (copied to Contracts Specialist) (Atlanta’s 27 May email) seeking particulars of the proposed sale of the Bangalow Property, the likely sale price, the mortgage/debt over the Bangalow Property and whether the defendants’ interests in the Bangalow Property were altered or adjusted by the Family Court orders. The email sought a response by close of business on 29 May 2024. The email also sought the agreement of Ms Amos for preservation from the proceeds of sale of a sum that represents the likely award in Atlanta’s favour upon final hearing in these proceedings and asserted that, absent such agreement, Atlanta would move on an application for “asset freezing”. This indicated an intention on the part of Atlanta to apply for a freezing order if Ms Amos did not agree to Atlanta’s proposed course.

30. On 29 May 2024 at 2:59pm, Cornwalls sent an email to YBL (copied to Contracts Specialist) stating that they were currently seeking instructions from Ms Amos, did not anticipate being in a position to respond by 4pm that day and that they expected to be in a position to respond by early to midway through the following week. The email concluded by requesting that in the interim Atlanta take no steps to apply for a freezing order.

31. In reply later that day, YBL sent an email to Cornwalls (copied to Contracts Specialist) saying that they expected to take until Monday/Tuesday the following week to prepare the freezing order application and supporting affidavit, so a response by early the following week was “good timing”. This indicated Atlanta’s ongoing intention to apply for a freezing order.

32. On 30 May 2024 at 3:38pm, Cornwalls sent an email to YBL (copied to Contracts Specialist) asserting that it was unreasonable for YBL to request that Ms Amos provide particulars of the sale within two business days and for Atlanta to now be taking steps to prepare a freezing order even before considering a reply from Ms Amos. Cornwalls invited Atlanta to resist any premature conduct until they had provided a substantive response in relation to the particulars of the sale of the Bangalow Property.

33. On 30 May 2024 at 3:48pm, YBL replied to Cornwalls (copied to Contracts Specialist) commenting on the ease with which a reply to the particulars sought could be provided by Ms Amos and noting that whether the freezing order application was prepared was a matter for Atlanta.

34. On 3 June 2024, YBL conducted real property searches with respect to each of the defendants in all of the States and Territories of Australia. These searches revealed that Ms Amos had no interest in any real property other than the Bangalow Property and that a person with the name “David Joseph Abela” had an interest in 10 real properties, nine of which were located in Victoria and the other being the Bangalow Property located in New South Wales.

35. On 4 June 2024 at 7:26pm, YBL sent an email to Cornwalls and Contracts Specialist attaching the real property searches and asking, by close of business the following day, for a response to Atlanta’s 27 May email and advice on whether Mr Abela was the owner of the nine Victorian titles and, if so, the market value of those properties and the level of any encumbrance over them.

36. On 6 June 2024 at 11:36am, Cornwalls sent a letter by email to YBL (copied to Contracts Specialist) responding to Atlanta’s 27 May email. In the letter, Cornwalls said, amongst other things, that:

1. They did not have the particulars of the sale of the Bangalow Property readily available to provide Atlanta on demand to satisfy its unreasonable deadlines.

2. Atlanta’s threats to prepare and then file an application for a freezing order were premature.

3. Putting aside the weakness of Atlanta’s case, Atlanta would be unable to demonstrate that there is any danger that any judgment in Atlanta’s favour would be wholly or partly unsatisfied.

4. The auction of the Bangalow Property would be conducted by McGrath Real Estate in Byron Bay, the sale of the Bangalow Property was required by the Family Court orders and, pursuant to the Family Court orders, the sale price for the Bangalow Property could not be less than $2,150,000.

5. Ms Amos could not provide a copy of the Family Court orders without permission from the Family Court.

6. The likely sale price of the Bangalow Property would be not less than $2,150,000.

7. There is a mortgage secured on the Bangalow Property.

8. Without admission, Ms Amos would provide YBL with notice of sale of the Bangalow Property, including the date of settlement.

37. On 6 June 2024 at 12:11pm, YBL sent an email to Cornwalls (copied to Contracts Specialist) asking that they state by the end of the day whether the Victorian properties appearing in the title searches were owned by Mr Abela, the measure of debt by the defendants over the Bangalow Property and whether the defendants agreed to hold the net proceeds of sale of the Bangalow Property in an interest-bearing account pending the outcome of the proceedings.

Notices to produce

38. On 6 June 2024 at 2:49pm, YBL sent an email to Contracts Specialist (copied to Cornwalls) attaching a notice to produce filed on 5 June 2024 addressed to Mr Abela under r 21.10 of the UCPR (Abela notice to produce). The Abela notice to produce sought the following categories of documents:

1   Copies of any interim or final orders made by the Federal Circuit and Family Court of Australia in proceedings involving the First Defendant, David Abela, and the Second Defendant, Rebecca Amos, which relate to, or require the sale of, the property situated at Certificate of Title Folio Identifier Lot 6 in Deposited Plan 217534, otherwise known as 33-35 Leslie Street, Bangalow NSW 2479.

2   Copies of any interim or final orders made by the Federal Circuit and Family Court of Australia in proceedings involving the First Defendant, David Abela, and the Second Defendant, Rebecca Amos, which relate to:

a.   the First and Second Defendants’ matrimonial or relationship property interests (pool of assets),

b.   the determination of the pool of assets,

c.   the determination of their respective interest in the pool of assets,

d.    the determination of any adjustment of their respective interests in the pool of assets,

e.   requiring the sale, encumbrance, transfer or in any way dealing with any of the pool of assets.

39. On 6 June 2024 at 2:50pm, YBL sent an email to Cornwalls (copied to Contracts Specialist) to which was attached a notice to produce filed on 5 June 2024 addressed to Ms Amos under r 21.10 of the UCPR (Amos notice to produce). The Amos notice to produce was in essentially the same terms as the Abela notice to produce.

40. On 14 June 2024 at 11:04am, Cornwalls sent an email to YBL (copied to Contracts Specialist) asserting that the Amos notice to produce was defective because it failed to comply with r 21.10 of the UCPR on the basis that it did not seek any document or thing “referred to in any originating process, pleading, affidavit or witness statement filed or served” in the proceedings or a specific document relevant to a fact in issue as required by the rule. The email also stated that Ms Amos would not comply with the Amos notice to produce.

Threat to seek freezing orders

41. On 14 June 2024 at 11:27am, YBL sent an email to Cornwalls (copied to Contracts Specialist) stating that Atlanta would file and serve a notice of motion seeking freezing orders.

Mr Abela’s solicitors cease to act

42. On 19 June 2024, Contracts Specialist filed a notice of intention of ceasing to act for Mr Abela in the proceedings. On 18 July 2024, Contracts Specialist duly gave notice of ceasing to act for Mr Abela.

Auction of the Bangalow Property

43. On 19 June 2024, an auction of the Bangalow Property was held by McGrath Real Estate, Byron Bay. After the auction, YBL called McGrath Real Estate who informed YBL that no bids were made at the auction, but they were expecting offers from interested parties.

Hearing for notices to produce

44. On 24 June 2024, the Abela notice to produce and the Amos notice to produce were listed before Acting Senior Deputy Registrar Czerwinski (the Registrar).

45. On 27 June 2024 at 12:38pm, YBL sent an email to Cornwalls (copied to Contracts Specialist) stating that on 24 June 2024 Atlanta had appeared before the Registrar in respect of the Abela notice to produce and the Amos notice to produce, there had been no appearance by the defendants and the Registrar had relisted the two notices to produce on 1 July 2024.

46. On 27 June 2024 at 5:26pm, Cornwalls sent an email to YBL (copied to Contracts Specialist) in response to YBL’s email of 12:38pm noting that they were not informed of any call on the Amos notice to produce or listing date for the return of the Amos notice to produce and reiterating their position as expressed in their email of 14 June 2024 that the Amos notice to produce was defective. The email also stated that Cornwalls had provided details to Atlanta relating to the sale of the Bangalow Property in their letter of 6 June 2024 which was all the information they were instructed to provide and invited Atlanta to withdraw the application for freezing orders, noting that if Atlanta failed to do so, Ms Amos would contest the application and seek her costs.

Freezing orders motion filed

47. On 28 June 2024, Atlanta filed the freezing orders motion and served it on the defendants by email at 1:59pm that day to Contracts Specialist and Cornwalls.

48. The freezing orders motion sought freezing orders, pursuant to UCPR r 25.11, against each of the defendants in identical terms, restraining them from “disposing of, dealing with ,or diminishing the value of [their] interest in the net proceeds of the sale of the [Bangalow Property]” other than for the purposes of paying reasonable legal expenses of defending these proceedings and paying ordinary day-to-day living expenses in the event that those could not be met by other means.

49. Asset disclosure orders were also sought pursuant to UCPR r 25.12 requiring the defendants to each inform Atlanta of all assets held in Australia by them (including their value, location and details).

Further hearing for notices to produce

50. On 30 June 2024 at 8:09pm, Cornwalls sent an email to YBL (copied to Contracts Specialist) noting that the Amos notice to produce was listed the next day and inviting YBL to withdraw the Amos notice to produce and issue a complying notice. The email also stipulated that if the Amos notice to produce was not withdrawn, Cornwalls was instructed to file and serve a notice to set it aside and if there was no withdrawal, requested Atlanta’s consent to a timetable for the filing and service of Ms Amos’ motion to set aside the Amos notice to produce and supporting evidence within seven days and a corresponding period for Atlanta’s response.

51. On 1 July 2024, the hearing for the return of the two notices to produce was held by the Registrar, with an appearance by Atlanta and Ms Amos.

52. On 1 July 2024 at 11:44am, Cornwalls sent an email to YBL (copied to Contracts Specialist) stating that, as indicated at the hearing before the Registrar earlier that day, Ms Amos intended to file a notice of motion to set aside the Amos notice to produce and seeking confirmation by close of business the next day whether Atlanta would agree to withdrawing the Amos notice to produce. The email also indicated that if Atlanta did not withdraw the Amos notice to produce, Ms Amos would proceed to file and serve a notice of motion to set it aside and seek her costs of doing so.

No particulars provided for the properties held by the defendants

53. Atlanta says that as at 2 July 2024, it had not received any of the particulars sought with respect to the Bangalow Property or other real estate holdings of Mr Abela or Ms Amos since YBL’s email of 6 June 2024.

Notice to produce motion

54. On 12 July 2024, Ms Amos filed a notice of motion, together with a supporting affidavit, seeking to set aside the Amos notice to produce.

55. On 15 July 2024 at 1:20am, YBL sent an email to Cornwalls withdrawing the Amos notice to produce and enclosing an identical notice to produce dated 14 July 2024 issued under r 34.1 of the UCPR (second Amos notice to produce) with a return date of 26 July 2024.

56. On 23 July 2024, Cornwalls sent an email to YBL which attached a letter that referred to Cornwalls’ emails of 14 and 30 June 2024 and 1 July 2024 concerning the deficiencies with the Amos notice to produce, the invitations which had been made to YBL to withdraw it and YBL’s failures to respond to those emails or withdraw the Amos notice to produce. Cornwalls stated that they were instructed to seek the costs of Ms Amos’ 12 July 2024 notice of motion. Cornwalls also said that Ms Amos opposed the second Amos notice to produce on the basis that it called for the production of the Family Court orders which could not be compelled in this court and the Family Court orders are restricted and cannot be disclosed except in accordance with the restrictions and limitations in ss 114N to 114T of the Family LawAct 1975 (Cth). Cornwalls invited YBL to withdraw the second Amos notice to produce.

57. On 26 July 2024, Ms Amos filed the notice to produce motion in court seeking to set aside the second Amos notice to produce.

58. At the hearing on 26 July 2024, for the reasons set out under Issue 1 below, I ordered that the notice to produce motion be dismissed. Atlanta then called on the second Amos notice to produce and Ms Amos produced the Family Court orders in a heavily redacted form.

59. On 28 July 2024 at 11:20am, YBL sent an email to Cornwalls requesting a copy of the unredacted Family Court orders, which had been produced before the court on 26 July 2024, by close of business on 29 July 2024. YBL said that it was aware of the suppression order and that the Family Court orders would not be revealed to Atlanta or any other party and would be used solely for the purposes of the proceedings. No response to that email was received by YBL.

60. On 30 July 2024 at 10:02am, YBL sent an email to Cornwalls making a further request for the provision of the unredacted Family Court orders by 12 noon that day, failing which they would seek to relist the proceedings. No response to that email was received by YBL.

61. On 30 July 2024, YBL requested that the proceedings be relisted before me.

Further hearings in relation to the production of the Family Court orders

62. On 2 August 2024, the proceedings were heard before me for the purpose of Atlanta renewing its call on the second Amos notice to produce. Ms Amos produced a further slightly less redacted version of the Family Court orders to Atlanta. There was no appearance by Mr Abela at the hearing.

63. On 23 August 2024, the proceedings were heard before me for the purposes of determining the final form of the redacted Family Court orders being received into evidence, along with evidence of communications with my Associate. At that hearing, I also permitted Atlanta and Ms Amos to make further submissions in relation to the freezing orders motion. There was no appearance by Mr Abela at the hearing.

Judgment against Mr Abela

64. On 13 September 2024, Stevenson J made orders in the proceedings in relation to Atlanta’s claim against Mr Abela and Mr Abela’s cross-claim against Atlanta, including:

(1)   ORDER the First Defendant’s List Response filed on 7 September 2023 be struck out.

(2)   ORDER that the Cross-Summons and Cross-List Statement filed by the First Defendant on 7 September 2023 be dismissed.

(3)   ORDER that there be judgment entered in favour of the Plaintiff against the First Defendant in the amount of $694,976.59.

(4) ORDER that interest run on the sum of $694,976.59 at the rate prescribed by section 100 of the Civil Procedure Act 2005 (NSW) from 20 August 2021 to the date of these orders in the sum of $135,177.45.

(5) ORDER that interest run on the sum of $694,976.59 at the rate prescribed by section 101 of the Civil Procedure Act 2005 (NSW) from the date of these orders until the judgment is paid.

(6)   ORDER that the First Defendant has liberty to apply to set aside these orders, such liberty to be exercised no later than 5pm on 27 September 2024.

(7)   ORDER the Plaintiff to serve a copy of these Orders on the First Defendant by 5pm on 20 September 2024.

Evidence of the income and assets of Ms Amos

65. At the hearing on 26 July 2024, Ms Amos read an affidavit of her solicitor, Richard Hutchings of Cornwalls, stating his instruction and belief that:

1. Ms Amos works full-time.

2. Ms Amos owns her own Mercedes Benz car.

3. Ms Amos has substantial assets that will surpass any possible judgment against her.

4. Ms Amos and Mr Abela are the joint registered proprietors of the Toorak Property.

5. As part of the orders made in the Family Court proceedings, Mr Abela’s interest in the Toorak Property will be transferred to Ms Amos in the coming months.

6. The asserted approximate value of the Toorak Property is between $4.33 million and $5.55 million, giving a mid-value of $4.94 million.

7. The Toorak Property is subject to a mortgage in favour of the NAB, with an amount of about $1.9 million remaining outstanding on that mortgage.

8. If the asserted mid-value for the Toorak Property is the fair value of the Toorak Property, the equity held in the Toorak Property is about $3.04 million.

9. Ms Amos and Mr Abela are the joint proprietors of the Bangalow Property.

10. The Bangalow Property is listed on the open market for sale and must have a reserve price of not less than $2,150,000.

11. Ms Amos has no intention of placing her assets beyond the reach of Atlanta.

ISSUE 1: NOTICE TO PRODUCE MOTION

66. The notice to produce motion was brought by Ms Amos seeking to set aside the second Amos notice to produce. During the hearing on 26 July 2024, I determined to dismiss the notice to produce motion. Set out below are my reasons for doing so.

67. The second Amos notice to produce was issued under r 34.1 of the UCPR. In summary, it sought the production of the following two categories of documents:

1. any interim or final orders made by the Family Court in proceedings involving Mr Abela and Ms Amos which relate to or require the sale of the Bangalow Property; and

2. any interim or final orders made by the Family Court in proceedings involving Mr Abela and Ms Amos which relate to their matrimonial or relationship property interests, any determination of those interests or require the sale, encumbrance, transfer or any dealing with those interests.

68. Atlanta said that the second Amos notice to produce was issued for a legitimate forensic purpose because: the Family Court orders are directly raised in the list statement as being a basis on which the defendants were no longer able to cooperate (particulars to [10.1]); the marriage separation and Family Court proceedings are expressly raised in the Amos list response as being a basis for Ms Amos no longer being liable under the Contract by reason of the estoppel she has asserted (([C10](a)–(d)) and the particulars to [10](f)(v)(3) – (5)); and any orders made by the Family Court regarding the sale of the Bangalow Property are directly relevant to the disposal of assets by Mr Abela and Ms Amos for the purposes of the determination of the freezing orders motion.

69. Ms Amos said that there was no legitimate forensic purpose in the second Amos notice to produce, and it was essentially a fishing exercise by Atlanta to try to obtain sufficient evidence for the purposes of the freezing orders motion. Ms Amos said the proper course would have been for Atlanta to take steps in the Family Court and get information from it before bringing the freezing orders motion. Ms Amos said that the operation of ss 114Q and 114S of the Family Law Act could potentially expose those who publish the orders of the Family Court to criminal sanctions.

70. It is well established that the grounds on which a notice to produce may be set aside are the same as those which justify the setting aside of a subpoena. In Azzi v Volvo [2006] NSWSC 283, Brereton J at [4] conveniently collected the relevant authorities on this principle, saying as follows:

It is now established that a notice to produce of this type may be set aside in circumstances and on grounds equivalent to those applicable to the setting aside of subpoenas [Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136, Highfields Preparatory and Kindergarten School Pty Ltd v Simpson (NSWSC, Master Greenwood, 22 August 1985, unreported); Portal Software Pty Ltd v Bodsworth [2005] NSWSC 1115, [10]]. Those grounds include, relevantly that the subpoena seeks discovery or further discovery from a party [Commissioner for Railways v Small (1938) 38 SR (NSW) 564; National Employers’ Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372; Finnie v Dalglish [1982] 1 NSWLR 400]; that the subpoena is oppressive [Commissioner for Railways v Small; Senior v Holdsworth; Ex parte Independent Television News Ltd [1976] QB 23; Finnie v Dalglish], or that the subpoena calls for production of documents which have no apparent relevance to the issues in the proceedings [Trade Practices Commission v Arnotts Ltd (1989) 21 FCR 306; Hatton v Attorney-General (2000) 158 FLR 31; Portal v Bodsworth [20]-[21]]. The grounds which I have stated are far from exclusive, and are all but instances of the court's power to control its process, the power to set aside a subpoena being an instance of the court's inherent jurisdiction to control its process in the case of an abuse of process. The traditional categories of cases in which subpoenas might be set aside are not the only cases in which the court will intervene, but particular examples of a broad class of case in which the court will set aside a subpoena as an abuse of process [Botany Bay Instrumentation Pty Limited v Stewart [1984] 3 NSWLR 98, 100 – 101].

71. The test for whether the documents sought in a notice to produce or subpoena have a legitimate forensic purpose was stated in Secretary of the Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145, by Bell P (as the Chief Justice then was) at [65] and [68] as follows:

[65]   It is sufficient, in my view, to justify a subpoena as having been issued for a legitimate forensic purpose if the documents sought are “apparently relevant” or, to use the words of Nicholas J in ICAP [Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2009] NSWCA 307] at first instance, it can be seen that the documents sought to be produced by way of subpoena will materially assist on an identified issue or there is a reasonable basis beyond speculation that it is likely the documents subpoenaed will so assist. Of course, if it can be shown that the material assistance will be to the party that issued the subpoena, the prospect of the forensic purpose of the issuing party being impugned as illegitimate will be virtually non-existent.

…

[68]   There is a plain difference between “apparent relevance” and “fishing”, the latter being the metaphor that is frequently deployed in this area of discourse: see, for example, Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575; (1938) 55 WN (NSW) 215 . The word “apparent” admits of the possibility that the documents sought by way of subpoena may not ultimately turn out to be relevant. Their apparent relevance, however, should be able to be ascertained by an examination of the description or identification of the document or documents sought in the schedule to the subpoena in light of the issues in the case, as they present themselves on the pleadings, in particulars and/or in affidavits or witness statements if they have been filed or served at the time of the issue of the subpoena.

72. In my view, the documents sought in the second Amos notice to produce have a legitimate forensic purpose because they are apparently relevant to the issues raised by Atlanta in the list statement and by Ms Amos in the Amos list response and they also relate directly to the dealing with the assets of Mr Abela and Ms Amos in accordance with the Family Court orders. In the affidavit of Mr Hutchings on behalf of Ms Amos, he referred to the Family Court proceedings as the reason for the transfer of Mr Abela’s interest in the Toorak Property to Ms Amos. As I have explained under Issue 2 below, the dealing with assets by a defendant forms part of the two elements which must be demonstrated by an applicant for a freezing order.

73. I also consider that ss 114Q and 114S of the Family Law Act are no impediment to the production of the documents sought in the second Amos notice to produce because s 114Q makes an offence communications “to the public of an account of proceedings” in the Family Court. The production of the redacted form of the Family Court orders to Atlanta pursuant to the second Amos notice to produce does not involve a communication to the public. Any confidentiality of the redacted form of the Family Court orders is also protected by way of the non-publication order I made with respect to them.

ISSUE 2: FREEZING ORDERS MOTION

Legal principles

74. The existing principles for whether a freezing order should be made are well established.

75. The power of court to make a freezing order falls within the inherent jurisdiction to make such orders as the court may determine to be appropriate to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, Gleeson CJ at 321 (with whom Meagher JA and Rogers AJA agreed); PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1; [2015] HCA 36, French CJ, Kiefel, Bell, Gageler and Gordon JJ at [43]. The power to make a freezing order exists not to create additional rights but to enable a court to protect its process from abuse in relation to the enforcement of its orders: Jackson v Sterling Industries Ltd (1987) 162 CLR 612; [1987] HCA 23, Wilson and Dawson JJ at 619.

76. The court also has a statutory power to make freezing orders as a result of r 25.11 of the UCPR which provides:

25.11 Freezing order (cf Federal Court Rules Order 25A, rule 2)

(1)   The court may make an order (a freezing order), upon or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the court’s process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.

(2)   A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.

77. The primary object of a freezing order is to protect a prospective enforcement process and such an order is not granted to aid the cause of action which is asserted in the proceedings: PT Bayan, French CJ, Kiefel, Bell, Gageler and Gordon JJ at [46], citing Mercedes Benz AG v Leiduck [1996] AC 284, Lord Nicholls at 306. Further, the purpose of a freezing order is not to create security for the plaintiff or to require a defendant to provide security as a condition of being allowed to defend the action against them: Patterson, Gleeson CJ at 323, citing Jackson, Deane J at 625. These matters are emphasised in Practice Note SC Gen 14.

78. A freezing order is an exceptional or drastic remedy which should not be granted lightly: KR Properties Global Pty Ltd (t/as AK Properties Group) v Kazzi [2024] NSWCA 141, Mitchelmore JA at [15], citing Frigo v Culhaci [1998] NSWCA 88, Mason P, Sheller JA and Sheppard AJA at 6, Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18, Gaudron, McHugh, Gummow and Callinan JJ at [51] and Tomasetti v Brailey [2012] NSWCA 6, Campbell JA at [16]. In particular, as stated in Lake v Crawford (No 2) [2010] NSWSC 419, by Harrison J (as the Chief Judge at Common Law then was) at [15]:

Practice Note SC Gen 14 provides in part that the purpose of a freezing order is to prevent frustration or abuse of the process of the Court, not to provide security in respect of a judgment or order. Such an order should be viewed as an extraordinary interim remedy because it can restrict the right to deal with assets even before judgment. Such orders are commonly granted ex parte. However, while the rules specifically contemplate that applications for freezing orders may be made ex parte, the exceptional nature of the order and its possible adverse consequences make it generally undesirable for an application to proceed in that way unless there are exceptional circumstances for doing so.

79. An applicant for a freezing order in advance of judgment must establish two elements:

1. there is a prima facie or good arguable case on the cause of action which is asserted; and

2. having regard to all the circumstances, there is a danger that a prospective judgment will be wholly or partly unsatisfied because the prospective judgment debtor absconds or the assets of the prospective judgment debtor are removed from Australia or disposed of, dealt with or diminished in value: Patterson, Gleeson CJ at 320-321 (with whom Meagher JA at 326 and Rogers AJA at 327 agreed); Tomasetti, Campbell JA at [14]; Samimi v Seyedabadi [2013] NSWCA 279, McColl JA at [68]–[72].

80. The first element of a good arguable case is used “in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than 50 percent chance of success”, and does not involve a premature trial of the action but is a preliminary appraisal of the plaintiff’s case: Samimi, McColl JA at [69], citing Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG “The Niedersachsen” [1983] 1 WLR 1412; [1984] 1 All ER 398, Mustill J at 404.

81. The second element of the danger of an unsatisfied prospective judgment from the defendant absconding or dissipating assets must be proved by solid evidence beyond mere assertion, with the precise form of evidence depending on the particular case: Samimi, McColl JA at [73], citing Ninemia Maritime, Mustill J at 406.

82. There is no special standard of proof to obtain a freezing order and while it is not an essential ingredient of such an application, a prima facie case that the defendant has been dishonest in dealing with the subject matter of the plaintiff’s claim will often give rise to a strong inference that the defendant will not, unless restrained, preserve the subject matter of the claim for the benefit of the plaintiff should it be successful in the action: Turner v Universal Home Loans Pty Ltd [2004] NSWSC 936, Palmer J at [20].

83. It is not necessary for an applicant for a freezing order to show that the defendant has a positive intention of evading a judgment, and it is sufficient to show that the course on which the defendant proposes to embark is, objectively speaking, calculated to have that effect: Samimi, McColl JA at [74], citing Finn v Carelli [2007] NSWSC 261, Brereton J at [4].

84. A freezing order is only warranted if there has been conduct on the part of the defendant which can reasonably be interpreted as potentially having the effect of frustrating the ordinary processes of the court and the enforcement of its judgments, or of being intended to do so, or of being in any way evasive indicating dishonesty or otherwise indicating actually or potentially that the assets of the defendant have been or will be dealt with in an irregular way: TZ Ltd v ZMS Investments Pty Ltd [2010] NSWSC 196, Barrett J at [26], citing Acquasun Pty Ltd v Coverdale Ram Pty Ltd [2000] NSWSC 1146, Bryson J at [5].

85. The mere fact that a judgment may not be satisfied for reasons of impecuniosity does not mean that there is an abuse of process, and the mere prospect of impending insolvency is not a reason to grant a freezing order: Samimi, McColl JA at [74], citing Finn, Brereton J at [5].

86. As the awarding of a freezing order is discretionary, the court must take into account and weigh considerations such as the expedition or delay with which the application was made and the balance of convenience: Patterson, Gleeson J at 323; Cardile, Gaudron, McHugh, Gummow and Callinan JJ at [53]; Samimi, McColl JA at [75].

87. The court also has the power to make ancillary orders to freezing orders, which is contained in r 25.12 of the UCPR which provides:

25.12 Ancillary order (cf Federal Court Rules Order 25A, rule 3)

(1)   The court may make an order (an ancillary order) ancillary to a freezing order or prospective freezing order as the court considers appropriate.

(2)   Without limiting the generality of subrule (1), an ancillary order may be made for either or both of the following purposes—

(a)   eliciting information relating to assets relevant to the freezing order or prospective freezing order,

(b)   determining whether the freezing order should be made.

88. The precedent form of freezing orders annexed to the Practice Note contains the form of “Provision of information” ancillary orders of the sort which are contemplated by r 25.12(2)(a) of the UCPR.

89. In Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142, Robb J at [34]–[37] helpfully gathered the principles from the authorities on the making of such ancillary orders, saying:

[34]   An ancillary order requiring disclosure by the respondent need not be limited to information relating to the assets and liabilities of the respondent but can rather include information in respect of payments of money and other transactional arrangements: Graincorp Operations Limited v Duncan Ross Munro [2015] NSWSC 227 at [9]-[17] (Bergin CJ in Eq).

[35]   There are competing views in the authorities as to whether the Court need first make a freezing order, or at least propose to make a freezing order, as a jurisdictional prerequisite to the making of an ancillary order: see MWP Transport Pty Limited v Michael Thomas Kent [2018] NSWSC 1119 at [3] (McDougall J) but cf YAJ1 v Opera Australia [2021] NSWSC 771 at [11] (Adamson J).

[36] The power to make ancillary orders under r 25.12 is ultimately discretionary, and the Court will not make disclosure orders if it does not consider them “appropriate”. For instances in which this Court has declined to make the “provision of information” orders annexed to Practice Note SC Gen 14, see Jingalong Pty Ltd v Todd (No 2) [2014] NSWCA 347 at [16] (Gleeson JA); H Biotechnology Pty Ltd v Shao; H Biotechnology Pty Ltd v Chen [2020] NSWSC 585 at [20]-[22] (Hamill J).

[37]   The Court’s consideration of whether ancillary orders such as disclosure orders are “appropriate” should be guided by the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act 2005 (NSW), s 56; MWP Transport Pty Limited v Michael Thomas Kent at [3] (McDougall J).

Submissions of Atlanta

90. The submissions of Atlanta can be summarised as follows:

1. When Ms Amos advised Atlanta on 27 May 2024 that the Bangalow Property was to be imminently sold, Atlanta made repeated and reasonable specific requests on 27, 29 and 30 May 2024 and 4 and 6 June 2024 about the defendants’ asset status, and specifically about the sale of the Bangalow Property and their respective interests in it as a result of orders made by the Family Court. Those requests were made in circumstances in which Atlanta was aware of the defendants’ Family Court proceedings, which were referenced in the list statement and the Amos list response.

2. The questions asked by Atlanta should have been readily answered by Ms Amos. Ms Amos repeatedly chose not to respond to Atlanta’s requests about her asset position, including about her interests in any real property, yet a week prior to the hearing put on an affidavit through her solicitor disclosing her ownership of the Toorak Property.

3. The assets disclosed by Ms Amos are insufficient to assure the court that a prospective judgment debt can be met because there is no evidence of the level of mortgage or encumbrance on the Toorak Property, and the values given for the Toorak Property and the evidence of the sale of the Bangalow Property, its value and its level of encumbrance are unsubstantiated opinion evidence which was only accepted in evidence subject to a limitation. The affidavit evidence about the assets and income of Ms Amos does not reveal what her full-time occupation is, what she is paid, what model of Mercedes Benz she owns and contains nothing more than an assertion that she has substantial assets which will surpass any possible judgment against her.

4. Mr Abela has taken no steps (and the reasonable requests of his legal representatives, Contracts Specialist, have gone unanswered) in relation to the Abela notice to produce or the freezing orders motion and his asset position is not known. Of his known assets, his interest in the Bangalow Property will be divested when it is sold and he will be transferring his interest in the Toorak Property and other properties to Ms Amos, and he has given an indemnity to Ms Amos for Atlanta’s claim pursuant to the Family Court orders in circumstances where Ms Amos says she has no liability for Atlanta’s claim. What will become of the proceeds of sale of the Bangalow Property in the hands of Mr Abela (presuming the requisite sale price for him to receive such proceeds is surpassed) is not known. The Family Court orders therefore demonstrate that the risk of dissipation has shifted towards and against Mr Abela and not Ms Amos and, if anything, reveal that Ms Amos’ position has improved from that which was known.

5. There is sufficient evidentiary basis in the Family Court orders that Mr Abela is divesting himself of assets within the jurisdiction in a manner which prevents Atlanta from having any judgment it obtains against him satisfied. The divestiture is not in the ordinary course of day-to-day living expenses, it is a divestiture in circumstances where Mr Abela knows of a substantial claim against him, where he has not served evidence responsive to Atlanta’s lay and expert evidence, has terminated the engagement of his solicitor, has not appeared in the proceedings knowing the application is before the court, and has chosen to ignore the court’s processes, all because he knows that any judgment against him now by reason of his divestiture cannot be recovered.

6. As to the sale of the Bangalow Property, one of the defendants’ primary assets, in the absence of some type of assurance, either through agreement by the defendants or through an order of the court, Atlanta cannot be satisfied that there will be sufficient funds available to satisfy any judgment should it succeed. There is a sufficient basis for the court to find that there is a real risk that there will be insufficient funds available if a freezing order of some nature is not made, particularly against Mr Abela but also against Ms Amos.

7. Atlanta is exposed to a real possibility of prosecuting what may be a pyrrhic victory. An order preserving the proceeds of sale of the Bangalow Property for a short period, allowing Atlanta to obtain a summary judgment against Mr Abela or reach a final hearing of the matter, is necessary.

8. Atlanta, in filing the freezing orders motion, adhered to its obligations under ss 56 and 59 of the Civil Procedure Act 2005 (NSW) of engaging promptly, courteously and genuinely in the proceedings (including by providing reasonably required information or explanations) with the firm intention of resolving interlocutory issues, as far as possible without involving the processes of the court except as a last resort, including by making reasonable and focussed requests for information, citing Tugrul v Tarrants Financial Consultants Pty Ltd (No 5) [2014] NSWSC 437, Kunc J at [64], [69] and [72]–[75].

9. In any event (as raised in Atlanta’s written submissions dated 1 August 2024), the freezing orders motion should not actually be characterised as an application for a freezing order against each of Mr Abela and Ms Amos but should be more correctly seen as an injunction to prevent the dealing with sale proceeds from the Bangalow Property, citing Overdean Developments Pty Ltd v Garslev Holdings Pty Ltd (No 2) [2020] NSWSC 745, Williams J at [20]. In the hearing on 23 August 2024, Atlanta confirmed their primary position that “this is not a freezing order application” and, as an injunction to restrain the dissipation of sale proceeds of the Bangalow Property, the motion ought be decided on the balance of convenience.

Submissions of Ms Amos

91. The submissions of Ms Amos can be summarised as follows:

1. A freezing order should not be granted lightly because it imposes a severe restriction upon a defendant’s right to deal with their assets, citing Cardile at [53]. The purpose of a freezing order is not to change the status quo in favour of the plaintiff, provide the plaintiff with security in advance of judgment or to create additional rights for the plaintiff. The true purpose of a freezing order is to protect the court’s process from abuse in relation to the enforcements of its orders.

2. A freezing order is only warranted if there has been conduct on the part of the defendant which can be reasonably interpreted as potentially having or intending the effect of frustrating the ordinary processes of the court and the enforcement of its judgments, or of being evasive, indicating dishonesty, or if the assets of the defendant actually have been or potentially will be dealt with in an irregular way.

3. There must be solid evidence that there is a danger that a prospective judgment will be wholly or partly unsatisfied because there is a real risk that Ms Amos will dissipate her assets. Mere assertion or suspicion of that risk is insufficient.

4. The freezing orders motion was brought in circumstances where it lacks a solid evidentiary basis, there being no evidence of dissipation of assets by Ms Amos. Atlanta has proceeded at all times as if it was entitled to bring such an application without solid evidence.

5. The bringing of the application was foreshadowed by Atlanta on 27 May 2024, just seven minutes after it was voluntarily and in good faith notified by Ms Amos that the Bangalow Property would be put on the market. At that time, there was no adequate evidence which would justify the bringing, let alone the threatening, of a freezing order application because there was no solid evidence of a risk of dissipation at all.

6. Atlanta continued after 27 May 2024 to threaten to apply for a freezing order against Ms Amos without any solid evidence of dissipation, continuing over the following weeks in the form of “knee-jerk, cynical responses” to Ms Amos. The burden of proof is on Atlanta to adduce solid evidence in support of dissipation of Ms Amos’ assets, not to engage in speculation or mere assertion.

7. Atlanta did not locate Ms Amos’ ownership of the Toorak Property in their real property searches and took no steps whatsoever to seek any orders from the Family Court regarding the respective defendants’ positions.

8. The evidence on behalf of Ms Amos indicates that she works full-time, owns a Mercedes Benz car, is a joint registered proprietor of the Toorak Property and will soon become the sole registered proprietor of that property, the only creditor of Ms Amos is the NAB which holds a mortgage over the Toorak Property and Ms Amos’ net equity in the Toorak Property (less the NAB mortgage) is $3.04 million. This amount dwarfs the best-case scenario for Atlanta in these proceedings.

9. Ms Amos is required to sell the Bangalow Property with a reserve price of not less than $2.15 million and nothing in the Family Court orders has diminished Ms Amos’s position to the disadvantage of Atlanta. In fact, Atlanta concedes that the Family Court orders have improved Ms Amos’ financial position.

10. The sale of an asset, such as the Bangalow Property, for full value is not dissipation, and owning another substantial real property which is not being sold is more than sufficient. Atlanta’s approach to the freezing orders motion has been flawed since its inception, rises no higher than suspicion and is merely an attempt to get security in advance for a judgment that it hopes to obtain and fears might not be satisfied. There is no evidence of a dissipation risk in relation to Ms Amos at all.

11. There is also no evidence that Mr Abela is divesting or dissipating any of his assets. The Family Court orders demonstrate that two wealthy people are allocating their assets in an ordinary division of property in a divorce.

12. The freezing order should also be refused on discretionary grounds. Atlanta did not take action in the Federal Court and there has been no expedition or urgency to progress the freezing orders motion, which is a telling indicator of an absence of any danger of dissipation. The freezing orders motion was foreshadowed on 27 May 2024.

13. Atlanta has the burden of establishing it has a good arguable case and its submissions do not address this point. It is clear that the sums claimed for damages ($694,976.59) and costs ($400,000) by Atlanta are without substance. The conduct of the proceedings has been inordinately slow and there is no good basis for the amounts claimed.

Consideration

92. This is a case in which Atlanta has fallen short of the requisite level of proof required to support the making of a freezing order against either Mr Abela or Ms Amos.

93. Despite the submissions of Atlanta at the hearings on 2 and 23 August 2024 that it was not seeking a freezing order, the whole of the application until then had been conducted on the basis that freezing orders were sought. The notice of motion expressly stated that orders were sought under rr 25.11 (expressed to be a power to make a freezing order) and 25.12 (expressed to be a power to make ancillary orders to a freezing order). At the substantive hearing on 26 July 2024, the debate was about the application of the authorities for the making of a freezing order against each of Mr Abela and Ms Amos. I reject the attempt by Atlanta to re-characterise the application as something other than for a freezing order.

94. KR Properties and the authorities cited in that case emphasise that a freezing order is not to be made lightly because of its exceptional or drastic nature. Further, as stated in Patterson and PT Bayan, the purpose of a freezing order is to prevent the abuse or frustration of the court’s enforcement process, not to create security for the plaintiff.

95. Turning to the first element required to be established in accordance with the principles stated in Patterson and Samimi, it appears to me that based on the allegations raised in the list statement, Atlanta has a good arguable case against Mr Abela and Ms Amos for the relief sought, which is for an amount of approximately $700,000. Other than Ms Amos asserting that the case made by Atlanta is without substance, there was no serious contest about this element before me.

96. The real debate before me was in relation to the second element of the principles outlined in Patterson and Samimi which required Atlanta to demonstrate by solid evidence that there is a danger that a prospective judgment in Atlanta’s favour will be wholly or partly unsatisfied because Mr Abela and Ms Amos have each disposed of, dealt with or diminished in value their respective assets. I will deal with the positions of Ms Amos and Mr Abela in turn.

97. The unfortunate way in which the application against Ms Amos was developed in the present case is demonstrated by the fact that Atlanta started from the position on 27 May 2024 (after having been voluntarily told by Ms Amos that the Bangalow Property would be put on the market) requesting particulars of the proposed sale and stating that it would bring an application for a freezing order unless Ms Amos agreed to preserve the proceeds of sale. Having requested those details and being unsatisfied with the answers provided, Atlanta ended up in a position where it was established on the evidence before me that Ms Amos had gained money and real property from the outcome of the Family Court orders. Rather than there being solid evidence against Ms Amos that there was a danger that she was disposing of or diminishing her assets, the opposite appears to be the case.

98. The evidence established that pursuant to the Family Court orders, Ms Amos would acquire sole proprietorship of the Toorak Property, she would solely receive the net sale proceeds of the Euroa Property and she would solely receive the net sale proceeds of each of the Bangalow Property and the Swan Street Property up to a particular amount and then share any excess with Mr Abela, being 70% to Ms Amos and 30% to Mr Abela. In addition Ms Amos is indemnified by Mr Abela against any judgment and order for costs which might be made against her in these proceedings.

99. The evidence suggests that the Toorak Property may be worth in excess of the amount owed to NAB for its mortgage over that property, and that the equity which Ms Amos will hold in the Toorak Property will be worth about $3 million. Whatever income Ms Amos earns from her full-time work and whatever the value of her Mercedes Benz car, these will only add to her ability to satisfy any prospective judgment in favour of Atlanta against her.

100. In all the circumstances, I consider that the evidence falls well short of demonstrating that there is a danger that a prospective judgment in Atlanta’s favour will be wholly or partly unsatisfied by Ms Amos disposing of or diminishing her assets. In the circumstances, it is not necessary for me to consider any of the discretionary considerations which were raised in argument before me.

101. The position of Mr Abela is different. He did not respond to any of the inquiries made by Atlanta of his solicitor about the proposed dealings with the Bangalow Property, he did not contest the freezing orders motion and he made no appearance in the hearings before me.

102. The Family Court orders demonstrate that Mr Abela will lose his interest in the Toorak Property to Ms Amos, has no interest in the net sale proceeds of the Euroa Property and has no interest in the net sale proceeds of each of the Bangalow Property and the Swan Street Property unless they exceed a particular amount. Mr Abela has also given an indemnity to Ms Amos in respect of any prospective judgment against her in these proceedings, further placing his assets at risk. On any view, the evidence indicates that there has been a substantial diminution in the value of Mr Abela’s assets.

103. I did not receive any evidence from Mr Abela concerning the existence of any other assets he owns or the unencumbered value of his assets. I did not receive any evidence from Mr Abela about any income he receives.

104. While I would be minded to grant a freezing order against Mr Abela, I seriously doubt the utility of the form of freezing order against him which is sought in the freezing orders motion, which is limited to the value of his interest in the net proceeds of the sale of the Bangalow Property. As the Family Court orders demonstrate, Mr Abela has no interest in those net proceeds unless they are in excess of a specified amount, and any amount he receives is likely to be well short of the amount of any prospective judgment that Atlanta seeks in these proceedings.

105. In any event, on 13 September 2024, Atlanta obtained judgment in its favour against Mr Abela in the amount of $694,976.59 plus interest to that date of $135,177.45, with liberty to Mr Abela to apply to set aside the judgment by 5pm on 27 September 2024. In those circumstances, I will grant liberty to Atlanta to make submissions to me in chambers as to the form of a proposed freezing order against Mr Abela given that it might be taking steps imminently to enforce the judgment against Mr Abela.

COSTS

106. Applying the ordinary rule that costs follow the event, in respect of costs I propose to take the following approach:

1. In the face of the notice of motion filed 12 July 2024 by Ms Amos, Atlanta withdrew the Amos notice to produce. Ms Amos should have her costs of that notice of motion.

2. I found in favour of Atlanta in relation to the notice of motion filed 26 July 2024 by Ms Amos (which I have referred to as the notice to produce motion in this judgment). Atlanta should have its costs of that notice of motion.

3. I found in favour of Ms Amos in relation to the notice of motion filed 28 June 2024 (which I have referred to as the freezing orders motion in this judgment) insofar as it sought orders against Ms Amos. Ms Amos should have her costs of that notice of motion.

4. I found in favour of Atlanta in relation to the notice of motion filed 28 June 2024 insofar as it sought orders against Mr Abela. Atlanta should have its costs of that notice of motion against Mr Abela.

ORDERS

107. For the reasons sets out above, I propose to make the following orders:

1. Dismiss the notice of motion filed 28 June 2024 by the plaintiff insofar as it seeks relief against the second defendant.

2. Grant the plaintiff liberty to apply to McGrath J in chambers as to the form of any proposed freezing order against the first defendant.

3. Grant the plaintiff liberty to apply in relation to the notice of motion filed 28 June 2024 by the plaintiff insofar as it seeks relief against the first defendant.

4. Order that the plaintiff pay the costs of the second defendant in relation to the notice of motion filed 28 June 2024 by the plaintiff.

5. Order that the first defendant pay the costs of the plaintiff in relation to the notice of motion filed 28 June 2024 by the plaintiff.

6. Order that the plaintiff pay of the costs of the second defendant in relation to the notice of motion filed 12 July 2024 by the second defendant.

7. Order that the second defendant pay the costs of the plaintiff in relation to the notice of motion filed 26 July 2024 by the second defendant.

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Decision last updated: 20 September 2024