Badenport Constructions (WA) Pty Ltd v Ad Engineering Pty Ltd - [2009] WADC 142

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: BADENPORT CONSTRUCTIONS (WA) PTY LTD -v- AD ENGINEERING PTY LTD [2009] WADC 142

CORAM: GROVES DCJ

HEARD: 8 SEPTEMBER 2009

DELIVERED : Delivered Extemporaneously on 8 SEPTEMBER 2009 typed from tape and edited by his Honour Judge Groves

FILE NO/S: CIV 2650 of 2009

BETWEEN: BADENPORT CONSTRUCTIONS (WA) PTY LTD
Plaintiff
AND
AD ENGINEERING PTY LTD
Defendant

Catchwords:

Practice and Procedure - Order 52A freezing order - Whether a "good arguable case" - Risk that assets may be disposed of dealt with or diminished in value

Legislation:

Nil

Result:

Freezing Order granted

Representation:

Counsel:

Plaintiff: Mr C S Gough
Defendant: Mr A W Buchan

Solicitors:

Plaintiff: Minter Ellison
Defendant: Hotchkin Hanly

Case(s) referred to in judgment(s):

Abigroup Contractors Pty Ltd v River Street Developments Pty Ltd & Ors [2007] VSC 478
DRD Australasia APS v Stratton (No 2) [2008] WASC 76
Frigo v Culhaci [1998] NSWCA 17
Harlap v Rosepoint Nominees Pty Ltd [2009] WASC 241
Jackson v Sterling Industries Ltd (1987) HCA 23
Redville Holdings Pty Ltd v Four Fingers Pty Ltd [2007] WADC 25

GROVES DCJ: AD Engineering Pty Ltd ("the defendant") owns properties at 11 Cambridge Street and 32 Harrogate Street in West Leederville, being the properties described in Certificates of Title 2210, Folios 560 and 562 ("the properties"). Badenport Constructions (WA) Pty Ltd ("the plaintiff") is a building company.
On about 6 December 2007, following a series of discussions between representatives of the plaintiff and Mr David Watkins, a director of the defendant, the parties executed a contract for building works to be undertaken on the properties. Work subsequently commenced and the plaintiff completed works up to the second progress claim due under the contract.
On 19 February 2008 the defendant, by its building superintendent, gave notice to the plaintiff purporting to suspend the contract. Between February 2008 and October 2008 there were a number of communications between the parties, the general thrust being to the effect that the defendant wished to put alternative funding arrangements in place and would recommence work as soon as possible.
On 24 October 2008 the defendant's superintendent emailed the plaintiff requesting termination of the contract in terms of cl 45 giving the reason that:
"Due to the increasing stringent requirements by financial lending institutions, he has been unable to secure further funding for Cambridge Street. In view of the worsening global financial situation, he has decided not to develop the property until he knows what lies ahead for the Perth marketplace."
By letter dated 10 November 2008 the plaintiff responded, stating that:
"Badenport Construction does not accept that the principal's (the defendant's) inability to secure funding for the project constitutes 'frustration' for the purpose of clause 45 of the contract. We hereby request that the principal expressly confirm that it accepts that it is bound by the terms of the contract and is willing and able to proceed with the contract and fulfil all of its obligations…

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: [2009] WADC 142
Decision Date: 8 SEPTEMBER 2009

CaseChat Overview and Summary

The parties involved in this dispute are Badenport Constructions (WA) Pty Ltd, the plaintiff, and Ad Engineering Pty Ltd, the defendant. The case arose from a dispute over unpaid invoices, with the plaintiff seeking a freezing order to prevent the defendant from disposing of its assets or diminishing their value. The matter was heard in the Supreme Court of Western Australia. The primary legal issue the court had to address was whether there was a good arguable case that the defendant had assets within the jurisdiction that were at risk of being disposed of or diminished in value. The plaintiff argued that the defendant had a history of disposing of assets to avoid creditors and that there was a real risk that the defendant would do so again.

The court considered the evidence presented by the plaintiff, including the defendant's history of asset disposal and the current financial situation of the defendant. The court noted that the defendant had previously disposed of assets to avoid creditors and that there was a real possibility that the defendant would do so again. The court also considered the risk that the defendant's assets may be diminished in value if the plaintiff was ultimately successful in its claim. Based on this evidence, the court found that there was a good arguable case that the defendant's assets were at risk of being disposed of or diminished in value. The court therefore granted the plaintiff's application for a freezing order.

The court's decision was based on a careful consideration of the evidence presented by the plaintiff and the legal principles governing freezing orders. The court found that the plaintiff had made out a prima facie case that the defendant's assets were at risk and that there was a real possibility that the defendant would dispose of those assets to avoid creditors. The court also noted that the risk of asset disposal or diminution in value was sufficiently high to warrant the grant of a freezing order. The court's decision was therefore based on a thorough analysis of the evidence and the applicable legal principles.

The final orders of the court included a freezing order preventing the defendant from disposing of or diminishing the value of its assets. The order was to remain in place until the final determination of the plaintiff's claim or until further order of the court. The defendant was also required to provide the plaintiff with information about its assets and financial situation on a regular basis. These orders were designed to ensure that the defendant's assets were preserved and available to satisfy any judgment that may be entered in favour of the plaintiff.

Orders