BCBC Singapore Pte Ltd v PT Bayan Resources TBK - [2012] WASC 170

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BCBC SINGAPORE PTE LTD -v- PT BAYAN RESOURCES TBK [2012] WASC 170

CORAM: PRITCHARD J

HEARD: 5 APRIL 2012

DELIVERED : 5 APRIL 2012

FILE NO/S: CIV 1562 of 2012

BETWEEN: BCBC SINGAPORE PTE LTD
Plaintiff
AND
PT BAYAN RESOURCES TBK
First Defendant
KANGAROO RESOURCES LTD
Second Defendant

Catchwords:

Freezing order - Rules of the Supreme Court 1971 (WA) O 52A - Principles applicable to granting of freezing order

Freezing order - Relationship between requirement for good arguable case and sufficient prospect that another court will give judgment and that that judgment will be registered or enforced by the Court

Freezing order - Test for danger that prospective judgment will be wholly or partly unsatisfied

Freezing order - Rules of the Supreme Court 1971 (WA) O 52A and O 10 r 7 - Whether leave is required to serve outside jurisdiction

Legislation:

Foreign Judgments Act 1991 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff:     Dr A S Bell SC & Mr D Roche
First Defendant             :     No appearance
Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Freehills
First Defendant             :     No appearance
Second Defendant         :     No appearance

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

ANZ Grindlays Bank PLC v Fattah (1991) 4 WAR 296
BGC Contracting Pty Ltd v WA Construction Hire Pty Ltd [2010] WASC 25
CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] QB 16
Hadid v Lenfest Communications Inc (1996) 67 FCR 446
McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 89
Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188

PRITCHARD J:
(This judgment was delivered extemporaneously on 5 April 2012 and has been edited from the transcript.)

BCBC Singapore Pte Ltd (BCBCS), makes an application ex parte for a freezing order and other orders against the PT Bayan Resources TBK (BR), and for a freezing order and other orders against Kangaroo Resources Ltd (KRL). In these reasons for decision I deal with seven matters:
(1)the background facts;
(2)the nature of and foundation for the present application;
(3)the principles applicable to the grant of the orders sought by BCBCS;
(4)whether BCBCS has established a good arguable case;
(5)whether BCBCS has established that there is a danger that a prospective judgment will be wholly or party unsatisfied;
(6)whether having regard to any other relevant discretionary grounds I am persuaded that the orders sought should be made; and
(7)whether leave is required to serve the orders on BR, as it is outside the jurisdiction.
I will deal with the terms of the orders a little later.

The background facts

BCBCS is a company incorporated in Singapore. It is a wholly‑owned subsidiary of an Australian company, Binderless Coal Briquetting Co Pty Ltd (BCBC), which is in turn a wholly‑owned subsidiary of another Australian company, White Energy Co Ltd (WECL). Unless otherwise specified, the factual information I refer to in these reasons has been derived from the affidavit of Mr Ivan Maras, the Chief Financial Officer (the CFO) of WECL, who in that capacity also has responsibility as the CFO of BCBC and BCBCS.
BCBCS owns a 51% interest in an Indonesian joint venture company, PT Kaltim Supacoal (KSC). The remaining 49% of the joint venture company is owned by BR. BR is an Indonesian company. BR is a company which sits at the top of the corporate structure of what I will refer to as the Bayan group of companies.
The rights and obligations of the shareholders in KSC are governed by a joint venture deed dated 7 June 2006 (the JV Deed). Initially the parties to the JV Deed were Bayan International Pty Ltd (BI) and BCBC. In a deed of novation dated as at 12 February 2009 BR acquired the 49% interest previously held by BI and BCBCS acquired the 51% interest previously held by BCBC. The JV Deed is governed by Singaporean law and the parties submitted to the non‑exclusive jurisdiction of the Singaporean courts.
The parties to the JV Deed fell into dispute in November and December 2011. BCBCS alleged that BR breached its obligations under the JV Deed. The primary areas of dispute at that stage, at least from BCBCS's perspective, were that BR had instructed its associated companies to stop supplying coal to KSC and that BR was refusing to provide funding to KSC. Further, on 13 December 2011, BR issued a default notice alleging that BCBCS had breached its obligations under the JV Deed. BCBCS takes issue with that notice.
On 27 December 2011, BCBCS commenced proceedings against BR and BI in the High Court of Singapore claiming, amongst other things, damages for BR's breaches of the JV Deed (the Singaporean proceedings). A statement of claim in those proceedings was filed on 31 January 2012 and a defence and counterclaim were filed on 22 February 2012.
On 21 February 2012, BR purported to issue a termination notice to BCBCS immediately terminating the JV Deed. BCBCS treated the purported termination as a wrongful repudiation of BR's obligations under the JV Deed, accepted the repudiation, and thus terminated the JV Deed. On 23 March 2012, BCBCS filed an amended statement of claim in the Singaporean proceedings and the relief claimed under that amended statement of claim is damages for breach of contract.

The nature of and foundation for the present application

BCBCS applies to this Court for a freezing order under O 52A of the Rules of the Supreme Court 1971 (WA) (the Rules). The genesis of BCBCS's claim in this Court is its belief that it will be successful in the Singaporean proceedings but that it will be unable to enforce judgment against BR in Indonesia where the majority of BR's assets are located. Aside from its Indonesian assets, BR has substantial assets in Australia comprising a 57% share in KRL, an Australian coal company, whose principal place of business is in Perth. In real terms, that share holding equates to approximately 1,925,000,000 shares trading at about 13 and a half cents, or $259,875,000 worth of stock.
BCBCS submits that it would, however, be able to register and enforce the judgment in Australia pursuant to the Foreign Judgments Act 1991 (Cth) (the Act). However, BCBCS is concerned that BR may seek to deal with the shares in such a way that they will be unavailable to BCBCS when it comes time to enforce judgment. Accordingly, BCBCS now seeks a freezing order restraining BR and KRL from dealing with the shares in a manner that would dissipate the available assets of BR in this jurisdiction.
In this case, BCBCS relies on O 52A r 2 ‑ r 5 of the Rules. Rule 5(1) provides that the rule applies if an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in another court in the case of a cause of action to which r 5(3) applies. Rule 5(3) applies to a cause of action if:
(a)there is a sufficient prospect that the other court will give judgment in favour of the applicant; and
(b)there is a sufficient prospect that the judgment will be registered in or enforced by the Court.
The Court is then empowered to make a freezing order, an ancillary order, or both against a prospective judgment debtor if the Court is satisfied, having regard to all of the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied because, amongst other things, the assets of the prospective judgment debtor are disposed of, dealt with, or diminished in value.

The principles applicable to the grant of the orders sought by BCBCS

The principles in relation to the power of the Court to make a freezing order were recently summarised by Beech J in Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188 [130] ‑ [144]. I note that his Honour's judgment was the subject of an appeal, but that his recitation of the principles in relation to freezing orders was not challenged, and I respectfully adopt his Honour's summary of the relevant principles.

Whether BCBCS has established a good arguable case

The amended statement of claim which BCBCS has filed in the Singaporean High Court was before the Court, as was the defence and counterclaim filed by BR and BI. I note that by its appearance in those proceedings BR has acceded to the jurisdiction of the Singaporean High Court to deal with the action. Nothing in the papers before this Court suggest that there is any issue as to jurisdiction in those proceedings. I accept the submission of counsel for BCBCS that the High Court of Singapore will apply the common law in dealing with the respective claims of the parties.
It is not necessary for present purposes to deal with BCBCS's claims against BI in the Singaporean proceedings but rather I focus solely on its claims as against BR. Those claims are that BR breached its contractual obligations by:
(a)refusing to provide funding to KSC;
(b)refusing to procure the supply of coal to KSC and instructing its subsidiaries to cease supplying coal to KSC;
(c)purporting to issue a default notice to BCBCS in circumstances where it had no basis for doing so; and
(d)terminating the contract without justification.
Evidence in relation to each of these alleged breaches of contract was set out in the affidavit of Mr Maras and the exhibits thereto, and was referred to by counsel for BCBCS in the hearing this morning.
I accept that BCBCS has put before the Court some evidence of each of the alleged breaches in relation to the claim that BR refused to procure the supply of coal to KSC and instructed its subsidiaries to cease supplying coal. I also accept that the evidence provides support for the conclusion that by instructing its subsidiaries to cease the supply of coal BR arguably breached a number of its obligations under the JV Deed. On the basis of that evidence, I accept that BCBCS appears to have a good arguable case for its allegations of breach of contract by BR.
As to the allegations that are relied upon in relation to BR's issuing of the default notice, the default notice relied on three contractual breaches by BCBCS. Having regard to the affidavit material before me, and counsel's submissions, I accept that it is arguable that BCBCS was not acting in breach of its obligations under the JV Deed as alleged.
The argument is that BCBCS caused KSC to incur $7 million in expenditure without obtaining BR's consent in contravention of the JV Deed. BCBCS's response to this claim is that it was not required to obtain BR's consent to the expenditure but that in any event, BR had consented, or had knowledge of the expenditures, and BR's signatories had signed the cheques for the expenditures. BCBCS also contends that even if BR's consent was required, and had not been obtained, it would have been obliged to provide it.
The second basis for the argument in relation to the default notice is that WECL made public statements referring to negotiations and/or confidential matters in relation to the JV Deed without first obtaining BR's consent, and that that was in breach of the JV Deed. The response of BCBCS is that it did not make the relevant announcements (because they were made by WECL, which is not a party to the JV Deed) and that in any event, WECL was required to disclose material matters in relation to BCBCS's situation pursuant to the requirements of the Australian Stock Exchange.
The third basis for the default notice is that as a result of BCBCS's conduct, BR had not received any consideration under the JV Deed. BCBCS's response to that is that there is no contractual provision in the JV Deed which might support such a claim, but in any event, BR had received benefits under the JV Deed and the commercial production of briquettes at the plant was imminent at the time of the suspension of the plant's operations.
In addition, BCBCS pleads in its amended statement of claim that the default notice was not validly issued. The basis for that pleading seems, on the face of the pleading, and having regard to the information before me, to be arguable also, with the result that by issue of the default notice BR was itself in breach of its obligations under the JV Deed.
As to its allegations that BR had no entitlement to purport to terminate the JV Deed, BCBCS's case is that BR had no basis in fact for doing so and that its termination constituted a wrongful repudiation of the JV Deed. I accept that on the material before me this claim appears to be an arguable one also.
However, that is not the end of the matter because BR has lodged a defence and counterclaim and it is necessary to assess BCBCS's case by reference to such information as is available in relation to the defence to that claim. In addition, counsel accepted that it was necessary to assess BCBCS's case by reference to the merits of the counterclaim as well and the implications of that counterclaim on the overall position of BCBCS in the Singaporean proceedings.
BR claims that it was discharged from its obligations to provide funding and to secure the supply of coal to KSC because:
(a)there had been a complete failure of consideration for the JV Deed and for a memorandum of understanding which was entered into by the parties in relation to funding on 16 March 2009 (the Funding MOU); and
(b)BCBCS had itself breached the terms of the JV Deed and the Funding MOU.
It is extremely difficult to assess the merits of the defence, and thus the merits of BCBCS's claim overall, and of the counterclaim, and thus of the prospects of BCBCS's overall or net success in its action in the Singaporean High Court, in an ex parte application. In making the following observations about the defence and counterclaim, I am highly cognisant of the fact that for every contractual dispute there are two sides of the story and I have only one side before me at present. Nevertheless, in order to make an assessment of whether BCBCS has a good arguable case I have endeavoured to do the best I can on the information presently available.
As to the contention that there was a total failure of consideration of the JV Deed, I have already dealt with this point. BCBCS says there is no contractual provision to this effect. In addition, the evidence presently before the Court tends to suggest that BCBCS would be able to resist this claim. That evidence was that the work to construct and commission the coal processing plant was 95% ‑ 98% complete. There was also evidence that during the commissioning phase the plant had begun to produce some briquettes and had operated at approximately 25% capacity. There was also evidence that if the commissioning process had been able to continue, and had coal supplies to the plant continued, then its full operation to produce operative coal briquettes could have commenced by early December 2011.
To the extent that the price of coal supplied by BR's subsidiaries to KSC is relevant to the question of the alleged failure of consideration, then I note that there is some evidence that even on a higher price of coal - which the evidence suggests has resulted from a regulation set by the Indonesian government, and which far exceeded the coal price agreed to under the coal supply agreement entered into between KSC and various subsidiaries of BR - the plant's operations would have continued to be viable.
As to the contention that BR was discharged from its contractual obligations because BCBCS had previously acted in breach of its own obligations, BR relies on three breaches:
(1)that BCBCS incurred expenditure without obtaining the consent of BI in contravention of the requirements of the GBD - I have dealt with BCBCS's response to this issue already;
(2)that because KSC failed to produce upgraded coal briquettes, BCBCS breached its obligations under the JV Deed, including its obligation to act in good faith - BCBCS says that the alleged breach could not have constituted a breach of a good faith obligation, but even if it did, that obligation applied to all the joint venture parties; and
(3)BCBCS breached an implied term in the JV Deed, or the Funding MOU, that BCBCS would ensure that KSC could produce 1 million tonnes of upgraded coal briquettes per annum - BCBCS says that no such term could be implied under the JV Deed on the usual test for the implication of terms for business efficacy and because such a term would be inconsistent with the express terms of the JV Deed.
I accept that BCBCS appears to have an arguable case to resist BR's claims on these bases.
BR has not yet filed its defence to the fourth plank of BCBCS's case against it, namely, the termination of the JV Deed. However, I have made some observations in that respect already.
In addition to these overlapping claims in the defence and counterclaim, BR makes additional claims against BCBCS in its counterclaim. First, that BCBCS breached the JV Deed by failing to respond to the default notice - that claim will fall away if the default notice is found to be invalid. Secondly, that BCBCS's or WECL's representative made misleading and negligent misrepresentations to BR and BI to the effect that KSC would produce a million tonnes of coal per annum - BCBCS's response is that the JV Deed expressly provides that the terms of the JV Deed constitute the agreement between the parties. In addition, BCBCS wishes to lead evidence that the parties all understood the risks associated with the project.
In assessing whether BCBCS has a good arguable claim for a breach of contract it is also necessary to take into account the damages claims of the parties: see Perdaman [190] ‑ [192] (Beech J). BCBCS's claim is for damages for a repudiatory breach of contract or for breach of contract. It submits that it is entitled to recoup the expenses it lost as a result of these breaches; that is, its reliance losses. According to Mr Maras' affidavit, and the spreadsheet exhibited thereto, those losses can be calculated at approximately $128 million including interest.
Having regard to the submissions of counsel for BCBCS at pars 85 ‑ 86 of his written submissions, I accept that BCBCS has demonstrated a good arguable case that it would be entitled to recover $128 million in reliance damages. BCBCS has adduced evidence that they have a claim for reliance damages in this vicinity and submitted that they may have a claim for expectation losses based on long term coal supply agreements. Ultimately, it seems to me that the applicable principles of law will mean that BCBCS will have to elect which of those claims to pursue. However, for now it suffices to say that I accept that BCBCS has demonstrated an arguable case for relief in the form of reliance damages. In reaching that conclusion I rely on the fact that BCBCS has provided authority for the proposition that it is accepted in Singaporean law that, in a claim to recoup expenditure arising from a breach of contract, the onus of proving that the expenditure would have been wasted regardless of breach rests with the defendant: Halsbury's Laws of Singapore (2009) [80.547], citing CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] QB 16, 37 ‑ 38 (Hutchison J).
As I have already observed, counsel for BCBCS indicated that there was to be a claim for expectation damages and he submitted that these could be pursued in addition to reliance damages. It is not entirely clear to me on the authorities that this is possible, but in any event no present quantification of the expectation damages is available, and so I have proceeded for present purposes on the basis of reliance damages alone.
I note that at this stage there is no evidence at all in relation to the quantum of BR's likely counterclaim insofar as it may found any damages. One issue canvassed with counsel was whether the parties' claims against each other were mutually exclusive; that is, whether this is a case where only one party could be successful because acceptance of the arguments of one would preclude acceptance of any of the arguments of the other. Leaving to one side the argument in relation to the total failure of consideration, which I have already addressed, even if this is a case where the claims of both parties are partially successful, so that there is a set-off of one claim against the other, I am satisfied that BCBCS has established that it has a good arguable case that it will recover damages in that it seems likely, at this stage, that its claim for damages would exceed the likely quantum of any successful claim in damages against it by BR.

The foundation for BCBCS's claims, together with the difficulties I have identified in relation to the defence and counterclaim made by BR, at least on the information presently available to me, leads me to the view that there is a sufficient prospect that the Singaporean High Court will give judgment in favour of BCBCS. I am therefore persuaded, on the basis of the limited information before me, that BCBCS has demonstrated that it has a good arguable case in the proceedings in the Singaporean High Court.
I therefore turn to the question of whether BCBCS will be able to enforce that judgment in Australia, which is the second aspect of whether it has established a good arguable case for the purpose of O 52A of the Rules. The Act provides a framework for the enforcement of foreign judgments through a registration process. A money judgment of the High Court of Singapore is a judgment to which the Act extends. Such a judgment will be registrable and enforceable under the Act. I therefore accept that BCBCS has demonstrated a sufficient prospect that if it obtains judgment in the Singaporean High Court, that judgment will be registered in or enforced by this Court.
That leads me to the conclusion overall that in relation to O 52A, BCBCS has made out a good arguable case as is required. I should say, however, that in reaching that conclusion I have considered that under O 52A r 5(3) there is a reference to what at first blush appears to be different criteria, namely, that there be a sufficient prospect that the other court will give judgment in favour of the applicant and that there is a sufficient prospect that the judgment will be registered in or enforced by the Court. It is not entirely clear on the face of the rule itself how that provision interacts with what appears to be the overall requirement in O 52A r 5, that an applicant show that it has a good arguable case that a prospective cause of action will be able to be pursued in another court.
It seems to me that the better construction of the provision is that the purpose of r 5(3) is to direct attention to the fact that, when the prospective cause of action is in another jurisdiction, the Court needs to consider both the question of whether the other court will give judgment and the question of whether that judgment will be able to be registered in or enforced by the Court, and that the requirements of sufficient prospect in O 52A r 5(3) do not add anything to the overall requirement of a good arguable case under O 52A. That is the basis upon which I proceeded to analyse the evidence and the submissions before me.

Whether BCBCS has established that there is a danger that a prospective judgment will be wholly or partly unsatisfied

The second element required to establish that a freezing order can be properly granted is the question of whether there is a danger that the prospective judgment will be wholly or party unsatisfied. This danger is at the heart of the jurisdiction to grant a freezing order.
I note that it is not necessary for an applicant to show a positive intention on the part of a respondent to frustrate judgment: see, for instance, BGC Contracting Pty Ltd v WA Construction Hire Pty Ltd [2010] WASC 25 [12] ‑ [13] (Le Miere J). Notwithstanding that there is no need to show a positive intention, it remains incumbent upon an applicant to prove that there is a risk that a judgment will be rendered fruitless.
There have been a number of judicial statements which try to explain what the extent of the risk is required to be. Justice Le Miere suggested that an applicant must establish that the risk is real and not fanciful: BGC Contracting Pty Ltd [15]. Justice Lehane in the Federal Court, in Hadid v Lenfest Communications Inc (1996) 67 FCR 446, 448 framed it in terms that 'a real risk may be in this context, it is something greater than a risk which is in turn greater merely than de minimis'.
I also note the comments of Ward J in McLaughlin v Dungowan Manly Pty Ltd [2010] NSWSC 89 [106], where her Honour said:
In Patterson, Gleeson CJ (at 325) rejected as appropriate tests that sought to impose some form of burden or onus of proof in the nature of 'more than usual likelihood' that assets were to be dissipated. Likewise, Gleeson CJ rejected any test as to whether the likelihood of dissipation of assets had been established 'upon the balance of probabilities', for reasons which are discussed. In Vaughan v Bongiorno [2007] NSWSC 1398, Hamilton J, at [7], has described the degree of proof needed to establish the second requirement for the Mareva injunction as being an 'apprehension of dispersal of assets'.
I accept that BCBCS has established that there exists a danger of judgment being unsatisfied, insofar as the meaning of risk is explained in the cases I have just referred to.
It is established that there exists a danger that any judgment which BCBCS obtains against BR in the High Court of Singapore will be rendered fruitless because the assets of BR may be disposed of. That danger, in my view, can be discerned from the evidence to the effect that Mr Maras has not been able to obtain information as to any of BR's assets other than those in Indonesia, and in Australia insofar as shares are held in KRL, together with the fact that judgments of a non‑Indonesian court cannot be enforced against BR in Indonesia. As to this, I rely on the affidavit of Mr Assgaf which was tendered in these proceedings and statements by BR in its prospectus in 2008 to the following effect:
We are an Indonesian company and all of our commissioners, directors and executive officers and certain of the experts named in this offering memorandum, are residents of Indonesia. As a result, you should note that it may be difficult or impossible to serve legal process on us, our management or experts, and to force us to appear in a non‑Indonesian court. It may be also be difficult or impossible to enforce a judgment of a non Indonesian court against any of these parties. Finally, an Indonesian court may refuse to hear an original action based on securities laws of other countries.
Our Indonesian legal advisers have advised us that judgments obtained in non-Indonesian courts based upon the civil liability provisions of the securities laws of other countries are not enforceable in Indonesian courts. Our Indonesian legal advisers have also advised us that there is doubt as to whether Indonesian courts will enter judgments in original actions brought in Indonesian courts based only upon the civil liability provisions of the securities laws of other countries.
The claims and remedies available under Indonesian law may not be as extensive as those available in other jurisdictions. No assurance can be given that the Indonesian courts will protect the interests of shareholders in the same manner or to the same extents as would courts in more developed countries outside of Indonesia.
Finally, Mr Maras says that BR is looking to refinance its debt in the sum of approximately $700 ‑ $900 million and that it intends to use company assets as collateral for those facilities.
In reaching my conclusion that there is a real danger that any judgment obtained might be rendered fruitless, I have not placed any weight on three aspects of BCBCS's case before me, namely:
(a)that the nature of the breaches by BR of its contractual obligations are so flagrant as to suggest that this danger exists;
(b)BR's attempts to avoid contributing to its creditors' demands; and
(c)information in relation to the attitude of Mr Dato Low, the majority shareholder in BR, to avoid any implications of judgments obtained in other legal proceedings.
I have not found it necessary to take these matters into account in finding myself satisfied that a danger of the kind required in O 52A exists.

Whether having regard to any other relevant discretionary grounds I am persuaded that the orders sought should be made

I now turn to consider whether there are discretionary factors which would militate against granting the orders sought. On the material before me, no other discretionary factors appear to militate against the granting of a freezing order as against BR. Accordingly, I am persuaded that such an order should be made. I will discuss the terms of that order in a moment with counsel.

Grounds for the orders sought against KRL

In relation to the position of KRL, I accept that clearly the Court has jurisdiction to make an order as against KRL pursuant to O 52A - even though it is a third party, and not party to the Singaporean proceedings - and that the purpose of such an order is to ensure that any order as against BR is not rendered nugatory, and again to alleviate the prospect of a danger that any judgment obtained in a Singaporean court might be rendered wholly or partly unsatisfied. In the present circumstances, I accept that that danger exists because without an order restraining KRL from registering a share transfer from BR to a related entity the effect of an order against BR would be able to be wholly rendered nugatory.
I accept that BCBCS has shown that there is a danger that any prospective judgment it may obtain in the Singaporean High Court could be wholly or partly unsatisfied if the shares in KRL owned by BR are sold, transferred to a related entity, or if the value of those shares is somehow diminished. I do have some concerns about the scope of the orders sought against KRL, insofar as they might lead to arguments about the extent to which its ability to engage in ordinary business might be affected, and I will hear counsel in relation to those matters in a moment.
I should add as well that in relation to any other discretionary factors in relation to the grant of an order as against KRL, at least to the extent that the freezing orders sought only seek to restrain KRL in relation to registering the transfer of shares from BR to a related entity, and then otherwise seek only to have BCBCS's solicitors notified of other intended transfers, those orders would, in my view, minimise the interference with KRL's business activities as far as possible and, to that extent, there would be no discretionary considerations that would militate against the grant of such an order.

Whether leave is required to serve the orders on BR, as it is outside the jurisdiction

Finally, I deal now with the question of leave in relation to service of a freezing order outside the jurisdiction, because this is something I do not need to address further in discussions with counsel. Order 52A r 7 of the Rules provides for the service of an application for a freezing order on a person outside Australia where any of the assets to which the order relates are located in the Court's jurisdiction. On the other hand, O 10 r 1A of the Rules provides that original notice of a writ cannot be served on a person who is outside of the Commonwealth unless the Court grants prior leave to serve. Order 52A r 7 does not indicate whether the Court's leave is required before an application for a freezing order is served on a person who is outside the Commonwealth.
BCBCS argues that O 52A r 7 sits outside O 10. The basis for that submission is threefold. First, it is submitted that the actions dealt with in O 10 are actions for substantive relief; secondly, it is submitted that O 52A was introduced as part of a package of nationally uniform provisions for the grant of freezing orders and that unlike Western Australia, most States do not require leave before serving a person outside of the Commonwealth; and, finally, that the procedure in O 10 is ill suited to the urgent nature of freezing order relief.
There is some merit in relation to those submissions, particularly in relation to the submissions deriving from the uniform nature of the freezing order rules which now apply in all jurisdictions. The difficulty, however, seems to me to be that BCBCS's submissions do not refer to O 10 r 7 or do not adequately refer to or explain the interaction of O 52A r 7 and O 10 r 7. Order 10 r 7 provides that the Court may allow service outside the jurisdiction of any originating process other than a writ or of any summons, order or notice in any proceedings duly instituted whether by writ of summons or otherwise and that O 10 r 1A, r 3, r 4, r 5 and r 6 apply mutatis mutandis to such service.
One of the consequences of O 10 r 7 is that an order or notice to which the rule applies cannot be served on a foreign defendant unless the Court grants leave. Justice Anderson in ANZ Grindlays Bank PLC v Fattah (1991) 4 WAR 296 said that O 10 r 7 comprehends any order or notice that has any coercive effect or which may provide a foundation for the exercise of jurisdiction over the defendant in the future (301). Because freezing orders do have a coercive effect, it appears to me that they fall within the scope of O 10 r 7. It appears, therefore, that an application for a freezing order, at least at first blush, could not be served on a person who is outside of the Commonwealth unless the Court's leave is first obtained.
There is the prospect, of course, that one could construe O 52A r 7 as excluding the requirement for leave. However, had that been intended I would have expected to see some express indication to that effect. Insofar as the argument was advanced that the requirement for a grant of leave would somehow inhibit the operation of O 52A and that it would be ill suited to the nature of freezing order relief, I do not accept that argument. It seems to me that if an applicant is able to establish that grounds exist for a freezing order, those grounds are very likely to strongly support the conclusion that leave should also be granted.
In light of O 10 r 7 and the case I have discussed, in my view, leave is required and this is an appropriate case for the grant of leave.
In summary, therefore, I am minded to make orders partly in terms of the orders that are proposed which accompanied the originating motion filed by BCBCS, but I wish to discuss with counsel the terms of some of those orders and also the question of substituted service.