CMI Pty Limited v Miocevic
[2023] NSWDC 209
•09 June 2023
District Court
New South Wales
Medium Neutral Citation: CMI Pty Limited v Miocevic [2023] NSWDC 209 Hearing dates: 9 June 2023 Date of orders: 9 June 2023 Decision date: 09 June 2023 Jurisdiction: Civil Before: Newlinds DCJ Decision: Orders in accordance with paras 1 and 2 of the short minutes of order, as amended
Catchwords: Interim Freezing Order
Category: Procedural rulings Parties: CMI Pty Limited (plaintiff)
Louise Genda Miocevic (first defendant)
Iljko Miocevic (second defendant)Representation: Counsel:
Solicitors:
R Kaufmann (plaintiff)
Defendants self-represented
RK Lawyers (plaintiff)
File Number(s): 2023/37212 Publication restriction: None
JUDGMENT – Ex tempore
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HIS HONOUR: This is an application by motion filed 2 June 2023 wherein the plaintiff seeks against the defendant relief which used to be described as Mareva type injunctions but is now known as freezing orders.
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The plaintiff's claim against the defendants is in contract. I have read the pleadings and received the submissions of Mr Kaufmann, counsel for the plaintiff, as to the issues in that case. Mr Kaufmann has invited me to find that the plaintiff has a strong case to the point where the defendants defence to it of itself would be something that would support an inference that the defendants might be seeking to dissipate assets so as to defeat the process of the Court. I do not accept that submission, I think as far as I can go on the evidence that I have before me is that the plaintiff has an arguable case, but so too, the defendant has an arguable defence. It seems to all turn on whether a particular text message was sent or not. I'm in no position to resolve or indeed make any prediction as to the outcome of that contest at a final hearing.
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So, I proceed upon the basis that the plaintiff has an arguable case for recovery of a debt in an amount of about $1 million.
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Mr Kauffman's submissions are that I should have the requisite degree of concern from the conduct of the defendants over the last few months so as to conclude that there is a reasonable possibility that the defendants might seek to dissipate assets so as to defeat any judgment that the plaintiff might ultimately obtain against them.
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I am so persuaded, but I should make it clear that I consider the application to be very much line‑ball, and the inferences that Mr Kaufmann seeks me to draw from the events that have happened are available but are not particularly overwhelming. There are to my mind innocent explanations for the defendant's conduct, albeit they have not really been teased out by the defendants themselves.
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In short, the case is based on a chain of correspondence that started on 1 March 2023 when the defendants who were self-represented then and have been self-represented today wrote to the plaintiff encouraging him to not seek to obtain any judgment against them because they contended that they would have no assets to pay such a judgment. They set out in that email a statement of assets and liabilities as at 1 March 2023, but also projected for a 12 month period.
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The plaintiffs then sought further information to clarify what they saw were discrepancies within that statement of assets and liabilities. It is the defendants' response to those requests which is the basis of these applications.
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Mr Kaufmann points to what is described in the assets and liabilities as the "Larkin Loan". It seems the defendants' position is that that is a loan from Mrs Miocevic's parents. It is said in the 1 March 2023 email to be “secured over both properties” but I have not seen any written loan agreement let alone a mortgage that would support the proposition that that loan, or if it exists at all, is secured over either of the two pieces of real property being the family home at Bellevue Hill and another property at Crescent Head.
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There is also said to be a loan secured by a caveat over the title to both properties to a person called "Yuan Tu He".
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The defendants have provided at the request of the plaintiff supporting documents to prove the legitimacy of that liability and the fact that it is secured over the two properties by way of mortgage. That information is scant. It includes an email, apparently from a solicitor, and an unsigned loan agreement and an unsigned mortgage. It is not surprising that in those circumstances the plaintiff finds the circumstances concerning the He loan and security to be suspicious.
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I won't go into the other matters which Mr Kaufmann has taken me through in both his written and oral address. Suffice to say that I am persuaded that there is a basis for Mr Kaufmann to make the submissions he has, that is that there is reason to believe that there has been a level of dishonesty by the defendants in relation to the disclosure concerning their assets. That is not to say that I make a finding that the defendants have been dishonest, I go no further than to accept the proposition that there is a reasonable basis for the plaintiff to make the submissions they have, and the fact that there is such a reasonable basis is enough to persuade me, especially in light of the limited nature of the order that I'm going to make, that it is appropriate to make a freezing order for a short period of time to allow the parties to come back to court so as to amongst other things give the defendants a proper opportunity to explain the matters that remain unexplained and to work out what, if as is expected the Bellevue Hill property is sold, is to be done with any claim by Mr He for any money that is left over after discharge of what is accepted as a legitimate debt to La Trobe Finance.
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For those reasons I make orders in accordance with paragraphs 1 and 2 of the short minutes of order which I have amended by hand in the way I have described to the parties. I direct the defendants to file any affidavit evidence on which they intend to rely to resist the continuation of the injunction and/or the further application by the plaintiff for disclosure on or before 19 June 2023. Next, I stand the matter over for further consideration before me at 9.30am on 22 June 2023, and I direct the plaintiff to provide written submissions and any further evidence it wishes to rely on to both the defendants and to my chambers on or before 21 June 2023.
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I note that the orders I've just made upon the plaintiffs by their counsel giving the usual undertakings to damages, and you do, Mr Kaufmann, have those instructions.
KAUFMANN: I do, your Honour.
HIS HONOUR: One of the amendments I have made to the orders is that it will ‑ the injunction is up to and including 5.00pm on 22 June 2023. What that means is on 22 June, we'll come back here, it will be up to Mr Kaufmann to persuade me whether I should extend the injunction. I think you know that he'll ask to extend the injunction and he'll also ask for the disclosure orders that I have declined to make made today. I think you should proceed upon the basis that that's what he'll do. You've got an opportunity to put before me and the plaintiff such evidence as you want.
If you exchange contracts between now and then in relation to Bellevue Hill, you will then have an expected settlement date on the contract. You should tell the plaintiff that you propose to sell the property on that settlement date, and you should tell the plaintiff what you propose to do with the purchase price, which as I understand it is, number 1, it will go to La Trobe, and you want number 2 to go to Mr He.
FIRST DEFENDANT: Correct. Yes.
HIS HONOUR: And that will I think crystallise an issue about the He debt which we'll try and deal with on the next occasion. I reserve the question of costs.
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Decision last updated: 20 June 2023
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