Core Building Group Pty Ltd v Dickson Developments - [2023] ACTSC 202

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Core Building Group Pty Ltd v Dickson Developments Precinct 1 Pty Ltd
Citation:	[2023] ACTSC 202
Hearing Date:	28 July 2023
Decision Date:	28 July 2023
Before:	Mossop J
Decision:	1. Orders in the form of annexures 1 and 2 of the originating application filed 27 July 2023, amended so that they are in the form attached. 2. These orders be drawn up in the Registry and entered forthwith. 3. Direct that the defendants file and serve any evidence not later than 12 noon on Monday 7 August 2023. 4. The matter be adjourned until 10am on 10 August 2023.
Catchwords:	FREEZING ORDERS – Freezing orders sought against two companies – where each company is a special purpose vehicle for a construction project – orders sought in circumstances where developers have called on security bonds provided by builder – plaintiff fears dissipation of assets in order to frustrate potential judgment – whether plaintiff has good arguable case against each defendant – temporary freezing orders made
Legislation Cited:	Court Procedures Rules 2006 (ACT) r 743
Cases Cited:	Bloc (ACT) Pty Ltd v Crafted Capitol Pty Ltd [2021] ACTSC 81 Frigo v Culhaci [1998] NSWCA 88
Parties:	Core Building Group Pty Ltd (Plaintiff) Dickson Developments Precinct 1 Pty Ltd (First Defendant) Dickson Developments Precinct 5 Pty Ltd (Second Defendant)
Representation:	Counsel D Cook SC with W Chan (Plaintiff) B Buckland (First and Second Defendant)
Solicitors Crisp Law (Plaintiff) HFW Australia (First and Second Defendant)
File Number:	SC 309 of 2023

MOSSOP J:

Introduction

1․The plaintiff, a building company, has applied for freezing orders against two companies. The plaintiff is involved in two different building projects. One relating to the first defendant, Dickson Development Precinct 1 Pty Ltd, which I will refer to as DDP1, and one relating to the second defendant, Dickson Development Precinct 5 Pty Ltd, which I will refer to as DDP5.
2․Both developers are, through a chain of $1 or $2 companies, controlled by Johnny Roso and Elisa Roso. The first project was referred to in the evidence as the “Mulberry Project”. It involves the building of 370 residential apartments on Northbourne Avenue in Dickson. The developer is DDP5. It is a $1 company. On 10 July 2023 the plaintiff learnt that DDP5 had, on 5 July 2023, called on bonds that had been provided as security for its performance under the building contract. The total amount provided pursuant to the bonds was $4,499,796.
3․The second project was referred to as the “Kashmir Project”. The developer is DDP1. It is a $2 company. It is involved in constructing 141 residences in two buildings on Northbourne Avenue. On 10 July 2023 the plaintiff learnt that DDP1 had called upon bonds that it had lodged in the sum of $1,860,000. Having regard to the circumstances in which the calling upon those security bonds occurred, the plaintiff fears that the money paid as a result of those calls will be dissipated so as…

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

AGLC: Core Building Group Pty Ltd v Dickson Developments [2023] ACTSC 202
Case: [2023] ACTSC 202
Decision Date

CaseChat Overview and Summary

In the Supreme Court of the Australian Capital Territory, Core Building Group Pty Ltd applied for freezing orders against Dickson Developments Precinct 1 Pty Ltd and Dickson Developments Precinct 5 Pty Ltd. These companies are special purpose vehicles for construction projects, and the plaintiff fears dissipation of assets to frustrate potential judgments. The plaintiff is a building company involved in two projects, one with DDP1 and the other with DDP5, both controlled by Johnny Roso and Elisa Roso. The plaintiff believes that the defendants' calling on security bonds without proper notice and subsequent conduct indicates an intent to dissipate funds to avoid fulfilling contractual obligations.

The legal issues in the case revolve around whether the plaintiff has a good arguable case against each defendant and if there is a danger that assets will be disposed of or diminished in value. The court found that the plaintiff had a good arguable case against both defendants, as there were substantial claims related to the projects and wrongful calls on the bonds. The court also concluded that there was a danger that assets would be dealt with or diminished in value, based on the defendants' course of conduct. The court weighed the principles of contractual freedom against the need to prevent asset dissipation and decided that the particular circumstances warranted granting the freezing orders. The court rejected arguments that the expert determination clause in the contracts precluded the granting of a freezing order and noted that the orders would only operate on an interim basis until the defendants could be properly heard.

The court ordered the freezing orders to be amended as specified, to be entered forthwith, and directed that the defendants file and serve any evidence by a certain date. The matter was adjourned to a later date for further hearing.

Orders