D and a Property Group Pty Ltd v Sonar Investments Pty Ltd

In the Federal Circuit and Family Court, D and a Property Group Pty Ltd, as the plaintiff, sought an interlocutory freezing order against Sonar Investments Pty Ltd, the defendant, to secure assets that could be used to satisfy any claims under a share sale agreement. The plaintiff claimed that the defendant's conduct threatened the enforceability of the agreement, which involved the sale of shares in a company. The plaintiff argued that the defendant had breached the agreement by not fulfilling their obligations, which included a forecast of future profits.

The primary legal issue the court needed to address was whether a freezing order should be granted to preserve assets that might be used to meet claims under the share sale agreement. Specifically, the court had to determine if the order should extend to the forecast profits under the agreement and if it should include potential GST liabilities that might arise. The court had to balance the plaintiff's need to secure the assets against the potential harm to the defendant and the broader public interest.

The court ruled that the freezing order should not encompass the forecast profits as they were speculative and not yet realised. However, the court did find that the potential GST liability was a genuine risk and should be included in the freezing order. The court reasoned that the plaintiff had demonstrated a strong likelihood of success in their claim and that the balance of convenience favoured the issuance of the freezing order to the extent of the potential GST liabilities. The court also noted that the defendant had not provided any compelling reasons why the freezing order should not be granted in this form.

The court's final order was that a freezing order would be issued against the defendant's assets, but it would not extend to the forecast profits under the share sale agreement. Instead, the order would cover any potential GST liabilities that might arise, ensuring that these assets would be available to meet any claims under the agreement.