GRACON PROPERTIES PTY LTD (ACN 640 126 138) (in its capacity as trustee for the Gracon Properties Unit Trust) (and others according to the attached Schedule)	Plaintiffs
v
KOSTA GRACIEVSKI (and others according to the attached Schedule)	Defendants

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JUDGE:	Craig J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 September 2025 — further affidavit material and submissions on 12 September 2025
DATE OF JUDGMENT:	17 September 2025
CASE MAY BE CITED AS:	Gracon Properties Pty Ltd & Ors v Gracievski & Ors
MEDIUM NEUTRAL CITATION:	[2025] VSC 590

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PRACTICE AND PROCEDURE – Freezing order – Whether there is an arguable case – Whether there is a risk of dissipation of assets – ‘Good arguable case’ of breach of fiduciary duty and ‘knowing assistance’ established – Risk of dissipation established – Supreme Court (General Civil Procedure) Rules 2025 order 37A – Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; Rozenblit v Vainer [2019] VSCA 164 applied – Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 applied – Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Jonathan Evans KC Bridget Slocum	Madgwicks Lawyers
For the First, Second, Fourth and Fifth Defendants	Christopher Young KC Christopher Hender	HFW Lawyers
For the Third Defendant	Richard A Harris	MGA Lawyers

HIS HONOUR:

Introduction

Pursuant to order 37A of the Supreme Court (General Civil Procedure) Rules 2025 (Vic) (Rules) and the inherent jurisdiction of the Court, the plaintiffs seek freezing orders in the sum of $7 million against each of the defendants.

The first plaintiff is Gracon Properties. It has three directors: the second plaintiff (Atanas), the third plaintiff (Ile also known as Elliot) and the first defendant (Kosta).[1]
[1]Without intending any disrespect, in these Reasons I have used the first names of members of the Gracievski family.

The defendants fall into two separately represented groups.

The first group comprises Kosta, the second defendant (Divine Complex), fourth defendant (Fusion 2) and fifth defendant (Inspire). I shall refer to them as the Kosta Parties.

The second group comprises the third defendant, Northern Link.

Following the making of ex-parte freezing orders in the sum of $1.5m against each of the named defendants[2] on 22 August 2025, I heard the contested inter-partes application on 5 September 2025. At the conclusion of argument on 5 September 2025, I made interim freezing orders until midnight on 17 September 2025 or until further order of the Court, so as to provide the defendants an opportunity to file and serve any responsive evidence and submissions on the alleged quantum of the plaintiffs’ claims.
[2]The freezing orders were made against all of the current defendants, but for completeness I note that Fusion 2 and Inspire were only added as defendants to the proceeding on 5 September 2025.

For the reasons that follow, I…

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.

Continue reading Gracon Properties Pty Ltd v Gracievski

Details

AGLC: Gracon Properties Pty Ltd v Gracievski [2025] VSC 590
Case: [2025] VSC 590
Decision Date: 17 September 2025

CaseChat Overview and Summary

In the Supreme Court of Victoria, Gracon Properties sought a freezing order against multiple defendants in connection with the alleged breach of fiduciary duty by Kosta Gracievski, a director of Gracon Properties. The defendants included Kosta, Divine Complex, Fusion 2, Inspire, and Northern Link. The plaintiffs argued that Kosta had breached his fiduciary duties by pursuing a business opportunity for his own benefit without the consent of Gracon Properties. The defendants contended that there was no good arguable case of breach and that there was no risk of dissipation of assets. The court held that there was a good arguable case against Kosta, Divine Complex, Fusion 2, and Inspire, based on their knowledge and involvement in the alleged breach of fiduciary duty. The court also found that there was a reasonable possibility that assets may be disposed of or diminished in value if a freezing order was not made. The court granted a freezing order of $3.2 million against each defendant, with carve-outs for living expenses, reasonable legal expenses, and bona fide business expenses. The costs of the application were reserved.

Orders