Lamont v Malishus and Ors (No.2) - [2018] FCCA 895

FEDERAL CIRCUIT COURT OF AUSTRALIA

LAMONT v MALISHUS & ORS (No.2)

[2018] FCCA 895

Catchwords:
PRACTICE & PROCEDURE – Ex parte application for freezing orders – whether preconditions for the granting of such orders satisfied – application dismissed.

Legislation:

Federal Circuit Court of Australia Act 1999 (Cth), s.15

Federal Circuit Court Rules 2001 (Cth), r.1.05(2)

Federal Court of Australia Act 1976 (Cth), s.23
Federal Court Rules2011 (Cth), r.7.35

Cases cited:

Insolvency Guardian Melbourne Pty Ltd v Carlei [2016] FCA 72

Jackson v Sterling Industries Limited (1987) 162 CLR 612

Lamont v Malishus & Ors [2018] FCCA 423

Applicant:

DARREN LAMONT

First Respondent:

MALISHUS NZCN 4429858

Second Respondent:

ROBERT JURCIC

Third Respondent:

CLINTON SELWYN

Fourth Respondent:

RIMA NICHOLLS

File Number:

SYG 2008 of 2014

Judgment of:

Judge Manousaridis

Hearing date:

6 April 2018

Date of Last Submission:

6 April 2018

Delivered at:

Sydney

Delivered on:

6 April 2018

REPRESENTATION

Applicant in person ex parte

ORDERS

The application in a case filed 03 April 2018 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2008 of 2014

DARREN LAMONT

Applicant

And

MALISHUS NZCN 4429858

First Respondent

ROBERT JURCIC

Second Respondent

CLINTON SELWYN

Third Respondent

RIMA NICHOLLS

Fourth Respondent

REASONS FOR JUDGMENT

(Revised from the transcript)

On 3 April 2018 the applicant, Mr Lamont, lodged an application in a case. That application was made returnable on 17 April 2018. That was done after the Registry consulted my chambers, and without my realising that Mr Lamont believed there was urgency to the application that he filed on 3 April 2018. In any event, after further communications from Mr Lamont, the application was made returnable before me at 11.30 am today, which is 6 April 2018, and the application was heard ex parte.
In that application Mr Lamont seeks what is described in paragraph 1 as a “Worldwide Asset Preservation Order” against the four respondents, Malishus Limited, Mr Robert Jurcic, Mr Clinton Selwyn, and Mr Rima Nicholas. The application also seeks other orders, which it is not necessary for me to set out.
The order which I have just set out does not, in terms, describe an order, but instead alludes to a particular type of orders which are known as “freezing orders”. The Federal Court of Australia and the State Supreme Courts each have detailed uniform practice notes that set out the form of such orders, and the preconditions that must be satisfied before such orders may be granted.
It would be useful if I here set out the central order that freezing orders contain. An example is one of the orders Edelman J, when his Honour was a judge of the Federal Court of Australia, made in Insolvency Guardian Melbourne Pty Ltd v Carlei.[1] . In that case his Honour ordered that the respondent not remove from Australia or in any way dispose of, deal with, or diminish the value of any of his asserts in Australia up to an unencumbered value of $400,000. So it will be seen that, in effect, what Mr Lamont is seeking is an order that the respondents not dispose of their assets, although he does not expressly state, as the order of Edelman J states, the value of the assets the respondents are not to dispose. It is apparent from the other parts of the application in a case that the value of the assets that are not to be disposed are the values of the claims for damages, including punitive damages as described, Mr Lamont claims he will be entitled to if he were to succeed at the hearing of this matter.
[1] [2016] FCA 72
The Federal Circuit Court of Australia does not have any specific rules or a practice note governing the granting of freezing orders. It may be that the rules in the Federal Court Rules2011 (Cth) (FC Rules) dealing with freezing orders apply because of r.1.05(2) of the Federal Circuit Court Rules 2001 (Cth). Whether or not that is so, this Court has jurisdiction under s.15 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act). That section provides:
The Federal Circuit Court of Australia has power, in relation to matters in which it has jurisdiction, to:
(a) make orders of such kinds, including interlocutory orders, as the Federal Circuit Court of Australia thinks appropriate; and
(b) issue, or direct the issue of, writs of such kinds as the Federal Circuit Court of Australia thinks appropriate.
Section 15 is in similar terms as s.23 of the Federal Court of Australia Act 1976 (Cth) (FC Act) and in Jackson v Sterling Industries Limited[2] the High Court held that the power to grant a Mareva injunction (being the name by which freezing orders were previously known) is comprehended by s.23 of the FC Act in relation to a matter in which the Federal Court has jurisdiction.
[2] (1987) 162 CLR 612
It is therefore clear that under s.15 of the FCC Act this Court has jurisdiction to grant a freezing order, and in particular the orders that Mr Lamont seeks, provided, of course, the preconditions for the granting of those orders are met. In broad terms, and as held in Sterling in relation to s.23 of the FC Act, s.15 of the FCC Act confers jurisdiction on the Court to issue an order if there is a danger of a respondent absconding, or there is a danger of a respondent’s assets being removed out of the jurisdiction or disposed of in some other way within the jurisdiction, so that there is a danger that a successful plaintiff will not be able to have his or her judgments satisfied.
The preconditions for the granting of a freezing order, at least in the Federal Court, are set out in r.7.35 of the FC Rules, and these may be taken as constituting the preconditions that apply to the granting of freezing orders by this Court. A relevant summary of what those preconditions is set out in the judgment of Edelman J in Insolvency Guardian Melbourne. His Honour there said: [3]
[3] [2016] FCA 72, at [16]
The criteria that must be satisfied for the court to grant a freezing order are set out in r.7.35 of the Federal Court Rules 2011(Cth). In substance, the criteria relevant to this application are that:
(1)the applicant have a good, arguable case on an accrued or prospective cause of action that is justiciable in the Federal Court of Australia;
(2) there is a sufficient prospect that the judgment will be registered in or enforced by the Federal Court of Australia; and
(3)the Court is satisfied, having regard to all the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied because any of the following might occur:
(a) the judgment debtor, prospective judgment debtor or another person absconds; or
(b) the assets of the judgment debtor, prospective judgment debtor or another person are:
(i) removed from Australia or from a place inside or outside Australia, or
(ii) disposed of, dealt with or diminished in value.
I then turn to the evidence that is before me that is relevant to these preconditions. First, there is the question of whether Mr Lamont has a good, arguable case. In Lamont v Malishus & Ors[4], I concluded that Mr Lamont does, indeed, have, or has indeed pleaded reasonable causes of action. That conclusion was based not only on my analysis of the pleadings, but also on the voluminous documentary evidence that Mr Lamont filed, and on which he relied in the application that is subject of the judgment to which I have just referred.
[4] [2018] FCCA 423
Saying, however, that Mr Lamont has a good arguable case is not the end of the matter. What is relevant is the relief that is being sought. The principal facts out of which the causes of action Mr Lamont pleads in his statement of claim arise is his being the owner of a registered trademark, and the allegations that the respondents have infringed that trademark in Australia. There is very little evidence, however, of the damages that Mr Lamont will be entitled to should he succeed at the hearing.
Mr Lamont referred me to paragraph 103 of the proposed amended statement of claim, and to paragraph 1 of the affidavit on which relies in support of the application that he made before me today. I am not satisfied, however, on the material that Mr Lamont has identified as to what damages, if any, he would be entitled to if he were to succeed. In those circumstances, it is very difficult to grant, and it is an important factor against my granting, a freezing order, not knowing what the amount of monetary relief Mr Lamont would be entitled to claim if he were to succeed in his causes of action. That by itself would prevent me, at least today, from making a freezing order.
Assuming that, however, that is not a difficulty, or that would not, by itself, prevent me from making a freezing order, I then look at the other factors Edelman J identified in Insolvency Guardian Melbourne. The second factor identified by Edelman J is obviously satisfied, because the proceeding in relation to which this application is made is a proceeding within this Court’s jurisdiction, and any relief that Mr Lamont will attain if he succeeds in any of his causes of action will be relief that will be enforceable by this Court.
It is the third matter that requires some attention. That is, whether on the evidence there is a danger that any monetary compensation that Mr Lamont may obtain will be wholly or partly unsatisfied because the respondents will deal with their assets in some sort of way or diminish their value so as to defeat or render nugatory any monetary award Mr Lamont might obtain. In that regard, Mr Lamont refers or relies on two principal matters. One is a document annexed to his affidavit which, on its face, suggests that a property at 816/60 Siddeley Street, Docklands Victoria has been sold. That document reveals that the sale took place in October 2016. Mr Lamont does not say that that document reveals who the owner of the property is. He claims a belief that that property was owned by either Mr Jurcic or Mr Selwyn. I cannot be satisfied on the basis of that document that the property referred to there is a property which was at any time owned by Mr Jurcic or Mr Selwyn, nor can I be satisfied that if it were that, by itself, would indicate that the property was sold for a reason connected with the application or the claims Mr Lamont has made in these proceedings.
Mr Lamont also refers to the fact that the business conducted by Mr Jurcic and Mr Selwyn now has a post box address rather than a street address. That too, by itself, even when considered with the apparent sale of the property at Siddeley Street does not satisfy me of any danger that assets Mr Selwyn or Mr Jurcic own will be dissipated or diminished in value.
Another matter on which Mr Lamont relies is a document which indicates that the first respondent, Malishus Limited, has sold a property in New Zealand and has acquired another property at 7345 State Highway in New Zealand. There are two things to say about that: First of all, the evidence does not suggest the disappearance of an asset but indicates a substitution of one asset for another. Secondly, and relatedly, that does not give rise to any risk in my mind that the transaction whereby one property was sold and another acquired was done for any reason connected with the proceeding that Mr Lamont has commenced.
For these reasons, I am not satisfied it is appropriate that I make the orders that Mr Lamont seeks, and I propose to dismiss the application in a case. That, of course, does not preclude Mr Lamont from making any further application, if he becomes aware of evidence which has got greater strength than the evidence I have identified which indicates a danger that the respondents have dealt or propose to deal with their assets in a way which might frustrate any monetary relief that Mr Lamont may be entitled to if he succeeds on his causes of action.
I should have noted that Mr Lamont in his application in a case seeks an order requiring the respondents to file and serve a “financials and assets statement” for the past five years. It is within the jurisdiction of the Court to make such an order but only in aid of a freezing order in the first place. Having concluded that I am not satisfied that the preconditions for the making of a freezing order have been satisfied, it must necessarily follow that the preconditions for making an order in terms of order 2 of the application in a case are also not satisfied.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate:

Date: 13 April 2018