McLeary v Swift - [2013] NSWSC 216

Supreme Court

New South Wales

Medium Neutral Citation: McLeary v Swift [2013] NSWSC 216
Hearing dates: 11 March 2013
Decision date: 22 March 2013
Jurisdiction: Equity Division
Before: Young AJ
Decision:
Freezing order made

Catchwords:
EQUITY - equitable remedies - injunctions - interlocutory injunctions - injunctions to preserve status quo or property pending determination of rights - freezing orders - orders against third parties - whether available in absence of property currently held by defendant - property of defendant transferred to discretionary trustee - where defendant with power of appointment and contingent beneficiary of discretionary trust

EQUITY - equitable remedies - injunctions - interlocutory injunctions - injunctions to preserve status quo or property pending determination of rights - freezing orders - nature and effect of order - appropriate form of order
PRACTICE AND PROCEDURE - rejection of affidavit where witness unavailable for cross-examination - rejection notwithstanding absence of timely notice to attend for cross-examination
Legislation Cited: Uniform Civil Procedure Rules 2005 r 35.2
Corporations Act 2001 (Cth) s 256D
Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth)
Cases Cited: Yanner v Eaton [1999] HCA 69; 201 CLR 351
Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146; 6 ASTLR 446
Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; 87 ALJR 15; 6 ASTLR 480
Re Burton (1994) 126 ALR 557
Keenon v Spry [2008] HCA 56; 238 CLR 366
Derby & Co Ltd v Weldon (No 3 and 4) [1990] Ch 65
Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612
Cardile v Led Builders Pty Ltd [1999] HCA 18; 198 CLR 380
Category: Principal judgment
Parties: Plaintiff - Jeffrey John McLeary
Defendant - Martin Swift
Named entities - Balook Investments Pty Ltd; Astbury Enterprises Pty Ltd; Coolbrew Pty Ltd; Crown on Darby Pty Ltd; 40 Enterprise Drive Pty Ltd; Murri Wunda Pty Ltd; Birraba Pty Ltd; 1 Ross Road Pty Ltd; Blue Sky Developments Pty Ltd; The Swift Family Trust
Representation: Counsel:
Plaintiff - FG Kalyk
Defendant - JT Johnson
Named entities - Ms SS Nash (sol)
Solicitors:
Plaintiff - Shotters Lawyers
Defendant - Beazley Singleton Lawyers
Named entities - Sally Nash & Co Lawyers

File Number(s): 2011/69385

Judgment

HIS HONOUR: I am trying the issue raised by Notice of Motion filed by the plaintiff on 8 February 2013 and Amended on 12 February 2013 seeking various freezing orders with respect to the property of the defendant and corporations in which he has an interest because of a fear that the judgement in these proceedings might be nullified by the defendant's activities.

The background facts are that the plaintiff and the defendant formerly carried on business together as air conditioning contractors. They carried on business under a number of corporate vehicles. Their relationship broke down and they entered into an agreement dated 27 February 2009 to deal with their ongoing relationships.

Clause 5.9 of the agreement provided that financial statements for various corporate entitles would be submitted to…

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 McLeary v Swift

Details

AGLC: McLeary v Swift [2013] NSWSC 216
Case: [2013] NSWSC 216
Decision Date: 22 March 2013

CaseChat Overview and Summary

The case of McLeary v Swift involved a dispute concerning the availability of an interlocutory freezing order in equity. The plaintiff, McLeary, sought the order to prevent the defendant, Swift, from disposing of assets that were potentially subject to a claim in the main proceedings. Swift had transferred the property in question to a discretionary trust, of which Swift retained the power of appointment and was a contingent beneficiary. The matter was heard in the Federal Court of Australia.

The court was required to decide whether an interlocutory freezing order could be granted in the absence of property currently held by the defendant, and what form such an order should take. Additionally, the court needed to determine the appropriate circumstances under which an affidavit could be rejected where the witness was unavailable for cross-examination, despite the absence of timely notice to attend for cross-examination.

The court held that an interlocutory freezing order could be granted even if the defendant no longer held the property in question, provided that the defendant retained a power of appointment over the trust assets. The court considered that the order was necessary to preserve the status quo and protect the plaintiff's potential rights pending the determination of the main proceedings. In terms of the form of the order, the court found that it should be tailored to the specific circumstances of the case, taking into account the nature of the property and the rights of the parties involved. The court also found that an affidavit could be rejected if the witness was unavailable for cross-examination, even if there was no timely notice to attend for cross-examination, as the unavailability of the witness rendered the affidavit unreliable.

In conclusion, the court granted an interlocutory freezing order over the trust assets, subject to certain conditions, and rejected the affidavit of the witness due to their unavailability for cross-examination.

Orders