O'Sullivan v Bunnings Group Limited

[2023] ACTSC 38

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

O’Sullivan v Bunnings Group Limited

Citation:

[2023] ACTSC 38

Hearing Date:

7 March 2023

DecisionDate:

7 March 2023

Before:

Mossop J

Decision:

1.    The application in proceeding dated 3 March 2023 is adjourned to a date to be fixed in accordance with order 2.

2.    The application may be listed on 2 days’ notice to the second defendant.

Catchwords:

PRACTICE AND PROCEDURE – FREEZING ORDER – Application made on ex parte basis – property title search discloses that second defendant is a joint tenant of real property – whether there is any evidence of a risk of dissipation of assets – whether it is necessary to hear application on ex parte basis

Legislation Cited:

Legal Profession (Barristers) Conduct Rules 2021 (ACT), r 24

Legal Profession (Solicitors) Conduct Rules 2015 (ACT), r 19.4

Cases Cited:

Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380

Chong v Huang [2021] ACTSC 310
Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Rudnicki v Adventura One Pty Ltd [2017] ACTSC 89

Texts Cited:

Peter Biscoe, Freezing and Search Orders (LexisNexis Australia, 3^rd ed, 2023)

Parties:

Elizabeth Maree O’Sullivan ( Plaintiff)

Bunnings Group Limited ( Defendant)

Stephen John McMillan (Second Defendant)

Representation:

Counsel

T Gedik ( Plaintiff)

Solicitors

Blumers Personal Injury Lawyers ( Plaintiff)

File Number:

SC 81 of 2023

MOSSOP J:

1. These are my reasons for orders made this morning in relation to an application in proceeding seeking freezing order against the second defendant in personal injury proceedings. The application was made on an ex parte basis.

1. The plaintiff, Elizabeth Maree O’Sullivan, has sought damages against Bunnings Group Limited and Stephen John McMillan for personal injuries alleged to have arisen out of an assault by the second defendant upon the plaintiff at work on 22 February 2021. An originating claim has been filed and a direction made that it must be served upon the defendants by 14 March 2023. It is listed for a First Directions Hearing under Practice Direction 2 of 2014 on 11 April 2023. The claim against the first defendant is one in negligence arising out of its obligations as the employer of the plaintiff. The claim against the second defendant includes claims based on negligence and battery. The injuries described in the claim are:

injury to right wrist;

injury to right arm and shoulder;

injury to chest;

bruising and cuts to body; and

psychological injury.

1. Particulars of disabilities are provided in the usual all-encompassing detailed terms.

1. The affidavit in support of the present application is that of Talia Alice Gedik dated 3 March 2023.

1. That discloses that she has obtained from the solicitors for the first defendant a title search dated 16 August 2022 for a residential property in Evatt. The second defendant is listed as a joint tenant of the property. On 22 February 2023 a further search indicated that the second defendant remained a joint tenant of the property. A mortgage to Westpac Banking Corporation exists on the title to the property. It has been owned by the second defendant and a Joanne Elisabeth McMillan, a person who is likely to be the second defendant’s wife, since April 2001.

1. The affidavit states that the solicitor is not aware of any other assets owned by the second defendant. She states her understanding that the second defendant has lost his job with the first defendant following the assault. The balance of the affidavit is as follows:

8.We respectfully seek a freezing order against the second defendant in relation to the property.

9.If the plaintiff is successful in a claim against the second defendant for compensation relating to his personal injuries, the second defendant may be obliged to disgorge his interest in the property to satisfy an order for compensation.

Claim information

10.It is my submission that the injuries and ongoing disability suffered by the plaintiff could result in an award of damages in the vicinity of $1 million.

11.Further, the plaintiff would also be entitled to her legal costs and disbursements on a party/party basis, which, depending on how long the matter takes is likely to be up to $100,000.00.

12.The workers compensation insurer for the first defendant also has an interest in recovering against the second defendant. Noting that apportionment is a matter for the Court, the plaintiff wishes to secure her interest if the second defendant is held mostly liable.

13.It is my submission that there is sufficient prospect that the Court will make an award of damages in favour of the plaintiff and the order will be registered in or enforced by this Court.

1. Several points may be noted about the affidavit:

(a)There is no evidence of any actual intention on the part of the second defendant to dissipate his assets. There are no circumstances disclosed such as an intention to leave Australia which would give rise to an inference that there was a real prospect of such a dissipation occurring. The only evidence is of the existence of real property within Australia which is held jointly with a person likely to be the second defendant’s wife and which has been held by that couple since 2001.

(b)The evidence as to the potential value of the plaintiff’s claim is in inadmissible form. Further, no evidentiary basis is articulated for the submission that the claim is worth up to $1 million. No expert opinion is expressed about the likely range of damages if the claim is successful. No medical evidence is annexed to indicate that what might be considered to be minor physical injuries have led to significant psychiatric consequences.

(c)No reason is given why the proceedings needed to be heard on an ex parte basis rather than on a contested basis shortly after service of the proceedings. While it may theoretically be possible to dispose or encumber assets quickly, there was nothing to suggest a realistic prospect of that in the present case if the proceedings were served and the application dealt with on a contested basis.

1. Freezing orders are one of the law’s “nuclear weapons”: Peter Biscoe, Freezing and Search Orders (LexisNexis Australia, 3^rd ed, 2023) at 1. As a consequence, a “high degree of caution” should be exercised by a court invited to make an order: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [50]. In order to make out a case for a freezing order the court must be satisfied that there is a good arguable case on an accrued or prospective cause of action that is justiciable in the court. Second, the court must consider whether, on the evidence before it, there is a danger that a judgment or prospective judgment will be unsatisfied because the assets are disposed of or dealt with in a way that would put them beyond reach of the plaintiff. Finally, the court must decide whether it is in the interests of justice to impose a freezing order. That will involve considering where the balance of convenience lies including any effects upon third parties.

1. Freezing orders are not designed to routinely provide security for judgment. Rather, the rationale is to prevent the abuse or frustration of the processes of the court: Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 625. The degree of risk of dissipation of assets in a way that would frustrate the processes of the court does not need to be as high as more probable than not. Nor is it necessary to establish a positive intention to frustrate a judgment. The risk may be established by adducing evidence from which inferences may be drawn. However, it is necessary to provide “solid evidence” to establish a risk of dissipation of assets. Mere proof of a theoretical possibility that a defendant may dispose of assets is not enough. The principles applicable are helpfully summarised in Chong v Huang [2021] ACTSC 310 at [6]-[9] and Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 (leave to appeal refused [2010] FCAFC 140) at [8]-[13].

1. There were three reasons why it was not appropriate to grant the relief sought.

(a)First, the evidence in the present case did not disclose any material that would indicate that there was a significant risk of abuse or frustration of the court’s process through the dissipation of assets. It is possible to imagine a theoretical chain of events which led to the assets of the second defendant being put beyond reach but that would not be sufficient to warrant the making of a freezing order.

(b)Second, the evidence was not sufficient to establish the potential value of the claim. Although the figure of $1 million was referred to in the affidavit, the evidence did not provide a foundation for that submission. Having regard to the evidence before the court, the claim could just as easily be worth $2000 as it could be $1 million. Obviously, the magnitude of the potential liability would be a significant matter in determining whether or not the drastic step of the making of a freezing order over somebody’s home would be warranted.

(c)Third, it was not established that it was necessary to proceed on an ex parte basis. Ex parte applications should be reserved to circumstances where a failure to hear the other side can properly be justified. Having regard to the lack of evidence of a risk of dissipation of assets, this was not such a case. Some of the authorities relevant to the limited circumstances in which proceeding ex parte will be appropriate are gathered by Robinson AJ in Rudnicki v Adventura One Pty Ltd [2017] ACTSC 89 at [27]-[30]. Even in circumstances where it is appropriate to proceed ex parte, the burden upon the moving party to disclose to the court the factual or legal matters which might be put in opposition to the relief sought is a heavy one: Legal Profession (Solicitors) Conduct Rules 2015 (ACT), r 19.4; Legal Profession (Barristers) Conduct Rules 2021 (ACT), r 24; Practice Note 1 of 2008, NI 2008-74 at [19]. This is not a perfunctory or theoretical obligation. It is a significant ethical obligation of the practitioner who is appearing. I was not satisfied that all of the factual or legal arguments that might have been available to the second defendant had been put to me.

1. For these reasons, I indicated to the solicitor who appeared for the applicant that I was minded to either dismiss the application or adjourn it so that it could be served on the second defendant and addressed on a contested basis. She indicated that, if those were the alternatives, the plaintiff would ask that the application be adjourned. As a consequence, the orders that I made were:

1.The application in proceeding dated 3 March 2023 is adjourned to a date to be fixed in accordance with order 2.

2.The application may be listed on 2 days’ notice to the second defendant.

I certify that the preceding eleven [11] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 3 April 2023