FEDERAL COURT OF AUSTRALIA
Rentokil Initial Pty Ltd v Kelly [2021] FCA 1119
File number(s): NSD 923 of 2021 Judgment of: CHEESEMAN J Date of judgment: 7 September 2021 Date of publication of reasons: 14 September 2021 Catchwords: PRACTICE AND PROCEDURE – urgent application for freezing orders and ancillary orders – where first respondent was formerly employed by applicant company – where first respondent is sole director and shareholder of the second and third respondents – where applicant alleges the respondents defrauded it of approximately $3.2 million through the payments made on falsified supplier invoices – whether there is a good arguable case warranting the making of freezing orders – whether there is a risk of dissipation of assets – whether the balance of convenience favours making the orders sought by the applicant – Held: relief granted in part – freezing orders – some, not all, ancillary orders sought made. Legislation: Federal Court of Australia Act 1976 (Cth) s 23
Federal Court Rules2011 (Cth) Div 7.4, rr 7.32, 7.33 and 7.35
Cases cited: Basi v Namitha Nakul Pty Ltd [2019] FCA 743
Beach Petroleum NL v Johnson (1992) 9 ACSR 404
Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380
Deputy Commissioner of Taxation v Chemical Trustee Ltd (No 4) [2012] FCA 1064; (2012) 90 ATR 711
Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; (2010) 273 ALR 194
Deputy Commissioner of Taxation v Shi [2021] FCA 22; (2021) 95 ALJR 634
National Australia Bank Ltd v Bond Brewing Holdings Limited [1990] HCA 10; (1990) 169 CLR 271
Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH UND CO KG [1983] 1 WLR 1412
Patterson v BTR Engineering (1989) 18 NSWLR 319
Re Donnelly; Hancock v Porteous [2001] FCA 345
RRG Nominees Pty Ltd v Visible Temporary Fencing Australia Pty Ltd [2017] FCA 1352
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 43 Date of hearing: 7 September 2021 Counsel for the Applicant: Mr J C Giles SC with Mr R A Jedrzejczyk Solicitor for the Applicant: Clayton Utz ORDERS
NSD 923 of 2021 BETWEEN: RENTOKIL INITIAL PTY LTD (ACN 000 034 597)
Applicant
AND: JESSE JAMES KELLY
First Respondent
JJK ENTERPRISES & PROPERTY MANAGEMENT PTY LTD ACN 639 764 346
Second Respondent
JJK PROPERTY INVESTMENTS & WEALTH MANAGEMENT PTY LTD ACN 640 114 094
Third Respondent
ORDER MADE BY:
CHEESEMAN J
DATE OF ORDER:
7 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.The claim for interlocutory relief in the Originating Application filed 7 September 2021 is made returnable immediately for hearing on an ex parte basis.
2.Time for service of the Originating Application filed 7 September 2021 is abridged to
5:00 PM on 9 September 2021.
3.Subject to further order of the Court, the Originating Application, the affidavit of David Peter Hames sworn 7 September 2021 and a copy of these orders are…
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- Rentokil Initial Pty Ltd v Kelly [2021] FCA 1119
- Case
- [2021] FCA 1119
- Decision Date
CaseChat Overview and Summary
The court found that Rentokil had established a good arguable case for the making of freezing orders, meeting the threshold required under the applicable principles. Justice Cheeseman concluded that the balance of convenience favoured making the freezing orders largely in the form proposed by Rentokil. However, the court was not satisfied that it should make orders requiring the respondents to provide information regarding the present whereabouts of the sums received from Rentokil between 31 March 2020 and 15 July 2021, deferring the determination of these further disclosure orders until the respondents had been served.
Consequently, the court granted relief in part, issuing freezing orders against Jesse James Kelly, JJK Enterprises & Property Management Pty Ltd, and JJK Property Investment & Wealth Management Pty Ltd, in the terms largely proposed by Rentokil. The freezing orders restricted the respondents from disposing of or diminishing the value of their assets up to specified amounts and required them to provide information about their assets in Australia. The court also granted leave to Rentokil to file and serve subpoenas to produce documents on various financial institutions.
The final orders of the court included the immediate return of the Originating Application for an ex parte hearing, the abridgement of the time for service of the Originating Application, and the service of the application and supporting documents on the respondents. The freezing orders were made against the respondents in the terms outlined in annexures attached to the orders. The court reserved the costs of the application to be determined at the hearing on the return date. The parties were granted liberty to apply to the duty judge at any time.
Orders
Orders of the court
1. The claim for interlocutory relief in the Originating Application filed 7 September 2021 is made returnable immediately for hearing on an ex parte basis.
2. Time for service of the Originating Application filed 7 September 2021 is abridged to
5:00 PM on 9 September 2021.
3. Subject to further order of the Court, the Originating Application, the affidavit of David Peter Hames sworn 7 September 2021 and a copy of these orders are to be served as follows:
(a) by email to jesse@mbrcr.com.au, addressed to Jesse James Kelly, within 1 hour of the applicant receiving a sealed copy of these orders from the Court;
(b) by personal service on the First Respondent on or before 5:00 PM on 9 September 2021;
(c) by personal service on the Second Respondent at its registered address at Unit 4, 22-32 Robson Street Clontarf QLD 4019 on or before 5:00 PM on 9 September 2021;
(d) by personal service on the Third Respondent at its registered address at Unit 11, 2 Lakes Entrance Drive, Springfield Lakes QLD 4300 on or before 5:00 PM on 9 September 2021.
4. Pursuant to rules 7.32 and 7.35 of the Federal Court Rules 2011 (Cth) (FCR) and on the basis of the undertakings given by the Applicant to the Court, freezing orders be made against the First Respondent in the terms set out in Annexure A to these orders.
5. Pursuant to rules 7.32 and 7.35 of the FCR and on the basis of the undertakings given by the Applicant to the Court, freezing orders be made against the Second Respondent in the terms set out in Annexure B to these orders.
6. Pursuant to rules 7.32 and 7.35 of the FCR and on the basis of the undertakings given by the Applicant to the Court, freezing orders be made against the Third Respondent in the terms set out in Annexure C to these orders.
7. Subject to further order, the Originating Application is returnable before the duty judge at 2:30 PM on 13 September 2021 for hearing in respect of the claims for interlocutory relief set out in prayers 4 to 6 of the Originating Application.
8. Pursuant to rule 24.01 of the FCR, the Applicant has leave to file and serve a subpoena to produce documents on the Commonwealth Bank of Australia in the form submitted to the Court.
9. Pursuant to rule 24.01 of the FCR, the Applicant has leave to file and serve a subpoena to produce documents on Australian and New Zealand Banking Group Limited in the form submitted to the Court.
10. Pursuant to rule 24.01 of the FCR, the Applicant has leave to file and serve a subpoena to produce documents on Macrosphere Pty Ltd in the form submitted to the Court.
11. These orders may be entered forthwith.
12. The parties have liberty to apply to the duty judge at any time.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
Rule 39.33
Freezing order (made without notice)
Federal Court of Australia
District Registry: New South Wales
Division: Commercial and Corporations
No. NSD 923 of 2021
Rentokil Initial Pty Ltd (ABN 98 000 034 597)
Applicant
Jesse James Kelly and others named in the schedule
Respondents
PENAL NOTICE - FREEZING ORDER
TO: JESSE JAMES KELLY
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO: JESSE JAMES KELLY (FIRST RESPONDENT)
This is a 'freezing order' made against you on 7 September 2021 by Justice Cheeseman at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavit listed in Schedule B to this order.
The Court orders:
Introduction
1. (a) The application for this order is made returnable immediately.
(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 5:00 PM on 9 September 2021.
2. Subject to the next paragraph, this order has effect up to and including 13 September 2021 (the Return Date). On the Return Date at 2:30 PM there will be a further hearing in respect of this order before the duty judge.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) 'applicant', if there is more than one applicant, includes all the applicants;
(b) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) 'third party' means a person other than you and the applicant;
(d) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
Freezing of assets
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD$3,269,793.78 ('the Relevant Amount').
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(a) your assets include:
(i) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(ii) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(iii) the following assets in particular:
A. the property known as 83 Quay CCT, Newport QLD 4020 or, if it has been sold, the net proceeds of the sale;
B. your shares in the following corporations:
1) JJK Enterprises & Property Management Pty Ltd, carried on at Unit 4, 22-32 Robson Street, Clontarf QLD 4019;
2) JJK Property Investment & Wealth Management Pty Ltd, carried on at Unit 11, 2 Lakes Entrance Drive Springfield Lakes QLD 4300;
3) JJK Flock By The Bay Pty Ltd, carried on at Unit 4, 22-32 Robson Street, Clontarf QLD 4019;
4) JTM & JJK Wealth Management Pty Ltd, carried on at Unit 11, 2 Lakes Entrance Drive Springfield Lakes QLD 4300;
5) RHJK Holdings Pty Ltd, carried on at Unit 11, 2 Lakes Entrance Drive Springfield Lakes QLD 4300;
6) DKPKJKCK Wealth Management Pty Ltd, carried on at 20 Findlay Street Burpengary QLD 4505
or, if any or all of the assets have been sold, the net proceeds of the sale; and
C. any money in the following bank accounts:
1) account number 421181081 in the name of Jesse James Kelly held with Australia & New Zealand Banking Group Limited ;
2) account number 421181145 in the name of Jesse Kelly held with Australia & New Zealand Banking Group Limited;
3) account number 10319303 in the name of Jesse Kelly held with the Commonwealth Bank of Australia; and
4) account number 10297007 in the name of JJ Kelly held with the Commonwealth Bank of Australia.
(b) the value of your assets is the value of the interest you have individually in your assets.
Provision of information
8. Subject to paragraph 9, you must:
(a) by 5:00 PM on Wednesday 15 September, to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; and
(b) by 5:00 PM on Wednesday 15 September 2021, swear and serve on the applicant an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(c) You must:
(i) disclose so much of the information required to be disclosed to which no objection is taken; and
(ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
(iii) file and serve on each other party a separate affidavit setting out the basis of the objection.
Exceptions to this order
10. This order does not prohibit you from:
(a) paying up to $500 a day on your ordinary living expenses;
(b) paying $20,000 on your reasonable legal expenses;
(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(d) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly. Any communications to the Court should be copied to the applicant's lawyers identified in Schedule B.
12. (a) This order will cease to have effect if you:
(i) pay the sum of $3,269,793.78 into Court; or
(ii) pay that sum into a joint bank account in the name of your lawyer and the lawyer for the applicant as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant 12(a) above, you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
Costs
13. The costs of this application are reserved to the Court hearing the application on the Return Date.
Persons other than the applicant and first respondent
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the first respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
SCHEDULE A
UNDERTAKINGS GIVEN TO THIS COURT BY THE APPLICANT
1. The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
2. As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
3. As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
4. The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.
5. If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
6. The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
7. The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of deponent Date affidavit made
(1) David Peter Hames 7 September 2021
NAME AND ADDRESS OF APPLICANT’S LAWYERS
The Applicant’s lawyers are:
Clayton Utz
Level 15, 1 Bligh Street
Sydney NSW 2000
Attention: Jonathan Slater / Ananya Roy
jslater@claytonutz.com / aroy@claytonutz.com
612 9353 5314
Annexure B
Rule 39.33
Freezing order (made without notice)
Federal Court of Australia
District Registry: New South Wales
Division: Commercial and Corporations
No. NSD 923 of 2021
Rentokil Initial Pty Ltd (ABN 98 000 034 597)
Applicant
Jesse James Kelly and others named in the schedule
Respondents
PENAL NOTICE - FREEZING ORDER
TO: JJK ENTERPRISES & PROPERTY MANAGEMENT PTY LTD ACN 639 764 346
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO: JJK ENTERPRISES & PROPERTY MANAGEMENT PTY LTD ACN 639 764 346 (SECOND RESPONDENT)
This is a 'freezing order' made against you on 7 September 2021 by Justice Cheeseman at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.
The Court orders:
Introduction
1. (a) The application for this order is made returnable immediately.
(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 5:00 PM on 9 September 2021.
2. Subject to the next paragraph, this order has effect up to and including 13 September 2021 (the Return Date). On the Return Date at 2:30 PM there will be a further hearing in respect of this order before the duty judge.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) 'applicant', if there is more than one applicant, includes all the applicants;
(b) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) 'third party' means a person other than you and the applicant;
(d) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
Freezing of assets
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD$1,715,117.03 ('the Relevant Amount').
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(a) your assets include:
(i) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(ii) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(iii) the following assets in particular:
A. the property known as 8 Tubbs St, Clontarf QLD 4019 or, if it has been sold, the net proceeds of the sale;
B. the property known as Unit 4, 22-32 Robson St, Clontarf QLD 4019 or, if it has been sold, the net proceeds of the sale;
C. the motor vehicle described as a 2019 Mercedes-Benz A250 Hatchback bearing the registration number 095JTM and VIN WDD1770472N115691;
D. the motor vehicle described as a 2020 Hyundai Tucson Wagon bearing the registration number 749AQ8 and VIN KMHJ2814MMU331984;
E. the motor vehicle described as a 2020 Mercedes-Benz G63 AMG Wagon bearing the registration number GWAGGN and VIN W1N4632762X370477; and
(iv) the assets of your businesses associated with you:
A. JKS BOAT CHARTERS,
B. JKS AUTO DETAILING,
C. JKS CAR DETAILING,
D. JKS DETAILING,
E. FLOCKY BY THE BAY,
F. JKS AUTO GROUP,
G. JK'S AUTOCARE,
H. JK'S EUROPEAN AUTOCARE SPECIALIST,
I. FLOCK EATERY,
J. ADVANCED ADVANTAGE TRAINING ACADEMY,
K. CONSULTING WITH JOEL,
L. HERBERT'S HOT FOOD,
M. JKS HOT FOOD,
N. JKS HOT FOOD TRUCKS,
O. JKS SWIM SCHOOL,
P. JK'S COMMUNITY SERVICE CONSULTING,
Q. JK'S SUPPLY CHAIN CONSULTING,
R. JK'S FISH & CHIPPY,
S. JK'S HOUSING INVESTMENTS,
carried on at Unit 4, 22-32 Robson St, Clontarf QLD 4019 or, if any or all of the assets have been sold, the net proceeds of the sale;
(v) any money in the following bank accounts:
A. account number 319587026 in the name of JJK ENTERPRISES & PROPERTY MGMT P/L T/AS JK'S FISH & CHIPPY held with Australia & New Zealand Banking Group Limited; and
B. account number 39871184 in the name of JJK Enterprises & Property Management held with Commonwealth Bank of Australia.
(b) the value of your assets is the value of the interest you have individually in your assets.
Provision of information
8. Subject to paragraph 9, you must:
(a) by 5:00 PM on Wednesday 15 September 2021, to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; and
(b) by 5:00 PM on Wednesday 15 September 2021, swear and serve on the applicant an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(c) You must:
(i) disclose so much of the information required to be disclosed to which no objection is taken; and
(ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
(iii) file and serve on each other party a separate affidavit setting out the basis of the objection.
Exceptions to this order
10. This order does not prohibit you from:
(a) paying $5,000 on your reasonable legal expenses;
(b) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(c) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly. Any communications to the Court should be copied to the applicant's lawyers identified in Schedule B.
12. (a) This order will cease to have effect if you:
(i) pay the sum of $1,715,117.03 into Court; or
(ii) pay that sum into a joint bank account in the name of your lawyer and the lawyer for the applicant as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant 12(a) above, you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
Costs
13. The costs of this application are reserved to the Court hearing the application on the Return Date.
Persons other than the applicant and second respondent
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the second respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
SCHEDULE A
UNDERTAKINGS GIVEN TO THIS COURT BY THE APPLICANT
1. The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
2. As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
3. As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
4. The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.
5. If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
6. The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
7. The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of deponent Date affidavit made
(1) David Peter Hames 7 September 2021
NAME AND ADDRESS OF APPLICANT’S LAWYERS
The Applicant’s lawyers are:
Clayton Utz
Level 15, 1 Bligh Street
Sydney NSW 2000
Attention: Jonathan Slater / Ananya Roy
jslater@claytonutz.com / aroy@claytonutz.com
612 9353 5314
Annexure C
Rule 39.33
Freezing order (made without notice)
Federal Court of Australia
District Registry: New South Wales
Division: Commercial and Corporations
No. NSD 923 of 2021
Rentokil Initial Pty Ltd (ABN 98 000 034 597)
Applicant
Jesse James Kelly and others named in the schedule
Respondents
PENAL NOTICE - FREEZING ORDER
TO: JJK Property Investment & Wealth Management Pty Ltd ACN 640 114 094
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO: JJK Property Investment & Wealth Management Pty Ltd ACN 640 114 094 (THIRD RESPONDENT)
This is a 'freezing order' made against you on 7 September 2021 by Justice Cheeseman at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.
The Court orders:
Introduction
1. (a) The application for this order is made returnable immediately.
(b) The time for service of the application, supporting affidavits and originating process is abridged and service is to be effected by 5:00 PM on 9 September 2021.
2. Subject to the next paragraph, this order has effect up to and including 13 September 2021 (the Return Date). On the Return Date at 2:30 PM there will be a further hearing in respect of this order before the duty judge.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) 'applicant', if there is more than one applicant, includes all the applicants;
(b) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) 'third party' means a person other than you and the applicant;
(d) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
Freezing of assets
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia ('Australian assets') up to the unencumbered value of AUD$3,269,793.78 ('the Relevant Amount').
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(a) your assets include:
(i) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(ii) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(iii) the following assets in particular:
A. the property known as 13 Etty St, Dalby QLD 4405 or, if it has been sold, the net proceeds of the sale;
B. the property known as Unit 39, 6 Sullivan St, Emerald QLD 4720 or, if it has been sold, the net proceeds of the sale;
C. the property known as Unit 45, 6 Sullivan St, Emerald QLD 4720 or, if it has been sold, the net proceeds of the sale; and
(c) the value of your assets is the value of the interest you have individually in your assets.
Provision of information
8. Subject to paragraph 9, you must:
(a) by 5:00 PM on Wednesday 15 September 2021, to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; and
(b) by 5:00 PM on Wednesday 15 September 2021, swear and serve on the applicant an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively:
(i) have committed an offence against or arising under an Australian law or a law of a foreign country; or
(ii) are liable to a civil penalty.
(c) You must:
(i) disclose so much of the information required to be disclosed to which no objection is taken; and
(ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and
(iii) file and serve on each other party a separate affidavit setting out the basis of the objection.
Exceptions to this order
10. This order does not prohibit you from:
(a) paying $5,000 on your reasonable legal expenses;
(b) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(c) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly. Any communications to the Court should be copied to the applicant's lawyers identified in Schedule B.
12. (a) This order will cease to have effect if you:
(i) pay the sum of $3,269,793.78 into Court; or
(ii) pay that sum into a joint bank account in the name of your lawyer and the lawyer for the applicant as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the applicant to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the applicant with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant 12(a) above, you must as soon as practicable file with the Court and serve on the applicant notice of that fact.
Costs
13. The costs of this application are reserved to the Court hearing the application on the Return Date.
Persons other than the applicant and third respondent
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the third respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
SCHEDULE A
UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT
1. The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
2. As soon as practicable, the applicant will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the applicant at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
3. As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.
4. The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent's assets.
5. If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
6. The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
7. The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent's assets.
SCHEDULE B
AFFIDAVITS RELIED ON
Name of deponent Date affidavit made
(1) David Peter Hames 7 September 2021
NAME AND ADDRESS OF APPLICANT’S LAWYERS
The Applicant’s lawyers are:
Clayton Utz
Level 15, 1 Bligh Street
Sydney NSW 2000
Attention: Jonathan Slater / Ananya Roy
jslater@claytonutz.com / aroy@claytonutz.com
612 9353 5314
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
The applicable principles were summarised in Basi v Namitha Nakul Pty Ltd [2019] FCA 743 (Wigney J) at [7] - [9]:7 The purpose of a freezing order is to prevent an abuse or a frustration of the Court’s process by depriving an applicant of the fruits of any judgment obtained in the action: Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 625. It is “no light matter” to freeze a party’s assets and there is, accordingly, a need for the Court to exercise caution: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 324F. A freezing order is a “drastic remedy” which should not be lightly granted: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at [51] citing Frigo v Culhari (unreported, NSW Court of Appeal 17 July 1998 at 10-11).8 An applicant has a good arguable case if they have “a reasonably arguable case on legal as well as factual matters”: Cardile at [68]; Insolvency Guardian Melbourne Pty Ltd v Carlei (2016) 111 ACSR 236; [2016] FCA 72 at [18]. It has also been said that a “good arguable case” is one “which is more than barely capable of serious argument, and yet not necessarily one the judge considers would have better than a fifty per cent chance of success”: Curtis v NID Pty Ltd [2010] FCA 1072 at [6] citing Ninemia Maritime Corp v Trave Schiffahrtsgesselschaft mbH & Co KG (The Niedersachsen) [1983] Com LR 234 at 235 (affirmed on appeal: [1983] 1 WLR 1412); Deputy Commissioner of Taxation v Greenfield Electrical Services Pty Ltd (2016) 103 ATR 327; [2016] FCA 653 at [7].9 Where a freezing order is sought on the basis of a danger of the dissipation of assets, it is not necessary for the Court to be satisfied that the risk of dissipation is more probable than not. Nor is it necessary for the applicant to adduce evidence of an intention on the part of the respondent to dissipate assets: Deputy Commissioner of Taxation v Hua Wang Bank Berhad (2010) 273 ALR 194; [2010] FCA 1014 at [8]-[10]; Deputy Commissioner of Taxation v Chemical Trustee Ltd (No 4) (2012) 90 ATR 711; [2012] FCA 1064 at [23]. The making of a freezing order involves a discretionary exercise of power. The Court retains a discretion to refuse relief even if the requirements in r 7.35 of the Rules are satisfied: Patterson at 321-322. CONSIDERATIONGood arguable case Before a freezing order is made, Rentokil must show that there is a good arguable case on legal and factual matters or a sufficiently realistic prospect of success on the proceedings: Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 at 408 [68] (Gaudron, McHugh, Gummow, Kirby and Callinan JJ); Re Donnelly; Hancock v Porteous [2001] FCA 345 at [9] (Stone J). In the context of r 7.35, Rentokil must establish that it has a good arguable case on a justiciable cause of action. The criterion of good arguable case is a lesser standard than the prima facie cause of action requirement favoured by the majority in Patterson v BTR Engineering (1989) 18 NSWLR 319 (Gleeson CJ and Rogers A-JA).