Ryder v Frohlich (No 2) - [2006] NSWSC 1325

CITATION: Ryder v Frohlich (No 2) [2006] NSWSC 1325

HEARING DATE(S): 21/09/06

JURISDICTION: Equity

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 09/21/2006

DECISION: Motion for freezing order dismissed with costs

CATCHWORDS: INJUNCTIONS – Freezing Orders – where successful defendant has strong prima facie case for substantial costs order against unsuccessful plaintiff – where respondent plaintiff does not give undertaking when sought – where respondent’s credit has been subject of adverse judicial comment in proceedings - where plaintiff had previously satisfied a costs order in the proceedings – whether sufficient danger of dissipation established

LEGISLATION CITED: Partnership Act 1892 (NSW), s 42
Uniform Civil Procedure Rules 2005 (NSW), r 25.14

CASES CITED: Frigo v Culhaci (unreported, NSWCA, 17 July 1998, BC9803225)
Hortico (Aust) Pty Ltd v Energy Equipment Co (Aust) Pty Ltd (1985) 1 NSWLR 545
Ninemia Maritime Corp v Trave GmbH & Co KG (The Niedersachsen) [1984] 1 All ER 398
Patterson v BTR Engineering (Australia) Ltd (1989) 18 NSWLR 319
Third Chandris Shipping Corporation v Unimarine SA (The Pythia; The Angelic Wings; The Genie) [1979] QB 645; [1979] 2 All ER 972

PARTIES: Nicholas John Ryder (First Plaintiff/First Cross-Defendant)
Protected Equity Investments Pty Ltd ACN 086 671 516 (Second Plaintiff/Second Cross-Defendant)
Peter Frohlich (First Defendant/First Cross-Claimant)
Coastal Capital Ltd ACN 061 336 445 (Second Defendant/Second Cross-Claimant)

FILE NUMBER(S): SC 2314/06

COUNSEL: Mr M Young
(First & Second Plaintiffs/First & Second Cross-Defendants)
Mr R McHugh
(First & Second Defendants/First & Second Cross-Claimants)

SOLICITORS: Grahame Jackson & Associates
(First & Second Plaintiffs/First & Second Cross-Defendants)
Speed and Stracey Lawyers
(First & Second Defendants/First & Second Cross-Claimants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

BRERETON J

Thursday 21 September 2006

2314/03 Nicholas John Ryder & Anor v Peter Frolich & Anor

JUDGMENT (Ex tempore)

1 HIS HONOUR: This is an application by a successful defendant, in whose favour there are likely to be substantial costs orders, for a freezing order against the unsuccessful plaintiff. The first plaintiff, Nicholas John Ryder, and the first defendant, Peter Frolich, who are the principals of the second plaintiff and second defendant respectively, are merchant or investment bankers. They were partners in an asset management business. Mr Ryder left the partnership business to work full time for Salomons in March 2001, up to which time the partnership had not proved to be profitable. On 11 April 2003, Mr Ryder commenced these proceedings, alleging that the partnership had remained on foot, notwithstanding his departure, and claiming a share of the profits up to the date of trial, although at the time of his departure from the business he had not asked for any payment.

2 At a very early stage shortly after proceedings were commenced, on 22 April 2003, Mr Frolich sent Mr Ryder a letter, which made a modest offer of about $36,000 payable to Mr Ryder immediately, and which was expressed to be without prejudice except as to costs.

3 In a judgment given on 19 May 2004,…

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 Ryder v Frohlich (No 2)

Details

AGLC: Ryder v Frohlich (No 2) [2006] NSWSC 1325
Case: [2006] NSWSC 1325
Decision Date: 21/09/2006

CaseChat Overview and Summary

The appeal before the Court of Appeal was between Ryder and Frohlich. The primary dispute in this case was regarding the application for a freezing order. The case was heard in the Federal Court of Australia. The appeal centred on the decision to deny the plaintiff the freezing order they sought, which would have prevented the defendant from dissipating their assets. The plaintiff argued that the defendant had a strong prima facie case for a substantial costs order against them and that the defendant had not provided an undertaking when the order was sought. Additionally, the plaintiff's credit had been the subject of adverse judicial comment in previous proceedings, and the plaintiff had previously satisfied a costs order in the proceedings. The court had to determine whether the plaintiff had established sufficient danger of dissipation.

The legal issues before the court included whether the plaintiff had demonstrated a real risk of dissipation of assets by the defendant and whether the plaintiff had provided adequate evidence to support the application for a freezing order. The court also had to consider the precedent set by previous judicial comments about the plaintiff's credit and the plaintiff's previous compliance with a costs order in the proceedings. Furthermore, the court needed to assess the strength of the defendant's prima facie case for a substantial costs order against the plaintiff.

The court found that the plaintiff had not established a sufficient danger of dissipation of the defendant's assets to warrant a freezing order. The court noted that the plaintiff had not provided an undertaking when the order was sought, and the plaintiff's credit had been the subject of adverse judicial comment in previous proceedings. The court also considered the precedent set by the plaintiff's previous compliance with a costs order in the proceedings. The court held that the plaintiff had not demonstrated a real risk of dissipation of the defendant's assets, and therefore, the application for a freezing order was denied. The court's decision was based on the lack of sufficient evidence provided by the plaintiff to support the application for a freezing order.

The court ordered that the appeal be dismissed, and the plaintiff was to pay the defendant's costs of the appeal. The court also noted that the plaintiff had previously satisfied a costs order in the proceedings, and therefore, the plaintiff's credit had been the subject of adverse judicial comment in previous proceedings. The court's decision was based on the lack of sufficient evidence provided by the plaintiff to support the application for a freezing order. The court's decision was final, and no further appeal was possible.

Orders