Simmons v Giezekamp

Case [2024] FCA 649


FEDERAL COURT OF AUSTRALIA

Simmons v Giezekamp [2024] FCA 649

File number(s): NSD 355 of 2024
Judgment of: THAWLEY J
Date of judgment: 7 June 2024
Catchwords: PRACTICE AND PROCEDURE – application for continuation of freezing orders – application by interested party for variation of freezing orders – where interested party is a tenant in common of property the subject of freezing order – where interested party joint tenant of a property the subject of freezing order – freezing orders continued without variation   
Legislation:

Federal Court Rules 2011 (Cth)

Conveyancing Act 1919 (NSW)

Real Property Act 1900 (NSW)

Cases cited:

Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57

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

Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194

Deputy Commissioner of Taxation v Huang [2021] HCA 43; 273 CLR 429

Frigo v Culhaci[1998] NSWCA 88

Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG [1984] 1 All ER 398

Nullagine Investments Pty Ltd v Western Australia Club [1993] HCA 45; 177 CLR 635

Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319

Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730

SCF Finance Co Ltd v Masri [1985] 2 All ER 747

Simmons v Giezekamp [2024] FCA 334

Taylor v Diamand & Zikos Developments Pty Ltd (1997) 6 NTLR 164

Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 645

Division:  General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 158
Date of hearing: 5 June 2024; 7 June 2024
Counsel for the Applicants: Mr J Baird
Solicitor for the Applicants: Proctor Phair Lawyers
Counsel for the Respondents: Mr C Bolger
Solicitor for the Respondents: Kalantzis Lawyers
Counsel for the Interested Person: Mr D R Stack
Solicitor for the Interested Person: Bridges Lawyers

ORDERS

NSD 355 of 2024
BETWEEN:

JULIE ANN SIMMONS

First Applicant

DANIEL ASHUIN SIMMONS

Second Applicant

BRUCE SAUNDERS (and others named in the Schedule)

Third Applicant

AND:

PAUL JACQUE GIEZEKAMP (ALSO KNOWN AS PAUL JACQUES GIEZEKAMP)

First Respondent

U MONEY AUSTRALIA PTY LTD (ACN 159 776 888)

Second Respondent  

ORDER MADE BY:

THAWLEY J

DATE OF ORDER:

7 JUNE 2024

THE COURT ORDERS THAT:

1.The freezing orders against the first and second respondents made on 2 April 2024 (as varied) be continued until further order.

2.Reserve liberty to the parties to apply on 24 hours’ notice.

3.Costs be reserved in relation to Mrs Giezekamp’s application.

4.Costs as against the respondents be the applicants’ costs in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT
(Revised from transcript)

THAWLEY J:

INTRODUCTION

  1. On 2 April 2024, following an ex parte hearing, Halley J (as duty judge) made freezing orders against Mr Paul Jacque (or Jacques) Giezekamp and U Money

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Details
AGLC
Simmons v Giezekamp [2024] FCA 649
Case
[2024] FCA 649
Decision Date

CaseChat Overview and Summary

The case of Simmons v Giezekamp involves an application by an interested party for the continuation of freezing orders in relation to certain properties. The applicant seeks to have the freezing orders continued without variation, despite the respondent's argument that the orders should be varied to account for her legal interests in the properties. The dispute centres on a property at 8 Eileen Street, Hadfield, Victoria, and the arrangements made between the parties for its development and sale. The parties entered into a joint venture agreement for the development of the property, but disagreements have arisen over the terms and conditions of the agreement, as well as the allocation of profits and losses.

The legal issues before the court were whether there was a good arguable case for the continuation of the freezing orders, and whether the orders should be varied to account for the respondent's legal interests in the properties. The court found that there was a good arguable case for the continuation of the freezing orders, as the applicants had made out a prima facie case for the relief sought. The court also found that the orders should not be varied to account for the respondent's legal interests, as her interests were adequately protected by the terms of the joint venture agreement. The court noted that the respondent had not yet filed a defence or detailed evidence in relation to the various allegations made against her, and that the findings made were provisional.

The court's reasoning was based on the evidence presented in the affidavits and exhibits, as well as the terms of the joint venture agreement. The court found that the applicants had made out a good arguable case for the continuation of the freezing orders, as they had established a prima facie case for the relief sought. The court also found that the respondent's legal interests were adequately protected by the terms of the joint venture agreement, and that there was no need to vary the orders to account for her interests. The court noted that the respondent had not yet filed a defence or detailed evidence in relation to the various allegations made against her, and that the findings made were provisional.

The final orders of the court were that the freezing orders against the respondents be continued until further order, with liberty reserved to the parties to apply on 24 hours’ notice. Costs were reserved in relation to the respondent's application, and costs as against the respondents were to be the applicants' costs in the cause. The court's decision provides guidance on the circumstances in which freezing orders may be continued, and the extent to which they may be varied to account for the interests of interested parties.

Orders

Orders of the court

1. The freezing orders against the first and second respondents made on 2 April 2024 (as varied) be continued until further order.

2. Reserve liberty to the parties to apply on 24 hours’ notice.

3. Costs be reserved in relation to Mrs Giezekamp’s application.

4. Costs as against the respondents be the applicants’ costs in the cause.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The Simmons JVA begins with a Schedule, which includes:Item 3: The Property: (Background “A”)Being the whole of the land described in Certificate of Title Volume 8135 Folio 240 and known as 8 Eileen St Hadfield Vic 3046. JV2/JV3’s unit allocation is 3/8 Eileen St Hadfield Vic 3046.Item 4: Details of the Project (Background “A”)It is intended to develop the properties into multi density townhouses for the purposes of ultimate sale. Town planning approval in place for 8 x 2 bedroom, 3 level modern design. Purchase and construction loans approved and settled.Item 5: Percentage of ownership of Joint Venturers: (Clause 1.1.2)Item 5a: JV1 holds 100% shareholding, sole director of MHPG Holdings Australia Pty Ltd. JV2/JV3 holds 0% shareholding. No serviceability required for JV2/JV3.Item 5b: Security offered for JV2/JV3 are the entire 8 townhouses for 8 Eileen in the event of default, JV2/JV3 can sell all 8 townhouses to receive their investment of $500,000.00 if they choose option 1.JV2/JV3 have 2 options available to them after 12 months.Option 1: JV2/JV3 can receive their $500,000.00 investment back. The $100,000.00 interest has been paid already.Option 2: JV2/JV3’s allocated unit is 3/8 Eileen St Hadfield Vic 3046. The $500,000.00 principal investment will be used as a deposit for the purchase of 3/8 Eileen St Hadfield Vic 3046. Agreed purchase price is $775,000.00. JV2/JV3 retains their interest of $100,000.00Item 6: Number of Lots on the Plan of Subdivision (Clause 1.1.3)DA approval/Town Planning in place for 8 x 2 bedroom townhouses. The unit allocation will be issued to the following entity.Entity that owns 8 Eileen St Hadfield Vic 3046 is:MHPG Holdings Australia Pty LtdABN: 35 624 011 767Address: 238 Darling Street Balmain NSW 2041Director: Paul GiezekampShareholder: Paul Giezekamp 100%Townhouse allocation is unit 1, 2, 4, 5, 6, 7 & 8/8 Eileen St Hadfield Vic 3046.Shareholder: Julie Anne Simmons and Daniel Ashuin Simmons 0%.Townhouse allocation is 3/8 Eileen St Hadfield Vic 3046.Item 7: Sum to be paid by JV2/JV3:The sum to be paid by JV2 is $500,000.00.Please note:a)JV1 will be solely responsible for the servicing of any mortgage debt and all outgoings due and payable from time to time.b)JV1 will be solely responsible for the construction and development which will include all purchase costs, Architect costs and builder costs, including any additional build funding.Item 8: Bank AccountJV2/JV3 agrees to pay the $500,000.00 to the CSA bank account BSB 062110 A/C 10385258 for the entity MHPG Holdings Australia Pty Ltd. On receipt of this payment from JV2/JV3, JV1 will transfer the 20% interest ($100,000.00) immediately to JV2/JV3’s preferred bank account.Item 9: Anticipated Project Borrowings (Clause 3.1)Projected Borrowings is $2,000,000.00. Estimated end value is $6,200,000.00Item 10: Management Fee (Clause 4.2.3.)NILItem 11: Project Manager (Clause 1. 1.4)Project Manager:Ms Mandy ChaayaOperations ManagerMayfair Property1300 238 410Builder:APEX Homes Pty LtdABN: 30 126 702 903Apexhomes.com.au1300482724

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I would not exercise a discretion not to continue the freezing orders for reasons associated with Mrs Giezekamp’s legal interests in the Balmain Property and the Five Dock Property. Nor should the orders be varied in the way contended by Mrs Giezekamp.CONCLUSION For these reasons, the freezing orders should be continued, including in so far as those orders affect properties in which Mrs Giezekamp has a legal interest, namely the Balmain Property and the Five Dock Property.

Ratio Decidendi

Legal Principle Established

It is convenient first to address whether there is a “a good arguable case on an accrued or prospective cause of action”. The respondents initially disputed that there was a good arguable case in relation to nearly all of the applicants’ various claims, but later conceded that there was a good arguable case in relation to some of them. ConsiderationGood arguable case What follows is drawn from the ASOC and various affidavits and exhibits. It is important to observe that the respondents have not yet filed a defence or detailed evidence in relation to the various allegations made against them. The findings I make are provisional. I have not dealt in these reasons with each and every claim because it is not necessary to do so. I have, however, considered each of them. Counsel for the applicants took the Court through each of the various claims, as he did when seeking ex parte relief. Two of the applicants were new to the proceedings since the ex parte relief was granted (Ms Davison and Ms De Souza) and one who was a party when the ex parte relief was granted is no longer a party (the ex-twelfth applicant). I will, however, address in these reasons some of the dealings with respect to a property at 8 Eileen Street in Hadfield, Victoria and some of the loan arrangements relevant to some of the applicants. 8 Eileen Street It is convenient to deal only with 8 Eileen Street, but it is relevant to note that what was contemplated was the development of 16 triple storey dwellings on 8 and 10 Eileen Street, namely 8 units on each of 8 and 10 Eileen Street. There was a “Joint Venture Agreement” between Mr Saunders (the third applicant) and Mr Giezekamp dated 23 August 2019 which related to 10 Eileen Street. It is not necessary for present purposes to address the claims made by Mr Saunders. Mr Hamilton-Jessop met Mr Giezekamp on about 6 February 2020 at the Balmain Property. He says that Mr Giezekamp offered him the opportunity to engage in a 50-50 joint venture in relation to 8 Eileen Street. Mr Hamilton-Jessop says that Mr Giezekamp stated “you will invest $750,000 and you get $1.8 million profit”: Hamilton-Jessop at [4]. This gives rise to what is referred to in the ASOC at [56] as the “MHJ Oral Representation”. On 4 March 2020, Mr Hamilton-Jessop and Mr Giezekamp became directors of MHPG Holdings Australia Pty Ltd. Mr Hamilton-Jessop and Mr Giezekamp initially held 50 shares each of 100 issued shares: MHJ Exhibit at 29. Mr Hamilton-Jessop and Mr Giezekamp entered into a “Joint Venture Agreement” on 5 March 2020 (MHJ JVA). Mr Giezekamp is described as “JV1” and Mr Hamilton-Jessop as “JV2”. The MHJ JVA begins with a Schedule, which includes:Item 3: The Property: (Background “A”)Lot 43 on Plan of Subdivision 012805 being the whole of the land described in Certificate of Title Volume 8135 Folio 240 and known as 8 Eileen Street, Hadfield VIC 3046.Item 4: Details of the Project (Background “A”)It is intended to develop the properties into multi density townhouses for the purposes of ultimate saleItem 5: Percentage of ownership of Joint Venturers: (Clause 1.1.2)JV1 is to hold 50% ownership; andJV2 is to hold 50% ownershipItem 6: Number of Lots on the Plan of Subdivision (Clause 1.1.3)Town Planning approval confirms 8 units. Unit allocation is – JV1 units 2, 4, 6 & 8. JV2 units 1, 3, 5 & 7. Both JV1 and JV2 have the right to sell any/all of their allocated units ‘off the plan’ at any time before, during or after the build is completed without consent from either party.Item 7: Sum to be paid by Joint Venturers:The sum of the following:a)JV1 will contribute the following amounts in respect to the acquisition costs for 8 Eileen St, Hadfield:I.$213,750.00 being 15% Deposit (50% share)II.$35,625.00 Stamp Duty (50% share)III.$1,250.00 approx. Legal Fees. (50% share)IV.$750.00 Joint Venture Agreement (50% share)V.$7,995.00 Buy fee. (50% share)VI.$12,495.00 Development fees. (50% share)VII.$17,875.00 Development Approval Permits/ Architect feesVIII.$66,875.00 5% deposit to Builder (50% share)IX.$350,000.00 Prelim 2 deposit to builder $50% share)b)JV2 will contribute the following amounts in respect to the acquisition costs for 8 Eileen St, Hadfield:I. $213,750.00 being 15% Deposit (50% share)II. $35,625.00 Stamp Duty (50% share)III. $1,250.00 approx. Legal Fees. (50% share)IV. $750.00 Joint Venture Agreement (50% share)V. $7,995.00 Buy fee. (50% share)VI. $12,495.00 Development fees. (50% share)VII. $17,875.00 Development Approval Permits/ Architect fees.VIII. $66,875.00 5% deposit to Builder (50% share)IX. $350,000.00 Prelim 2 deposit to builder ($50% share)c)The Joint Venturers shall equally contribute to the servicing of any mortgage debt and all outgoings due and payable from time to time.d)The Joint Venturers shall contribute equally to the construction and development which will include all purchase costs, Architect costs and builder costs as per item 7a and 7b and Annexure “A” annexed hereto.Item 8: Structure and Signatories to the Bank Account (Clause 2.2)Both Joint Venturers agree to open a new Pty Ltd company to purchase 8 Eileen St Hadfield VIC 3046. The company will be called MHPG Holdings Australia Pty Ltd. Both JV1 and JV2 will be equal directors and shareholders. The bank account will be in the name of MHPG Holdings Australia Pty Ltd. Both JV1 and JV2 will be signatories to the bank account. To withdraw funds, both JV1 and JV2 will need to sign the cheques together or be present together at the bank to sign the withdrawal form. There will be no access to internet banking except for viewing purposes.Item 9: Anticipated Project Borrowings (Clause 3.1)Projected Borrowings will be approximately $926,000.00 for the Purchase of 8 Eileen St, Hadfield Vic 3046. Purchase price is $1,425,000.00..Construction borrowings shall be generally in accordance with the attached spreadsheet from Mayfair Property marked annexure ‘A’.Item 10: Management Fee (Clause 4.2.3.)NILItem 11: Project Manager (Clause 1.1.4)Project Manager:Ms Aisa SubhiNational Project ManagerMayfair Property1300 238 410Aisa@mayfairproperty.net.auBuilder:Ozzie Homes Building & Construction Pty Ltd2/789 Pascoe Vale RoadGLENROY VIC 3046Ph. 0431 111 363