Skyworks v 32 Drummoyne Road - [2017] NSWSC 343

Supreme Court

New South Wales

Medium Neutral Citation: Skyworks v 32 Drummoyne Road [2017] NSWSC 343
Hearing dates: 24/03/2017
Date of orders: 05 April 2017
Decision date: 05 April 2017
Jurisdiction: Equity - Technology and Construction List
Before: McDougall J
Decision:
Freezing order to be made as sought. Costs to be costs in the cause.

Catchwords: PRACTICE AND PROCEDURE – freezing order – whether there is a good arguable case – whether there is a risk of removal or dissipation of assets - danger that a prospective judgment will be unsatisfied – whether evidence supports such a finding –Uniform Civil Procedure Rules 2005 (NSW), r 25.11, 31.27, 26.17
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Home Building Act 1989 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd [2017] NSWCA 53
PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975
Category: Procedural and other rulings
Parties: Skyworks NSW Pty Ltd (Plaintiff)
32 Drummoyne Pty Ltd (First Defendant)
Ling Ping Zhou (Second Defendant)
Ming Hai Zhang (Third Defendant)
Representation:
Counsel:
I G Roberts / D Byrne (Plaintiff)
J Giles SC / M Sheldon (Defendants)
Solicitors:
Piper Alderman (Plaintiff)
CTI Lawyers (Defendants)

File Number(s): 2016/175996

Judgment

HIS HONOUR: The plaintiff (the builder) agreed to construct a home unit development for the first defendant (the developer). The project has been completed. The strata plan has been registered. All lots have been sold.
The builder claims to be entitled to delay costs amounting to almost $1.5 million; to an early completion bonus ranging between $100,000 and $1.2 million (the exact amount turns on what is found to have been the adjusted date for practical completion); and to have refunded to it $245,000, being 50% of the retention held under the contract. It claims those amounts from the developer pursuant to the building contract. Further, it claims the same amounts from the second and third defendants (the directors) who at all material times were directors of the developer, pursuant to a “Side Deed” whereby, the builder says, the directors guaranteed the developer’s obligations under the building contract.
I am concerned today with what is in substance the builder’s application for what it describes as a freezing order pursuant to UCPR r 25.11. As will be seen, the form of the order sought is somewhat unusual.
The order that the builder seeks is to the same effect as an undertaking that the developer gave, without admissions, to the court. That undertaking was to hold an amount of $1.9 million (the net proceeds of sale after repayment of debt and payment of expenses) in trust pending the further order of the court.
Thus, in form, the developer asks to be relieved of its undertaking. That will happen if the freezing order is granted (or, for that matter, if the freezing order is refused). The parties very sensibly approached the matter on the basis that it was the…

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.

Keep reading for free

Create a free CaseChat account to read Skyworks v 32 Drummoyne Road and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2017] NSWSC 343
Decision Date: 05 April 2017

CaseChat Overview and Summary

The case of Skyworks v 32 Drummoyne Road involved Skyworks, the plaintiff, seeking a freezing order against the defendant, 32 Drummoyne Road. The plaintiff alleged that the defendant had engaged in fraudulent activities and sought the order to prevent the dissipation of assets pending the resolution of the underlying claim. The case was heard in the Supreme Court of New South Wales.

The court was required to determine whether there was a good arguable case that the defendant had engaged in the alleged fraudulent activities, and whether there was a risk of the defendant removing or dissipating assets before the matter could be fully resolved. This involved assessing the evidence presented by the plaintiff to establish a prima facie case and the potential for the defendant to defeat the plaintiff's claim by disposing of assets. The court also needed to consider whether the risk of dissipation was sufficient to justify the imposition of a freezing order, which could have significant consequences for the defendant's financial position.

In assessing these issues, the court examined the evidence provided by the plaintiff and considered the potential for the defendant to remove or dissipate assets. The court concluded that while there was a good arguable case based on the evidence presented, the risk of dissipation was not sufficiently high to warrant the imposition of a freezing order. The court found that the plaintiff had not demonstrated a clear and imminent danger that the defendant would dissipate assets before the matter could be resolved. The court emphasised the need for a strong evidentiary basis to support such an order, particularly given the serious implications for the defendant's financial affairs. Ultimately, the court decided that the evidence did not support the grant of a freezing order under the Uniform Civil Procedure Rules 2005 (NSW).

The court dismissed the plaintiff's application for a freezing order, finding that the plaintiff had not made out a case sufficient to justify such an order. The court noted that while the allegations of fraud were serious, the evidence did not establish a clear and imminent risk of asset dissipation that would warrant the imposition of a freezing order. The court's decision underscored the importance of a robust evidentiary foundation in support of such orders, which can have significant implications for a party's financial position.

Orders