Summer Hicks v Daniel Mark Harris - [2023] SADC 94

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
SUMMER HICKS v DANIEL MARK HARRIS
[2023] SADC 94
Judgment of his Honour Judge Burnett
21 July 2023
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DETENTION, INSPECTION AND PRESERVATION - FREEZING ORDERS
The applicant seeks, an ancillary order to a freezing order, that the respondent provide further information about certain assets.
The Court made a freezing order in October 2022. The Court also ordered that the respondent file and serve an affidavit of his assets and liabilities.
The respondent provided that affidavit. The applicant had concerns about the adequacy of the information provided in that affidavit and sought further information which the respondent refused to provide. The information sought by the applicant in this application falls into two broad categories. In the first category, the applicant has sought information about assets in the possession of the respondent, namely (1) money in his bank account or in joint names with his ex-wife; (2) properties in the name of the respondent and (3) any business owned or operated by the respondent. In the second category, the applicant has sought information about what has happened to certain assets, namely (1) the proceeds of the sale of a property at O’Sullivan Beach (2) assets obtained from the deceased estate of the respondent’s father; and (3) details of the financial settlement between the respondent and his ex-wife.
Held:
(1) No further order should be made in respect to the first category of assets or the respondent’s financial settlement with his ex-wife. There is no evidence that the respondent has assets of the type specified and the provision of the ancillary information would incriminate the respondent or treat the respondent as a judgment debtor. Such purposes go beyond the jurisdictional basis of an ancillary order: AJ Bekhor & Co Ltd v Bilton [1981] QB 923 applied.
(2) The information sought in relation to the sale of the O’Sullivan Beach property and the deceased estate of the respondent’s father comes within the proper scope of an ancillary order. There is a proper evidentiary basis for contending that the respondent has disposed of these assets without receiving any or sufficient consideration such that the payment to a third party may be void against the trustee in bankruptcy. A freezing order and therefore an ancillary order may be ordered against a third party on the basis that the third party may hold assets that may be enforceable by a judgment creditor against a potential judgment debtor in the event of bankruptcy or liquidation of that respondent: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 applied. An ancillary order may also be made when the affidavit provided requires better explanation to ensure that all relevant assets were identified: Hathway (Liquidator) in the matter of Tightrope Retail Pty Ltd (in Liq) v Tripolitis [2015] FCA 1003 applied.
(3) The Jones v Dunkel inference does not apply in an interlocutory application of this nature: McMillan Investment Holdings Pty Ltd v Mangos [2021] NSWSC 37 applied.
Bankruptcy Act 1966 (Cth) s 120, referred to.
Yadlamalka Land Pty Ltd v Ragless & Anor [2018] SASC 131; Jackson v Sterling Industries (1987) 162 CLR 612; Seeley International v Millennium Electronics [2020] SASC 205; AJ Bekhor & Co Ltd v Bilton [1981] QB 923; Biscen Pty Ltd v Temsign Pty Ltd [1995] FCA 1587; Firmtech Aluminium Pty Ltd v Xie (No 2) [2022] NSWSC 1142; Graincorp Operations Limited v Duncan Ross Munro [2015] NSWSC 227; Hathway (liquidator), in the matter of Tightrope Retail Pty Ltd (in liq) v Tripolitis [2015] FCA 1003; Planet International Limited v Garcia (No.2) [1991] 1 Qd R 426; House of Spring Gardens Limited v Waite [1985] FSR 173; Universal Music Australia Pty Ltd v Sharman License Holdings Ltd (2005) 228 ALR 174; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; RAC Limited v Allsop Unreported 3 October 1984 but reproduced in [1998] Ch 109; Cobra Golf Inc v Rata [1997] 2 All ER 150; [1998] Ch 109; Microsoft Corp v Goodview Electronics Pty Ltd [1999] FCA 754; Jones v Dunkel (1959) 101 CLR 298; Bosi Security Services Ltd v Wright [2013] WASC 431; McMillan Investment Holdings Pty Ltd v Mangos [2021] NSWSC 37, considered.

SUMMER HICKS v DANIEL MARK HARRIS
[2023] SADC 94
Civil
Background to the application

This application concerns the extent of the power of the Court to make ancillary orders to a freezing order.
The applicant has brought a claim against the respondent for personal injuries. The respondent denies any liability to the applicant.
The applicant served a pre-claim notice on the respondent on 5 August 2022. The claim was instituted on 29 September 2022 but not served on the respondent until shortly after 7 October 2022.
On 7 October 2022, the applicant brought an interlocutory application in which she sought, pursuant to Uniform Civil Rules 2020 (UCR) 112.14, a freezing order over the assets of the respondent. The applicant further sought pursuant to UCR 112.15 an order that the respondent file and serve an affidavit of his assets and liabilities.
On 7 October 2022, the Court granted an interim freezing order effective to 12 October 2022. The Court further ordered that the respondent inform the applicant in writing of his assets, giving their value, location and details (including any mortgages, charges or other encumbrances to which they were subject) and further ordered that the applicant provide an affidavit setting out that information.
On 12 October 2022, the Court granted the freezing order over the assets of the respondent.
Pursuant to the order made on 7 October 2022, the respondent provided an affidavit to which he annexed a table of his assets as at 4 August 2022. In that table of assets, the respondent disclosed that he held the following assets:
·10,000 shares in Costaki Holdings Pty Ltd valued at $10,000;
·A motor vehicle, the estimated value of which was $10,500;
·A further motor vehicle, the estimated value of which was $6,000;
·Negligible money held at the bank (less than $10);
·Minimal superannuation of $3000; and
·Artwork, the estimated value of which was $8,400.
The respondent confirmed this table of assets in an affidavit sworn on 25 October 2022.
The respondent also provided details of the transfer of a property at 140a Murray Road, Port Noarlunga (the Port Noarlunga property). That property had been held in the joint names of the respondent and his wife, Mrs Mary Anne Harris. The affidavit of the respondent’s solicitor stated that the property had been purchased by the respondent’s estranged wife, Mrs Mary Anne Harris, and that she was the sole financial contributor to the purchase of the property and its ongoing maintenance. The affidavit further stated that the Port Noarlunga property had been transferred into the sole name of Mrs Harris in October 2022 as a result of the marriage breakdown of the respondent and Mrs Harris.
The applicant had concerns regarding the adequacy of the financial information provided by the respondent in the affidavit to which I have referred. The applicant adduced evidence that:
(1)The respondent had been the sole registered proprietor of the property situated at 1 Borrago Street, O’Sullivan Beach (the O’Sullivan Beach property). That property had been transferred by the respondent to third parties for the sum of $576,125 in March 2022. There was no mortgage on the property;
(2)The respondent had received an inheritance from his father who had passed away in 2019. That inheritance was alleged to have included a backpacker’s hostel and cash and other assets;
(3)The respondent had reached a financial settlement with his wife.
The applicant requested that the respondent include in his statement of assets and liabilities details about the above assets. The respondent declined to do so and stated that he had complied with the orders made and had filed an affidavit of his assets in accordance with the orders of the Court. The respondent further stated that the orders of the Court did not require him to provide details of assets that he held prior to the date of the order.
The applicant was dissatisfied with the response of the respondent and brought a further interlocutory application on 15 November 2022 in which she sought an order pursuant to UCR 112.15 that the respondent provide further information about his assets including:
(1)the proceeds of the sale of the O’Sullivan Beach property (which was formerly owned by the respondent);
(2)any money in the account of Daniel Mark Harris or in joint names with Mary Anne Harris;
(3)any assets obtained from the deceased estate of the respondent’s father;
(4)any business including a backpacker’s hostel which the respondent runs or operates;
(5)any properties in the name of the respondent; and
(6)details of the respondent’s financial settlement with his estranged wife, Mary Anne Harris.
The information sought by the applicant falls into two broad categories. First, the applicant is seeking information about assets that she says the respondent now has in his possession. In this category are the money (if any) which the respondent holds in his bank account or joint bank account, any business he runs or operates and any properties in his name. Secondly, the applicant is seeking information about what has happened to assets, or the proceeds from the disposal of assets, that the respondent had prior to the freezing order being made. In this category are the proceeds of the sale of the O’Sullivan Beach property, any assets obtained from the deceased estate of the respondent’s father and details of the financial settlement between the respondent and his ex-wife, Mary Anne Harris.
The entitlement of the applicant to information that falls into this second category depends on the breadth of the power of the Court to make ancillary orders. The breadth of that power will be informed by the doctrinal basis for the granting of a freezing order.
The respondent objected, on the ground of hearsay, to the Court receiving an affidavit from the applicant that deposed to conversations that the applicant had with the respondent. The respondent contended that the affidavit could not be used as evidence of the truth of those conversations. I consider the affidavit to be admissible for this purpose. The affidavit records conversations which, in the context of this application, include admissions by the respondent that he held assets from his father’s estate. Such admissions are an exception to hearsay. In any event, such hearsay would be admitted in an interlocutory application.
Legal Principles relating to freezing and ancillary orders
UCR 112.14 provides:
(1)The Court may make an order (a freezing order), with or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.
(2)A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.
UCR 112.15 provides:
(1)The Court may make an order (an ancillary order) ancillary to a freezing order or prospective freezing order as the Court considers appropriate.
(2)Without limiting the generality of subrule (1), an ancillary order may be made for either or both of the following purposes –
a. eliciting information relating to assets relevant to the freezing order or prospective freezing order;
b. determining whether the freezing order should be made.
The doctrinal basis of the freezing order, as set out in UCR 112.14 and also established in a long line of authority, is to prevent the frustration of the Court’s process (namely the recovery of a judgment) and is designed to protect a prospective enforcement process.[1] The order is not designed to provide security for the applicant’s claim.[2]
[1] Yadlamalka Land Pty Ltd v Ragless & Anor [2018] SASC 131 at [38] and the cases referred to therein.
[2] Jackson v Sterling Industries [1987] HCA 23; (1987) 162 CLR 612 at 621, 625.
The applicant for a freezing order must establish that there is a real danger that the assets of the prospective judgment will be wholly or partly unsatisfied because the assets of the prospective judgment debtor are disposed of or dealt with or otherwise diminished in value.[3]
[3] Seeley International v Millennium Electronics [2020] SASC 205 at [6]; Yadlamalka Land Pty Ltd v Ragless & Anor [2018] SASC 131 at [35] ff.
In Yadlamalka Land Pty Ltd v Ragless & Anor,[4] Hinton J observed that the freezing order is a drastic remedy, is not lightly granted and that its purpose is to preserve the status quo.
[4] Ibid at [40].
Although the power to make an ancillary order is expressed in wide terms and UCR 112.15 does not limit the circumstances in which an order might be made, “any order made must be framed to as to come within the limits set by the purpose which the order can properly be intended to serve, that is, to ensure the effective exercise of the jurisdiction invoked”.[5]
[5] Yadlamalka Land Pty Ltd v Ragless & Anor [2018] SASC 131 at [39].
The discretion that the Court has to make an ancillary order must be exercised by reference to the purposes of the freezing order. Therefore, the ancillary order must assist the freezing order to ensure assets of the prospective judgment debtor are not disposed of or dealt with or otherwise diminished in value so as to frustrate any prospective judgment.
In AJ Bekhor & Co Ltd v Bilton,[6] the Court of Appeal held that the court had power to make all such ancillary orders as appeared to be just and convenient to ensure that the exercise of the jurisdiction to make a mareva injunction was effective to achieve its purpose. Accordingly, the Court in that case ordered the respondent to provide information about his assets. The Court could also order that the respondent attend for cross-examination.
[6] [1981] EWCA CIV 8; [1981] 2 All ER 565; [1981] QB 923 at 940.
However, the Court emphasised that the ancillary order must not go too far. The Court held that an order which was sought for the purpose of ascertaining whether a previous disclosure order had been breached (and therefore for the purpose of incriminating and ultimately punishing the respondent for contempt) goes beyond the jurisdictional basis of such an order and will not be made.[7] Ackner LJ held that the purpose of the mareva injunction (or freezing order) was not to improve the position of the applicant in an insolvency but to prevent the disposal of assets which would otherwise be available to satisfy a judgment. He went on to hold:[8]
The Courts must be vigilant to ensure that the Mareva defendant is not treated like a judgment debtor. It was no doubt with this general principle in mind that Robert Goff J in A v C (Note). Post 956 [A v C [1981] 1 QB 956] was at pains to point out that it would not be right to make general use of the power to enable the plaintiff to discover whether the defendant has any assets here. However, having established the existence of assets, it may in a particular case, be necessary for the proper exercise of the jurisdiction that the defendant should provide information about a particular asset.
[7] Ibid at 945.
[8] Ibid at 942.
Stephenson LJ held that insofar as the ancillary order sought information that related to the respondent’s past assets as distinct from the present whereabouts of assets, the purpose of the ancillary order was not to assist the court or the applicant to locate and freeze particular assets now, as to open the way to punishing the respondent for contempt. That purpose goes beyond the legitimate purpose of an ancillary order and is not necessary for the proper and effective exercise of the mareva injunction.
There have been a number of cases that have considered the principles set out in Bekhor and that provide some guidance as to the width of the ancillary orders.
In Biscen Pty Ltd v Temsign Pty Ltd,[9] Carr J refused to make an order concerning assets and liabilities and any dispositions of assets since a certain date for the reasons set out in Bekhor.
[9] [1995] FCA 1587.
More recent decisions have taken a broader approach than that taken in Bekhor and Biscen.
In Firmtech Aluminium Pty Ltd v Xie (No 2),[10] Robb J analysed the jurisdictional basis for making ancillary orders to a freezing order and concluded that an ancillary order requiring disclosure by the respondent did not need to be limited to information relating to the assets and liabilities of the respondent but could include information in respect of payments and other transactional arrangements, citing Bergin CJ in Eq in Graincorp Operations Limited v Duncan Ross Munro.[11] In Graincorp, a payment of $750,000 was made to the respondent in exchange for the delivery of barley. In the context of an application for a freezing order, the applicant sought the disclosure of the assets and liabilities of the respondent together with the identification of the bank account or other destination of those payments. The Court granted that order and found that the applicant had a concern where the money went and given the silence of the respondent in relation to that issue, it was appropriate that the ancillary order require the provision of that information.
[10] [2022] NSWSC 1142 at [34].
[11] [2015] NSWSC 227 at [9]-[17].
Markovic J in Hathway (liquidator), in the matter of Tightrope Retail Pty Ltd (in liq) v Tripolitis,[12] granted an order, ancillary to a prospective freezing order, requiring the respondent be cross examined on his affidavit as to assets and liabilities. Markovic J quoted from the decision of Thomas J in Planet International Limited v Garcia (No.2)[13] who in turn quoted from the judgment of Cumming-Bruce LCJ in House of Spring Gardens Limited v Waite[14]that:
The court has the power (and, I would add, the duty) to take such steps as are practicable upon an application of the plaintiff to procure that where an order has been made that the defendants identify their assets and disclose their whereabouts, such steps are taken as will enable the order to have effect as completely and successfully as the powers of the court can procure.
and –
The purpose of the cross-examination would be to elicit with greater particularity the extent and the whereabouts of the defendants’ assets. The background of applications for Mareva injunctions is often a situation in which it is urgently necessary for the court to intervene in order to assist the plaintiff to prevent the defendant from frustrating the object of the proceedings. In such a situation an order to cross-examine upon an unsatisfactory affidavit already filed is one of the courses that the court has jurisdiction to take. When such cross-examination takes place it is entirely a matter for the judge presiding on cross-examination properly to control it.
[12] [2015] FCA 1003.
[13] [1991] 1 Qd R 426 at 427.
[14] [1985] FSR 173 at 183.
Thomas J went on to hold:
Mr Lyons Q.C. on behalf of the respondent Mr Garcia submitted that courts are slow to make such orders. I am not sure that that is correct, although I acknowledge that the defendants need protection from being treated as “debtors in advance” as Lord Ackner acknowledged in A.J. Bekhor and Company Limited v. Bilton [1981] EWCA Civ 8; [1981] QB 923, 942; [1981] 1 Lloyds’ Rep 491, 500. Also fishing expeditions must be prevented if that seems to be the object of the exercise. However it seems to me that the matter is at large and that it will depend upon the facts and circumstances of each particular case whether the exercise is unduly oppressive, unnecessary, insufficiently relevant, or whether the affidavit plainly requires better exposition that the deponent is prepared to give without the stimulus of cross-examination.

Markovic J also referred to the decision in Universal Music Australia Pty Ltd v Sharman License Holdings Ltd,[15] where Moore J held that where there might be doubt as to whether the disclosure of assets and liabilities had been complete, cross examination on the affidavit would be appropriate to test whether the disclosure affidavits fully revealed the assets over which the mareva injunction operated and which might be available to satisfy a judgment.
[15] (2005) 228 ALR 174 at 184.
In deciding that it was appropriate to make an ancillary order requiring the respondent to be cross-examined on his affidavit, Markovic J relied, amongst other matters, upon the fact that funds had moved from the applicant companies to a bank account of the respondents and the funds could not now be located. Her Honour concluded that the order for cross-examination was within the bounds of what is permitted and was a just and convenient way of ensuring that all relevant assets were identified before any opportunity arises from the dissipation of assets.
The respondent sought to distinguish Hathway on the basis that in that case there was evidence that the applicant companies had transferred some $22 million in funds to the respondents, some of which could be traced but the remainder could not be traced. Therefore, the applicant required the information so that it could trace the remainder of the assets. I do not consider this provides a basis for distinguishing the case. Although the causes of action may be different and the applicant companies in Hathway might assert a proprietary interest in the moneys being traced, the principles set out in Hathway and the authorities relied upon remain applicable to the present case. The finding in Hathway that there may be other assets available to the respondents in that case which have not been disclosed in their affidavits provided a justification for the making of the ancillary order. The assets in the present case are those assets which a trustee in bankruptcy might seek to recover. The High Court in Cardile v LED Builders Pty Ltd[16] (see below) has held that these assets come within a freezing order. It follows an ancillary order relevant to that order come within the proper scope of an ancillary order.
[16] [1999] HCA 18; (1999) 198 CLR 380.
Cases involving the making of ancillary orders in the context of Anton Piller orders, or as they are now called, search orders, also provide some assistance in determining the scope of such orders. In RAC Limited v Allsop,[17] the Court examined the rationale for the making of ancillary orders in the context of Anton Piller orders in the following passage which was cited with approval in Cobra Golf Inc v Rata.[18] With necessary modifications, the same principles apply to an ancillary order in aid of a freezing order. In RAC Limited v Allsop, Peter Gibson J said:
On the assumption that the court has the power to order cross-examination, the question remains whether it is appropriate in the particular circumstances of each defendant to make an order for cross-examination. It is clear that on the assumption the court has a discretion, it is of proper concern of court that its order should be fully complied with. It cannot be right that a person who is ordered to swear an affidavit giving certain information should be able to disclose to whatever he pleases without any fear that the evidence can be challenged effectively. Further, a principal object of the order for disclosure where Anton Piller relief is granted is to give to the plaintiff knowledge of the sources and whereabouts of illicit goods so that the plaintiff can take further proceedings against such sources and seize such supplies. As I see it the court should be ready to further that purpose. But in this area the court should proceed with caution. The object of the application must, I apprehend, truly be to obtain the further information which it believed is in the possession of the person the subject of the order but which the person has failed to disclose notwithstanding the earlier order. The object of the application must not be to enable contempt proceedings to be brought so as to punish the person served with the order. Further, it must not be to obtain information which is to be used for the purpose of the action when the action comes to trial. Inevitably if cross-examination is ordered and information is elicited there is likely to be some information which will go to questions of contempt and to the subject matter of the litigation. The court, must, I think, be alive to the dangers that an order for cross-examination brings. Mr Platts-Mills [Counsel] accepted that the court should not make an order for cross-examination unless satisfied that there was a reasonable likelihood that the person sought to be cross-examined had information which should have been disclosed pursuant to the order for disclosure and which would lead to the fulfilment of the purpose of the order, that is to say disclosure of sources and ascertaining the whereabouts of illicit goods. In my judgment Mr Platts-Mills [counsel] was plainly right to accept that there was a proper limitation in the court’s power to order cross-examination. It cannot be right to allow a plaintiff the opportunity of a roving cross-examination merely because the plaintiffs harbour suspicion that the person sought to be made the subject of the order has not been entirely open in his disclosure.
The ancillary order must not be used as a mere investigatory tool. In Microsoft Corp v Goodview Electronics Pty Ltd,[19] Branson J held:
The Court, must in my view, be careful to avoid the extraordinary jurisdiction of the Court to make an Anton Piller order from being subverted to a mere investigatory tool for the applicants, or indeed, from being used for any purpose other than the preservation of vital evidence pending the hearing and determination of a proceeding.
[17] Unreported 3 October 1984 but reproduced in [1998] Ch 109 at 122.
[18] [1997] 2 All ER 150; [1998] Ch 109 at 133.
[19] [1999] FCA 754 at [24]-[26].
Lastly, reference should be made to the decision of the High Court in Cardile v LED Builders Pty Ltd[20] where the matter under consideration was the power of the Court to grant a mareva injunction (or freezing order) against a third party preventing it from disposing of assets. In that case, the third parties were directors of the respondent company and had received a dividend in the sum of $400,000 from the company. The plurality of Gaudron, McHugh, Gummow and Callinan JJ held that it was too narrow a proposition to say that the granting of mareva relief against the third party should be limited to cases where the third party holds or is about to hold or dissipate or further dissipate property beneficially owned by the respondent in the substantive proceedings. The plurality held that the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained was as follows:[21]
In our opinion such an order may, and we emphasise the word "may", be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which:
(i)the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies", of the judgment debtor or potential judgment debtor; or
(ii)some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.
[20] [1999] HCA 18; (1999) 198 CLR 380.
[21] Ibid at [57].
Determination
The above analysis suggests that the purpose of the ancillary order is to enable the freezing order to have as much effect as possible so as to ensure that the assets of the prospective judgment debtor are not disposed of or otherwise dealt with so as to diminish their value. With that purpose in mind, there are limits as to the breadth of ancillary orders. They are (1) the orders cannot be made for the purpose of incriminating the respondent; (2) the orders cannot be made for the purpose of improving the position of the applicant in the event of the insolvency of the respondent; (3) the orders cannot be made for the purpose of seeking information about past assets and (4) the orders cannot be made as a mere investigatory tool.
Therefore, the facts and circumstances of this case must be considered to determine the following matters: first, whether the information sought is for a legitimate purpose; secondly, whether the affidavit that has been provided by the respondent requires further explanation; and thirdly, whether the information being sought goes beyond the legitimate purpose and is, in substance, for one of the extraneous purposes referred to above.
In relation to what I have described as the first category of information sought (that is information about money in bank accounts, properties that the respondent owns or has an interest in and any business that he owns or operates) the respondent has already provided that information. He has filed an affidavit of his assets which does not include any of those assets. In short, he says that he does not have these assets. If that is false, contempt proceedings can be taken. However, an ancillary order should not be made requiring the provision of further information as the information sought has already been provided. There is no specific evidence that suggests that the respondent has any assets of the type sought in this first category of information that have not been disclosed. In accordance with the authorities, the purpose of seeking the provision of that information is to incriminate the respondent. That is, to show that his affidavit as to assets was false. The applicant is, in respect of the documents in the first category, using the ancillary order as an investigatory tool or is colloquially “fishing”.
I therefore decline to make an order in relation to the first category of information sought.
The information sought in the second category (the proceeds of the sale of the O’Sullivan Beach property, any assets obtained from the deceased estate of the respondent’s father and details of the financial settlement with his wife) raises different issues.
It important to observe that when determining the purpose of the ancillary orders that the High Court in Cardile v LED Builder[22] held that the power to grant a mareva injunction extended to freezing the assets of a third party, including in circumstances where there might be available some against the judgment debtor by, inter alia, a trustee in bankruptcy that may result in the third party being required to disgorge that property. It follows that an order could be made ancillary to such a freezing order for the purpose of identifying that property. The cases involving ancillary orders requiring a respondent to provide information about where a payment was sent are further examples of the power to make such orders not being restricted to assets actually in the possession of a respondent.
[22] [1999] HCA 18; (1999) 198 CLR 380.
Applying these principles to the present case, the evidence that has been adduced, for the purposes of the interlocutory application, establishes that the respondent was in possession of and had a legal interest in the O’Sullivan Beach property and the assets from his father’s estate, including a backpacker’s resort. The disclosure affidavit filed by the respondent makes no reference to these assets or any asset that might be said to be the proceeds from the sale of those assets.
The respondent did not file any affidavit in opposition to this application. The applicant submitted that the Court should draw a Jones v Dunkel[23] inference from that failure. I do not regard the rule in Jones v Dunkel as having any application in interlocutory applications of this nature.[24] The Court is not determining any issue or making a definitive finding of fact. Its task is determining on the evidence adduced, whether the applicant has established a proper basis for making the order. That requires an examination of, in this case, the sufficiency of the evidence contained in the applicant’s affidavits. If the applicant has not produced sufficient evidence to provide a basis for the order, the application must fail and no Jones v Dunkel inference can supplement that deficiency. In McMillan Investment Holdings Pty Ltd v Mangos,[25] Walton J held that it was not apparent how the Jones v Dunkel inference might apply in interlocutory proceedings where witnesses are not required for cross-examination and the issue is the weight to be accorded to evidence adduced in affidavits.
[23] (1959) 101 CLR 298.
[24] Bosi Security Services Ltd v Wright [2013] WASC 431 at [51].
[25] [2021] NSWSC 37 at [12].
The inference to be drawn for the affidavit material tendered is that there is a proper evidentiary basis for contending that the respondent has disposed of these assets to a third party without receiving any or sufficient consideration. Such a contention is not mere speculation.
That finding has the consequence that the transaction may be void against any trustee in bankruptcy of the respondent (if one is appointed) pursuant to s 120 of the Bankruptcy Act 1966 (Cth). Section 120 provides, subject to some exceptions that are not relevant for present purposes, that a transfer in the period of 5 years before the commencement of bankruptcy is void against the trustee in bankruptcy if the transferee gave no consideration for the transfer or gave consideration of less than the market value of the property.
Therefore, the information sought about the O’Sullivan Beach property and the assets from the estate of his father, relate to assets that might be available to the applicant (on the bankruptcy of the respondent) and in respect of which the applicant is entitled to information. The applicant currently does not have, and the respondent has refused to supply, that information. An ancillary order which seeks the provision of that information is a proper exercise of the power of the Court in the circumstances of this case.
The cases in which an ancillary order have been granted to provide information as to where funds have been transferred by a respondent also confirm that it is within the proper scope of an ancillary order to require the respondent to provide information about the disposal of the O’Sullivan Beach property and the assets from his father’s estate when the affidavit is silent on that issue. To use the words of Markovic J in Hathway (liquidator), in the matter of Tightrope Retail Pty Ltd (in liq) v Tripolitis[26] the ancillary order (in that case an order for cross-examination) was a just and convenient way of ensuring that all relevant assets are identified before any opportunity arises for the dissipation of those assets.
[26] [2015] FCA 1003 at [24].
The respondent opposed the orders and submitted that it had no obligation to provide the information. The respondent submitted that an order for the provision of the information was beyond the proper scope of an ancillary order as the respondent had provided an affidavit which set out his assets and liabilities as at the date specified in the order. The respondent further submitted that it was more speculation that he might hold further assets at that date. That is not the relevant issue in this application. The issue is whether there was an evidentiary basis that he had disposed of assets for insufficient consideration such that the order for the provision of information is within the proper scope of an ancillary order.
The respondent further submitted that he did not have to set out in his affidavit details about assets which he had disposed of prior to the date of the order. For the reasons which I have expressed, I consider that a potential action available to any trustee in bankruptcy is a chose in action to bring an action pursuant to s 120 of the Bankruptcy Act to recover the amount of those dispositions. It follows that in my view such a chose in action is directly related to the issue of whether the recovery of a prospective judgment would be frustrated by the dispositions of assets and is not beyond the proper scope of an ancillary order.
The respondent also submitted that the O’Sullivan Beach property had been disposed of prior to the respondent receiving notice of the proceedings. The property was disposed of in March 2022. That is not an answer to the application for the ancillary order to provide information about that disposal. The disposal may still give rise to a chose in action in any trustee in bankruptcy of the respondent or may give rise to the question of whether the applicant retains any interest in the property.
The respondent argued that the application was a fishing expedition and if the order was made, the respondent was being treated like a debtor in advance. The substance of that argument is that it is the contention of the respondent that (1) it is only speculation that the respondent has those assets and (2) the order was akin to a requirement that the respondent file a report as to affairs where he discloses all disposition of assets over a period of time preceding his bankruptcy. For the reasons that I have already expressed, I do not consider the application in relation to the O’Sullivan Beach property or the assets from the estate of his deceased father to be fishing. The applicant has adduced evidence of the existence of the assets and in the case of the O’Sullivan Beach property, its disposal and its inferred disposal in the case of the assets from his father’s estate. Requiring the respondent to provide information about these known assets and the proceeds from any disposal of those assets, is not treating the respondent as the judgment debtor because the applicant is seeking information about a known asset, within the meaning of that term as discussed in Cardile.
I have considered whether it is appropriate that the respondent provide information or documentation in relation to these matters or whether an order should be made that the respondent be ordered to be cross-examined on these issues. The less intrusive measure is more appropriate. I will therefore order that the respondent provide information about the O’Sullivan Beach property and any assets from the estate of his deceased father.
I consider the information requested by the applicant concerning the respondent’s financial settlement with his wife raises different issues. The applicant has not specified any particular asset that he says was disposed of or transferred by the respondent to his wife as part of the matrimonial settlement. In my view, the respondent is seeking to use the ancillary order as an investigatory tool. There is no basis, on the evidence before me, to make any finding that there might be either an asset owned by the respondent or a cause of action available to the trustee in bankruptcy of the respondent that arises from the respondent’s financial settlement with his wife.
Conclusion
For the reasons that I have expressed, I consider that it is an appropriate exercise of the power to make orders ancillary to the freezing order, that the respondent provide the information concerning:
(1)the disposition of the O’Sullivan Beach property and the proceeds from the sale of the property;
(2)the disposition of any asset from his father’s estate including any backpackers business and/or the disposition of the proceeds of sale of those assets.

The respondent is not required to provide further information about:
(1)any money in the bank account of the respondent or in joint names with Mary Anne Harris;
(2)any business (including the backpacker’s resort) which the respondent runs or operates;
(3)any properties in the name of the respondent;
(4)details of the respondent’s financial settlement with Mary Anne Harris.
I will hear the parties on costs and direct that the applicant brings into Court minutes of order reflecting these reasons.