The Owners - Strata Plan No. 102081 v Aqualand Construction Pty Ltd

The Owners - Strata Plan No. 102081 brought proceedings against Aqualand Construction Pty Ltd seeking an interim preservation freezing order. The plaintiffs sought to freeze the assets of the developer, Aqualand, who had sold several residential units in a strata development. The plaintiffs argued that Aqualand would likely sell the remaining four units and not retain the proceeds to satisfy any potential judgment debt owed to the plaintiffs. The case was heard in the Supreme Court of New South Wales. The primary legal issue the court had to decide was whether there was a danger that the prospective judgment would be unsatisfied if a freezing order was not granted. The plaintiffs argued that the risk of the defendant not retaining the proceeds of sale was sufficiently high to justify the grant of a freezing order.

The court examined the meaning of “danger” in the context of granting a freezing order. It considered whether the plaintiffs had established a real danger of the defendant not retaining the proceeds of sale of the remaining units. The court noted that the plaintiffs needed to show more than a mere possibility; rather, there must be a real risk that the defendant would dissipate assets in a way that would make it difficult to satisfy any judgment. The court concluded that the plaintiffs had not established the necessary real danger. The evidence did not convincingly demonstrate that the developer would sell the remaining units and not retain the proceeds. Therefore, the court found that the plaintiffs had not met the threshold for granting a freezing order.

As a result, the court dismissed the application for an interim preservation freezing order. The plaintiffs' application was unsuccessful as they had not demonstrated a real danger that the prospective judgment would be unsatisfied. The court's reasoning focused on the standard required to establish the necessary danger and concluded that the plaintiffs had not met this standard. The orders of the court reflected this outcome, with the application for the freezing order being dismissed.