Vasilaras & Co Pty Ltd v Laprese

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROFESSIONAL LIABILITY LIST

S ECI 2018 00678

VASILARAS & CO PTY LTD (ACN 168 127 222) AND ANOR
(according to the schedule)

Plaintiff

MARINA LAPRESE AND ANOR

(according to the schedule)

Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 October 2018
DATE OF JUDGMENT:	13 February 2019
CASE MAY BE CITED AS:	Vasilaras & Co Pty Ltd v Laprese
MEDIUM NEUTRAL CITATION:	[2019] VSC 56 (first revision 14 November 2019)

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PRACTICE AND PROCEDURE – Freezing order – Application for variation to use funds held in a specified account for legal costs in defending the proceeding and related criminal prosecutions – Whether first defendant discharged the onus of establishing she has no other financial resources available to pay the costs – Whether proposed variation in the interests of justice – Freezing order to be administered subject to the interests of justice and consistently with the purposes for which it was originally made – Application for the variation dismissed on the ground that it would not be in the interests of justice.

PRACTICE AND PROCEDURE – Second plaintiff added after initial freezing order made – Freezing order extended on application of first plaintiff when second plaintiff added as a party – Second plaintiff a statutory authority with authority and powers to monitor and enforce consumer interests – No undertaking as to damages given at time of extension of freezing order – First plaintiff contends second plaintiff should give the same undertaking as to damages, it having the benefit of the freezing order – Consideration of the circumstances in which the Crown or a statutory authority may be required to give an undertaking as to damages – Undertakings as to damages required to be given by the second plaintiff if it is to have the benefit of the freezing orders - ACCC v Giraffe World Australia Pty Ltd (1998) 157 ALR 273; Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227; Optus Networks Pty Ltd v City of Boroondara [1997] 2 VR 318; Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486 referred to.

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APPEARANCES:	Counsel	Solicitors
For the First Plaintiff	Mr AP Tragardh	Colin Biggers & Paisley
For the Second Plaintiff	Mr D Connors	Director of Consumer Affairs Victoria
For the First Defendant	Mr A Sandbach	Katherine Moorhouse Perks
For the Second Defendant

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Procedural background – freezing and search orders................................................................. 2

The plaintiffs’ claims......................................................................................................................... 4

Factual background........................................................................................................................... 6

Laprese’s and One Call Legal’s disclosed assets........................................................................ 13

Laprese’s application....................................................................................................................... 14

Laprese’s contentions................................................................................................................. 15
Vasilaras’ response..................................................................................................................... 18
The Director’s response.............................................................................................................. 19
Black Rock property................................................................................................................... 23

Consideration.................................................................................................................................... 26

Undertaking as to damages – the arguments.............................................................................. 31

Consideration.............................................................................................................................. 34

The recent application..................................................................................................................... 39

Conclusions....................................................................................................................................... 42

HIS HONOUR:

Introduction

There are two applications before me, both referred by a Judge of the Court:[1]

(a) the defendants apply to vary freezing orders made by Garde J on 3 August 2018 and Cavanough J on 10 August 2018 to permit the payment by the defendants of legal expenses up to an amount of $64,000.[2] The orders were made under O 37A of the Supreme Court (General Civil Procedure) Rules 2015 (Rules);

(b) the first plaintiff (Vasilaras) seeks that the second plaintiff, who is the Director of Consumer Affairs Victoria (the Director), give an undertaking as to damages.

[1]By order of Justice Moore made on 24 October 2018 pursuant to r 77.05 of the Supreme Court (General Civil Procedure) Rules 2015.

[2]Marina Laprese and One Call Legal & Conveyancing Pty Ltd, Summons, 11 September 2018, [2].

There appeared at the hearing of the applications to be no particular urgency in their determination, particularly having regard to the history of the applications and the fact that the first defendant, who is the applicant for a variation of the freezing orders, is on remand facing prosecution for criminal offences arising out of the matters the subject of the claims in this proceeding.

Shortly before these reasons were finalised, another application was made that relates to a specific asset not previously disclosed by the first defendant (as she was required to do by the orders referred to below). I heard that application on 8 February 2019 and made orders that day. These reasons include reasons for that order.

In summary, my conclusions are:

(a) On the application by summons filed on 11 September 2018 to vary the freezing order to enable access to funds held in an account of the second defendant (One Call Legal) held with the National Australia Bank Ltd (NAB) to pay legal costs incurred and to be incurred in this proceeding and in the defence of the criminal proceedings, I am not satisfied that the proposed variation is in the interests of justice;

(b) In the circumstances before the Court, and on the basis of arguments raised by the plaintiffs, the Director should be required to give an undertaking as to damages.

Procedural background – freezing and search orders

Vasilaras commenced this proceeding against the first defendant (Laprese) by writ on 3 August 2018. On the same day, Vasilaras made application ex parte for freezing and search orders against Laprese. On that day, Garde J made a freezing order restraining Laprese from in any way disposing of, dealing with or diminishing the value of any of her assets in Australia up to an unencumbered value of $1,000,000 (the relevant amount). Exceptions to the order were, in the usual way, that the order did not prohibit Laprese from paying up to $1,000 per week on ordinary living expenses and $10,000 on legal expenses (freezing order).

The freezing order included ancillary orders that by 2 pm on Thursday 9 August 2018, Laprese must swear and serve on the plaintiffs an affidavit setting out all of her assets in Australia and worldwide giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of her interests in the assets. The affidavit was to include, where relevant, full details of bank accounts, shareholding, motor vehicles and real property and supporting documentation where available. The ancillary order was subject to the usual exception where some or all of the information required to be disclosed may tend to prove that Laprese had committed an offence against or arising under an Australian law or law of a foreign country or make her liable to a civil penalty. In that circumstance she was required to disclose so much of the information required to be disclosed to which no objection was taken. In relation to information required to be disclosed to which objection was taken, she was required to prepare an affidavit containing that information and deliver it to the Court in a sealed envelope and file and serve on each other party a separate affidavit setting out the basis of the objection.

Vasilaras gave undertakings to the Court to meet any order for compensation to any person affected by the operation of the order and the other undertakings usual in ex parte freezing orders (the undertaking as to damages).

Search orders were also made on 3 August 2018. These permitted searches of premises at 93 Lennon Parkway, Derrimut, Victoria, and involved a search party that included an independent solicitor (Sarah Coffey), an independent computer expert (Justin Geri) and the plaintiff’s solicitor. That order also required Laprese to swear and serve by 9 August 2018 an affidavit setting out information regarding the ‘listed things’ identified in sch A to the order, which comprised documents relating to conveyancing files, State Revenue Office (SRO) duty statements, banking and accounting records and any other documents relating to the business affairs of Laprese referred to below.

The matter returned to Court on 10 August 2018 at which time, Cavanough J made two orders. Each order was carefully worded.

The first order:

(a) was premised on, amongst other things, the continuation of the undertakings given in paragraphs 1 and 3 to 7 in sch A to the freezing order made by Garde J. Paragraph 1 of that schedule contains the undertaking as to damages;

(b) gave leave to Vasilaras to join One Call Legal as the second defendant in the proceeding and thereby added it as second defendant;

(c) gave leave to the Director to be joined as a second plaintiff and thereby added the Director as the second plaintiff

(d) extended the freezing order to the hearing and determination of the proceeding or further order.

(e) varied the freezing order by, amongst other things, increasing the amount of funds to be released from the operation of the freezing order for the purposes of legal expenses from $10,000 to $25,000.

The second order was a freezing order made against One Call Legal. It names the Director as the second plaintiff but in terms makes clear that the applicant for the freezing order is Vasilaras alone and not the Director. The undertaking as to damages referred to in the order is given by Vasilaras alone. The freezing order had effect until the hearing and determination of the proceeding or further order.

On 16 August 2018, Cavanough J made further orders. Those orders extended the undertakings given by Vasilaras and varied the freezing orders against Laprese and One Call Legal. The Director was, unsurprisingly, not required to give an undertaking as to damages arising out of the variations. The variations required Laprese to file and serve an affidavit providing information in relation to Unit 10, 64-72 Anderson Road, Sunshine (the Sunshine property) and 305-306 Beach Road, Black Rock (the Black Rock property). In addition, Laprese was restrained, whether by herself, under any alias or through any incorporated or unincorporated entity (including One Call Legal) from acting in any conveyance of real property and a range of other legal or quasi legal activities. No undertaking from the Director was given in relation to this injunction.

No undertaking as to damages was given by the Director in any order made on 10 August or 16 August 2018. Indeed it may be said that no freezing order was made in favour of the Director which called for such an undertaking. I will return to this matter when dealing with the second application before me.

On 23 August 2018 Laprese, under the name Marina Loprese, was arrested and charged with various offences, including obtaining money and property by deception. The criminal charges relate to the same subject matter as is the subject of this proceeding, as I shall relate.

The plaintiffs’ claims

The writ issued on the day that the freezing and search orders were made is generally endorsed. In substance, it alleges that Laprese was engaged by Vasilaras on a consultancy basis to perform conveyancing services on its behalf and that she owed Vasilaras duties to act honestly, in good faith in the best interests of Vasilaras and to act for a proper purpose. It alleges that she breached the duties by wrongfully performing services, in the name of Vasilaras with no authority to do so, wrongfully producing false documents whilst performing services in the name of Vasilaras and wrongfully misappropriating funds of clients of Vasilaras or persons or entities who consider themselves clients. The relief claimed includes a declaration that Laprese holds any sums acquired through breach of fiduciary duty on trust and orders that she pay any sums held by her on trust to Vasilaras or such other person or entity as the Court sees fit. An alternative claim for equitable compensation is made.

On 21 September 2018, the Director filed an indorsement setting out the Director’s claims.[3] The claims are, in substance, that Laprese, on her own behalf and on behalf of One Call Legal, improperly, falsely and wrongly held herself out and falsely represented that she was a qualified legal practitioner and a licensed conveyancer pursuant to the Conveyancers Act 2006 (Vic) (Conveyancers Act) when she was neither legally qualified, admitted to practice as a legal practitioner nor licensed as a conveyancer under that Act. Upon these misleading and deceptive representations, Laprese induced consumers to engage her services and engaged in misleading or deceptive conduct contrary to the consumer protections contained in the Competition and Consumer Act 2010 (Cth) sch 2, Australian Consumer Law (ch 2, ss 18, 21, 29) (ACL) by:
[3]Order of Moore J in Vasilaras & Co Pty Ltd v Laprese (Supreme Court of Victoria, S ECI 2018 00678, 14 September 2018).

(a) obtaining monies from consumers for the purposes of paying stamp duty which she did not pay;

(b) charging consumers fees for acting as a licensed conveyancer when she was not lawfully allowed to do so;

(c) transferring properties into her own name from a consumer;

(d) mortgaging properties of consumers without their consent and retaining those monies for herself and/or the benefit of One Call Legal.

As a result of her misleading or deceptive conduct, consumers have suffered loss, damage and detriment such that compensation is appropriate and the defendant is liable to pecuniary penalties. The prayer for relief includes claims for compensation orders for consumers of the defendants’ conduct and orders that the One Call Legal transfer back to consumers property obtained without consent and pecuniary penalties.

The Director holds the statutory position to s 107 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (ACLAFTA) with the authority and powers to monitor and enforce consumer interests pursuant to ss 109 and 110 of that Act.

Factual background

Artemis Vasilaras (Mr Vasilaras) is an Australian legal practitioner. He is the sole director of Vasilaras, which Mr Vasilaras established in February 2014 to practice employment law and general litigation. Vasilaras is comprised of Mr Vasilaras and one employee, Nelson Pinto (Pinto).

Vasilaras uses a cloud based legal practice management system known as LEAP. This allows employees to work remotely. Mr Vasilaras mainly works from home and usually attends the office for client appointments only. Vasilaras has a room in Queen Street, Melbourne, for this purpose.

In about November 2016, Mr Vasilaras met Laprese in the course of a conveyancing transaction. Mr Vasilaras was impressed with the work Laprese undertook in that transaction. At that time, she worked at a legal firm called AMC Law & Associates.

Shortly after that transaction Laprese told Mr Vasilaras that AMC Law was closing down. Mr Vasilaras had a number of contacts in the real estate and mortgage broking areas who wished to refer conveyancing work to Vasilaras, but Mr Vasilaras had limited experience in that area. He commenced discussions with Laprese regarding a proposal for her to work for Vasilaras on a consulting basis to undertake conveyancing. The proposal included Laprese’s assistant, Mariamagdalena Ng-Youne (Magda) also acting as a consultant. Mr Vasilaras met with Laprese several times to discuss the consulting arrangement. During these discussions Laprese told Mr Vasilaras that she had more than 30 years’ experience in property and conveyancing, that she had previously practiced as a lawyer and had experience in legal matters other than property (e.g. wills and estates). She also said she had cancer and was receiving ongoing treatment.

On about 24 February 2017, Mr Vasilaras reached an oral agreement with Laprese for her and Magda to act as conveyancing consultants for Vasilaras. Laprese was authorised to source work in addition to transactions referred to her by Mr Vasilaras or his contacts. A fee sharing agreement was reached. As part of the agreement, Laprese was to have access to LEAP with a separate account for her and for Magda to share and have access to precedent letters and email accounts in the name of Vasilaras, together with business cards and any referrals from contacts that Mr Vasilaras had.

On about 29 March 2017, Mr Vasilaras set up an email account for Laprese in the name of Vasilaras and instructed her that she was only to use it for conveyancing transactions legitimately carried out in the name of Vasilaras. She was also instructed only to use Vasilaras’ letterhead for work authorised by Vasilaras.

In May 2017, Mr Vasilaras set up individual accounts for Laprese and Magda on the SRO duties online portal and provided login details. He also provided login details for SIA Global, which provides online search and settlement services for property transactions.

Initially, Mr Vasilaras understood that Laprese and Magda worked from their respective homes. In September 2017, Laprese told Mr Vasilaras that she had opened an office in Glen Waverley, which she did at her own expense. Mr Vasilaras also became aware at this time that Laprese operated a separate conveyancing business called ‘One Call Legal & Conveyancing Pty Ltd’, the second defendant. Vasilaras had no involvement in that entity. Mr Vasilaras’ understanding based on his discussions with Laprese was that the Laprese operated One Call Legal for clients who had not been referred to her by Vasilaras. Mr Vasilaras had no knowledge of any of the clients or files of One Call Legal.

Mr Vasilaras first became suspicious about the conduct of Laprese in about July 2018 as a result of two matters:

(a) Mr Vasilaras received a complaint regarding an ING cheque that Laprese had told the complainant had been paid into Vasilaras’ trust account. It arose from Laprese acting, purportedly, as solicitor for a deceased estate without the authority of Vasilaras. Laprese produced the cheque and it was deposited into Vasilaras’ trust account. It was a transaction that Vasilaras had not authorised Laprese to undertake. Moreover, it turned out that a forged grant of probate was used by Laprese in relation to the estate. This led Mr Vasilaras to conclude that Laprese was dishonest and that he could not have any trust or confidence in her work;

(b) A complaint in early July from an unidentified person regarding a conveyancing matter which, after seeking an explanation from Laprese, made no sense. It seemed that Laprese had been involved in making personal loans to clients in property transactions in which she was acting, which Mr Vasilaras did not consider to be appropriate.

After learning of these matters, Mr Vasilaras changed Laprese’s password for her firm email account so as to stop her from using it any further and downloaded all of her emails from Vasilaras’ server that were available to him. These emails raised further concerns, including the forging of Pinto’s signature on a transfer of land. He contacted Laprese and arranged a meeting and went through the emails he had downloaded from Vasilaras’ server with her. During the meeting, he found further forged documents, one a transfer of land with the signature of Pinto forged on it and a duties form certified with the forged signature of Mr Vasilaras. Laprese blamed another person who worked for her. Laprese maintained that the matters were not files of Vasilaras but of One Call Legal. Laprese had to leave the meeting to attend cancer treatment but Mr Vasilaras asked to retain her laptop to which Laprese agreed.

Following the meeting on 20 July 2018, Mr Vasilaras undertook further research and discovered that Laprese used a number of aliases, including Marina Loprese, Marina Dankovic, Marina Dawson and Marina Lapze. He also found a warning notice from Consumer Affairs Victoria dated 14 July 2011 warning consumers not to engage one Marina Dankovic, Marina Dawson or Marina Loprese. The notice stated that the person was the subject of a number of complaints, had engaged in unlicensed conveyancing, had misrepresented that she was a lawyer or legally qualified and had been charged with dishonesty offences.

He subsequently discovered that Laprese had been sentenced to gaol in 2012 under the name Marina Dankovic as a result of pleading guilty to indictments for charges of obtaining property by deception, amongst other charges.[4] As a part of his sentencing remarks in that matter, Lacava J of the County Court noted that Laprese had admitted a number of prior convictions from 15 court appearances dating back to August 1979. With one exception, all these prior convictions were for dishonesty offences or for breaching non-custodial dispositions by further offending by dishonesty offences. An application for leave to appeal from the sentencing imposed by Lacava J was refused by the Court of Appeal.[5]
[4]Director of Public Prosecutions v Dankovic [2012] VCC 712 (Lacava J).
[5]Dankovic v The Queen [2012] VSCA 255.

After these matters were unearthed, Mr Vasilaras accessed the SRO duties online account held by Vasilaras, which listed 19 transactions. Only three of them were matters undertaken with the authority of Vasilaras and two of these were bona fide. The third involved a fraud. The 16 other transactions were entirely unauthorised. Further investigations showed that in a number of matters cheques had been issued for the payment of stamp duty in circumstances where Laprese had not lodged the transaction with the SRO using Vasilaras’ account and settlement statements showed that cheques were issued in the name of Laprese or one of her aliases, with the SRO referred to in brackets. Mr Vasilaras calculated the value of the cheques made payable to Laprese in the matters he investigated as amounting to $274,502.22. He could not say whether any of those monies were paid to the SRO but he suspected none were.

Further investigations undertaken by Mr Vasilaras of the emails from Laprese using Vasilaras’ account revealed further transactions involving the use of cheques payable to Laprese or one of her aliases with a total value of a further $103,720.97. Mr Vasilaras reveals matters that show that Laprese had taken cheques from clients drawn for the purpose of paying stamp duty and deposited those cheques to her benefit or the benefit of someone other than the SRO.

Mr Vasilaras also discovered that:

(a) the respondent was using a letterhead and tax invoices which identified that One Call Legal ‘incorporates’ Vasilaras;

(b) Laprese set up an email domain name ‘Vasilarasco.com.au’ with email accounts in the name of ‘Dom Lacatus’ and ‘Nina Avdic’ without his knowledge or authority. He does not know who those people are and whether they were held out as connected to Vasilaras;

(c) further transfers of land with forged signatures of Pinto and signatures of Laprese and Avdic purportedly as a legal practitioners.

At the time of the granting of the freezing and search orders, Mr Vasilaras deposed that the full amount of damage caused to Vasilaras was unknown. His concern was that clients of Vasilaras had suffered potentially significant losses at the hands of Laprese and, further, he had had to refer most of his files to other solicitors. He gave reasons for the belief that there was a risk that Laprese was likely to deal with her assets in a deliberate way to thwart the administration of justice and was likely to hide or destroy evidence once she became aware of the proceeding.

In addition to the affidavit of Mr Vasilaras in support of the freezing and search orders, there were affidavits of the solicitor (Patrick Xavier Tuohey of Colin, Biggers & Paisley Lawyers), the independent solicitor engaged, Sarah Carolyn Maclean Coffey, and an independent fraud investigator, Shane Robert Ringin.[6]
[6]All three affidavits were sworn on 3 August 2018.

In Mr Ringin’s affidavit, there is an analysis of 18 SRO transactions performed by Laprese on behalf of Vasilaras. Mr Ringin’s analysis of these transactions reveals it likely that there were 17 properties liable for stamp duty where a false ‘exempt from duties statement’ was lodged giving rise to a total potentially evaded sum of $369,540. In addition, there were further suspicious SRO duty statements amounting to $167,280, a further sum of $274,502.22 in respect of settlements undertaken for Michael Vasilaras where cheques were requested for stamp duty but no payments were made to the SRO and a further sum of $103,720.97 identified as cheque directions in conveyancing files where the cheques were payable directly to Laprese’s name or one of her aliases. The total of the amounts that could be identified by the investigator as having been subject to the dishonest or fraudulent conduct by Laprese totalled $915,046.19. Mr Ringin concludes that in his opinion, based on the evidence that he reviews in his affidavit, that it is probable:

(a) Laprese unlawfully retained funds provided to her for the payment of stamp duty;

(b) Laprese made false SRO duty statements to provide to clients to deceive them; and

(c) Laprese inputted incorrect entries into SRO accounting software in an attempt to hide stamp duty obligations and did so dishonestly.

By summons dated 11 September 2018, Laprese applied to stay this proceeding until further order because of the criminal charges that had been laid against her. There was no opposition to the making of that order.[7] One of the affidavits filed before the hearing of that application on behalf of the Director was by Nicholas John Bateup made 13 September 2018. He analysed records obtained from the NAB concerning accounts in the name of One Call Legal.[8] He noted significant unexplained sums of money withdrawn from this account in the recent past:

(a) $855,979.10 withdrawn on 24 April 2018; and

(b) $797,987.46 withdrawn on 22 May 2018.

[7]Order of Moore J in Vasilaras & Co Pty Ltd v Laprese (Supreme Court of Victoria, S ECI 2018 00678, 14 September 2018).

[8]BSB 083–004, Acct. 909626793.

Mr Bateup made a further affidavit for the purposes of the application for variation of the freezing order made by Laprese[9] in which he identified that:

(a) on 5 September 2018, a freezing order was made by the Melbourne Magistrates’ Court pursuant to the Confiscation Act 1997 (Vic) (Confiscation Act) on application by Victoria Police in relation to the NAB account in the name of One Call Legal;

(b) that on 9 August 2018, Laprese (under the name Marina Loprese) opened two accounts at the Commonwealth Bank of Australia (CBA). These bank accounts were opened after the freezing order had been served on Laprese and five days before she swore her affidavits as to assets, and that as at 4 September 2018, one of the accounts was in credit to the sum of $83,914.06 and, at the date of his affidavit, was in credit to the sum of $83,911.56. It was common ground that there was a freezing order under the Confiscation Act in relation to these funds also.[10]

[9]Affidavit of Nicholas John Bateup, made 19 October 2018.

[10]Transcript of Proceedings, Vasilaras & Co Pty Ltd v Laprese (Supreme Court of Victoria, S ECI 2018 00678. Derham AsJ, 24 October 2018) 28 (Transcript).

These CBA accounts were not disclosed in Laprese’s affidavit of assets sworn on 14 August 2018, nor in the affidavit she swore on behalf of One Call Legal on the same day. There has been no subsequent explanation given by her in relation to the source of the monies in the account or as to the circumstances in which she opened the accounts. Laprese’s legal representatives only learnt of the existence of these accounts and the freezing order relating to them a few days before the hearing and were unable to get instructions regarding them.[11]
[11]Transcript, 61.

Laprese’s and One Call Legal’s disclosed assets

In her affidavit of assets filed pursuant to the freezing order, Laprese discloses a list of her assets (including mortgages and other encumbrances) and her interest in those assets. They comprised, at that time:

(a) a NAB bank account ending 3370 in her own name with a small amount of about $2,000;

(b) a NAB account ending 4354 in her name with about $690;

(c) a NAB traveller card account ending 9873 in her name with about $1,379;

(d) 8 shares in PL Conveyancing Pty Ltd (PL Conveyancing) with a nil value;

(e) 100 shares in One Call Legal with a nil value;

(f) the legal interest in Unit 10, 64–72 Anderson Road, Sunshine, valued at approximately $330,000, subject to a mortgage of about $260,000, held by her on trust for her son Adam Dawson;

(g) the legal and equitable estate in the Black Rock property, valued at $1,060,000 subject to a mortgage of $220,000;

(h) two motor vehicles, a BMW 2001 sedan and a BMW 2000 sedan with a total value of about $3,500.

By another affidavit made by her on behalf of One Call Legal, Laprese lists the assets of One Call Legal as comprising a NAB account ending 6793 with a credit balance of $65,000.[12]
[12]Affidavit of Marina Laprese, made 14 August 2018 on behalf of One Call Legal. It is noted that the exhibit to that affidavit is a certificate of balance of the account which shows a credit balance of $78,990.79 as at 9 August 2018.

It should be noted that, in relation to the Black Rock property that is claimed by Laprese to be owned by her, one of the criminal charges laid against her is:

The accused in Victoria on 5 June 2017 did by deception, namely acquiring ownership of 305–306 Beach Road, Black Road, 3193, through lodgement of falsified land transfer information did dishonestly obtain property namely 305–306 Beach Road, Black Road, 3193, belonging to Emma Tait Nominees Pty Ltd and valued at $2,000,000 with the intention of permanently depriving Emma Tait Nominees Pty Ltd of the said property.[13]

[13]Charges later laid break down the elements of this charge into a number of charges: see Exhibit KMPB to the affidavit of Katherine Moorhouse Perks, made 7 February 2019.

Pursuant to the right reserved to her by the orders of the Court, she objected to disclosing any further information relevant to her ownership of the Black Rock property on the grounds that the information may tend to expose her to criminal charges or a civil penalty.[14]
[14]Affidavit of Marina Laprese, made 1 October 2018.

In relation to the Sunshine property that she states she holds it on trust for Adam Dawson, she states that at the time of entry into the purchase of the property, her son was not able to secure a loan in his name due to an adverse credit rating. She agreed to be the registered owner provided her son maintained the mortgage payments and paid for renovations on the property, which he has done.[15]
[15]Affidavit of Marina Laprese, made 23 August 2018 pursuant to Orders 1 and 2 of Cavanough J in Vasilaras & Co Pty Ltd v Laprese (Supreme Court of Victoria, S ECI 2018 00678, 16 August 2018).

Laprese’s application

The summons filed on behalf of Laprese seeks that:

Paragraph 8(b) of the freezing order made by the Honourable Justice Garde on 3 August 2018 and paragraph 3 of the Orders [defined earlier in the summons to mean the orders made by Cavanough J on 10 August 2018] are varied to permit the payment of legal expenses to the amount of $64,000.00.

The reference in the summons to para 3 of the freezing orders made by Cavanough J (in relation to One Call Legal ) would appear to be a mistake and should refer to para 8(c), which provides the limit of $25,000 for legal expenses, after taking into account the legal expenses of Laprese personally.

There is approximately $64,000 frozen in the NAB account of One Call Legal. The affidavit of Laprese’s solicitor, Katherine Moorhouse Perks,[16] makes clear that Laprese seeks the release of the whole of the moneys standing to the credit of that specific account. No mention is made of the funds in the CBA account.
[16]Affidavit of Katherine Moorhouse Perks, made 30 August 2018.

The moneys in One Call Legal’s NAB account are, of course, on the face of the evidence before the Court, property or moneys of One Call Legal and not Laprese.

Laprese’s contentions

In the affidavits filed on behalf of the plaintiffs it is alleged that large sums of money were withdrawn from a One Call Legal bank account on 24 April 2018 ($797,987.46) and 22 May 2018 ($855,979.10). Laprese states in her affidavit[17] that she has advised that the terms of the freezing order made on 3 August 2018 did not ask nor require her to specify dispositions of assets occurring before 3 August 2018. She states that she believed that she is entitled under the freezing order and at common law to decline to provide information about the withdrawal of these sums of money on the basis that she is not required to disclose information that may tend to expose her to a criminal charge or a civil penalty. Subject to that, she says that neither of the two sums were used ‘to purchase any assets in any of my names or in the name of One Call Legal and Conveyancing Pty Ltd, P/L Conveyancing or anyone else associated with me’.
[17]Affidavit of Marina Laprese, made 1 October 2018.

Laprese also gives evidence that not all the funds in the One Call Legal bank account were sourced from fees charged for conveyancing outside the scope of her employment with Vasilaras or any other firms with which she had arrangements. Some funds deposited into the One Call Legal bank account were derived from agreed payments for services supplied under the auspices of Vasilaras and one Hina Pasha: ‘[t]he bulk of the fees earned by me and One Call over the last year from conveyancing work performed, for vendors and purchasers, pursuant to agreements with Vasilaras and Hina Pasha were paid into the One Call account’.[18]
[18]Affidavit of Marina Laprese, made 1 October 2018.

At the time of the application Laprese was in custody, and had not been granted bail, pending her committal hearing on multiple charges of dishonestly obtaining financial advantage by deception. The allegations raised by the plaintiff in this proceeding traverse the same factual allegations as are made by the Victoria Police in a number of the charges that had been laid against her. It is clear from reading the charges exhibited to the affidavit of Laprese’s solicitor Katherine Moorhouse Perks[19] that representatives of the first plaintiff, in particular Mr Vasilaras, will be witnesses for the prosecution as will be a representative or representatives of the Director.
[19]Affidavit of Katherine Moorhouse Perks, made 30 August 2018.

Laprese’s solicitor anticipates legal expenses for Laprese to be greatly increased by:

(a) the unexpectedly large volume of the digital downloads the solicitor has been required to check preparatory to Laprese’s objection to inspection by the plaintiffs of the digital downloads provided by the independent computer expert late on 16 August 2018;

(b) the defence of the charges brought by the Victoria Police.

Ms Perks gives evidence that there are approximately 14,000 individual items to check on the digital downloads that the independent computer expert has provided to her. These digital downloads are derived from a variety of sources including Laprese’s laptop computer, mobile phone and other devices. The list of copied digital items provided to Ms Perks by the independent computer expert is over 5,000 pages in length.

Laprese’s legal costs between 6 August and 10 August 2018 amounted to $11,000. Since 10 August 2018, a further $29,000 approximately has been incurred in defending this proceeding and the criminal charges.[20]
[20]Exhibit KMP–A to the affidavit of Katherine Moorhouse Perks, made 30 August 2018, 8–28.

In relation to future costs, Ms Perks deposes that she will be required:

(a) to seek leave to extend the time by which Laprese can object to inspection of the digital downloads at an approximate cost of $5,500 for counsel and $1,200 for herself;

(b) conclude the examination of approximately 13,000 more digital items at an estimated cost of approximately $52,260 (based on ten hours per 1,000 emails, equalling 130 more hours of inspection at the Supreme Court scale of $402 per hour);

(c) simultaneously conducting research and assisting counsel in the criminal proceedings which she estimates will occupy another 15 hours of research in compiling material, conferences at the facility where Laprese is detained, up to the committal mention in December 2018 at a cost of $6,030 and counsel’s fees in the criminal matter for advice and conferences at a further cost of approximately $8,800 plus expert witness fees of approximately $5,000.

Laprese submits that:

(a) it is well established that a freezing order does not deprive a defendant of title to or possession of the assets to which the order extends. It is not a species of anticipatory execution. It is not a form of security for any judgement which may ultimately be awarded;[21]
[21]Cardile v LED Builders Pty Ltd [1999] 198 CLR 380; Rema Tip Top Asia Pacific Pty Ltd v Grüterich [2018] NSWSC 591 (Rema).

(b) the aim of the freezing order is not to stop the relevant person spending their money. It is to stop them spending it in ways which are not legitimate. To deny access to funds for reasonable legal expenses goes beyond the proper protective purposes of the jurisdiction;[22]
[22]Gouvas v McIntosh [2002] NSWSC 713.

(c) even where a freezing order is justified by dishonest conduct of a defendant, it can never extend to prevent that defendant from having access to her own assets to the extent necessary to meet legitimate expenses, such as ordinary living and business and legal expenses;[23]

(d) there was no challenge to the reasonableness of the expenses incurred by the defendants. They have the benefit of lawyers who are charging at the Supreme Court rate;

(e) the assets of One Call Legal have been tied into the freezing order from the outset and properly treated as assets under the sole control of Laprese. She is entitled to use those assets for her own legitimate purposes, through the exercise of her complete control of One Call Legal, within the bounds regulated by the freezing orders.

[23]Rema [2018] NSWSC 591; Clout (Trustee) v Anscor Pty Ltd [2001] FCA 174.

Vasilaras’ response

Vasilaras opposes the application to vary the freezing order and submitted:

(a) the evidence discloses that the only source of funds available to provide the payment of legal fees is the balance of funds held in a bank account of One Call Legal;

(b) in the circumstances it is reasonable to infer that those funds are the proceeds of crime or are funds held by One Call Legal on trust for the victims of Laprese’s fraud.

(c) the initial allowance for legal expenses was $10,000 under the order made by Garde J. That was then increased by Cavanough J on 10 August 2018 to $25,000, inclusive of GST. The evidence given by Ms Perks shows that the costs incurred since the commencement of her engagement to 30 August 2018 are $40,036.37. Notably, $15,036.37 of those costs were incurred without any order of the court permitting payment up to that amount. The application is, in substance, retrospective as well as covering future costs and covers costs both for this proceeding and the associated criminal proceeding. It was also submitted that the costs are incorrectly calculated, excessive and unreasonable;

(d) in relation to future costs of the defence of this proceeding, on 14 September 2018, Moore J stayed the further conduct of this proceeding until further order, with exceptions to enable the filing of an endorsement of claim by the Director, the making of the two applications the subject of these reasons and any ruling in relation to costs. Thus there ought to be no future costs to be incurred by the defendant in this proceeding for some time;

(e) in relation to the costs of defending the criminal charges, Laprese faces three charges of obtaining property by deception and one charge of attempting to obtain property by deception. It is conceded that the allegations raised by the plaintiffs in this proceeding traverse the same factual allegations as are the subject of the charges, but, after Laprese was arrested on 23 August 2018 the police conducted a record of interview with her at which time she made full admissions in relation to the facts the subject of the charges. In light of the full admissions made in her record of interview with the police, any future costs associated with the criminal proceedings could only be the costs of a sentencing hearing. Notwithstanding this, Ms Perks’ affidavit suggests that the future costs of the criminal proceedings are for the defence of them.[24]

[24]Since the hearing of the application, a further 155 charges have been laid against Laprese (under the name of Marina Loprese): affidavit of Katherine Moorhouse Perks made 7 February 2019.

The Director’s response

The Director contends that:

(a) the affidavit in particular of Mr Ringin, the investigator employed by Vasilaras, supports the allegation that the source of the funds in the One Call Legal NAB bank account is the fruits of deceptions and frauds perpetrated upon various clients who retained the defendants. It is clear from the evidence that neither Laprese nor One Call Legal were licensed to conduct conveyancing in Victoria;[25]
[25]Affidavit of Emma Louise Brewton, made 10 August 2018, [39].

(b) the evidence of Mr Ringin and Mr Vasilaras provides a firm foundation for the allegations that Laprese was accepting instructions and acting for clients in conveyancing matters outside the scope of her employment by Vasilaras and that in so acting she charged conveyancing fees and dishonestly diverted funds that had been entrusted to her to pay stamp duty to the SRO. She made false declarations in relation to stamp duty that the transactions were non dutiable, and wrongfully and fraudulently retained the monies for her own use and benefit. The amounts identified by Mr Ringin exceed $915,000;

(c) the evidence of Mr Bateup in his affidavit[26] shows that monies of clients were deposited in the One Call Legal NAB account as were other monies related to property transactions;
[26]Affidavit of Nicholas John Bateup, made 13 September 2018, [7], [8].

(d) the affidavits filed by the defendants pursuant to the ancillary orders contain misrepresentations and disclose a lack of candour;

(e) pursuant to the order of Cavanough J (extending the time in para 11 of the freezing order of Garde J) Laprese, on behalf of One Call Legal deposed that One Call Legal held the sum of $64,000 in a NAB bank account (No. 909626793). By a further affidavit made pursuant to the order of Cavanough J, Laprese filed and served an affidavit of assets on 14 August 2018. She deposed in that affidavit that she was the sole legal and beneficial owner of the Black Rock property and that it had an estimated gross value of $1,060,000, and after a mortgage secured over the property of $220,000, had a net equity of $840,000;

(f) a result of these affidavits is that the Court has been led to believe that there are over $900,000 in assets available should any compensation orders be made against the defendants in favour of the victims of the frauds. In the affidavit of Mr Ringin made on 3 August 2018, it is deposed that he has identified approximately $915,000 of money that is believed to have been improperly misused by Laprese. This misuse and quantum is supported by the affidavit of Mr Vasilaras made 3 August 2018;

(g) that there is a duty on all parties not to mislead the Court and that where such deception is uncovered, the party responsible should not retain the benefit of that deception.[27] The Director submitted that therefore Laprese should not be allowed to have any further access to the funds in the bank account of One Call Legal to pay legal expenses of her criminal charges. He points also to the fact that when Laprese first appeared in the Court on 10 August 2018, no mention was made of the various aliases under which she had operated, nor that her proper name was Marina Dankovic, a name she had adopted by deed poll registered on 10 November 2004. She should have advised the Court of her proper name, despite her various aliases being revealed in the affidavit made by Mr Vasilaras;
[27]See Savcor Pty Ltd v Cathodic Protection International APS [2005] VSCA 213.

(h) most importantly, the withdrawals made by Laprese from the NAB bank account in her name (ending 6793) of the sums of $855,979.10 on 24 April 2018, and $797,987.46, on 22 May 2018 are unexplained. Other smaller amounts, in the tens of thousands, were also withdrawn and, like these large withdrawals, no information beyond the short statement referred to above at para 49 has been given in relation to those funds;

(i) the Court has already determined in making the freezing orders where the balance of convenience lies. The only question now for the Court is whether the variation sought would create a greater injustice if the variation were not accepted compared with the competing interests of the persons who are likely to have been defrauded by the conduct of Laprese;

(j) the burden lies upon Laprese to demonstrate to the Court that to maintain the orders as presently made will create a greater injustice than varying the order as she seeks. The Director submitted the balance of convenience favours preserving what little assets remain in the name of the defendants to provide for the making of compensation orders for victims;

(k) there is no evidence as to the availability of Legal Aid to assist Laprese in the defence of the criminal charges. It is tolerably clear, however, that should the freezing orders not be varied to allow the release of further funds to pay the legal costs of defending her against the criminal charges, she will have to go to Legal Aid for assistance. She will thus not be precluded from mounting a defence to the charges, only mounting a privately funded defence;

(l) even if there were an increase in the amount allowed to Laprese for her costs of defending the criminal charges, that sum would be quickly exhausted with the result that, if she has no other funds, she will be forced to seek Legal Aid assistance in any event.

The Director also submits that if, as may well be anticipated, Laprese pleads guilty to some or all of the charges that have been laid against her, it would be inappropriate for the funds standing to the credit of the NAB account in the name of One Call Legal to be used to fund a plea of guilty. This would be tantamount to requiring the victims to pay for the legal costs incurred as a result of the wrong done to them.

The Director therefore submitted that the course of action which carries the lower risk of injustice should it turn out to be wrong is to refuse any variation of the freezing order as sought.[28] As the Court of Appeal noted in Bradto Pty Ltd v Victoria:

[T]he flexibility and adaptability of the remedy of injunction as an instrument of justice will be best served by the adoption of the Hoffman approach. That is, whether the relief sought is prohibitory or mandatory, the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial.[29]

[28]Bradto Pty Ltd v State of Victoria; Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65, [35].

[29]Ibid.

The Director also submitted that the use of the funds standing to the credit of the One Call Legal NAB account would constitute an improper use of its monies. The defending of criminal charges is not a proper expense allowed under s 202A(2) of the Corporations Act 2001 (Cth) (Corporations Act). The expenditure of these funds would not pass the ‘business judgment rule’ as required by ss 180, 181, 182 and 202A of that Act. The Director also maintains that s 199A(3)(b) prohibits the use of company money to defend criminal charges. The most that can be done is to offer an indemnification or an agreement to pay later on condition that the officer is not found guilty of the criminal charges. Given the evidence advanced by Laprese as to her limited assets (and taking into account the likelihood that the Black Rock property will be found not to be beneficially owned by her) if these monies were advanced by One Call Legal to Laprese for use in her defence of the criminal charges, there is no real prospect that they could be repaid in the event that she is found guilty. In the result, the use of the monies in the account of One Call Legal is a breach of s 199A(3)(b) of the Corporations Act and would be unlawful for the company. The application should therefore be refused.

It is also contended by the Director that the dissipation of the funds held in the One Call Legal NAB account will, having regard to the likely outcome on any contest over the Black Rock property, result in there being no funds restrained by the freezing orders (ignoring the funds in the CBA account which Laprese has not acknowledged or referred to). This flies in the face of the proper justification advanced for the original order of the court, freezing Laprese and One Call Legal’s assets.

Black Rock property

It is likely that the claim to ownership of the Black Rock property by Laprese is false. For the purposes of this application, the Director filed an affidavit of Anton Biskup, Australian legal practitioner of Dimos Lawyers. Mr Biskup deposes that he acts on behalf of Emma Tait Nominees Pty Ltd (Emma Tait), the sole directors and shareholders of which are Mr John Alevras and Ms Angela Alevras. He deposes that:

(a) Emma Tait had been the registered proprietor of the Black Rock property since 10 October 1988;

(b) in about 2015, Emma Tait sold a commercial investment building at 309 Waverley Road, East Malvern, Victoria for $910,000. Laprese, as an employee of Anthony Chimounas, who was then acting as solicitor for Emma Tait, handled the sale and all related paperwork;

(c) in or about April 2016, an unrelated business that operated out of the Black Rock property was sold. Mr Chimounas’ firm was involved in the settlement of the sale of that business and Laprese was managing that settlement. Mr and Mrs Alevras met with Laprese at the Black Rock property with the new owners of the business that had operated from that address to discuss entering into a new lease with the new owners of that business;

(d) on or about 22 August 2018, Emma Tait discovered, by way of a phone call from the SRO and subsequently the police, that Laprese defrauded them and through a forged transfer form transferred the Black Rock property into her own name. Emma Tait and Mr and Mrs Alevras had no knowledge of the transfer and received no consideration for it. They never mortgaged the Black Rock property.

Emma Tait has now commenced a proceeding in this Court against Laprese and the Registrar of Titles. In that proceeding[30] Emma Tait claims against Laprese, as an unlicensed conveyancing clerk, that:
[30]S ECI 2018 02141.

(a) from 16 November 1988 to 6 June 2017, Emma Tait was the sole registered proprietor of the Black Rock property;

(b) that Laprese was at all times employed as a conveyancing clerk by Corporate Legal Associates Pty Ltd, which was an incorporated legal practice carrying on business under the name AMC Law & Associates from premises at Burnley Street, Richmond in Victoria. That firm held the duplicate certificate of title to the Black Rock property in custody for safekeeping on behalf of Emma Tait;

(c) that on 6 June 2017, Laprese fraudulently lodged for registration by the Registrar a bogus instrument of transfer of land in a form registerable under the Transfer of Land Act 1958 (Vic) (TLA) which bore Laprese’s name and signature as transferee of the property, the name of Emma Tait as the transferor of the property and a signature which purported to be the signature of one of the directors of Emma Tait but in truth was a forgery written by Laprese or some other person unknown;

(d) in reliance upon the signature on the instrument of transfer, the Registrar registered the instrument on 6 June 2017;

(e) Emma Tait is entitled, by operation of s 44(1) of the TLA to a declaration that the transfer is wholly null, void ab initio and of no effect.

In addition it is claimed that Laprese dishonestly and deliberately signed an instrument of mortgage as mortgagor of the property to one AET Corporate Trust Pty Ltd (AET) in consequence of which AET advanced to her the sum of $220,000 by way of loan and the Registrar registered an instrument of mortgage over the property. In consequence, Emma Tait has suffered loss and damage.

There is a further claim that on 1 May 2018 Laprese, well knowing Emma Tait was in truth the sole proprietor of the Black Rock property, fraudulently purported to enter into an agreement as proprietor of the property with MMG Capital (Aust) Pty Ltd (MMG) under which she’d procured a loan and in respect of which MMG would be entitled to lodge a caveat. This occurred and the loan was advanced and MMG lodged a caveat on 10 August 2018. As a result of these matters, Emma Tait has suffered loss and damage.

Finally, there is a claim against the Registrar of Titles under s 110(1) of the TLA for an indemnity in respect of the loss and damage suffered by Emma Tait in consequence of the dishonest and fraudulent conduct of Laprese.

Katherine Moorhouse Perks has, on behalf of Laprese, entered an appearance (on 10 December 2018) and filed a defence (on 25 January 2019). In the defence, it is pleaded that Laprese has been charged by Victoria Police with various offences including dishonestly obtaining the Black Rock property and stealing the title to it. The defence goes on to refer to the freezing order and the stay of this proceeding ordered by Moore J on 14 September 2018 by reason of the charges laid by the Victoria Police against her. By reason of those matters, she claims that pleading in answer to the claims made against her will tend to prejudice her in the conduct of her defence of the criminal charges and may be seen to be a contempt of the freezing order. She relies on these matters and the fact that the freezing order prevents her dealing with the Black Rock property not to admit any of the allegations made against her.

Consideration

It is undoubted that a freezing order (or a ‘Mareva’ Order as it used to be called) does not exist to create additional rights. Rather it exists to enable a Court to protect its process from abuse in relation to the enforcement of its orders, it being neither a species of anticipatory execution, nor a form of security for any judgment which may ultimately be awarded.[31]
[31]Jackson v Sterling Industries Ltd (1987) 162 CLR 612, 619.

To the extent, therefore, that the plaintiffs rely upon tracing what amount to stolen funds into the One Call Legal NAB bank account, and in that way purporting to establish a propriety interest in the funds in that account, that is not the purpose of the freezing order. The function of the order is to minimise the possibility of an unscrupulous defendant rendering itself judgment proof by taking steps which are liable to produce the result that no assets are within the jurisdiction on the day of judgment.[32]
[32]Frigo v Culhaci [1998] NSWCA 88, cited in Rema [2018] NSWSC 591, [24]–[25]; see also Alka Developments P/L v Lemery Holdings P/L [2005] NSWSC 1335, [24]–[25].

The exception that is always made in a freezing order for living expenses and legal costs reflects a recognition of the nature of the order. Because it is not security, and because the object is to prevent an abuse of the process of the Court by the defendant disposing of his assets to defeat any judgment, the freezing order cannot extend to prevent a respondent from having access to its own assets to the extent necessary to meet legitimate expenses such as ordinary living and business and legal expenses.[33]
[33]See Clout (Trustee) v Anscor Pty Ltd [2001] FCA 174, [19].

The aim is not to stop people spending their money. It is to stop them spending it in ways which are not legitimate having regard to the interests of the claimants in ensuring that there is no untoward removal of assets from the ownership of the person against whom a judgment may in due course be entered.[34] The denial of access to funds needed to fund the conduct of the very litigation the integrity of which the order is designed to protect goes beyond the proper protective province of the jurisdiction.[35]
[34]Goumas v McIntosh [2002] NSWSC 713, [23].
[35]Ibid [27].

Where there is an application for a variation of the terms of the freezing order, the variation is dictated by what justice demands in the particular circumstances of the case.[36] The following matters are established by the authorities:
[36]Bird v McComb (No 3) [2011] FCA 697; Deputy Commissioner of Taxation v Gashi [2012] VSC 401, [16].

(a) the Court may vary the terms of the order to give the defendant access to assets in order to meet, amongst other things, legal expenses of defending proceedings providing the purpose does not conflict with the purpose for which the order was made;[37]
[37]Iraqi Ministry of Defence v Arcepey Shipping Co SA [1981] 1 QB 65; Allomak Ltd v Allan [2010] VSC 187 (Allomak); Break Fast Investments Pty Ltd v Gravity Ventures Pty Ltd [2013] VSC 89, [43] (Break Fast Investments); Batrouney v Forster [2016] VSC 393.

(b) having made a freezing order, a Court should not be quick to reverse it save for good reason and the dictates of justice;[38]
[38]MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 568, [14]; Break Fast Investments [2013] VSC 89, [43].

(c) the defendant carries the burden of establishing the lack of assets, other than those bound by the injunction, out of which the expenses might be paid;[39]
[39]Clark Equipment Credit of Australia v Como Factors Pty Ltd (1988) 14 NSWLR 552; Deputy Commissioner of Taxation v Gashi (No 4) [2011] VSC 487; Allomak [2010] VSC 187.

(d) a general assertion about inability to pay expenses is insufficient;[40]

[40]Allomak [2010] VSC 187.

(e) when a defendant seeks variation of a freezing order allowing a specific dealing, even for intended permitted purposes, it is relevant to take into account whether the defendant has access to other sources of funds for those purposes;[41]

(f) where the plaintiff seeks the recovery of money allegedly held by the defendant on trust, an order allowing the defendant to use part of the money to pay legal expenses does no more than permit to be done what otherwise would constitute a contempt of court. If the plaintiff succeeded at trial, the order would not necessarily bar the plaintiff from recovering the money from the solicitors to whom the payment for the expenses was made;[42]

(g) it may be appropriate in the interests of justice to refuse a variation where the variation requested, if granted, would give rise to a substantial risk that any judgment obtained by the plaintiffs would be rendered nugatory due to the limited remaining assets held by the defendants, so that the effect of the variation, if ordered, would more than likely frustrate the plaintiffs in their attempt to seek a remedy at law.[43]

[41]Deputy Commissioner of Taxation v Karas [2011] VSC 673.

[42]United Mizrahi Bank Ltd v Doherty [1998] 2 All ER 230; Distinctive FX Pty Ltd v Wright(No 3) [2015] VSC 482.

[43]Break Fast Investments [2013] VSC 89, [45].

There are a number of significant facts that impact whether it is in the interests of justice in this case to vary the freezing orders (in fact it is the order of 10 August 2018 made by Cavanough J that is relevant), as follows:

(a) that on 5 September 2018, a freezing order was made by the Melbourne Magistrates’ Court pursuant to the Confiscation Act 1997 (Vic) on application by Victoria Police in relation to the NAB account in the name of One Call Legal. At a date not identified by the parties, a similar order was made in respect of the money in the CBA account;

(b) that on 9 August, Laprese (under the name Marina Loprese) opened two accounts at the CBA. These bank accounts were opened after the freezing order had been served on Laprese and five days before she swore her affidavits as to assets. As at 4 September 2018, one of the accounts was in credit to the sum of $83,914.06 and at the date of Mr Bateup’s affidavit, was in credit to the sum of $83,911.56;

(c) that Laprese gives no explanation of what became of the sums of money withdrawn from the One Call Legal bank account on 24 April 2018 ($797,987.46) and 22 May 2018 ($855,979.10). She is of course entitled to decline to reveal the explanation on the basis that it might expose her to criminal liability or a civil penalty, as she has done. The limited disclosure she makes is that neither of the two sums were used ‘to purchase any assets in any of my names or in the name of One Call Legal and Conveyancing Pty Ltd, P/L Conveyancing or anyone else associated with me’;

(d) The defendants seek access to the specific funds in the One Call Legal NAB account to pay both the joint costs incurred and to be incurred in the defence of this proceeding and to pay legal costs of Laprese’s defence of the criminal proceedings;

The point arising from the first matter in ([74(a)] above) is that no variation of the freezing orders made in this proceeding will affect the orders made under the Confiscation Act 1997. It is not consistent with principle that this Court makes orders that are pointless and of no practical effect. Counsel for Laprese suggested that the orders might be invalid, but that is not a matter that is appropriate to be determined in an application such as this.

The point arising from the next matter ([74(b)] above) is twofold. First, the straight forward proposition that Laprese has misled the Court and not even bothered to explain her conduct in opening the CBA bank accounts after the first freezing order was made and notified to her. Second, she has assets that have not been disclosed; indeed they appear to have been concealed. Notwithstanding that they may be subject to the freezing orders, Laprese has demonstrated (by opening the CBA accounts and not disclosing them) that a knowing contempt of the Court’s orders is not a matter of great concern to her.

The third matter ([74(c)] above) arises from her limited explanation regarding the withdrawal of the two large sums. The problem is not that she has relied on her privilege (I take no account of that), but that she has the burden of establishing her lack of assets, other than those bound by the freezing orders, out of which the legal costs might be paid. Her explanation leaves a lot of possibilities, including that she has access to the funds. She has many aliases and it would cause no great surprise should it turn out the moneys are available to her. Laprese maintains that she is not obliged to disclose what has happened to these funds. The inference is that they are not now her or One Call Legal’s assets otherwise she personally, or as representing One Call Legal, would have referred to them in her affidavits. That does not mean these funds may not be held in such a way as to be characterised as not her assets, but still to be accessible by her. Laprese has demonstrated (by opening the CBA accounts and not disclosing them) that a knowing contempt of the Court’s orders is not a matter of great concern to her. I am not prepared to accept the limited disclosure she makes as excluding the funds being available to her in some way.

On the other hand, if that is the wrong inference to draw, then there are no assets other than the funds in the One Call Legal NAB account and the CBA accounts that will ultimately be available to satisfy any judgment in the proceeding so that varying the freezing order in the way asked will render the order nugatory.

The point arising from the fourth matter ([74(d)] above) is that to the extent that the variation is for the payment of Laprese’s costs in the criminal proceedings, the money sought to be accessed is the property of One Call Legal. I agree with the submissions of the Director that by Laprese using these funds One Call Legal would be in breach of s 199A(3)(b) of the Corporations Act. Given the evidence advanced by Laprese as to her limited assets (and taking into account the likelihood that the Black Rock property will be found not to be beneficially owned by her) if these monies were advanced by One Call Legal to Laprese for use in her defence of the criminal charges, there is no real prospect that they could be repaid in the event that she is found guilty. In the result, the use of the monies in the account of One Call Legal is a breach of s 199A(3)(b) of the Corporations Act and would be unlawful for the company. The Court should not lend its aid to a breach by the One Call Legal of the Corporations Act.[44]
[44]No evidence was given as to the existence of loan accounts in the Company that might enable One Call Legal to repay loans to Laprese to use to defray legal costs, rather than pay legal costs itself.

It is necessary to be realistic about the assessment of the availability of the alleged equity in the Black Rock property to Laprese. In all the circumstances before me, I think it highly likely that Laprese will not succeed in resisting the claim by Emma Tait. That will mean there is little identifiable assets subject to the freezing order other than the money standing to the credit of the One Call Legal NAB account and the money in the CBA account. The result is that by allowing the variation sought there is a substantial risk that any judgment obtained by the plaintiffs would be rendered nugatory due to the limited remaining assets held by the defendants, so that the effect of the variation, if ordered, would more than likely frustrate the plaintiffs in their attempt to seek a remedy at law.

When these matters are considered in combination they point strongly to the conclusion that the variation of the freezing orders is not in the interests of justice.

Undertaking as to damages – the arguments

Vasilaras seek that the Director give an undertaking as to damages. At the time of the first freezing order, Vasilaras gave the usual undertakings required. When the Director was joined as a plaintiff on 10 August 2018, and the freezing order previously made against Laprese was extended and a fresh order made against One Call Legal, it is clear, on a close reading of the orders, that they were made only on the application of Vasilaras and not the Director. In the result prima facie the Director does not have the benefit of the freezing orders and they could be varied or discharged by agreement between Vasilaras and the defendants. It is thus not surprising that no undertaking was required by Cavanough J when he made the orders.

Although there is nothing specifically in writing from the Director, his counsel made it clear at the hearing that he seeks to obtain the benefit of the freezing orders by seeking the continuation of them for his own purposes.[45] Thus the Director seeks to obtain the benefit of the freezing orders by seeking the continuation of them for the purposes of orders for compensation ‘for consumers of the defendants conduct’ and the transfer back to consumers of any property obtained without consent.[46] There is authority that a Crown instrumentality must proffer the usual undertaking as to damages if it seeks injunctive relief.[47]
[45]Transcript, 40.
[46]The indorsement filed by the Director specifically refers to One Call Legal transferring such property back. I think that limitation is likely to be amended once the facts are made clear regarding the Black Rock property, so that is relates also to Laprese.
[47]See Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 157 ALR 273 (ACCC v Giraffe World); Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39.

If the Director was seeking an injunction pursuant to s 232 of the ACL or s 201 of the ACLAFTA, which primarily concern restraining conduct in contravention of the ACL, there are provisions that effectively excuse the Director, and any other person, from giving an undertaking as to damages.[48] But that is not this case.[49] No injunction of that kind was sought.[50] The Director seeks to be party to a freezing order for the benefit of the consumer public who have suffered loss as a result of the conduct of the defendants. The benefit to the Director of the freezing orders is to protect the interests of consumers who may be entitled to compensation under the Act or who may be entitled to have property transferred back to them. That makes the circumstances of this case similar to the circumstances in ACCC v Giraffe World,[51] where Lindgren J required an undertaking as to damages because:

In the present case, the Mareva injunctions are in aid of private rights. Indeed, the rights in question are those, not of the Crown, but of private individuals. The ACCC submits that by bringing the proceeding under Part IVA, it is endeavouring to carry forward the policy of the TP Act. However, the only application which the ACCC could have a “duty” to make in order to ensure that the statute is enforced, is one for an injunction. Indeed, given the fact that any person has standing to seek injunctive relief, it is doubtful whether, consistent with the passage from the speech of Lord Diplock set out above, the ACCC has a “duty” even to apply for that form of relief. Although it would, in a general sense, fulfil the policy of the TP Act if Group Members obtained any compensation to which they may be held to be entitled in respect of any loss or damage caused to them by a contravention of the TP Act, this does not necessarily give rise to a duty incumbent on the ACCC to apply for such compensation on their behalf. There is nothing to suggest that the Group Members are incapable of bringing proceedings themselves, even though it would obviously be more convenient if their claims could be heard and determined together, and, better still, if they could be made and determined in the one proceeding.

[48]ACLAFTA s 208; ACL s 234(2).

[49]It was not suggested by the Director that the freezing order was an interim injunction within the meaning of s 234 of the ACL, as to which see ACCC v Giraffe World (1998) 157 ALR 273, 297.

[50]Save for the orders made on 16 August 2018 which are separate from the freezing orders.

[51](1998) 156 ALR 273.

Vasilaras submitted that because it is a freezing order, an undertaking ought to be given by anyone seeking the benefit of it, like the Director. If the Director had gone down the route of getting injunctions under the legislation, that would be a different matter. This is not the case. The freezing orders are not interim injunctions within the meaning s 234 of the ACL.[52] They are not statutory injunctions under the ACL or the ACLAFTA. They are orders made under O 37A of the Rules and the statutory and inherent powers of this Court. Applying the reasoning of Lindgren J ACCC v Giraffe World, Vasilaras submitted that this is a plain vanilla freezing order application:

The Director seeks to obtain the benefit of it and therefore ought to pay the price, as we have done. Bearing in mind that the price will need to be paid, not only upon any application by the defendant, or the defendants, but any third party adversely affected which could include, for example, the owners of the – the true owners, we would submit, of the property at Beach Road. Or any other third parties that we don't know about that are adversely affected by the conduct of the defendant.

[52]ACCC v Giraffe World (1998) 157 ALR 273, 297.

The Director opposes the application because:

(a) the basis of the joinder of the Director as a plaintiff arose from the breaches of the ACL and the statutory position of the Director which involves him monitoring and enforcing the consumer interests within the State of Victoria. Under the ACL, the Director has standing to commence civil proceedings against the defendants;

(b) the general endorsement of claim filed on behalf of the Director shows that he seeks compensation for victims of the defendants frauds together with pecuniary penalties against the defendants.

In the current proceedings, the Director submitted, it is therefore beyond question that he is acting in the public interest, to protect the public and consumer rights and not to protect any propriety or private right of the Director. Each of the cases relied upon by Vasilaras in support of its application should be distinguished from the current proceedings because in those cases the government or authority was seeking to protect proprietary or private rights. In fact, the authorities support the principle advanced by the Director that a public authority should not be required to provide an undertaking as a condition of obtaining injunctive relief where it is acting in the public interest and not seeking to protect a proprietary or private right.

Consideration

I have referred above to the nature of the relief that is sought by the Director in the general indorsement filed on his behalf. Clearly, he does not seek to enforce or pursue any private or proprietary right of his own. But his claim does include the recovery of compensation on behalf of the consumers who have allegedly been defrauded by Laprese. To that extent the Director’s claim falls into the same category as ACCC v Giraffe World and the freezing orders are in aid of private rights of private individuals. There is no indication that in ACCC v Giraffe World any pecuniary penalties were sought, nor that the Mareva injunction was in any way given to preserve assets for the payment of such penalties. Indeed it would be surprising to find the preservation of assets for payment of penalties as the imposition of pecuniary penalties is not compensatory but punitive.

The general indorsement of the Director in this proceeding begins with the proposition that under the ACLAFTA the Director holds a statutory position pursuant to s 107 of that Act, with authority and powers to enforce ‘consumer interests’ pursuant to ss 109 and 110 of that Act. Section 109 of ACLAFTA sets out the functions of the Director, which include so far as presently relevant:

(a) to monitor compliance with that Act, the Consumer Acts[53] and the regulations thereunder;

(b) to investigate and prosecute breaches of that Act, a Consumer Act or the regulations thereunder; and

(c) to institute and defend proceedings to achieve the purposes of that Act or a Consumer Act.

[53]The Consumer Acts are defined to include the ACL and many other consumer related legislation.

Although the Director’s claim has a public interest element, in that it is a proceeding instituted to achieve the purposes of the Act and it seems to involve the pursuit of pecuniary penalties, it is primarily concerned with the recovery of compensation caused by, and property lost by, the conduct of the defendants. It is a consequence of investigations undertaken by his officers, but it does not involve a prosecution in the ordinary sense of a criminal prosecution. The only purpose of the freezing orders, which the Director wishes to have the benefit of, is to minimise the possibility of the defendants rendering themselves judgment proof by taking steps which are liable to produce the result that no assets are within the jurisdiction on the day of judgment in favour of the Director for the benefit of the relevant consumers. It is thus indistinguishable from the circumstances in ACCC v Giraffe World.[54]
[54](1998) 157 ALR 273, 297.

Contrary to the Director’s submissions, the freezing orders are clearly not injunctions of the kind imposed pursuant to ss 201, 202 or 203 of the ACLAFTA nor pursuant to s*232 of the ACL. The observations of Lindgren J in ACCC v Giraffe World[55] regarding the then provisions of the Trade Practices Act 1974 (Cth) apply mutatis mutandis to the current provisions:

I am of the view that the Mareva injunctions currently in force are not “interim injunctions” within the meaning of subs 80 (6). In my opinion, the “interim injunction” referred to in subs 80 (6) is the interim injunction referred to in subs 80 (2). The power to grant interim injunctions given in subs 80 (2) is a power to do so “pending determination of an application under subsection 80 (1)” and in my view it is a power to do so in aid of, and in order to render effectual, a permanent injunction of a kind referred to in subs 80 (1). A Mareva injunction, on the other hand, is directed to preventing frustration, not of a permanent injunction, but of an award of monetary relief.[56]

[55](1998) 157 ALR 273.

[56]Ibid, 296-7.

The power of the Court to impose as a condition of the grant of a freezing order a requirement that the relevant plaintiff give an undertaking as to damages is a part of the discretion of the Court involved in the exercise of the discretionary power to grant a freezing order.[57] The rationale of the decision of Lindgren J in ACCC v Giraffe World[58] provides a powerful consideration in the exercise of the discretion.
[57]See for example Mansfield v Director of Public Prosecutions for Western Australia (2006) 226 CLR 486, [33]-[34].
[58](1998) 157 ALR 273, 297. See also the Commentary in Court Forms, Precedents & Pleadings Victoria, LexisNexis, [35,050], ‘where a public authority such as the Trade Practices Commission is enforcing private rights it will be required to give an undertaking’ citing ACCC v Giraffe World Australia Pty Ltd (1998) 157 ALR 273, 297.

It was not argued before me that the matters considered by the House of Lords in Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd[59] were applicable in this case. Some explanation of that case is necessary and it is to be found conveniently in the decision of the Court of Appeal in Optus Networks Pty Ltd v City of Boroondara[60] where Charles JA said:[61]
[59][1993] AC 227.
[60][1997] 2 VR 318 (Ormiston, Charles and Callaway JJA).
[61]Ibid, 331-334.

In Kirklees M.B.C. v Wickes Building Supplies Ltd…, the question was whether a borough council, seeking to restrain by injunction Sunday trading in breach of s. 47 of the Shops Act 1950, was required to give an undertaking as to damages. The House of Lords held that there was no rule that the Crown was exempt from giving an undertaking in damages in law enforcement proceedings but that the court had a discretion not to require the undertaking and the discretion extended to public authorities exercising the function of law enforcement in appropriate circumstances. After considering Hoffmann-La Roche, Lord Goff of Chieveley said of that case at 274-5:
… I do not read the speeches in the Hoffmann-La Roche case as conferring a privilege on the Crown in law enforcement proceedings. On the contrary, I read them as dismantling an old Crown privilege and substituting for it a principle upon which, in certain limited circumstances, the court has a discretion whether or not to require an undertaking in damages from the Crown as law enforcer. The principle appears to be related not to the Crown as such but to the Crown when performing a particular function. It is true that, in all the speeches in that case, attention was focused upon the position of the Crown, for the obvious reason that it was the position of the Crown which was in issue in that case. But the considerations which persuaded this House to hold that there was a discretion whether or not to require an undertaking in damages from the Crown in a law enforcement action are equally applicable to cases in which some other public authority is charged with the enforcement of the law.
… In these circumstances, I for my part see no material distinction between the council in the present case and the Crown in Hoffmann-La Roche. Nor do I feel compelled to depart from that conclusion by the fact that, under the present practice, a local authority which acts as a relator in a relator action is required to give an undertaking in damages even though it is so proceeding in order to enforce the law in the public interest. I observe that, in the Hoffmann-La Roche case, Lord Diplock distinguished the position of a relator on the ground that he owes no duty to the public to initiate any law enforcement action. In the present case, however, the Council is indeed charged with such a duty. That does not prevent the Crown from proceeding to enforce the law under its general power; but it would be an extraordinary situation if a local authority, acting under a statutory duty, was required to give an undertaking in damages, whereas the Crown was not. To my mind, the position of the local authority as relator cannot be decisive of the present case. The essential question is whether the court's discretion to require an undertaking in damages in law enforcement cases is confined to cases in which the Crown is plaintiff, or should be held to apply to other public authorities exercising the function of law enforcement in the circumstances specified in the Hoffmann-La Roche case. In my opinion, for the reasons I have given, it should be held so to apply. (Emphasis added.)

In the passages quoted both Lord Diplock and Lord Goff of Chieveley placed particular emphasis on the duty owed to the public by the person seeking to enforce the law. In each case the person seeking the injunction was acting under a duty to enforce the law of the land, as opposed to a relator who owes no duty to the public to initiate any law enforcement action.
[and then at [1997] 2 VR 318, 333 - 334]…
The opinion of Lord Goff of Chieveley in Kirklees clearly develops and extends the law by placing a statutory authority such as the city in the same position as the Crown when a court is considering whether an undertaking should be extracted as the price of an interlocutory injunction. That is not the end of the matter however, because the discretion whether to extract an undertaking must then be considered in all the circumstances of the particular case;…
The reasons given by Lord Goff of Chieveley in Kirklees are, with respect, persuasive, although some might contend that to place a public authority seeking to enforce its planning scheme in the same position as the Crown with respect to an undertaking as to damages would be to extend a position they would say is an anomaly and to cause injustice. It is not necessary in this judgment, for reasons that will appear later, to decide the point. But I shall assume, without deciding, that in an appropriate case a court may excuse a public authority acting under a legal duty to enforce a planning scheme, from giving such an undertaking.

It can be seen from these passages that the essential point to be gained from the decision of the House of Lords in Kirklees is that at least in some cases where a public authority is under a legal duty to enforce the law and applies for an interim or interlocutory injunction in the course of performing that duty, then it is in the same position as the Crown in like circumstances.[62]
[62]See the summary by Callaway JA in Optus Networks Pty Ltd v City of Boroondara [1997] 2 VR 318, [340].

The Court of Appeal in Optus Networks did not find it necessary to apply the reasoning to be derived from the decision of the House of Lords in Kirklees. So far as I am aware, the Court of Appeal has not ruled on the point and in Mansfield v Director of Public Prosecutions for Western Australia[63] the High Court also did not rule on the point as it was unnecessary to do so.[64]
[63](2006) 226 CLR 486.
[64]Ibid [45].

In this case a distinction must be drawn between the Director and the kind of public authority under consideration in Kirklees and Optus Networks. The Director is a public servant,[65] that is a servant of the Crown, and for the purposes of considering whether the Director should be required to give an undertaking as to damages he should be equated with the Crown in right of the State of Victoria. The question then is whether that makes any difference in the circumstances of this case?
[65]See ACLAFTA s 107.

The reasoning of the Lindgren J in ACCC v Giraffe World, relying as he does on the principles derived from Hoffman-La Roche, is equally applicable to a claim by the Crown. There is no judgment of a court that I have been able to find, and none was put to me by either party, that overturns or qualifies the decision in ACCC v Giraffe World.[66]
[66](1998) 157 ALR 273, 297. See also the Commentary in Court Forms, Precedents & Pleadings Victoria, LexisNexis, [35,050], ‘where a public authority such as the Trade Practices Commission is enforcing private rights it will be required to give an undertaking’ citing ACCC v Giraffe World Australia Pty Ltd (1998) 157 ALR 273, 297.

If, on the other hand, the principles to be derived from Kirklees were to be applied in this case, the question is whether the joinder of the Director to make the claims he makes is the performance of a legal duty by him to enforce the law for the benefit of the consumer. This was not the contention of the Director in the hearing before me. At this point I am unable to conclude that he was under a statutory duty to join in the proceeding and it seems to me, that he was empowered to, but need not have, taken the action he has in this case.

It remains the case that whether to require an undertaking as to damages remains a matter of discretion. It would be relevant that the claims were highly likely to succeed. The material so far before the Court in support of the claims is, on its face, convincing, but untested. That material is, for reasons connected with the criminal charges, not answered by the defendants. At present, however, the completely one sided circumstances put before the Court do not enable me to come to any satisfactory conclusion as to the probability of the plaintiffs succeeding in their claims. It is also not possible to determine whether any third parties are, or might be, affected by the freezing orders.

Having regard to all these matters, in the exercise of the discretion of the Court, and particularly having regard to the decision in ACCC v Giraffe World and the absence of a legal duty caste on the Director to join in the proceeding, and the matters mentioned in the last paragraph, I consider that the Director should be required to give an undertaking as to damages in the form advanced by Vasilaras in its submission. That will require variations of the freezing orders to make it clear that they are continued for the benefit of the Director as well as Vasilaras.

The recent application

On or about 7 February 2019, the defendants applied to amend the summons filed 11 September 2018 by adding a paragraph to the following effect:

That the freezing orders made by Garde J on 3 August 2018 and by Cavanough J on 10 August 2018 be varied to permit the solicitor for the first defendant to remove the caveat in dealing AR205056L lodged by or on behalf of Marina Loprese (also known as Marina Laprese, the first defendant herein) on or about 4 July 2018 over the property at 44 Aldridge Road, Wyndham Vale, Victoria, being the land described in Certificate of Title volume 11200, Folio 758 and to permit any monies received in exchange for the removal to be paid to the first defendant’s solicitor.

In an affidavit in support of the application made by Katherine Moorhouse Perks[67], it was revealed that:
[67]Made 7 February 2019.

(a) the proceeding relating to the Black Rock property had been commenced by Emma Tait and because Emma Tait had refused to stay the proceeding, a defence had been filed;

(b) obtaining instructions from Laprese is difficult because she is incarcerated in the Dame Phyllis Frost Centre;

(c) since her last affidavit, she has continued to represent the defendant and has incurred further costs; and

(d) she produces a request for a caveat withdrawal in respect to the caveat lodged by Marina Loprese over the land at 45 Aldridge Road, Wyndham Vale, a search of the Register in relation to the title of that property and a request to the plaintiffs to consent to orders giving effect to the removal of the caveat to enable the completion of the contract of sale of that property on 8 February 2019.

In the letter sent the plaintiffs, Ms Moorhouse Perks noted:

On 30 January 2019, the writer received notice that a loan of approximately $20,000 made by Ms Loprese to a third person was to be repaid from the sale by that third person of their real estate and a removal of the caveat was required by 8 February 2019. Apparently there is a contract sale and the vendor will be in default of the contract of sale if the withdrawal of caveat is not provided by 8 February 2019.

Ms Moorhouse Perks went on to request that the plaintiffs give their consent to the withdrawal of the caveat and for Ms Moorhouse Perks to receive the $20,000 repayment to defray legal costs of the defendants incurred in this proceeding and in relation to the criminal proceeding. She threatened that if she was not advised by 5 pm on Monday 4 February 2019 that both of the plaintiffs will consent to the variation of the freezing orders in the manner sought, then the defendants will make an urgent application to the court for that relief.

By letter dated 4 February 2019, the Director responded noting that the loan of $20,000 referred to in Ms Moorhouse Perks’ letter was not disclosed to the Court as an asset of Laprese and should have been, that the request to receive the $20,000 for the purposes of legal fees is a matter currently before the court and that decision remains reserved (noting that the Director had strenuously resisted the release of any funds) that it did not seem reasonable to incur any legal costs in the Emma Tait proceeding when it is simply a matter of agreeing to a transfer over the property back to its rightful owner and the Director will consent to Laprese providing a withdrawal of caveat upon the following conditions:

(a) that a copy of the caveat and the withdrawal is provided to the Director;

(b) that the repayment of $20,000 loan be made into a bank account subject to the freezing order of the Court;

(c) that ‘you confirm when this is done’; and

(d) that the defendants do not seek to avoid the freezing order of the court by using this money to defray legal costs.

On 5 February 2019 Vasilaras, by its solicitors, adopted the same position as the Director. This was not acceptable to Ms Moorhouse Perks.

It was plainly in the interests of all parties that the Caveat be withdrawn. Not only did that release further funds, either for the defendants legal costs or to be subject of the freezing orders, it avoided Laprese being subject to a damages claim or legal costs, or both, for failing to remove the caveat.[68]
[68]I note that the caveat does not claim a charge over the land in question, but claims a freehold estate and for that reason was always liable to be removed. In any event, an offer to repay the loan purportedly ‘secured’ by the caveat would give rise to an immediate removal of the caveat for failure to do so.

Having regard to my conclusions as to the primary application for variation of the freezing orders, it would be inappropriate for the same reasons for any loan repayment to be used by the defendants’ solicitor to defray the legal costs in any of the proceedings. For this reason, I preferred that the proceeds received for the withdrawal of the caveat be preserved and the most appropriate means of doing so was for the proceeds to be paid into Court, after deducting a fixed and modest sum for the expenses to which the defendant’s solicitor has been put in seeking the consent of the plaintiff’s to the removal of the caveat and for its removal, but not for any of the costs of the hearing, because I concluded that it was unreasonable of the defendants’ solicitor not to accept the plaintiffs’ offer to deal with the application by agreement and without an appearance in Court.

Conclusions

In my opinion:

(a) the freezing orders, in particular that made by Cavanough J on 10 August 2018 in respect of One Call Legal, should not be varied as proposed by the defendants; and

(b) the Director should be required to give an undertaking as to damages

I will ask the Director to bring in minutes of proposed orders. Further, should any party wish to advance and argument that the costs of each application should not follow the event, they should submit a written submission not exceeding 2 pages setting out the order proposed and the reasons for it.

In addition, in relation to the caveat lodged by or on behalf of Marina Loprese on or about 4 July 2018 in dealing AR205056L over the property at 45 Aldridge Road Wyndham Vale, Victoria, being the land described in Certificate of Title Volume 11200 Folio 758 (Caveat), Laprese’s solicitor, Katherine Moorhouse Perks, was, by order made on 8 February 2019, authorised on Laprese’s behalf to remove, or authorise the removal of, the Caveat, and any moneys received in consequence of removal of the Caveat were ordered to be paid into Court, subject to the defendants’ solicitor retaining a small sum for the expense to which she had been put by the necessity of having to seek removal of the caveat.

SCHEDULE OF PARTIES

S ECI 2018 00678
BETWEEN:
VASILARAS & CO PTY LTD (ACN 168 127 222)	First Plaintiff
DIRECTOR OF CONSUMER AFFAIRS VICTORIA	Second Plaintiff
- v -
MARINA LAPRESE	First Defendant
ONE CALL LEGAL & CONVEYANCING PTY LTD (ACN 621 152 136)	Second Defendant

[2019] VSC 56

13 February 2019