Waterproofing Technologies Pty Limited v Perri (No 3)

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FEDERAL COURT OF AUSTRALIA

Waterproofing Technologies Pty Limited v Perri (No 3) [2025] FCA 934

File number(s): NSD 660 of 2021
Judgment of: MOORE J
Date of judgment: 12 August 2025
Catchwords: PRACTICE AND PROCEDURE – application to set aside or vary interlocutory orders – whether there has been a material change in circumstances – where freezing orders subject to cap for reasonable legal expenses – where reasonable legal expenses have changed significantly since orders made – where previous breach of freezing orders does not outweigh considerations in favour of granting a variation to the freezing orders for reasonable legal expenses  
Legislation: Federal Court Rules 2011 (Cth) rule 39.05(c)
Cases cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170

Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44

Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 2) [2021] FCA 894

CIP Group Pty Ltd v So (No 5) [2024] FCA 1373

Greenbot Pty ltd v Clean Energy Regulator [2025] FCA 369

Chan v Zacharia (1984) 154 CLR 178

Liu v The Age Company Limited (2016) 92 NSWLR 679; [2016] NSWCA 115

National Australia Bank Ltd v Human Group Pty Ltd (No 2) [2020] NSWSC 1900

P Dawson Nominees Pty Ltd v Australian Securities and Investments Commission (No 2) (2009) 255 ALR 466; [2009] FCA 413

Pivotel Satellite Pty Limited v Optus Mobile Pty Limited [2010] FCA 121

Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378; [1967] 2 AC 134

Tucker v McKee [2024] FCA 199

Waterproofing Technologies Pty Ltd v Perri (No 2) [2022] FCA 1293

Waterproofing Technologies Pty Ltd v Perri [2022] FCA 714

Westpac Banking Corporation v Forum Finance Pty Ltd (Freezing Order variation No 2) [2022] FCA 1206
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Corporations and Corporate Insolvency
Number of paragraphs: 69
Date of hearing: 1 May 2025
Counsel for the Applicants: Mr J Simpkins
Solicitor for the Applicants: McCabes Lawyers
Counsel for the First, Second, Third, Sixth, Eighth and Eleventh Respondents: Mr S Horgan KC and Mr A Ford
Solicitor for the First, Second, Third, Sixth, Eighth and Eleventh Respondents: Greenwich Legal
Counsel for the Ninth Respondent: Mr L Magowan
Solicitor for the Ninth Respondent: Schembri + McCluskys

ORDERS

NSD 660 of 2021
BETWEEN:

WATERPROOFING TECHNOLOGIES PTY LTD ACN 152 481 215

First Applicant

POLYSEAL WATERPROOFING VICTORIA PTY LTD ACN 086 669 650

Second Applicant
AND:

LUIGI PERRI

First Respondent

CCBM BARE PTY LTD ACN 162 850 731

Second Respondent

MILLENIUM HOMES PTY LTD ACN 096 371 667 (and others named in the Schedule)

Third Respondent

ORDER MADE BY:

MOORE J

DATE OF ORDER:

12 AUGUST 2025

THE COURT ORDERS THAT:

1.Each order 9(b) of the Freezing Orders dated 21 July 2021, directed at each of the first respondent, second respondent, third respondent and sixth respondent (the Freezing Order Respondents), be amended to provide as follows:

9(b) paying up to a total…

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Details
Case
[2025] FCA 934
Decision Date

CaseChat Overview and Summary

The case of Waterproofing Technologies Pty Limited v Perri (No 3) involved an application by the first to third respondents to set aside or vary interlocutory freezing orders that had been previously imposed. The case was heard by Anderson J in the Federal Court of Australia, with the primary focus on whether there had been a material change in circumstances warranting a variation of the orders. This application followed two earlier judgments by Anderson J, wherein the applications to discharge or vary the freezing orders were dismissed. The latest application sought to adjust the cap on reasonable legal expenses to cover costs that had significantly exceeded the original limit of $250,000.

The legal issues before the court revolved around whether the respondents had demonstrated a material change in circumstances that justified varying the freezing orders to allow for higher legal expenses. The court had to consider whether the increase in legal expenses was warranted and if there had been a breach of the orders and whether this breach negated the application. Anderson J had to weigh the need for a variation against the interests of justice and the principle of finality in litigation. The court also needed to assess whether there were other assets beyond those covered by the freezing orders and whether the respondents would still be able to meet legal costs if the orders were not varied.

In his judgment, Anderson J rejected the application for variation. He found that there was insufficient evidence to support the proposed increase in the cap on legal expenses. His Honour was not persuaded by the explanations provided for the prior breach of the freezing orders and the delay in disclosing this breach to the court. Additionally, Anderson J concluded that there was no evidence to show that the respondents would be unable to meet legal costs if the orders were not varied, particularly in light of other assets not covered by the freezing orders. The court held that the prior breach did not constitute a material change in circumstances that warranted a variation of the orders. The application was dismissed with costs.

The court's orders included amending the limit on reasonable legal expenses to a combined total of $824,000 for the respondents. The court also stipulated that if the respondents sought a higher limit for legal fees in the future, they would need to provide detailed evidence of their assets and liabilities. Additionally, the respondents were granted leave to file a further amended defence and the applicants were allowed to file a reply within 21 days of the orders. The court ordered the respondents to pay the costs associated with filing the further amended defence.

Orders

Orders of the court

1. Each order 9(b) of the Freezing Orders dated 21 July 2021, directed at each of the first respondent, second respondent, third respondent and sixth respondent (the Freezing Order Respondents), be amended to provide as follows:

9(b) paying up to a total of $824,000 (combined) on reasonable legal expenses for the first respondent, second respondent, third respondent and sixth respondent.

2. If the Freezing Order Respondents seek a higher limit for reasonable legal fees, they are to file and serve further evidence demonstrating the assets and liabilities of each of the Freezing Order Respondents and the net value of the assets that are frozen.

3. The first, second, third, sixth, eighth and eleventh respondents have leave to file and serve the proposed Further Amended Defence in the form exhibited to the affidavit of Mr Paul Mitchell sworn on 26 March 2025.

4. The first, second, third, sixth, eighth and eleventh respondents pay the costs thrown away by the amendment referred to in order 3.

5. The applicants have leave to file and serve a reply to the Further Amended Defence within 21 days of the date of these orders.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Notwithstanding that the Freezing Orders were initially made by consent, there were two applications before Anderson J by the first to third respondents to discharge or vary the Freezing Orders. They are the subject of previous judgments of Anderson J, being Waterproofing Technologies Pty Ltd v Perri [2022] FCA 714 (the First Judgment) and Waterproofing Technologies Pty Ltd v Perri (No 2) [2022] FCA 1293 (the Second Judgment). In both instances, his Honour declined to vary the Freezing Orders (and declined to discharge the Freezing Orders in the case of the First Judgment) and dismissed the applications with costs. In the First Judgment, his Honour concluded (at [62]) that there was a good arguable case against each of the relevant respondents, and that no circumstances had been demonstrated which would warrant the exercise of his discretion to discharge or vary the Freezing Orders. In the Second Judgment, his Honour was dealing with an application by the first to third respondents to vary the Freezing Orders against those respondents so as to increase the amount available for legal costs. Orders were sought in the alternative for (a) an unlimited exception for costs that are reasonably incurred in the proceedings, and (b) a combined limit of $505,000 for costs reasonably incurred in the proceedings (i.e. slightly more than doubling the limit). The evidence on this second application for a variation revealed that there had previously been a breach by the first to third respondents of the limit of $250,000 for costs, and that this breach had occurred prior to the hearing that gave rise to the First Judgment, but had not been disclosed to the Court at that time. There was no evidence to explain why this had not been disclosed. Legal expenses continued to be paid in excess of the $250,000 limit, and by 13 October 2022 the total paid was $374,736.52. In the Second Judgment, Anderson J concluded (at [22]) that the explanation put forward to explain the breach of the Freezing Orders was inadequate, as was the explanation of why the breach of the orders was not brought to the attention of the applicants or the Court until 13 October 2022. His Honour rejected the application to vary the Freezing Orders on a number of grounds. First, his Honour held that there was no sufficient evidence to support either of the alternative orders amending the amount available for legal costs. Secondly, his Honour held that there was no satisfactory evidence, from either Mr Perri or his lawyers, to explain the prior breach of the Freezing Orders. Thirdly, his Honour held that the first to third respondents had not led any probative evidence to show that they did not have other assets beyond the assets covered by the Freezing Orders. Fourthly, his Honour was not satisfied that if he refused to vary the orders, the first to third respondents would not have funds to meet relevant legal costs, particularly having regard to assets owned by Ms Perri. Fifthly, his Honour was not satisfied there had been any relevant material change of circumstances since the previous application for variation. His Honour dismissed the application with costs.

Ratio Decidendi

Legal Principle Established

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