Australia, Aug. 2 -- New South Wales Land and Environment Court issued text of the following judgement on July 2:

1. Mitchelmore JA: The applicant, Aqualand North Sydney Lavender Development Pty Ltd, sought leave to appeal from freezing orders made by Stevenson J on the application of the respondent, the owners corporation of a mixed commercial and residential development in Milsons Point that the applicant developed (I will refer to the applicant below as the Developer). The respondent has brought proceedings seeking damages against the Developer and another company in the Aqualand group in respect of alleged building defects. The orders which are the subject of the application for leave enjoin the Developer from disposing of, dealing with or diminishing the value of any of its assets below the unencumbered value of $10,628,123.00, being the amount of the respondent's claim.

2. The Developer sought leave to appeal on the basis that the freezing orders are interlocutory: Supreme Court Act 1970 (NSW), s 101(2)(e). The draft notice of appeal contained a single proposed ground, alleging that the primary judge misapplied the test in r 25.11 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and/or to enliven the Court's inherent jurisdiction to grant a freezing order. The application for leave was heard concurrently with the appeal.

3. Although the Developer contended that the application raised a point of general principle, its arguments in support of the proposed ground of appeal were directed at the primary judge's application of settled principles to the particular circumstances of the case, and did not raise an injustice which was reasonably clear in the sense of going beyond what was merely arguable: see eg Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[39]. Accordingly, I would refuse leave to appeal.

The decision of the primary judge

4. The respondent made the application for freezing orders under Part 25 Division 2 of the UCPR. Relevantly for present purposes, r 25.11 provides:

25.11 Freezing order

(1) The court may make an order (a freezing order), upon or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the court's process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.

(2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.

5. Rule 25.14 relevantly provides:

25.14 Order against judgment debtor or prospective judgment debtor or third party

(1) This rule applies if-

(a) ...

(b)an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in-

(i) the court, or

(ii) in the case of a cause of action to which subrule (3) applies-another court.

(2)...

(3) This subrule applies to a cause of action if-

(a) there is a sufficient prospect that the other court will give judgment in favour of the applicant, and

(b) there is a sufficient prospect that the judgment will be registered in or enforced by the court.

(4) The court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur-

(a) the judgment debtor, prospective judgment debtor or another person absconds,

(b) the assets of the judgment debtor, prospective judgment debtor or another person are-

(i) removed from Australia or from a place inside or outside Australia, or

(ii) disposed of, dealt with or diminished in value.

(5) ...

(6) Nothing in this rule affects the power of the court to make a freezing order or ancillary order if the court considers it is in the interests of justice to do so.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197bde722089f2b169971c6e)

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