Byron v JBG Contractors (NSW) Pty Ltd [2021] NSWSC 549

Supreme Court New South Wales

Medium Neutral Citation: Byron v JBG Contractors (NSW) Pty Ltd [2021] NSWSC 549 Hearing dates: 27 April 2021 Date of orders: 27 April 2021 Decision date: 27 April 2021 Jurisdiction: Common Law Before: Garling J Decision: (1) Dismiss the Notice of Motion filed by the defendant on 23 April 2021. (2) Order the defendant to pay the legal costs, if any, of the 7th plaintiff. Catchwords: CIVIL PROCEDURE – Interim preservation – Freezing orders – Sale of house not an attempt to dissipate assets – Applicant does not adduce any evidence to demonstrate the sale was underhand or not at a proper value – Discretion of the Court – Freezing orders are not made Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: Byron v JBG Contractors (NSW) Pty Ltd [2020] NSWSC 1280 Texts Cited: Not Applicable Category: Procedural rulings Parties: Oriana Ausilia Byron (P) G Fretwell (P7) JBG Contractors (NSW) Pty Ltd (D) Representation: Counsel: W Onishi (P1-6) Self-Represented (P7) J Lee (D) File Number(s): 2017/388214 Publication restriction: Not Applicable

EX TEMPORE Judgment 1. This is an application by JBG Contractors (NSW) Pty Ltd ("the Company") by Notice of Motion filed 23 April 2021, for a freezing order against Mr Gregory Fretwell who is the 7th plaintiff in these proceedings. The Company seeks to freeze the assets of Mr Fretwell in the amount of $247,432.50 subject to a range of conditions and exceptions set out in a proposed draft order. 2. The claim of entitlement to the freezing order is based upon the course of litigation between the Company (as a defendant) and seven plaintiffs (including Mr Fretwell). The 1st to 5th plaintiffs were the owners of a property on the Princes Highway, Albion Park. They succeeded in a claim for damages against the Company, which was heard and determined by Fagan J in this Court by judgment delivered on 21 September 2020: Byron v JBG Contractors (NSW) Pty Ltd [2020] NSWSC 1280. The Company was ordered to pay the sum of $26,099 to the 1st to 5th plaintiffs. 3. The 6th plaintiff and Mr Fretwell (the 7th plaintiff) sued in respect of a property adjoining that owned by the 1st to 5th plaintiffs on the Princes Highway at Albion Park. The 6th plaintiff failed and judgment was given to the Company against her because she was not an owner of the property at the relevant times. 4. Mr Fretwell succeeded in obtaining a judgment for $15,292.50 against the Company. The terms of that judgment make it plain that the Company was liable to the successful plaintiffs because of the nuisance which it created by the release of lime dust, otherwise known as "airborne hydrated lime", which drifted from a building site under the control of the Company and onto the two residential properties. 5. All of the plaintiffs made claims for significant monetary damages for the nuisance of the Company. 6. The 1st to 5th plaintiffs' schedule claimed damages in respect of one property that was a little over $241,000. As I have said, they succeeded in obtaining a judgment of about $26,000. 7. Mr Fretwell's claim was for a little over $270,000 and he succeeded in obtaining a judgment of a little over $15,000. It can be said that all the plaintiffs took an expansive view of their entitlement to damages and were not particularly successful. 8. Whilst no appeal appears to have yet been lodged against the first judgment of Fagan J, it seems to be at least suggested by Mr Fretwell that he intends to lodge an appeal. 9. Subsequent to the first judgment of Fagan J, there was a second judgment dealing with costs. On 23 November 2020, his Honour ordered the plaintiffs to pay the defendant's costs of the proceedings and that they were to be assessed on the ordinary basis up to 11 May 2020 and on an indemnity basis on and from 12 May 2020. It seems that judgment was based upon the fact that on 11 May 2020, the Company by its solicitors made an offer to settle the proceedings on the basis of judgment for all seven plaintiffs for $200,000 with the defendant to pay the plaintiffs' costs of the proceedings as agreed or assessed. That offer was not accepted. 10. A further judgment of Fagan J stayed the execution of the judgments which had been entered on 21 September 2020 in favour of the 1st to 5th plaintiffs and the 7th plaintiff. His Honour stayed those judgments, totalling a little over $41,000 on the application of the Company, because the Company showed that its estimated costs (of about $235,000) greatly exceeded the combined total of those judgments. In those circumstances, execution of the judgments was stayed and his Honour ordered that the Company was entitled to set off its liability to pay the judgments to the plaintiffs against any sum owing to it for its costs. 11. An assessment has been made of the Company's legal costs and disbursements in the sum of $242,271.08 - which is said to be the costs payable under the orders of the Court of 23 November 2020. Although the Company makes claim for additional costs incurred since that time, I am not satisfied that they can be encompassed by those aforementioned orders. 12. It has come to the attention of the solicitors for the Company that the 7th plaintiff's property, which is directly across the road from the building site that the Company was working on, has been offered for sale and is recorded on the relevant agent's site on the internet as being sold on 21 April 2021. 13. Accordingly, the Company has sought the freezing orders before me today. Mr Fretwell is the only person against whom the freezing orders are sought. No freezing order is sought against any of the other plaintiffs. 14. Mr Fretwell was served with documents recently and has appeared by telephone this morning without any legal representation. Mr Fretwell confirms that contracts have been exchanged for the sale of the property and, although he does not claim any precise knowledge, he suggests that settlement may take place within about four weeks, perhaps on 19 May 2021. He says that the sale price was $570,000; that there is a registered mortgage to ANZ which will need to be discharged to enable the sale to occur and that registered mortgage is about $400,000. Mr Fretwell says that he owes many debts estimated to total about $120,000. 15. The conditions of the proposed freezing orders which are sought are that from the total sum of money which the Company seeks to freeze, Mr Fretwell would be able to pay up to $1,000 a week for his ordinary living expenses, $100,000 for his reasonable legal expenses, and also that he would be entitled to use the frozen assets to discharge "obligations bona fide and properly incurred under a contract entered into" before the order was made. This condition is subject to an obligation where possible for him to give two working days' notice to the Company in writing of the particulars of that obligation. 16. The principles upon which this Court would make a freezing order are well established and are referred to in r 25.11 of the Uniform Civil Procedure Rules 2005. 17. It should be kept in mind that the relevant authorities establish that freezing orders of the kind sought here are not made by a court simply because one party asks for it. A party seeking a freezing order must establish that it has a prima facie claim against the other party which will result in some form of monetary judgment and, secondly, that there is a danger that by reason of the other party absconding, removing assets from the jurisdiction, or disposing of them within the jurisdiction, the applicant for the order will not be able to have its judgment satisfied. 18. However, the authorities emphasise that it is insufficient for an applicant to merely assert that the other party was likely to put assets beyond the applicant's reach, nor is it sufficient to assert that the party the subject of the order is impecunious and that by reason of that impecuniosity, any further dealing with assets would mean that the judgment may not be able to be fulfilled or satisfied. The mere fact that by reason of impecuniosity the judgment may not be satisfied does not mean that there is an abuse of process. Further, a freezing order is not to be obtained for the purpose that, or so as to have the effect that, one creditor obtains a preference over other creditors where the pool of assets is inadequate to satisfy all claims upon it. 19. The Company contends that because of findings made by Fagan J in the course of his judgment, it can established that Mr Fretwell has previously acted in such a manner that his probity is not to be relied upon and that this is a material fact to be taken into account in determining whether to make the order sought. 20. I keep in mind that it is not necessary for an applicant for an order to show that the other party has a positive intention of evading a judgment, but that it is sufficient to show that the course upon which the other party intends to embark is, objectively speaking, calculated to have that effect. 21. An issue has arisen in the course of the hearing regarding the value of the assets that are sought to be frozen. Mr Lee, counsel for the Company, accepts that a credit ought be allowed by the Company with respect to the sum being claimed for the total of the two judgments entered by Fagan J in favour of all plaintiffs for the sum of a little over $41,000. 22. I am not persuaded that the Company is entitled to add additional costs incurred since the preparation of the Assessment of Costs by its independent Costs Assessor in the sums I have earlier referred to. The effect of all of that is that there is a sum of about $200,000 net to which, in my assessment, the Company has established a prima facie claim. Of course, that is a claim against all seven plaintiffs, not just Mr Fretwell. That is because the judgment of Fagan J was against all plaintiffs and they were all jointly and severally liable to pay whatever sum was assessed as being owing. 23. Mr Lee accepts that if there were to be an equitable apportionment as between plaintiffs of that debt, it would be appropriate to divide it in half on the basis that two properties were the subject of the claims made against the Company; each of the claims were well in excess of that which was recovered; and on the probabilities about one-half of all of the costs were apportioned to each property. That would mean the Mr Fretwell would pay about $100,000. 24. Whilst, of course, Mr Lee is correct to say that the liability is joint and several and the Company can look to Mr Fretwell to pay the entirety of it, as a matter of discretion in considering these orders, I am also entitled to look at, ultimately, what the real liability of Mr Fretwell may be. 25. Ultimately, the Court must exercise discretion in this matter i.e. to consider whether or not the interests of justice favour the making of a freezing order. 26. I am not satisfied that the mere sale of the house, which has been identified by the Company, is of itself and without more an attempt to dissipate assets. There is no suggestion in the evidence before me that the sale was in any way underhand or not at a proper value. 27. It appears from the affidavits of service that when the process servers attended at the premises there was a sign outside advertising the sale. Agents were appointed to sell it and it was also advertised for sale on the internet. There is no evidence or suggestion before me that the sale which occurred was at anything other than a reasonable market value. All that the sale of property tells me is that Mr Fretwell is maintaining his asset position but changing the form of the asset. He is exchanging real property for cash. Because there is a registered mortgage, he is of course entitled to the net proceeds that he would obtain from the sale of the property. 28. I have seen no evidence, and the defendant does not adduce any evidence, of a disposition of assets carrying with it any character which would suggest that Mr Fretwell is evading the obligations for which he will have responsibility in due course when a judgment is entered with respect to the costs order. 29. Of course, I do not overlook the fact that, as with the other plaintiffs, Mr Fretwell made an exaggerated claim for damages from the Company. I do not overlook the fact that Mr Fretwell made a less than a favourable impression on Fagan J and that his Honour found that he was a person whose evidence could not be accepted. However, to me, in weighing the matters up, those facts do not clothe the present circumstances surrounding the sale of the property with any indicia of disposition of assets for the purpose of evading a judgment or dealing with assets deliberately so as not to be in a position to meet the judgment when it is entered. 30. The application for an order, as I have earlier said, does not have to show that there is a positive intention to evade a judgment. However, that Mr Fretwell sold his house to release the net assets to pay for his debts is not, objectively speaking, a course which is calculated to have the effect contended for by the Company. 31. It seems to me that the real substance of this matter is that, in circumstances where Mr Fretwell has other debts which have not been clearly established, the Company is seeking to put itself in a preferred position to other creditors. 32. In those circumstances, I am wholly unpersuaded that this is a proper matter in which a freezing order should be made.