Supreme Court New South Wales Medium Neutral Citation: In the matter of K. & A. Laird (N.S.W.) Pty Ltd (in liq) — K. & A. Laird (N.S.W.) Pty Ltd (in liq) v Aidzan Pty Ltd (in liq) [2022] NSWSC 510 Hearing dates: 28 April 2022 Date of orders: 28 April 2022 Decision date: 29 April 2022 Jurisdiction: Equity - Corporations List Before: Williams J Decision: See paragraph [52] Catchwords: INJUNCTIONS — application for orders under UCPR r 25.3(3) preserving the fund that is the subject of these proceedings — where fund is being depleted by payment of a defendant's legal costs of these proceedings and other payments — order made preserving fund — no question of principle Legislation Cited: Corporations Act 2001 (Cth), ss 471B, 482 Supreme Court Act 1970 (NSW) s 66 Uniform Civil Procedure Rules 2005 (NSW), r 25.3(3) Cases Cited: Australian Receivables Ltd v Tekitu Pty Ltd [2008] NSWSC 433 Australian Spirit Management Pty Ltd v Badman v Drake [2008] NSWSC 968 Commissioner of Taxation [2011] NSWSC 1626 In the matter of Aidzan Pty Ltd (in liq) [2020] FCA 1764 In the matter of Aidzan Pty Ltd (in liq) (No. 2) [2020] FCA 1780 In the matter of Duomatic Ltd [1969] 2 Ch 365 Re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 1918 Category: Principal judgment Parties: K. & A. Laird (N.S.W.) Pty Ltd (in liq) (Applicant) Aidzan Pty Ltd (in liq) in its own capacity and in its capacity as trustee of the Peter Laird Trust, the Peter Alan Laird Property Trust (known as the PAL Property Trust) trading as the Aidzan Superannuation Fund (First Defendant) Nazdia Pty Ltd in its capacity as trustee of the Aidzan Superannuation Fund (Second Defendant) Peter Alan Laird (Third Defendant) Alan Godfrey Topp and Bruce Gleeson in their capacities as liquidators of Aidzan Pty Ltd (in liq) (Respondents) Representation: Counsel: Mr M Oakes SC with Mr J Tobin (Applicant) Mr R Marshall SC with Mr K Lord (First to Third Defendants and Respondents) Solicitors: Watson Mangioni Lawyers (Applicant) Ashurst (First to Third Defendants and Respondents) File Number(s): 2020/351691 Publication restriction: N/A Judgment 1. The plaintiff in these proceedings, K&A Laird (NSW) Pty Ltd (KAL), applies for orders under r 25.3(3) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) preserving a fund that represents part of the net proceeds of sale of a property at 146 Sunnyholt Road, Blacktown (the Sunnyholt Property). That fund is presently held in an account maintained by the liquidators of the first defendant, Aidzan Pty Ltd (Aidzan), which was the registered proprietor of the Sunnyholt Property. The liquidators are respondents to KAL's application. 2. These are my reasons for making the orders that I made under UCPR r 25.3(3) at the conclusion of the hearing of the plaintiff's application on 28 April 2022. 3. KAL's principal claim in these proceedings is that the third defendant, Mr Peter Laird, breached his duties as a director of KAL by diverting an opportunity for KAL to purchase the Sunnyholt Property and causing that property to be acquired by Aidzan, rather than by KAL, in early 1990. At that time, Mr Laird and his mother Mrs Dorothy Laird were the shareholders and directors of Aidzan. Mr Laird became the sole shareholder and director of Aidzan after the death of his mother in November 2009. KAL claims that Mr Laird's alleged breaches of duty in causing the Sunnyholt Property to be acquired by Aidzan deprived KAL of the benefit of the property and the capital gain realised when it was sold in October 2019 for approximately $7,980,500 (including GST), significantly in excess of the $3,083,000 purchase price paid in 1990. 4. The October 2019 sale was undertaken by Mr Alan Topp and Mr Bruce Gleeson who had been appointed as receivers of the assets of the Peter Alan Laird Property Trust (the Property Trust) pursuant to orders made by the Federal Court of Australia on 6 March 2019, having earlier been appointed as joint and several liquidators of Aidzan pursuant to winding up orders made by this Court on 4 February 2019. 5. According to Mr Topp's affidavit sworn in the present proceedings on 9 February 2022, Aidzan acquired the Sunnyholt Property in March 1990 as trustee of the Peter Laird Trust (PL Trust). Mr Peter Laird was (and still is) the sole beneficiary of the PL Trust. The beneficial interest in the property was transferred to the Property Trust in 1993. Aidzan remained the registered owner of the Sunnyholt Property in its capacity as trustee of the Property Trust. Aidzan also owned all of the units in the Property Trust in its capacity as trustee of the Aidzan Superannuation Fund (AZSF). Mr Peter Laird was (and still is) the sole beneficiary of the AZSF. Nazdia Pty Ltd (Nazdia) replaced Aidzan as trustee of the AZSF on 18 February 2019, shortly after Aidzan was placed into liquidation on 4 February 2019. Nazdia is the second defendant in the proceedings in this Court. 6. Mr Topp has deposed that Mr Peter Laird has informed him that the $3,083,000 purchase price of the Sunnyholt Property in 1990 was funded by a credit facility of $1,800,000 under which both KAL and Aidzan were the borrowers and an "unsecured payment" of $1,283,000 that Mr Peter Laird and his mother caused KAL to make to Aidzan. From completion of the purchase, KAL operated its business out of the Sunnyholt Property (and other premises). KAL leased the Sunnyholt Property from Aidzan on terms that required KAL to pay rent of $420,000 per annum (reviewable annually) and all rates, taxes and other outgoings, costs and expenses incurred by Aidzan in respect of the property. 7. Mr Topp has also deposed that Mr Peter Laird has informed him that the $1,800,000 credit facility was repaid in full in February 2004 and that the $1,283,000 "unsecured payment" has also been repaid to KAL. This is disputed or not admitted by KAL. 8. KAL alleges that the Sunnyholt Property was required for KAL's business operations and that it could have purchased the property for itself. Aidzan was newly incorporated and had no trading history or assets. Its involvement in the transaction was entirely for the benefit of Mr Peter Laird, the sole beneficiary of the PL Trust for which Aidzan acquired the Sunnyholt Property. KAL contends that the design of the transaction was essentially to gift the Sunnyholt Property to Aidzan, with KAL paying for the property via the rent charged by Aidzan under the lease (which KAL alleges exceeded the market rent), which was applied to repaying the credit facility and paying down the "unsecured payment" that KAL had made to Aidzan. 9. KAL claims that the net sale proceeds of the Sunnyholt Property, and any interest of Aidzan, Nazdia or Mr Peter Laird in those sale proceeds, are held on resulting trust or constructive trust for KAL. KAL has been in liquidation since 24 August 2018 and its liquidator, Mr Alan Hayes, has the conduct of these proceedings. 10. KAL's allegations concerning Mr Peter Laird's breaches of directors' duties are disputed. Each of the defendants – Aidzan, Nazdia and Mr Peter Laird – deny that they hold their interest in the Sunnyholt Property on trust for KAL. The defendants also raise various other defences, including a defence relying on Re Duomatic Ltd [1969] 2 Ch 365 and a limitation defence. In response, KAL contends that the Duomatic principle is not applicable because ratification did not occur and because the principle does not apply in circumstances where substantive rights are involved. In relation to the limitation defence, KAL contends that statutory limitation periods do not apply directly or by analogy to its claims for equitable relief and, further or alternatively, alleges fraudulent concealment. 11. It is not necessary to refer to the other claims, defences and cross-claims in these proceedings in order to determine KAL's application for interim orders under UCPR, r 25.3 preserving the net sale proceeds of the Sunnyholt Property. 12. It is common ground that the remaining net sale proceeds of the Sunnyholt Property are held in an account maintained by Messrs Topp and Gleeson as liquidators of Aidzan. Adopting the terminology used by the parties in these proceedings and in proceedings in the Federal Court of Australia arising from the winding up of Aidzan, [1] I will refer to this account as the Liquidation Account. 13. The balance of the Liquidation Account as at 1 February 2022 was $5,584,725.20. At the commencement of the hearing on 28 April 2022, senior counsel for the defendants and respondents informed the Court that the current balance of the Liquidation Account is $5,185,442.61. The defendants did not adduce detailed evidence explaining how the amount of the Sunnyholt Property sale proceeds has been reduced to that balance. However, money has been withdrawn from the account to pay remuneration payable to Messrs Topp and Gleeson (in their capacities as receivers of the Property Trust and as liquidators of Aidzan) and legal costs incurred by Messrs Topp and Gleeson as liquidators of Aidzan in respect of Aidzan's defence of these proceedings and its defence of separate proceedings in which it is sued as the owner of the Sunnnyholt Property for damages for personal injury allegedly sustained at the property by a person unrelated to the parties to these proceedings. 14. I note that all three defendants in these proceedings – Aidzan, Nazdia and Mr Peter Laird – have common legal representation and have filed one defence to KAL's statement of claim. There is evidence from the defendants' solicitor to the effect that his firm has entered into separate retainers with each defendant and maintains a separate file in relation to its work for each defendant. Any work relating to these proceedings is allocated to one of those files. Work attributable to both Mr Peter Laird's defence and Aidzan's defence of these proceedings is generally allocated to Aidzan's file and charged to Aidzan. 15. The withdrawals from the Liquidation Account for remuneration and legal costs have been the subject of orders made in the Federal Court proceedings referred to above. 16. On 29 July 2020, Messrs Topp and Gleeson (in their capacity as liquidators of Aidzan) filed an interlocutory application in the Federal Court proceedings claiming the following relief in two stages: 1. Stage 1: 1. determination of the amount of their remuneration as liquidators and orders for them (in their capacity as receivers) to pay that remuneration and liquidators' expenses from the funds held in the receivership; and 2. directions as to the payment of the funds held by them as receivers to the Commissioner of Taxation in respect of the Property Trust's taxation liabilities, to themselves as liquidators for their remuneration, to themselves as receivers for their remuneration and expenses, and the balance to Nazdia as trustee of the AZSF (subject to the receivers retaining an amount of $350,000 for anticipated remaining costs and expenses of the receivership and the winding up). 1. Stage 2: 1. an order passing the receivership accounts; 2. an order pursuant to s 482 of the Corporations Act 2001 (Cth) terminating the winding up of Aidzan; and 3. an order discharging Messrs Topp and Gleeson as receivers and a direction requiring them to pay the balance of the funds held in the receivership to Aidzan on the date of their discharge. 1. Rares J delivered judgment in relation to the first stage of that interlocutory application in the Federal Court proceedings on 20 November 2020: In the matter of Aidzan Pty Ltd (in liq) [2020] FCA 1764. His Honour made orders concerning the remuneration of the liquidators and authorising the payment of that remuneration out of the funds held by the receivers and fixed the balance of the claims for relief in the interlocutory application for hearing on 17 December 2020. Directions were made for parties wishing to be heard, including Mr Hayes (as liquidator of KAL), to file and serve written submissions in advance of that hearing. In the course of dealing with the remuneration issues in his reasons for judgment, his Honour stated (at [21]): "As Aidzan is now clearly solvent, the liquidators anticipate that the winding up will soon be terminated and the company restored to its shareholders. Likewise, the purpose of the receivership is now fulfilled." 1. Rares J made orders on 17 December 2020 discharging the receivers and directing them to pay their remuneration and outstanding expenses and to pay the balance of the funds held by them as receivers into the Liquidation Account, which Messrs Topp and Gleeson (in their capacity as liquidators) were authorised to open for the purpose of holding money held or previously held in the bank account of the Property Trust. 2. The liquidators did not press their application for an order terminating the winding up of Aidzan at the hearing on 17 December 2020. The present proceedings had been commenced in this Court on 11 December 2020. In his reasons for judgment delivered on 17 December 2020, Rares J recorded (In the matter of Aidzan Pty Ltd (in liq) (No. 2) [2020] FCA 1780 at [2]-[5]): "2. Peter Laird informed the receivers' and liquidators' solicitors yesterday by email that if, upon the termination of the receivership, the winding up would also terminate so that, as the director of Aidzan, he would be returned to control it and the PAL Trust, he would seek to take steps to reappoint liquidators to Aidzan. He explained that this was because of proceedings that Mr Hayes, the liquidator of K. & A. Laird (N. S. W.) Pty Ltd, filed in the Supreme Court of New South [sic] on 11 December 2020 as plaintiff, against Aidzan, in its own behalf and in its capacity as trustee of the PAL Trust, Nazdia in its capacity as trustee of the Aizdan Superannuation Fund, and Peter Laird (the Supreme Court proceeding). Mr Hayes' claims are based substantively on alleged breaches of fiduciary duty by those defendants over the course of 30 years. The Supreme Court proceeding is listed before the Equity Registrar for first directions on 22 February 2021. 3. Mr Hayes opposed the liquidators remaining in office, and so giving effect to Peter Laird's wishes to avoid a new liquidation, as appear to have been expressed in the email. Mr Hayes' opposition was on the basis that any continuing, or new, liquidation would absorb, unnecessarily, funds in the PAL Trust that could otherwise be applied for the benefit of the successful party in the Supreme Court proceeding. 4. During the course of argument, a convenient alternate possibility emerged. Mr Hayes suggested that, upon further reflection, Peter Laird would be able decide, having regard to his necessary personal involvement as a defendant in the Supreme Court proceeding, whether he wished to also have the responsibility of defending Aidzan's and the PAL Trust's positions in respect of what, at this stage, appears to be possibly common allegations against each of the defendants that would not require them to have separate representation. This may clarify when defences and any cross-claims come to be pleaded in the Supreme Court proceeding. The fate of this proceeding, and the question of what will happen to the liquidation of Aidzan, would then be able to be considered on a more informed basis when this matter comes back for case management before me on 5 March 2021. 5. In addition, Mr Hayes has sought an order nunc pro tunc under s 471B of the Corporations Act 2001 (Cth) authorising him to begin, and subsequently proceed with, the Supreme Court proceeding. It is common ground that it is appropriate to make such an order." 1. His Honour granted leave nunc pro tunc pursuant to s 471B of the Corporations Act for Mr Hayes, as liquidator of KAL, to commence the present proceedings in this Court. His Honour also made the following order: "9. Directs to the extent necessary under section 90-15, Schedule 2, Corporations Act 2001 (Cth) that until further order of this Court or the Supreme Court of New South Wales the First and Second Plaintiffs would be entitled: (a) to use the funds held in the Liquidation Account to pay the remuneration of the First and Second Plaintiffs as liquidators of the Third Plaintiff approved in accordance with Division 60 of Schedule 2, Corporations Act 2001 (Cth) for time spent in managing the liquidation of the Third Plaintiff, including without limitation, defending any proceeding commenced against the Third Defendant, including the NSWSC Proceedings; and (b) to engage solicitors, counsel, experts or incur other incidental costs in connection with the liquidation of the Third Plaintiff, including without limitation, defending any proceeding commenced against the Third Defendant, including the NSWSC Proceedings with such costs and expense to be paid from the moneys held in the Liquidation Account." 1. References to the "NSWSC Proceedings" in order 9 are references to the present proceedings. References to the "Third Plaintiff" in order 9 are references to Aidzan. The reference to the "Third Defendant" in order 9(b) was subsequently corrected to refer to the "Third Plaintiff" (that is, Aidzan). 2. Order 9 expressly contemplates that the position may be altered by an order of this Court. 3. The application for an order terminating the winding up of Aidzan was adjourned to 5 March 2021 for case management. As I understand it that application has subsequently been adjourned on a number of occasions and has not yet been pressed. Aidzan remains in liquidation. 4. As KAL submitted, it is plain from the reasons for judgment of Rares J set out at [19] above that the continuation of the winding up reflects Mr Peter Laird's preference not to have any responsibility for the defence of KAL's claims insofar as they concern Aidzan. It appears that Mr Laird continues to prefer that Messrs Topp and Gleeson, as liquidators of Aidzan, bear that responsibility. 5. Further applications to the Federal Court for the approval of the remuneration of the Aidzan Liquidators were made, with prior notice to Mr Hayes, and determined on 15 April 2021, 6 August 2021 and 6 December 2021. 6. KAL's application for orders preserving the funds in the Liquidation Account under UCPR, r 25.3(3) was made by notice of motion filed on 18 November 2021. 7. UCPR r 25.3(3) provides that: "In proceedings concerning the right of any part to a fund, the court may order that the fund be paid into court or otherwise secured." 1. There is no dispute that the Liquidation Account is a separate fund that represents the remaining net sale proceeds of the Sunnyholt Property, and that this very fund is the subject matter of KAL's claims in these proceedings that I have summarised above. 2. UCPR r 25.3(3) does not prescribe the form or terms of order that may be made securing a fund, short of an order for payment of the fund into court. In this case, KAL seeks the following orders in prayers 2 and 3 of its notice of motion filed on 18 November 2021: [2] "2. Order that the entitlement of the respondents, Alan Godfrey Topp and Bruce Gleeson as set out in Orders 9(a) and (b) made by the Federal Court of Australia on 17 December 2020 in proceeding NSD 306 of 2019, be terminated. 3. Order, until further order or unless by consent of the plaintiff, restraining the respondents, Alan Godfrey Topp and Bruce Gleeson, from withdrawing, encumbering or otherwise using in any manner the monies received by the first defendant from the proceeds of sale of the property 146 Sunnyholt Rd, Blacktown, or the balance of such monies still held on behalf of the first defendant, in the 'Liquidation Account' (as defined in order 4 of the Federal Court of Australia orders of 17 December 2020)." 1. Prayers 2 and 3 are directed to the preservation of the remaining Sunnyholt Property sale proceeds by restraining the liquidators of Aidzan from withdrawing from, encumbering or otherwise dealing with those sale proceeds that remain in the Liquidation Account, including to pay their remuneration as liquidators and to pay for their legal costs of defending these proceedings as permitted by order 9 of the Federal Court orders made on 17 December 2020. Senior counsel for KAL confirmed at the hearing on 28 April 2022 that KAL was not seeking orders that would require the liquidators of Aidzan to pay back into the Liquidation Account monies that have been withdrawn to date in accordance with the orders made in the Federal Court proceedings. 2. An order under UCPR r 25.3(3) is discretionary. 3. It is plain from the pleadings, the evidence adduced for the purpose of the present application and the detailed written submissions of KAL and the defendants that KAL's claims are seriously arguable but will be vigorously defended. The structure of the transaction by which the Sunnyholt Property was acquired and that acquisition was financed, as recorded in the contemporaneous transaction documents, provides strong prima facie support for KAL's claims. However, much will depend on the circumstances in which and the reasons why the transaction was structured in the manner that it was. These circumstances will be the subject of other documentary and oral evidence. The resolution of the claims will require findings about those historical factual issues, which may be informed by an assessment of the credibility of witnesses and the reliability of their recollections of events three decades ago, as well as the determination of legal issues of some complexity. This was confirmed by the nature of the matters raised by senior counsel for the defendants and respondents in support of a submission that KAL's case against Aidzan is a weak case and Aidzan has a strong defence to the case. The matters relied in support of that submission were primarily factual contentions that will be the subject of evidence at trial and in respect of which (for the most part) that evidence is not presently before the Court. Senior Counsel also made submissions directed to the legal doctrines and principles on which Aidzan's defence relies. The applicability and operation of those doctrines and principles will depend on the findings made at trial in relation to disputed factual contentions. In those circumstances, it is neither appropriate nor possible to assess the relative strengths and weaknesses of the claims and defences of KAL and the defendants in relation to the Sunnyholt Property sale proceeds beyond observing that both the claims and the defences raise serious questions. The balance of convenience will therefore be determinative of the present application. 4. The balance of convenience must be assessed bearing in mind that, if an order under UCPR r 25.3(3) is wrongly declined, the subject matter of the proceedings will be further diminished. Whilst freezing orders are generally subject to an exception permitting the defendants to pay reasonable living expenses and legal costs out of their own assets (which are not the subject matter of the proceedings), that is not the case in relation to orders under r 25.3(3) (which are directed to assets that are the subject matter of the proceedings). However, any hardship that would be occasioned by an order is relevant to the balance of convenience and the discretion extends making an order on terms that permit payment of such expenses and costs out of the fund in cases where the injustice of making an order without such exceptions would outweigh the injustice of declining the order: Badman v Drake [2008] NSWSC 968 at [6]; Australian Receivables Ltd v Tekitu Pty Ltd [2008] NSWSC 433 at [28]; Australian Spirit Management Pty Ltd v Commissioner of Taxation [2011] NSWSC 1626 at [50] and the authorities there cited; Re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 1918 at [48]-[59]. 5. The question is whether the injustice to KAL of the fund being further depleted if the order under r 25.3(3) is declined outweighs any injustice that may be suffered by Aidzan if an order is made: Badman v Drake at [5], [11]. In circumstances where Aidzan held the Sunnyholt Property as trustee of the Property Trust and claims its interest in the net sale proceeds of the property in that capacity, Nazdia is the owner of all of the units in the Property Trust as trustee of the AZSF and Mr Peter Laird is the sole beneficiary of the AZSF, the inquiry about the injustice that may be suffered if an order were wrongly made is directed, in substance, to whether any injustice may be suffered by Mr Laird as the only person who ultimately stands to benefit if Aidzan succeed in defending KAL's claims. 6. Mr Topp has given evidence that Aidzan has no funds or assets from which to pay its legal costs of defending these proceedings other than the net sale proceeds of the Sunnyholt Property in the Liquidation Account. KAL relies on evidence of Mr Peter Laird's assets of which KAL is aware and submits that he has sufficient assets available to him to fund Aidzan's costs of these proceedings and the liquidators' remuneration. The defendants did not adduce evidence of Mr Peter Laird's total financial position. Nor did the defendants contend that his assets are inadequate for him to put the liquidators of Aidzan in funds to defend these proceedings for his ultimate benefit and to pay their remuneration. Rather, the defendants submitted that it would be unjust for Mr Laird to have to do so and that the balance of convenience favours refusing to make the order under r 25.3(3) for the following seven reasons identified in their written and oral submissions. 7. First, the defendants submit that "KAL has chosen to pursue claims against Aidzan as trustee", Aidzan is entitled to defend those claims and its defence requires work over and above that which is required to defend the claims against Mr Peter Laird. Although all three defendants are represented by the same legal representatives, the costs of their defences are being invoiced to them separately. 8. KAL's "choice" to sue Aidzan was driven by Mr Peter Laird's structure of the ownership of the Sunnyholt Property through a series of trusts of which Aidzan is the trustee and he is the sole ultimate beneficiary. Aidzan's right to defend the claims against it has no bearing on whether the interests of justice favour granting or refusing an order restraining it from drawing on the very fund that is the subject matter of the dispute in order to pay for that defence and to pay the remuneration of the liquidators in circumstances where the available evidence suggests that Mr Laird is in a position to fund the liquidators' remuneration in the winding up that he has elected to continue and their legal costs incurred in defending these proceedings for his benefit. 9. It is plain from the evidence of the defendants' solicitor referred to at [14] above that work is being done in defending the proceedings that benefits both Mr Peter Laird and Aidzan and that the whole of the fees for such work is charged to Aidzan rather than being apportioned between the two defendants. Thus, Mr Peter Laird is utilising the fund in dispute in the proceedings to his own benefit both directly and indirectly before KAL has had an opportunity to have its claim to beneficial ownership of the fund determined. That is a matter that weighs in favour of KAL in assessing the balance of convenience. I note that, in the period from the commencement of these proceedings until 28 February 2022, the defendants' solicitors issued invoices to Aidzan for legal fees and disbursements (including counsel's fees) incurred in the defence of these proceedings totalling $523,864.78. During the same period, the total amount of legal fees invoiced to Mr Peter Laird was $51,240.98. 10. Third, Aidzan submits it would be unjust for Mr Peter Laird to have to draw on his own resources to fund Aidzan's defence in circumstances where Mr Hayes, the liquidator of KAL, holds approximately $8 million for the benefit of KAL and yet has made no interim distribution in the winding up to KAL's shareholder, Alan Laird (Holdings) Pty Ltd (ALH). As a 32% shareholder in ALH, Mr Laird would expect to receive (through ALH) a commensurate proportion of any interim distribution paid by KAL. 11. It is a matter for ALH to take such steps as it may be advised to request Mr Hayes to make an interim distribution in the winding up of KAL. The defendants did not adduce any evidence of any such request having been made. On the contrary, an email from the defendants' solicitor to KAL's solicitor dated 16 March 2022 records that Mr Hayes had explained to the defendants' solicitors at a meeting held on 25 October 2021 that he was not prepared to make a distribution to any shareholder until the conclusion of these proceedings due to tax considerations and the uncertainty concerning any outstanding tax obligations of KAL, ALH and another related entity, Winbourne Engineering Pty Ltd. The email makes no complaint about that position adopted by Mr Hayes and senior counsel for the defendants raised no criticism of Mr Hayes' position or his reasons for that position in his submissions made at the hearing on 28 April 2022. 12. If the order sought by KAL under r 25.3(3) is made and if Aidzan's defence of KAL's claims subsequently succeeds, Mr Peter Laird is the sole person who will benefit from that success. The fund that is in dispute will have been preserved for his benefit. In those circumstances, I do not consider that it is unjust that he should have to draw on other resources now to put Messrs Topp and Gleeson in funds to conduct Aidzan's defence of the proceedings. There is no evidence that this would cause hardship to Mr Laird. Any injustice to him (if any) in having to draw on his own resources now is outweighed in my opinion by the injustice to KAL in the event that its claims succeed and the fund found to be held on trust for it has been diminished to pay the costs of Aidzan's unsuccessful defence. 13. Fourth, Aidzan points to Mr Peter Laird's 32% shareholding in ALH, which in turn owns KAL, as having the consequence that he is paying for a large proportion of Mr Hayes' remuneration as liquidator of KAL and KAL's costs of the proceedings. It was submitted that "Peter is in effect already paying to sue himself as part of a family dispute". 14. I reject that characterisation of these proceedings. KAL is suing the defendants, including Aidzan. The cost of doing so is indirectly borne by all of the shareholders of ALH (including Mr Peter Laird), which owns KAL. Equally, if KAL's claims succeed, all of those ALH shareholders will ultimately share in the fruits of that success, including any costs order against the defendants. As a result of the trusts through which he has structured his affairs, Mr Peter Laird finds himself on both the plaintiff and defendant sides of the ledger in these proceedings. That circumstance does not render it unjust that the fund that is the subject matter of the dispute should be preserved pending the outcome of the proceedings rather than being depleted by Aidzan's legal costs and the remuneration of Aidzan's liquidators. 15. Fifth, Aidzan relies on the evidence of serious physical health conditions suffered by Mr Peter Laird since 2004, together with the psychological impact of the decline in his physical health, as a factor relevant to the exercise of the discretion under UCPR r 25.3(3). I do not regard this circumstance, which came into being many years prior to the commencement of these proceedings, as tipping the balance of convenience in favour of declining to make an order for the preservation of the fund in dispute. 16. Sixth, Aidzan refers to its cross-claims in these proceedings for indemnity against the beneficiaries of the estate of the late Mrs Dorothy Laird, who was Mr Peter Laird's co-director and co-shareholder of Aidzan prior to her death in November 2009. Aidzan submits that, if Mr Peter Laird is liable for the alleged breaches of directors' duties, Mrs Dorothy Laird should be equally liable. In circumstances where her estate was distributed before KAL's claims were known, Aidzan submits that it should be able to draw on the fund in dispute in these proceedings to pay its legal costs for the prosecution of those cross‑claims for indemnity which, if successful, would benefit KAL. 17. If KAL succeeds in its claims against Mr Peter Laird and/or Aidzan, successful cross‑claims for indemnity against the beneficiaries of Mrs Dorothy Laird's estate would not benefit KAL (at least directly), but would benefit Mr Peter Laird and/or Aidzan by entitling them to indemnity or some contribution from those beneficiaries in respect of their liability to KAL. 18. Seventh, Aidzan submits that it is in the interest of all parties to the present proceedings that Aidzan be able to properly defend the claims made against it as the owner of the Sunnyholt Property in the personal injury proceedings. I fail to see how it is in the interests of all parties (as opposed to the interests of Aidzan and, indirectly, Mr Peter Laird) that the fund in dispute in these proceedings should be depleted by payment of Aidzan's legal costs of defending claims that I assume arise out of its alleged acts or omissions during the period in which it has been the registered proprietor of the Sunnyholt Property. 19. Eighth, Aidzan refers to its undertaking that the remuneration of its liquidators will not be withdrawn from the Liquidation Account pending the determination of these proceedings or further order of the Court as achieving an appropriate balance between the interests of KAL and the interests of Aidzan. That undertaking is ineffective to ameliorate the injustice to KAL, if it ultimately succeeds in these proceedings, of the fund in dispute having been diminished by the legal costs of Aidzan's unsuccessful defence. 20. For all of those reasons, the appropriate exercise of the discretion under UCPR r 25.3(3) is to make an order in terms that will have the effect referred to at [30] above. 21. Senior counsel for KAL confirmed that KAL gives the usual undertaking as to damages. 22. Having determined KAL's application under UCPR r 25.3(3) in its favour, it is not necessary to consider the alternative bases of its application relying on s 66 of the Supreme Court Act 1970 (NSW) and/or general law principles concerning interim injunctions. However, I would have reached the same conclusion in relation to those alternatives essentially for the same reasons that I have set out above. 23. For all of those reasons, I made the following orders at the conclusion of the hearing on 28 April 2022: 1. Upon the plaintiff, by its counsel, giving the usual undertaking as to damages, order that the respondents, Alan Godrey Topp and Bruce Gleeson be restrained until further order of the Court from withdrawing from, encumbering, using or otherwise dealing with in any manner without the written consent of the plaintiff the balance of the monies received by the first defendant from the proceeds of sale of the property at 146 Sunnyholt Road, Blacktown, New South Wales, being the monies held as at the date of this order in the "Liquidation Account" as defined in order 4 made by the Federal Court of Australia on 17 December 2020 in proceeding NSD 306 of 2019. 2. For the avoidance of doubt, order that the restraint in order 1 above includes (without limitation) any withdrawal from or use of the monies that are the subject of order 1 in a manner that would otherwise be permitted by order 9 made by the Federal Court of Australia on 17 December 2020 in proceeding NSD 306 of 2019. 3. Grant liberty to the parties to apply on two days' notice by email to the Associate to Williams J for an order permitting withdrawal from the funds that are the subject of order 1 above of a specified amount in respect of remuneration and legal costs incurred prior to and including the hearing on 28 April 2022 but not yet withdrawn from the Liquidation Account. 4. Note that prayer 4 of the plaintiff's notice of motion filed on 18 November 2021 is not pressed. 5. Order the plaintiff's costs of the notice of motion filed on 18 November 2021 be paid by the first defendant on the ordinary basis in such amount as may be agreed or assessed. ********** Endnotes 1. Proceedings NSD 306 of 2019. 2. KAL did not press the claim for relief in prayer 4 of the notice of motion. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 April 2022