Miller v LMG Building Pty Ltd [2023] NSWSC 1613

Supreme Court New South Wales

Medium Neutral Citation: Miller v LMG Building Pty Ltd [2023] NSWSC 1613 Hearing dates: 5 December 2023 Date of orders: 5 December 2023 Decision date: 05 December 2023 Jurisdiction: Equity - Technology and Construction List Before: Rees J Decision: Freezing order extended. Catchwords: CIVIL PROCEDURE – judgment against builder – builder engages in 'phoenixing', transferring assets to third party for nil consideration – no appearance by third party – whether freezing order should be continued against third party – where third party run by director of defendant builder, risk of further asset disposal to frustrate judgment. Legislation Cited: Uniform Civil Procedure Rules (2005) r 25.15 Cases Cited: Commissioner of Taxation v Iannuzzi (No 2) [2019] FCA 1818 Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 Tomasetti v Brailey [2012] NSWCA 6 Category: Procedural rulings Parties: Susan Miller (Plaintiff) Luke Glazenburg (Second Defendant/First Respondent) NCC Group AU Pty Ltd (Second Respondent) Representation: Counsel: Mr B Moustafa (Plaintiff) Mr JP Nathan (Second Defendant)

Solicitors: Fielding Robinson (Plaintiff) Bradbury Legal (Second Defendant) Development Lawyers (Ms Collins) (Fourth Defendant) File Number(s): 2023/240621

EX TEMPORE JUDGMENT 1. HER HONOUR: On 30 November 2023, his Honour Justice Ball made an ex parte freezing order against the second defendant, Luke Glazenburg, and a third party to these proceedings, NCC Group AU Pty Limited. His Honour stood the matter over for hearing today inter partes, as to whether the freezing orders should continue in effect, and if so, until when. 2. Today, counsel appeared for Mr Glazenburg, and by consent, orders were made to extend the freezing order against him until 5pm on 9 February 2024. It remains to consider whether the freezing order made against NCC Group should also be extended. There was no appearance for that company today, notwithstanding that the company was served with the motion, affidavit in support, the orders made by his Honour on 30 November 2023 and the transcript of the ex parte hearing. 3. Notwithstanding that NCC Group has not appeared today, it remains necessary for the Court to consider whether it is appropriate to extend the freezing order. The considerations which apply are uncontroversial. An applicant for a freezing order must establish, first, a good arguable case and, second, a risk that any judgment will go unsatisfied by reason of the other party dealing with their assets to place them out of the reach of the applicant: Tomasetti v Brailey [2012] NSWCA 6 at [14] –[15]; Samimi v Seyedabadi [2013] NSWCA 279 at [72] –[74]. It must be shown that there is a risk, not a mere assertion, that a respondent may dispose of or deal with their assets in such a manner as to leave any judgment unsatisfied: Samimi v Seyedabadi at [72] –[74] . 4. The basis on which the freezing order is sought against NCC Group is that the first defendant, LMG Building Pty Limited (in liquidation) has been "phoenixed", with the assets of LMG Building transferred to NCC Group. "Phoenixing" is winding up a company to avoid paying liabilities but transferring assets and employees to a new company: Commissioner of Taxation v Iannuzzi (No 2) (2019) 140 ACSR 497; [2019] FCA 1818 (per Stewart J) at [114] and [123]. 5. In support of the application to extend the freezing order, the plaintiff relied on the affidavit evidence of her husband, Jason Hones, and a substantial amount of documentary material. In addition, the plaintiff tendered a Report to Creditors by the administrator of LMG Building (the company then being in administration). A tolerably clear position emerges from this material.