TZ Ltd v ZMS Investments Pty Ltd [2010] NSWSC 196

New South Wales Supreme Court

CITATION : TZ Ltd v ZMS Investments Pty Ltd [2010] NSWSC 196

HEARING DATE(S) : 15/03/10

JUDGMENT DATE : 19 March 2010

JURISDICTION : Equity Division Corporations List

JUDGMENT OF : Barrett J

1. Upon the plaintiff by its counsel giving to the court the undertakings contained in Schedule I of Appendix A of the orders made herein on 26 August 2009, order that orders 1 to 7 of the orders made and entered herein on 16 September 2009 be continued as against the first defendant (ZMS Investments Pty Ltd) up to 5pm on 13 August 2010 subject, however, to the following modification, that is to say, the addition of a new paragraph 2(e) as follows: "paying a sum of $150,000 ('Sum') to Bridges Lawyers by: (i) drawing the Sum from any account in the name of ZMS including but not limited to an account held with KAS Bank; (ii) borrowing the Sum from any available tender and utilizing the property at 19 Aero Road, Ingleburn as security, by a second mortgage, for such borrowing; or (iii) selling or mortgaging shares owned by ZMS in TZ Limited, on condition that: (A) the Sum be held in the solicitors' trust account of Bridges Lawyers for the sole purpose of paying legal and accounting expenses reasonably necessary for the defence of winding-up proceedings commenced by the Deputy Commissioner of Taxation against ZMS in the Federal Court of Australia ('Proceedings'); DECISION : (B) prior to the conduct in (i), (ii) or (iii) occurring, the partner of Bridges Lawyers responsible for the conduct of the proceedings provides the Court with an undertaking that the Sum will not be used for any purpose other than the payment of legal and accounting expenses reasonably necessary for the defence of the Proceedings; (C) payments from the Sum will be made directly to the law firm or accounting firm required to be paid and, for the avoidance of doubt, no part of the Sum will be paid to Andrew Sigalla, ZMS or BZI Pty Limited or any entity controlled by Andrew Sigalla; (D) a receipt is obtained for each payment in (C) and a copy is provided to the solicitors for TZ within 5 business days of each payment; and (E) the source of the Sum (bank account details and/or lender/mortgagee), and the manner in which it is acquired (the terms of any loan, mortgage or purchase), is disclosed by ZMS to the solicitors of TZ within 5 business days of the Sum's payment to Bridges Lawyers." 2. Direct that order 1 be entered forthwith. 3. Order that the plaintiff do give security in the sum of $250,000 for the costs of the defendants. 4. Order that the security be in such form as the Registrar determines. 5. Order that the proceedings be stayed until such security is provided. 6. The costs of the applications heard by me on 15 March 2010 are at this stage reserved for future consideration.