Supreme Court New South Wales Medium Neutral Citation: Barrak Corporation Pty Limited v Sukru Sarikaya t/as C & S Kitchens [2013] NSWSC 1154 Hearing dates: 20 August 2013 Decision date: 20 August 2013 Before: Kunc J Decision: Injunction continued and proceedings transferred to District Court Catchwords: COURTS AND JUDGES - Courts - Comity - Inappropriate for Supreme court freezing order in aid of District Court proceedings - Proceedings transferred to District Court Category: Interlocutory applications Parties: Barrak Corporation Pty Limited (Plaintiff) Sukru Sarikaya (Defendant) Representation: Counsel: Mr F. Salama (Plaintiff) Mr A. Di Francesco (Defendant) File Number(s): 2013/250074 Publication restriction: No EX TEMPORE Judgment 1HIS HONOUR: These proceedings were commenced on short notice in the duty list last Friday, 16 August 2013, and were dealt with on that occasion by Robb J. 2His Honour made a freezing order, on the ex parte application of the plaintiff, which was expressed to have effect up to and including today. The proceedings came before his Honour again this morning, as duty judge, and were subsequently referred to me. 3It is unnecessary for me in these reasons to go into the history of why these proceedings were commenced in the Supreme Court. However, it is notable that the summons, as filed in court before Robb J on 16 August 2013, did not contain any prayers for substantive relief other than the making of the freezing order. On its face that is unusual. Freezing orders are generally sought in aid of substantive relief such as damages or declarations of interest in particular property and the like. 4When the matter came on before me it was explained to me by Mr F Salama of Counsel for the plaintiff, that the freezing order was sought in aid of proceedings currently before the District Court of New South Wales, between the plaintiff and defendant in this Court and related parties. The District Court proceedings are fixed for a final four day hearing in that court commencing on 24 September 2013. 5It is also relevant that the plaintiff has a notice of motion in the District Court proceedings seeking to strike out all of the defendants' (including the defendant in this Court) defences in the District Court proceedings. That notice of motion will be heard by the District Court this Friday, 23 August 2013. 6Any substantive determination of the plaintiff's entitlement to a freezing order will now require this Court to come to an appreciation of the issues before the District Court. In my view it is undesirable that proceedings for what is really ancillary relief in aid of the substantive action brought by the plaintiff in the District Court should continue in this Court. In saying that I am not at all critical of the plaintiff for having commenced these proceedings in the way they did. The reasons for doing so have been explained. The only question before me is what should happen next. 7There are at least two compelling reasons why I have reached the view that the appropriate course is for the status quo to be maintained until the question of what, if any, ancillary relief the plaintiff may be entitled to is considered by the District Court. The first of those reasons is one of comity between courts. Except in unusual circumstances, this Court should not embark upon an exercise of examining parties' prospects and arguments in proceedings that are currently before the District Court. That court has power to make freezing orders under UCPR Pt 25. Second, it is an inefficient use of both judicial and the parties' resources for the proceedings to run on two tracks in two different courts. 8For these reasons I have proposed to the parties, and they have accepted, in the case of the defendants on a without admissions basis, that the appropriate course in the short term is to extend the orders made by Robb J (narrowed in a way I shall describe shortly) until this Friday, transfer these proceedings to the District Court to be dealt with concurrently with the District Court proceedings and then allow that court to decide what should happen next in the context of that court's consideration of the plaintiff's motion that is fixed for hearing this Friday in the District Court. 9I therefore wish to make it clear that I have approached today solely from the viewpoint of comity with the District Court and to find a practical, cost efficient way forward in terms of case management. I have in no way become acquainted with the merits of the plaintiff's claim in the District Court or whether or not the plaintiff is ultimately entitled to a freezing order. However, having said that, I note the concession made by Mr A Di Francesco of Counsel appearing for the defendant, that there is at least an arguable case for relief brought by the plaintiff against the defendant in the District Court. Mr Di Francesco indicated to me, in the course of argument, that it was nevertheless his client's principal position that the plaintiff was not entitled to an asset preservation order at all. Nothing I am doing today is to be taken as prejudging that question, or depriving the defendant of an opportunity this Friday, or at such other time as he may be advised, from seeking to persuade a judge of the District Court that the order which I am making today should not continue beyond Friday. 10I mentioned that the order I propose to make would be in a narrower form than that originally made by Robb J. As events have transpired since the matter was last before the court, the plaintiff has come to the view that it is sufficient for its purposes that any asset preservation order be limited to dealings by the defendant with certain land at Auburn. With that narrowing of the object of the relief many, if not most, of the standard provisions set out in the applicable Practice Note relating to freezing orders are no longer required. Both counsel have accepted that, for present purposes, it will be sufficient for an order to be made solely in relation to the Auburn property without the many other procedural orders that would usually accompany a freezing order. 11The defendant applies for the costs of today. The plaintiff says that today's costs should be costs in the District Court proceedings. 12In practical terms today has become a step along the road, having regard to the fact that the control of these orders will pass to the District Court. I am not satisfied that the manner in which the proceedings were commenced in this Court is such that costs of today ought to be ordered against the plaintiff. Rather, it seems to me the costs of today should follow whatever happens in the District Court on Friday. That is to say, if, as I imagine will be the case, the plaintiff applies for the continuation of the freezing order, then today would bear the character of an interlocutory appearance leading up to that determination. It would be a matter for the District Court judge hearing the application to determine how the costs of today should be dealt with having regard to the ultimate outcome of any further application which the plaintiff may make on Friday. Equally, if the plaintiff makes no further application on Friday and the order dissolves in accordance with its terms, then my reserving the costs of today will simply have the effect that the costs of today would follow the costs of the proceedings in the District Court unless the District Court otherwise orders. 13For those reasons I propose to make an order that the costs of today be reserved subject to any further order of a judge of the District Court. 14The orders of the court are as follows: Upon the plaintiff by its counsel giving the usual undertaking as to damages: (1)The defendant, by himself, his servants or agents, is restrained up to and including Friday, 23 August 2013 or further order of the District Court of New South Wales from disposing of, dealing with, encumbering, or in anyway diminishing the value of the property registered in the name of the defendant and comprised in certificate of title folio identifier XXXXXX and located at XXXXX, Auburn, NSW 2144. (2)The proceedings are transferred to the District Court to be heard with District Court proceedings 2011/270996 in the Construction List of the Sydney registry of that court. (3)Subject to the convenience of the District Court, these proceedings are listed for mention in that court at the same time as the hearing of the plaintiff's notice of motion in the District Court proceedings on Friday, 23 August 2013. (4)The costs of today are reserved, subject to any further order of the District Court. (5)Direct that these orders be taken out forthwith. ********** 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: 21 August 2013