Skyworks v 32 Drummoyne Road [2017] NSWSC 343

Supreme Court New South Wales

Medium Neutral Citation: Skyworks v 32 Drummoyne Road [2017] NSWSC 343 Hearing dates: 24/03/2017 Date of orders: 05 April 2017 Decision date: 05 April 2017 Jurisdiction: Equity - Technology and Construction List Before: McDougall J Decision: Freezing order to be made as sought. Costs to be costs in the cause. Catchwords: PRACTICE AND PROCEDURE – freezing order – whether there is a good arguable case – whether there is a risk of removal or dissipation of assets - danger that a prospective judgment will be unsatisfied – whether evidence supports such a finding –Uniform Civil Procedure Rules 2005 (NSW), r 25.11, 31.27, 26.17 Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Home Building Act 1989 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd [2017] NSWCA 53 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975 Category: Procedural and other rulings Parties: Skyworks NSW Pty Ltd (Plaintiff) 32 Drummoyne Pty Ltd (First Defendant) Ling Ping Zhou (Second Defendant) Ming Hai Zhang (Third Defendant) Representation: Counsel: I G Roberts / D Byrne (Plaintiff) J Giles SC / M Sheldon (Defendants)

Solicitors: Piper Alderman (Plaintiff) CTI Lawyers (Defendants) File Number(s): 2016/175996

Judgment 1. HIS HONOUR: The plaintiff (the builder) agreed to construct a home unit development for the first defendant (the developer). The project has been completed. The strata plan has been registered. All lots have been sold. 2. The builder claims to be entitled to delay costs amounting to almost $1.5 million; to an early completion bonus ranging between $100,000 and $1.2 million (the exact amount turns on what is found to have been the adjusted date for practical completion); and to have refunded to it $245,000, being 50% of the retention held under the contract. It claims those amounts from the developer pursuant to the building contract. Further, it claims the same amounts from the second and third defendants (the directors) who at all material times were directors of the developer, pursuant to a "Side Deed" whereby, the builder says, the directors guaranteed the developer's obligations under the building contract. 3. I am concerned today with what is in substance the builder's application for what it describes as a freezing order pursuant to UCPR r 25.11. As will be seen, the form of the order sought is somewhat unusual. 4. The order that the builder seeks is to the same effect as an undertaking that the developer gave, without admissions, to the court. That undertaking was to hold an amount of $1.9 million (the net proceeds of sale after repayment of debt and payment of expenses) in trust pending the further order of the court. 5. Thus, in form, the developer asks to be relieved of its undertaking. That will happen if the freezing order is granted (or, for that matter, if the freezing order is refused). The parties very sensibly approached the matter on the basis that it was the builder that bore the onus of showing that the freezing order should be granted, not the developer that bore the onus of showing that it should be relieved of its undertaking to the court.