Dr Bill Lyon Pty Limited v Smooth as Silk Laser Cosmetic Clinic Pty Limited [2018] NSWSC 1174

Supreme Court New South Wales

Medium Neutral Citation: Dr Bill Lyon Pty Limited v Smooth as Silk Laser Cosmetic Clinic Pty Limited [2018] NSWSC 1174 Hearing dates: 27/07/2018 Date of orders: 27 July 2018 Decision date: 27 July 2018 Jurisdiction: Equity - Commercial List Before: McDougall J Decision: Order second defendant to file and serve an affidavit setting out details of his assets, their values, and the amounts of charges, mortgages and encumbrances. Stay that order until 5pm on 1 August 2018. Stand over to that date for further hearing. Catchwords: CIVIL PROCEDURE – application to require second defendant to provide affidavit regarding details of his assets – where second defendant has admitted liability to egregiously dishonest conduct – where second defendant began surreptitiously selling assets – order made but stayed until 1 August 2018 for further argument. Category: Procedural and other rulings Parties: Dr Bill Lyon Pty Ltd (First Plaintiff) Dr Bill Lyon Services Pty Ltd (Second Plaintiff) Smooth as Silk Laser and Cosmetic Clinic Pty Ltd (First Defendant) Tommy Meyir Yitzhak Jodlovich (Second Defendant) Representation: Counsel: JP Knackstredt (Plaintiffs) MJ Dawson (First and Second Defendants)

Solicitors: McLachlan Thorpe Partners (Plaintiffs) WMD Law (Defendants) File Number(s): 2018/158608

Judgment (EX TEMPORE – REVISED 27 JULY 2018) 1. HIS HONOUR: The plaintiffs have a judgment against the defendants for damages to be assessed relating to a contract for the sale of a business. It is the plaintiffs' case that the defendants engaged in fraudulent or misleading or deceptive conduct, as a result of which the plaintiffs were induced to enter into the purchase. The defendants did not plead to the plaintiffs' Commercial List Statement, saying that they exercised their privilege against self-incrimination. The defendants then admitted liability and as a result judgment has been entered for damages to be assessed. The process of assessment is to be undertaken by the Honourable Kevin Lindgren AM QC as referee. 2. In the course of the proceedings, the second defendant gave an undertaking to the Court equivalent to a freezing order. The undertaking has the effect that the second defendant may not dispose of property so as to reduce his net assets below $1.5 million. 3. The plaintiffs have become aware that the second defendant is selling real estate. They have sought information as to the sale and as to its impact on the value of the second defendant's net assets. The second defendant's responses have not been particularly informative. 4. In the circumstances, the plaintiffs move for an order ancillary to the undertaking, which is, as I have said, equivalent to a freezing order. What they seek, by their notice of motion filed in court today, is an order that the second defendant within seven days file and serve an affidavit setting out details of his assets, including their value and the value of charges, mortgages or encumbrances. The second defendant has opposed that, apparently on the basis that the protection afforded by the undertaking is sufficient. I do not agree. In a context where the defendants (including the second defendant) have admitted liability for egregiously dishonest conduct and where the second defendant has begun surreptitiously selling his assets, I think there is every reason to fear that, absent disclosure, the plaintiffs may be left whistling. 5. The second defendant also protests that there is no reason for urgency. An email to that effect has been put before the Court, since the second defendant did not trouble to send anyone along to represent his position orally. Again, I do not agree. The circumstances to which I have referred, including the surreptitious nature of the sales and the refusal to provide any meaningful information, suggest that the sooner the plaintiffs obtain the protection of disclosure, the better it will be. 6. There has been no suggestion that the time within which the affidavit is to be given is insufficient. In any event, if the second defendant is concerned about that, he may apply to have the order that I am about to make varied. 7. There is I suppose a question as to whether the order, being interlocutory in nature, requires the protection of an undertaking as to damages. I do not think it does. In any event, given that the order is ancillary to an undertaking to the Court in the nature of a freezing order, there is presumably an undertaking in place already. 8. Again, I note, the second defendant has not sought any such undertaking. 9. For those reasons I make an order in accordance with prayer 1 of the notice of motion filed in court today. 10. I order the second defendant to pay the plaintiff's costs of that notice of motion. 11. I direct that these orders be entered forthwith.