Sherman v Oaklands [2006] NSWSC 1327

Sherman v Oaklands [2006] NSWSC 1327

Wedmora or its liquidators had a good arguable case to recover payments made to Wed Property Services at least to the extent of on-payments to JBO, and JBO might be obliged to contribute to Wed Property Services' assets to help satisfy any judgment in favour of Wedmora. The opportunistic payments, absence of evidence of the alleged guarantees, retrospective creation of invoices, preservation of an identifiable asset, and coincidence of JBO's establishment with signs of insolvency established a more than usual risk of dissipation. A freezing order was therefore warranted against JBO, but not against Mrs Oaklands because the disputed proceeds were in JBO's hands.

Jurisdiction
Australia
Judgment Date
31 October 2006
Procedural Posture
Application for Freezing Order or Asset Preservation Order / Contested Interim Hearing
Outcome
Asset preservation order made; freezing order made against JBO Holdings Pty Ltd, but not against Mrs Oaklands.
Legal Topics
['asset Preservation Orders' 'freezing Orders Against Third Parties' 'risk of Dissipation' "director's Duties" 'related Company Transactions' 'uncommercial Transactions' 'liquidators']
['equity' 'civil Procedure' 'injunctions' 'corporations and Insolvency'] ['asset Preservation Orders' 'freezing Orders Against Third Parties' 'risk of Dissipation' "director's Duties" 'related Company Transactions' 'uncommercial Transactions' 'liquidators']

Case Brief

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Procedural Posture

Application for Freezing Order or Asset Preservation Order / Contested Interim Hearing

Legal Issues

  1. 1 ['Whether the plaintiffs had a good arguable case on an accrued or prospective cause of action justiciable in the Court against JBO Holdings Pty Ltd or a basis for JBO Holdings Pty Ltd to contribute to assets available to satisfy a judgment.' 'Whether there was a danger that a prospective judgment would be wholly or partly unsatisfied because of dissipation of assets.' 'Whether a freezing order should be made against Mrs Oaklands as distinct from JBO Holdings Pty Ltd.' 'Whether payments by JBO Holdings Pty Ltd to Geoffrey David McDonald as liquidator of Wed Property Services Pty Ltd should be exempted from the freezing order.']

Ratio Decidendi

Wedmora or its liquidators had a good arguable case to recover payments made to Wed Property Services at least to the extent of on-payments to JBO, and JBO might be obliged to contribute to Wed Property Services' assets to help satisfy any judgment in favour of Wedmora. The opportunistic payments, absence of evidence of the alleged guarantees, retrospective creation of invoices, preservation of an identifiable asset, and coincidence of JBO's establishment with signs of insolvency established a more than usual risk of dissipation. A freezing order was therefore warranted against JBO, but not against Mrs Oaklands because the disputed proceeds were in JBO's hands.

Court Disposition

Asset preservation order made; freezing order made against JBO Holdings Pty Ltd, but not against Mrs Oaklands.

Orders

  • ['Upon the plaintiffs by their counsel giving the usual undertaking as to damages, a freezing order was made against JBO Holdings Pty Limited ACN 115837502 until 5pm on 13 November 2006 in the terms of the draft freezing order attached to the interlocutory process filed on 27 October 2006 and marked Annexure A,...