The Owners – Strata Plan No 89866 v Zouki [2024] NSWSC 696

The Owners – Strata Plan No 89866 v Zouki [2024] NSWSC 696

The Owners Corporation established a good arguable case that, absent a freezing order, there was a danger any judgment against Hardy Pty Ltd would be wholly or partly unsatisfied because the proceeds of the sale of Unit 5 could be disposed of, dealt with or diminished in value. The evidence also made the s 37A case more than barely capable of serious argument. However, because Unit 5 appeared to be Hardy Pty Ltd’s only asset, the freezing order should be confined to the $1.1 million proceeds of sale rather than $3.2 million, with a carve out for reasonable legal expenses but not ordinary living expenses.

Jurisdiction
Australia
Judgment Date
29 May 2024
Procedural Posture
Building Defects Proceedings Involving an Interlocutory Application for Freezing Orders / Application to Extend and Vary Freezing Orders
Outcome
Freezing orders varied and continued until the conclusion of the hearing or further order.
Legal Topics
['interim Preservation' 'freezing Orders' 'good Arguable Case' 'danger That Judgment Will Be Unsatisfied' 'intent to Defraud Creditors' 'sale of Property at an Undervalue' 'building Defects']
['civil Procedure' 'equity' 'building and Construction' 'conveyancing'] ['interim Preservation' 'freezing Orders' 'good Arguable Case' 'danger That Judgment Will Be Unsatisfied' 'intent to Defraud Creditors' 'sale of Property at an Undervalue' 'building Defects']

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Procedural Posture

Building Defects Proceedings Involving an Interlocutory Application for Freezing Orders / Application to Extend and Vary Freezing Orders

Legal Issues

  1. 1 ['Whether the Owners Corporation established a good arguable case that Hardy Pty Ltd disposed of an asset so as to bespeak a danger that any judgment obtained by the Owners Corporation would be wholly or partly unsatisfied.' 'Whether the Owners Corporation established a good arguable case that Hardy Pty Ltd sold Unit 5 to Ms Lahood with intent to defraud its creditors for the purpose of s 37A of the Conveyancing Act 1919 (NSW).' 'Whether the freezing order should continue at $3.2 million or be confined to the proceeds of sale of Unit 5.' 'Whether the order restraining Ms Lahood from dealing with Unit 5 should be extended.']

Ratio Decidendi

The Owners Corporation established a good arguable case that, absent a freezing order, there was a danger any judgment against Hardy Pty Ltd would be wholly or partly unsatisfied because the proceeds of the sale of Unit 5 could be disposed of, dealt with or diminished in value. The evidence also made the s 37A case more than barely capable of serious argument. However, because Unit 5 appeared to be Hardy Pty Ltd’s only asset, the freezing order should be confined to the $1.1 million proceeds of sale rather than $3.2 million, with a carve out for reasonable legal expenses but not ordinary living expenses.

Court Disposition

Freezing orders varied and continued until the conclusion of the hearing or further order.

Orders

  • ['Upon the Owners Corporation continuing its undertaking as to damages and the other undertakings recorded in the current freezing order, the freezing order was continued until the conclusion of the hearing or further order.' 'The freezing order was varied by changing the figures in paragraphs 8(a) and 12(a) from...