Beach Petroleum NL v Johnson

Judgment 1This is a contested application as to whether a freezing order previously made against the Defendant, Mr Gabrielian, initially on an ex parte basis and then in a different form by consent, should be continued. 2By way of background, on 2 July 2014, the Plaintiff, Black Eagle Media Pty Ltd ("BEM"), filed an Originating Process seeking relief against Mr Gabrielian under ss 180 - 183 of the Corporations Act 2001 (Cth) and interlocutory relief under ss 1323 and 1324 of the Corporations Act or under r 25.14 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). On the same date, Ball J, sitting as Duty Judge, made an order, on an ex parte basis, in the nature of a freezing order in respect of Mr Gabrielian. I subsequently continued that order, on an ex parte basis, where efforts had been made to effect service upon Mr Gabrielian, apparently without success, for the reasons set out in my judgment delivered on 4 July 2014. On 21 July 2014, I then made orders, by consent, discharging the orders previously made by the Court and, subject to the usual undertaking as to damages, restraining Mr Gabrielian from dealing with a particular property situated at Fairfield, New South Wales, without giving seven days prior written notice to the Plaintiff's solicitors containing all material particulars of the proposed dealing, up to and including 22 September 2014. On 19 September 2014 that order was continued, by consent, to 10 November 2014. 3By letter dated 6 November 2014, the solicitors for Mr Gabrielian referred to what they characterised as BEM's disregard of court orders in respect of the preparation of the proceedings for hearing, and advised that Mr Gabrielian would not consent to further orders involving the extension of the restraint upon Mr Gabrielian dealing with the Fairfield property. In particular, they referred to a delay by BEM of two and a half months in serving its evidence and contended that there was no material before the Court to support the continuation of the freezing orders. On 10 November 2014, the order made in respect of the Fairfield property was extended to 24 November 2014 to permit a contested hearing as to whether it should further be extended. After that hearing, that order was further extended, by consent, to 22 December 2014 to allow the delivery of this judgment. 4By letter dated 17 November 2014 from his solicitors, Mr Gabrielian also purported to give notice under the orders of his intention to list the Fairfield property for sale upon the expiry of 7 days from the date of that letter. That letter also indicated that Mr Gabrielian had debts in the order of $58,000, including credit card debts in the order of $46,000, a personal loan of $6,000, and debts owed to Sydney Water, for council rates and strata levies. It treated the Fairfield property as worth in the vicinity of $320,000 and noted that the mortgage on the property was $151,433, suggesting that Mr Gabrielian's equity in the property was in the order of $170,000, which, I interpolate, substantially exceeds the amount of the claim against him in the proceedings. 5There may be a question whether the entry into a listing agreement between Mr Gabrielian and the selling agent, of the kind referred to in the letter dated 17 November 2014 would amount to a dealing with the relevant property, for the purposes of the relevant orders, where it would not itself affect the title to the property, although it could expose Mr Gabrielian to liability to the agent if he was unable to proceed with a sale of the relevant property by reason of the Court's previous orders. In any event, as Mr Smith, who appears for BEM, points out, that letter did not give material particulars of the proposed sale of the property, as contemplated by the terms of those orders, since it did not disclose the proposed sale price, the manner of the proposed sale or whether there would be a reserve price for the sale, or the terms of any listing agreement with the relevant agent. It therefore does not seem to me that notice has been given, for the purposes of the relevant orders, so as to have any effect upon their continuance or to permit any dealing with the Fairfield property, if those orders are otherwise to be continued. 6Mr Smith in turn indicated that BEM took no objection to the Fairfield property being placed on the market and sold although he submitted that any sale should be subject to a reserve (T10). It would not be appropriate for me to determine any further issues as to the terms of any proposed sale of the property where the question before me was whether the relevant freezing order should continue, and in what form, rather than the terms of any suggested sale of that property. The principles applicable to freezing orders 7Rule 25.11 of the UCPR allows a freezing order to be made for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment will be wholly or partly unsatisfied; and such an order may restrain a respondent from disposing of, dealing with, or diminishing the value of his or her assets. Rule 25.14 (on which BEM specifically relied) in turn allows a freezing order to be made where a plaintiff has a good arguable case and, having regard to all the circumstances, there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied, for example, because the assets of the judgment debtor, prospective judgment debtor or another person are disposed of, dealt with or diminished in value. In Jackson v Stirling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612, Deane J (with whom Mason CJ, Brennan, Wilson and Dawson JJ agreed) observed (at 625) that the purpose of a freezing order: "is not to create security for the plaintiff or to require a defendant to provide security as a condition of being allowed to defend the action against him ... . It is to prevent a defendant from disposing of his actual assets ... so as to frustrate the process of the Court by depriving the plaintiff of the fruits of any judgment obtained in the action." His Honour also observed (at 625-626) that: "It may be appropriate in a rare case that such an [freezing] order requires the defendant actually to deliver assets to a named person or even to the Court itself. ... Even in such cases however, the order must be confined to preserving assets until after judgment or, arguably, until there has been an opportunity to seek execution. ... Any order requiring the delivery of assets should make clear that the assets will be held on behalf of the defendant until after judgment or further order and will then be redelivered to the defendant unless they are made the subject of some other claim." 8In Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322, on which BEM relied, Gleeson CJ observed that: "The remedy [of a freezing order] is discretionary, but it has been held that, in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant's absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied." Mr Smith also points out to the observation of Gleeson CJ in that case (at 325 - 326) that, where a defendant was there alleged to have fraudulently misappropriated a large amount of money, comprising the bulk of his or her assets, and the evidence to date was consistent with such an allegation, then it may be reasonable for the Court to infer that "he is not the sort of person who would, unless restrained, preserve his assets intact so that they might be available to his judgment creditor". In Beach Petroleum NL v Johnson (1992) 9 ACSR 404 at 405 - 406, von Doussa J in turn referred to Patterson v BTR Engineering above and observed that it was enough to support a freezing order that the applicants establish that "in the absence of relief, there is a danger that assets will be dealt with in a way which will prevent the applicants recovering the judgment". 9In Clout (as trustee in bankruptcy of the Estate of Dexter) v Anscor Pty Ltd [2001] FCA 174 at [19], Drummond J similarly noted that a freezing order: "...cannot be used to give the applicant security in respect of an as yet unliquidated claim, ... its sole legitimate object is to prevent a respondent, pending final adjudication, from disposing of assets where the respondent's object in doing that is to abuse the process of the Court by ensuring that, if the applicant is successful in the litigation, its judgment will be an empty one." His Honour also observed that: "Even in a case in which a [freezing order] is justified it can never extend to prevent a respondent from having access to its own assets to the extent necessary to meet legitimate expenses such as ordinary living and business and legal expenses". 10In Goumas v McIntosh [2002] NSWSC 713, Barrett J (as his Honour then was) also observed (at [23]) that the sole concern with such relief is: "with reasonable measures to ensure that the processes of the Court are not frustrated by removal from the jurisdiction, dissipation or misapplication of assets which will be available to meet any eventual judgment. The aim is not to stop people spending their money. It is to stop them spending it in ways which are not legitimate, having regard to the interest of the claimant in ensuring that there is no untoward removal of assets from the ownership of the person against whom a judgment may in due course be entered." His Honour also observed (at [27]) that: "It has been said repeatedly by the courts that a [freezing] order must not operate as a form of de facto security for the applicants' claims and that the sole purpose is to prevent illegitimate dissipation of assets that will otherwise be available to meet any judgment. I say "illegitimate" dissipation to emphasise that to deny access to funds needed for ordinary living purposes or to fund the conduct of the very litigation the integrity of which the order is designed to protect goes beyond the proper protective province of the jurisdiction and causes the order sought to be a means of exerting pressure foreign to the underlying purpose." Mr Smith in turn accepted, in oral submissions, that a freezing order should not operate as a form of security, where BEM cannot point to a proprietary right in the relevant property. While Mr Smith submits that that position has arisen because of Mr Gabrielian's conduct in paying over funds from a loan account of BEM to his solicitors, even accepting that proposition, it does not alter the result that BEM does not have a proprietary right in any asset of Mr Gabrielian. 11Mr Wallis, who appears for Mr Gabrielian, in turn points out that the purpose of a freezing order under UCPR r 25.11 is to prevent the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied. He accepts that such an order may be made where, inter alia, the Court is satisfied, having regard to all the circumstances, there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because, relevantly, the assets of the prospective judgment debtor are disposed of, dealt with or diminished in value, referring to UCPR r 25.14(4). Whether BEM has a good arguable case 12As I noted above, UCPR r 25.14 allows a freezing order to be made where a plaintiff has a good arguable case. The parties, and particularly BEM, advanced submissions as to that question although it ultimately was not contentious. Mr Wallis points out that, since the original freezing orders were made on an ex parte basis, Mr Gabrielian has filed his Points of Defence and a Cross-Claim in which he claims to be owed monies, exceeding the sum of $70,000 taken from BEM's bank account, by BEM and others. Mr Smith points to several matters that are alleged in BEM's Points of Claim and not disputed in Mr Gabrielian's Points of Defence. In particular, there appears to be no dispute that Mr Gabrielian, by a direct debit request made on 23 May 2014, directed a lender to BEM to withdraw an amount of $70,000 from BEM's loan account and pay that money to the trust account of Mr Gabrielian's solicitors. It appears that there is a dispute, inter alia, whether BEM (or at least its principal, Mr Hallacq) was then indebted to Mr Gabrielian for a sum in excess of that amount under an agreement on which Mr Gabrielian relies in his Points of Defence, whether the withdrawal of that amount from BEM's loan account involved a breach of Mr Gabrielian's duties as a statutory or de facto director of BEM; and to whether BEM is entitled to the relief sought. 13Mr Smith advances several criticisms of Mr Gabrielian's defence that he did not breach directors' duties or fiduciary duties owed to BEM by directing the payment from BEM's loan account to his solicitor's trust account, by reason of the agreement alleged in his Points of Defence. He submits that, first, BEM was not party to the alleged agreement, which is said to be between Mr Gabrielian and Mr Hallacq in a personal capacity, for Mr Hallacq to pay or cause other entities to make the relevant payment. Mr Smith submits, with substantial force, that an agreement between Mr Gabrielian and Mr Hallacq could not give rise to rights as against BEM. Second, Mr Smith submits that, if the agreement existed and was enforceable against BEM, it would give rise to a claim of $50,000 in respect of a single property owned by BEM, whereas Mr Gabrielian had withdrawn an amount of $70,000 from BEM's loan facility. Third, Mr Smith submits that the relevant agreement would have failed for lack of consideration. Finally, Mr Smith submits that, even if a director is owed money by a company, that would not support his or her paying himself or herself that money from the company's funds without authority. Each of these submissions (other than as to consideration as to which I express no view) seems to me to have some force, and it therefore does not seem to me that Mr Gabrielian's defence could be said to deprive BEM's case of a good arguable character. 14In the event, it is not necessary to address these issues further. Although both parties addressed these issues, it was common ground between them that I should proceed on the basis that BEM had an arguable case, and that the issue between the parties turned on discretionary factors raised in Mr Gabrielian's submissions. Neither party submitted that any further assessment of the relative strength of the case should be undertaken in addressing those factors. Whether there is a danger of disposal of assets such that BEM, if it succeeds, will not be able to have its judgment satisfied 15Mr Smith submits that no evidence has been led by Mr Gabrielian of circumstances to warrant a discharge of the freezing orders. Mr Wallis responds by drawing attention to the observations of Palmer J in Commonwealth Bank of Australia v Saleh [2005] NSWSC 843 at [10] that a plaintiff seeking an interlocutory injunction always had the burden of demonstrating that the circumstances of the case warrant such an order, and that position applied even where an order had previously been made by consent and continued until further order of the Court. His Honour noted (at [11]) that: "As a general rule, if a defendant who has consented to an interlocutory injunction 'until further order' brings the matter back before the Court for further consideration, it remains the burden of the plaintiff who obtained the injunction to satisfy the Court that the injunction should be continued; the mere fact that the defendant has previously consented to the injunction 'until further order' does not reverse the burden so that the defendant must then satisfy [the] Court that the injunction should be discharged." I should note, for completeness, that his Honour expressed that proposition as a general rule, and recognised that it would not apply where the terms of the consent orders show that the parties had a different intention, but that position does not arise in this case. 16In oral submissions, Mr Smith, accepted that BEM needed to establish that there was a basis for the extension of the freezing order, although he also addressed the question of exceptions from that order to which I will refer below. It seems to me that, consistent with the approach adopted by Palmer J, and where the freezing orders previously made by the Court were made for specified periods and extended by consent for specified periods, and Mr Gabrielian does not now consent to a further extension of the freezing order, it is a matter for BEM to establish that the freezing order continues to be justified, rather than for Mr Gabrielian to demonstrate a reason why it should not be continued. 17Turning now to the basis for the freezing order, Mr Smith points out that the amount of $70,000 paid from BEM's loan account to Mr Gabrielian's solicitors' trust account coincides with the amount referred to in a "fixed fee agreement" with Mr Gabrielian's solicitors to act on his behalf in relation to his directorship of various corporations, and to provide "initial advice in relation to recovery of debts owed to [Mr Gabrielian] by Carlo Hallacq and related corporations" (Hunt 10.11.2014 Ex JRPH-4, p 18). I reviewed the circumstances of that payment in my earlier judgment, and that payment involved conduct on the part of Mr Gabrielian suggestive of an attempt to conceal the payment, including the provision of contact details to BEM's lender that would have led to contact being made with him rather than with BEM. 18In support of the freezing order, Mr Smith also points to an apparent deterioration in Mr Gabrielian's financial position since the freezing orders were made in July 2014. During that period, the balance of a credit card which Mr Gabrielian holds with one bank has increased from $15,000 to $38,354.24 and the balance of another credit card with another bank has increased from $4,171.43 to $7,902.37. Mr Smith points out that Mr Gabrielian has incurred additional liabilities of $33,525.67 in a four month period, and that there is no explanation for the increase in those liabilities. BEM also relied on a further affidavit of Mr Hunt dated 20 November 2014 relating, inter alia, to a subpoena issued to Mr Gabrielian's solicitors and to information produced by the National Australia Bank as to Mr Gabrielian's loan balance. Mr Hunt's affidavit also indicated that BEM claims loss and damage suffered by reason of an alleged breach of directors' duties or fiduciary duties by Mr Gabrielian arising from the payment of $70,000 from BEM's loan account and has also claimed interest, which he calculates as being in the order of $3,800 if a hearing occurred in February 2015 and judgment was delivered in late March 2015. He also refers to the fact that BEM has paid a filing fee, will incur hearing fees and estimates its costs as exceeding $20,000 in respect of the hearing. Mr Smith also relies on evidence led by Mr Gabrielian's solicitor indicating that his sole source of income is derived from government benefits while continuing his studies, and that he has no adequate income to meet his debts (Quartermain 17.11.2014, Annexure "Q"), although there is also some evidence that Mr Gabrielian has also received rental payments on a periodic basis over the period, as well as the fortnightly amount which appears to have been received by way of a government allowance. 19Mr Smith submitted, in oral submissions, that the evidence indicated that Mr Gabrielian was not presently incurring an ordinary level of expenditure, by reason of the extent to which his debt has increased in the recent past, and that Mr Gabrielian appears to be living a "champagne lifestyle on a beer income" (T9) and that the increase in his debts is not that of "the ordinary living expenses of a student" (T9). I do not consider that I can draw an inference in those terms, where it seems that Mr Gabrielian's income is limited. However, Mr Gabrielian has not sought to lead evidence identifying or explaining his expenditures over this period, and I should draw an inference that any evidence he could have led in that regard would not have assisted him in resisting BEM's application to extend the freezing order for a further period. Mr Wallis made clear in oral submissions that Mr Gabrielian did not advance a specific contention that funds were required by Mr Gabrielian for legal costs although he did submit that the existing costs agreement was not conclusive of that issue (T18 - 19). 20Mr Smith submitted that this case fell within the rare category noted by Deane J in Jackson v Stirling Industries above, where it is appropriate for the Court not only to order that somebody not encumber or deal with their assets, but also order the delivery up or control of those assets pending the outcome of the proceedings (T17). It does not seem to me that there is anything in the facts of the case that it takes it outside the situation, which occurs from time to time, that a claim is brought by a company against a director in order to recover monies allegedly improperly applied by that director. This is not a case where BEM has any particular claim to possession of Mr Gabrielian's property or assets, as distinct from any claim to be protected against improper dissipation of those assets to defeat a judgment. Mr Smith submitted that, to the extent that Mr Gabrielian made a decision that he was no longer able to pay his debts as and when they fell due, BEM would fall behind with every other creditor as a secured creditor (T17). That submission had implicit in it that BEM is, at least to some extent, seeking to secure its position over other unsecured creditors by the freezing order over the Fairfield property. That is not, as I have noted above, a proper purpose for a freezing order. 21Mr Wallis submits that there is no evidence that Mr Gabrielian intends to remove or otherwise deal with his assets for the purpose of frustrating or inhibiting the Court's process. While I accept that submission, so far as Mr Gabrielian's subjective intent is concerned, it does not seem to me to address the inferences that may be drawn from Mr Gabrielian's earlier conduct in respect of the payment of monies from BEM's loan account to his solicitors, or the element of concealment involved with that conduct, in the manner to which Gleeson CJ referred in Patterson v BTR Engineering (Aust) Ltd above; see also Samimi v Seyedabadi [2013] NSWCA 279 at [74]. It also does not address the fact that Mr Gabrielian's level of debt appears to have increased markedly in the period that the proceedings are on foot, and he offers no explanation of that matter or of how the relevant monies have been expended, and I should infer that any explanation he would have given would not have assisted him to resist BEM's application to extend the freezing order. 22Mr Wallis also points out, and I accept, that the purpose of freezing orders is not to provide a security for judgment but only to prevent the Court's processes from being frustrated in the circumstances set out in the relevant rules and, in particular, is not intended to prefer a judgment creditor over other creditors in the event of a defendant's impecuniosity. He refers to Finn v Carelli [2007] NSWSC 261 and Perpetual Nominees Ltd v Taouk [2009] NSWSC 605 in that regard and I have also noted other authority to the same effect above. In summary, Mr Wallis submits that Mr Gabrielian should not be prevented from utilising his only substantial asset, the Fairfield property, for the purpose of meeting his properly incurred liabilities and normal living expenses pending the outcome of the proceedings, particularly where those proceedings have been prolonged by BEM's delay in complying with the Court orders, to which I will refer below. 23On balance, it seems to me that, subject to the discretionary matters raised by Mr Gabrielian that I will address below, and even allowing for the affirmative defence now relied on by Mr Gabrielian, the evidence of the increase in Mr Gabrielian's debt, unexplained by him, and the element of concealment involved in the original withdrawal from BEM's loan account (having regard to the reasoning adopted by Gleeson CJ in Patterson v BTR Engineering (Aust) Ltd above) are sufficient to establish a risk of dissipation of Mr Gabrielian's assets such that BEM, if it succeeds, it would not be able to have its judgment satisfied, so as to support the continuance of a freezing order in some form. 24However Practice Note SC Gen 14, paragraph [11] recognises, consistent with the case law, that "[t]he value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant's claim, including interest and costs". It does not seem to me that I should continue the present form of the order made by the Court, restraining any dealing with Mr Gabrielian's Fairfield property, without his consent, where the value of his equity in that property appears significantly to exceed the amount of BEM's claim. That would, in my view, amount to inappropriately treating that property as a form of security for that claim. I am satisfied, for the reasons that I was satisfied at the time I extended the orders made by Ball J as set out in my earlier judgment, and by reason of the additional matters noted above, that there is a proper basis for a narrower order preventing Mr Gabrielian disposing of, dealing with or diminishing the value of any of his assets in Australia below the unencumbered value of $70,000, plus adjustment for interest and costs, and subject to the usual exceptions. It may be that Mr Gabrielian has no other assets than that property, but the difference between the two orders is that the latter form of order will not prevent a disposal of that property, provided Mr Gabrielian maintains the minimum level of assets specified, and will, for the reasons noted below, be subject to the usual exceptions for reasonable living and legal expenses. 25Mr Wallis points out, and I accept, that the form of any freezing order should generally permit a defendant to make provision for ordinary living expenses and liabilities properly incurred, and he refers to Frigo v Culhaci [1998] NSWCA 88 in that regard. The usual practice of including such exceptions in freezing orders is recognised in Practice Note SC General 14, paragraph 12 and in Jackson v Sterling Industries Ltd above, Gaudron J referred (at 642) to the practice that, where freezing orders were made, the defendant would be allowed "sufficient funds to meet reasonable living expenses"; see also Clark Equipment Credit of Aust Ltd v Como Factors Pty Ltd (1988) 14 NSWLR 552 at 569; Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380; Deputy Commissioner of Taxation v Bollands [2012] FCA 1050 at [22]. 26Mr Smith submits that where, in this case, only one asset, the Fairfield property, is the subject of a freezing order, then Mr Gabrielian bears the onus of proving that it has no other assets or sources to draw upon to meet his obligations. I recognise that, where a freezing order is imposed only on part of a respondent's assets, a respondent who seeks a relaxation of the restraint has an evidentiary onus, if not a full persuasive onus, to show that it has no other assets beyond those covered by the injunction to which it can resort to meet the relevant expenses: A v C (No 2) [1981] QB 961; [1981] 2 All ER 126 and Clout (as trustee in bankruptcy of the estate of Dexter) v Anscor Pty Ltd above at [20]. However, this principle has no application where, as I noted above, I do not consider that I can continue a freezing order over the Fairfield property, where there is now no consent to that course, rather than making a freezing order in the more common form, over Mr Gabrielian's assets generally. Exceptions for ordinary living and legal expenses are properly included in such an order extending to all of Mr Gabrielian's assets, even where it is subject to a monetary limit. Discretionary factors 27Mr Wallis also pointed, in opposition to the freezing order, to delay by BEM in preparing the matter for hearing and to a text message by Mr Hallacq, the principal of BEM, that is suggestive of an improper purpose in the freezing order. 28First, Mr Gabrielian relies on delay to support the discharge of the freezing order. The parties led substantial evidence as to the question of delay. Mr Gabrielian relied on the affidavit of his solicitor, Mr Quartermain, dated 17 November 2014 which referred to delays in the filing of BEM's evidence and the provision of particulars. Mr Wallis submits that Mr Gabrielian filed his Points of Defence and Cross-Claim by 11 August 2014, in accordance with directions made on 21 July 2014. He submits that BEM did not file and serve its evidence by 25 August 2014, as it was directed to do, and did not serve any further evidence by 28 September 2014, as it was directed to, and that the first evidence filed by BEM, being Mr Hallacq's first affidavit, was served two and a half months after it was due, and a further affidavit shortly afterwards. He also points out that particulars of the Points of Reply by BEM requested on 7 October 2014, which were the subject of further requests made on 28 October and 7 November 2014, were not provided until 9 November 2014. 29BEM in turn relied on the affidavit of its solicitor, Mr Hunt, dated 10 November 2014, which outlined issues in respect of the production of documents in subpoena and a suggested non-compliance by Mr Gabrielian with a notice to produce issued in the proceedings. Mr Smith relied on those matters as context for a delay by BEM in filing its evidence, but I was not asked to reach any substantive findings in that regard. Mr Hunt indicated that BEM had now served its evidence in chief, having served affidavits of Mr Hallacq on 8 November 2014 and 9 November 2014. BEM acknowledges that there has been delay on its part in the preparation and service of its evidence, but submits that it has now complied with its obligations in the proceedings. It submits that its delay was mitigated by issues as to compliance with a subpoena issued to Mr Gabrielian and his alleged failure to respond to a notice to produce issued to him, and the additional issues raised by his affirmative defence. Mr Smith submits that this matter does not justify not continuing the freezing order, where, he submits, much of BEM's case is established by admissions, and Mr Gabrielian otherwise relies on the defence to which I have referred above. 30Mr Hallacq's text message (Quartermain 17.11.2014 Annexure Q) could only be described as wholly inappropriate both in its language and its tone, and included (among other and more offensive comments) the proposition that: "You stole the money so not only is the property now mine but I will be pushing to bankrupt you also!" Mr Hallacq's evidence is that that text was sent in retaliation for verbal threats made by Mr Gabrielian, and it is not appropriate to determine a dispute as to its circumstances in this application, without cross-examination of the parties. Mr Smith submitted that Mr Hallacq's apparent lack of understanding of the difference between a restraint by way of freezing order and ownership of a property, as displayed by his text message, would be shared by members of the general public and that the Court would not place any weight on that text message in declining relief, where an inference was available that BEM was seeking legitimately to restrain the dissipation of Mr Gabrielian's assets to avoid the consequences of judgment (T18). Mr Smith also submits, sensibly enough, that the parties would be well advised not to engage in further direct communications with each other, but submits that the text message is not a reason to decline to extend the freezing order. 31I do not consider that the extent of BEM's delay, now remedied, or that Mr Hallacq's aggressive approach in that text message or any misunderstanding on his part as to the purpose of a freezing order, are such that it should not be continued in the narrower form to which I have referred above. I have held above that there is sufficient basis to find that there is a risk of dissipation of Mr Gabrielian's assets such that BEM could not satisfy its judgment, if such an order is not made. It may be that a continuing and unremedied delay by BEM in preparation of its evidence and compliance with the Court's orders might have been sufficient to require that it be exposed to that risk, where otherwise the freezing order would have continued indefinitely. However, the fact of a now remedied delay by BEM, which is longer than it ought to have been but still not particularly long in absolute terms, or the fact that Mr Hallacq misunderstands the nature of a freezing order, does not seem to me to be sufficient to warrant exposing BEM to that risk, where Mr Gabrielian's proper interests may be protected by the usual exceptions to such an order. Outcome and orders 32Accordingly, absent any agreement between the parties to continue the existing freezing order, I propose to reinstate the form of freezing orders that were originally made by Ball J and were continued on 4 July 2014 which, in effect, will prevent Mr Gabrielian dissipating his assets beyond the amount of the claim against him, plus any adjustment for interest and costs and subject to the usual exceptions for payment of reasonable living expenses and legal expenses. An order of that kind will not unreasonably restrict Mr Gabrielian meeting his commitments in a proper fashion. I will hear the parties as to the amount to be specified in that order. 33The result has been a mixed one, where BEM has not sustained the freezing order in the wide form it had sought, nor has Mr Gabrielian avoided its continuance in some form. It seems to me that the appropriate costs order is that costs be costs in the cause. I will also hear the parties briefly in that regard.