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Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), s 25(1)
Conveyancing Act 1919 (NSW), s 37A
Duties Act 1997 (NSW), s 54(3)
Uniform Civil Procedure Rules 2005 (NSW), rr 25.11 and 25.14

Cases Cited: Aqualand North Sydney Lavender Development Pty Ltd v The Owners – Strata Plan No. 102081 [2025] NSWCA 143
KR Properties Global Pty Ltd (ACN 602 693 729) t/as AK Properties Group (ABN 62 971 068 965) v Kazzi [2024] NSWCA 141

Category: Procedural rulings

Parties: Binah Constructions Pty Ltd (Plaintiff)
Sunnice Pty Ltd (Defendant)

Representation: Counsel:
M Christie SC / S Speirs (Plaintiff)
D Hume SC / H Zhu (Defendant)
Solicitors:
Vincent Young (Plaintiff)
McCullough Robertson (Defendant)

File Number(s): 2026/252764

Publication restriction: Nil

JUDGMENT

1. The plaintiff, Binah Constructions Pty Ltd (Binah), is a builder. The defendant, Sunnice Pty Ltd (Sunnice), is a developer. On 12 June 2026, Binah filed an adjudication certificate as a judgment for a debt under s 25(1) of the Building and C**onstruction Industry Security of Payment Act 1999 (NSW) (the SOP Act). Sunnice is the judgment debtor. The amount of the judgment is $3,567,037.63.

2. On 18 June 2026, Binah commenced these proceedings by way of an urgent ex parte application to Peden J, sitting as the Technology and Construction List Duty Judge. Her Honour granted leave for Binah to file a summons in Court and made a freezing order against Sunnice. The freezing order requires Sunnice to ensure that it does not deal with its assets in such a way that the total unencumbered value of its assets falls below the amount of the judgment debt.

3. As is common, the annexure to the freezing order identifies a number of properties. I will refer to these properties as the ‘Apartments’ or the ‘Babylon Apartments’ because they are strata lots in a residential development known as the Babylon development.

4. The proceedings were returnable before Hammerschlag CJ in Eq on 26 June. His Honour varied the order to permit Sunnice to settle certain contracts due for completion. His Honour also set the matter down for a hearing before me on the question of whether the 18 June freezing order, as varied, should be continued and, if so, on what terms.

5. These are my reasons in relation to that question.

Background facts

6. The dispute concerns a large residential development on Terry Road, Rouse Hill, undertaken by members of the Tsai family.

7. The development land (the Land) was acquired in 2003 by the trustee of the Tsai Ting Hsiung Family Trust (the Tsai Family Trust) for the sum of about $3,000,000. The trustee was, and still is, Denvell Pty Ltd (Denvell). The Tsai Family Trust had been established in 1995. The appointor is Mr Ting Hsiung Tsai to whom I will refer as Mr Tsai Senior.

8. Sunnice was incorporated in May 2016 as a special purpose vehicle. Sunnice is owned and controlled by Mr Joshua Cheng Hua Tsai, who is the son of Mr Tsai Senior.

9. On 9 May 2016, Denvell and Sunnice (known at the time as Southcote Pty Ltd) entered into an Option Agreement in relation to the Land. Under that agreement, Sunnice could call for a transfer of the Land for 90% of its market value. The option period was five years.

10. In about January 2021, Mr Joshua Tsai, on behalf of Sunnice, and Mr Tsai Senior, on behalf of Denvell, reached an oral agreement that in return for Denvell extending the option period, Sunnice would develop the Land. I was not informed of the terms on which that development was to take place. For example, there was no explanation as to how Sunnice’s development costs were to be funded, how it was to exercise the option, or how it would be able to profit from its exercise of the option.

11. According to Mr Joshua Tsai, Sunnice and Denvell formalised their agreement to extend the call option on 7 May 2021 pursuant to an Extension Agreement. An Extension Agreement was in evidence. It shows that the option was extended until 9 May 2024.

12. Sunnice then took steps to develop the Land. On 25 November 2022, it entered into a contract with Binah titled ‘Design & Construct Contract – Contract Relating to Main Works at 41 Terry Road Rouse Hill NSW 2155’ (the Building Contract). It is important to note that at the time it entered into the Building Contract, Sunnice was not a trustee of the Tsai Family Trust. It did not enter into that contract as trustee or in anticipation of becoming a trustee of that trust.

13. The total contract price under the Building Contract was $133,300,000. It provided for the construction of 364 residential apartments across 11 buildings as well as related communal and public domain construction works.

14. On 9 March 2023, Sunnice secured financing for the Babylon development from Indigo Development III Ltd (Indigo), an unrelated financing entity. Under its arrangements with Sunnice, Indigo agreed to lend an amount of up to $151,300,885 (the Indigo facility). Denvell was a guarantor. It granted a mortgage over the Land to secure its obligations as guarantor.

15. The main financing agreement was the ‘Project Denzel Loan Note Subscription Agreement’ (Loan Note Subscription Agreement). Sunnice was the Borrower. Denvell both in its personal capacity and as trustee was a guarantor. The ‘Property’ identified in this agreement was the Land on which the development was to be built. The agreement contemplated a transfer of the Property from Denvell to Sunnice. In fact, a schedule to the agreement suggested that Sunnice had already exercised its option. The body of the agreement used the expression ‘Landowner’ to mean Denvell prior to the ‘Permitted Land Transfer Date’ and to mean Sunnice thereafter. Clause 24.1(a)(i) provided that Denvell must:

“procure the satisfaction of the Permitted Land Transfer Conditions and transfer title to the Property to the Borrower [Sunnice] by no later than 31 December 2023 (or such later date agreed to in writing by [Indigo]) ...”

16. The conditions were set out in clause 24.1(b) and included matters such as delivery of a mortgage to Indigo and evidence of duty having been paid.

17. Works commenced in March 2023. Binah and Sunnice are, however, in dispute as to the performance of some aspects of the work. I have already mentioned Binah’s claim against Sunnice which has resulted in a judgment debt: see paragraph [1] above. Sunnice also has a claim against Binah which is set out in its Technology and Construction List Response filed in related proceedings. The total amount of Sunnice’s claim is $12,769,589.12.

18. By late 2025, the project was nearing completion. Sunnice had entered into a large number of contracts with individual purchasers for the sale of Apartments. These pre-completion contracts represented somewhere between 60% and 70% of the total development. Sunnice entered into these contracts in its personal capacity and in anticipation of becoming the owner of each Apartment prior to completion pursuant to the call option. It did not enter into contracts in anticipation of becoming a trustee of the Tsai Family Trust. The contracts with purchasers contained a disclosure that Sunnice was not the registered proprietor but that Sunnice had the benefit of a call option to acquire the development site and that it held ‘any rights necessary to perform its obligations under’ the contract.

19. At the same time, Sunnice owed the whole amount of the Indigo facility including accumulated interest expense. It had also supposedly incurred other debts totalling about $21 million, as follows:

20. $14,435,692.65 borrowed from Mr Tsai Senior on 10 August 2018.

21. $5,879,300 borrowed from Denvell as trustee of the Tsai Family Trust on 16 July 2021. This borrowing had supposedly incurred interest of $469,861.07 as at 3 December 2025.

22. $825,000 borrowed from an entity known as ‘New World Reserve’ on 27 March 2020.

23. According to Mr Joshua Tsai, Sunnice had by this point (that is, late 2025) allowed the call option to expire. He says that Sunnice had ‘lost its opportunity to make a profit on purchasing and developing the land’. He did not say whether Denvell’s obligation to transfer the Land under clause 24.1 of the Loan Note Subscription Agreement had expired and, if so, how that had come to be. It is hard to see why Indigo would have tolerated a clause like that to simply expire, since it was the basic mechanism by which the properties could be sold by the developer to repay its loan.

24. According to Mr Joshua Tsai, the situation led to a dispute between Sunnice and Denvell. Apparently, the loans described in paragraph [19] above were due and payable in December 2025, well before completion of the project and before settlement of any Apartments could occur. On 3 December 2025, Amberlake Lawyers, a new firm of solicitors acting for Denvell, Mr Tsai Senior and New World Reserve, wrote a letter of demand to McCullough Robertson, the solicitors for Sunnice, for immediate repayment of their loans.

25. In their letter, Amberlake Lawyers made no mention of the option having expired. Nor did they mention clause 24.1 of the Loan Note Subscription Agreement. To the contrary, they asserted that the option had been extended to 9 May 2026. They said they were instructed that ‘as at the date of this letter [Sunnice] has not exercised the option’ and that Sunnice was in default of the Extension Agreement by reason of its failure to pay a particular sum. Amberlake Lawyers added that if a satisfactory response was not received, ‘the Trust will consider its options which include terminating’ the Option Agreement and the Extension Agreement.

26. The response from McCullough Robertson was dated 6 December 2025. It was as follows:

“We are instructed that our client is presently unable to repay any of the amounts demanded in your letter. Indeed, although nearing an end, due to construction and other costs associated with the project at 41 Terry Road, Rouse Hill (Project), our client will be unable to complete the Project without additional funds.”

24. One of the reasons Sunnice did not call for the Land to be transferred to it was that it would have incurred a large stamp duty liability which, according to Mr Joshua Tsai, it could not pay.

25. On 22 December 2025, the parties entered into a Deed of Settlement and Release. The recitals included the following:

“E. The rights that Sunnice has to acquire the Property from Denvell have passed and Sunnice has not exercised any option it had to purchase the Property.

F. Sunnice claims it is entitled to be paid by Denvell for the value of the improvements in the Property, which now endure for Denvell’s benefit. Denvell disputes this claim.

G. Sunnice has contracts with multiple third party purchasers to convey a completed strata lot in the Babylon development of the Property to those purchasers. Absent any agreement between Denvell and Sunnice, Sunnice is unable to fulfil those contractual obligations to settle.”

26. The operative terms of the Deed of Settlement and Release resolved these issues in an imaginative way. Clause 2.1 was as follows:

“The parties have agreed to resolve the Disputed Matters, on a without admission basis as follows:

(1) Sunnice will release all Claims it has against Denvell (in its own capacity and as trustee of the Trust) in relation to the Property and the Development Documents in consideration for Sunnice issuing the Tax Invoice to Denvell.

(2) Denvell will appoint Sunnice as co-trustee of the Trust, to hold only the Property (the other assets of the Trust remaining in the name of Denvell). The appointment will be made by way of Deed of Appointment of Co-Trustee under which Sunnice will be irrevocably prohibited from benefiting from the Trust in any way, including by confirming that there is no right of indemnity to act as trustee of the Trust, to seek to have the transfer of the Property from Denvell (as trustee of the Trust) to Sunnice (as appointed co trustee of the Trust) fall within s 54(3) of the Duties Act 1997 (NSW).

(3) Sunnice will settle all existing contracts of sale that it has entered into for strata lots in the Babylon development of the Property and irrevocably directs all net proceeds of sale to be paid towards the Lender’s loan to Sunnice.

(4) In relation to the Loans:

(a) Sunnice will assign the obligations to pay the Tsai Loan and the New World Loan to Denvell;

(b) Denvell will write off the Trust Loan.

(5) Denvell will use its best endeavours to assume the balance of the loan obligations to the Lender, after the payment of the net sale proceeds from the strata lot sales in (3) above, from the Lender and cause the Lender to otherwise release Sunnice from any obligations in relation to the Lender’s loan.

(6) Sunnice accepts, in full satisfaction of its rights to payment of the Tax Invoice, the combination of:

(a) the payment of the net sale proceeds to the Lender as set out in (3) above; and

(b) the Loans being dealt with as set out in (4) above; and

(c) Denvell using its best endeavours as set out in (5) above.

(7) The Parties will apply GST on the Tax Invoice in the usual way, being the claiming of an input tax credit by Denvell and the remission of GST by Sunnice.

(8) The Parties are liable for their own conveyancing costs in relation to the transfer of the Estate’s interest in the Property in accordance with subclause (2) above.

(9) Each party will otherwise bear their own costs of the proceedings except as for the Costs Settlement Sum.”

27. Under the Deed of Settlement and Release, Sunnice was therefore to become the sole registered proprietor of the Land as a ‘co-trustee’ of the Tsai Family Trust but could then perform its settlement obligations under its pre-existing contracts (being contracts that had been entered into in anticipation of exercising the call option) by transferring title to the purchasers. It could also reduce its liability – that is, its liability on a standalone basis and not as trustee – by the amounts paid to Indigo as mortgagee on settlement.

28. Sunnice would thereby become Schrödinger’s trustee: it would be a trustee and not a trustee in relation to the same property. It would acquire title to property as trustee but then dispose of the same property in performance of contracts entered into in its own right.

29. Sunnice was appointed as an additional trustee of the Tsai Family Trust by an undated deed of amendment titled ‘Deed of Appointment of Co-Trustee for the Tsai Ting Hsiung Family Trust’ among Sunnice, Denvell and Mr Tsai Senior, as appointor (Deed of Appointment). The Deed of Appointment did not, however, simply make Sunnice an additional trustee of the existing trust. Rather, it provided that Sunnice was to be an additional trustee ‘to hold the Property on the terms of the Trust’, where ‘Property’ was limited to the development property, that is, the Land. Thus, the trust property in relation to which Sunnice and Denvell would be ‘co-trustees’ was limited to the Land. Sunnice did not become a trustee of the Tsai Family Trust in relation to any other trust property.

30. Recital I to the Deed of Appointment read:

“The intent of this appointment and amendment is to ensure that the transfer of the Property from the Current Sole Trustee to the New Co-Trustee falls within the terms of s 54(3) of the Duties Act 1997 (NSW) and any interpretation reasonably open on the construction of this Deed that advances that objective should be preferred.”

31. A new clause 1A was inserted into the trust deed of the Tsai Family Trust as follows:

“1A. Despite any other provision of this Deed a Trustee or Trustees of the Trust are forever and irrevocably prohibited from benefiting from the Trust, whether by way of destitution, as a beneficiary, or otherwise, and the trustee’s right of indemnity is expressly excluded.”

32. In order for the transfer of the Land to Sunnice to have the benefit of the concession in s 54(3) of the Duties Act 1997 (NSW), and therefore to be assessed with duty of only $100, it was necessary for Sunnice to make a full and frank disclosure to the Chief Commissioner of State Revenue (Chief Commissioner) of the circumstances of its appointment so that the Chief Commissioner could be satisfied about the matters mentioned in that section.

33. Under cover of a letter to the Chief Commissioner dated 15 January 2026, the solicitors for Sunnice relevantly forwarded a copy of the Deed of Appointment but made no mention of the Deed of Settlement and Release. The Chief Commissioner was therefore not informed that Sunnice intended to utilise the trust property to settle its pre-existing contracts. Instead, the letter simply mentioned that the ‘New Trustee’ (being Sunnice) had entered into contracts with third-party purchasers. It said that ‘the New Trustee (and not the Original Trustee) is recorded as the seller in the unit sale contracts’.

34. The Chief Commissioner formed a view, no doubt on the basis of this material, that the requirements of s 54(3) were met. On 19 January 2026, he duly issued a Duties Notice of Assessment in the amount of $100. Sunnice became the registered proprietor of the Land.

35. Two Partial Occupation Certificates were issued on 15 December 2025, each covering different parts of the development. Sunnice then proceeded to settle its pre-existing contracts and pay down its debt.

36. Although I cannot be certain based on the evidence, the total value of Apartments transferred by Sunnice pursuant to contracts entered into in its own right was about $150 million. It seems that Sunnice has received no part of the proceeds of these sales after paying selling expenses, GST and the mortgagee.

37. The value of the as-yet unsold Apartments is uncertain. They had a value of $90,832,550 as at May 2025 but there was no more recent valuation available. These properties will be sold under the GST margin scheme by Sunnice as trustee. Based on the May 2025 valuation, the net proceeds after GST are expected to be around $82,574,962.88.

38. The total amount currently owing to Indigo was $76,559,871.52 as of a few weeks ago.

39. These figures imply that there may be around $6 million of equity in the remaining Apartments. However, the Apartments are not selling very quickly and interest is accruing at approximately $37,761.47 per day. The valuation on which that $6 million figure is based is also quite out of date.

40. Mr Joshua Tsai said that the assets and liabilities of Sunnice on a standalone basis (that is, apart from its position as trustee) do not include any interest in the Land but that the debt on the Indigo facility is being reduced as a result of sales, including the sales pursuant to contracts entered into by Sunnice as trustee. There was no evidence about how all this was being accounted for. According to Mr Joshua Tsai, on a standalone basis Sunnice’s only major asset is its claim against Binah: see paragraph [17] above. He said that its only assets were this claim and $3,089,015.60 in bank guarantees provided as the strata bond for the development, plus some insignificant cash deposits. According to Mr Joshua Tsai, Sunnice in its own right has no ability to meet Binah’s claim or claims by any other creditors.

41. Sunnice would like to refinance. The evidence is that it may be able to make significant savings if it is able to do so. However, its refinancing proposal includes a proposal for Sunnice to dispose of all of the unsold Apartments to a ‘clean skin finco’. This proposal does not reflect a requirement of the lender. What happened was that Sunnice told the lender that it proposed to assign all of the properties to a new landowner. When the lender asked about this, it was informed by Sunnice’s solicitors – seemingly for the first time – that the properties had been transferred to a trustee company (which the lender was unhappy about) and that:

“The rationale is simply that it will be cleaner for the refinance and in [the lender’s] interests, including because as it [sic] quarantines the incoming financier from historical issues with the Builder [Binah].” (emphasis in original)

42. The lender’s only request was that if, as Sunnice wishes, it is to transfer the Land, it should not be to another trustee. Sunnice originally proposed that it would assign the properties to a proprietary company wholly owned by Mr Tsai Senior. However, the current proposal is for the properties to be held by a new and different trustee of the Tsai Family Trust or, possibly, an entity held by the trustee. Indigo seems to be content with this proposal but there is no evidence to show that the change in ownership is required for the purpose of refinancing.

The existing freezing order

43. The freezing order made on 18 June includes the following:

“5. The Plaintiff, to make the usual undertaking as to damages in relation to actioning the freezing orders pursuant to UCPR 25.11 and 25.14 in accordance with Annexure A of these orders against the Defendant, until further order of the Court.

6. Pursuant to UCPR 25.3 that, pending further order from the Court, the Defendant and its officers, employees, servants or agents must not in any way transfer, encumber, dispose of or otherwise deal with, or diminish the value of any of the Properties (as set out in Annexure A to these orders) up to the unencumbered value of AUD $3,567,037.63.”

44. The ‘Properties’ set out in Annexure A are the unsold Apartments. Orders 4 and 5 in Annexure A are in familiar form:

“4. You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia up to the unencumbered value of AUD $3,567,037.63 (the Relevant Amount).

5. If the unencumbered value of your assets in Australia exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.”

The parties’ arguments

45. Sunnice says that the freezing order should be lifted in its entirety. It submits that Binah’s claim is not a claim against it as trustee and that the Apartments are not now and will not in the future be available to meet Binah’s claim.

46. Sunnice emphasises that the freezing order means that it is unable to continue to sell the Apartments because the uncertainty about their valuation means that the unencumbered value of the Apartments as a whole may already have fallen below the sum of $3,567,037.63. For the same reason, it is unable to pursue the refinancing. It submits that the refinancing and its ability to continue to make sales are in everyone’s interests.

47. Binah submits that there is a strong case for the continuation of the freezing order. It submits that the effect of the Deed of Settlement and Release was that Sunnice gave up all of its rights against Denvell, including a possible claim in quantum meruit to be paid for all of the development work which it performed to construct the Apartments. It submits that there is a strong prima facie case that the Deed of Settlement and Release and the resulting transfer of property into Sunnice’s name as trustee should be set aside under s 37A of the Conveyancing Act 1919 (NSW). Binah submits that, under the Deed of Settlement and Release, Sunnice voluntarily put itself in a position whereby it could meet some claims against it (relevantly, the claims by purchasers under existing contracts, and the claims by Indigo, Denvell and the other lenders) but have no ability to pay its sole remaining creditor, Binah.

48. As to this last point, Sunnice contends that by the time of entry into the Deed of Settlement and Release, it no longer had any right to call for the transfer of the Land into its name and that it had well and truly lost any opportunity to profit from the development. It points out that it could not have maintained a claim based on a quantum meruit in circumstances where its contractual rights to profit from the development had come and gone.

49. Finally, Binah accepts that it is appropriate that Sunnice should be allowed to continue to market and sell the Apartments. Its main objection is to the proposal for the Apartments to change hands yet again in the course of the proposed refinancing. Binah submits that it may in due course set aside the Deed of Settlement and Release and, if that occurs, it may be open to Sunnice to call for the properties pursuant to the call option (or on some other basis) or to pursue a quantum meruit claim. It argues that this prospect should not be foreclosed by the taking of further steps to put the properties beyond reach of Sunnice and its major creditor, Binah.

Should the freezing order be continued?

50. There was no dispute about the principles to be applied in deciding whether the freezing order made on 18 June should be continued. I refer to the explanation of the relevant principles in KR Properties Global Pty Ltd (ACN 602 693 729) t/as AK Properties Group (ABN 62 971 068 965) v Kazzi [2024] NSWCA 141 at [13]-[16] (Mitchelmore JA) and Aqualand North Sydney Lavender Development Pty Ltd v The Owners – Strata Plan No. 102081 [2025] NSWCA 143.

51. This is an instance of a freezing order granted to protect the position of a judgment creditor: Uniform Civil Procedure Rules 2005 (NSW), rr 25.11 and 25.14. Having first been granted ex parte, Binah bears the onus of demonstrating that the order should be continued.

52. Binah’s claim against Sunnice was not in its capacity as trustee. Its claims arise out of the Building Contract and do not relate in any way to the administration of the Tsai Family Trust. Sunnice did not enter into the Building Contract as trustee and none of the matters that have given rise to Binah’s claim relate to things done by Sunnice as trustee. I am unable to accept the argument that the claim relates to the administration of the trust because Sunnice was a trustee in relation to the property that was the subject of the Building Contract at the time the claim under the SOP Act was made and judgment was entered.

53. On the other hand, a prominent feature of the Deed of Settlement and Release was that it put Sunnice in a position whereby it could meet all claims against it, save for Binah’s claim. Having been appointed trustee, Sunnice could complete all of the pre-completion contracts, pay GST and selling expenses and reduce the debt to Indigo, but at the same time have no assets at all to meet Binah’s (or anyone else’s) claim.

54. Sunnice submitted that the Deed of Settlement and Release did not involve any significant disposition of property or rights by it because, by that stage, Sunnice had no rights as against Denvell. The Option Agreement had apparently expired, as had Denvell’s obligation to transfer the Land under the Loan Note Subscription Agreement. As mentioned, Sunnice argued that the written agreements between the parties have left no room for the operation of restitutionary remedies. Mr Joshua Tsai’s evidence was that Sunnice’s opportunity to profit from the development at all had lapsed.

55. Although there is force in these arguments, they are not dispositive. It is true that Mr Joshua Tsai’s evidence is that the Option Agreement had lapsed, but at the same time there is contemporaneous evidence from Denvell’s own lawyers in December 2025 that this was not so: see paragraph [22] above. There is also no explanation in Mr Joshua Tsai’s evidence as to what had occurred in relation to Denvell’s obligation to transfer the Land under the Loan Note Subscription Agreement. I note also that Sunnice was sufficiently certain about its entitlement to payment from Denvell that it issued a tax invoice for the development costs. I was informed that Denvell may not yet have claimed an input tax credit on the strength of this invoice, but there was no evidence about this and it tells me nothing about the strength of Sunnice’s claim. I also note that there was no evidence about whether, and if so, how Sunnice paid any resulting GST net amount for the period in which the invoice was issued. Taken together, these matters cause me to doubt the strength of Sunnice’s submission that it had no rights against Denvell of any particular value at the time of entry into the Deed of Settlement and Release.

56. It is also necessary to consider what is likely to occur if the freezing order is lifted. In that respect, Sunnice is proposing to transfer the remaining Apartments to a new trustee.

57. This proposed transfer is a cause for concern. It is not one that has been prompted by a request from the lender. Rather, it seems that the purpose of the transfer is only to make clear (presumably to Binah) that Binah has no claim in relation to the Apartments because they are trust property. That is not a very satisfying explanation for why the properties are to be transferred to a new entity. It is also inconsistent with at least one of the earlier proposals for the ‘clean skin finco’, which was that it should be a proprietary company owned entirely by Mr Tsai Senior. In any event, if Sunnice’s premise is correct and Binah’s claim cannot be met from trust property, there should be no occasion to transfer the properties in the first place.

58. I also take into account that the profit on sale of the units to date is entirely unexplained in the evidence. The total gross realisation value of the Babylon development as at 7 May 2025 was $247,645,914 including GST, at least according to the valuation in evidence. Total construction costs at that point were $163,160,251. This implied a profit margin after interest expense of more than 18%, or $34,505,760. There have been significant sales to date, possibly in the order of about $150 million, but no explanation at all as to how any profit has been accounted for.

59. Binah accepts that the freezing order should not prevent Sunnice from continuing to sell the properties, to remit GST and to pay down the secured debt. I agree. It should be permitted to sell the Apartments in the ordinary course of business at market value and to use the proceeds to remit GST and pay Indigo in relation to its secured entitlement. It should of course also retain sufficient sums to meet its income tax liability, since based on the limited evidence before me the properties would appear to be sold by Sunnice as trustee of a trust which acquired the Land for $3,000,000 and which has incurred neither interest expense nor development costs in the meantime.

60. However, it is appropriate for the freezing order to remain in place in relation to assets owned beneficially by Sunnice, whatever they may be. This will likely have very little impact on Sunnice because it has almost no beneficially held assets. Be that as it may, particularly given the fact that the dispute is at a very early stage and because I have not been informed about how its significant dealings with the properties have been accounted for since entry into the Deed of Settlement and Release, I consider it appropriate for the restraint to continue as against Sunnice in its personal capacity.

61. I also consider that it is appropriate to make an order that Sunnice as trustee not dispose of the unsold Babylon Apartments other than for market value. The reason for an order in those terms is not that Binah has demonstrated a claim against Sunnice as trustee. Rather, it is to ensure that if Binah succeeds in its argument that the Deed of Settlement and Release should be set aside pursuant to s 37A of the Conveyancing Act, and if it is shown that Sunnice had enforceable claims against the trustee of the Tsai Family Trust, then Sunnice will be in a position to enforce those claims against trust property that has not been diminished by non-arm’s length transactions. Sunnice should not be permitted to further transfer the properties if doing so has the potential to further erode Binah’s ability to recover in the event that its s 37A argument is successful. This order will prevent Sunnice from transferring the remaining unsold Babylon Apartments to a new trustee (or anyone else) as part of a refinancing other than for market value unless it first obtains an appropriate variation of the freezing orders.

ORDERS

62. I will invite the parties to bring in short minutes of order to give effect to these reasons. Costs will be costs in the cause.

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