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[2026] NSWSC 913
Supreme Court of NSW
2026-07-30
Williams J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Gazzard v Wormald Malanda Pty Ltd ATF Anthony Hekeik Trust [2026] NSWSC 913
Hearing dates: 18 March, 30 July 2026
Date of orders: 30 July 2026
Decision date: 30 July 2026
Jurisdiction: Equity
Before: Williams J
Decision: See orders at [34].
Catchwords: PRACTICE AND PROCEDURE – Enforcement of judgments and orders – Where judgment entered in earlier proceedings in the Court in favour of first plaintiff and against parties including the first and second defendants in the present proceedings – Where charging order made in the earlier proceedings over units held by the first and second defendants in a unit trust by way of enforcement of the judgment debt – Where first plaintiff now seeks order for judicial sale of those units – Held: Orders made for judicial sale of the units at a price determined by reference to an expert valuation of the units and by a process compliant with the pre-emptive rights granted to unit holders under the trust deed.
Legislation Cited: Civil Procedure Act 2005 (NSW), s 101, 126
Cases Cited: Ghannam v BB&B Penrith Pty Ltd [2022] NSWSC 1588 King Investment Solutions Pty Ltd v Hussain (2005) 64 NSWLR 441; (2005) 13 BPR 25,077; [2006] ANZ ConvR 48; [2005] NSWSC 1076 Sood v Christianos (2008) 14 BPR 26,101; [2008] NSWSC 1087
Category: Principal judgment
Parties: Richard Warwick Gazzard (First Plaintiff)
Badajoz Property Pty Limited ATF Badajoz Property Unit Trust (Second Plaintiff)
Wormald Malanda Pty Limited ATF Anthony Hekeik Trust (First Defendant)
Wormald Malanda Pty Limited ATF Raymond Hekeik Trust (Second Defendant)
Anthony Joseph Hekeik (Third Defendant)
Representation: Counsel:
Mr S Aspinall (Plaintiffs)
Mr A Hekeik (Litigant in person appearing on behalf of the Defendants)
Solicitors:
LAS Lawyers (Plaintiffs)
N/A (Defendants)
File Number(s): 2024/311076
Publication restriction: N/A
In proceedings 2021/40040 of 2021, this Court entered judgment on 23 March 2022 in favour of the plaintiff (Mr Richard Gazzard) against the first defendant (Mr Anthony Hekeik), the second defendant (Wormwald Malanda Pty Ltd), the third defendant (Wormwald Malanda Pty Ltd as trustee of the AJH & RJH Family Trust), the fourth defendant (Wormwald Malanda Pty Ltd as trustee of the Anthony Hekeik Trust) and the fifth defendant (Wormwald Malanda Pty Ltd as trustee of the Raymond Hekeik Trust) in the sum of $2,321,675.67.
The defendants in those proceedings have not paid any part of that judgment sum to the plaintiff in those proceedings.
Interest has accrued on that judgment sum pursuant to s 101 of the Civil Procedure Act 2005 (NSW).
In these reasons, I will adopt the parties’ convention of referring to proceedings 2021/40040 as the Debt Proceedings, and I will refer to the principal judgment sum in the Debt Proceedings together with accrued interest as the Judgment Debt.
On 21 May 2024, Mr Gazzard obtained charging orders in the Debt Proceedings against:
10 ordinary units in the Badajoz Property Unit Trust held by the fourth defendant in those proceedings (Wormwald Malanda Pty Ltd as trustee of the Anthony Hekeik Trust), being units numbered 61 to 70 in unit certificate number 3; and
10 ordinary units in the Badajoz Property Unit Trust held by the fifth defendant in those proceedings (Wormwald Malanda Pty Ltd as trustee of the Raymond Hekeik Trust), being units numbered 71 to 80 in unit certificate number 4.
I will refer to those units collectively as the Charged Units.
The Badajoz Property Unit Trust was established by a trust deed dated 4 February 2015 (the Trust and the Trust Deed).
There are 100 issued units in the Trust, of which:
60 units are owned by Ricgaz Pty Ltd – an entity associated with Mr Gazzard - as trustee of the RWG Family Trust (units numbered 1 to 50 and 81 to 90);
10 units are owned by Mr Simon Charbel Hekeik (units numbered 51 to 60);
10 units are owned by Wormwald Malanda Pty Ltd as trustee of the Anthony Hekeik Trust (units numbered 61 to 70), as referred to above;
10 units are owned by Wormwald Malanda Pty Ltd as trustee of the Raymond Hekeik Trust (units numbered 71 to 80), as referred to above; and
10 units are owned by Ranon Property Group Pty Ltd (units numbered 91 to 100).
Clause 7(1)(a) of the Trust Deed provides that each unit holder is entitled to transfer any unit held by them, subject to the provisions of clause 7.
Clauses 7(1)(b)-(e) provide for the form of instruments of transfer and the process of registration of transfers by the trustee.
Clause 7(2)(a) requires any unit holder desiring to sell units to serve the trustee with a notice specifying the units to be sold, the name of the proposed transferee, the sale price, and the terms of sale (defined as a “Transfer Notice” in respect of “Specified Units”). On receipt of such a Transfer Notice, the trustee is constituted as the agent of the proposed transferor to sell the Specified Units subject to the remaining provisions of clause 7(2).
Those provisions require the trustee to offer the Specified Units to all unit holders (other than the proposed transferor) for the sale price and on the terms specified in the Transfer Notice within 14 days of receipt of the Transfer Notice (clause 7(2)(b)). That offer may be accepted by notice in writing to the trustee within 28 days of the offer being served on the unit holders specifying the number of Specified Units that the accepting unit holder wishes to purchase. If not accepted within 28 days, the offer is deemed to have been refused (clause 7(2)(c)).
The transferor is bound to sell the Specified Units to such of the unit holders as accept the offer. Where there is competition between accepting unit holders, the Specified Unites shall be sold to them in the same proportions as the existing unit holdings bear to the total number of units on issue (clauses 7(2)(c) and (d)).
If and to the extent that the offer made by the trustee as agent of the transferor is not accepted by unit holders, the trustee may offer to sell the Specified Units to any person that the trustee thinks fit and the transferor is obliged to sell the Specified Units to that person notified to them by the trustee within 70 days after the issue of the Transfer Notice (clause 7(2)(e)).
If the trustee is unable to sell the Specified Units, then the transfer is free to sell them to any person, provided that they must not be sold at a sale price or on terms more favourable to the purchaser than the price and terms set out in the Transfer Notice (clause 7(2)(f)).
By summons filed on 22 August 2024, Mr Gazzard (the first plaintiff) and Badajoz Property Pty Ltd (the second plaintiff) commenced these proceedings against Wormwald Malanda Pty Ltd as trustee of the Anthony Hekeik Trust (the first defendant), Wormwald Malanda Pty Ltd as trustee of the Raymond Hekeik Trust (the second defendant) and Mr Anthony Hekeik (the third defendant) seeking orders that the Charged Units be transferred to Mr Gazzard and that the Judgment Debt in the Debt Proceedings be reduced by the aggregate value of the Charged Units. As explained above, Mr Gazzard is the judgment creditor in respect of the Judgment Debt and an associate of the majority unit holder in the Trust. Mr Gazzard is also the sole director of the second plaintiff in these proceedings, which is the trustee of the Trust (the Trustee).
The proceedings were listed for hearing on 18 March 2026.
In their submissions served in advance of that hearing, and without applying for leave to amend, the plaintiffs reformulated their claims for relief. Relying on s 126(2) and (5) of the Civil Procedure Act 2005 (NSW), the plaintiffs submitted that Mr Gazzard is entitled in relation to the Charged Units to any relief that he would have been entitled to if the first and second defendants had granted him a charge over those units. The plaintiffs submitted that Mr Gazzard is therefore entitled to an order for judicial sale in respect of the Charged Units, that being the standard remedy available to an equitable chargee seeking to enforce the charge following default by the chargor: see King Investment Solutions Pty Ltd v Hussain (2005) 64 NSWLR 441; [2005] NSWSC 1076 at [81] (Campbell J); Sood v Christianos (2008) 14 BPR 26,101; [2008] NSWSC 1087 at [16] (Brereton J); Ghannam v BB&B Penrith Pty Ltd [2022] NSWSC 1588 at [23]-[24] (Peden J). In substance, the plaintiffs’ submissions outlined a claim for an order for the appointment of the plaintiffs’ solicitor to conduct a judicial sale of the Charged Units as agent for and under the supervision of the Court at a price and in a manner that did not involve offering those units for sale in any market but by a process that complied with clause 7(2) of the Trust Deed, commencing with the service of a Transfer Notice on the Trustee in respect of the Charged Units under clause 7(2)(a) specifying Mr Gazzard as the proposed transferee, specifying a sale price of $18,818.33 per unit, and stating that the sale price may be paid deducting it from the Judgment Debt.
The matter was adjourned part-heard on 18 March 2026 to give the plaintiffs an opportunity to address material deficiencies in their evidence concerning the value of the Charged Units, on which they relied in respect of the sale price stipulated in the orders sought, and to amend their summons to reflect the relief now claimed.
By their amended summons filed on 12 May 2026, the plaintiffs seek orders for judicial sale of the Charged Units by a process that complies with clause 7(2) of the Trust Deed, commencing with the service of a Transfer Notice on the Trustee in respect of the Charged Units under clause 7(2)(a) of the Trust Deed specifying Mr Gazzard as the proposed transferee, specifying a sale price of $193,520 for each parcel of ten units held by the first and second defendants (representing a price of $19,352 per unit), and stating that the sale price may be paid by deducting it from the Judgment Debt.
At the adjourned hearing on 30 July 2026, Mr Anthony Hekeik appeared for himself and for the first and second defendants with leave of the Court. Mr Hekeik informed the Court that the defendants did not oppose an order for judicial sale of the Charged Units, but disputed the price of $19,352 per unit.
At the conclusion of the adjourned hearing, I made orders substantially in the terms sought by Mr Gazzard, on the basis that my reasons for doing so would be published as soon as practicable. These are those reasons.
I accept Mr Gazzard’s submission that the charging orders entitle him to the same relief as if the defendants had granted a charge in his favour over the Charged Units, and that he is therefore entitled to an order for judicial sale, subject to the Court being satisfied that the terms of the order are designed to achieve the best price for the Charted Units: see Civil Procedure Act 2005 (NSW), s 126(5) and the authorities referred to at [18] above.
In making any order for judicial sale in favour of an equitable mortgagee or chargee, the Court is astute to ensure that the terms of the order give the conduct of the sale to the party with the greatest interest in maximising the sale price and that the best price is achieved for the property to be sold. That is why a judicial sale is ordinarily conducted by public auction, although the Court may make orders for judicial sale by private treaty in appropriate circumstances: see Sood v Christianos [2008] NSWSC 1087, especially at [20]-[22] (Brereton J).
In the present case, the Trust is not listed, and the transfer of units in the Trust is subject to the provisions of clause 7(2) of the Trust Deed. A sale of the Charged Units by public auction would not comply with clause 7(2). Any marketing campaign offering the Charged Units for sale would need to be conducted on the basis that any offer received from a prospective purchaser would be the subject of a Transfer Notice under clause 7(2)(a) and that the Charged Units would be sold to the offeror only if they were not purchased by another unit holder through the clause 7(2) process. The Trust is a closely held, loss-making property investment vehicle: see [8] above and [26]-[32] below. In my opinion, there is unlikely to be a ready market for the Charged Units to be sold into outside existing unitholders. In those circumstances, Mr Gazzard seeks orders for judicial sale of the Charged Units at a price reflecting the value of the Charged Units to him or to such other unit holder as may wish to purchase them pursuant to clause 7(2) of the Trust Deed.
Mr Gazzard has tendered the audited financial statements of the Trust for the financial years ended 30 June 2020 to 2025 and an expert opinion of forensic accountant Mr Alex Bell of Grant Thornton Australia Limited as to the value of the Charged Units.
The financial statements show that the Trust has operated at a loss for each of the financial years ended 30 June 2020 to 2025. As at 30 June 2025, the assets of the Trust comprised two adjacent properties at Ryde, the cost value of which is recorded in the audited accounts as $3,711,730, and cash, cash equivalent and receivables totalling $16,784.41. As at 30 June 2025, the Trust had current liabilities of $1,859,235.07 (comprising an unsecured loan of $1,747.13 and net unpaid distributions of $1,857,487.94) and non-current liabilities of $1,965,046.29 (being loans secured by mortgage over the Ryde properties).
The financial statements show that the rental income from the Ryde properties is the sole source of income for the Trust. According to Mr Gazzard’s evidence, rental income from the properties does not cover the mortgage repayments, and he has made payments to the mortgagee to cover the shortfall over many years in addition to paying certain outgoings in respect of the properties. According to the first plaintiff’s evidence, he has been the only person who has made such contributions to the liabilities and expenses of the Trust. According to Mr Gazzard’s evidence, his contributions have been recorded as a liability of the Trust to him in the financial statements of the Trust. The amount of that liability recorded in the unaudited, unsigned financial statements for the Trust for the year ending 30 June 2025 is $2,010,397.66. It is that figure, less the sum of $152,909.72 said to be owing by the third defendant Mr Hekeik, that is recorded as unpaid distributions of $1,857,487.94 in the 30 June 2025 financial statements. The auditors report recommends that these amounts be reclassified as loans to Mr Hekeik of $152,909.72 and loans from Mr Gazzard of $1,857,487.94, noting that this will not affect the net asset position or overall financial position of the Trust.
On behalf of the defendants, Mr Hekeik disputed that the Trust has a liability of $2,010,397.66 to Mr Gazzard and that he (Mr Hekeik) has a liability to the Trust of $152,909.72. Mr Hekeik contended that the Trust’s liability to Mr Gazzard should be reduced by $500,000, and that the Trust has a liability of $500,000 to him which should be offset against the $152,909.72 so that the Trust’s liability to him is a net sum of $347,090.28, in the 30 June 2025 financial statements. Mr Gazzard does not accept those contentions, but caused draft accounts to be produced incorporating Mr Hekeik’s adjustment and demonstrating that the adjustments do not result in any change to the total amount of $1,857,487.94 for unpaid distributions/loans in the 30 June 2025 financial statements and therefore do not result in any change to the net assets of the Trust which underpins Mr Bell’s valuation to which I refer below. After being taken through the draft accounts during the hearing, Mr Hekeik accepted this.
The plaintiffs obtained a valuation of the Ryde properties at $4,700,000. However, for the purpose of these proceedings, the plaintiffs accept the defendants’ valuation of $5,750,000.
Mr Bell has opined that the value units in the Trust is driven predominantly by the value of the assets of the Trust. Income-based valuation methodologies would not be appropriate because the Trust is not conducting active operations and the income that it earns from holding the Ryde properties is insufficient to cover its expenses. The operations of the Trust have generated losses, as disclosed in the audited financial statements. Mr Bell has therefore valued units in the Trust as at 30 June 2025 and as at the date of his report (12 May 2026) on the basis of the adjusted book value of the assets of the Trust. He has adjusted the book values by excluding formation costs (an asset which has no realisable value), and by increasing the value of the Ryde properties from the book value to the defendants’ market valuation of $5,750,000. For the purpose of the valuation as at 12 May 2026, Mr Bell has adjusted the book value to take into account additional liabilities of the Trust to Mr Gazzard in respect of payments made by Mr Gazzard in respect of Trust expenses during the period since 30 June 2025. Mr Gazzard has given evidence of those payments in his affidavit made on 6 March 2026.
The outcome of Mr Bell’s assessment (after correcting for a typographical error in the starting point of the 30 June 2025 valuation that was identified during the hearing) is an adjusted book value of the Trust of $1,942,503 as at 30 June 2026 and $1,836,337 as at 12 May 2026, which equates to a value of $19,425 per unit for each of the 100 units in the Trust as at 30 June 2025 and $18,363 per unit as at 12 May 2026. By the conclusion of the hearing, Mr Hekeik did not dispute that valuation. Mr Gazzard is content for the higher value of $19,425 per unit to be incorporated into the order for judicial sale of the Charted Units. On that basis, the price for the parcel of ten units owned by each of the first and second defendants is $194,250.
Mr Hekeik did not oppose the orders sought by Mr Gazzard for judicial sale of the Charged Units at that price to Mr Gazzard or another unitholder in accordance with clause 7(2) of the Trust Deed. Given that the amount of the Judgment Debt far exceeds the value of the Charged Units as determined by Mr Bell, and that the sale price is no longer disputed, and I satisfied that it is appropriate that the solicitor for Mr Gazzard and the Trustee as the agent of the Court to effect the judicial sale.
For all of the reasons, I made the following orders at the conclusion of the hearing on 30 July 2026:
Order for judicial sale of the property of the first and second defendant referred to in the charging orders made by the Court in proceedings 2021/40040 (Substantive Proceedings) on 22 May 2024 (Charged Property), being the 10 units (numbered 61 to 70 inclusive) held by the first defendant in the Badajoz Property Unit Trust and the 10 units (numbered 71 to 80 inclusive) held by the Second Defendant in the Badajoz Property Unit Trust.
Order that Mr Deon Manca, solicitor for the plaintiffs, be appointed as the agent of the Court to effect the judicial sale of the charged property.
Mr Manca in that capacity, within 7 days of the date of these orders, is to serve on the second plaintiff notices of transfer on behalf of the first and second defendants indicating a desire to sell the Charged Property to the first plaintiff on the following terms:
(a) a sale price of $194,250 for the 10 units (numbered 61 to 70 inclusive) held by the first defendant in the Badajoz Property Unit Trust; (b) a sale price of $194,250 for the 10 units (numbered 71 to 80 inclusive) held by the Second Defendant in the Badajoz Property Unit Trust; (c) that the sale price may be paid by the first plaintiff by provision of a written acknowledgment that the amount of the judgment debt owed by the first and second defendants to him pursuant to the judgment in the Substantive Proceedings is reduced by the sale price.
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Gazzard
Wormald Malanda Pty Ltd ATF Anthony Hekeik Trust