Hurst, in the matter of Lloyds Curry Shop Pty Ltd (in liq) v Prasad

APPLICABLE PRINCIPLES 3 The principles that inform the grant of leave to adduce further evidence or re-open are well established: see Hakea Holdings Pty Ltd v McGrath [2021] FCA 660 at [30] to [31]; F.Y.D. Investments Pty Ltd v Promptair Pty Ltd [2017] FCA 1097 at [31] to [32]; Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24] approved by the Full Court in Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75; 251 FCR 404 at [168] to [169]. It is not necessary to repeat those principles here, other than to note that if the evidence was not led, or the submissions were not made, by reason of the negligence of the party or its legal representatives, is not necessarily fatal to an application for reopening being allowed. In LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1141 at [34] Lindgren J observed: Clearly, the fact that a failure to make submissions on a point is, as here, solely attributable to the neglect or default of the party seeking leave will militate against the granting of the application for leave. But it will not necessarily defeat the application in all cases. 4 Each case will turn on its own facts.

Background 5 By way of background, on 9 August 2021, a duty judge of this Court made ex parte freezing orders against Sam Cassaniti and David Cassaniti, the third and fifth respondents, respectively. Ancillary asset disclosure orders were also made. At this time, ex parte freezing orders were also made against Kaushik Prasad, the first respondent. On the inter partes hearing that followed, the ex parte freezing orders against Mr Prasad were discharged. The ex parte application was brought by the applicants on an ex parte basis before the duty judge on the basis that the application was urgent. It was approximately six years after the liquidator purported to have been appointed. 6 By a further order of this Court made on 18 August 2021, the application of the freezing orders against the Cassanitis was extended to 20 October 2021 by consent on a without admission basis. The time for compliance with the orders relating to the disclosure of assets was extended to 1 September 2021. On 20 September 2021, Carmelo Duardo was joined as the sixth respondent to these proceedings, and ex parte freezing orders and ancillary asset disclosure orders were made against him.

leave to adduce further evidence 7 The present application is for leave to adduce further evidence in respect of two interlocutory applications that are reserved. It is not necessary to descend into the detail of those applications, other than to note that the first application is an application to extend freezing orders which were obtained ex parte, and the second is an application to challenge the respondents' disclosure under asset disclosure orders. Critically, the applicants seek to rely on evidence that they did not lead when their applications were heard, notwithstanding that the evidence was publicly available and was the product of the usual investigations that one would expect to have been undertaken as a matter of course in a matter such as this. 8 It is necessary to say something about the evidence that is the subject of the application and the context in which it arises. 9 As noted above, this Court made orders on 9 August 2021 and 20 September 2021 requiring, respectively, the Cassanitis and Mr Duardo to provide asset disclosure statements. Sam Cassaniti and David Cassaniti filed affidavits to that effect on 1 September 2021 and 2 September 2021 respectively, and Mr Duardo filed an affidavit to that effect on 5 October 2021. The content of these affidavits can be summarised as follows: (1) Sam Cassaniti swore that his assets were limited to $90.15 held in his personal bank account; $53.27 held in a joint bank account shared with his partner; unspecified remuneration paid to him on a weekly basis; and his personal effects. (2) David Cassaniti declared that his assets were limited to $28.03 held in his personal bank account; and his personal effects. (3) Mr Duardo swore that his assets were limited to $12,600 held in a joint bank account; twelve personal bank accounts, one of which held $500, and the balance of which had a balance of $0; unspecified remuneration paid to him on a weekly basis; shares in Accolade Advisory Pty Ltd (the second respondent) worth $100; cryptocurrency to the value of $1418; and his personal effects. 10 Apart from the assets at (1) to (3) above, the Cassanitis and Mr Duardo each gave evidence that they did not own, or have any interest in land or motor vehicles. Mr Duardo subsequently swore an affidavit on 16 March 2022 in which he disclosed that he had purchased a property at 10 Rosebank Avenue, Elizabeth Hills NSW 2170 (the Rosebank Ave Property). The purchase price was $1,420,000 and the contract for sale was dated 23 October 2021. The property settled on or around 7 December 2021. 11 In February 2022, the solicitors for the applicants undertook various searches in respect of the Cassanitis and Mr Duardo, including: (1) current and historical land title searches; (2) current land title searches; and (3) personal name extract searches. 12 The searches did not reveal that, at the time of those searches in February 2022, either of the Cassanitis held real property in their individual names, whether alone or jointly with any other entity or person. However, the searches revealed that Mr Duardo had an interest in the Rosebank Ave Property. The searches also revealed that Sam Cassaniti was, at that time, the current director and secretary of nineteen companies, including Mount Hunter NSW Pty Ltd, Goodman Court Pty Ltd, Raptor Collections Pty Ltd, Sheffield (Tas) Pty Ltd and Celera Pty Ltd. Critically, the searches revealed that Sam Cassaniti was the sole shareholder of Mount Hunter, Goodman, Raptor, Sheffield and Celera; and that David Cassaniti was the sole shareholder of Whistledixie Pty Ltd. 13 Upon receiving this information, the solicitors for the applicants did not undertake any further searches directed to ascertaining whether the relevant companies associated with the Cassanitis held property interests which may fall under the description of being under the control of the Cassanitis and arguably within the reach of the asset disclosure orders. No such searches were undertaken by the applicants in respect of these companies before the hearing of the extension application. That was so, notwithstanding that the applicants: (1) recognised that they bore the onus on the application to extend the freezing orders, and (2) invited the Court at the hearing of the extension application to conclude that the Cassanitis had not, in their respective asset disclosure affidavits, complied with the disclosure obligations imposed on them by the asset disclosure orders. That submission was directed to a contention that the Cassanitis had not disclosed their respective interests as beneficiaries of certain discretionary trusts. 14 At the hearing of the extension application, Mr Duardo's affidavit of 16 March 2022 was read. Counsel for the applicants contended that it was "virtually impossible" to reconcile the financial position of Mr Duardo, to which he had sworn in his asset disclosure affidavit dated 5 October 2021, with the subsequent purchase of the Rosebank Ave Property, shortly thereafter on 23 October 2021. Mr Duardo was the sole mortgagor and sole proprietor of the Rosebank Ave Property. Counsel for the applicants submitted that these circumstances meant that a risk of dissipation could be inferred, and that Mr Duardo was attempting to defeat creditors. Counsel for Mr Duardo contended that the Rosebank Ave Property was purchased after the making of the freezing order, and that the applicants' submission was purely speculative in nature. Counsel for Mr Duardo further submitted that Mr Duardo was not subject to any further application to put on further evidence in relation to his assets. 15 Against that background, the further evidence that the applicants seek to leave to rely on includes the following: (1) Title searches dated 25 February 2022 that show Mr Duardo purchased a property at 10 Rosebank Avenue, Elizabeth Hills NSW (Rosebank Avenue Property) as the sole registered proprietor on 23 October 2021 for $1,420,000. Mr Duardo's affidavit affirmed on 16 March 2022 disclosed that the Rosebank Property settled on 4 December 2021. A sale listing that reveals that the Rosebank Avenue Property was listed for sale on 29 August 2022. (2) A current and historical organisation extract and PPSR searches of Mount Hunter, and a title search for 515 Spring Creek Road, Mount Hunter NSW (Mount Hunter Property) which shows that Sam Cassaniti is the sole shareholder of Mount Hunter, and the latter is the registered proprietor of the Mount Hunter Property. A property valuation extracted from Realestate.com.au states that the estimated value of the Mount Hunter Property is $5,930,000. (3) Various company and PPSR searches of Goodman, Mount Hunter, Raptor, Sheffield and Celera, and title searches of the five properties of which those companies are respectively the registered proprietors. Sam Cassaniti was the sole director and sole shareholder. These companies are, respectively, the sole registered proprietors of the following properties: (a) 38 Dowling Street, Bardwell Valley NSW 2207; (b) 25 Calf Farm Road, Mount Hunter NSW 2570; (c) 11 Keiwarra Street, Kingsgrove NSW 2208; (d) 82 Hamptons Road, Sheffield TAS 7306; and (e) 66 Bong Bong Road, Horsley NSW 2530. The full title search of the Sheffield, TAS property is not found in the evidence. However, the title searches for the balance of the properties show that they each have a registered mortgage to Westpac Banking Corporation. The total combined value of the properties is estimated to be $14,375,000. (4) An ASIC Personal Name Extract of David Cassaniti which shows that he is the sole shareholder of Whistledixie, and a title search in relation to a property at 32 Brickfield Road, Ruse NSW (Brickfield Road Property). The title search shows that Whistledixie is the registered proprietor of the Brickfield Road Property, which is mortgaged to the Commonwealth Bank of Australia. The estimated value of this property is $798,000.

CONSIDERATION 16 The further evidence that the applicants seek leave to adduce is, in the main, not new evidence, in the sense that it was in existence before the April hearing. It is evidence that was available - indeed, publicly available - and which, with even moderate diligence, could readily have been served prior to the hearing of the interlocutory applications. 17 The applicants offer no explanation for why the evidence was not served in accordance with the Court timetable ahead of the hearing. The applicants did not attempt to explain their delay or give any account for why this evidence was not served until recently. 18 The manner in which the applicants have conducted these applications flies in the face of the obligations owed by parties under ss 37M and 37N of the Act. More so, when one has regard to the fact that the first applicant purports to be acting as a liquidator. The applicants' conduct has resulted in delay, wasted costs, including it would appear in the administration of the liquidation, and a waste of court time and resources. Litigation should not be run in this way. 19 However, without in any way detracting from what I have said in relation to the applicants' conduct, I have reluctantly, and with some reservation, decided that, on balance, having regard to the whole of the circumstances, leave should be granted to adduce the further evidence. 20 I have reached this conclusion for a number of reasons which may be briefly stated. First, the evidence which the applicants wish to lead appears to be significant and it is of a relatively narrow compass. Secondly, the respondents impacted by the grant of leave do not point to any specific prejudice that will result from leave being granted that cannot be ameliorated by an appropriate costs orders. Thirdly, I take into account that notwithstanding the dilatory way in which the applications have been conducted, at the end of the day, the proceedings are for the benefit of creditors, and to refuse the application has the potential, albeit indirectly, to adversely impact creditors. Finally, a significant factor in my decision is that the application is made in relation to reserved decisions in respect of interlocutory applications. The reality is that if the application to adduce further evidence is refused, then subject to whether it be an abuse of process to do so, the likelihood is that a new interlocutory application pursuing the same argument relying on the proposed further evidence would likely be pursued. It is not be desirable to allow that to occur when it is possible to avoid it by granting leave to adduce the evidence on the present application. It is in the interests of the future efficient conduct of the proceedings to grant leave in order to forestall yet another interlocutory application.

CONCLUSION 21 Accordingly, I will make orders permitting the applicants to rely on the further evidence the subject of this application and for the further steps necessary to finalise the outstanding interlocutory applications. 22 The appropriate time to determine the costs orders consequential on this application will be at the time the outstanding interlocutory applications are finalised. I will order that costs be reserved accordingly. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.

Associate: Dated: 23 September 2022 SCHEDULE OF PARTIES NSD 797 of 2021 Respondents Fourth Respondent: RELIANCE FINANCIAL SERVICES PTY LTD ACN 146317919 Fifth Respondent: DAVID CASSANITI Sixth Respondent: CARMELO DUARDO