J.A.M.C. Nominees (Aust) Pty Ltd v Ciccarello [2025] FCA 1367

1. Mr Clinton Barker is a director of J.A.M.C. Nominees (Aust) Pty Ltd (JAMC). In August 2024, JAMC obtained judgment against Ciccarello Fitness Pty Ltd in the amount of $111,599.74. Mr Barker says that the judgment remains outstanding. In November 2024, a winding up order was made in respect of Ciccarello Fitness. JAMC and Mr Barker claim that Ciccarello Fitness was trading while insolvent before it was placed into liquidation. JAMC and Mr Barker have together commenced proceedings in this Court against Mr Jake Ciccarello who they say was the sole director of Ciccarello Fitness at the time the liabilities the subject of the judgment were incurred. They seek relief on the basis that s 588M of the Corporations Act 2001 (Cth) applies. It is concerned with instances where a director has breached the statutory duty under s 588G to prevent insolvent trading by the company of which that person is a director.
2. Where a director has contravened s 588G in relation to the incurring of an unsecured debt by a company and a creditor to whom the debt is owed has suffered loss or damage by reason of the company's insolvency and the company is being wound up then the creditor may, with the written consent of the company's liquidator, recover from the director an amount equal to the loss or damage: see s 588M and s 588R.
3. The proceedings commenced by JAMC and Mr Barker against Mr Ciccarello seek relief based upon s 588M. They also seek an order requiring the sale of a property in Pooraka, South Australia said to be owned by Mr Ciccarello. It appears to be Mr Ciccarello's residence.
4. JAMC and Mr Barker bring an ex parte interlocutory application for a 'charging order or caveat or any other order ... to secure judgment debts in favour of [JAMC]' and 'default judgment if [Mr Ciccarello] does not comply [with the] Federal Court Rules'. The application is supported by two affidavits of Mr Barker. They are brief and do not deal with any of the facts relied upon by JAMC and Mr Barker to support their claim of insolvent trading. There is no undertaking as to damages and the indications are that JAMC lacks the financial capacity to support any undertaking if it were to be forthcoming. A consent from the liquidator for JAMC to be able to commence proceedings under s 588M has been provided in the form of an email communication to Mr Barker from the liquidator.
5. JAMC is not legally represented. At the hearing of the interlocutory application conducted before me as duty judge, Mr Barker sought to appear on behalf of JAMC.
6. For the following reasons, I determined that (a) Mr Barker is not a proper party to the proceedings and the claim brought by him must be dismissed; (b) the interlocutory application must be dismissed; and (c) the question whether Mr Barker should be allowed to conduct the proceedings on behalf of JAMC is a matter that should be raised with the case managing judge once the matter has been allocated. I made orders accordingly and indicated that I would provide my reasons for doing so. These are my reasons.

1. The party with rights to pursue a claim under s 588M is the creditor. The judgment relied upon in support of the application is in favour of JAMC. The consent given by the liquidator is in favour of JAMC. No basis was suggested upon which there was a debt owed to Mr Barker. Yet, Mr Barker was named as the second plaintiff. It was obvious that Mr Barker has no personal claim under the statutory provisions relied upon and therefore he was not a proper party. For those reasons, I ordered that the claim brought by Mr Barker must be dismissed and JAMC be named as the sole plaintiff.

1. For the following reasons, no basis was demonstrated for making the interlocutory orders sought.
2. First, in the circumstances relied upon in support of the application, the Court has no power to make a charging order. As to a caveat, the right to lodge one depends upon whether JAMC has a caveatable interest. As to whether any such interest exists, the statutory claim brought by JAMC against Mr Ciccarello depends upon demonstrating that there is no secured interest. The absence of any secured interest means that there is no interest of that kind to support the caveat. There is nothing to indicate some other basis for a caveat to be lodged. Even if there were, the lodgement of a caveat is a matter for a party. It does not require a court order.
3. Second, it appears that what JAMC is seeking is a form of asset preservation order that would apply specifically to the Pooraka property to prevent its sale pending the outcome of the insolvent trading claim advanced by JAMC. The Court has issued a practice note as to the matters that must be addressed if a freezing order is sought. The evidence required to support such an application has not been provided.
4. Third, there is no evidence to provide the foundation for an arguable claim that s 588G may have been contravened and s 588M may apply. In order to obtain an asset preservation order, the party seeking the relief must demonstrate at least an arguable claim. It is a condition precedent to obtaining any form of interlocutory injunctive relief 'that "a plaintiff seeking an interlocutory injunction must be able to show sufficient colour of right to the final relief, in aid of which interlocutory relief is sought", the usual description of the sufficiency of that colour of right being the establishment of a serious question to be tried or a prima facie case': Minister for Immigration and Multicultural Affairs v MZAPC [2025] HCA 5 at [23] (Gageler CJ, Gordon, Gleeson and Jagot JJ), quoting Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 at [11] (Gleeson CJ).
5. Fourth, in order for an asset preservation order to be made, it must be demonstrated that there is a danger that the asset will be dealt with in a way that will mean that the plaintiff, if successful, will not be able to get any judgment satisfied. The danger must be sufficiently substantial to warrant the freezing order: Deputy Commissioner of Taxation v Huang [2021] HCA 43; (2021) 273 CLR 429 at [18] (Gageler, Keane, Gordon and Gleeson JJ). There is no evidence to suggest that the Pooraka property is for sale or that some other imminent steps may be taken to dispose of the property. There does not appear to have been any formal communication with Mr Ciccarello explaining the basis for the claim made in this Court and seeking an undertaking in relation to disposal of the property pending the resolution of these proceedings. These are steps that would be expected to be taken in a case of this kind. Here there is no evidence to found a concern that those steps are contemplated and are imminent.
6. Fifth, Mr Barker advanced generalised contentions to the effect that he believed Mr Ciccarello would try and do anything to avoid having the Pooraka property available to meet what he claimed to be a personal liability arising by reason of Mr Ciccarello allowing Ciccarello Fitness to trade whilst insolvent. As has been mentioned, there was no evidence to support contentions of that character. As to such concerns, Mr Ciccarello has now been served with the originating application. Therefore, he is on notice of the proceedings in this Court. In those circumstances, serious consequences are likely if Mr Ciccarello was to now transfer the Pooraka property for the purpose of avoiding meeting any judgment that may be entered in favour of JAMC in these proceedings.
7. Sixth, no undertaking as to damages has been provided by JAMC or Mr Barker. An undertaking of that kind is usually required as a condition of granting any asset preservation order. The purpose of requiring the undertaking is to protect the other party in the event that the claim made (in the present case the insolvent trading claim made by JAMC) is unsuccessful. In that regard, Mr Barker has informed the Court that he seeks to appear on behalf of JAMC because it lacks the funds to obtain legal representation. That statement raises concerns as to whether JAMC could support any such undertaking. It could be provided by Mr Barker personally, but no such undertaking has been given.

1. As to Mr Barker's request to appear for JAMC, I allowed him to make statements to the Court on the basis that I would consider his position when dealing with the interlocutory application. Rule 4.01(2) of the Federal Court Rules 2011 (Cth) provides that a corporation must not proceed in the Court other than by a lawyer. Rule 1.34 provides that the Court may dispense with compliance with any of the Rules. Matters to be considered when deciding whether to dispense with the requirement were considered in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12) [2012] FCA 289 at [15]- [21] (Flick J).
2. Having regard to the view that I reached to the effect that the interlocutory application must be dismissed, I considered the appropriate course to be to allow matters concerning the representation of JAMC to be considered by the case managing judge.

1. For the above reasons, I made orders that: (a) the substantive proceedings brought by the second plaintiff are dismissed; (b) the first plaintiff is renamed the plaintiff; and (c) the interlocutory application dated 3 November 2025 is dismissed. I also directed that a copy of the transcript of the hearing be provided to the parties.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.