Mouawad as liquidator of DCA Capital Pty Ltd (in liq) v Balanian

NYREE BALANIAN (and others named in the Schedule)

1. The first and fourth defendants' interlocutory process filed 16 December 2025 be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

(Delivered ex tempore, revised from the transcript)

1. On 10 April 2024, Markovic J made freezing orders against the defendants, and those orders were subsequently amended on 19 April 2024 and 10 May 2024.
2. The proceeding is in the docket of Cheeseman J, where it is substantially advanced. By way of illustration, the court file records there to have been 113 listings, and there are 30 transcripts on the court file.
3. Two of the defendants, Ashod Balanian and Nala State Pty Ltd - being the first and fourth defendants - now apply to amend the freezing orders. They also apply for orders that are aimed at having one of the underlying frozen assets in the form of cryptocurrency sold. I will return to that aspect.
4. Relevantly, the freezing orders restrain any dealing with assets of the defendants such as to reduce their residual value below $55 million, subject to the conventional exceptions. One of the frozen assets is a residential property in Ingleside, which is owned by Nala State. It is the family home of Mr Balanian where he, his wife and his children resided until recently.
5. On 11 September 2025, the first mortgagee, La Trobe Financial, took possession of the property and thereafter marketed it for sale. That was in order to settle its secured debt, currently said to be in the amount of about $5.7 million. Mr Balanian and his family now live at the home of his mother-in-law in North Ryde. The mortgagee in possession is expected to accept an offer for the purchase of the property at any time from today, hence the urgency of the matter and it being on the duty list.
6. The variation of the freezing orders is sought to enable Mr Balanian and Nala State to refinance the debt on the property. The refinance that has been offered has the following relevant features:

(1) It is for a total loan amount of $6,093,750 on a property valuation of $8,125,000.

(2) The existing first mortgage with La Trobe Financial will be paid in an amount of $5,722,021.90.

(3) The loan will carry interest at 8.99% per annum.

(4) The first three months' interest will be capitalised, whereafter interest will be payable in the amount of $45,652.34 per month in advance.

(5) The loan will be repayable after 12 months.

(6) The loan will be secured by a first mortgage over the property and a guarantee by Nyree Balanian, the third defendant.

1. The key feature of the proposed loan and security is that the property will be encumbered to a greater amount than it is currently, to the extent of approximately $300,000. That is to say the currently frozen asset will have a residue of about $300,000 less than what it currently has. That erodes the position of the plaintiffs.
2. A further difficulty is that there is no evidence of how the interest charges will be serviced or how the loan will be repaid after 12 months. There is, therefore, a risk that further interest will accrue on the loan at the substantial rate which will be secured by the mortgage. That is to say the position of the plaintiffs may be further eroded from the $300,000 figure already mentioned. That consideration also goes some way to answer the contention that to allow the mortgagee's sale to go ahead will result in wasted sale costs. That is because I can have no confidence that the property will not have to be sold in due course, and sale costs, therefore, incurred in any event.
3. In short, contrary to the submission on behalf of Mr Balanian, the relief that is sought will not maintain the status quo but will erode it. The defendants seek to meet that problem by referring to the hardship faced by Mr Balanian and his family by being out of the family home. They say at least the family will be returned to their home in the meanwhile if the relief that they seek is granted, and they can then make whatever arrangements they can to service the new loan or to sell the property themselves at a higher price than the price that may be achieved by the mortgagee in possession. Whilst I accept that there is hardship in being out of the family home, it is not apparent that that is necessarily because of the freezing orders. It is the mortgagee that has foreclosed on the loan and is selling the property as a mortgagee in possession, not the plaintiffs.
4. But, more particularly, there is no evidence to support a conclusion that the conventional exceptions to the freezing orders for living expenses and the like - in order 16 of the current freezing orders - are insufficient in this case such as to cause hardship. Mr Balanian has not taken the court into his confidence by deposing to his and his family's sources of income or support. I am, hence, unable to conclude that recourse to hardship is a sufficient basis to vary the freezing orders in the manner contended for. There is also no evidence to support the suggestion that Mr Balanian will likely be able to secure a better sale price than the current mortgagee in possession.
5. In summary, the position is as follows. Freezing orders were made for reasons that I must assume were sufficient to justify the orders. They have not been challenged. The orders should not be varied unless I am satisfied that they go further than what is necessary to protect the court's processes or because they are causing unjustified hardship. I am not satisfied as to the first matter because the proposed refinancing would erode the value of the frozen assets. I am not satisfied as to the second matter because there is no evidence to support it.
6. Mr Balanian initially also sought an order in relation to payment out to him of the residue of the proceeds of sale of another property at Rydalmere. That relief was ultimately abandoned. No more need be said about it.
7. The interlocutory application also seeks relief in relation to the staged sale of cryptocurrency assets. That relief is not urgent and is, in any event, very involved and not appropriately dealt with in the duty list. It raises difficult questions that are the subject of competing expert opinions. Even aside from urgency, it is not presently ripe to be dealt with. I will dismiss it for that reason, leaving it open to the defendants to apply again for that relief in a proper way so as to be dealt with by the docket judge.
8. The interlocutory application must accordingly be dismissed. Costs follow the event.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.

NALA STATE PTY LTD (RECEIVERS AND MANAGERS APPOINTED)