//
[449]
[2025] VSC 438
General information, not legal advice.
Supreme Court of Victoria
2025-07-10
Connock J
Original judgment source is linked above.
FREEZING ORDERS - Freezing order - Applicable principles - Supreme Court (General Civil Procedure) Rules 2015 (Vic) ord 37A - Inherent jurisdiction and freezing orders - Ancillary orders general principles - Allegations of dishonesty - Good arguable case threshold - Exceptions and carve-outs to freezing orders - Quantum of freezing orders - Freezing orders and third parties - Undertaking as to damages - Security for damages undertaking - Discretionary consideration - Multiple causes of action and defendants - Ordinary living expenses exception - Legal expenses exception - Information disclosure orders - Security ordered - No fixed monetary limits on ordinary living expenses or reasonable legal expenses - Concessions regarding good arguable case and dissipation risk - Freezing orders made - Information disclosure ancillary orders made.
General Principles - Freezing Orders and Ancillary Orders 62
Freezing order and information disclosure order against Jim 82
Freezing order and information disclosure order against Elianne 102
Freezing order and information disclosure order against JKEK 108
Exceptions and carve-outs to the freezing orders 110
Undertakings and security for damages undertakings 115
1 By its amended summons filed 2 July 2025 (Summons), Refuse to Lose Pty Ltd (RTL) and Synochi Pty Ltd (Synochi) (together, the Plaintiffs) applied for freezing and information disclosure orders against the first defendant, Mr Jim Kostakis (Jim), the second defendant, Ms Elianne Kostakis (Elianne), the third defendant, JKEK Investments Pty Ltd (JKEK), and an information disclosure ancillary order against the fourth defendant, Premier Laser Hair Removal Pty Ltd (PLHR) (together, the Defendants),[1] pursuant to order 37A of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) and the inherent jurisdiction of the Court (Application).
2 Jim and Elianne owned and operated a business which traded as 'Australian Laser & Skin Clinics' (ALSC Business). ALSC provided laser hair removal, skin treatments and related cosmetic therapies in the Melbourne area, both as a franchisor and as an operator of franchisor-owned clinics.
3 RTL and Synochi are part of a group of companies said to be owned by the family of Peter Arvanitis (Peter) and his wife Areti Arvanitis (Areti). Areti is said to be the ultimate sole owner of each of RTL and Synochi through her company Ultimate Meaning Pty Ltd, the sole shareholder of each of the Plaintiffs. Synochi is the trustee of the Synochi Trust and a company said to be engaged in the business of money lending. Luke Brady (Luke) is the chief executive officer of RTL and Synochi.
4 Jim and Elianne met Peter and Areti in 2016 when on holiday with their respective families and became friends and, during 2021, business partners.[2] Their friendship and business relationship broke down in late 2024 or early 2025 in connection with the disputes the subject of this proceeding.
5 In about mid-2021 Peter and Areti's interests, through RTL, acquired 50% of the ALSC Business. The corporate structure is as recorded in the corporate diagram provided to the Court by the Plaintiffs which comprises Annexure A to these reasons (Corporate Diagram). As was common ground (and is reflected in part in the Corporate Diagram), RTL paid $3.25 million to acquire a 50% interest in the following entities:
ALSC Australasia Pty Ltd (ALSC Australasia), being the entity which became the owner and operator of the franchising business;
ALSC Admin Pty Ltd, which marketed the ALSC brand for the benefit of both ALSC Australasia and franchisees (ALSC Admin); and
Australian Cosmetic & Laser Clinic Pty Ltd (ACLC) as trustee for The Australian Cosmetic & Laser Clinic Unit Trust (ACLC Unit Trust), which was a franchisor-owned ALSC clinic, operating in Moonee Ponds, Victoria.
RTL also acquired 50% of the units in the ACLC Unit Trust.
6 In mid-2022, RTL and PLHR incorporated ALSC Mornington Pty Ltd (ALSC Mornington), each holding 50% of the shares, through which they purchased the ALSC franchisee clinic at Mornington and ran it as a franchisor-owned clinic. The four ALSC entities referred to above are referred to as the ALSC Entities in these reasons.
7 Jim and Elianne's 50% interest in the ALSC Business was held through PLHR, which also held 50% of the units in the ACLC Trust. Jim held 51% of the shares in PLHR and is and was its sole director, and Elianne held the other 49% of the shares. Elianne is the sole director and shareholder of JKEK, which is the trustee of the J & E Investments Trust (J&E Trust).
8 It is alleged that at all relevant times Jim was the sole director of each of the ALSC Entities. At Jim's instigation, after consulting the accountant for the ALSC Entities, but allegedly without Peter, Areti, or Luke's knowledge, administrators were appointed to each of the ALSC Entities on 4 April 2025, with liquidators being appointed not long thereafter.
9 In this proceeding the Plaintiffs make many claims against the Defendants in connection with allegations regarding, among other things:
RTL's acquisition of a 50% interest in the ALSC Business based on misleading or deceptive conduct regarding the EBITDA, financial performance, and value of the ALSC Business;
a loan granted by Synochi to JKEK, where that loan was paid out by JKEK using separate loan funds advanced to JKEK by National Australia Bank (NAB) that were secured by, among other things, guarantees and other security interests (ALSC Securities) given to NAB by Jim over all of the assets of ALSC Australasia, ALSC Mornington and ACLC as trustee for the ACLC Unit Trust (ALSC Security Entities) for the personal benefit of Jim and Elianne, without the knowledge of Peter, Areti, Luke, or the Plaintiffs, and for no benefit to the ALSC Business; and
Jim making or obtaining alleged unauthorised or inappropriate withdrawals, benefits, and payments from the ALSC Entities for the benefit of Jim, Elianne and their associated entities, of which approximately $493,000 was said not to have been repaid.
10 Jim, Elianne and their two children relocated permanently to Dubai in early December 2024. At that time a property in the name of Elianne at 67 Were Street, Brighton, Victoria (Brighton Property), had been sold (in September 2024) for $10.25 million, and the sale was due to complete on 10 July 2025. The Court was informed that this would result in the payment of net settlement proceeds to Elianne of approximately $2.448 million. The settlement was very recently deferred until 10 July 2026.
11 The Application was heard urgently on 8 and 9 July 2025 (Hearing), and the following day, 10 July 2025, I delivered my ruling orally, with reasons to follow. These are those reasons, and for the reasons that follow, I concluded that:
A freezing order and information disclosure order should be made against Jim.
A freezing order and information disclosure order should be made against Elianne.
A freezing order and information disclosure order should be made against JKEK.
An information disclosure ancillary order should be made against PLHR.
The Plaintiffs' undertakings as to damages should be supported by security in the total sum of $1 million, or such other sum as is agreed between the parties.
12 The orders against each of the Defendants were made and authenticated on 10 July 2025.
13 The material relied upon for this interlocutory application was voluminous, with the many affidavits alone comprising more than 2,400 pages.[3] The Plaintiffs relied upon:
four affidavits of Luke, as chief executive officer of the Plaintiffs, sworn on 2 June 2025 (First Brady Affidavit), 20 June 2025 (Second Brady Affidavit), 4 July 2025 (Third Brady Affidavit), and 8 July 2025 (Fourth Brady Affidavit);
three affidavits of Peter, as former director of and present consultant to the Plaintiffs, sworn on 3 June 2025 (First Arvanitis Affidavit), 16 June 2025 (Second Arvanitis Affidavit), and 19 June 2025 (Third Arvanitis Affidavit);
written submissions[4] filed 20 June 2025, and reply written submissions dated 4 July 2025, which were supplemented by oral submissions at the Hearing;
an Amended Table of Claims;
the parties' Joint Chronology; and
a NAB customer acknowledgement document of JKEK and executed by Elianne as sole director and company secretary of JKEK.[5]
five affidavits of Ms Clarisse Hui-Ru Lam, a solicitor in the employ of the solicitors for the Defendants, sworn on 6 June 2025 (First Lam Affidavit), 20 June 2025 (Second Lam Affidavit), 30 June 2025 (Third Lam Affidavit), 2 July 2025 (Fourth Lam Affidavit), and 3 July 2025 (Fifth Lam Affidavit);
written submissions dated 1 July 2025 and supplementary submissions[6] filed 7 July 2025, which were supplemented by oral submissions from counsel for the Defendants during the Hearing;
aspects of the evidence filed by the Plaintiffs;[7] and
the Joint Chronology.
15 There were no objections taken to the admissibility of any particular paragraphs of the affidavit evidence or exhibited material relied upon by the parties, although each party made submissions regarding the weight and persuasive force of aspects of the evidence.
16 Prior to delivering my ruling at 2:15pm on 10 July 2025, I had read and considered all of the material relied upon, including the oral submissions.[8]
17 This proceeding was commenced by writ on 15 April 2025. Following an urgent hearing held before me on 6 June 2025 for the purpose of addressing interim orders, Elianne, by her counsel, undertook that she would not (whether by herself or through her agents or affiliates) cause the settlement of the sale of the Brighton Property to occur earlier than 10 July 2025.[9] Timetabling directions were also made by orders dated 10 June 2025 to facilitate the hearing of the Application on 8 July 2025, two days before the scheduled settlement of the Brighton Property on 10 July 2025.
18 Issues arose between the parties in relation to compliance with the 10 June 2025 timetabling orders, and extension and other orders were made on the papers on 24 June 2025. Further issues arose between the parties in connection with, among other things, the matters referred to in the Third Lam Affidavit and, in particular, foreshadowed issues and proposed changes to the settlement date of the sale of the Brighton Property. An urgent hearing was held before me on 1 July 2025 and orders were made further extending parts of the timetable, and granting leave to the Plaintiffs to file and serve the Summons and a further amended statement of claim (FASOC). At that hearing each of the Defendants, by their counsel, gave an undertaking to the Court in respect of the payment of any further deposit monies or proceeds of sale from the Brighton Property being retained in their solicitors' trust account, the details of which are recorded in the orders made on 1 July 2025.
19 The timing of relevant events was said to be as reflected in the Joint Chronology, a copy of which comprises Annexure B to these reasons.[10] The Plaintiffs' position regarding the factual background was also evident from the affidavit material they relied on, the pleadings, and their written and oral submissions. The relevant background was said by the Plaintiffs to include the following.
20 Jim was said to have been the source of the funds for the acquisition of the Brighton Property, through the following property transactions.[11] On 9 June 2020, Jim became the sole registered proprietor of the property at 30 Moffat Street, Brighton, Victoria (30 Moffat Street), having purchased it for $4.65 million. On 15 October 2021, Jim settled the sale of 30 Moffat Street for $6.56 million. On the same day Elianne became the sole registered proprietor of the property at 14 Edro Avenue, Brighton East (14 Edro Avenue), having purchased it for $5.5 million. On 24 February 2023, Elianne settled the sale of 14 Edro Avenue for $5.85 million and on the same day Elianne became the sole registered proprietor of the Brighton Property, having purchased it for $4.44 million.
RTL's purchase of its 50% interest in the ALSC Entities
21 In April 2021, Jim, Peter and Luke entered negotiations in relation to RTL's potential investment in the ALSC Business. At meetings on 27 April 2021 and 15 May 2021, Jim allegedly made verbal representations relied on by Peter to the effect that the historical combined EBITDA of the corporate entities comprising the ALSC Business was $1.2 million, and that the entities would achieve at least the same in the future. Peter deposed that, due to his close relationship with Jim, he did not review the ALSC Entities' financial statements in detail, instead relying on a summary prepared by a corporate advisory firm. Luke said that he received emails and other documents from Jim but due to other work pressures did not consider them at the time.
22 At around the same time, in April and May 2021, it was said that RTL proposed that Peter and Areti's son (Stephen) become a director of each company in which RTL was to acquire a 50% interest.
23 On 28 July 2021, RTL and PLHR entered into a shareholders agreement with ALSC Australasia in relation to ALSC's franchising business (Shareholders Agreement) and on 30 July 2021, RTL advanced $3.25 million to acquire a 50% interest in the ALSC Entities. That amount was said to have been calculated by reference to an agreed 5.5 times multiple of the allegedly represented annual EBITDA of $1.2 million, which was then halved to reflect RTL's 50% interest.[12] The Plaintiffs contend that the ALSC Entities never had or did generate the $1.2 million EBITDA said to have been promised and represented by Jim.
24 On 1 December 2021, Luke is said to have met with Jim and Jim's accountant, during which Jim proposed that he remain the sole director rather than Peter's son, Stephen, being appointed as co-director. Luke said that he trusted Jim and agreed.
Alleged unauthorised withdrawals, benefits and withholding of funds from the ALSC Entities by Jim
25 Luke deposed that he discovered numerous unauthorised and improper withdrawals, withholdings and payments made by Jim from funds of the ALSC Entities for the benefit of Jim, Elianne and JKEK that were not disclosed to Luke, Peter or Areti (Unauthorised Withdrawals). Luke's evidence regarding these amounts included the following.
26 On 18 October 2021, Jim caused ACLC as trustee for the ACLC Unit Trust to draw down loan funds of $180,000 from NAB (October 2021 Personal Loan), which were transferred as: $177,930 to an unstated account as 'Funds Required for Settlement'; and $2,070 to the account '252292687' as 'For Fees and Charges'. Luke deposed that he believed the $177,930 related to the settlement of Elianne's purchase of 14 Edro Avenue on 15 October 2021. By 21 December 2021, Jim had repaid the October 2021 Personal Loan, but Luke deposed that, as a result of interest and service fees, and $6,000 of the repayment coming from a bank account of ACLC, ACLC incurred costs of $8,240.76 in obtaining the loan.
27 From June 2022 onwards, Jim withdrew funds of at least $126,500 from the 'tax' accounts of ALSC Australasia, ACLC, and ALSC Mornington (Tax Account Withdrawals), which resulted in these entities having insufficient funds to pay their respective tax liabilities and the need to seek payment plans with the ATO.
28 On 24 November 2022, Jim obtained a further personal loan for $141,000 in the name of ACLC as trustee for the ACLC Unit Trust and transferred that amount with the narration 'Funds to 226457127 J Ek Investments Pty L', which Luke believes was to JKEK (November 2022 Personal Loan). By 24 February 2023, Jim had repaid the November 2022 Personal Loan, but Luke deposed that, as a result of interest and service fees, and $9,000 of the repayment coming from a bank account of ACLC, ACLC incurred costs of $12,064.19 in obtaining the loan.
29 From July 2023 to December 2024, ACLC made gross salary payments to Elianne totalling $85,384.53 (Elianne Salary Payments) when it was said that Elianne was never employed by ACLC during that period.
30 From 23 August 2023, ALSC Admin incurred interest expenses said to be the result of Jim using an American Express credit card in the name of ALSC Admin to pay personal expenses (Credit Card Expenses). The total costs incurred by ALSC Admin in relation to these credit card expenses was said to be at least $75,500.
31 At a meeting on 18 September 2023, Peter and Luke raised with Jim and Elianne the November 2022 Personal Loan, the Credit Card Expenses and the Tax Account Withdrawals. In notes of the meeting exhibited to Luke's affidavit, it was recorded that Peter explained to Elianne that her husband's conduct was 'criminal and to the point of fraud' and in breach of the Shareholders Agreement. Luke deposed that Jim and Elianne acknowledged the conduct and that Jim agreed to repay the amounts but that this did not occur.
32 In about February 2024, Jim obtained an $82,000 American Express business loan through ALSC Admin (AMEX Loan) and Jim withdrew the funds on the same day, after which ALSC Admin incurred ongoing interest charges.
33 On 6 June 2024, Luke sent an email to Jim regarding the ALSC Entities' tax debts and requesting repayment of monies after the Brighton Property is sold. The email stated in part as follows:[13]
Jim,
I've meet with Peter and Areti this morning to discuss the current operational/liquidity issues at ALSC Group.
...
This can only change after the property located at 67 Were Street Brighton is sold/settled and the below is repaid
1. Cash $126,500 plus interest cost associated with the ATO repayment plans
2. Business loan - $82,000 plus interest costs
3. Business Credit card - plus interest costs
...
Our personal issues/affairs cannot get in the way of business which has clearly occurred here. This has now put the businesses at significant risk due to the lack of transparency to the other 50% shareholder.
...
Arvanitis notes the issue with the retention however we cannot look past the AMEX loan, Credit Card, and withdrawal of funds noting some points have previously been raised.
...
34 Prior to sending the email Luke says he had been told by Jim that he and Elianne had no money to repay the amounts and that this would not change until after the settlement of the sale of the Brighton Property.
35 According to a report generated from the Xero platform, ALSC Australasia transferred $34,615.38 with narrations of or similar to 'Jim Kostakis - Consulting' and 'J&E Investments - Management & Consulting Fees' (Consulting Fees). Luke deposed that he discovered this in February 2025 despite numerous prior conversations with Jim about not taking consulting fees, which it was said Jim had agreed to, and agreed that he would continue with his salary.
36 From about mid-September to December 2024, Jim was said to have operated for his benefit the ALSC franchisee clinics in Reservoir and Ringtail, which, unbeknownst to Peter and Luke, were owned by corporations of which Jim was a director until 6 and 25 November 2024. Luke's evidence addressed the discussions with Jim about these clinics and that Jim had proposed that they be purchased by RTL and PLHR to keep marketing and royalty fees coming in to ALSC Australasia. Jim then proposed that his stepdaughter, Chantalle, take over the two clinics, which appears is what occurred. However, Luke's evidence was to the effect that Jim failed to disclose that he was to have an interest in the clinics and was a director. Luke deposed that, to his knowledge, the Reservoir and Ringtail franchises did not pay any royalty to ALSC Australasia or any marketing fee to ALSC Admin in respect of the period from 19 September 2024 to 21 December 2024. He estimates that total royalties of $44,100 and marketing fees of $14,700 were payable over that time.
37 On 3 December 2024, Peter and Luke met with Jim. Among other things, Peter spoke to Jim about the Consulting Fees and the AMEX Loan. Luke then asked Jim to sign a loan agreement for $284,500 with Jim as borrower and ALSC Australasia, ALSC Admin, ALSC Mornington and ACLC as lenders (December 2024 Loan Agreement), which Jim did. Later that day, Jim sent to Luke an email requesting a copy of the contract and saying, 'I'm unsure of the details since I was quite flustered and revved up at the time when I signed where you showed me to sign without fully understanding the content. [...] Additionally, I noticed that the figure mentioned in the document lacked a detailed breakdown, and I don't believe it accurately reflects what I owe. I'm more than willing to settle my obligations, but I would like to see a clear explanation of the charges.'
38 Luke deposed that at the time the December 2024 Loan Agreement was signed he was not aware of the Elianne Salary Payments or the October 2021 Personal Loan and therefore the relevant amounts were not included in the December 2024 Loan Agreement. The $284,500 amount the subject of the December 2024 Loan Agreement was said to have been made up of the $126,500 Tax Account Withdrawals, $82,500 in respect of the AMEX Loan and $75,500 in respect of the Credit Card Expenses.
Grant of security over the ALSC Entities to NAB to refinance the Synochi Loan to JKEK
39 Following the purchase of the Brighton Property in February 2023, Jim and Elianne began construction work. In November 2023 and July 2024, at the alleged request of Jim to Luke, Synochi advanced a loan to JKEK, in its own capacity and as trustee for the J&E Trust, ultimately totalling $1.3 million (Synochi Loan). The Synochi Loan was recorded in a loan deed executed on 28 November 2023 (Synochi Loan Deed) and varied by a variation deed executed on 2 July 2024 (Synochi Variation Deed). As security for monies owed under the Synochi Loan, Synochi was provided with a second registered mortgage over the Brighton Property (Synochi Mortgage) and written guarantees from Jim and Elianne. Repayment was due on 31 December 2024 and interest was payable at 10% per annum on the first advance, and 20% per annum on the subsequent advances. In the event of default, interest was payable at 20% per annum for the first advance, and 25% per annum for the subsequent advances. Further, the Synochi Loan Deed included a term that Synochi as lender, JKEK as borrower, and Jim and Elianne as guarantors, would each perform their obligations in good faith and reasonably.
40 In May 2024, Jim sent to Luke an email stating, among other things, 'I don't have a dollar until I sell my house.' On 2 October 2024, Jim told Peter and Luke that he and Elianne were in the process of sourcing a further loan from NAB to obtain the funds required to pay out the Synochi Loan and discharge the Synochi Mortgage (NAB Synochi Loan). Upon Luke asking how NAB could consider approving such a loan given Luke's understanding that Jim and Elianne did not have the income necessary to service it, Jim allegedly responded, 'I don't know.'
41 On 25 November 2024, NAB sent to Jim written confirmation that it had approved a $1.375 million loan facility for JKEK and enclosed an accompanying guarantee and indemnity which listed as guarantors Elianne, Jim, as well as ACLC as trustee for the ACLC Unit Trust, ALSC Mornington, and ALSC Australasia. On 27 November 2024, Elianne, as sole director and company secretary of JKEK, signed the loan acceptance document (NAB Synochi Loan Acceptance Document). The NAB Synochi Loan Acceptance Document stated that as security for monies owed under the NAB Synochi Loan, NAB was provided with (among other things) a guarantee and indemnity supported by a security over all present and future rights, property and undertaking of ACLC (as trustee for the ACLC Unit Trust), ALSC Mornington, and ALSC Australasia.
42 Pursuant to the NAB Synochi Loan, on 28 November 2024, NAB transferred to Synochi the amount required to pay out the Synochi Loan and discharge the Synochi Mortgage over the Brighton Property. It is said that none of the Plaintiffs, Peter, Areti or Luke, were aware that Jim and Elianne were using the ALSC Securities for their personal affairs and that, had they been aware, Synochi would not have accepted repayment or discharged the Synochi Mortgage over the Brighton Property.
43 Luke deposed that, without the grant of the ALSC Securities, Jim and Elianne would have been unable to obtain a loan on better terms than the Synochi Loan, and therefore the Synochi Loan would not have been repaid on the due date of 31 December 2024, or at all until the sale of the Brighton Property. It was said that JKEK therefore would have been in default, and accumulating interest at the default rate under the Synochi Loan between 1 January and 10 July 2025, which during the Hearing was revised to 10 July 2026 given Ms Lam's evidence in the Fourth Lam Affidavit regarding the deferral of the settlement of the sale of the Brighton Property.
44 As mentioned, in December 2024, Jim and Elianne permanently relocated to Dubai with their children and they remain in Dubai.
45 On 4 April 2025 and without consulting or informing Luke, Peter or Areti, Jim placed each of the ALSC Entities into administration. On 21 May 2025, creditors voted to appoint liquidators to each of the ALSC Entities.
46 The Plaintiffs' evidence, and particularly the evidence of Luke, also included evidence regarding, among other things: what was said to be RTL's overpayment for its share in the ALSC Business based on alleged misleading representations; the amounts of the Unauthorised Withdrawals; the claimed total loss of RTL's investment as a result of the Unauthorised Withdrawals and the ALSC Securities being given to NAB for the personal benefit of Jim, Elianne and JKEK; Deloitte's financial statements for the 2023 and 2024 financial years recording the alleged sound financial position of the ALSC Entities; and evidence regarding the value of RTL's interest in the ALSC Entities. Although the detail of all of this evidence need not be set out here, aspects of it are further addressed in the sections of these reasons below that deal with the parties' respective submissions and my later consideration of the same.
47 Neither Jim nor Elianne filed any affidavits and the Defendants relied upon the five Lam Affidavits, which largely comprised evidence given on information and belief based on instructions from Jim and Elianne in Dubai. Although it is not necessary or desirable to set out all of the detail regarding the Defendants' position regarding the background, that which follows, when read with the Defendants' written submissions, gives reasonable insight regarding the same.
48 It may also be noted that the competing lengthy affidavit materials of the Plaintiffs and the Defendants, the Joint Chronology, and the competing written and oral submissions, revealed that there are many issues of disputed fact for trial, particularly between Jim on the one hand and Peter and Luke on the other, and also revealed that there will be material issues of credit arising in respect of (at least) each of Jim, Elianne, Peter and Luke.
49 The First Lam Affidavit exhibited correspondence passing between the Plaintiffs' solicitors in connection with the proceeding and the foreshadowed freezing order application, as well as a copy of the contract of sale for the Brighton Property between Elianne as vendor and Mr Terry Spasevski (Terry) as purchaser.
50 The Second Lam Affidavit addressed events and communications between the solicitors for the parties following the hearing on 6 June 2025 and exhibited relevant communications and correspondence, the detail of which need not be set out. In substance, this affidavit was directed towards complaints by the Defendants about the Plaintiffs' alleged non-compliance with timetabling orders, the receipt of a proposed further amended statement of claim, and seeking adjustments and extensions to the timetabling orders. This resulted in timetabling and other adjustments being made by orders dated 24 June 2025.
51 The Third Lam Affidavit primarily addressed circumstances relating to the settlement of the sale of the Brighton Property that had not previously been traversed or disclosed to the Court at the earlier hearing, including the proposed deferral of the settlement of the sale from 10 July 2025 to 10 July 2026.
52 The Fourth Lam Affidavit addressed numerous factual matters on the basis of instructions said to have been given to Ms Lam. The matters addressed by Ms Lam included those referred to below.
53 The structure of the ALSC Entities and the nature of the ALSC Business.
54 Peter being the founder of the aged care company Estia Health that was acquired by Bain Capital for a substantial sum in December 2023; Peter's alleged involvement with aged care homes investigated in connection with the COVID-19 pandemic; and Peter and Areti's departure from Australia for Greece in December 2021 in what were said to be circumstances associated with the aged care homes and the COVID-19 pandemic.
55 RTL and Synochi operating as investment 'shell companies' for Peter and Areti, the absence of ownership of property in Australia by RTL or Synochi, and Jim's concern that any undertaking as to damages by RTL or Synochi would be of no value given the absence of assets in Australia.
56 The previous relationship between Jim, Elianne, Peter and Areti, and how they came to know each other and became involved together in the ALSC Business.
57 Elianne's instructions regarding: her role as predominantly a stay-at-home mum; her working part-time in the ALSC Business over the years and the nature of her duties; her absence of access to the bank account or Xero accounts of the ALSC Entities or any other entities comprising the ALSC Business; and Jim managing not only the affairs of the ALSC Business, but 'all of JKEK's affairs'. In this context Elianne is said to have instructed Ms Lam that: she signed 'whatever Jim placed in front of her'; that it was not her practice to read the documents that she signed; and that even if she read documents, she expects that she would not understand their content. She informed Ms Lam, for example, that she knows what a home mortgage is but does not know what a 'security' is.
58 Ms Lam also addressed the background to what was described as Peter's acquisition of an interest in the ALSC Business, and meetings and discussions regarding the same, parts of which revealed the extent to which contested issues of fact will arise in this proceeding. Ms Lam deposed that Jim instructed her that in April 2021, Jim, Elianne, Peter and Areti had a meeting the purpose of which was to let Peter and Areti know that Jim and Elianne did not want to mix friendship and business. It was said that at this meeting:
Jim expressed his reluctance to Peter to sell the ALSC Business as the COVID‑19 restrictions caused uncertainty in relation to when the clinics would be able to reopen and trade.
Peter was still interested in acquiring a part of the ALSC Business and said to Jim words to the effect of: 'it was just money'. Peter represented to Jim that together they could grow the ALSC Business and either sell it to a private equity firm or float it on the stock market, as Peter had done with his previous ventures.
Peter emphasised to Jim that Peter had the finances on hand to grow the ALSC Business and that he 'had [Jim's] back'.
Peter further represented that upon his acquisition of part of the ALSC Business, nothing would change in the manner in which Jim operated the business and that Jim could continue to run the business as he always had. Peter said that he would work behind the scenes in the ALSC Business and also act as a personal adviser to Jim.
On the basis of the above representations and promises, Jim verbally accepted Peter's offer to acquire part of the ALSC Business.
59 The evidence included evidence regarding the pre-sale negotiations that took place between, among others, Peter, Jim and Luke regarding the acquisition of the interests in the ALSC Business and the financial and other documents and communications that were exchanged regarding the same. It is again evident from aspects of this evidence that there are disputed questions of fact between the parties regarding the oral and other communications that took place in the lead up to the acquisition, including the extent of reliance on the same by Peter and Luke. For example, in paragraphs 58 to 68 of the Fourth Lam Affidavit, Ms Lam's evidence included the following:[14]
A copy of this email and its attachments is at pages 116-207 of PA-1.
...
Purchase price of the ALSC Business
60 Ms Lam also deposed to the circumstances leading to the absence of any Arvanitis-connected director of the ALSC Entities, including Peter informing Jim that he did not want to be a director, that he did not want his son Stephen being a director, and Jim not recalling RTL suggesting that anyone else be appointed a director of the ALSC Entities on Peter's behalf.
61 Ms Lam addressed the role of Luke, including as to the nature and frequency of communications between Jim and Luke, with examples given, including that Luke was said to be involved in procuring loans for the ALSC Business.
62 Ms Lam's evidence addressed Jim's responses to the allegations about the Unauthorised Withdrawals from the ALSC Entities. Jim was said to have understood that funds could be borrowed if he needed personal funds, in the manner of advanced directors' drawings, and that he understood that Ms De Pace, the bookkeeper, was recording loan amounts in the name of PLHR or Jim in the business general ledger and posting the borrowings and repayments to the loan accounts at or about the time they occurred. Through Ms Lam, Jim also addressed the December 2024 Loan Agreement and the circumstances in which that was signed by Jim, and his position that he had stopped borrowing money from the ALSC Entities by the time he executed the agreement in December 2024.
63 The dealings with the Ringwood and Reservoir clinics in August/September 2024 were also addressed in connection with the prospect of the franchisee entities going into liquidation, the proposed acquisition of these clinics by Jim's stepdaughter (Chantalle), and conversations and WhatsApp messages regarding Luke's knowledge of the same. Ms Lam deposed to Jim's reasons for involvement with those clinics being to assist Chantalle, and that the waiving of marketing and royalty fees for the first three months of a new franchisee was consistent with Jim's practice over many years.
64 Ms Lam addressed Jim's employment within the ALSC Entities and the circumstances in which it was said that he was going to change his status from an employee on a salary to contractor paid consulting fees. This was said to have been discussed and agreed with Luke in about October 2024, with Luke agreeing to the arrangement on the basis that Jim's pay would not exceed the $120,000 that he was currently earning, which Jim said did not occur.
65 Through Ms Lam, Jim also addressed the Synochi Loan and the circumstances in which it was obtained and later repaid. Ms Lam's evidence on this topic included the following:
66 Through Ms Lam, Jim also further addressed the NAB Synochi Loan and the ALSC Securities given in support of the NAB Synochi Loan. The loan was said to be primarily supported by a mortgage over the Brighton Property, with Jim and Elianne listed as guarantors. Jim said that there was a low risk that the ALSC Securities were going to be called upon because the Brighton Property had ample equity beyond secured borrowings, and that the loans would be paid out in full from the Brighton Property settlement proceeds. Reference was also made to an email from NAB dated 1 May 2025 said to confirm that the NAB Synochi Loan would be fully paid out from the sale proceeds of the Brighton Property so that any other securities for the loans would be discharged at that point. This was said to confirm that the NAB does not intend to call upon the ALSC Securities.
67 Ms Lam's evidence also addressed the circumstances in which the ALSC Entities were placed into administration in April 2025, which, in part, was addressed as follows:
68 Ms Lam was informed by Jim that, despite his best efforts, he was not able to save the ALSC Business, noting that Peter had already said that he was not prepared to invest any more money in the business. Jim said he had no readily available additional funds to contribute to the ALSC Business and was therefore left with no choice but to appoint an administrator over the ALSC Entities on 4 April 2025. Ms Lam's evidence also addressed Jim's instructions regarding: the administration of the ALSC Entities and events leading up to administration, including discussions with the accountants and being warned about trading whilst insolvent; advice received that Jim should liquidate the ALSC Business sooner rather than later; consulting Richard Rohrt to discuss his concerns; communications between Peter and Jim regarding disputes they were having at about this time; Jim feeling threatened by Peter's communications, including those regarding his relocation to Dubai; and Jim's consultation with Mr Rohrt, and advice as to the solvency position, causing him to have the ALSC Entities appoint Mr Rohrt as their administrator. Ms Lam's evidence also addressed what was said to be Luke's ongoing access to banking records and business records prior to administration, and the content of the administrator's reports for each of the ALSC Entities.[16]
69 With respect to the move to Dubai, Ms Lam deposed that Jim said that he and Elianne had been planning to move to Dubai since late 2022 as they had friends and family there and saw opportunities in the laser cosmetic industry. Jim said they had been to Dubai many times, loved the climate, people and culture, and Elianne had always wanted to move there. The family had stayed there for three weeks during the December 2023 to January 2024 school holidays to experience the place and to assess whether a permanent move was right for their family. At that time Jim said they inspected properties and their children attended school interviews. This trip was said to have cemented Jim and Elianne's decision to move to Dubai to start a new life and their children were said to have been registered for enrolment on 28 February 2024 to start school the following year in January 2025. Relevant documents were exhibited.
70 As to how the business was to be run remotely, Ms Lam deposed that she was instructed that before moving to Dubai, Jim had set up the ALSC Business to ensure that area managers were able to oversee the day-to-day operations of the business, supervised by Jim remotely. Further, Jim had pre-planned quarterly visits to Australia, and had returned to Australia in March 2025 where he visited multiple clinics and met with management.
71 Through Ms Lam, Jim also addressed JKEK's investment in the Exus Capital Property Fund, being $100,000 in Fund 1, $75,000 in Fund 2, and $75,000 in Fund 3. Statements received on 24 March 2025 were said to indicate that the value of JKEK's investment totalled $365,982.50, being $136,550 with respect to Fund 1; $186,555 with respect to Fund 2; and $42,877.50 with respect to Fund 3.
72 In the Fifth Lam Affidavit, Ms Lam addressed Jim and Elianne's instructions regarding what were said to be the consequences of a freezing order on the Defendants, including the financial impact, and also addressed details of living expenses and legal costs. It was said that Jim and Elianne were concerned that if a freezing order was made, especially if of a sizeable value, it would unduly constrain their ability to manage their own and their children's lives, including their ability to complete their schooling at their current school in Dubai (noting that one child is in year 12), and severely inhibit their ability to make a living and to provide care for their family. Two examples regarding the provision of medical care and funding were given but need not be detailed here.
73 With respect to living expenses, Ms Lam was informed by Jim that the family's current weekly living expenses totalled $28,884.81, comprising the matters set out in the living expenses table in the Fifth Lam Affidavit, to which I refer but will not set out.[17] With respect to legal costs, Ms Lam deposed that as at 30 June 2025 the Defendants' outstanding legal costs were approximately $250,000, and it was noted that the Plaintiffs' pleadings had already changed several times and remained problematic, and that this required attention and increased the Defendants' costs in preparing to respond to them. It was also said that the freezing order application and the way that it had been prosecuted, including the length of the submissions and the volume of material exhibited to the five affidavits that the Plaintiffs had filed at that time, had significantly escalated the costs of seeking to meet the Application. Ms Lam said that, given that the hearing of the freezing order application was yet to be held, that the Plaintiffs' pleadings may still be challenged, a defence is yet to be filed, and none of the usual pre-trial steps have occurred, she anticipated that the Defendants' legal costs for the next stage of the proceeding up to mediation would be in the vicinity of $100,000.
74 In its 70-page FASOC the Plaintiffs make many claims against the Defendants, invoking a range of causes of action, and seeking extensive relief in their 27‑paragraph[18] prayer for relief. The various claims, causes of action, and relief claimed were summarised in an Amended Table of Claims relied on by the Plaintiffs that was prepared at my request. Although I have considered and reviewed the detail of the FASOC, it is convenient to set out in these reasons the Amended Table of Claims, which I do below in almost identical terms to the form in which it was filed.
[A] Claim by RTL for MDC in pre-sale negotiations
Claim alleging misleading or deceptive conduct (MDC) by Jim and PLHR in April and May 2021 during negotiations for RTL's acquisition of a 50% interest, in representing that the combined annual EBITDA of the entities in which a 50% interest was being acquired, was $1.2 million.
[B] Claims by Synochi for loss of interest income
Claim alleging breach by Jim, EK and JKEK of obligations under the Synochi Loan Deed to act in good faith and reasonably, due to their failure to disclose to the Plaintiffs that the funds used to repay the Synochi Loan were obtained by pledging the assets of the ALSC Security Entities, causing a loss of interest income for Synochi.
Damages of $147,500 - calculated per FASOC 32B, detailed in LB Ann 3.
Claim alleging MDC by Jim in failing to disclose to the Plaintiffs that he intended to cause the grant of the ALSC Security Interests - if disclosed, Synochi would not have accepted payment nor agreed to discharge the Synochi Mortgage.
Claim alleging that each of Elianne, JKEK and PLHR were 'persons involved' in the MDC of Jim alleged in the row immediately above, as each knew Synochi would not have accepted payment if it had known of the ALSC Security Interests.
[C] Claims by RTL for MDC regarding the ALSC Security Interests
Claim alleging MDC by Jim in failing to disclose to the Plaintiffs that he intended to cause the grant of the ALSC Security Interests as security for the NAB Brighton Loan - if disclosed, RTL would have prevented the ALSC Security Interests being granted, which would have prevented the ALSC Entities entering administration.
Damages of $2.858m / $1.863m (FY23 / FY24 EBITDA) per 37A, and LB Ann 2.
Claim alleging that each of Elianne, JKEK and PLHR were 'persons involved' in the MDC of Jim alleged in the row immediately above, as each knew the Plaintiffs would object to the grant of the ALSC Security Interests, and was obliged to disclose same.
[D] Claims by RTL for MDC regarding the withdrawal of funds from ALSC Entities
Claim alleging MDC by Jim in withdrawing or withholding funds from ALSC Entities for personal use by Jim, EK and JKEK, without disclosing same to RTL, which funds were not available to those entities as at 4 April 2025 - but for which those entities would not have entered administration, if they were not already insolvent by reason of the grant of the ALSC Security Interests.
Damages of $2.858m / $1.863m (FY23 / FY24 EBITDA) per
Claim alleging that each of Elianne, JKEK and PLHR were 'persons involved' in the MDC of Jim alleged in the row immediately above, as each knew the Plaintiffs would object to the withdrawals and withholding of funds, and was obliged to disclose it.
[E] Claims by RTL alleging breaches of fiduciary duties - re: ALSC Security Interests / withdrawals of funds
Claim alleging that by causing each ALSC Security Entity to grant an ALSC Security Interest, Jim breached fiduciary duties which he owed to RTL as 50% shareholder of that entity - but for the grant of the ALSC Security Interests, the ALSC Entities would not have entered administration.
Claim alleging that by withdrawing and withholding of funds from ALSC Entities, Jim breached fiduciary duties which he owed to RTL as 50% shareholder of each - but for the withdrawal / withholding of funds, the ALSC Entities would not have entered administration (if not already insolvent due to the grant of the ALSC Security Interests).
Equitable compensation $2.858m / $1.863m; Account for $493,419 per 19P.
Claim alleging that Jim' breaches of fiduciary duty regarding the ALSC Security Interests constituted a dishonest and fraudulent design, and that each of Elianne, JKEK and PLHR knowingly assisted Jim to engage in that design.
Claim alleging that Jim' breaches of fiduciary duty regarding the withdrawing and withholding of funds from ALSC Entities, constituted a dishonest and fraudulent design, and that Elianne, JKEK and PLHR knowingly assisted Jim to engage in that design.
[F] Claims by RTL alleging breaches of Trustee duties owed to RTL (for ACLC atf the ACLC Unit Trust)
Claim alleging that ACLC as trustee of the ACLC Unit Trust, by granting an ALSC Security Interest over its assets for the NAB Brighton Loan, breached duties owed by it as trustee to RTL as 50% unitholder in the ACLC Unit Trust, as part of a dishonest and fraudulent design - and that each of Jim, Elianne, JKEK and PLHR knowingly assisted in that design, causing loss of RTL's investment in that entity.
Equitable compensation of $757,977 / $322,465 (per FY23 / FY24 EBITDA for ACLC), per LB Ann 2.
[G] Claim by RTL alleging knowing receipt by Elianne and JKEK of property of the ACLC Unit Trust
Claim alleging that Elianne and JKEK knowingly received assets of the ACLC Unit Trust to the value of $121,714.48 in breach of trust, being the total of:
Equitable compensation of $757,977 / $322,465 as above; Account for $121,714 per 56A.
[H] Claim alleging breaches by PLHR of the Shareholders Agreement
Claim alleging that PLHR breached the Shareholders Agreement by reason of Jim:
Damages for loss of RTL's investments in the following entities, per LB Ann. 2 (based on FY23 / FY24 EBITDA for each):
(a) as to each ALSC Security Entity - causing it to grant an ALSC Security Interest; and
(b) as to each ALSC Entity - withdrawing and/or withholding funds from it;
engaged in oppressive conduct in relation to that ALSC Entity.
Orders that Jim buy RTL's shares for the price per Entity in LB Ann 2, a total of $2.858m / $1.863m as per [C], being:
(a) as to ALSC Australasia/ALSC Admin: - the amounts in [H];
Alternatively, compensation by Jim to each ALSC Entity in those amounts.
Claim alleging that PLHR, as a 50% shareholder / unitholder in respect of each ALSC Entity, by failing to inform RTL of Jim' conduct in relation to that Entity as alleged in paragraphs 68-71, notwithstanding its knowledge (through Jim) of that conduct, and notwithstanding the terms of the Shareholders Agreement, engaged in oppressive conduct in relation to that ALSC Entity.
The same orders against PLHR that are sought against Jim as to oppressive conduct.
Claim alleging that Elianne and JKEK, by their conduct per ALSC Security Entity, including:
(a) applying for the NAB Brighton Loan on the basis that it would be secured by an ALSC Security Interest of no benefit to that entity; and
(b) receiving and retaining funds of that ALSC Security Entity, knowing they had no entitlement to retain those funds;
engaged in oppressive conduct in relation to that ALSC Security Entity.
The same orders against EK & JKEK that are sought against Jim as to oppressive conduct, for ALSC Security Entities.
75 As can be seen from the FASOC and the Amended Table of Claims, substantial, and at least in part, somewhat complex claims are made against each of Jim, Elianne, JKEK, and PLHR in connection with, among other things, the acquisition, operation, and collapse of the ALSC Business, the Unauthorised Withdrawals, the liquidation of the ALSC Entities, the NAB Synochi Loan, the ALSC Securities, and the repayment of the Synochi Loan. The Plaintiffs' claims include claims for: misleading and deceptive conduct; aiding, abetting and involvement in such conduct; breach of contract; breach of fiduciary duty; knowingly assisting in a breach of fiduciary duty; breaching contractual obligations of good faith; breach of trust; knowing receipt of property in breach of trust; engaging in oppressive conduct; and other claims. The relief claimed includes substantial monetary claims of RTL based on the alleged inflated purchase price resulting from Jim and PLHR's misleading and deceptive conduct, and the loss of the value of RTL's investments in the ALSC Business. Including interest and costs, the total of the monetary claims made are said by the Plaintiffs to exceed $5 million.
76 I note for completeness that the Defendants have not yet filed a defence, and that a previous order requiring the Defendants to file and serve their defence prior to the hearing of the Application was vacated at the motion of the Defendants and consented to by the Plaintiffs.[19] That said, and as the Defendants' counsel made plain, the Plaintiffs' claims are to be strongly contested by the Defendants.
77 Putting to one side for the moment the question of quantum, it is not necessary to further address the nature or detail of the many claims made by the Plaintiffs at this point. This is because at the Hearing, and after being given the opportunity to clarify instructions, and then after being given a further opportunity to clarify instructions, the Court was ultimately informed by counsel that, for the limited purpose of the Application, the Defendants conceded that the Plaintiffs had established a good arguable case in respect of each of the claims brought against each of the Defendants, but that the quantum of the claims was strongly contested.[20]
78 I turn now to the parties' written and oral submissions.
Plaintiffs' Primary Submissions**[21]**
79 The Plaintiffs submitted, in summary, that the freezing orders should be made for the following reasons:
The Plaintiffs have a good arguable case with respect to the claims against each of Jim, Elianne, JKEK and PLHR.
Further or alternatively to the substantive claims against Elianne and JKEK, the Plaintiffs have a good arguable case that a freezing order should be made against each of them as third parties.
Unless freezing orders are made there is a clear danger that prospective judgments against Jim, Elianne and JKEK will be wholly or partly unsatisfied because their respective assets will be disposed of, dealt with, or diminished in value, or because Jim and Elianne will have left Australia.
The balance of convenience favours making freezing orders and information disclosure orders against Jim, Elianne and JKEK, as well as an information disclosure order against PLHR.
80 The substance of the Plaintiffs' submissions as to why a good arguable case had been demonstrated in respect of each of the Plaintiffs' claims was addressed at some length in their primary written submissions, which I have read and considered, and to which I refer, but will not recite here. In doing so I am conscious of the Defendants' 'good arguable case' concession made during the Hearing, and their concession that the Plaintiffs had established the relevant risk of dissipation, which was not contested.[22]
81 In addressing the contention that there was a danger that a prospective judgment would be wholly or partly unsatisfied, the Plaintiffs made two primary submissions. First, Jim and Elianne are now living with their children in Dubai, so that, in the absence of a freezing order over the remaining assets in Australia, it can be inferred that the Defendants will transfer their assets overseas where they have 'established a life'. Second, that the improper conduct said to have been engaged in by Jim, Elianne, JKEK and PLHR enables the Court to infer a real risk or danger that the assets will be dealt with in a way that will prejudice the enforcement of a judgment. It was submitted that a reasonably arguable case of dishonesty and misappropriation of funds is, of itself, sufficient to demonstrate a danger or real risk that the assets will be dealt with in a way which would prevent the applicant from recovering judgment. In this context the Plaintiffs referred to various authorities, including: Patterson v BTR Engineering (Aust) Ltd;[23] Victoria University of Technology v Wilson;[24] Bunnings Pty Ltd v McMillin;[25] Distinctive FX Pty Ltd v Wright (Distinctive FX);[26] Spotlight Pty Ltd v Mehta;[27] Nevro Medical Pty Ltd v McKelvie;[28] and Re Royal Express Pty Ltd.[29]
82 Further or alternatively, the Plaintiffs also submitted that a freezing order could also be made against Elianne and JKEK as third parties. In this regard, the Plaintiffs' contentions included: First, Elianne and JKEK: (a) holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of Jim; and (b) is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of Jim.
83 In respect of Elianne, this was said to be so because the Brighton Property (and its proceeds of sale) are said to be held by Elianne under a constructive trust or a resulting trust in favour of Jim.[30] It was contended the Court should infer that the purchase of the Brighton Property was funded through the sale of 14 Edro Avenue and that the purchase of 14 Edro Avenue was funded through the sale of 30 Moffat Street, which was held in Jim's name. Further, the Plaintiffs drew attention to a number of occasions in which Jim described the Brighton Property as being his own house. These included an email to Luke on 7 May 2024 stating, 'I don't have a dollar until I sell my house.'
84 In respect of JKEK, the Plaintiffs stated that Jim is a beneficiary of the J&E Trust, of which JKEK is trustee. Further, it was said that Jim referred to JKEK's investment of $250,000 in the Exus Capital Property Fund as being his own, saying to Peter via WhatsApp message, '... what I am asking from you and other friends is to just buy out my shares of Hectors fund. I have $250k invested and asking all my friends in the ground to buy 50k each of my fund ...'.
85 It was further submitted that Jim arguably controls JKEK's power of selection because his wife, Elianne, is the sole director of JKEK and has the power to appoint a new trustee, and therefore Jim has something approaching a general power and ownership of the trust property. The Plaintiffs referred to observations of French J (as his Honour then was) in ASIC v Carey (No 6):[31]
[T]he beneficiary who effectively controls the trustee's power of selection because he is the trustee of one of them and/or has the power to appoint a new trustee has something approaching a general power and the ownership of the trust property.
86 Second, relying upon the inherent jurisdiction of the Court, it was submitted that a future legal process of a court may ultimately be available to the Plaintiffs (which might be contingent on the appointment of a trustee-in-bankruptcy of Jim) pursuant to which Elianne and JKEK may be obliged to disgorge assets or to contribute to the funds of Jim to help satisfy the prospective judgment.[32] This was said to be because a trustee in bankruptcy could claw back the funds used for the purchase of the Brighton Property or their traceable proceeds from Elianne, and the proceeds of sale of the Brighton Property, by claiming a constructive trust or a resulting trust, or applying to void the transfers pursuant to s 120(1) of the Bankruptcy Act 1966 (Cth). Further, it was said that a trustee in bankruptcy may have a claim to the assets held by JKEK as trustee of the J&E Trust given Jim and Elianne's alleged effective control of the trust.
87 As to the balance of convenience, it was submitted that the lower risk of injustice favoured the grant of freezing orders, referring to the Court of Appeal's decision in Bradto v State of Victoria.[33] This was said to be because, in the absence of a freezing order: the assets may be lost irretrievably; damages are not an adequate alternative remedy because in the meantime the funds may be dissipated and any ability to trace them will be lost; and there were no disentitling equitable considerations.
88 With respect to the information disclosure orders sought, the Plaintiffs submitted, among other things, that:
The Court may grant information disclosure orders before considering whether to grant a freezing order, or as accompanying a freezing order, and an ancillary order assists in eliciting information relating to assets relevant to a freezing order or a prospective freezing order, or determining whether a freezing order should be made.[34]
Information disclosure orders were sought against Jim, Elianne and JKEK to accompany any freezing orders made against them, for the purpose of eliciting information relating to the assets relevant to any freezing orders.
Against PLHR, information disclosure orders were sought to determine whether a freezing order should be made against it, and to elicit information relating to assets relevant to any such prospective freezing order. PLHR was said to be one of the key corporate entities operated by Jim, and its asset position was unknown to the Plaintiffs beyond the shares and units which it holds in the now insolvent ALSC Entities.
89 Oral submissions were also made by senior counsel for the Plaintiffs, which drew upon various matters referred to in the written submissions and addressed some additional matters. The oral submissions included those referred to below.
90 The Plaintiffs emphasised that neither Jim nor Elianne had gone on oath in relation to any of the evidence, with all five affidavits of Ms Lam being sworn on information and belief.
91 The Plaintiffs addressed aspects of the claims made and engaged with the Bench regarding various matters, which the transcript will record but I will not set out in detail here. In this context, and particularly in connection with the quantum of the claims, reference was made to numerous parts of the affidavits of Luke and other evidence, including in relation to the following:
Luke's evidence regarding what was said to be the ability of the ALSC Entities to raise loan funds of $1.4 million if Jim had not given the ALSC Securities to NAB. This was further elaborated upon in the Fourth Brady Affidavit filed during the course of the Hearing.
If the ALSC Entities' assets had remained unencumbered they would have been in a position to raise loan funds for working capital, which would have prevented the ALSC Entities from going into administration. This was said to be supported by aspects of the administrator's reports, which referred to limited working capital being available.
The collapse of the ALSC Entities being caused by the ALSC Securities being given to NAB and the impact of the Unauthorised Withdrawals. In this context reference was made to the December 2024 Loan Agreement with Jim regarding some of these withdrawals, and the fact that the Plaintiffs do not seek to directly claim the amounts of the Unauthorised Withdrawals, although damages or compensation claims were made based on such amounts.
How the quantum of the inflated purchase price damages claim and RTL's loss of investment damages claim had been calculated, including relevant evidence regarding the same.
The oppression claims, including the primary contention regarding the lost value of RTL's investment, and an alternative contention that a compensation order might be made for 50% of the total amount of the Unauthorised Withdrawals.
The lost interest claimed in respect of the Synochi Loan being calculated until only 10 July 2025 in circumstances where that would now be a greater amount given that the Brighton Property settlement has been deferred until 10 July 2026. This increase was addressed in the Fourth Brady Affidavit, with the revised lost interest amount claimed said to total $401,999.90.
Freezing orders being able to be made against Elianne and JKEK as third parties in any event. In this context it was submitted that the requirements of r 37A.05(5)(a) of the Rules were satisfied and, further, that even though r 37A.05(5)(b) was not engaged because 'the Court' in that rule means the Supreme Court of Victoria, such an order could be made pursuant to the inherent jurisdiction of the Court.[35]
There was no basis for apportionment of amounts claimed against different Defendants when setting the amounts of freezing orders against the Defendants.
The need for an information disclosure order to be made against PLHR as it was being contemplated that a freezing order would be sought against it. In this context it was submitted that, to the extent that it was held in Deputy Commissioner of Taxation v Gashi (Gashi)[36] that an ancillary order needed to be linked to an existing freezing order, that observation was too narrow and not correct. Reference was also made to the decision in Caboche.[37]
As to the giving of security in support of the Plaintiffs' damages undertakings, it was submitted that no security should be required to be given by the Plaintiffs.
92 The Defendants relied upon their primary written submissions and their supplementary written submissions, which were supplemented, refined and clarified by oral submissions from counsel. Although it is not necessary to recite all of the detail of the written and oral submissions, it may be noted that the Defendants' submissions included submissions to the effect referred to below.
93 When regard is had to the Defendants' submissions, it is to be noted that, as things ultimately transpired at the Hearing, and for the limited purpose of the Application, the Defendants conceded and did not contest that the Plaintiffs had established a good arguable case in respect of each of the claims made against each of the Defendants, and the existence of the relevant risk of asset dissipation in respect of each of the Defendants.[38] The Defendants' ultimate position was that it did not contest that freezing orders and information disclosure orders should be made against Jim, Elianne and JKEK, but that they did strongly contest the quantum sought by the Plaintiffs and the monetary limits the Plaintiffs proposed for living expenses and legal expenses. In addition, the Defendants contended that the Plaintiffs' application for an information disclosure ancillary order against PLHR should be refused, and that the Plaintiffs should be required to give security for their respective damages undertakings.
94 By reference to the Plaintiffs' and Defendants' affidavit material, the Defendants addressed aspects of what was submitted to be relevant background in paragraphs 12 to 22 of their written submissions, to which I refer but will not recite. The Defendants' first written submissions addressed the principles applicable to freezing and ancillary orders in a non-controversial way with reference to relevant authorities. Particular emphasis was placed upon, among other things: the need for appropriate undertakings to be provided by a party seeking a freezing order; ensuring that the assets covered by a freezing order do not exceed the likely maximum amount of the applicants' claim, including interest and costs; and the desirability of requiring security to be provided to support an applicant's usual undertaking as to damages.
95 The Defendants observed that the Plaintiffs had made three attempts before the close of pleadings to articulate the asserted and overlapping claims relied upon to obtain the freezing orders seeking a large quantum. The Defendants contested the quantum sought in the freezing orders and submitted that aspects of the pleaded claims against all Defendants were flawed in that the allegations as to quantum and causation of loss were too tenuous, not supported by sufficient cogent evidence, and not sufficiently likely to constitute the ultimate amount of the Plaintiffs' claim if successful.[39]
96 The Defendants submitted that the Plaintiffs have '3 core complaints' out of which they had sought to assert many causes of action. The core complaints were described as: (1) the ALSC Securities complaint; (2) the withdrawn monies and payment of wages/fees complaint; and (3) the buyers' remorse complaint. These were all said to be overarched by the 'sole director situation', referring to Jim being the sole director of the ALSC Entities. It was also said that whilst the Plaintiffs' pleadings painted a certain picture to support the quantum sought, there were four key omissions from their pleadings as follows:
that the sole director situation was at the Plaintiffs' instigation;
that prior to the acquisition of a share in the ALSC Business the Plaintiffs were given the written financial statements of the relevant companies, including for FY2019, showing actual figures, and the Plaintiffs were not confined to relying only upon any verbal representations;
that access to information was always open to the Plaintiffs, and from December 2021 the Plaintiffs, and from approximately February 2022 the Plaintiffs' external accountants Deloitte, had access to the Xero accounts of the companies and could monitor their business affairs, which they actively did, until the administrations commenced; and
that Jim's modest borrowings or drawings from the ALSC Entities from time to time was something that the Plaintiffs were already aware of, and had been dealt with by way of the December 2024 Loan Agreement (with high interest) that Jim had executed in December 2024.
97 The Defendants described the 'overarching sole director situation' in their written submissions largely as follows. Overarching the Plaintiffs' three core complaints is the circumstance that - contrary to what the Plaintiffs selectively allege - Peter/RTL made the decision that he did not want to have an RTL nominee on the board of the ALSC Entities so Jim agreed to remain as the sole director. However, Jim did not have sole access to information or sole control. Luke had access to and supervised the companies' affairs and accounts, as did the Plaintiffs' accountants Deloitte, with Luke and Peter being involved in key business decisions. It was said that, as was always intended, Jim continued to manage the day-to-day affairs of the ALSC Business, with the Plaintiffs' supervision and involvement. This was said to have continued right up until the point when Jim was advised that, in line with his duties, he should appoint an administrator to the ALSC Entities.
98 It was submitted that the industry in which the ALSC Business operated was hard hit by the COVID-19 pandemic and the conditions that followed it; that the business was struggling, and that Peter knew this when he invested in 2021; but that he now complained when the adverse conditions could not be overcome, and looks for someone else to blame.
99 The Defendants addressed their position regarding quantum in their first written submissions, which was further refined in their supplementary written submissions, and was further refined and clarified during oral submissions. In the first written submissions, the Defendants submitted that the value of the freezing orders against the Defendants should not exceed a value between $493,793.87 to $697,793, and that the value should be less for Elianne and JKEK. These amounts were addressed in the Defendants' 'Quantum Contentions' in paragraphs 26 to 96 of their first written submissions and summarised in their Quantum Table comprising Annexure A to the said submissions. That table was largely in the following form.[40]
basis and sufficient evidence for freezing order
Said to flow from historical EBITDA rep re 2019. Amount of alleged overpayment.
Plaintiffs were given actual figures, financial statements, prior to sale as per their own (Peter's) affidavit.
Synochi claim for lost interest income - early loan repayment
Said to flow from Synochi being 'unable to deploy the funds repaid to it'.
No basis for conclusionary assertion re causation and quantum. No particulars or evidence. No unsuccessful attempts to so deploy. Nothing.
Said to flow from giving of ALSC Securities having caused Administrations of the 4 companies.
No basis to assert causation. No particulars or evidence of ability to borrow in final 6 months. Evidence of Administrators reports indicate other causes of failure.
Unsound basis to assert market value of interest in struggling business as at Nov 2024.
Alterative, nominal figure suggested if Court finds it is arguable was a contributing factor to failures.
MDC - withdrawal of funds, wages ($85k), consulting fees ($34k)
Said to flow from withdrawal of funds and payment of wages having caused Administrations.
Amounts alleged modest, per company, not impactful.
No basis to assert causation. Evidence of Administrators report contradicts. Unsound basis to assert market value, as above.
Alternative, nominal figure suggested if Court finds it is arguable was a minor contributing factor to failures.
Breach of fiduciary duties - ALSC Securities, withdrawals and wages
No alternative nominal sum, as it is not arguable a Court will order duplicate relief to C and D above.
Moreover, if compensation awarded to ALSC Entities for same transactions for oppression (see below), then $0 here. Not arguable a Court will order duplicate relief.
Knowing assistance in dishonest and fraudulent design re breach of trustee duties by ACLC by grant of ALSC Securities, withdrawals and wages re ACLC
Compensation - said to be tied to EBITDA for ACLC for FY23/FY24. Asserted basis unclear. One guess - giving of ALSC Securities/withdrawn funds having caused failure of ACLC? No basis to assert causation. Unsound basis to assert value - see C above.
No alternative nominal sum, as it is not arguable a Court will order overlapping/duplicate relief to C and D above re ACLC.
No alternative nominal sum, as it is not arguable a Court will order overlapping/duplicate relief to D above re ACLC.
Moreover, if compensation awarded to ALSC Entities for same transactions for oppression (see below), then $0 here. Not arguable a Court will order duplicate relief.
Breaches by PLHR of (implied terms and terms) of Shareholders Agreement
Said to be tied to EBITDA for FY23/ FY24 of Australasia, FY24 for Admin - said in ATOC to be loss of RTL's investments, caused by ALSC Securities and withdrawn funds and $34k consulting fees
Causation is not shown. No basis. Repeat C and D above.
No alternative nominal sum, as it is not arguable a Court will order duplicate relief to C and D above.
Compensation to each ALSC Entity - same amounts as below Order that Jim buy RTL's shares -
No sound basis for that quantum of compensation to be asserted as properly payable to the companies.
At most, loss to ALSC Entities as a result of withdrawal of funds, whilst not established that these withdrawals led to insolvency and are oppressive, is:
1. Monies totalling $153,615 allegedly withdrawn from ALSC Australasia [68(b)];
2. Monies totalling $122,689.48 allegedly withdrawn from ACLC [69(b)];
3. Monies totalling $34,500 allegedly withdrawn from ALSC Mornington [70(b)]; and
4. Monies totalling $182,989.39 allegedly withdrawn from ALSC Admin [71(a)].
Re any share purchase order - no sound basis for that quantum to be the asserted market value of shares of the companies, which are in liquidation.
100 During the course of oral submissions I observed that, although the issue of good arguable case was conceded, some of the written and oral quantum submissions appeared to address that issue, or potentially cut across the concession. As earlier mentioned, following helpful exchanges with counsel for the Defendants,[41] and allowing opportunities and additional time to confirm the Defendants' position and instructions, it was confirmed that the Defendants conceded for the purpose of the Application that the Plaintiffs had established a good arguable case in respect of each of the claims against each of the Defendants. With respect, this appeared to me to be an understandable concession for the Defendants to make on the Application in the circumstances.
101 By their supplementary written submissions filed on 7 July 2025 the Defendants made some revised submissions regarding the quantum of the freezing orders on the basis of what were said to be the 'defendants' calculations'. It was submitted that the quantum of the freezing orders should be confined to the actual amounts of arguable 'inappropriate payments', which were not the subject of the vague and speculative opinion evidence. For the reasons set out in those supplementary submissions, to which I refer but will not detail, it was submitted that the total amount of arguably 'inappropriate payments' was $294,789.39 less an amount of $45,138.49 that had been repaid, giving a total of $249,650.90. It was said that this could be rounded up to $250,000, and that adding an additional $250,000 for interest and costs, it was submitted that the quantum of the freezing orders should not exceed $500,000. It was further submitted that this amount should be 'equally apportioned' between Jim, Elianne and JKEK. This was said to be on the basis of the claim alleged against Jim for oppression and the orders against Elianne and JKEK being made against them as third parties. It was further submitted that it was appropriate that there be separate freezing orders, but that it would be unsound to multiply the freezing order as against married couples and closely related parties.
102 Paragraphs 8 and 9 of the supplementary submissions addressed the Unauthorised Withdrawals that had been excluded from the calculations, on the basis that they should be excluded given that the payments were not the subject of the December 2024 Loan Agreement, and because Luke and the Plaintiffs' external accountants had had access to the books and records of the ALSC Entities up until 4 April 2025.
103 The submissions made in the first written submissions regarding the contested issue of quantum included the following.
A.[42] Misleading and deceptive conduct (MDC) in pre-sale negotiations - the 'buyers remorse' complaint - quantum not established
104 It was submitted that the Plaintiffs failed to establish, without speculation, that it is likely that they will recover $1.41 million as RTL's loss flowing from alleged misleading and deceptive conduct in pre-sale negotiations and that causation was problematic. It was said that Luke failed to disclose that Jim provided Peter and Luke with multiple documents as to the value of the business prior to the acquisition, including multiple financial statements showing the actual past figures achieved for the business.[43] Having been furnished with the actual 2019, 2020 and 2021 figures, it was contended that the cause of any overpayment was the decision of Luke and Peter and resulted largely from their own failures.
B. Synochi's claim for loss of interest income - quantum not established
105 The Defendants contended that the Plaintiffs failed to establish, without speculation, the likely amount of the claim for the early repayment of the Synochi Loan, which it was said Peter insisted upon, and said that causation was not shown. Whilst Synochi claimed that this loss flowed from it being 'unable to deploy the funds paid to it', which it said sat in its account, it was submitted that the Plaintiffs had shown no basis for this conclusionary assertion as to causation and quantum, noting the absence of particulars or evidence regarding unsuccessful attempts to so deploy the funds.
106 It is also said not to be shown that NAB or another lender would not have given the JKEK Loan to JKEK without the ALSC Securities, particularly where it was said that there was ample equity available to repay the loan from the Brighton Property, and that speculation by the Plaintiffs as to what they assume NAB would or would not have done was not a sufficient basis to determine the quantum of a freezing order. It was further submitted that there was no proper basis for the loss to be quantified as the full amount of interest claimed.
C. MDC re ALSC Securities - and alleged knowing involvement - quantum not established
107 With respect to the quantum of the claims it was contended that the Plaintiffs had failed to establish, with precision and without speculation, that it is likely that they will recover the '$2.858m / $1.863m' said to be RTL's loss flowing from the loss of its investment alleged to have been caused by the giving of the ALSC Securities and the Unauthorised Withdrawals. Causation was again said to be a problem. Conclusionary assertions were said not to be sufficient and it was said that there were no particulars or evidence of an inability of the ALSC Entities to borrow in the final six months that were attributable to the ALSC Securities. It was submitted that there were no particulars or evidence that the ALSC Entities would have been otherwise solvent, nor that there would have been no basis to place them in administration, nor that they would have continued to trade. It was noted that speculation and guesswork is no substitute for evidence of fact or properly drawn inference, and that the ALSC Business was struggling with regulatory requirements, greatly increasing costs, and lowering revenue (including due to the failure of franchisees) during and since the COVID-19 pandemic. Reference was also made to the administrator's reports not pointing to the giving of the ALSC Securities as a cause, or contributing factor, to the ALSC Entities going into administration.
108 The Plaintiffs were said to have adopted an unsound basis to assert such a high market value of a 50% interest in the ALSC Business at November 2024, noting that the market value of interests in tightly held private companies can be difficult to value, as expert evidence was said to repeatedly show. The absence of an independent expert report was referred to and it was said that it was far from certain that the Plaintiffs' assertions on value are arguable, and that they would be a tenuous basis for the quantum of any freezing order.
109 As to Synochi's alleged loss said to flow from the giving of the ALSC Securities, the quantum sought was said to be speculative, unsound and imprecise for the reasons set out in section A above.
110 Alternatively, for the claim against Jim only, it was submitted that if the Court found that it was arguable that the Unauthorised Withdrawals from the ALSC Entities was a contributing factor to the failure of those entities, a nominal figure of $100,000 may be appropriate for the purposes of roughly assessing causation and quantifying loss at this stage, noting also the purpose of a freezing order not being to provide security.
D. MDC re withdrawal of funds, wages ($85k), consulting fees ($34k) - quantum not established
111 The Defendants submitted that the Plaintiffs failed to establish, with precision and without speculation, that it is likely that they will recover '$2.858m / $1.863m' said to be RTL's loss flowing from the withdrawing or withholding of the funds referred to above, and that there was no basis to assert causation, with reference being to submissions previously made (referred to above). It was further submitted that the unauthorised use of funds was alleged to have occurred from October 2021, but that many of the loans entered into were repaid. It was also said not to be clear how the 'relatively small' amounts alleged to have been outstanding as at 4 April 2025, ranging from $34,500 to $168,315.38, could have caused each company to be insolvent. The Defendants also repeated the alternative submission regarding the $100,000 amount in respect of Jim only.
E. Breach of fiduciary duties re ALSC Securities and withdrawals and wages - and alleged knowing assistance in a dishonest and fraudulent design to do so - quantum not established as to equitable compensation, no election yet made, account would result in double recovery
112 Again the Defendants submitted that the Plaintiffs had failed to establish, with precision and without speculation, that it is likely that they will recover '$2.858m / $1.863m' said to be RTL's loss flowing from breach of fiduciary duties with respect to the granting of the ALSC Securities and the Unauthorised Withdrawals from the ALSC Entities. It was also contended that neither of the matters complained of were on a particularly significant scale. As to equitable compensation, the quantum was noted to be tied to the EBITDA for FY23/FY24 and submissions made earlier (referred to above) on these matters were repeated.
113 With respect to the claim for an account in the amount of $493,419, three points were made. First, the Plaintiffs had not yet made their election as to equitable compensation or an account and have not shown they can properly seek amounts for both, as it was said they are doing if they seek a freezing order that covers both. Secondly, it was noted that the transactions constituting the withdrawal of funds from the ALSC Entities were also pleaded in the Plaintiffs' oppression claims and it was submitted that if a compensation order is made to compensate the ALSC Entities for loss as a result of the same transactions for oppression, then no monetary amount should be sought here. It was also said that the funds withdrawn from the ALSC Entities was not loss suffered by RTL but by the ALSC Entities, and that a compensation order for oppression would redress ALSC Entities' loss. Thirdly, it was noted that no alternative nominal sum was available, as it was not arguable a court will order duplicate relief.
F. Knowing assistance in ACLC breach of trustee duties - quantum not established
114 It was again submitted that the Plaintiffs had failed to establish, with precision and without speculation, that it is likely that they will recover equitable compensation in the amount of '$322,465 / $757,977' noting that the equitable compensation was said to be tied to ACLC's EBITDA for FY23/FY24. In this context reference was again made to the previous submissions regarding the evidence on alleged lost value, and it was submitted that no alternative nominal sum is available.
G. Knowing receipt by Elianne of ACLC monies - quantum as to equitable compensation not established, no election, and account results in double recovery
115 It was submitted that the Plaintiffs had failed to establish, with precision and without speculation, that it is likely that they will recover equitable compensation in the amount of '$322,465 / $757,977' for knowing receipt of ACLC monies. The contentions made in support were consistent with other submissions made, with some additional points also being made, to which I refer but will not recite.
H. Breach of implied terms and minor terms of Shareholders Agreement - quantum not established
116 It was submitted that the Plaintiffs failed to establish, with precision and without speculation, that it is likely that they will recover damages for the loss of RTL's investment in ALSC Australasia and ALSC Admin based on the EBITDA of those entities for FY23/FY24, with the submissions on the topic previously made (referred to above) being repeated.
I. Oppression - quantum as to buy out order and compensation not established
117 Regarding the quantum of the oppression claims, it was again contended that the Plaintiffs had failed to establish, with precision and without speculation, that it is likely that a share buy-back order or compensation to the ALSC Entities should be based on a FY23/FY24 EBITDA of the ALSC Entities, with reference being made to earlier submissions on the topic. It was said that, at most, any loss to the ALSC Entities as a result of withdrawal of funds, whilst not established that these withdrawals led to insolvency or were oppressive, is:
Monies totalling $153,615 allegedly withdrawn from ALSC Australasia;
Monies totalling $122,689.48 allegedly withdrawn from ACLC;
Monies totalling $34,500 allegedly withdrawn from ALSC Mornington; and
Monies totalling $182,989.39 allegedly withdrawn from ALSC Admin.
118 It was submitted further that the Plaintiffs had not established how the loss of such amounts would have caused each ALSC Entity to be insolvent such that they could be considered oppressive, and that causation was again an issue. It was submitted that the Plaintiffs had similarly not established how the grant of the ALSC Securities would have caused each ALSC Entity to be insolvent such that that conduct could be considered oppressive. It was again noted that the NAB Synochi Loan was supported by a mortgage over the Brighton Property, with Jim and Elianne also listed as guarantors, and that the Brighton Property had ample equity beyond secured borrowings so that the risk of the ALSC Securities being called upon was low.
119 Notwithstanding the above, it was submitted that if the Court was minded to award a freezing order in some amount with respect to potential compensation to the ALSC Entities for oppression, it should be no more than $493,793.87.
120 With respect to the quantum of any buy-back order, it was contended that the Court needed to identify a valuation which represents a 'fair assessment of the loss' that the Plaintiffs have sustained by reason of Jim or PLHR's actions, and the Defendants repeated their earlier submissions regarding the claimed amounts of $2.858 million / $1.863 million, based on FY23/FY 24 EBITDA. It was submitted further that there was no evidence to support the contention that, had the alleged oppressive conduct not occurred, the ALSC Entities would have continued to trade and achieved an EBITDA similar to those reached in FY23 or FY24. The Defendants submitted that RTL cannot simply pick an historical EBITDA advantageous to its interests to assert that a willing but not anxious buyer would pay $2.858 million/$1.863 million to acquire its shares in a closely held private entity. Such a submission was said to ignore the factors that led Jim to place the ALSC Entities in administration, namely: the increase of wages for nurses; increasing regulation in the industry limiting the ability to advertise and promote the ALSC Business; the escalated cost of living reducing revenue; and franchisees struggling or terminating their agreements leading to a reduction in the collection of franchise fees.
121 The Defendants submitted that an ancillary order against PLHR would exceed what was necessary to make freezing orders against the Defendants effective, with reference being made to various authorities including those referred to in the Defendants' first written submissions. It was further submitted that the disclosure affidavits to be prepared by Jim, Elianne and JKEK should be sufficient, and that the Court should not make an additional disclosure order against PLHR.
122 The Defendants emphasised that a freezing order is a drastic and extraordinary remedy, submitting that a high value freezing order would have a real and damaging impact on the family's ability to live their lives. It was further submitted that the Plaintiffs' pleadings and the administrator's reports show that this is not a case that justifies a significant freezing order, submitting that it is not a phoenixing case, or a case where large swathes of company assets had been misdirected elsewhere and needed to be frozen so that they may be retained and traced. The Defendants submitted that the allegations made were 'relatively minor in scale and nature', with emphasis again being placed on what were described as the three core complaints. It was submitted that RTL failed - despite the experience and expertise of Peter and Luke - to read and consider the financial statements they were given, and properly value the interests they were buying. It was submitted that Luke was 'oddly silent about this' in the affidavit material.
123 It was submitted the Defendants' alleged conduct complained of is not shown to be so significant or impactful as to justify a large freezing order, noting further that the burden was on the Plaintiffs to establish with precision and without speculation the quantum of the prospective judgment. It was contended that the Plaintiffs failed to discharge this quantum burden for many of their claims, largely due to an inability to show causation, and being hampered by a problematic pleading.[44] It was further emphasised that any undertaking as to damages should be supported by security in an amount to be determined by the Court and that this must be available and ready to be given by the Plaintiffs on the day that any freezing order is made.
124 During oral submissions made on behalf of the Defendants, reference was made to many of the matters referred to in their written submissions, and further submissions were made, including those referred to below. Counsel for the Defendants confirmed that the Defendants accepted that freezing and information disclosure orders should be made against Jim, Elianne and JKEK, but that the quantum was contested. It was submitted that the weakness of the Plaintiffs' case in relation to quantum impacted materially on the Court's assessment regarding the amount of any freezing order, and reference was made to a number of authorities including Nedroc Pty Ltd v Welling (Nedroc);[45] Belmont Tyre & Auto Service Centre Pty Ltd v Ampak Holdings Pty Ltd (Belmont Tyre);[46] and Zhang v Woo;[47] with particular emphasis placed upon the circumstances in Nedroc.
125 It was submitted that the Plaintiffs' Application reflected an overreaching on their part and that this should cause the Court to exercise particular caution. The matters referred to in this context included: the breakdown of the friendships; what was said to be Peter's desire to 'crush' Jim; the purpose and nature of the remedy of a freezing order; the limited nature of the three core complaints and the attempt to introduce multiple claims in respect of them; the alleged inaccurate impression conveyed by the Plaintiffs' evidence regarding Jim being the sole director; the alleged failure by Luke to disclose that he had been provided with and had access to financial statements and other documents at the time of the acquisition; the alleged exaggerated impact of the giving of the ALSC Securities and the Unauthorised Withdrawals; the limited prospect of the ALSC Securities ever being called on; repayments by Jim of various amounts; what was said to be 'small scale' conduct; and the unreliability and speculative nature of the evidence of Luke regarding the alleged lost value based on 2023 and 2024 EBITDA multiples. This evidence was said to be speculative, vague, not from an expert, lacking independence, and revealing a weak causation case in circumstances where the evidence was unreliable. The Defendants also referred to their supplementary written submissions and drew attention to the basis upon which it was submitted that the quantum of the freezing order should be confined to the actual amounts of the selected arguable Unauthorised Withdrawals referred to in the submissions.
126 The Defendants submitted that no regard should be paid to the fact that the Defendants' evidence came through their solicitor, Ms Lam, rather than directly from Jim and Elianne. Any suggestion that Jim and Elianne had acted inappropriately when they left Australia to move to Dubai was said to be without merit.
127 With respect to the ALSC Securities impeding the ALSC Entities' ability to borrow further funds for working capital, it was submitted that this was simply unknown. In connection with the Plaintiffs' claims regarding the alleged loss of their investment value by reason of the grant of the ALSC Securities, and the claimed absence of an ability to prevent the administrators being appointed by reason of the absence of knowledge, the Defendants submitted that the Plaintiffs had access to the books of the ALSC Entities and the bank accounts until administrators were appointed in April 2025. In this context it was said that there could be no surprise that the ALSC Entities were struggling and, further, that the Plaintiffs had failed to mitigate their loss by putting forward a proposed deed of company arrangement in order to breathe life back into the ALSC Entities. It was further contended that the Plaintiffs had ample time to compile evidence for the proceeding and therefore it should be inferred that there is no 'evidentiary iceberg' below the surface to be adduced at trial.
128 With respect to the alleged constructive or resulting trust in favour of Jim regarding the Brighton Property or its proceeds of sale, it was submitted that, given the matrimonial relationship, it ought not to be accepted that it would follow that the entire property would be found to be held by way of a constructive or resulting trust in Jim's favour.[48] During this exchange counsel for the Defendants also confirmed that there was no evidence from the Defendants suggesting that the funds for the purchase of the Brighton Property had come from anywhere other than the proceeds of sale of Jim's previous property, and counsel for the Defendants responsibly confirmed that the source of the funds for the purchase of the Brighton Property was not being contested.
129 During her oral submissions on the second hearing day, counsel for the Defendants made submissions regarding what were said to be seven further matters, namely: the onus of proof being on the Plaintiffs; the quantum of the freezing orders proposed by the Defendants; the quantum of the freezing orders sought by the Plaintiffs; why it was contended that the amount of any freezing orders should be 'apportioned'; carve-outs or exceptions that should be made to the freezing orders; why an ancillary order should not be made against PLHR; and why the Plaintiffs should be required to give security for their undertakings as to damages. The submissions made by the Defendants regarding these and related matters are recorded in the transcript and need not be recited in detail. In substance they included the following:
The onus was on the Plaintiffs to establish the likely quantum and the evidence relied upon failed to establish that the Plaintiffs' alleged loss in the quantum sought by the Plaintiff flowed from the alleged wrongful conduct.
For the reasons referred to in the Defendants' supplementary written submissions, the freezing orders should relate to an amount only in respect of a limited number of the Unauthorised Withdrawals, less an amount of $45,138.49 (Repaid Amount) plus $250,000 for interest and costs. As a secondary position, it was put that the freezing orders should be in no more than the amount of the Unauthorised Withdrawals (approximately $493,000), less the Repaid Amount, giving a total of $448,280.51, plus an amount of $300,000 for interest and costs.
The Court should not be satisfied in relation to the quantum of the amounts claimed in respect of the misleading conduct acquisition claims, the lost investment claims, and the claim for lost interest in respect of the Synochi Loan - whether in respect of a settlement date of 10 July 2025 ($147,500) or 10 July 2026 ($401,999.90).
Any amounts the subject of the freezing order ought to be apportioned in the manner addressed in the Defendants' supplementary written submissions. In this context reference was made to authorities including Nevro Medical Pty Ltd v McKelvie,[49] Cardile v LED Builders Pty Ltd (Cardile),[50] Distinctive FX,[51] Zhang v Woo,[52] and Bridges Financial Services Pty Ltd v Brown (Bridges),[53] although through helpful exchanges with counsel this apportionment contention appeared to be retreated from by the Defendants.
From the Defendants' perspective, and noting that it had been conceded that a good arguable case and removal and dissipation risk had been established, it was not necessary for the Court to address the position of Elianne or JKEK as a third party for the purpose of the freezing order application.
The ancillary orders sought against PLHR amounted to little more than fishing, PLHR was not part of the ALSC Entities, and no basis had been shown for obtaining such an order against it.[54]
The time for the service of the asset information affidavits should be set at 6 August 2025, rather than the Plaintiffs' proposed date of 15 July 2025.
130 With respect to the carve-out for living expenses and legal expenses, reference was made to the contents of the Fifth Lam Affidavit and it was submitted that an allowance of $350,000 should be made for legal expenses, and an allowance in the order of $28,800 per week should be allowed for living expenses. Reliance was placed upon a number of authorities that address the function and nature of the freezing order remedy, what a freezing order is directed to, and that a freezing order should not operate to prevent a person living the life that they ordinarily live. Following exchanges with the Bench, and after hearing reply submissions from counsel for the Plaintiffs and having the opportunity to obtain further instructions, the Defendants submitted that the preferable course was to make an order allowing for ordinary living expenses without a monetary limit and requiring the Defendants to keep a record of such expenses, rather than arriving at a fixed weekly amount.
131 As to security, it was submitted that security for the Plaintiffs' undertaking as to damages should be obtained given that the evidence showed that there was no real property held by the Plaintiffs in Australia, and noting that the evidence regarding Synochi's limited finances, as trustee for the Synochi Trust, which revealed net assets of only $10. As to how that security might be calculated in terms of an amount, it was submitted that it was difficult to address the future, but contended that one way it could be calculated was the annual difference between the limit of any lower weekly limit net for living expenses and the amount of $28,800 per week sought by the Defendants. Alternatively, it was said that further evidence may need to be given later regarding the nature of the losses that might follow by utilising liberty to apply.
132 The Plaintiffs contended in their written reply submissions that the Defendants' submissions were misplaced and should be rejected and that freezing orders should be made in the amounts sought. They submitted that it was appropriate for the quantum of the freezing order against each of Jim, Elianne and JKEK to be $5 million, which was said to be the likely maximum of the amount of the Plaintiffs' claims including interest and costs. In this context it was noted that the Defendants did not contest the making of a freezing orders.
133 The manner in which the quantum of the freezing orders was calculated was addressed in paragraphs 2 to 7 of the Plaintiffs' reply submissions, to which I refer but will not set out in detail. In these submissions it was submitted, in respect of the claims against Jim, among other things, as follows:
Compensation payable to RTL for loss resulting from the purchase of shares in the ALSC Entities was quantified as $1.41 million, said to be the difference between the purchase price paid for the shares ($3.25 million) and the true value of the shares at the time they were acquired ($1.839 million).
The Defendants had not provided their own assessment of damages in respect of this claim but allege a failure of reliance in circumstances where there was evidence that RTL, through Peter, relied on oral representations made by Jim and PLHR rather than relying on the contents of the financial documents.
Compensation payable to RTL for loss resulting from the collapse of the ALSC Entities was quantified, at its highest, at $2.858 million in respect of the four entities, and reference was made to the evidence addressing this assessment.
There was a good arguable case that the collapse of the ALSC Entities was caused by two matters. First, the ALSC Securities caused the collapse of the ALSC Entities because they encumbered all the assets of the ALSC Entities in favour of NAB, leaving those assets unavailable as a source of additional finances as a matter of commercial reality, and secondly, the impact on the ALSC Business of the Unauthorised Withdrawals.
The Defendants had not adduced any evidence that the grant of the ALSC Securities and the Unauthorised Withdrawals did not cause the collapse of the ALSC Entities, and the Court should draw an inference that any evidence on the topic would not have assisted the Defendants.
The reports of the administrators (now liquidators) stated that the ability of the ALSC Entities to raise additional or alternative finance was 'unknown', with the administrators also noting that each entity did not have sufficient short term assets to cover its short term liabilities as and when they fell due. It was contended that it could be inferred that, but for the ALSC Securities and Unauthorised Withdrawals, the entities would have had unencumbered assets against which to raise working capital.
The compensation payable to Synochi for loss resulting from the Synochi Loan, as at 10 July 2025, was quantified as $147,500. It was submitted that if the Defendants wished to raise a defence of failure to mitigate loss, as was suggested in their submissions, that could be pleaded in due course but was not a reason to reduce the quantum of the freezing order.
The total compensation therefore payable for the Plaintiffs' losses was $4.415 million (ie, $1.41 million plus $147,500 plus $2.858 million). It was said that the amount of $5 million, which encompassed interest and costs, was therefore an appropriate cap for the freezing order.
134 In respect of Elianne and JKEK it was stated that freezing orders were sought against them on two alternative bases. First it was submitted that there were direct claims against them as defendants to the proceedings which include: (a) claims for loss resulting from the collapse of the ALSC Entities, which is again quantified at the highest at $2.858 million in respect of the four entities; and (b) the compensation payable to Synochi for loss resulting from the Synochi Loan, quantified at $147,500 as at 10 July 2025, and now higher for 10 July 2026.
135 Second and alternatively, it was submitted that Elianne and JKEK are third parties who: (a) hold or are using or have exercised or are exercising power of disposition over assets of Jim, or are in possession of or in a position of control or influence concerning assets of Jim; further or alternatively (b) may be obliged to disgorge assets or contribute to funds of Jim to help satisfy the prospective judgment against him. It was submitted that the amounts of the claims to which the Plaintiffs can look to Elianne and JKEK mirror the amounts of claims against Jim, and accordingly the freezing order against Elianne and JKEK should be in the same amount as Jim, namely $5 million. The Plaintiffs submitted that the Defendants' submissions did not address at all the freezing orders sought against Elianne and JKEK as third parties.
136 With respect to the question of security in connection with the Plaintiffs' undertakings as to damages, it was submitted that there should be no requirement for the Plaintiffs to provide security. Among other things it was contended that the Plaintiffs were not foreign applicants but based in Australia; that the Plaintiffs did not bear an onus of proving their capacity to meet an undertaking as to damages; that the Plaintiffs have assets in Australia being their claims against the Defendants and the shares in the ALSC Entities; that the Defendants concede a good arguable case in respect of the claims; that the Defendants had not adduced any evidence of any loss they expect to face as a result of the freezing orders; and that it was inappropriate to require security for the undertaking as to damages where the depreciation in the value of the Plaintiffs' key assets was caused by the Defendants.[55]
137 The Plaintiffs submitted that there were additional matters favouring the grant of freezing orders including: the absence of affidavits sworn by Jim or Elianne; the absence of an explanation as to why Jim and Elianne have not gone on oath; the objectionable nature of material in the Fourth Lam Affidavit; the tension between Elianne being said to be a 'stay at home mum' and receiving a substantial salary from the ALSC Entities; the reference to Jim managing the affairs of JKEK, suggesting that he was a shadow or de facto director of JKEK; and Elianne's seeking to wash her hands of responsibility by saying it was not her practice to read documents that she signed.
138 The Plaintiffs further submitted that at the time of signing her NAB guarantee there was evidence that Elianne received independent legal advice from lawyers in which she was asked to confirm that she had the opportunity to review the documents and did not require any further information about her obligations in them. Further matters said to support the making of freezing orders included: the evidence regarding the renegotiation of the Brighton Property contract, which was said to underscore the risk of dissipation of assets; the absence of evidence as to whether NAB had been informed of the rescheduled settlement date or whether its position on enforcement of the ALSC Securities has changed, giving rise to a material risk that NAB will enforce the ALSC Securities; and the mischaracterisation of Jim's alleged misappropriation of funds from the ALSC Entities.
139 With respect to the Defendants' submissions regarding pleading issues it was submitted that these should be rejected and that the freezing order application was not the occasion to determine pleading contests. In this context it was submitted that the Defendants had conceded that there was a good arguable case; there was a proper basis for the various claims referred to; that the fiduciary duties alleged were based on authorities referred to in the submissions; that there was at least a good arguable case in relation to the implication of the terms relied upon; that there was evidence that JKEK was controlled by Jim and was used as a vehicle for conducting the affairs of the ALSC Entities; and that there was evidence that Elianne was effectively controlled by Jim by being his proxy and signing whatever documents he placed in front of her, and therefore she, too, was used by Jim as a vehicle for conducting the affairs of the ALSC Entities.
140 It was submitted that r 37A.03(b) of the Rules expressly provided that an ancillary order could be made for the purpose of determining whether the freezing order should be made, and that this was appropriate in relation to PLHR, which was a key entity used by Jim and a company through which he held his interest in the ALSC Entities. Again reference was made to the contention that Jim paid little heed to strict company laws having managed all of the affairs of his wife's company, JKEK, and placing documents in front of his wife to sign, which was said to be a further reason to compel disclosure of assets by PLHR.
141 The Plaintiffs' further submissions in reply were delivered orally by junior counsel on the second day of the Hearing in senior counsel's absence. In substance, they included the following. First, that the Unauthorised Withdrawals excluded from the Defendants' calculation of quantum included three large amounts that were not known at the time that the December 2024 Loan Agreement was negotiated and entered into with Jim. These amounts were said to be (approximately) $85,000 in respect of payment of Elianne's salary; $58,700 in respect of the Ringwood and Reservoir franchise fees; and $34,000 in respect of Jim's consultancy fees.
142 Second, attention was drawn to the Fourth Brady Affidavit, including: the calculation of the alleged further lost interest in respect of the Synochi Loan; Luke's statements regarding the ability of the ALSC Entities to raise finance given the asset position; and the Synochi Trust financial statements.
143 Third, that if the Court was minded to order that security be provided in support of the Plaintiffs' undertaking as to damages, this could be provided by Synochi by way of bank guarantee or some other suitable form of security.
144 Fourth, the Defendants' contention that the Plaintiffs could have put forward a deed of company arrangement was without merit and could not be accepted as constituting a failure to mitigate the Plaintiffs' loss.
145 Fifth, that the amount sought by the Plaintiffs per week for living expenses was unrealistic and unsustainable, with reference being made to the amounts that would be required to be earned in order to sustain that level of living expenses. The Plaintiffs further contended that the preferable course was to set a fixed amount of $10,000 per week for living expenses rather than making provision for 'ordinary living expenses' with a record being kept of those expenses. It was also submitted that the list of expenses provided for the period January to April 2025 could not be taken as a reliable indicator of ordinary living expenses, noting further that the Defendants had recently had to set up a new life in Dubai during that period.
146 Sixth, and contrary to the Defendants' submission, there ought to be no carve-out in respect of bona fide business expenses in favour of Jim or Elianne because there was no evidence that Jim or Elianne were conducting or planned to conduct a business.
147 Seventh, that paragraph 170 of the First Brady Affidavit established that he did not have knowledge of Elianne's salary payments given that the ledgers referred to gross wages and did not identify particular employees, also emphasising that there was no ability to have access to the relevant information between the administration and these applications given that access was cut off and the Plaintiffs did not know in advance that an administrator was going to be appointed.
148 Eighth, it was wrong to submit that Luke was silent about receiving information from Jim at the time of the proposed acquisition in the ALSC Business because this was directly addressed in the First Brady Affidavit.
149 Undertakings were given to the Court by the Plaintiffs as reflected in Schedule A to the authenticated orders. These included undertakings as to damages and an undertaking by Synochi to pay $1 million into Court by 17 July 2025 as security for each of the Plaintiffs' damages undertakings.
General Principles - Freezing Orders and Ancillary Orders
150 The Court has power to make freezing orders pursuant to its inherent power and the express power provided under ord 37A of the Rules, to which I refer but will not set out. Rule 37A.06 expressly states that nothing in ord 37A limits the inherent, implied or statutory jurisdiction of the Court to make a freezing order or an ancillary order.
[22] First ... a freezing order, by its very nature, is a drastic remedy and a court must exercise a high degree of caution before taking a step which will interfere with a party's capacity to deal with his or her assets.[59]
[23] Second, the order is not designed to provide security for the applicant's claim.[60] It is solely directed to preserving assets from being dissipated, thereby frustrating the court process.[61]
[24] Third, the applicant bears the onus both in satisfying the Court that the order should be continued and in satisfying the Court as to the amount which is to be the subject of the order.
[25] Fourth ... an order can only be made on the basis of admissible evidence which supports the contentions made by the party seeking the order. Speculation and guesswork is no substitute for either the facts or inferences properly drawn from proved facts.[62]
[26] Fifth, that before such an order can be made it is necessary that the applicant establish -
(a) an arguable case against the defendant;[63] and
(b) that there is a danger that the prospective judgment will be wholly or partly unsatisfied as a result of the defendant's actions in either removing the assets or disposing or dealing with them so as to diminish their value.[64]
[27] Sixth, the balance of convenience must favour the granting of the freezing order.[65]
[28] Seventh ... there is no set process determining the exact nature of an order. The order will be framed according to the circumstances of the case.[66]
[29] Eighth, the applicant must establish with some precision the value of prospective judgment. The order should not unnecessarily tie up a party's assets and property.[67]
[30] Finally, there may be discretionary considerations which militate against the granting of a freezing order, such as delay in bringing the application on before the court or a lack of candour in the materials placed before the court.[68]
152 In Distinctive FX,[69] Elliott J added that the evidence relied on by a plaintiff in seeking to establish an arguable case against a defendant may also be relied upon to demonstrate that there is a danger a prospective judgment will be wholly or partially unsatisfied as a result of the removal, disposal or diminishing of assets. His Honour also observed that where the allegations made against a defendant contain allegations of serious dishonesty, 'that evidence of itself may satisfy the Court that the requisite danger exists.'[70]
153 Whilst noting the difference in language between 'real risk' under the general law and 'danger' in r 37A.05(4), in the present case the substance of these considerations applies equally, and the result does not change, whether the order is sought pursuant to the inherent powers of the court or pursuant to ord 37A. In this context I note also the observations of the Court of Appeal in Rozenblit v Vainer (Rozenblit)[71] regarding the origins of ord 37A,[72] including the observation that '[t]he governing principles set out in O 37A, which was introduced in 2006 as part of a harmonisation exercise involving all Australian States and Territories, closely reflect the principles enunciated by the High Court of Australia in Cardile v LED Builders Pty Ltd'.[73] In so observing the Court of Appeal again emphasised that the rationale is the prevention of the frustration of the court's processes, not the provision of security, and that caution is required so as not to lightly grant such a drastic remedy.[74]
154 Although the Court of Appeal in Rozenblit was addressing circumstances involving a freezing order pending appeal, its considered observations in that context apply more broadly. The summary of principles there set out was in the following terms:[75]
[19] In summary then, the principles governing an application for a freezing order pending appeal are as follows:
(1) The purpose of granting a freezing order is to prevent the frustration or inhibition of the Court's process by seeking to meet a danger that a prospective judgment of the Court will be wholly or partly unsatisfied. Its purpose is not to provide security in respect of a prospective judgment or order.
(2) A freezing order is to be viewed as an extraordinary interim remedy. The order is a drastic remedy which calls for a high degree of caution on the part of the Court before an order is made.
(3) An applicant for a freezing order pending appeal will be required to establish that there is a good arguable case that the appeal will succeed. This means that it can be seen from the available material that the appeal has a real prospect of success.
(4) It must be shown that there is a reasonable possibility, not necessarily more than a 50 per cent chance, that assets may be disposed of or dealt with or diminished in value if an order is not made.
(5) In the case of an order against a third party, it must be shown that there is a danger that the prospective judgment will be wholly or partly unsatisfied as a result of the third party's ability to exercise power in respect of the relevant assets, or that a court process may be available to the applicant as a result of a prospective judgment, under which the third party may be obliged to disgorge assets or contribute to satisfying the prospective judgment.
(6) The value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant's claim, including interest and costs.
(7) As a condition of making a freezing order it will normally be appropriate to require the applicant to give undertakings to the Court, including the usual undertaking as to damages, supported if necessary by the provision of security.
(8) The order being discretionary,[76] other considerations including the balance of convenience may bear upon the Court's ultimate decision, but it is not a distinct requirement that the balance of convenience favours the making of the order.
(9) The inherent jurisdiction of the Court is preserved and r 37A.05 simply addresses the minimum requirements that ordinarily need to be satisfied in an application.
155 The threshold set by the 'good arguable case' test was described by Edmonds J in Curtis v NID Pty Ltd (Curtis)[77] as being a 'very low one':
Though the respondents have filed a defence in opposition to the applicant's statement of claim in the substantive proceedings, they do not dispute that he has a 'good arguable case'. The threshold is a very low one: in Ninemia Maritime Corp v Trave Schiffahrtsgesselschaft mbH und Co KG (The Niedersachsen) [1983] Com LR 234 at 235 (affirmed on appeal: [1983] 1 WLR 1412), Mustill J (as his Lordship then was) said that a good arguable case is one 'which is more than barely capable of serious argument, and yet not necessarily one the judge considers would have better than a fifty per cent chance of success'. This test has since been applied in numerous domestic cases: Errigal Ltd v Equatorial Mining Ltd [2006] NSWSC 953 (White J); Pure Logistics Pty Ltd v Scott [2007] NSWSC 595 (McDougall J); Westpac Banking Corporation v McArthur [2007] NSWSC 1347 (Barrett J).
156 The observations of Mustill J in Ninemia Maritime Corp v Trave Schiffahrtsgesselschaft mbH und Co KG (The Niedersachsen) (Ninemia)[78] were referred to by McDougall J in Pure Logistics Pty Ltd v Scott,[79] where McDougall J also drew attention to the warning given in Ninemia about not being drawn into a premature trial of the action:
His Lordship followed this by warning that "the court should not be drawn into a premature trial of the action, rather than a preliminary appraisal of the plaintiff's case." Although that warning was directed to the circumstance that, in the case before his Lordship, the dispute was to be resolved by arbitration, it is I think something to be borne in mind more generally. The Court is approaching the question on the basis of very limited evidence compared to what is likely to be led at trial. The Court should not - indeed, in my view, cannot - undertake more than a preliminary appraisal for the purposes of r 25.14.
157 This was recently underscored by the Court of Appeal in Woodruff v Manda Capital Holdings Pty Ltd (Woodruff)[80] when it was observed that the good arguable case test highlights that on such an interlocutory application, '... the Court cannot and should not attempt to resolve disputed factual issues'.[81]
158 In Westpac Banking Corporation v McArthur,[82] Barrett J accepted the plaintiff's submission that the 'good arguable case' criterion adopted by the rules of court is less stringent than a 'prima facie cause of action' criterion. Justice Beach in ACCC v Get Qualified Australia Pty Ltd,[83] observed similarly, and when referring to the observations of Edmonds J in Curtis, noted that the good arguable case threshold '... is not high ...'.[84] In Basi v Namitha Nakul Pty Ltd,[85] Wigney J, referring to Curtis, observed that an applicant has a good arguable case if they have a reasonably arguable case on legal as well as factual matters.[86]
159 In Nicols as trustee of the bankrupt estate of Manietta v Manietta,[87] Cheeseman J held that 'the expression "reasonably arguable case" is a lesser standard than the prima facie cause of action standard.' Justice Pike recently observed in MaxRelief USA Inc v 365 Health Australia Pty Ltd[88] that the good arguable case threshold is 'relatively low', as was also noted by Stevenson J in The Owners - Strata Plan No 89866 v Zouki[89] and Robb J in Firmtech Aluminium Pty Ltd v Xie (No 2).[90]
160 Most recently in Woodruff it was noted that the Court's role is to determine whether on the evidence there is a good arguable case as a necessary first step to determining whether it is just and appropriate to order the relief sought.[91] The Court of Appeal observed further as follows regarding the good arguable case test in respect of both trials and, separately, applications for leave to appeal:[92]
While it is desirable not to explicate the criterion of a 'good arguable case' in fixed terms for every case, it has been said that it must be 'sufficiently plain that there is a serious question to be tried and that the plaintiff has a realistic prospect of success'[93] ie 'more than barely capable of serious argument' but 'not necessarily one which the judge believes is likely to have better than a 50 per cent chance of success'.[94] Relatedly, in the context of an application for a freezing order pending application for leave to appeal, this Court stated that the requirement to establish a good arguable case that the appeal will succeed meant that 'it can be seen from the available material that the appeal has a real prospect of success'.[95]
161 As noted earlier, it is well established that the applicant bears the onus of satisfying the Court as to the amount which is to be the subject of the order,[96] and that the freezing order should not unnecessarily tie up a party's assets and property.[97] Regarding the latter principle, the 'value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant's claim, including interest and costs'.[98] In Cardile,[99] Kirby J explained as follows:
The restraint against the disposal of assets pursuant to an asset preservation order is usually expressed so that it does not tie up assets and property beyond the extent that the party seeking the orders may be thought likely to recover.[100] This rule is a reflection of considerations involved in the "minimum equity" principle, namely that relief should be confined to the "limits set by the purpose which it can properly be intended to serve".[101] In the case of orders affecting non-parties, the practice tends to minimise the inconvenience which an asset preservation order may otherwise occasion.[102] A bank or other innocent non-party could not ordinarily be expected to know details of the judgment debtor's assets.[103] Further the rule is, in part, a consequence of an entirely proper desire to limit the ambit of the orders made to that which is truly necessary, given that breach renders the party bound by the orders liable to prosecution for contempt.[104] To the extent that orders for the preservation of property impede the use by a party of its assets beyond that which is essential to the purposes of the preservation, it oppresses the party bound, exposes it needlessly to risk of punishment for contempt, ties up its affairs and finds no justification in either of the reasons which have given birth to this remedy.[105]
162 The position with respect to freezing orders against third parties, pursuant to r 37A.05(5) of the Rules or the inherent jurisdiction of the Court, has been addressed in various cases, including by Bell J in Gashi[106] and Hargrave J in Robmatjus Pty Ltd v Violet Home Loans Australia Pty Ltd (Robmatjus).[107]
163 In Robmatjus,[108] Hargrave J observed as follows regarding the available process against third parties:
[57] The plaintiffs rely upon the second limb of Rule 37A.05(5). Rule 37A.05(5) is based upon the decision of the High Court in Cardile v LED Builders Pty Ltd.[109] The facts in that case bear a number of similarities to the facts in this case. The joint judgment of Gaudron, McHugh, Gummow and Callinan JJ contains the following statement of principle as to the circumstances in which freezing orders may be made against persons who are not parties to the proceeding:
What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word "may", be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies", of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.[110]
[58] The principles stated by the High Court are now contained in Rule 37A.05(5). In this case, reliance was placed by the plaintiffs upon sub-rule (b) of that Rule. It was submitted that there may be a process available to the plaintiffs under which the non-parties may be required to disgorge property or otherwise contribute to the funds of the defendant to help satisfy any judgment against it.
[59] A threshold issue was raised in argument. It was submitted on behalf of the defendant and the non-parties that, in order to establish that a relevant process "may" ultimately be available, the plaintiffs must establish "a compelling cause of action" for relief as a result of such process being instigated. It was submitted that a mere possibility that some process may ultimately lead to relief of the relevant kind is not sufficient for the purposes of the rule. I do not accept this submission. Although I accept that a merely theoretical possibility will not fall within the rule, I do not think that a plaintiff need establish a "compelling cause of action". It will be enough if a plaintiff can satisfy the Court that, in all the circumstances of the case, there is a real case to be investigated under the process or processes relied upon as potentially yielding a means of satisfaction of the judgment from the assets of the non-parties.
[56] In my opinion nothing in Rule 37A, introduced by Statutory Rule 102/2006, qualifies the entrenched common law requirement in Victoria that in order for Mareva relief to flow, a good arguable case against the respondent must be demonstrated.
[57] If the threshold was reduced to reflect a real case to be investigated, to determine whether the third party may be obliged to disgorge assets or contribute toward satisfying a judgment or prospective judgment, this, in my opinion would not advance the requirement for a high degree of caution to be exercised on the part of a court invited to make an order of this kind, rather, it would diminish the capacity of a court to give effect to the requirement and would be inconsistent with it.
[58] Finally, in my opinion, no distinction is warranted or should be made as to the test to be applied in the evaluation of the evidence in cases where the Mareva order is sought, whether against a party to the principal proceeding or a non‑party.
[59] With the greatest respect to the observations and approach of Hargrave J in Robmatjus, to the extent that his Honour applied the real case to be investigated test for the purposes of granting a freezing order against third parties, I decline to follow and apply such a test.
[60] Accordingly, and in addition to discretionary considerations to be taken into account, as a minimum in my view, a good arguable case against a respondent must be demonstrated before relief may be granted for a freezing order under Rule 37A, whether that relief is sought against a party to the principal proceeding or a third party.
165 The 'good arguable case' test for third parties has been followed consistently in subsequent authorities.[115] In SK Developments, Nichols J addressed the principles regarding third parties that emerged from the High Court's decision in Cardile[116] and helpfully further elaborated in connection with companies, shareholders and directors,[117] to which I refer but will not set out here.
166 Although additional considerations may arise when a post-judgment freezing order is sought,[118] as is apparent from many of the authorities, the terms of the Form 37AA - Freezing Order in the Rules, and paragraph 4.10 of the relevant Practice Note,[119] exceptions or carve-outs to a pre-judgment freezing order are almost invariably specified so as to allow payments to be made for specified particular purposes.[120] In Westpac Banking Corporation v McArthur,[121] Barrett J made a number of instructive observations regarding the inclusion in freezing orders of qualifications or exceptions for legal expenses and for living expenses:
[51] In relation to all these matters, it is necessary to remember that a freezing order of this kind is not meant to operate as a form of de facto security for any judgment the plaintiff may ultimately recover. The sole concern is with reasonable measures to ensure that the processes of the court are not frustrated by removal or dissipation of assets that will in the ordinary course be available to answer the judgment.
[52] ... First, it is appropriate to make some general observations. When it comes to specifying monetary limits for legal expenses and accountancy expenses, the court necessarily enters upon a difficult terrain. I note, in that respect, that the draft form of order suggested by the majority in Cardile v LED Builders Pty Ltd (1997) 198 CLR 380 at p.410 does not contemplate any monetary limit. There is reference only to "the reasonable legal expenses of defending these proceedings and any appeal therefrom" and "their normal accountancy fees". This, it seems to me, indicates the desirability of allowing expenditure on "reasonable and proper" legal and accountancy expenses incurred and to be incurred by the person concerned. It would be wrong to think that a client subject to a freezing order and incurring such legal and accounting expenses will somehow be more profligate and less vigilant than a client not subject to such an order. The money is, after all, his own money and expenditure of it by way of payments to lawyers and accountants for services rendered cannot be seen as presenting some opportunity for indirect and improper dissipation in the face of the possibility of a future judgment. As a check, however, it is desirable that provision be made for what was called, in Halifax plc v Charlton [2001] EWCA Civ 1750, "self-certification", that is periodic written certification by Mr McArthur's lawyers as to the amount of the reasonable and proper legal expenses incurred. The lawyers, as officers of the court, would have obvious responsibilities in that regard.
[53] In relation to living expenses, a limit per week (or per month or per day) presents obvious difficulties. If a person goes to the dentist for major treatment, thousands of dollars might be spent in one particular week on that item alone, while nothing is spent on dental treatment again for many months. If rent for a dwelling is payable monthly and a weekly limit on expenditure is set, there will be an item of expenditure for rent in every fourth week but no such expenditure in any of the intervening weeks. If a residential property is owned, there will be expenditure on council rates in one week of the year (or one week in each quarter, if the option to pay by four instalments is exercised). An order embodying a weekly limit may instinctively be assumed to allow some form of averaging (so that, for example, the large dental bill or the annual or quarterly charge for rates can somehow be spread over some number of weeks assumed to be appropriate) - but, of course, that is not the effect of such an order at all. An order which simply limits expenditure on living expenses to a stated sum "per week" means what it says, that is, that there must be no week in which more than the stated sum is expended on living expenses.
[54] There is also the point that a successful applicant for a freezing order does not acquire the right to tell the person bound by the order how to live his or her life. The draft form of order suggested in Cardile refers simply to "ordinary living expenses" without quantification.
167 In the circumstances then being considered by Barrett J, his Honour observed that a budget that had been put forward did not form any basis for fixing a weekly or other periodic limit on personal expenses, and concluded that the preferable approach was to follow the course suggested by the form of order in Cardile, by including an exception for 'ordinary living expenses' without qualification. Justice Barrett also regarded it as appropriate in the circumstances to make a further order requiring the relevant defendant to keep a record of amounts actually expended on ordinary living expenses and produce that record to the court if and when a further order requiring such production was made. This was said to 'provide a mechanism for monitoring and checking should the plaintiff in future persuade the court that compliance with the 'ordinary living expenses' exception is in question.'[122] His Honour also observed as follows in this context:[123]
A person who is under court-imposed constraint as to expenditure on "ordinary living expenses" must, before making any expenditure on "living", pause to think whether the expense he or she is defraying is in truth part of "ordinary" living expenses. If a clear positive answer cannot be given, the expenditure must not be made. The need to keep records imposes an additional personal discipline.
168 The observations of Derham AsJ in Vasilaras & Co Pty Ltd v Laprese were similarly oriented:[124]
[70] The function of the order is to minimise the possibility of an unscrupulous defendant rendering itself judgment proof by taking steps which are liable to produce the result that no assets are within the jurisdiction on the day of judgment.
[71] The exception that is always made in a freezing order for living expenses and legal costs reflects a recognition of the nature of the order. Because it is not security, and because the object is to prevent an abuse of process of the Court by the defendant disposing of his assets to defeat any judgment, the freezing order cannot extend to prevent a respondent from having access to its own assets to the extent necessary to meet legitimate expenses such as ordinary living and business and legal expenses.
[72] The aim is not to stop people spending their money. It is to stop them spending it in ways which are not legitimate having regard to the interests of the claimants in ensuring that there is no untoward removal of assets from the ownership of the person against whom a judgment may in due course be entered. The denial of access to funds needed to fund the conduct of the very litigation the integrity of which the order is designed to protect goes beyond the proper protective province of the jurisdiction.
169 Whether a carve-out for living, legal, or other expenses will be made, and the extent of it, is ultimately dependent on what is just and convenient in the circumstances of the case,[125] noting also that where the freezing order is not in respect of all of a person's assets (up to a specified limit or otherwise), a relevant factor will usually be whether the defendant has sufficient available assets other than those which are the subject of the freezing order to meet those costs.[126] In such a case the defendant will bear the evidential burden to establish that they do not have sufficient available assets to meet those costs.[127]
170 The Court has the power to make ancillary orders under the Rules and pursuant to the Court's inherent jurisdiction. Rule 37A.03 of the Rules provides as follows:
(1) The Court may make an order (an ancillary order) ancillary to a freezing order or prospective freezing order as the Court considers appropriate.
(2) Without limiting the generality of paragraph (1), an ancillary order may be made for either or both of the following purposes -
(a) eliciting information relating to assets relevant to the freezing order or prospective freezing order;
(b) determining whether the freezing order should be made.
171 With respect to the making of ancillary orders in conjunction with a freezing order, J Forrest J observed as follows in Deputy Commissioner of Taxation v AES Services (Aust) Pty Ltd (No 2):[128]
[16] It is now well settled that a Court has the power to make ancillary disclosure orders in conjunction with the imposition of freezing orders.[129]
[17] The Court has the power to make orders that will achieve the objective of the freezing order. In Hospital Products Ltd v Ballabil Holdings Pty Ltd, Rogers J said:
...Mareva injunctions are granted to preclude the disposal of assets designed to render a defendant judgment proof. An affidavit of discovery of assets may be ordered in every case where the information in such affidavit will further the court's purpose in defeating such a stratagem... The object must remain throughout to prevent disposal of assets in furtherance of the illegitimate aim of making oneself judgment proof and of stultifying the order of the court. Whatever needs to be done to achieve that objective, the court has power to order as part of its inherent jurisdiction.[130]
[18] In Bax Global (Australia) Pty Ltd v Evans,[131] Austin J said:
Since the source of the jurisdiction to make Mareva orders is the Court's inherent power to prevent abuse of its processes and stultification of the administration of justice by the removal of assets from the plaintiff's reach, the Court must also have the power to order disclosure of the nature and location of particular assets or assets of a class so that the Mareva relief is effective and not oppressive. As Robert Goff J pointed out in A v C (at 351), if the plaintiff does not know the number and location of (say) the defendant's bank accounts, a Mareva order in respect of bank accounts generally could be oppressive both to the defendant and to the bankers who are required to act in accordance with it, especially where there is more than one account or several defendants. Without information about the nature and location of the defendant's assets, the plaintiff may be unable to make the risk assessment which is necessary in order to give the undertaking as to damages, or if the undertaking is given, it may lead to an unexpected exposure. Robert Goff J concluded, as do I, that considerations such as these point to the conclusion that in the special cases where the court decides to make Mareva orders, it may make such disclosure orders as are necessary to ensure that the Mareva jurisdiction is properly and effectively exercised.
[19] It follows that any disclosure order should be made for the purpose of rendering the freezing order effective. In Turner v Universal Home Loans,[132] for example, Austin J found that it was inappropriate for the plaintiffs to seek an affidavit of assets and income, when it was plain that the purpose of requiring the affidavit would be related to the allegation of breach of the asset preservation orders, rather than to make the asset preservation orders effective.[133] His Honour concluded that such disclosure would go "outside the jurisdictional basis for ancillary disclosure orders".[134]
[20] In Universal Music Australia Pty Ltd v Sharman License Holdings Ltd,[135] Moore J said:
Ancillary orders can be made to make the Mareva order more efficacious. One such order involves directing the party bound by the Mareva order to file an affidavit disclosing assets on which the Mareva order operates: see generally the judgment of Conti J in Kuan Han Pty Ltd v Oceanview Group Holdings Pty Ltd [2003] FCA 1063 at [45] and following. The reasons why such an affidavit can render the Mareva order more efficacious are helpfully described by Peter Biscoe QC in Mareva and Anton Pillar Orders: Freezing and Search Orders, LexisNexis Butterworths, Sydney, 2005, at [3.3]:
There are several reasons why an assets disclosure order is important to the efficacy the other freezing order. First, disclosure of the assets upon which the freezing order operates makes it more difficult for a respondent surreptitiously to disobey the freezing order. Secondly, disclosure identifies third parties such as banks who have custody of the assets and enables notice of the order to be given to them so as to bind them to the order, for third parties will be guilty of contempt of court if they knowingly assist a respondent to breach the order. Thirdly, disclosure may enable the freezing order to be framed by reference to specific assets rather than as a maximum some [sic] order, thereby minimising oppression to the respondent, and unnecessary exposure of the applicant to risk under its undertaking as to damages. Fourthly, disclosure assists an applicant to make a rational decision whether to continue its undertaking as to damages.[136]
[21] Courts have been careful to ensure that disclosure does not exceed what is necessary to make the freezing order effective. In Iraqi Ministry of Defence v Arcepey Shipping Co SA,[137] for example, Goff J said that the Mareva jurisdiction should not "improve the position of claimants". Rather, it should prevent the injustice of a defendant removing his assets from the jurisdiction which may have otherwise been available to satisfy a judgment. In Australia and New Zealand Banking Group Ltd v Bank of Melbourne Ltd,[138] Ashley J said:
It is no doubt very important that the intention of a Mareva injunction be not frustrated by a concealment or an inadequate disclosure of assets. As against that, a defendant is not to be treated as a "debtor in advance"; and the court should not sanction what appears to be a fishing expedition.
[22] In keeping with these principles, in Macquarie Bank v Riley Street Nominees,[139] Campbell J ordered that the contents of an asset disclosure affidavit should not be disclosed except to the applicant's legal advisers His Honour's intent being to ensure that information went no further than was needed for the purpose of the freezing order.[140]
[23] There are cases in which an ancillary order may be utilised, for example where there is a prima facie case of deprivation of property, to trace funds "with a view to recovering them".[141] Indeed, in this case, when making my initial orders, I concluded:[142]
Here, there is a strong prima facie case that ATO has been deprived of many millions of dollars by the conduct of AES and the directors. It is appropriate that orders be made in relation to both the directors and, as subsequently considered, the third parties, so that AES's funds can be traced and, if it becomes necessary, recovered.
172 Justice J Forrest also noted the importance of caution given the nature of information disclosure ancillary orders, and stated that he was not intending to convey '... that there could be an open ended inquiry forcing the third parties to provide information as to the ultimate source of the funds. That is not the purpose of the ancillary orders as the authorities ... demonstrate'.[143]
173 Although out of deference to the parties' filed material and submissions I have referred to much of the background and various competing factual and other positions, it is desirable to underscore that I am here dealing only with an interlocutory application at an early stage of the proceeding. As addressed in the authorities referred to earlier, on an application such as this it is important that the Court is cognisant of its important but limited task, and that it is not drawn into a premature trial of the proceeding or any aspect of it. As the Court of Appeal recently observed in Woodruff,[144] the Court cannot and should not attempt to resolve disputed factual issues. Having regard to the extensive material and submissions filed on this application, these observations resonate in the present circumstances.
174 Determining this application of course required consideration of the applicable rules and principles regarding freezing order applications, including in this case principles and rules relevant to freezing orders, information disclosure orders, the position of third parties, the good arguable case test, onus of proof, quantum, and exceptions or carve‑outs to freezing orders. However, there was no relevant controversy between the parties about the relevant principles, and these are addressed in the previous section of these reasons.
175 In all applications of this kind it is fundamental to keep firmly in mind that freezing orders are drastic and extraordinary remedies requiring the Court to exercise a high degree of caution before taking a step that will interfere with a party's capacity to deal with their assets. As is constantly emphasised in the authorities, a freezing order is not designed to provide security for an applicant's claim but is directed to preserving assets from the risk of being illegitimately dealt with so as to ensure that the processes of the Court are not frustrated by the removal or dissipation of assets.[145] As I later observe, there were aspects of the Plaintiffs' submissions regarding proposed carve-outs and exceptions to the freezing orders that raised the question of whether the bright line between protection of the Court's processes on the one hand, and not providing security for a claim on the other, had become a little blurred.
176 I also emphasise the obvious point that the Court must separately consider the position of each of the parties against whom freezing orders and/or information disclosure orders are sought, which I do below. It is also to be remembered that in this case the Application falls to be determined in a context where the Defendants ultimately conceded and accepted a number of things for the limited purposes of the Application, including the following:
The Plaintiffs had established a good arguable case in respect of each of the claims brought against each of the Defendants, but they contested the quantum of the alleged loss.[146]
The Plaintiffs had established the required risk of dissipation or removal of assets by the parties against whom the freezing orders were sought, and this issue was not contested.
Freezing orders could be made against Jim, Elianne and JKEK but, given the contested quantum issues, they should not be of a sizeable amount.
Although it should not be necessary to consider the position of Elianne and JKEK as third parties to the claims against Jim given the direct substantive claims against Elianne and JKEK, it was open to the Court to make freezing orders against Elianne and JKEK on a third party basis, but if that occurs the orders should not be of a sizeable amount.
The making of information disclosure orders against Jim, Elianne and JKEK was not opposed.
The source of the funds for the purchase of the Brighton Property was originally from Jim through the sale of his 30 Moffat Street property.[147]
177 I add that concessions regarding the good arguable case threshold, and/or the risk of removal or dissipation of assets, are not uncommon in freezing order applications. Typically there are forensic, pragmatic, strategic, or other considerations, informed by matters of principle,[148] that influence such decisions. This can include circumstances where there is considered to be little or limited practical utility in contesting the good arguable case threshold in respect of one or more claims where it is considered that the threshold has been met in respect of relevantly related parallel or similar claims. I respectfully observe that, having regard to the applicable principles and the evidentiary material and submissions before the Court, it appeared to me that the concessions made by the Defendants were understandable and appropriate in the circumstances, noting again that they were made without prejudice to the Defendants' quantum contentions.
178 I turn now to the position of each of Jim, Elianne, and JKEK, following which I address: the exceptions and carve‑outs to the freezing orders; the ancillary order application against PLHR; the undertakings proffered by the Plaintiffs; and the security required to support the Plaintiffs' damages undertakings. I add for completeness that, in reaching the conclusions referred to below, I have had regard to the objects referred to in s 9 of the Civil Procedure Act 2010 (Vic) (CP Act) and I have sought to give effect to the overarching purpose in s 7 of the CP Act, as required by s 8 of that Act.
Freezing order and information disclosure order against Jim
179 A freezing order and information disclosure order should be made against Jim, with the relevant asset value of the freezing order set at $3.5 million. This amount is materially less than the asset value amount pressed for by the Plaintiffs, and materially more than the asset value amount pressed for by the Defendants.
180 It is self‑evident and was common ground that the claims and causes of action pursued in the FASOC against all of the Defendants are justiciable in this Court. Putting quantum to one side, the Defendants also accepted for present purposes that the Plaintiffs had shown a good arguable case against Jim in respect of the claims brought against him. In addition they accepted that it had been established that, having regard to all the circumstances, there is a danger that a prospective judgment of the Court against Jim will be wholly or partly unsatisfied because the assets of the judgment debtor or another person might be removed from Australia or from a place inside or outside Australia, or might be disposed of, dealt with or diminished in value.[149]
181 Given the above, it was apparent (and common ground) that the relevant requirements of rr 37A.05(1)(b) and (4)(b) of the Rules were satisfied so as to enliven the Court's discretion under the Rules[150] to make a freezing order against Jim. Putting quantum to one side for the moment, even if the concessions referred to had not been made, having regard to the applicable rules and principles, the material before the Court, and the submissions of the parties, I would have concluded that the relevant requirements of the Rules had been satisfied in any event, including that a good arguable case had been shown in respect of at least a sufficient number of the claims made to support a freezing order being made against Jim with an asset value of $3.5 million. In light of the concessions made, it is neither necessary nor desirable to elaborate why I would have so concluded.
182 Whilst recognising the nature and extent of the onus that the Plaintiffs bore regarding the quantum of the claims made against Jim, Elianne, JKEK, and PLHR,[151] having regard to the applicable principles, the submissions made, and taking into account and weighing the evidence before the Court, I am satisfied that for present purposes the Plaintiffs have satisfied the burden and onus cast upon them in respect of the good arguable case of the:
$1.41 million quantum of the alleged loss claimed in respect of, at least, the misleading and deceptive conduct claims against Jim and PLHR regarding representations about the past and future EBITDA, financial performance, and value of the ALSC Business in the period leading up to RTL's acquisition of its 50% interest of the ALSC Business ($1.41 Million RTL Purchase Loss); and
Synochi's alleged lost interest claims of $147,500 in respect of the period up to 10 July 2025 ($147,500 Synochi Loss).
183 However, on the evidence before the Court I do not accept at this point that RTL has discharged the burden and onus that it bore regarding the good arguable case about the quantum of the alleged loss of the lost investment claims, namely approximately $2.858 million or alternatively approximately $1.863 million. Rather, I have concluded that the high end of the good arguable case of the quantum of loss established for those claims for present purposes is $1,497,355.94 ($1.497 Million Lost Investment Amount).
184 Putting the Unauthorised Withdrawals amounts of approximately $493,000 to one side ($493,000 Amount), the above amounts give a total for present purposes of $3,054,855.94, which in practical terms I consider should be rounded down to $3 million. In addition, an amount should be allowed to reflect interest, taking into account the prescribed statutory interest rate of 10% per annum and a 12-month period to trial, as well as an amount for taxed costs, which I consider at this stage should total $500,000. This gives a combined asset value for the purpose of the freezing order against Jim of $3.5 million (Jim Freezing Order Amount).
185 I elaborate below as to why I have reached these conclusions, addressing in turn the $1.41 Million RTL Purchase Loss, the $147,500 Synochi Loss, and the $1.497 Million Lost Investment Amount. Noting that the Plaintiffs did not seek to add to the asset value amounts in the proposed freezing orders the $493,000 Amount to the alleged loss that I have mentioned above, given my conclusions it is not necessary for present purposes to separately address the quantum challenges to the $493,000 Amount as this amount has not at this point been reflected in the asset values for any of the freezing orders.
186 The affidavits of Peter and Luke contain evidence regarding among other things: alleged false oral representations made by Jim about past and future EBITDA of $1.2 million per year; Peter relaying the representations to Luke; Peter's strong friendship with Jim and how much Peter trusted Jim; Peter and Luke trusting and relying upon Jim's representations; the agreed use of an earnings multiple of 5.5 being applied to the represented EBITDA for determining the value and acquisition price of the ALSC Business in 2021; the lower EBITDA of $668,782 for 2019, being the latest year financials not affected by the COVID-19 pandemic (2019 EBITDA); how the 2019 EBITDA was calculated; how applying a multiplier of 5.5 to the 2019 EBITDA yields a business value of $3.678 million, half of which is $1.839 million; $1.839 million being the true value of a 50% share of the ALSC Business at the time of acquisition in 2021; and RTL's loss on the purchase price of at least $1.41 million, being the (approximate) difference between the $3.25 million purchase price and the alleged $1.839 million true value of the acquired 50% share.
187 Whilst it is accepted that Ms Lam's evidence revealed that Jim firmly contests and disputes many factual matters deposed to by each of Luke and Peter, including in connection with the making of the alleged representations, reliance by Peter or Luke on anything Jim said, Peter and RTL looking after their own interests, and other related matters, it is plain that the Court cannot and should not on this application seek to resolve any of these (or any other) factual disputes at this point. These contested factual issues will ultimately be a matter for trial, recognising also that, based on the material currently before the Court, the credit of at least Jim, Elianne, Peter and Luke will be very much in issue.
188 With respect to the attacks in the Defendants' submissions on the evidence of Luke and Peter in connection with the making of the alleged EBITDA and earnings representations and reliance upon the same, it is again to be remembered that the assessment being undertaken on this application is a very different one to the assessment that will be undertaken at trial. Whilst it is accepted that there was some scope for additional evidence on these topics to be adduced from Luke or Peter, in my view, and for the present purposes, this does not relevantly or materially detract from my conclusion that the evidence before the Court is sufficient to discharge the onus borne by RTL in respect of the $1.41 Million RTL Purchase Loss.
189 That said, I also observe that the evidence given by Peter regarding his friendship, trusting relationship, and pre-purchase communications with Jim, was reasonably detailed, including regarding the alleged $1.2 million EBITDA representations. Peter also exhibited a note of the 27 April 2021 meeting, said to have been made at the time, that recorded Jim as saying, among other things, that sales will be better and stronger going forward and that the historical $1.2 million EBITDA will be easily met: 'Trust me I've been running this business for over 20 years.'
190 I note also that this is not a 'no transaction' claim, but is a claim that the acquisition of the ALSC Business would have proceeded as planned, but that the earnings multiple of 5.5 would have been applied to the 2019 EBITDA amount rather than the allegedly misrepresented EBITDA of $1.2 million.
191 I add that the evidence that the original purchase price was calculated by applying a 5.5 multiple to the $1.2 million EBITDA (and then halved) is supportive for present purposes of the contention that the value and price in the alleged counterfactual would have been determined in the manner alleged, namely by applying the same multiple of 5.5 to the (pre-COVID-19) 2019 EBITDA, which also finds support in the evidence in Peter and Luke's affidavits. It is also the case that there was evidence regarding the 2019 financials and how the alternative lower 2019 EBITDA amount was arrived at, noting also that Jim did not advance any evidence through Ms Lam that the 2019 EBITDA figures used by Luke for the counterfactual were wrong, inappropriate or materially inappropriate. And even if he had done so, this would have been another contested factual matter incapable of determination in this application. It also does not appear illogical for the Plaintiffs to have used pre-COVID‑19 financials in the counterfactual for present purposes, particularly noting Jim's evidence of the adverse impact of the COVID-19 pandemic on the revenue of the ALSC Business.
192 The end point is that, on the material and submissions before me, RTL has discharged the burden and onus that it bore for present purposes regarding the claimed $1.41 Million RTL Purchase Loss in respect of the purchase price overpayment claims against Jim and PLHR. Of course this conclusion is based only upon the information before the Court at this time and does not foreclose the position for all time. If circumstances materially changed, including for example, if the experts for both parties concluded that the claimed loss was materially lower, then one or other of the parties may wish to revisit the issue in communications between the parties and/or by application to the Court in the light of the then prevailing circumstances. However, these are matters for another day.
193 It will be apparent from the above, my ruling delivered on 10 July 2025, and the freezing orders made, that I do not accept the Defendants' contention that the loss for the inflated purchase price claims should be set at zero value for the purpose of determining the asset value to be included in the freezing order against Jim. In addition to the matters referred to above, I make the following brief observations regarding a number of the matters raised by the Defendants in this context.
194 There is little force for present purposes in the contention in the Defendants' Quantum Table and their submissions that the purchase price claims should be given a zero value on the application because Peter and Luke were given financial material prior to the acquisition, and because they had relevant financial expertise. This simply reveals the existence of some of the many issues of contested facts regarding (at least) reliance and causation. To the extent that it was pressed, I also give little weight to the Defendants' contention that Luke was 'oddly silent' or failed to state in his evidence that Jim provided him with documents and communications prior to RTL's purchase of its 50% share in the ALSC Business. This is because Luke specifically referred to receipt of material from Jim in the First Brady Affidavit, together with his explanation as to why he did not review or address the materials at the time. Whether or not Luke's (or Peter's) evidence is ultimately accepted at trial about these and related topics is another matter, about which I say nothing further at this point.
195 With respect to the Defendants' criticisms about the quantum evidence regarding the $1.41 Million RTL Purchase Loss being too speculative, unreasonable and partisan to discharge RTL's onus, in the context of the other relevant evidence I do not consider this to be so for present purposes. I refer in this regard to the evidence of Luke and Peter regarding events leading up to the acquisition, including the matters referred to above. Weighing all the evidence as I have, and keeping in mind the principles applicable to applications of this kind, including in respect of quantum, the evidence regarding the $1.41 Million RTL Purchase Loss, including with respect to causation, is sufficient for present purposes to discharge the burden and onus borne by RTL regarding the same. Whether that will be so at trial is a different matter.
196 In my view the Defendants' emphasis in submissions regarding the competing evidence about the making of the representations, the absence of reliance of Peter and Luke, and Peter and Luke not taking care of their own interests, was somewhat misplaced in the current context. These contested matters cannot and should not be determined or adjudicated upon in this application. Whilst the evidence demonstrates aspects of the challenges that might emerge for the Plaintiffs at trial, for present purposes they do not materially assist the Defendants' contentions regarding quantum of loss or other related matters.
197 As previously noted, given my observations above regarding the $1.41 Million RTL Purchase Loss, it is not necessary to say anything further in this context regarding the $493,000 Amount or any component of it, noting again that none of these amounts have been taken into account in arriving at asset value amounts to be included in any of the freezing orders. It also appeared that taking this amount into account in arriving at freezing order asset values carried with it a risk of 'double-counting', although it is not necessary to determine this question.
198 Although I have concluded that, for present purposes, the Plaintiffs have discharged their onus or burden in relation to the good arguable case about the quantum of the $1.41 Million RTL Purchase Loss (and quantum of loss in respect of the claims referred to below more generally), it is to be emphasised that these conclusions reflect the application of a different and lower standard, for a different purpose, to that which will be applied at trial. Whilst I accept the Defendants' contention that, on the material currently before the Court, none of the Plaintiffs' loss claims currently present as strong claims, that is not particularly germane because that is not the relevant threshold required to be met by the Plaintiffs on this application, whether in relation to quantum or otherwise.
199 With respect to the quantum of the $147,500 Synochi Loss to 10 July 2025, this is relatively straightforward for the present purposes. It is sufficient to say that the affidavit material includes evidence regarding: the making of the Synochi Loan; the interest rate and default interest rate applicable; Synochi being unwilling to allow the loan to be repaid and the Synochi Mortgage discharged if it had been aware of the misuse of the ALSC Securities; Synochi not yet having been able to re‑lend the repaid amount of the Synochi Loan to another borrower; and the Synochi Loan amount being held in a bank account at interest rates less than the Synochi Loan interest rates.[152]
200 Weighing all of the evidence in relation to the Synochi Loan, and noting that the arithmetic of the calculations was confirmed not to be in issue between the parties, in my view Synochi has discharged its burden and onus for present purposes of establishing a good arguable case about the loss to 10 July 2025 in the $147,500 amount claimed. Whilst it is apparent that the claim will be disputed and that many contested issues will arise, again, the Court cannot and should not seek to resolve any of these matters at this stage. With respect to some of the other matters raised by the Defendants about the quantum of this aspect of the alleged Synochi Loss, I make the following observations.
201 Whilst it is accepted that the evidence regarding the steps taken by Synochi to seek to lend the repaid Synochi Loan to other borrowers could have been more comprehensive, and may give rise to mitigation contentions in the defence, the position remains that, to the extent required for present purposes, Synochi has discharged its onus in establishing the $147,500 quantum of its likely loss in respect of this claim. The evidence given by Luke about Synochi not yet being able to re-lend the repaid Synochi Loan to another borrower is clear and direct evidence given on oath and is not retreated from or qualified in the Fourth Brady Affidavit filed during the Hearing. Luke's evidence also refers to the precise interest-bearing deposit accounts in which the repaid Synochi Loan funds are held, and the lower rates of interest being achieved. There is also direct evidence from Luke that Synochi would not have allowed the Synochi Loan to be repaid and the Synochi Mortgage discharged if it was known that the ALSC Securities were being pledged by Jim for the personal purposes that they were.
202 Whilst it is true that there is not any direct evidence from the Plaintiffs of the fact that JKEK was unable to obtain a different loan to the NAB loan to repay the Synochi Loan, that is not surprising given that the seeking of such an alternative loan is a past hypothetical event that on the evidence did not occur. It is the Defendants who could give the direct evidence about this at this stage if it had occurred. Further, there is evidence that Jim and Elianne's financial circumstances were, to say the least, very strained, if not somewhat precarious, at the relevant time. It might also reasonably be inferred on the evidence that Jim would not have given the ALSC Securities to NAB in respect of the NAB Synochi Loan unless they were required by NAB to secure the same.
203 As I have said, weighing all the evidence, including that referred to above, in my view Synochi has discharged for present purposes the burden and onus that it bore on this Application in relation to the causation and quantum of the $147,500 Synochi Loss in respect of the period to 10 July 2025.
204 The position is different regarding the $254,499.90 additional lost interest amount claimed by Synochi in respect of the alleged lost interest for the period between 10 July 2025 and 10 July 2026 (Synochi Further Interest Amount). Whilst there is evidence that the settlement of the sale of the Brighton Property has been deferred until 10 July 2026, at this point the extent to which, if any, Synochi may incur relevant losses in respect of lost interest during the 10 July 2025 to 10 July 2026 period calls for too much speculation, and Luke's evidence (including in the Fourth Brady Affidavit) does not materially assist in discharging Synochi's burden and onus in respect of this matter for present purposes. Self-evidently, what may or may not occur in the future is materially different to what is said to be the historical known facts and events that occurred during the period that has passed. Consequently, Synochi's claimed loss in respect of the Synochi Further Interest Amount is not reflected in the asset value amounts used for the freezing order against Jim (or against Elianne or JKEK).
$2.858/$1.863 Million Claimed Lost Investment Amounts
205 Turning to the alleged quantum of the lost investment claims, it is again clear from the evidence and submissions that there are and will be many issues of contested fact in relation to (relevantly, for present purposes) the quantum of the alleged loss and causation of the claimed $2.858 million/$1.863 million investment loss amounts (Claimed Lost Investment Amounts). I also accept that it may be that some of these issues will fall to be considered by reference to additional and, possibly expert, evidence should the matter proceed to trial. However, having weighed the evidence and considered the submissions, I am not satisfied that RTL has discharged its burden and onus regarding the good arguable case about the quantum of either of the Claimed Lost Investment Amounts in respect of the various lost investment claims against the Defendants. That said, I am satisfied that RTL has discharged its burden and onus for present purposes in respect of a loss in the amount of the $1.497 Million Lost Investment Amount referred to above.
206 As is apparent from the evidence and earlier parts of these reasons, the Claimed Lost Investment Amounts were addressed directly by Luke using the same method and approach that was said in the evidence to have been agreed with Jim at the time of the acquisition, namely by applying a multiple of 5.5 to EBITDA figures in order to derive a value and price for the entire enterprise, and then dividing it by 2 to derive a value for RTL's 50% share. Luke explained how the Claimed Lost Investment Amounts were calculated using EBITDA taken from the financial statements prepared by Deloitte, the ALSC Business accountants, for the 2023 and 2024 financial years, and how the relevant EBITDA figures were arrived, to which I refer but will not set out.
207 Having considered and weighed all the relevant evidence and taken into account the submissions, I am satisfied that RTL has established for present purposes a good arguable case about the quantum of loss for the lost investment claims, namely the $1.497 Million Lost Investment Amount. Although I have considered all of the relevant evidence, I draw attention to the following:
There was evidence from Luke and Peter that an EBITDA multiple of 5.5 had previously been used as the method for valuing the ALSC Business at the time of the acquisition in 2021, and that this was an agreed method with Jim.
There was evidence regarding a purchase approach having been made to Jim in January 2023 by a possible purchaser to acquire the ALSC Business using a methodology of multiples of EBITDA, being Luke's evidence regarding the 'SILK' approach, which also referred to an EBITDA multiple of 5.5.
The EBITDA multiple used by Luke for calculating the claimed loss was 5.5, which was consistent with the evidence of the EBITDA multiple used at the time of the acquisition in 2021 and the multiple addressed with 'SILK'.
There was evidence that the financial information for the 2023 and 2024 financial years, used by Luke to derive the relevant EBITDA figure for those years, was prepared by Deloitte as the ALSC Business' external accountants.
The Deloitte financial information appeared to be the latest financial details in evidence for the 2024 year prior to the financial material referred to in the administrator's reports post-administration. The Deloitte financials were also referred to in the administrator's reports, understandably on an unaudited basis.
The administrator's reports set out the Deloitte externally prepared financial statements for each of the ALSC Entities for each of the 2023 and 2024 financial years. These statements provide quite a detailed breakdown for each of the said years, including in respect of income and expenses, and they separately identify interest and depreciation expense items.
Luke used the 2023 and 2024 revenue and expenses from the Deloitte financials to derive EBITDA for the 2023 and 2024 financial years in the way addressed in the First Brady Affidavit. This involved taking the net accounting profit/(loss) before income tax and 'adding back' the amounts for interest and depreciation expense, thereby arriving at an EBITDA amount - ie, earnings before interest, tax and depreciation allowances. For the reasons referred to by Luke in his evidence, he also 'added back' Jim's salary in each of those years and an amount for Elianne's salary in the 2024 year.
Adding back Jim's salary and Elianne's salary had the impact of inflating the earnings figures in each of the relevant years by the amount of the salary amounts added back. On the evidence I am not satisfied that the reasons given by Luke for adding back Jim's salary ought to be applied for present purposes given that the approach was derived from a discussion about a possible sale to a third party at a different time in a different context, and there is therefore a consequent risk adverse to the Defendants that the loss amount derived from such an EBITDA amount would be overstated.
The calculation undertaken by Luke and referred to in an annexure to the First Brady Affidavit can very largely be arithmetically reconciled to the Deloitte figures for each of the relevant years set out in the administrator's reports, and it is a simple arithmetical exercise to reverse out Luke's 'add back' of Jim's salary amounts for each of the years, noting that they are identified by Luke as having been added back to the net accounting profit in the relevant years, and noting that the amounts are specified in the evidence.
I have not adjusted the 2024 EBITDA to reverse the 'add back' of the $66,417.07 for Elianne's wages in that year. This is because a good arguable case has been shown that this amount was not a legitimate expense at that time.
Undertaking the arithmetical exercise mentioned above yields:
a) revised EBITDA figures of $958,949.00 and $544,493.07 for the 2023 and 2024 financial years respectively (compared to Luke's figures of $1,039,569.80 and $677,693.07);
b) revised EBITDA derived enterprise values based on a multiple of 5.5 of $5,274,219.50 (2023) and $2,994,711.89 (2024) (compared to Luke's values of $5,717,633.90 and $3,727,311.89); and
c) revised half-share enterprise values of $2,637,109.75 (2023) and $1,497,355.94 (2024) (compared to Luke's values of $2,858,816.95 and $1,863,655.94).
This is how I have, for present purposes, arrived at the good arguable case loss quantum of the $1.497 Million Lost Investment Amount.
There was evidence from Luke about Jim communicating a message to Luke and Peter on 17 August 2024 about Jim being informed by a named private equity adviser that 'he thinks we sit around $7.5m based on our discussion', which it may be inferred from the evidence is a reference to the value of the ALSC Business at that time.
On the evidence before the Court, and for present purposes, Deloitte's financials are the most up-to-date financials prior to the administration and liquidation of the ALSC Entities. I consider it more appropriate for present purposes to use the more recent and lower 2024 numbers, rather than the earlier and higher 2023 figures.
208 Weighing all of the evidence and the submissions regarding the Claimed Lost Investment Amounts, I am satisfied that for present purposes RTL has discharged its burden and onus for present purposes in respect of the good arguable case about the quantum of loss for the various lost investment claims in an amount equal to the $1.497 Million Lost Investment Amount.
209 With respect to some aspects of the Defendants' submissions that are not directly or implicitly addressed by the above reasoning, I comment briefly further as follows.
210 I accept the Defendants' submission that, in the circumstances of this case at this time, the fact that Jim and Elianne gave their evidence through their solicitor, Ms Lam, is not something that weighs against them. Although it might be relevant or material in some circumstances, with respect to this application, and the timing of the same, it matters not. It is also to be noted that this is an interlocutory application only and it was not contested that Jim and Elianne were residing in Dubai with their children at the time of the Hearing.
211 I accept that some real and significant questions will continue to exist or arise between the parties regarding the question of causation, and whether it can ultimately be demonstrated at trial whether the grant of the ALSC Securities, separately or in combination with the fact of, and the impact of, the alleged Unauthorised Withdrawals, relevantly caused the loss of RTL's investment. However, having given the matter anxious consideration and accepting that the evidence does not at this stage reveal a strong case, there is sufficient evidence before me to be satisfied of the causation contention for present purposes, again noting that it is at an early stage of the proceeding and many issues of contested fact arise that cannot and should not be explored on this application. Whilst on the material before me the causation case in respect of the lost investment claims appears to have a number of challenges, it has been established that it is sufficiently arguable for present purposes. I am also cognisant in this context that the claimed loss for the alleged lost investment is also sought to be obtained through the oppression claim buyout relief, and note the very broad powers of the Court under s 233 of the Corporations Act 2001 (Cth) (Act), and that the Court's powers are not constrained in quite the same way regarding causation as they are with some other causes of action.
212 Whilst I accept that aspects of Luke's evidence in relation to quantum-related valuation matters is of limited weight it does not stand alone and is to be considered and weighed with other relevant evidence on this interlocutory application. When it is considered together and in the context of the other evidence addressed earlier, including regarding matters such as: financials; valuation approach at acquisition; Deloitte's financial statements; Jim's own evidence regarding Luke's financial acumen; other purchase approaches; and the other matters I have mentioned, I am satisfied that, for present purposes, RTL has satisfied its burden and onus in respect of the $1.497 Million Lost Investment Amount. I add for completeness that, in so concluding, I have of course taken into account the content of the administrator's reports.
213 On the material before the Court it is evident from the administrator's reports that matters contributing to the financial difficulties of the ALSC Entities were considered to include inadequate cashflow or high cash use, and a lack of working capital.[153] In this context the administrator's reports also note in part that sales were not sufficient to pay down 'the various related party loans of the Company' and that, in addition, 'the Company provided funds to related entities and shareholders of the Company which negatively impacted the Company's ability to meet its short-term obligations'. The administrator also noted elsewhere in his reports that a company's gross profit margin provides an indication of how well a company is managing its costs of production and management of inventory to generate gross trading profit. The administrator noted that relevant entities had maintained 'a high gross profit margin of between 81% and 84% from FY2023 to FY2025 year to date, in comparison with the industry average of between 50% to 65%, which indicated that the Company adequately managed its costs in production'. Whilst it may be accepted that at trial there may be live issues as to causation of at least the claimed lost investment amounts, on the evidence before me, including the material referred to in the administrator's report, there is sufficient evidence to establish for present purposes that the Unauthorised Withdrawals contributed to the cashflow issues and, further, some evidence from Luke regarding what would have been the ability of the ALSC Entities to borrow funds for working capital if security had not been granted over the ALSC Security Entities by Jim.
214 With respect to the evidence in the Fourth Brady Affidavit regarding what Luke said would have been the ability of the ALSC Entities to raise loan funds if the ALSC Securities had not been given to NAB by Jim, for present purposes I consider this to be relevant given his past experience, but note the absence of evidence regarding the relevance to a lender of the ability of the ALSC Entities to service any loan funds that might have been able to be raised. On the other hand, I do accept that, having regard to the relatively small nature of the enterprise and its annual earnings, the causation aspects of cashflow difficulties is at least double-edged for the Defendants given the allegations against Jim regarding the amounts of the Unauthorised Withdrawals.
215 Although I accept that there was some evidence supporting the Defendants' contention that it did not appear likely that the ALSC Securities would be called upon at the time NAB wrote the letter relied upon by the Defendants, that did not change the fact that Jim had given the securities over the ALSC Security Entities to NAB, or that they were and remain in place. It is also the case that the sale of the Brighton Property has been materially deferred, and it remains to be seen whether it proceeds, noting also the consequent unknown position of NAB in relation to the ALSC Securities going forward.
216 To the extent that the Defendants sought to play down or characterise Jim's conduct regarding the ALSC Securities and aspects of the Unauthorised Withdrawals as minor matters, given the evidence, I did not find these submissions to be persuasive or particularly germane. I add that, even if the concessions earlier referred to had not been made, I would have found that a good arguable case regarding, among other things, breaches of fiduciary duty, breaches of contract, including obligations of good faith, oppressive conduct, and the existence of a scheme of the character required for the Barnes v Addy claims, had been established in any event.
217 To the extent the Defendants relied upon Elianne's claimed passive role, with Jim managing all of the affairs and Elianne simply signing anything that was put in front of her by Jim, this did not assist the Defendants' position regarding (at least) the risk of asset removal or dissipation of assets.
218 Although I have taken it into account, in my view the Defendants' emphasis on the fact that the Plaintiffs did not seek to put forward a deed of company arrangement does little to assist the Defendants for present purposes.[154] Whilst this may be something that the Defendants seek to raise in their defence by way of mitigation (or more substantively), it can be seen that many contested factual and other matters will likely arise in this context, none of which can or should be addressed for present purposes. It may also be noted that there was evidence from Jim to the effect that he was the one with the knowledge and expertise in the industry, and that it was never contemplated that the ALSC Business would be run or managed by Peter and/or Luke.
219 Whilst it is correct that the Plaintiffs have had at least three attempts so far in compiling and refining their statement of claim, for present purposes this does not relevantly assist the Defendants' position in any material way, noting also the concessions appropriately made by the Defendants for the purpose of this application. That said, I have taken this and the matters raised regarding the pleading into account in any event. However, the Court was not here dealing with any application in relation to the pleadings and, at least to date, no such application has been made. Should issues remain between the parties regarding the pleadings then they should be addressed in the manner contemplated by the 'two letter rule' in the Commercial Court Practice Note, after which communications can be made with the Court as to how the matter is to be addressed if it is not resolved between the parties. I add for completeness that the leave that was given to the Plaintiffs to further amend their statement of claim was expressly granted without prejudice to the Defendants' rights to seek later to attack the Plaintiffs' pleadings should they be so advised.
220 Whilst I accept that there is a contested position between the parties regarding the reasons for Jim being the sole director of the ALSC Entities, this is yet another contested fact for determination at a different time. For present purposes though, it was clear on the evidence, and common ground, that whatever be the reason, Jim was in fact the sole director of the ALSC Entities at all relevant times.
221 Whilst there was evidence that at least Luke had access to bank accounts and accounting information for the ALSC Business up until the time of administration, for present purposes this does not carry the Defendants' position on this application very far. Again it will be a matter of fact to be explored at trial and little more need be said about it at this point.
222 Although it is readily apparent from the evidence that the December 2024 Loan Agreement did not include a number of the items making up the $493,000 Amount, for present purposes this is of little assistance to the Defendants, noting that there was evidence to the effect that the amounts or items missing from the amounts making up the loan the subject of the said agreement were not known about or had not been discovered by Luke and Peter at the relevant time.
223 Further, and as I have said, the asset value amounts addressed in the freezing orders do not include any amounts in respect of the $493,000 Amount. That being so, it is not necessary to address the calculations of the amounts in the Defendants' supplementary written submissions or their other submissions regarding the same.
224 Whilst it is apparent from the evidence and the position of the parties that the once strong friendship and business relationship between Jim and Peter has broken down and is now somewhat acrimonious, on this application I should not and cannot make any finding in respect of the Defendants' contention that Peter is seeking to 'crush Jim' by this proceeding, or what if any consequence might follow if that fact is relevant and ultimately established. Again, for present purposes, that is a matter for another day and my task is to determine the application having regard to the evidence, the submissions made, and by applying the well-established applicable rules and principles, as I have.
225 I agree that I should not and cannot on this application accept that it will necessarily be found that a constructive or resulting trust will be found in favour of Jim in respect of the 'entirety' of the Brighton Property or its proceeds of sale. However, that does not carry the position of the Defendants very far given that there is at least a good arguable case that some or all of the Brighton Property or its proceeds of sale are held by Elianne by way of resulting or constructive trust in favour of Jim.[155]
226 As to the balance of convenience, essentially for the reasons submitted by the Plaintiffs, the balance of convenience favours a freezing order and information disclosure order being made against Jim - as it does against Elianne and JKEK. Having regard to the concessions and evidence before me at this point, I am satisfied that in the absence of freezing orders being made there is a real danger that assets may be irretrievably lost, dissipated or removed, resulting in any judgment against Jim (or Elianne or JKEK) being wholly or partly unsatisfied, noting that damages would not be an adequate remedy in that context. Further, given my proposed exceptions and carve-outs to the freezing order (discussed later below), I do not accept that such an order will operate unfairly or oppressively against Jim (or Elianne or JKEK), noting also that the orders are made subject to further order, and that liberty to apply is reserved. In my view, making the freezing orders against Jim (and Elianne and JKEK) at this stage carries the lower risk of injustice.[156]
227 Although it appeared that counsel for the Defendants retreated from the contention that there should be some apportionment of the freezing order asset values between the freezing orders against each of Jim, Elianne and JKEK, to the extent that this contention was pressed, I do not accept it. It is sufficient to say that to apportion the amounts as suggested would not be consistent with principle, is not in my view logical, and to do so would not be just or fair. Further, adopting such an approach is not supported by authority, including the authorities referred to by the Defendants in their written and oral submissions.[157] A review of each of the cases referred to by the Defendants reveals that the differing freezing order asset values used for the various different parties, whether spouses or otherwise, resulted in each case from the particular positions of each of the parties, having regard to the particular facts and circumstances of each case, and not the application of an apportionment approach or principle.
228 Although I have reviewed the various authorities relied upon in connection with the quantum submissions, putting to one side the various statements of principle in the said authorities, it is apparent that the differing outcomes in each case very much depend upon their own facts and circumstances. To the extent the Defendants relied upon claimed similar facts in other cases, including, for example, the decision in Nedroc,[158] I do not consider that they relevantly advanced the Defendants' position. It is sufficient to say that, having carefully reviewed the said authorities, the facts of the present case, including with respect to causation and quantum, are quite different to the facts of each of the cases I was referred to.
229 As I have said, having weighed the evidence, considered the submissions and applied the applicable principles, I am satisfied that RTL has discharged the burden and onus it bears regarding the quantum of the $1.497 Million Lost Investment Amount.
230 The Defendants did not oppose information disclosure orders being made against each of Jim, Elianne and JKEK and it is therefore unnecessary to elaborate regarding these orders, save to say that, in my view, the Defendants' position was an appropriate one to take, and such orders would have been made in any event if the Defendants' position had been different.
231 A freezing order and information order was made against Jim on 10 July 2025 in the terms made and authenticated that day.
Freezing order and information disclosure order against Elianne
232 It will be recalled that the evidence discloses, among other things, that Elianne: is Jim's long-term spouse; is the sole director and shareholder of JKEK as trustee for the J&E Trust; is a 49% shareholder in PLHR; is a self-described 'predominantly stay at home mum'; is the registered proprietor of the Brighton Property; is the vendor in the contract of sale of the Brighton Property to Terry; is a party to the agreement with Terry deferring the settlement of the Brighton Property for 12 months; and that there is at least a good arguable case that Elianne received funds from the sale of Jim's 30 Moffat Street property as the source of funds for the acquisition of the 14 Edro Avenue property and then the Brighton Property. Elianne also relocated with Jim and their family to Dubai in December 2024, and Ms Lam's evidence refers to Elianne's instructions: that Jim managed not only the affairs of the ALSC Business but all of JKEK's affairs; that Elianne signed 'whatever Jim placed in front of her'; that it was not Elianne's practice to read the documents that she signed; and that even if Elianne read these documents, she expects that she would not understand their content.
233 As stated in my ruling given on 10 July 2025, I determined that freezing orders and information disclosure orders should be made against Elianne, with the freezing order asset value amount being the same as the Jim Freezing Order Amount, namely $3.5 million. I elaborate below as to why, observing that Elianne's and JKEK's positions may be dealt with more briefly than that of Jim given the very extensive overlap with the issues raised by the Defendants in respect of each of Jim, Elianne and JKEK.
234 I refer again to the justiciability by this Court of the claims made by the Plaintiffs, and the Defendants' concessions regarding the existence of a good arguable case in respect of the claims made against Elianne and the relevant removal/dissipation risk. Consequently, the Court's discretion under the Rules and inherent jurisdiction of the Court to make a freezing order against Elianne is enlivened. I also note again that it was ultimately not contested that a freezing order could be made against Elianne, but that it was submitted that it should be in respect of the lower asset value amounts identified earlier in these reasons when dealing with the Defendants' submissions.
$147,500 Synochi Loss and Claimed Lost Investment Amounts
235 As the FASOC and Amended Table of Claims reveal, the claims against Elianne include claims in respect of the alleged lost interest on the Synochi Loan, and the Claimed Lost Investment Amounts of $2.858 million, alternatively $1.863 million. The Plaintiffs contended that freezing orders can and should be made against Elianne having regard to the substantive claims made against her in the proceeding, but also on the basis that, in respect of the claims against Jim, orders can be made against Elianne (and JKEK) as a third party pursuant to r 37A.05(5) of the Rules, and the inherent jurisdiction of the Court.
236 For the reasons earlier referred to above when addressing the freezing order against Jim, I am satisfied that, for present purposes, the Plaintiffs have discharged their onus in respect of the alleged quantum of loss of $147,500 in respect of Synochi's lost interest claims against Elianne, and in respect of a loss of $1,497,355.94 in respect of the Claimed Lost Investment Amounts claims.
237 I note in this regard that the matters relied upon by the Defendants in challenging the quantum of loss and causation in respect of Synochi lost interest claims, and in respect of the lost investment claims against Jim, were also relied upon in respect of the challenges to quantum and causation in respect of the related claims against Elianne (and JKEK). Consequently, my reasons for being satisfied that, for present purposes, the Plaintiffs had discharged their burden and onus in relation to a good arguable case about the quantum of the $147,500 Synochi Loss and the quantum in respect of the $1.497 Million Lost Investment Amount, apply equally to Elianne, and I therefore refer to, without repeating, my above reasoning in relation to these matters above when dealing with Jim's position in relation to the same.
238 In so concluding in respect of the $1.497 Million Lost Investment Amount, I have not had regard to the direct claims made against Elianne that she engaged in oppressive conduct in the management of the affairs of the ALSC Entities. Having regard to the relevant oppression authorities, the terms of ss 232 and 233 of the Act, and the evidence currently before me on this claim, I am not satisfied that the direct oppression claim against Elianne (as opposed to Jim) reaches the good arguable claim threshold. However, given that senior counsel informed the Court that this claim was not pressed for present purposes when I raised the issue with him during the Hearing, it is not necessary to say anything further about it at this time.
239 Further, for the same reasons I referred to in connection with the application against Jim, to which I refer but will not repeat, I am not satisfied that Synochi has discharged its burden and onus for present purposes in respect of the quantum of the Synochi Further Interest Amount sought in the lost interest claims made by Synochi against Elianne.
240 To the extent that some of the particular matters raised by the Defendants are not expressly or implicitly dealt with by my reasoning in relation to the quantum of the loss for the claims I have mentioned, I also refer to the additional observations made regarding aspects of the Defendants' submissions in paragraphs 210 to 225 above.
241 The end point on these matters is that I am satisfied that, for present purposes, the Plaintiffs have discharged their burden and onus in respect of the quantum and causation of the $147,500 Synochi Loss and the $1.497 Million Lost Investment Amount claimed against Elianne. I turn now to the $1.41 million quantum of the overpaid purchase price claims against Jim and PLHR.
242 Although a direct claim is not made against Elianne in respect of the alleged $1.41 Million RTL Purchase Loss, I accept the Plaintiffs' submissions that a freezing order can and should be made against Elianne as a third party. It is not necessary to dwell upon this third party issue because, as I understood it, the Defendants accepted during the Hearing that it was open to the Court to make a freezing order against Elianne as a third party in respect of the claims made against Jim, but submitted that this should not be in a sizeable amount, and that it was not necessary in any event given the existence of the substantive claims made against Elianne where a good arguable case was conceded. Again, putting the question of quantum to one side, this concession and acceptance appeared in the circumstances to be an understandable and appropriate position for the Defendants to take and, even if that had not been the Defendants' position, I would have reached the same result in any event. In this regard I refer to the rules and principles regarding freezing orders against third parties addressed in the previous section of these reasons, and briefly comment further as follows.
243 The requirements of r 37A.05(5)(a)(i) of the Rules are satisfied on the evidence in respect of Elianne because there is at least a good arguable case that there is a danger that a prospective judgment of the Court against Jim will be wholly or partially unsatisfied because Elianne holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of Jim as the prospective judgment debtor. The relevant assets, claims and expectancies include at least Jim's alleged interest in the Brighton Property and its proceeds of sale, his alleged interest, claims and expectancies in respect of his status as a beneficiary of the J&E Trust, and his alleged interest in what Jim has described as his investments in the Exus Capital Property Fund, noting in this context that Elianne is the sole director and shareholder of JKEK as trustee for the J&E Trust and appears to act at Jim's direction in business and finance related matters.
244 Further, the requirements of r 37A.05(5)(a)(ii) are satisfied vis-a-vis Elianne as a third party in respect of Jim's claims because Elianne is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of Jim as the prospective judgment debtor. This includes, again, Jim's interest in the Brighton Property or its proceeds of sale, his claims and expectancies in respect of his status as a beneficiary of the J&E Trust, and his interest in the Exus Capital Property Fund investments.
245 I also accept that it was established that there is a good arguable case that a trustee in bankruptcy of Jim might claw back funds or traceable proceeds from Elianne in connection with at least the proceeds of sale of the Brighton Property, including by claiming a constructive trust or resulting trust in Jim's favour, or applying to void the transfers pursuant to s 120(1) of the Bankruptcy Act 1966 (Cth), on the basis that Elianne gave no consideration for the sale proceeds or a consideration that was less than market value. Further, I accept that a good arguable case has been established for any later appointed trustee in bankruptcy of Jim to claim that assets held by JKEK as trustee in truth belong beneficially to Jim given his and Elianne's effective control over the J&E Trust. I note for completeness in this context that, as was raised with counsel for the Defendants, it was accepted that this aspect of the power to make a freezing order against Elianne as a third party arises pursuant to the inherent jurisdiction of the Court and not r 37A.05(5)(b) of the Rules. This is because the reference to 'this Court' in the said rule is a reference to the Supreme Court of Victoria, and the processes relevantly referred to by the Plaintiffs are not processes that would or could be taken through this Court. As the authorities establish, the inherent jurisdiction of the Court is not so confined,[159] and it may be noted that r 37A.05(6) of the Rules expressly reserves the inherent jurisdiction of the Court in respect of freezing and ancillary orders.
246 In my view the balance of convenience weighs in favour of the Plaintiffs' application in this regard. Having regard to the claims made, the evidence before the Court, the Defendants' concessions, the established close inter-relationship between Jim, Elianne and JKEK, and Jim's influence and control, it is in my view clear that a freezing order should be made against Elianne as a third party to the claims against Jim (and PLHR) in respect of the $1.41 Million RTL Purchase Loss. Indeed, the same matters also provide an additional basis for making a freezing order against Elianne as a third party to the other claims made against Jim referred to above.
247 The Defendants did not oppose an information disclosure order being made against Elianne, which in my view was an appropriate position for them to take. That being so, it is not necessary to elaborate on this topic, save to say that, had the Defendants' position been different, I would have made such an order in any event. In all the circumstances it is clear that such an order should be made, noting further that the circumstances include: the close, longstanding and continuing spousal relationship between Jim and Elianne; the history of dealings between Jim and Elianne and JKEK as referred to in aspects of the evidence; Jim running their affairs, and Elianne just signing what is put in front of her; the control of Jim and Elianne over JKEK; and the evidence regarding the substantial weekly amounts said to have been spent by Elianne and Jim during the January 2025 to April 2025 period.
248 For essentially the same reasons regarding the balance of convenience addressed above in relation to Jim, it is in my view clear that the balance of convenience favours the making of freezing orders and information disclosure orders against Elianne - but subject to appropriate undertakings and security being provided in support of the Plaintiffs' damages undertakings.
249 A freezing order and information disclosure order was made against Elianne on 10 July 2025 in the terms made and authenticated that day.
Freezing order and information disclosure order against JKEK
250 With respect to the position of JKEK, I refer to the observations made earlier in these reasons about its role, position, assets and relationship with Jim and Elianne. Given the evidence and observations made so far about: Jim, Elianne and JKEK; the concessions appropriately made; and the overlapping submissions of the Defendants in respect of Jim, Elianne and JKEK, the position of JKEK can be more crisply addressed than was the case with Jim and Elianne. As I have earlier said, I determined that a freezing order should be made against JKEK for the same asset value as the Jim Freezing Order Amount, and that an information disclosure order should also be made against JKEK. I comment further as follows.
251 As with Elianne, the claims against JKEK include claims in respect of the alleged Synochi lost interest and the Claimed Lost Investment Amounts, but do not include a claim in respect of the $1.41 Million RTL Purchase Loss. As is apparent, JKEK's position is relevantly very similar to that of Elianne, noting also that Elianne is the sole director of JKEK but has said, in essence, that Jim manages JKEK's affairs and that she acts at his direction by just signing whatever is put in front of her.
252 For the reasons addressed above in relation to each of Jim and Elianne, to which I refer but will not repeat, I am satisfied that, for present purposes, the Plaintiffs have discharged their burden and onus in respect of the quantum of the loss for the claims for the $147,500 Synochi Loss and the $1.497 Million Lost Investment Amount, but not in respect of the Synochi Further Interest Amounts, or for the claimed quantum of loss equal to the Claimed Lost Investment Amounts.
253 For parallel reasons to those mentioned in relation to Jim and Elianne, I am also satisfied that the Court's discretion to make a freezing order against JKEK is enlivened, which was not in issue in any event, and that the balance of convenience favours the making of a freezing order and information disclosure order against JKEK, subject to appropriate undertakings and security being given by the Plaintiffs. Again, for parallel reasons to those given in relation to Elianne, and again noting the Defendants' concession, I am also satisfied that a freezing order can and should be made against JKEK as a third party to the claims against Jim, including in respect of the $1.41 Million RTL Purchase Loss, noting in this context that the discretion to make a third party freezing order against JKEK is enlivened because a good arguable case has been shown in respect of:
the requirements of r 37A.05(5)(a)(i) having been satisfied in relation to JKEK, noting the matters referred to earlier regarding Elianne and JKEK, Jim's influence over JKEK, and noting that JKEK is the trustee of the J&E Trust; and
the requirements of r 37A.05(5)(a)(ii) having been satisfied in relation to JKEK, noting the matters referred to above regarding Elianne and JKEK, Jim's influence over JKEK, and JKEK's position as trustee of the J&E Trust.
254 Given the above, it is not necessary to say anything regarding r 37A.05(5)(b) of the Rules or the slightly broader parallel power under the Court's inherent jurisdiction, although I refer to my earlier observations about JKEK in this context in my reasons addressing Elianne's position above.
255 I determined that, having regard to the evidence, submissions and applying the applicable principles, it is appropriate that a freezing order in an amount equal to the Jim Freezing Order Amount and an information disclosure order should be made against JKEK, but subject to the Plaintiffs providing relevant undertakings and security. A freezing order and information disclosure order was made against JKEK on 10 July 2025 in the terms made and authenticated that day.
Exceptions and carve-outs to the freezing orders
256 As indicated when delivering my ruling on 10 July 2025, I determined, among other things, as follows with respect to the exceptions and carve-outs to the freezing orders I proposed to make:
There would be a carve-out for ordinary living expenses in respect of the freezing orders against Jim and Elianne, but a minimum dollar amount would not be included at this stage.
There would be no living expenses carve-out for JKEK.
The standard carve-out in the Form 37AA order (under the Rules) for bona fide business assets and business expenses would remain in the orders for each of Jim, Elianne and JKEK.
There would be a carve-out in the orders for Jim, Elianne and JKEK in respect of certain medical expenses.
A legal expenses carve-out would be included in each of the freezing orders that entitles Jim, Elianne and JKEK to pay their respective reasonable legal expenses, or the reasonable legal expenses of one or more of the other Defendants to the proceeding, but at this stage the carve-out would not have a monetary limit fixed to it.
There would be the standard carve-out in the Form 37AA order (under the Rules) in each of the freezing orders regarding bona fide obligations under contracts entered into before the date of the orders.
There would be an order included in Jim and Elianne's freezing orders requiring them to keep a record of living, business, medical, and legal expenses, and a requirement to produce those records to the Court if and when ordered to do so.
There would be an order included in JKEK's freezing order requiring JKEK to keep a record of business, medical and legal expenses and a requirement to produce those records to the Court if and when ordered to do so.
I elaborate below regarding these exceptions and carve-outs.
257 When I gave my ruling on 10 July 2025 I informed the parties that my conclusions regarding the exceptions and carve-outs implied no express or implicit agreement or disagreement as to whether one or more of the claimed living expenses referred to in the Fifth Lam Affidavit fell within the category of 'ordinary living expenses'. That position remains and this issue is not necessary to further traverse for present purposes. I also regarded it appropriate to echo the observations of Barrett J in Westpac Banking Corporation v McArthur (Westpac)[160] when his Honour was dealing with challenges that can emerge about, among other things, specifying monetary weekly limits on ordinary living expenses, and making an order for keeping a record of such expenses. His Honour observed as follows, and I stated that this should be drawn to the attention of the parties who are the subject of the carve-outs:[161]
A person who is under court-imposed constraint as to expenditure on "ordinary living expenses" must, before making any expenditure on "living", pause to think whether the expense he or she is defraying is in truth part of "ordinary" living expenses. If a clear positive answer cannot be given, the expenditure must not be made. The need to keep records imposes an additional personal discipline.
258 In dealing with the question of living expenses, it is important to keep firmly in mind that the object of a freezing order is not to provide security for a plaintiff's claims, and is not to stop people spending their money in a legitimate manner. I refer in this regard to the authorities addressed in the 'General Principles' section of these reasons above.
259 In the circumstances of this case it also appeared to me that difficulties of the kind referred to by Barrett J in Westpac regarding the fixing of weekly or monthly monetary amounts for ordinary living expenses existed in this case, at least on the evidence as it currently stands. In part this was underscored by the Plaintiffs' submission that there should be a combined $10,000 limit per week, which was submitted to be at the 'upper end', in circumstances where no reasoned basis was put forward for arriving at that amount. In addition, the Plaintiffs submitted that the Defendants' evidence regarding living expenses was excessive, and unreliable in any event, because it reflected a limited period, also being a period where Jim and Elianne were setting up a new life in Dubai for themselves and their children. The evidence also revealed that many of the expenses referred to in the evidence could not be readily converted into a weekly amount for reasons similar to those expounded by Barrett J in Westpac. Although counsel for the Defendants proposed to hand up a table showing details of particular amounts awarded for ordinary living expenses in other cases, following a helpful exchange on the topic during the Hearing, that avenue was not pursued. In my view this was appropriate given that the question of ordinary living expenses in any given case must depend upon the particular facts and circumstances of that case, as reflected in the relevant evidence.
260 In all of the circumstances it is appropriate to allow a carve-out for ordinary living expenses without a monetary limit at this stage, but with a requirement to keep a record of those expenses.
261 With respect to the Plaintiffs' suggested limit of $50,000 for the Defendants' reasonable legal expenses, given the extent of the claims, the early stage of the proceeding, the manner in which the Application has been pursued, the number of claims made, the steps remaining, and the issues to be determined, in my view this amount was self-evidently materially deficient - whether viewed as an amount going forward from the time of the Application or more broadly. This submission and the submission regarding the allowance for living expenses raised the question of whether, in this limited context, the Plaintiffs were looking more to security for their claims rather than protection of the Court's processes, although I have assumed in their favour that this was not so. The inadequacy of the legal expenses amount was also reinforced by the evidence of Ms Lam in the Fifth Lam Affidavit regarding the legal costs of $250,000 incurred as at that time, and Ms Lam's $100,000 estimate of costs to get to a mediation in the not-too-distant future.
262 Again being conscious of observations in the authorities regarding the purpose of a freezing order, and having regard to the circumstances of this case at this point, and the appropriateness of the Defendants being able to legitimately utilise their resources to pay their reasonable legal expenses in respect of the defence of this proceeding, in my view justice requires a carve-out for reasonable legal expenses, with records to be kept, but without a monetary limit at this point.
263 As to the medical costs carve-out, there was evidence regarding some specific medical needs within Jim and Elianne's family, and a carve-out was proposed, and then revised, so as to allow for such expenses to be paid direct to relevant medical practitioners or service providers, or to be paid by way of reimbursement. In the circumstances of this case, it was clear that an exception of this kind should be included, which junior counsel for the Plaintiffs responsibly confirmed was not opposed.
264 Although I had initially queried with counsel for the Defendants whether the standard carve-out in the Form 37AA order (in the Rules) for bona fide business expenses ought to be included in respect of Jim and Elianne given the absence of evidence regarding the existence of any business, upon reflection and contrary to the submissions of the Plaintiffs, I determined that it was just and fair that such an exception remained at this time. I so concluded being conscious of the object of freezing orders, the rights of people to use their resources for relevantly legitimate expenses, and the absence of any evidence to suggest that business expenses were in some way being used, or going to be used, in order to remove or dissipate assets so as to frustrate the processes of the Court or a prospective judgment being wholly or partially satisfied.
265 The other exceptions and carve-outs I included were orthodox and not opposed, and I say no more about them.
266 Contrary to the submissions of the Defendants, it was in my view appropriate for an information disclosure order to be made against PLHR.
267 The principles applicable to the making of ancillary orders were not in dispute and the Defendants appropriately acknowledged that the making of an information disclosure ancillary order was not confined to circumstances where there was an existing freezing order. In any event so much is apparent from the authorities and the express terms of r 37A.03 of the Rules, which deals with ancillary orders. For example, r 37A.03(1) permits a court to make an order ancillary to a freezing order or prospective freezing order, as the court considers appropriate. It is further reinforced by r 37A.03(2) which, without limiting the generality of r 37A.03(1), provides that an ancillary order may be made for either or both of the purposes of (a) eliciting information relating to assets relevant to the freezing order or prospective freezing order; or (b) determining whether the freezing order should be made. So far as the authorities are concerned, I refer to observations in Cardile,[162] and also to the discussion of the principles relevant to ancillary orders in the previous section of these reasons.[163]
268 In the present circumstances it has been determined that substantial freezing orders should be made against each of Jim, Elianne, and JKEK, and that the Plaintiffs are considering applying for a freezing order against PLHR, about which they know little, in circumstances where material claims are also made against PLHR. I also accept that the evidence shows that PLHR was one of the key corporate entities used by Jim, and through which Jim held his interest in most of the ALSC Entities, which are now in liquidation. The evidence regarding Jim determining what Elianne and JKEK do in relation to the management of Jim and Elianne's affairs, and Jim's control as 51% shareholder and sole director of PLHR, when considered also in the context of the freezing orders and information disclosure orders to be made against Jim, Elianne and JKEK, underscores the desirability of an information disclosure order being made against PLHR. I also note that, consistent with aspects of the authorities, the information is in part sought to enable the Plaintiffs to determine whether to seek a freezing order against PLHR in circumstances where its asset position is not known. I also note that it was not contended that disclosing information will impose an oppressive burden on PLHR or Jim.
269 Given the relationship between PLHR and Jim, the claims made against PLHR, the prospect of an application being made against PLHR, the other conclusions reached on this application, and Jim's control over the entities including PLHR, I do not accept that the application can be described as fishing. In my view such an order is appropriate and the balance of convenience favours it.
270 Although the proposed orders proffered by the Plaintiffs in respect of the information disclosure order to be made against PLHR did not contain the undertakings referred to in Schedule A to the proposed draft freezing orders, in my view this approach was misplaced in the current circumstances. Having regard to the nature and purpose of an information disclosure order, and the intrusion that it necessarily entails, there is no reason why the relevant applicable undertakings ought not to be given to the Court in favour of PLHR, including an undertaking as to damages supported by security, which is what occurred.
Undertakings and security for damages undertakings
271 As previously mentioned, junior counsel for the Plaintiffs confirmed to the Court during the Hearing, and at the time my ruling was delivered on 10 July 2025, that he was instructed to give and did give on behalf of each of the Plaintiffs the various undertakings referred to in Schedule A to each of the freezing orders made, and the information disclosure order against PLHR. Having also ruled that, at this point, the Plaintiffs would be required to provide security for their damages undertakings in the sum of $1 million, it was agreed between the parties and accepted by the Court that this could be provided by way of a payment of $1 million into Court by Synochi by 17 July 2025, as security for each of the damages undertakings of the Plaintiffs in each of the orders.
272 It is of course apparent that I did not accept the Plaintiffs' submissions that no security should be ordered. The evidence showed that there was no real property held by Synochi or RTL in Australia, and no material information regarding RTL's asset position was brought forward by the Plaintiffs. The financial information regarding Synochi showed a net asset position of $10 in respect of the period ending 30 June 2024, being a time when the Synochi Loan was still outstanding.[164]
273 Further, although the Plaintiffs' contention that the Defendants were responsible for RTL's loss of its assets in Australia (being RTL's interest in the ALSC Entities) was taken into account and weighed in the balance, whether alone or together with any other circumstances, it was not relevantly persuasive. I note in this context that there appears to be a likely contest on many factual and other issues in the proceeding and that, although the good arguable case threshold was conceded,[165] on the evidence before me the Plaintiffs' claims did not present at this stage as being strong claims given the many contested issues.
274 Whilst I accept that it is not always an easy task to determine the level of security to be provided in applications of this kind, in all the circumstances the amount of $1 million is appropriate at this point. There was evidence that Synochi was holding at least $1.3 million in the bank from the repaid Synochi Loan, and junior counsel for the Plaintiffs had indicated that if security was to be provided it would be provided through Synochi. The form of security became a payment into Court by Synochi of $1 million rather than a bank guarantee at Synochi's request, which was understandably not opposed. Liberty to apply was reserved, noting also that the Defendants said that they may wish to take some further instructions on the topic.
275 As mentioned at the commencement of these reasons, when I gave my ruling on 10 July 2025 I determined that, subject to further order, and the Plaintiffs giving the relevant undertakings to the Court:
A freezing order and information disclosure order should be made against Jim.
A freezing order and information disclosure order should be made against Elianne.
A freezing order and information disclosure order should be made against JKEK.
An information disclosure ancillary order should be made against PLHR.
The Plaintiffs' undertakings as to damages should be supported by security in the total sum of $1 million, or such other sum as is agreed between the parties.[166]
276 After delivering my ruling on 10 July 2025 orders of the kind referred to above were made and authenticated that day. The exceptions included carve‑outs for ordinary living expenses[167] without a specified monetary limit, some medical expenses without a specified monetary limit, and reasonable legal expenses without a specified monetary limit. Jim, Elianne and JKEK were also each ordered to keep a record of amounts actually expended on specified expenses and to produce that record to the Court if and when a further order requiring such production is made. Liberty to apply was reserved.
REFUSE TO LOSE PTY LTD (ACN 646 189 924) as trustee for the REFUSE TO LOSE TRUST
SYNOCHI PTY LTD (ACN 638 794 206) as trustee for the SYNOCHI TRUST
JKEK INVESTMENTS PTY LTD (ACN 613 230 676) as trustee for the J&E INVESTMENTS TRUST
PREMIER LASER HAIR REMOVAL PTY LTD (ACN 107 928 370) as trustee for the PREMIER LASER DISCRETIONARY TRUST
Defendants say Elianne worked part-time in the ALSC Business over the years, including at the Brighton and Moonee Ponds clinic. Luke and Areti (Peter's wife) would attend the Moonee Ponds clinic and see Elianne working.
Defendants say Jim, Elianne, Peter and Areti meet on holidays on the Gold Coast
Jim Kostakis (Jim) becomes sole registered proprietor of the marital home of Jim and Elianne Kostakis (Elianne) at 30 Moffat Street, Brighton, having purchased it for $4.65m.
The defendants say that times were tough for the ALSC Business during the COVID-19 pandemic and that Jim made this known to Peter from time to time.
Defendants say the ALSC Business was shut down due to COVID-19
The defendants say Peter expressed to Jim an interest to acquire 50% of the ALSC Business
The defendants say Jim, Elianne, Peter and Areti meet at Elwood Bathers at 15 Elwood Foreshore, Elwood VIC 3184. At this meeting, Peter remained interested in acquiring part of the ALSC Business, and represented to Jim, inter alia, that upon his acquisition of part of the ALSC Business, nothing would change in the manner in which Jim operated the business and that Jim could continue to run the business as he always had. Peter said that he would work behind the scenes in the ALSC Business and also act as a personal advisor to Jim.
"I have sent some info which I had handy on email. Can you advise what other information you would like? Luke if you feel it's easier, please call on my mobile..."
"Thanks Jim, I would like to go through the P/L's tomorrow afternoon... let's get together and go through them. I just want you to clarify the title of the designation of income streams (which I think I have worked out) and marry up the year to date profitability...".
Plaintiffs say Jim and Peter Arvanitis (Peter) meet at Peter's residence at 34 Irving Road, Toorak, where they discuss the historical and future earnings of ALSC Admin and ACLC.
Defendants say Jim and Peter met at Peter's residence at 34 Irving Road, Toorak, to discuss RTL's proposed acquisition of 50% of the ALSC Business.
Defendants say, at this meeting, Peter tells Jim that he does not want to be a director as a result of adverse publicity with respect to his aged care businesses.
Plaintiffs say Jim and Peter meet at Jim's residence to further discuss the earnings of ALSC Admin and ACLC.
Defendants say Jim does not recall such a meeting taking place on 15 May 2021.
Jim sends Luke "as requested" the balance sheet for the Trustee for the ACLC Unit Trust as at 30 June 2020 and 31 December 2020, the balance sheet for ALSC Admin at 30 June 2020 and 31 December 2020, and the balance sheet for the ALSC Australia Trust as at 30 June 2021.
ALSC Australasia Pty Ltd (ACN 652 087 708) (ALSC Australasia) engaged in the business of providing skin care laser therapy and related therapies in the Melbourne metropolitan area under the name 'Australian Laser & Skin Clinics'.
RTL paid the following amounts totalling $3.25 million to purchase a 50% interest in ALSC Admin, ACLC as trustee of the ACLC Unit Trust and the Franchising Business:
Jim settles the sale of 30 Moffat Street for $6.56m.
Elianne becomes the sole registered proprietor of their marital home at 14 Edro Avenue, Brighton East, purchased for $5.5m.
Plaintiffs say Jim caused ACLC as trustee of the ACLC Unit Trust to borrow $180,000 from the National Australia Bank by way of a 'Market Rate Facility' account (ACLC MRF Account) (October ACLC NAB Loan), and transferred:
Plaintiffs say Jim caused the following payments to be made relating to the October ACLC NAB Loan and the ACLC MRF Account used to obtain that loan, namely:
Defendants say Peter tells Jim that he does not want his son, Stephen Arvanitis, to be appointed as director of the ALSC Entities.
"As discussed there isn't requirement [sic] for Stephen to be a Director of the entities and would provide greater privacy if someone does a company search on the entities, Refuse to Lose would appear as a shareholder".
RTL enters into revised versions of Agreement for the Sale of Shares and Deed of Sale of Shares and Units.
RTL becomes 50% shareholder of ALSC Australasia, ALSC Admin and ACLC RTL becomes unitholder of the ACLC Unit Trust
Plaintiffs say that a meeting takes place between Jim, Luke Brady (Luke) and Peter. Jim tells Peter and Luke that there was no need for RTL to appoint a second director to the Board of any of the companies in the ALSC Group, and that Jim would continue act as sole director of those companies.
Defendants say that Jim attended a meeting with Luke and Mr Diamataris of HD + Co, the accountants for the ALSC Entities on 1 December 2021. Peter did not attend because he was living in Greece at the time. At the meeting, Luke told Jim that he had spoken to Peter and confirmed there was no need for RTL to appoint a director to ALSC Australasia or any of the ALSC Entities.
Defendants say that on about the same day, Peter confirmed to Jim in a phone call words to the effect of:
"with all that's going on with aged care and the media, I think it's best we don't put Stephen on as a director. We don't want negative publicity on your business and the brand. Keep it a secret from everyone; your family, even our friends and the franchise owners".
RTL entered into revised versions of the written agreements which adjusted the price paid by RTL for its respective interests in ALSC Admin, and in ACLC as trustee for the ACLC Unit Trust, to be as follows:
PLHR transferred to RTL, 50% of the shares of each of ALSC Australasia and ALSC Admin, and 50% of the units of the ACLC Unit Trust, and Jim transferred to RTL, 50% of the shares of ACLC
Luke is given access to Xero for ALSC Australasia, ALSC Admin and ACLC.
Defendants say Luke would regularly email or call Jim to discuss matters with respect to the ALSC Business such as invoices, outstanding accounts, profit and loss reports, queries with respect to financial matters of interest and would advise what payments should be made and to where.
Example comms - [32]-[43] Fourth Lam Affidavit, and exhibits
Defendants say Luke requests that Braydn Mileto of Deloitte, the accountants for Arvanitis, to have access to the Xero for 'all ALSC entities'.
ALSC Mornington was incorporated, with Jim as sole director, and each of RTL and PLHR as a 50% shareholder
ALSC Mornington entered a written contract to purchase the ALSC franchisee clinic operating at 226 Main Street, Mornington from the franchisee, MJ Wright Aesthetics Pty Ltd, for a price of $80,000, which purchase settled in early August 2022 with each of RTL and PLHR contributing half the purchase price.
Luke sends an email to Mr Diamataris of HD+Co, the accountants for the ALSC Entities, telling him to:
"please hold off any ASIC changes for Stephen Arvanitis".
Plaintiffs say that Jim as sole director of ALSC Australasia, ACLC, and ALSC Mornington respectively, caused them to transfer to Jim, Elianne and/or JKEK, monies from the 'tax' bank accounts of those ALSC Entities in amounts totalling at least $126,500, comprising transfers from:
Defendants say and sample emails show that Jim would liaise with the ALSC Entities bookkeeper Ms De Pace about ensuring that borrowings of his from or transfers between any of the ALSC Entities were recorded correctly, including reimbursements of loans to 'tax' accounts.
Luke sends email to Sera De Pace, bookkeeper for the ALSC Business, requesting that Tom Wallace of Deloitte have access to the Xero for 'all ALSC entities'.
Plaintiffs say Jim caused ACLC as trustee of the ACLC Unit Trust to borrow $141,000 from the NAB via the ACLC MRF Account and transferred $141,000 to an account of JKEK (November NAB Loan).
Plaintiffs say Jim caused the following payments to be made relating to the November NAB Loan and the ACLC MRF Account used to obtain that loan, namely:
Elianne becomes the sole registered proprietor of the marital home at 30 Were Street, Brighton (Brighton Property), purchased for $4.44m.
Jim on behalf of himself and Elianne requested that the Arvanitis Family Entities advance loans to them to assist them (in addition to NAB loan) to complete the construction of a new house on Elianne's Brighton Property for the purposes of sale.
Synochi Pty Ltd (ACN 638 794 206) (Synochi) advanced loans totalling $1.3 million to JKEK as trustee for the J&E Investments Trust, pursuant to the Synochi Loan Deed and the Synochi Loan Variation Deed.
Defendants say that Deloitte, the accountants for the Arvanitis companies, which already had access to the ALSC Entities' Xero accounts (Braydn Mileto of Deloitte from February 2022, Tom Wallace of Deloitte from November 2022), became the ALSC Entities' external accountant with continued Xero access
Plaintiffs say Jim caused ACLC as trustee of the ACLC Unit Trust to pay amounts totalling $85,384.53 to Elianne as 'salary', and Elianne accepted the receipt of those amounts.
Plaintiffs say Jim used an American Express credit card in the name of ALSC Admin (the ALSC Admin Credit Card), and caused ALSC Admin to incur costs in terms of repayments and interest of at least $75,500.
JKEK in its own capacity and as trustee for the J&E Investments Trust as borrower, Synochi as lender, and Elianne and Jim as guarantors, executed a loan deed (the Synochi Loan Deed) pursuant to which, inter alia, Synochi agreed to advance $1.0 million to JKEK as borrower (the Synochi Loan), each of Jim and Elianne guaranteed JKEK's obligations as borrower, and Elianne granted a mortgage to Synochi over the Brighton Property (the Synochi Mortgage).
Synochi advanced a further $500,000 to JKEK, being the Second Advance under the Synochi Loan Deed.
Defendants say Jim and Elianne and their family stayed in Dubai to experience life there and consider a permanent move. They inspected properties and the children attended school interviews
Defendants say that Kostakis children registered in GEMS World Academy - Dubai for enrolment from January 2025
Plaintiffs say Jim caused ALSC Admin to apply to American Express for and obtain a business loan in the amount of $82,000 (the ALSC Admin Business Loan) and thereby caused ALSC Admin to incur liabilities totalling at least $92,789.39.
Synochi advanced $120,000 to JKEK, being the Fifth Advance, by transferring it (at the direction of JKEK, Elianne and Jim) into an account in Jim's name.
The parties to the Synochi Loan Deed executed a further deed (the Synochi Loan Variation Deed) pursuant to which it was agreed that, inter alia, Synochi would advance an additional $300,000 to JKEK beyond the amounts referred to in the Synochi Loan Deed, that Jim and Elianne would continue to guarantee JKEK's obligations, and that the Synochi Loan would be repaid on 31 December 2024.
Discussions had between Jim, Luke and Peter about Chantalle Harakka (Chantalle) purchasing the franchise businesses of the ALSC clinics operating in Ringwood and Reservoir respectively from the then-franchisees, and that Chantalle would operate those clinics on a daily basis.
Defendants say that on this date, Jim, Peter and Luke discussed the prospect of RTL and PLHR purchasing the Ringwood and Reservoir clinics. This did not proceed because Peter told Jim that he [Peter] decided that he was not going to put any more money in the ALSC Business.
Jim sent a WhatsApp message to Luke and Peter at about 8.10pm stating:
"Hi Guys, As discussed with Luke. Chantalle will be taking on the 2 clinics as she has some $$ saved and always wanted to own a clinic. She will do well running them. Also got a good secure 2 locations with no headache. Thanks."
New Ringwood Franchisee and the New Reservoir Franchisee were incorporated with both Jim and Chantalle as directors.
Elianne enters into contract to sell the Brighton Property (the Brighton Contract of Sale) for $10.25m.
Defendants say Peter places pressure on Jim to repay Synochi Loan as soon as possible.
Plaintiffs say that Jim operated the Ringwood and Reservoir clinics through the New Ringwood Franchisee and New Reservoir Franchisee.
Defendants say that Chantalle ran and operated the Reservoir and Ringwood clinic. Jim would assist his step-daughter Chantalle from time to time ad hoc with managing and running these businesses. He became a director of her companies for each clinic for an initial period to assist her to obtain a lease without a background experience in running the ALSC Business, which negotiations were proving difficult. He resigned as director once the leases were executed in November 2024.
Plaintiffs say meeting is held between Jim and Luke Brady on behalf of the Arvanitis Group Entities at the Botanical Café at Level 1, 32 Jackson St, Toorak where discussions were had about Jim and Elianne being in the process of sourcing a loan from NAB to obtain the funds required to pay out the Synochi Loan and discharge the Synochi Mortgage.
Plaintiffs say Jim as sole director of ALSC Australasia caused the entity to make payments to Jim and/or to JKEK as trustee for the J&E Investments Trust for 'consultancy fees' totalling at least $34,615.38
Defendants say that in October 2024 Jim told Luke that Jim was going to change his employment with ALSC Australasia from an employee to contractor, and that he would be paid consulting fees. Jim did this in an effort to reduce operating costs, by not incurring super contributions, PAYG instalments and WorkCover insurance.
Each of Jim and Elianne consents to lending application in respect of NAB loan to JKEK.
Email lists the following as borrower or guarantor:
NAB provides business lending proposal to Jim and Elianne, for loan to be made to JKEK, with mortgage over 67 Were Street, security interests to be granted by each of JKEK, ALSC Australasia, ACLC as trustee of the ACLC Unit Trust and ALSC Mornington; and guarantees to be granted by each of Jim, Elianne, ALSC Australasia, ACLC as trustee of the ACLC Unit Trust and ALSC Mornington.
Each of Jim and Elianne consents to proceeding with lending application in respect of NAB loan to JKEK. Email lists the following as borrower or guarantor:
Plaintiffs say meeting takes place with Jim, Luke, Peter about the Ringwood and Reservoir ALSC clinics landlord not consenting to the assignment of the relevant leases to the New Ringwood Franchisee or the New Reservoir Franchisee, and that as a result those entities could not begin operating the respective clinics until late November 2024.
Defendants say that Jim and Chantalle were facing difficulties with negotiating the terms of the lease for the Ringwood clinic. The leases were executed in November 2024. In the interim, the lease with the previous franchisee entity remained on foot and so the pre-paid services were being offered in the existing Ringwood clinic.
Jim as sole director of each of ALSC Australasia, ACLC as trustee of the ACLC Unit Trust and ALSC Mornington (each an ALSC Security Entity) and together the ALSC Security Entities), caused each ALSC Security Entity to provide a security interest to the NAB over all of that ALSC Security Entity's assets as security for the loan which security interests were registered by the NAB on the Personal Property Securities Register on 27 November 2024 (each an ALSC Security Interest, and together the ALSC Security Interests).
Elianne as sole director of JKEK caused JKEK as trustee for the J&E Investments Trust to apply for and obtain a loan from NAB (the JKEK Loan). Jim and Elianne grant guarantees of the JKEK loan in favour of NAB.
Meeting occurs with Jim, Luke, Peter about the ALSC Security Entities and security for the loan obtained.
Plaintiffs say that following requests from Luke that Jim acknowledge his obligation to repay the ALSC Entities moneys which he had previously drawn from those companies, Jim signs Loan Agreement which refers to $284,500 loan advanced to him on 1 July 2023.
Defendants note Jim was already repaying the loan account.
Defendants say that on or about 3 December 2024, at Luke's request, Jim signed a loan agreement in the amount of $284,500. The agreement states that the amount of the loan is $284,500 but does not identify how that amount has been constituted.
Date that Synochi Loan was to have been fully repaid in accordance with Synochi Loan Variation Deed, were it not for its early repayment.
Defendants say the ALSC Business is in financial stress
Defendants say Peter had already said in August 2024 that he was not prepared to invest any more money in the business
Defendants say Jim makes a quarterly visit to Australia visiting multiple ALSC clinics and meeting with management
Defendants say Jim seeks advice about the ALSC Entities and makes an appointment with an insolvency specialist
Jim and Peter exchange text messages about a meeting that day. Jim proposes it be by zoom or a phone call. Peter says it must be face to face. The meeting does not go ahead
Defendants say Jim meets with insolvency specialist Richard Rohrt of Kennedy Rya Advisory
Plaintiffs say NAB representative informs Luke Brady that the ALSC Security Interests had been granted to NAB as security for a loan advanced to Jim and Elianne's personal trust.
Plaintiffs say Jim placed each of the ALSC Entities into administration, without informing RTL.
Defendants say Jim placed each of the ALSC Entities into administration after discussions with Mr Diamataris in March 2025 and Richard Rohrt of Kennedy Ryan Advisory.
Plaintiffs say that RTL's user ID for NAB Connect was revoked by "the administrator" which Luke infers was Jim
Defendants say, and Administrator's office confirms, that that's wrong. The Administrator wrote to banks following his appointment freezing debits from company accounts, and that online banking access was likely removed from users by the bank following receipt of this correspondence.
The solicitors for Jim and PLHR sent a letter to the Plaintiffs' solicitors which stated, inter alia, that the ALSC Security Interests would not be released until the settlement of the sale of the Brighton Property, and that Jim and PLHR refused to provide to the Plaintiffs the documents relating to the JKEK Loan.
The defendants say that they complied with their obligation under s 26 of the Civil Procedure Act 2010 (Vic) to disclose the existence of critical documents
Administrator's reports for each of ALSC Admin, ALSC Australasia, ALSC Mornington and ACLC are issued.
The creditors of each ALSC Entity voted to place those entities in liquidation.
In principle agreement between vendor and purchaser to defer settlement of Brighton Property by 12 months
[1] In these reasons, and with no disrespect, the first names of the individuals have been used in the same way as they were used by the parties in their affidavits and submissions.
[2] Through related entities and dealings, as will be seen.
[3] The Plaintiffs' affidavit material comprised 1341 pages and the Defendants' material comprised 1063 pages. The parties did not seek leave to cross-examine any of the deponents.
[4] Including the many authorities referred to.
[5] This document became exhibit P1 having been tendered on the first day of the Hearing on 8 July 2025 without objection.
[6] And the many authorities referred to in written and oral submissions.
[7] As reflected in the written and oral submissions at the Hearing.
[8] And including the aspects of the authorities to which attention was drawn. Except for the Fourth Brady Affidavit that was filed during the Hearing, I had also had the opportunity to read and consider the affidavit material, written submissions and aspects of the authorities, in advance of the Hearing.
[9] Counsel for the Defendants confirmed this undertaking by email on the afternoon of 6 June 2025 as she was unable to obtain instructions at the hearing due to time zone differences.
[10] Noting also that the Joint Chronology addresses aspects where the parties have different contentions regarding various matters.
[11] Counsel for the Defendants responsibly acknowledged during the Hearing that the funding source (through Jim) was not disputed.
[12] Less a $50,000 amount, making the price $3.25 million.
[13] Exhibit to First Brady Affidavit, pages 394-395.
[14] Other aspects of the evidence also addressed Jim not recalling certain meetings alleged by the Plaintiffs, and having different recollections about what transpired in oral communications with Peter and Luke.
[15] Ms Lam also referred to and exhibited various emails between Jim, Luke and Peter in the period September 2024 to 28 November 2024 said to be consistent with Jim's account, which I have read and considered.
[17] That table also made reference to various pages of the exhibits said to support the existence and amount of various expenses referred to.
[19] And about which there is no issue.
[20] I do not take that concession to operate in respect of the claim that Elianne and JKEK themselves engaged in the oppressive conduct of the affairs of the ALSC Entities (as opposed to Jim), noting that, after this issue was raised by me with senior counsel for the Plaintiffs, senior counsel informed the Court that these direct allegations of oppression against Elianne and JKEK were not pressed - at least for the purpose of the Application.
[21] The Plaintiffs' submissions in reply are dealt with later below.
[22] Noting that these concessions were made for the limited purposes of the Application only.
[23] (1989) 18 NSWLR 319, 325-326 (Gleeson CJ).
[24] [2003] VSC 299, [33] (Redlich J).
[25] [2005] VSC 131, [6] (Kaye J).
[26] [2015] VSC 299, [39] (Elliott J).
[27] [2019] FCA 1796, [23] (Anderson J).
[28] [2020] FCA 1412, [17]-[18] (Snaden J).
[29] [2021] FCA 585, [31]-[35] (O'Bryan J).
[30] Referring to Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, and Bosanac v Commissioner of Taxation [2022] HCA 34; (2022) 275 CLR 37.
[31] [2006] FCA 814; (2006) 153 FCR 509, [37] (French J).
[32] Referring to PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36; (2015) 258 CLR 1 and Cardile v LED Builders Pty Ltd (1999) 198 CLR 380.
[33] [2006] VSCA 89; (2006) 15 VR 65, [35] (Maxwell P and Charles JA).
[34] Relying upon the discussion in Caboche v Southern Equities Corp Ltd [2001] SASC 55 (Caboche), [45]-[49] (Williams J), referring to, among others, Bax Global (Australia) Pty Ltd v Evans [1999] NSWSC 815; (1999) 47 NSWLR 538 at 544-5 (Austin J).
[35] In this context reference was made to, among other things, the observations in paragraph 4.17 of Peter Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (LexisNexis Butterworths, 3rd ed, 2023) and the cases there cited.
[38] Concessions were also made in connection with Elianne and JKEK's position as third parties and this is addressed later in these reasons.
[39] Referring in part to KTC v David (No 1) [2019] NSWSC 281, [24] (Kunc J).
[40] It was also noted in footnote 100 that the problems with quantum were in addition to vices with claims, including lack of proper basis, as shown in the pleadings.
[41] Including making clear that it was a matter for the Defendants as to whether they wished to make or maintain any concession.
[42] The letters 'A' to 'I' correspond with the claim categories in the Plaintiffs' Amended Table of Claims.
[43] It was noted that Peter acknowledged having received them, but claimed he 'had not had an opportunity to review the many financial statements for the year ending 30 June 2019' (First Arvanitis Affidavit at [19]) and that 'after the meeting [he] did not review in any detail the financial statements attached to Jim's emails earlier that day' (First Arvanitis Affidavit at [23]).
[44] For the avoidance of doubt, although many of the written submissions regarding pleading and problems with the claims were somewhat overtaken or neutralised by the Defendants' good arguable case concessions, I read, considered, and took those submissions into account prior to giving my ruling on 10 July 2025. Although these aspects of the submissions are not extracted in these reasons, they are addressed in aspects of paragraphs 27 to 97 of the first written submissions, to which I refer.
[48] In this context reference was made to Ma v Xu [2025] VSC 361 regarding the relevant presumptions being weak. See also Bosanac v Commissioner of Taxation [2022] HCA 34.
[54] In this context counsel for the Defendants responsibly clarified that the Defendants did not contend that the observations of Bell J in Gashi regarding third parties were authority for the proposition that an information disclosure ancillary order could only be ordered in respect of an existing freezing order.
[55] Referring to Orb arl v Ruhan [2016] EWHC 850 (Comm), [198].
[56] I addressed many of these principles in Arabic Assemblies of God Inc v Land of Refuge Arabic Church in Melbourne Inc [2020] VSC 24, [13]-[18] and in Manda Capital Holdings Pty Ltd v Pappas [2024] VSC 495 (Manda Capital) and it is convenient to largely repeat and supplement relevant aspects of that which I set out in those cases, which I do below. I refer also to the recent helpful summary of the principles set out by Nichols J in Rohan v Pavloff Family Investments Pty Ltd [2023] VSC 175, [9] and in SK Developments (Aust) Pty Ltd v Vansan Construction Pty Ltd [2025] VSC 402 (SK Developments).
[58] Footnotes included as in original.
[59] Cardile v LED Builders Pty Limited (1998) 198 CLR 380, [51] (Cardile); Practice Note 3 of 2006.
[60] Jackson v Sterling Industries [1987] HCA 23; (1987) 162 CLR 612, 621, 625.
[61] Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1, [73].
[62] Hartwell Trent (Aust) Pty Ltd v Tefal Societe Anonyme [1968] VicRp 1; [1968] VR 3, 13.
[63] Glenwood Management Group Pty Ltd v Mayo [1991] VicRp 45; [1991] 2 VR 49, 49. It is apparent from the balance of the reasons of J Forrest J and the decision his Honour cited that this is intended to be a reference to a 'good arguable case'.
[64] Rule 37A.02(1) Under the general law the plaintiff must establish that there is a real risk of assets being disposed of: Cardile [122].
[65] Consolidated Constructions Pty Ltd v Bellenville Pty Ltd [2002] FCA 1513.
[66] Jackson v Sterling Industries [1987] HCA 23; (1987) 162 CLR 612, 621.
[69] [2015] VSC 299, [39].
[70] Referring to Victoria University of Technology v Wilson [2003] VSC 299, [33] (Redlich J); Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, 325F-326A (Gleeson CJ, with whom Meagher JA and Rogers AJA agreed).
[72] Ibid, [14] (McLeish and Niall JJA).
[73] (1999) 198 CLR 380 (citation in original).
[74] [2019] VSCA 164, [14] (McLeish and Niall JJA).
[75] Ibid, [19]. Footnotes included as in original.
[76] Cardile (1999) 198 CLR 380, 404 [53] (Gaudron, McHugh, Gummow and Callinan JJ).
[77] [2010] FCA 1072, [6] (Edmonds J).
[78] [1983] Com LR 234, 235 (affirmed on appeal: [1983] 1 WLR 1412).
[79] [2007] NSWSC 595, [12] (McDougall J).
[80] [2025] VSCA 164 (McLeish, Walker and Lyons JJA).
[82] [2007] NSWSC 1347, [22] (Barrett J).
[83] [2016] FCA 976, [33] (Beach J).
[85] [2019] FCA 743, [8] (Wigney J). Cited with approval in Rentokil Initial Pty Ltd v Kelly [2021] FCA 1119, [6] (Cheeseman J); Melwani v Touch Gold Enterprises Pty Ltd [2019] FCA 1743, [6] (Wheelahan J); Nicols as trustee of the bankrupt estate of Manietta v Manietta, in the matter of Manietta [2022] FCA 39, [49] (Cheeseman J); EVP Opportunities Master Pty Ltd as trustee for The EVP Opportunities Master Fund v Strong Room Technology Pty Ltd (Receiver and Manager Appointed) (Administrators Appointed) [2025] FCA 548, [7] (Derrington J).
[86] Citing Cardile, [6] (Gaudron, McHugh, Gummow and Callinan JJ); and Insolvency Guardian Melbourne Pty Ltd v Carlei (2016) 111 ACSR 236; [2016] FCA 72, [18] (Edelman J).
[87] [2022] FCA 39, [84]. See also [49]. Cited with approval in TJ & P Pty Ltd as trustee for the Post Family Trust v Agrinova Pty Ltd [2024] FCA 318, [17] (Goodman J) and Probis Financial Services Pty Ltd (administrators appointed) v Kong [2023] FCA 1398, [30]-[31] (Goodman J).
[88] [2024] NSWSC 491, [34]-[37] (Pike J).
[89] [2024] NSWSC 696, [11] (Stevenson J).
[90] [2022] NSWSC 1142, [24]-[25] (Robb J).
[91] [2025] VSCA 164, [89] (McLeish, Walker and Lyons JJA).
[92] Ibid, [90]. Footnotes included as in original.
[93] Victoria University of Technology v Wilson [2003] VSC 299, [23] (Redlich J); applied in Ma v Luo [2010] VSC 329, [22] (Croft J).
[94] Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG ('The Niedersachsen') [1983] 1 WLR 1412; [1984] 1 All ER 398, 404 (Mustill J); applied in Ma v Luo [2010] VSC 329, [22] (Croft J); Samimi v Seyedabadi [2013] NSWCA 279, [69] (McColl JA).
[95] Rozenblit v Vainer [2019] VSCA 164, [19(3)] (McLeish and Niall JJA); see also [11].
[96] Zhen v Mo [2008] VSC 300, [24] (Forrest J).
[97] Zhen v Mo [2008] VSC 300, [29] (Forrest J).
[98] Rozenblit [2019] VSCA 164, [19(6)] (McLeish and Niall JJA).
[99] (1999) 198 CLR 380, [124] (Kirby J). Footnotes included as in original. Cited in Zhen v Mo [2008] VSC 300, [29] (Forrest J).
[100] Z Ltd v A-Z and AA-LL [1982] QB 558 at 576, 589.
[101] Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 625.
[102] A J Bekhor & Co Ltd v Bilton [1981] EWCA Civ 8; [1981] QB 923 at 947-948; Vereker v Choi (1985) 4 NSWLR 277; SCF Co Finance Ltd v Masri [1985] I WLR 876; [1985] 2 All ER 747; Tyree, 'Mareva Injunctions: The Third Party Problem', Australian Business Law Review, vol 10 (1982) 375, at pp 385-386; Zuckerman, 'Mareva and Interlocutory Injunctions Disentangled', Law Quarterly Review, vol 108 (1992) 559; Willoughby and Connell, 'The Mareva Injunction: A Cruel Tyranny?', European Intellectual Property Review, vol 8 (1997) 479.
[103] Z Ltd v A-Z and AA-LL [1982] QB 558 at 575-576.
[104] Abella v Anderson [1987] 2 Qd R I at 4-5.
[105] Iraqi Ministry of Defence v Arcepey Shipping Co SA [1981] QB 65 at 72-73; Riley McKay Pty Ltd v McKay [1982] I NSWLR 264 at 276; Marine Atlantic Inc v Blyth (1993) 113 DLR (4th) 501 at 504.
[108] [2007] VSC 165, [57]-[59] (Hargrave J). Footnotes included as in original.
[110] Ibid, [57] (citations omitted).
[111] [2024] VSC 495, [103]-[107].
[112] [2010] VSC 120, [45], [48]-[53] (Bell J).
[114] [2011] VSC 18, [56]-[60] (Vickery J).
[115] See eg Rafferty v Time 2000 West Pty Ltd (No 7) [2011] FCA 405 (Lander J); Deputy Commissioner of Taxation v Ekelmans [2013] VSC 346, [26] (Judd J); Suzhou Haishun Investment Management Co Ltd v Zhao (No 2) [2018] VSC 176, [29] (J Dixon J); Woodruff [2025] VSCA 164, [19] (McLeish, Walker and Lyons JJA); and SK Developments [2025] VSC 402, [22] (Nichols J).
[117] [2025] VSC 402, [16]-[23] (Nichols J). Footnotes included as in original.
[118] See the discussion in Peter Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (LexisNexis Butterworths, 3rd ed, 2023) at [2.94].
[119] See Practice Note SC Gen 17 - Freezing Orders.
[120] See, for example, paragraph 10 of Form 37AA - Freezing Order.
[121] [2007] NSWSC 1347, [51]-[54] (Barrett J).
[123] Ibid, [61]. See also similar observations of Henry J in National Australia Bank Ltd v Human Group Pty Ltd (No 2) [2020] NSWSC 1900, [109], noting also that additional considerations arise where proprietary relief is sought. Cited with approval by the Federal Court of Australia in Westpac Banking Corporation v Forum Finance Pty Limited (Freezing Order Variation No 2) [2022] FCA 1206, [11]-[13] (Thawley J).
[124] (2019) 135 ACSR 248, [70]-[72] (Derham AsJ). Cited with approval in Plus Recruitment Pty Ltd v Phillips (No 2) [2019] VSC 611, [44] (Lyons J).
[125] Plus Recruitment Pty Ltd v Phillips (No 2) [2019] VSC 611, [46] (Lyons J) (Plus Recruitment).
[126] See, for example, Clout (Trustee) v Anscor Pty Ltd [2001] FCA 174, [19]-[20] (Drummond J). Cited with approval in Allomak Ltd v Allan [2010] VSC 187, [24] (Davies J) and Lyons J in Plus Recruitment.
[127] Plus Recruitment [2019] VSC 611, [46]-[47] (Lyons J).
[128] [2009] VSC 527. Footnotes included. I refer also to the helpful discussion by Peter Biscoe in Mareva and Anton Pillar Orders: Freezing and Search Orders (LexisNexis Butterworths, 3rd ed, Sydney, 2023) and in particular, chapter 3, which deals with ancillary orders. This includes references to numerous authorities addressing the need for exceptional circumstances before an order would be made requiring a respondent to attend court for cross-examination in relation to a disclosure of assets affidavit or statement - see, for example, paragraphs 3.50 to 3.62. I refer also to chapter 9 'Sanctions for Disobedience'.
[129] See, eg, A v C (1980) 2 All ER 347, Hospital Products Limited v Ballabil Holdings Pty Ltd (1984) 2 NSWLR 662, 669.
[130] (1984) 2 NSWLR 662, 669.
[131] (1999) NSWSC 815, [23].
[138] Unreported, Victorian Supreme Court, 26 June 2005.
[141] Royal Australian College of Physicians Ltd v Yadam [2006] NSWSC 1463.
[142] [2009] VSC 418 [47].
[143] At [28]. His Honour also recognised and emphasised that ancillary orders are not intended to constitute interrogation or specific discovery where that would not be truly facilitative of the freezing orders in question - at [29] and in the particular circumstances there described. See also the observations of Bell J regarding ancillary orders in Gashi [2010] VSC 120, [59]-[66], referred to in greater detail in Manda Capital [2024] VSC 495, [103]-[107] Connock J.
[144] [2025] VSCA 164, [89] (McLeish, Walker and Lyons JJA).
[145] See, for example, the authorities referred to in paragraphs 151 and 154 above.
[146] Subject to the previous qualification I referred to earlier above regarding the oppressive conduct claims made directly against Elianne and JKEK.
[147] But noting that there is a transcript error at page 134:1 where, in response to my question as to whether the source of the funds was contested, it records counsel as stating that 'The source of the funds is not known', when in fact the answer was 'The source of the funds is not, no', which has been confirmed by reference to the video recording. In any event, no different result or finding about anything on the application would follow even if the transcript had been correct given the evidence about the sale and purchase of the 30 Moffat Street and 14 Edro Avenue properties, and the acquisition of the Brighton Property, noting also that the funding source was not contested or disputed in any of the Lam affidavits.
[148] Including, for example, the 'relatively low' good arguable case threshold as referred to above.
[149] I add that I did not understand the Defendants' concession regarding removal or dissipation risk to be a concession that it had been established that there was a risk that Jim or Elianne might 'abscond', although it may be noted that they moved permanently to Dubai in December 2024.
[150] And the inherent jurisdiction of the Court.
[151] See, for example, the observations made regarding quantum in the authorities referred to in the principles and observations section of these reasons above.
[152] I note that the lower bank rate appears unsurprising given the high rates of interest that the evidence revealed were payable in respect of the Synochi Loan.
[153] And the other matters referred to by the administrator and addressed by the Defendants in their submissions, including COVID-19, wages, regulations, and the cost of living.
[154] Whether alone or in any combination with one or more of the other relevant circumstances.
[155] Which remains the position on the evidence even if the Defendants' concession regarding the source of the funds is put to one side.
[156] See Bradto Pty Ltd v State of Victoria [2006] VSCA 89; (2006) 15 VR 65, [35] (Maxwell P and Charles JA).
[159] See, for example, Cardile and also the decisions in PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36; (2015) 258 CLR 1, [43], [46] (French CJ, Keifel, Bell, Gaegler and Gordon JJ) and Taggart v Sexton [2009] NSWCA 91; (2009) 255 ALR 522.
[160] [2007] NSWSC 1347, [61].
[163] And the cases there referred to.
[164] Noting also that the amount of the Synochi Loan appeared to be inaccurately recorded in the financial statements, which was responsibly acknowledged by junior counsel.
[165] And was sufficiently established in any event.
[166] Noting also that the Defendants accepted that separate freezing orders should be made against each of Jim, Elianne and JKEK, and not a combined order, although I would have made separate orders even if this had not been so.
[167] In the orders against Jim and Elianne.
Refuse to Lose Pty Ltd
Kostakis [2025] VSC 438
(1997) 198 CLR 380
(1989) 18 NSWLR 319
(1985) 160 CLR 583
(1987) 164 CLR 137
(2022) 275 CLR 37
(2006) 153 FCR 509
(2015) 258 CLR 1
(1999) 198 CLR 380
(2006) 15 VR 65
(1999) 47 NSWLR 538
(1998) 198 CLR 380
(1987) 162 CLR 612
(1998) 195 CLR 1
(1984) 2 NSWLR 662
(2009) 255 ALR 522