Resort Lifestyle Developments Pty Ltd & Ors v NGI Savannah Living Communities Pty Ltd [2022] QSC 194

1. The caveat having dealing number 721178061 over property described as Lot 62 on RP 12833 with title reference 11245042 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
2. The caveat having dealing number 721438803 over property described as Lot 3 on RP 166889 with title reference 15981196 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
3. The caveat having dealing number 721438831 over property described as Lot 2 on RP 61852 with title reference 12362130 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
4. The respondent pay the first to third applicants' costs of and incidental to the originating application filed 19 August 2022 to be assessed on the standard basis if not agreed.

1. The orders of Mullins J dated 28 November 2018 be varied to include a new paragraph 4A in the following terms:

"4A. For the avoidance of doubt, the following properties are not assets of the first defendant or the seventh defendant within the meaning of paragraphs 5, 11 or 13 of the Freezing Order:

(a) Lot 62 on RP 12833 with title reference 11245042;

(b) Lot 3 on RP 166889 with title reference 15981196; and

(c) Lot 2 on RP 61852 with title reference 12362130."

1. The orders of Mullins J dated 28 November 2018 be varied to include a new paragraph 4B in the following terms:

"4B. For the avoidance of doubt, the Freezing Order does not prohibit the first defendant or the seventh defendant from causing or permitting:

(a) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 62 on RP 12833 with title reference 11245042 (or such lots into which it may be subdivided) by Resort Lifestyle Developments Pty Ltd ACN 643 400 177;

(b) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 3 on RP 166889 with title reference 15981196 (or such lots into which it may be subdivided) by Lifestyle Resorts Pty Ltd ACN 647 601 769; or

(c) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 2 on RP 61852 with title reference 12362130 (or such lots into which it may be subdivided) by Lifestyle Resorts Albert Pty Ltd ACN 648 580 992."

1. The parties have liberty to apply in respect of orders 1 and 2 above.
2. The costs of the first and seventh defendants of the interlocutory application filed 19 August 2022 be those parties' costs in the proceedings.

REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - REMOVAL - PARTICULAR CASES - where a freezing order was made against the applicant - where three companies were incorporated after the freezing order was made with the applicant as director and shareholder - where the companies subsequently purchased real property for the purpose of development - where the respondent lodged caveats over the properties relying on s 122(1)(e) of the Land Title Act 1994 (Qld) and the freezing order - where the companies controlled by the applicant seek orders removing the caveats under s 127 of the Land Title Act 1994 (Qld) - whether the caveated properties are assets within the scope of the freezing order - whether the companies are restrained from dealing with the caveated properties by the freezing order against the applicant - whether the caveats should be removed

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DETENTION, INSPECTION AND PRESERVATION - FREEZING ORDERS - where a freezing order was made against the applicant - where three companies were incorporated for the purpose of developing real property after the freezing orders were made - where the registered owner of each property is a company controlled by the applicant - where the applicant seeks declarations or a variation of the freezing order that, inter alia, the freezing order does not prohibit development and sale of the caveated properties by the registered owner being the respective companies - whether the freezing order should be varied

Land Title Act 1994 (Qld), s 122, s 127

Uniform Civil Procedure Rules 1999 (Qld), r 260, r 260A, r 260C, r 260D, r 260E, r 667

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170, cited

BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 3) [2013] WASC 239; (2013) 276 FLR 273, cited

Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63; (1774) 98 ER 969, considered

Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44, cited

Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24; [2022] 2 WLR 703, considered

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, applied

Chant v Curcuruto [2021] NSWSC 751, cited

Cousins Securities Pty Ltd v CEC Group Limited [2007] QCA 192; [2007] 2 Qd R 520, cited

Group Seven Ltd v Allied Investment Corporation Ltd [2013] EWHC 1509; [2014] 1 WLR 735, considered

Hampton Court Ltd v Crooks [1957] HCA 28; (1957) 97 CLR 367, cited

Lakatamia Shipping Co Ltd v Su [2014] EWCA Civ 636; [2015] 1 WLR 291, considered

Levinge v Director of Custodial Services (1987) 9 NSWLR 546, cited

MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 568, cited

Morgan v Babcock & Wilcox Pty Ltd (1929) 43 CLR 163, cited

Nichols v Manietta [2022] FCA 39, cited

Parbery v QNI Metals Pty Ltd (2018) 358 ALR 88; [2018] QSC 107, considered

Prest v Prest [2013] UKSC 34; [2013] 2 AC 415, considered

R v Byckso (No 2) (1977) 17 SASR 460, cited

Re Jorss' Caveat [1982] Qd R 458, cited

T&L Byrne Excavations Pty Ltd v Robinson [2021] QSC 279, considered

Viterra BV v Shandong Ruyi Technology Group Co Ltd [2022] FCA 215, considered

G Gibson KC, with A J H O'Brien, for the applicants in BS No 9952 of 2022 and the applicant/defendants in BS No 11263 of 2018

P K O'Higgins, with P C Williams, for the respondent in BS No 9952 of 2022 and the plaintiff/respondent in BS No 11263 of 2018

Enyo Lawyers for the applicants in BS No 9952 of 2022 and the applicant/defendants in BS No 11263 of 2018

GRT Lawyers for the respondent in BS No 9952 of 2022 and the plaintiff/respondent in BS No 11263 of 2018

• [1] The proceeding numbered BS 11263 of 2018 (Principal Proceeding) involves a claim by NGI Savannah Living Communities Pty Ltd (NGI) against, inter alia, Neville Dunne (Mr Dunne), the first defendant, and MP01 Pty Ltd (MP01), the seventh defendant.
• [2] NGI's claim in the Principal Proceeding is for damages for breach of contract, equitable compensation and damages under s 236 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) arising out of alleged dishonest conduct on the part of Mr Dunne and entities associated with him in the course of the development of a retirement village property in North Queensland referred to as the Savannah development.
• [3] On 17 October 2018, Boddice J made a freezing order against Mr Dunne, MP01 and other defendants in the Principal Proceeding on an ex parte basis. A further freezing order was made by Boddice J by consent on 26 October 2018 which remained in effect until 28 November 2018. That order was later extended until trial or earlier order by consent order made by Mullins J (as her Honour then was) on 28 November 2018 (Freezing Order). The Freezing Order remains in force as against Mr Dunne and MP01.
• [4] Subsequent to the making of the Freezing Order, three companies controlled by Mr Dunne purchased real property for the purpose of development: Resort Lifestyle Developments Pty Ltd (Resort Lifestyle Developments); Lifestyle Resorts Pty Ltd (Lifestyle Resorts); and Lifestyle Resorts Albert Pty Ltd (Lifestyle Resorts Albert), (together the Development Companies). Upon becoming aware of the purchase of those real properties, NGI lodged caveats over the relevant properties, relying upon s 122(1)(e) of the (Qld) () and the Freezing Order.

(a) the caveated properties are assets which fall within the scope of the Freezing Order;

(b) in any event, Mr Dunne is restrained from causing the Development Companies to deal with the caveated properties where such dealings may diminish the value of Mr Dunne's shareholding in the Development Companies contrary to the terms of the Freezing Order;

(c) if necessary, r 260D(4) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) applies so that the Freezing Order imposes a restraint directly on the Development Companies.

• [8] NGI commenced the Principal Proceeding on 16 October 2018 against eight defendants. A number of those defendants are no longer party to the proceeding. The second, fourth, sixth and eighth defendants, being companies associated with Mr Dunne, have been deregistered. The third defendant is now in liquidation. The Principal Proceeding remains on foot against Mr Dunne and MP01. It has been listed for trial commencing on 27 February 2023.
• [9] In summary, NGI alleges in the Principal Proceeding that Mr Dunne:

(a) procured a payment of $1.1 million from NGI to a builder engaged on the Savannah development in circumstances where a secret arrangement had been made for the builder to pay that money to Mr Dunne;

(b) procured a payment of $250,000 from NGI to a real estate agent involved with the Savannah development in circumstances where a secret arrangement had been made for the real estate agent to pay that money to Mr Dunne; and

(c) arranged for the sixth defendant in the Principal Proceeding, a company which was controlled by Mr Dunne's girlfriend at the time and which has since been deregistered, to invoice NGI for over $2 million for civil works which were not carried out and which NGI paid.

(a) by paragraph 5(a), that Mr Dunne must not remove from Australia or in any way dispose of, deal with or diminish the value of any of his assets in Australia up to the unencumbered value of $3.7 million;

(b) by paragraph 11(a), that MP01 must not remove from Australia or in any way dispose of, deal with or diminish the value of any of its assets in Australia up to the unencumbered value of $350,000;

(c) by paragraph 13:

"For the purpose of this order, a defendant's assets include:

(a) all of the defendant's assets, whether they are in the defendant's name and whether they are solely or co-owned;

(b) any assets the defendant owns as trustee;

(c) any asset which the defendant has power, directly or indirectly, to dispose of or deal with as if it were the defendant's own (the defendant is to be regarded as having such power if a third party holds or controls the asset in accordance with the defendant's direct or indirect instructions); and

(d) the following assets in particular:

(a) paying the defendant's ordinary living expenses;

(b) paying the defendant's reasonable legal expenses;

(c) dealing with or disposing of any of the defendant's assets in the ordinary and proper course of the defendant's business, including paying business expenses bona fide and properly incurred; ..."

The Development Companies and the caveated properties

• [11] Each of the Development Companies was incorporated, and subsequently became the registered owner of one of the caveated properties, after the Freezing Order was made.
• [12] Resort Lifestyle Developments was incorporated on 11 August 2020. The sole shareholder of Resort Lifestyle Developments is Rhino Batteries Pty Ltd, which owns those shares as trustee of a discretionary trust. Mr Dunne is the sole director and sole shareholder of Rhino Batteries Pty Ltd.
• [13] On 24 March 2021, Resort Lifestyle Developments became the registered owner of Lot 62 on RP 12833, located at 80 Stephens Street in Morningside (Stephens Street Property).
• [14] Mr Dunne has deposed that Resort Lifestyle Developments owns the Stephens Street Property legally and beneficially and is presently developing it. He caused Resort Lifestyle Developments to be incorporated for the purpose of purchasing, subdividing and developing the Stephens Street Property. The Stephens Street Property is the only real property owned by Resort Lifestyle Developments and its development is the company's only business.
• [15] The Stephens Street Property is to consist of two duplexes which are presently under construction. Two of the proposed lots in the duplexes are presently under contract for sale.
• [16] Lifestyle Resorts was incorporated on 2 February 2021. Mr Dunne is the sole director and sole shareholder of Lifestyle Resorts. He owns the shares in Lifestyle Resorts as trustee of a discretionary trust.
• [17] On 16 June 2021, Lifestyle Resorts became the registered owner of Lot 3 on RP 166889, located at 107 Akonna Street in Wynnum (Akonna Street Property).
• [18] Mr Dunne has deposed that Lifestyle Resorts owns the Akonna Street Property legally and beneficially and is presently developing it. He caused Lifestyle Resorts to be incorporated for the purpose of purchasing, subdividing and developing the Akonna Street Property. The Akonna Street Property is the only real property owned by Lifestyle Resorts and its development is the company's only business.
• [19] The Akonna Street Property is to consist of eight townhouses which are presently under construction. Four of the eight townhouses are presently under contract for sale.
• [20] Lifestyle Resorts Albert was incorporated on 10 March 2021. Mr Dunne is the sole director and sole shareholder of Lifestyle Resorts Albert. He owns the shares in Lifestyle Resorts Albert as trustee of a discretionary trust.

(a) Stephens Street Property - approximately $3.1 million;

(b) Akonna Street Property - approximately $4.6 million;

(c) Wynnum Road Property - approximately $3.05 million.

• [26] According to Mr Dunne's evidence, all of the funds used to purchase and develop the caveated properties were borrowed from a mezzanine financier, Hallmark Investing Pty Ltd (Hallmark) which holds a registered mortgage over each of the caveated properties. He has deposed that the loans his companies have taken from Hallmark are on arms' length terms (but he has not exhibited any of the relevant loan documents). He has deposed that he has never invested any money with Hallmark, or any company associated with it or with its director.
• [27] Mr Dunne was not cross-examined.

• [28] On 18 October 2021, NGI lodged caveat numbered 721178061 over the Stephens Street Property.
• [29] On 27 January 2022, NGI lodged:

(a) caveat numbered 721438803 over the Akonna Street Property; and

(b) caveat numbered 721438831 over the Wynnum Road Property.

• [30] Each of the caveats is in relevantly similar terms. The interest claimed in item 3 of each of the caveats is expressed as:

"The benefit of a subsisting order of an Australian court in restraining the registered proprietor from dealing with the lot ...."

• [31] Item 4 of each of the caveats then described the grounds of claim:

"Pursuant to section 122(1)(e) of the Land Title Act 1994 (Qld) and in accordance with the order of the Supreme Court of Queensland dated 26 October 2018 and continued on 28 November 2018 in proceeding no BS11263 of 2018 granted in favour of the caveator restraining Neville Dunne from dealing with the land ...."

• [32] Further particulars gave a more detailed description of those grounds of claim:

(a) Mr Dunne's position as sole director and sole shareholder (or ultimate owner of shares in the case of Resort Lifestyle Developments) of the relevant Development Company which is the registered owner of the lot means he has the power to deal with the lot which engages paragraph 13(c) of the Freezing Order;

(b) Mr Dunne's position as sole shareholder (or ultimate owner of shares in the case of Resort Lifestyle Developments) of the relevant Development Company which is the registered owner of the lot means he is the owner of the lot in substance if not in name which engages paragraph 13(a) of the Freezing Order.

• [33] The court has power under the provisions of Chapter 8 Part 2 Division 2 of the UCPR to make a freezing order.
• [34] The relevant provisions of the UCPR are the following:
  1. Definitions for div 2

ancillary order has the meaning given by rule 260B.

another court means a court outside Australia or a court in Australia other than the court.

applicant means a person who applies for a freezing order or an ancillary order.

freezing order has the meaning given by rule 260A.

respondent means a person against whom a freezing order or an ancillary order is sought or made.

(1) The court may make an order (a freezing order) for the purpose of preventing the frustration or inhibition of the court's process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.

(2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.

260C Respondent need not be party to proceeding

A freezing order or an ancillary order may be granted whether or not the respondent is a party to an existing proceeding.

260D Order against judgment debtor or prospective judgment debtor or third party

(3) The court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because -

(a) the judgment debtor, prospective judgment debtor or another person might abscond; or

(b) the assets of the judgment debtor, prospective judgment debtor or another person might be -

(i) removed from Australia or from a place inside or outside Australia; or

(ii) disposed of, dealt with or diminished in value.

(4) The court may make a freezing order or an ancillary order or both against a person other than a judgment debtor or prospective judgment debtor (a third party) if the court is satisfied, having regard to all the circumstances, that -

(a) there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because -

(i) the third party holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(ii) the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(b) a process in the court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment.

(5) This rule does not affect the power of the court to make a freezing order or ancillary order if the court considers it is in the interests of justice to do so.

• [35] As Bond J (as his Honour then was) observed in Parbery v QNI Metals Pty Ltd,[1] it is implicit in the text of r 260A that, before exercising the jurisdiction to make a freezing order, the court would have to be satisfied that it was appropriate that the order be made for the purpose specified in r 260A(1).
• [36] As expressly acknowledged in r 260E, these provisions of the UCPR do not diminish the inherent, implied or statutory jurisdiction of the court to make a freezing order.
• [37] The principles which inform the exercise of the court's inherent jurisdiction to make such an order was considered in detail in Parbery.[2] Those principles, which require that the court consider whether there exists a risk to the integrity of the prospective court processes of execution and enforcement, also inform the exercise of the jurisdiction under the UCPR.[3] Although it is not necessary to set out those principles in detail, as will become apparent, the factors which inform the exercise of the jurisdiction and particularly the purpose sought to be achieved by the exercise of the jurisdiction is relevant to the ascertainment of the scope of a freezing order in circumstances such as exist in this case.

• [38] At the hearing no point was taken about the Development Companies not being incorporated, and the caveated properties not being acquired by those companies, until after the Freezing Order had been made. The applicants expressly accepted that if the caveated properties are assets of Mr Dunne within the meaning of paragraph 13 of the Freezing Order, properly construed, then they came within the operation of the order when they were purchased by the Development Companies.[4] It is therefore unnecessary to further consider the operation of the Freezing Order upon after-acquired assets.
• [39] It also follows from the position taken by the applicants that Mr Dunne's shareholding in each of the three Development Companies, held indirectly in the case of Resort Lifestyle Developments and directly in the case of the other two companies, are assets of Mr Dunne which fall within the scope of the Freezing Order. If Mr Dunne were to act in a manner which caused the value of those shareholdings to diminish then he would, subject to any relevant exceptions, contravene paragraph 5(a) of the Freezing Order.[5]
• [40] The applicants argue that, on the proper construction of the Freezing Order, and particularly the extended definition of a defendant's assets set out in paragraphs 13(a) and (c) of that order, the caveated properties are not assets of Mr Dunne. They are assets of the Development Companies and those companies are not subject to the Freezing Order. Mr Dunne's assets are limited to the shares he owns, directly or indirectly, in the Development Companies. To blur the distinction between the caveated properties owned by the Development Companies and the shares in those companies owned by Mr Dunne is to disregard the corporate veil where it has not been shown that it is appropriate to do so.

• [41] In advancing their argument, the applicants rely upon several decisions in England which have considered the meaning of an extended definition of a defendant's assets expressed in materially similar terms to that used in the Freezing Order.
• [42] The first decision is Group Seven Ltd v Allied Investment Corporation Ltd.[6] In that case the freezing order was in the following terms:

"8. Until Trial or further order of the court, each of the first, second and fourth respondents Marek Rejniak, Paul Sultana and Luis Nobre must not - (1) remove from England and Wales any of their assets which are in England and Wales up to the value of €12m; or (2) In any way dispose of, deal with or diminish the value of any of their assets whether they are in or outside England and Wales up to the same value.

1. Paragraph 8 applies to all the respondent's assets whether or not they are in his own name and whether they are solely or jointly owned. For the purpose of this order the respondent's assets include any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions."

• [43] It can be seen that paragraph 9 of the freezing order in Group Seven is in terms materially similar to both paragraphs 13(a) and (c) of the Freezing Order in the present case.
• [44] Mr Sultana, one of the respondents named in the freezing order in Group Seven, owed a debt to a company of which he was the sole director and shareholder. Acting on behalf of that company, Mr Sultana compromised its claim for recovery of that debt. The claimant then applied to commit Mr Sultana to prison for contempt of court on the basis that the chose in action for the debt held by the company was, by paragraph 9 of the freezing order, to be treated as an asset of Mr Sultana and that in compromising the claim he had, in breach of the freezing order, disposed of or dealt with that asset.
• [45] The application was refused. In reaching that conclusion, Hildyard J set out the following statements of principle:[7]

"(1) ... as is well known, a freezing order is 'designed to prevent injustice to a successful claimant by preserving assets and funds and guarding so far as possible against the risk that they will be disposed of or dissipated before a judgment is satisfied so as to render ineffective the claimant's attempts to recover what is due to him'.

(2) Without more, and in every day usage, the expression 'his assets' refers 'to assets belonging to that person, not to assets belonging to another person': and assts belonging, or at the time of the freezing order assumed to belong, beneficially to someone other than the defendant, will not be assets available to satisfy a claim against that defendant, and without words clearly extending the scope of the phrase 'his assets', such assets will not be subject to the freezing order.

(3) That said, a freezing order is a precautionary measure taken urgently to protect the claimant against the risk of disposition, disposal, reduction in value, or loss of assets pending a fuller examination as to what assets would in reality be available to the claimant for the purpose of enforcing a judgment. Accordingly, it may be perfectly consistent with the objectives of such relief to extend the scope of the phrase 'his assets' to assets which the defendant may not appear to own but which in truth may be available to him for the purposes of enforcement; however, words extending the ordinary meaning will be strictly construed, and so as not to invest a meaning that the words cannot reasonably bear: thus, the wording must be clear and free of ambiguity.

(4) If the words are ambiguous, or admit of a more restrictive interpretation, so that it is arguable whether or not the assets in question fall within their scope, the court is unlikely to treat a dealing with such assets as a contempt of court.

(5) ... words to extend the meaning of 'his assets' have been introduced into the standard CPR form: these are the words in paragraph 6 of the standard CPR form and paragraph 9 of the freezing order. Those words extend the meaning of 'his assets' to cover assets which are not in the legal ownership of the defendant but in respect of which the defendant 'retains the power to direct how the assets should be dealt with'.

(6) Thus, where that form is used, the phrase 'his assets' is extended to include also 'assets held by a foreign trust or a Liechtenstein Anstalt when the defendant retains beneficial ownership or effective control of the asset'.

(7) However, it is clear that those words in the standard form do not extend to assets of which the defendant remains the legal owner but holds for the benefit of someone else.

(8) If it is desired and found appropriate to extend the scope of the injunction to assets held in trust ..., additional wording must be included to make that clear: ....

(9) As to piercing or lifting the corporate veil: ownership and control of a company are not themselves sufficient to provide justification for that course, even when no unconnected third party is involved and it might be perceived that the interests of justice would be served by it: ... It is always necessary to show impropriety in the sense of a misuse of the company as a device or façade to conceal wrongdoing.

(10) Even where the circumstances are such as to justify the exceptional step of piercing or lifting the corporate veil the effect is not to alter the beneficial ownership of the company's assets: it is simply to provide for such asset to be available in defined circumstances to the claimant."

• [46] Hildyard J then observed that there was no case which directly answered the critical question, namely whether the last two sentences of paragraph 9 of the freezing order applied to the exercise of power vested in Mr Sultana in right of the company of which he is sole director and shareholder. Or, put another way: does a company which has a sole director, who also owns all its shares, hold or control its assets in accordance with that sole director and shareholder's "direct or indirect instructions" within the meaning of paragraph 9?
• [47] In giving a negative answer to this question,[8] Hildyard J explained that answer was compelled by settled principles of company law and referred to the following passage from the judgment of Rimer LJ in Prest v Prest:[9]

"[104] ... It is heretical to suggest that the total control that a single individual is (and will always be) entitled to exercise over the affairs of his one-man company is a feature resulting in the company's assets becoming assets to which he is 'entitled', and therefore, to which the company is not entitled ... The logic ... [would] ... be that a one-man company can never own its assets beneficially but can only ever hold its assets as the nominee of its sole controller. That is what Lord Wrenbury said is not the law [in Macaura v Northern Assurance Co Ltd [1925] AC 619, 633].

[105] The flaw in the 'power equals property' approach is that it ignores the fundamental principle that the only entity with the power to deal with assets held by it is the company. Those who control its affairs - even if the control is in a single individual - act merely as the company's agents. Their agency will include the authority to procure an exercise by the company of its dispositive powers in respect of its property, but those powers are still exclusively the company's own: they are not the agent's powers. When and if the agents act as such, and procure a corporate disposition, the property which immediately before the disposition belonged to the company will become the property of the disponee. Until then, it remains the property of the company and belongs beneficially to no one else. ..."

• [48] Applying those principles, Hildyard J found that in causing the company to compromise the claim to recover the debt he owed to it, Mr Sultana was not, as a matter of law, instructing the company directly or indirectly. He was not telling the company, as a third party, what to do. Rather, he was acting in right of and on behalf of the company.[10]
• [49] The decision in Group Seven was subsequently approved by the England and Wales Court of Appeal in Lakatamia Shipping Co Ltd v Su.[11] In that case a freezing order was made in terms which included paragraphs 2 and 3 in materially the same form as paragraphs 8 and 9 in Group Seven. In a later hearing to vary the terms of that freezing order the question arose whether the order had the direct effect of freezing the assets of three companies of which a defendant was the direct or indirect 100% shareholder and a director but which were not themselves defendants to the claims.
• [50] After considering the decision in Group Seven and other relevant authorities, Tomlinson LJ concluded:[12]

"[31] There is therefore no basis on which it can be asserted that the language of paragraph 6 of the standard form freezing order ... is either intended to have the effect or does have the effect of bringing within the definition of a defendant's assets the assets of a company which he controls, and such assets are not 'directly affected' by such an order."

• [51] The other members of the Court of Appeal reached the same conclusion.
• [52] Sir Bernard Rix stated:[13]

"[41] As for the interpretation of paragraph 3 of the present order, the upshot is that the language to be found there is not sufficient without more to cover assets of a company in which a director or shareholder of that company does not have a beneficial interest, even if the director is a sole director or the shareholder is a 100% shareholder. The order as a whole is directed to a defendant's assets, that is to say to the assets in which a defendant is beneficially interested. Although the language of the second sentence may look as if it extends much more widely, because of the expression 'as if it were their own', I am satisfied that what that language is primarily concerned with is the situation described in the third sentence of that paragraph, namely a form of trust where a third party holds or controls assets in accordance with a defendant's instructions. However, it does not extend to a company's assets just because of the powers which a director or shareholder may be able to exercise over them as such. The language 'holds or controls the asset in accordance with their direct or indirect instructions' does not well fit the relationship of a company director or shareholder, even a sole director or 100% shareholder, to a company's assets."

"[50] The assets that Burton J was considering in para 16 [of the judgment at first instance] were the assets of the companies. There is no suggestion that such assets belonged beneficially to anyone other than the companies; and it is trite law that a company's assets so held do not belong beneficially to their shareholders, not even to a shareholder in the position of the first defendant who is, for all practical purposes, the sole owner of the companies. This was explained, by reference to high authority, by the majority of the Court of Appeal in Prest v Prest, to which Burton J was referred, but which, when he came to para 16, he overlooked. He preferred the heretical view that because the sole owner of a company is in a position to control the destiny of its assets, the company's assets are his assets within the meaning of paragraph 3 of the order.

[51] That is wrong. The owner is of course able to control the destiny of the company's assets. But that does not make them his assets; and paragraph 3 is concerned only with assets which are his assets. Nor is any help the other way to be derived from the third sentence of paragraph 3 of the order. First, that is still only concerned with dispositions of assets belonging beneficially to the defendant, which these assets do not. Secondly, the first defendant has no authority to instruct the companies how to deal with their assets. All he has is the power, as an agent of the company, to procure the company to make dispositions of its assets. Such dispositions, when made, are made in consequence of decisions made by the organs of the company. They are not dispositions made by the company in compliance with instructions from the first defendant. That may seem to be a somewhat formal distinction. But it is a valid one: only the companies have authority to deal with and dispose of their assets. ...

[52] I would therefore disagree with Burton J's reasoning in para 16 of his judgment, just as I would disagree with his proposition in para 18 that, if judgment were obtained against the first defendant, a receiver would be able to execute the judgment against the assets of the companies. The receiver would not be able to do that. He might be in a position to deploy his rights over the first defendant's shareholdings to achieve a winding up of the companies and, in consequence, a distribution to himself of the surplus assets of the companies. But such a possibility still does not mean that the assets of the companies are assets of the first defendant so as to fall within the terms of the freezing order."

• [54] A more recent discussion of the principles relevant to the issue of the scope of the Freezing Order can be found in the Privy Council decision in Broad Idea International Ltd v Convoy Collateral Ltd.[15] In that case the applicant brought proceedings in Hong Kong claiming damages against a defendant who was a resident of Hong Kong. The defendant was the majority shareholder of Broad Idea, a company incorporated in the British Virgin Isles (BVI). Broad Idea owned shares in a company listed on the Hong Kong stock exchange. The applicant sought and was granted a freezing order in the BVI against both the defendant and Broad Idea. That order was subsequently set aside and the applicant appealed from that decision to the Privy Council.
• [55] Lord Leggatt, with whom three other members of the Privy Council agreed, stated that the basis and scope of the jurisdiction to grant a freezing order against a third party against whom no claim for substantive relief lies is explained by what is referred to as "the enforcement principle": that is, the essential purpose of a freezing order is to facilitate the enforcement of a judgment or order for the payment of a sum of money by preventing assets against which such a judgment could potentially be enforced from being dealt with in such a way that insufficient assets are available to meet the judgment.[16]
• [56] The ordinary requirement for granting a freezing order against a third party is that the third party is in possession or control of an asset against which a judgment could be executed. That test might be satisfied in circumstances where there is good reason to suppose that the asset is beneficially owned by the defendant. But it might also be satisfied in other ways: for example, where the defendant would have a right of indemnity against the third party which could be enforced by a receiver; or where a transaction by which the defendant transferred an asset to the third party might be avoided under insolvency laws; or where enforcement of a judgment against the defendant might lead to the appointment of a liquidator or trustee in bankruptcy who might pursue a claim against the third party.[17]
• [57] The critical questions in Broad Idea were (i) whether a judgment would be enforceable against the shares owned by Broad Idea in the Hong Kong listed company, and (ii) whether a freezing order was necessary to protect the applicant's ability to utilise such a process of enforcement. Lord Leggatt found that there was no evidence capable of supporting an inference that Broad Idea did not beneficially own the shares in the Hong Kong listed company. No reasonable basis was shown for asserting the defendant had any direct beneficial interest in the shares owned by Broad Idea.

"The practical purpose of granting a freezing injunction against the company in that case was to restrain the third party to whom its shares had been transferred from procuring the disposal of the company's assets and thereby diminishing the value of its shares (against which a future judgment could potentially be executed). There would not have been a need to grant an injunction against the company if the shares had remained in the possession of the defendants, as in that event the freezing injunction granted against them would have restrained them from procuring the company to dispose of its assets (thereby diminishing the value of the shares) and no purpose would have been served by granting in addition a freezing injunction against the company itself."

• [60] Lord Leggatt reached the same conclusion on the facts of the case in Broad Idea. The existence of a freezing order against the defendant which prevented him from, inter alia, diminishing the value of his shares in Broad Idea meant he was restrained from using his powers of control over Broad Idea to procure the company to deal with its shares in the Hong Kong listed company in a way which would reduce the value of his shareholding in Broad Idea. In those circumstances there was not any need or warrant for granting an additional freezing order against Broad Idea.[22]

• [61] The principles relevant to the grant of a freezing order over assets of a third party were also recently considered by Stewart J in Viterra BV v Shandong Ruyi Technology Group Co Ltd.[23] In that case, the applicant succeeded in an arbitration against a company incorporated in the People's Republic of China (PRC). The total award debt was estimated to be $18.7 million. The applicant took steps to enforce that arbitral award in the PRC, but those steps were considered unlikely to be successful. The applicant also commenced recognition and enforcement proceedings in Singapore and expected to obtain a judgment in its favour against the defendant PRC company from the High Court of Singapore.
• [62] The defendant PRC company had a wholly owned subsidiary incorporated in Singapore. That Singapore subsidiary was described as a "holding entity". It did not carry on business, had no employees and had no other assets other than shares in two Australian companies and a number of intercompany loans. The Australian companies had substantial interests in agricultural and other land, residential properties, a cotton ginnery, commercial leases and associated water rights and entitlements in Australia.
• [63] The applicant contended that, upon obtaining judgment in Singapore against the defendant PRC company, it would seek to execute on that judgment by way of judicial process in Singapore against the PRC company's shareholding in the Singapore subsidiary, likely by means of seizure and sale of the shares by the Sheriff's Office. If the applicant successfully bid at auction for those shares it would take control of the Singapore subsidiary and could use that control to cause the Singapore subsidiary to realise the value of its assets and pay a dividend to the applicant.
• [64] The applicant applied in the Federal Court of Australia to freeze the assets of the Singapore subsidiary. The court granted an order which precluded the Singapore subsidiary company from transferring its shares in two Australian companies without first giving 10 clear business days' notice in writing of the transfer to the applicant. The extended definition of the assets covered by the freezing order was in materially the same terms as paragraphs 13(a) and (c) of the Freezing Order.[24]

(a) the applicant failed to identify any process of the Federal Court of Australia that is or might be available to it as a result of any prospective judgment of that court under which process the Singapore subsidiary might be obliged to disgorge assets or contribute towards satisfying the prospective judgment;

(b) the processes identified by the applicant by which it would be able to realise the value of the defendant PRC company's shares in the Singapore subsidiary were not enforcement processes available to the applicant as judgment creditor to discharge the judgment debt, but were processes available to it as shareholder after the enforcement processes had come to an end;

(c) on discretionary grounds, due to the drastic nature of the freezing order together with the fact that they were directed not at assets of the judgment debtor but at the assets of an independent third party over which the debtor had no relevant control.

• [67] In reviewing the relevant principles, Stewart J referred to Cardile v LED Builders Pty Ltd[26] as the leading Australian case on freezing orders against third parties and distilled the following relevant points made by the High Court:[27]

"(1) There is no basis for the making of an order against a non-party which is not answerable or liable in some way to a party (plaintiff or defendant) in a proceeding or who is not holding, controlling or capable of disposing of the property of a party in that proceeding: [45]. (This point should be understood as being subject to (4) below.)

(2) A freezing order operates in personam as a very tight 'negative pledge' species of security over property, to which the contempt sanction is attached, and requires a high degree of caution on the part of the court; an order lightly or wrongly granted may have a capacity to impair or restrict commerce just as much as one appropriately granted may facilitate and ensure its due conduct: [50].

(3) A freezing order is a drastic remedy which should not be granted lightly; it imposes a severe restriction upon a defendant's right to deal with their assets; the function of the order is not to provide a plaintiff with security in advance for a judgment that it hopes to obtain and that it fears might not be satisfied: [51].

(4) The general proposition, accepted at point (1) above, that the grant of a freezing order against a third party should be limited to cases in which the third party holds or is about to hold or dissipate or further dissipate property to which the defendant is beneficially entitled in the substantive proceeding is too narrowly expressed; nevertheless, it will be a rare case in which a freezing order will be granted if such a situation does not exist: [54]."

• [68] Stewart J then referred to the High Court having identified the principle to guide courts in determining whether to grant freezing order where the activities of third parties are the object sought to be restrained. That principle is set out in Cardile as follows:[28]

"... 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."

• [69] It is this principle which is expressed in r 260D(4) of the UCPR.
• [70] By reference to subsequent High Court authority, Stewart J concluded that this statement of principle in Cardile might not be exhaustive of the circumstances in which the power to make a freezing order may properly be exercised against a third party, but ultimately found it unnecessary to decide that question.[29]
• [71] Stewart J then gave detailed consideration to Lakatamia Shipping and to Broad Idea and drew the following relevant conclusions from those decisions:[30]

(a) the assets of the Singapore subsidiary were not assets of the defendant PRC company, there being no suggestion that the defendant was beneficially entitled to those assets;

(b) the freezing order against the defendant PRC company would restrain it from causing the Singapore subsidiary to sell, dispose of or otherwise diminish the value of its assets because to do so would be to diminish the value of the defendant's shareholding in the Singapore subsidiary;

(c) once that freezing order took effect there may no longer be any justification for a freezing order against the Singapore subsidiary in order to preserve the value of the defendant PRC company's shareholding in the Singapore subsidiary.

• [72] In applying the relevant principles to the facts in Viterra, Stewart J discharged the freezing order against both the defendant PRC company and the Singapore subsidiary on the basis that the applicant relied only upon the enforcement in Singapore of a Singapore judgment against assets in Singapore. It did not seek to rely upon any process of the Federal Court to enforce the Singapore judgment in Australia. Nor did it seek to establish that it might seek to enforce any judgment obtained from the Federal Court in Singapore.[31] Those considerations do not arise in these applications.
• [73] However, Stewart J proceeded to give two further reasons why the applicant's case for maintaining the freezing order against the Singapore subsidiary failed.
• [74] First, the processes by which the applicant sought to access the assets of the Singapore subsidiary, which would involve it becoming a shareholder of the Singapore subsidiary, would not be processes of enforcing or executing the judgment in payment of the debt. They were not processes by which the Singapore subsidiary "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" as described in Cardile.[32]
• [75] Secondly, on discretionary grounds which relevantly included:

(a) that it is a rare case in which the drastic remedy of a freezing order will be granted against a third party where it does not hold assets to which the debtor or prospective debtor is beneficially entitled;[33]

(b) that upon the freezing order against the defendant PRC company taking effect there was no demonstrated need or warrant for the freezing order against the Singapore subsidiary;[34]

(c) that the assets of the Singapore subsidiary were beyond any relevant control by the defendant PRC company.[35]

• [76] Having regard to the principles set out in the authorities just discussed, I am not satisfied that the Freezing Order operates to restrain the Development Companies from dealing with the caveated properties. I am not satisfied that, on its proper construction, those properties come within the extended definition of a defendant's property in paragraph 13 of the Freezing Order.
• [77] Mr Dunne's position as sole director and sole shareholder of the Development Companies does not mean that, if he were to cause any of those companies to deal with the caveated properties, he would, as a matter of law, be instructing that company directly or indirectly so as to engage paragraph 13(c) of the Freezing Order. He would not be telling that company, as a third party, what to do. Rather, he would be acting in right of and on behalf of the company.
• [78] Further, there is insufficient evidence to support an inference that the Development Companies do not own the caveated properties beneficially, or conversely that Mr Dunne is beneficially entitled to those properties so as to engage paragraph 13(a) of the Freezing Order.
• [79] NGI submits that, from Mr Dunne's position as the ultimate beneficial owner of each of the Development Companies and his evidence that he relies only on income from property development companies to support himself and his family, it should be inferred that the proceeds of the development of the caveated properties will be directed to his benefit. That might be so, although I note that Mr Dunne's ability to cause the Development Companies to transfer proceeds obtained from developing the caveated properties to him would depend upon the engagement of one of the exceptions set out in paragraph 16 of the Freezing Order. But it does not follow from the fact that Mr Dunne might, as an organ of the Development Companies, cause those companies to transfer such benefits to him personally that Mr Dunne is beneficially entitled to the caveated properties while they remain in the hands of the Development Companies.
• [80] NGI also relies upon Mr Dunne's failure to address a number of matters in his affidavit evidence:

(a) the lack of evidence of the purchase price for each of the caveated properties, the anticipated profits from the sale of the developed lots or what use the Development Companies will make of those profits;

(b) the failure to explain how he was able to secure finance from Hallmark for the whole of the acquisition and development costs for the caveated properties or to provide any evidence of the terms of the loans;

(c) the failure to adequately explain his relationship with Hallmark, which shares a registered office with the Development Companies and which is controlled by Mr Comino who was the settlor of the trusts referred to in [12], [16] and [20] above.

• [81] In making this submission, NGI relies upon the observation of Lord Mansfield in Blatch v Archer[36] that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted." However, in my view, that observation would only be relevant in this case if there was evidence raising a probability that the caveated properties were beneficially owned by Mr Dunne, not by the Development Companies. That is the effect of the application of Blatch v Archer by Isaacs J in Morgan v Babcock & Wilcox Pty Ltd[37] and by Dixon CJ in Hampton Court Ltd v Crooks.[38]
• [82] It is true that NGI's ability to put on evidence about the ownership of the caveated properties is limited. Nevertheless, it must point to some aspect of the evidence which would support the inference it seeks to have the court draw before it can seek to strengthen the case for drawing that inference by reference to the considerations identified in Blatch v Archer. As I have already noted, I am not satisfied that the evidence supports an inference that Mr Dunne is beneficially entitled to the caveated properties so as to engage paragraph 13(a) of the Freezing Order.
• [83] In seeking to have the court draw such an inference, NGI invites me to reject Mr Dunne's evidence that the Development Companies are the legal and beneficial owners of the caveated properties, or to refuse to act on that evidence. It submits that course is open even though Mr Dunne was not cross-examined. I do not accept that submission. It was based on the following statement of McHugh JA (as his Honour then was) in Levinge v Director of Custodial Services:[39]

"The rule in Browne v Dunne prevents a court from refusing to act on or disbelieving evidence which has not been the subject of cross-examination. However, one exception to the rule in Browne v Dunn is the case where evidence is inherently improbable."

• [84] I am not satisfied that Mr Dunne's evidence as to the Development Companies' legal and beneficial ownership of the caveated properties, or the source of the funds those companies used to purchase and develop the properties, is inherently improbable or that it is inconsistent with other evidence or is otherwise lacking sufficient cogency such that I should reject that evidence. I decline to do so.
• [85] NGI advanced a further submission that the caveated properties were "covered by" the restraints in the Freezing Order because any dealings with those properties had the potential to diminish the value of Mr Dunne's shareholdings. NGI sought support for that submission from the judgment of Tomlinson LJ in Lakatamia Shipping.[40]
• [86] I do not consider that reasoning supports NGI's submission in the circumstances of this case. NGI's submission ignores the statements from the judgments in Lakatamia Shipping extracted at [50] to [53] above. It also ignores the discussion by Tomlinson LJ of the circumstances in which a court might be justified in extending the operation of a freezing order to the assets of a company wholly owned and controlled by the pros[41]ctive judgment debtor.41 That discussion centred on there being evidence that the prospective judgment debtor has or is likely to have assets in a non-trading body corporate which does not have any active business, and which is in truth no more than the pocket or wallet of the prospective judgment debtor. It is that circumstance which might give reason to believe that the assets of a company may ultimately be required to be made available for the purposes of enforcement against its controller.
• [87] There is no evidence in this case that the Development Companies are not trading or that they have no business. Mr Dunne's evidence is to the contrary and NGI did not challenge that evidence in cross-examination.
• [88] Further, NGI's submission ignores the later discussion of this "preservation of share value" justification for a freezing order against a third party company in Broad Idea and Viterra (see [58] to , and above). In this case, where the operation of the Freezing Order on Mr Dunne restrains him from causing the Development Companies to take any steps that would diminish his shareholding in those companies, there is no demonstrated need or warrant for the Freezing Order. Even if I was wrong, as a matter of construction, concerning the scope of the Freezing Order's operation, this would in my view provide a sufficient basis to vary the Freezing Order to exclude the caveated properties from its operation.

• [95] The application to remove the caveats is brought under s 127 of the LT Act, which provides as follows:

(1) A caveatee may at any time apply to the Supreme Court for an order that a caveat be removed.

(2) The Supreme Court may make the order whether or not the caveator has been served with the application, and may make the order on the terms it considers appropriate."

• [96] In T_&L Byrne Excavations Pty Ltd v Robinson_,[43] Bowskill SJA (as her Honour then was) observed:[44]

"On an application to remove a caveat, the caveator bears the onus and must first satisfy the court that, on the evidence presented to it, the claim to an interest in the property does raise a serious question to be tried, in the sense of a sufficient likelihood of success to justify in the circumstances the preservation of the status quo; and, having done so, must go on to show that on the balance of convenience it would be better to maintain the status quo until the trial of the action, by preventing the caveatee from disposing of the property."

• [97] The Development Companies' main argument in support of the removal application is that, in circumstances where the Freezing Order was not made against the Development Companies and does not restrain the Development companies from dealing with the caveated properties, NGI does not have an interest in the properties sufficient to support the caveats.
• [98] As set out in [28] to [32] above, NGI relies upon s 122(1)(e) of the LT Act and the operation of the Freezing Order against the caveated properties to support the caveats. Section 122(1)(e) of the LT Act provides:

(1) A caveat may be lodged by any of the following -

(e) a person who has the benefit of a subsisting order of an Australian court in restraining a registered proprietor from dealing with a lot."

• [99] NGI has the benefit of a subsisting order of this court, namely the Freezing Order. However, the conclusion I have reached in [94] above, means that the Freezing Order does not restrain dealings with the caveated properties. On that basis, the caveats cannot be supported under s 122(1)(e) of the LT Act and orders should be made that the caveats be removed.
• [100] In addition to their submissions on the scope of the Freezing Order's operation, the Development Companies advanced a further argument to the effect that, even if I had concluded that the caveated properties fell within the extended definition of the defendant's property in paragraph 13 of the Freezing Order, the caveats could not be supported under s 122(1)(e) of the LT Act because in those circumstances the Freezing Order would restrain Mr Dunne from dealing with the lots. That is certainly the effect of the grounds of claim set out in item 4 of each of the caveats extracted at [31] above.
• [101] The Development Companies submit that, properly construed, s 122(1)(e) of the LT Act only confers a caveatable interest in circumstances where the caveator has the benefit of a court order against the registered proprietor. A court order does not confer a caveatable interest if it is against a party other than the registered proprietor. This is said to arise both from the statutory text which is unambiguous and expressly refers to a court order "restraining a registered proprietor", as well as the legislative history of s 122(1)(e) of the LT Act.[45]
• [102] On that basis, the Development Companies argue that the Freezing Order does not engage s 122(1)(e) of the LT Act because Mr Dunne is not the registered proprietor of any of the caveated properties.
• [103] Schedule 2 of the LT Act contains the following relevant definitions:

"proprietor of a lot means a person entitled to an interest in a lot, whether or not the person is in possession.

registered proprietor of a lot means a person recorded in the freehold land register as a proprietor of the lot."

• [104] Title searches for each of the caveated properties show that one of the Development Companies is recorded in the freehold land register as the owner of the fee simple interest in the relevant lot. It follows that each of the Development Companies is the registered proprietor of one of the caveated properties.
• [105] On this basis, the Development Companies submit that, on the plain meaning of the statutory language used in s 122(1)(e), the critical question whether the Freezing Order restrains the registered proprietor of each of the caveated properties from dealing with the lot must be answered "no".
• [106] Had I not reached the conclusion set out in [94] above, but instead found that the caveated properties came within the extended definition of Mr Dunne's property in paragraph 13 of the Freezing Order, I would have accepted the submission by the Development Companies that s 122(1)(e) of the LT Act did not confer a caveatable interest on NGI because the Freezing Order did not restrain each of the registered owners from dealing with the lots. At that point it might have become necessary to consider whether NGI could have overcome that issue by applying for a variation of the terms of the Freezing Order to directly restrain the Development Companies if the principle in Cardile and r 260D(4) of the UCPR had been engaged. It is not necessary to consider that issue further.
• [107] On the balance of convenience, the Development Companies relied upon evidence of inconvenience and prejudice to them and to Mr Dunne if the caveats remain and the development of the caveated properties currently underway cannot continue.
• [108] That prejudice was said to arise in circumstances where:

(a) the Development Companies have financed the acquisition and development costs for the caveated properties through Hallmark which is a mezzanine financier;

(b) significant construction work has already been carried out at a cost of more than $10.75 million;

(c) approximately half of the proposed lots in the developments have been sold off the plan under contracts which require the Development Companies to give notice to the buyers of the registration of plans of subdivision and community management statements for the proposed lots by a sunset date, failing which the buyer may terminate the contract;

(d) if the Development Companies are unable, by reason of the caveats, to register plans of subdivision and community management statements for the proposed lots or to settle sales of the subdivided lots then development costs incurred to date might be wasted and additional holding costs are likely to be incurred.

• [109] The Development Companies also raised the prospect of additional costs of re-selling the subdivided lots at a later time (if that becomes possible) and the risk that future sales in a softening property market would occur at lower prices than under the existing sale contracts.
• [110] While Mr Dunne's evidence about those matters was not detailed, it was not challenged by NGI in cross-examination and I do not regard it as inherently improbable or lacking in cogency such that I would disregard it. It seems plain to me that the Development Companies will suffer prejudice if the caveats prevent them from completing the developments that are presently underway and from selling the subdivided lots.
• [111] The Development Companies submitted that NGI had not:

(a) offered the usual undertaking as to damages in support of the maintenance of the caveats (as distinct from the undertaking as to damages given in support of the Freezing Order); or

(b) adduced any evidence to establish that it has the means to support any undertaking as to damages.

• [112] When the Freezing Order was made NGI did not give the common undertaking to provide a bank guarantee by way of security for the undertaking as to damages given in support of the order. The undertaking to provide a bank guarantee was not required because, at that time, NGI owned the property comprising the Savannah development unencumbered. On the evidence read on the present applications, there was a suggestion that NGI has sold that property.
• [113] At the hearing of the applications, NGI sought and was granted leave to file further material addressing the question of an undertaking as to damages and the worth of that undertaking. That material was filed after the hearing and the parties provided further submissions on that issue.
• [114] That further material confirmed that NGI has sold the property comprising the Savannah development. The proceeds of that sale are now held by NGI's sole shareholder, Nora Goodridge Investments Pty Ltd (NG Investments).
• [115] The Development Companies submitted that NGI's further material does not proffer an undertaking as to damages in support of the maintenance of the caveats. Further, it does not proffer an undertaking by NGI to provide security in support of the undertaking as to damages given in support of the Freezing Order. Instead, NGI initially proffered undertakings by Ms Nora Goodridge:

(a) on behalf of NG Investments to indemnify NGI in respect of the undertaking as to damages given in support of the Freezing Order;

(b) to procure NG Investments to maintain a positive asset balance of at least $20 million until the discharge of the Freezing Order.

• [116] The Development Companies submitted that, for a number of reasons, the court should not be satisfied that these undertakings by Ms Goodridge address the concern that NGI could not meet its undertaking as to damages. In response, NGI filed a further affidavit of its solicitor who deposed to having received instructions from Ms Goodridge that NGI would cause an irrevocable undertaking to pay in the sum of $15 million to be issued by a bank with a place of business in Australia in respect of any order the court may make in respect of the undertaking as to damages given in support of the Freezing Order.
• [117] It is not necessary for me to finally resolve the question of the adequacy of NGI's undertaking. That is because, even it be assumed there was adequate security for an undertaking given in support of the caveats, I am not ultimately satisfied that NGI discharged its burden of demonstrating that on the balance of convenience it would be better to maintain the status quo until the trial of the Principal Proceeding by preventing the Development Companies from dealing with the caveated properties.
• [118] In my view, the existing restraint upon Mr Dunne under paragraph 5 of the Freezing Order from causing the Development Companies to deal with the proceeds of any sale of the caveated properties in a manner that diminished the value of his shareholding in the Development Companies, subject to the exceptions in paragraph 16 of the Freezing Order, means that there is no warrant for the additional restraint imposed by the caveats. That is a particularly strong factor weighing against the maintenance of the caveats.
• [119] For these reasons, I am satisfied that orders should be made for the removal of the caveats. It is unnecessary for me to consider the further argument that the caveat over the Stephens Street Property has lapsed.

The application to clarify the operation of the Freezing Order

• [120] In my view, the conclusion I have reached in [94] above, also means it is appropriate to make orders which clarify the scope of the operation of the Freezing Order.
• [121] Mr Dunne and MP01 have applied for declarations to the effect that:

(a) each of the caveated properties is not an asset of either Mr Dunne or of MP01 within the meaning of paragraphs 5, 11 and 13 of the Freezing Order;

(b) the Freezing Order does not prohibit Mr Dunne or MP01 from causing or permitting the subdivision, improvement or sale at market value of each of the caveated properties by its registered owner.

• [122] Alternatively, Mr Dunne and MP01 seek a variation of the Freezing Order to include, for the avoidance of doubt, new paragraphs which would be in materially the same terms as the declarations which have been sought.
• [123] NGI submitted that if I concluded that the caveated properties did not come within the extended definition of a defendant's property in paragraph 13 of the Freezing Order that I should make orders varying the Freezing Order in the terms sought by Mr Dunne and MP01 rather than making declarations.
• [124] As the Freezing Order is interlocutory in nature and made until trial, this court retains a discretion to set aside or vary the terms of that order should appropriate circumstances arise.[46] Whether, and in what manner, such an order should be varied will be dictated by the demands of justice in the particular circumstances of the case.[47]
• [125] If it is necessary for Mr Dunne and MP01 to demonstrate that there has been a material change of circumstances since the Freezing Order was made,[48] I am satisfied that subsequent events including the incorporation of the Development Companies, the acquisition and subsequent development by those companies of the caveated properties and the lodging of the caveats satisfy that requirement.
• [126] I am also satisfied that, where I have concluded that the caveated properties do not come within the extended definition of a defendant's property in paragraph 13 of the Freezing Order, it is in the interests of justice in the circumstances of this case that the terms of the Freezing Order be varied in the manner sought by Mr Dunne and MP01 to make that position clear.

• [127] On the originating application by the Development Companies in the Caveat Proceeding, the orders will be:
  1. The caveat having dealing number 721178061 over property described as Lot 62 on RP 12833 with title reference 11245042 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
  2. The caveat having dealing number 721438803 over property described as Lot 3 on RP 166889 with title reference 15981196 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
  3. The caveat having dealing number 721438831 over property described as Lot 2 on RP 61852 with title reference 12362130 be removed from the freehold land register pursuant to s 127 of the Land Title Act 1994 (Qld).
  4. The respondent pay the first to third applicants' costs of and incidental to the originating application filed 19 August 2022 to be assessed on the standard basis if not agreed.
• [128] On the interlocutory application by Mr Dunne and MP01 in the Principal Proceeding, the orders will be:
  1. The orders of Mullins J dated 28 November 2018 be varied to include a new paragraph 4A in the following terms:

"4A. For the avoidance of doubt, the following properties are not assets of the first defendant or the seventh defendant within the meaning of paragraphs 5, 11 or 13 of the Freezing Order:

(a) Lot 62 on RP 12833 with title reference 11245042;

(b) Lot 3 on RP 166889 with title reference 15981196; and

(c) Lot 2 on RP 61852 with title reference 12362130."

1. The orders of Mullins J dated 28 November 2018 be varied to include a new paragraph 4B in the following terms:

"4B. For the avoidance of doubt, the Freezing Order does not prohibit the first defendant or the seventh defendant from causing or permitting:

(a) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 62 on RP 12833 with title reference 11245042 (or such lots into which it may be subdivided) by Resort Lifestyle Developments Pty Ltd ACN 643 400 177;

(b) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 3 on RP 166889 with title reference 15981196 (or such lots into which it may be subdivided) by Lifestyle Resorts Pty Ltd ACN 647 601 769; or

(c) the subdivision, improvement or sale (such sale being at market value or fair market value) of Lot 2 on RP 61852 with title reference 12362130 (or such lots into which it may be subdivided) by Lifestyle Resorts Albert Pty Ltd ACN 648 580 992."

1. The parties have liberty to apply in respect of orders 1 and 2 above.
2. The costs of the first and seventh defendants of the interlocutory application filed 19 August 2022 be those parties' costs in the proceeding.

[1] [2018] QSC 107; (2018) 358 ALR 88 (Parbery) at [56].

[2] [2018] QSC 107; (2018) 358 ALR 88 at [16]- [49].

[3] [2018] QSC 107; (2018) 358 ALR 88 at [61].

[6] [2013] EWHC 1509; [2014] 1 WLR 735 (Group Seven).

[7] [2013] EWHC 1509; [2014] 1 WLR 735 at [63] (citations omitted).

[8] [2013] EWHC 1509; [2014] 1 WLR 735 at [65]- [66].

[9] [2013] UKSC 34; [2013] 2 AC 415.

[10] [2013] EWHC 1509; [2014] 1 WLR 735 at [67],-[70].

[11] [2014] EWCA Civ 636; [2015] 1 WLR 291 (Lakatamia Shipping).

[12] [2014] EWCA Civ 636; [2015] 1 WLR 291 at [31]. Note that paragraph 6 of the standard form freezing order was used in paragraph 3 of the order considered in Lakatamia Shipping.

[13] [2014] EWCA Civ 636; [2015] 1 WLR 291 at [41] (citations omitted).

[14] [2014] EWCA Civ 636; [2015] 1 WLR 291 at [50]- [52] (citations omitted).

[15] [2021] UKPC 24; [2022] 2 WLR 703 (Broad Idea).

[16] [2021] UKPC 24; [2022] 2 WLR 703 at [85]- [88].

[17] [2021] UKPC 24; [2022] 2 WLR 703 at [88].

[18] [2021] UKPC 24; [2022] 2 WLR 703 at [105].

[19] [2021] UKPC 24; [2022] 2 WLR 703 at [108].

[20] [2021] UKPC 24; [2022] 2 WLR 703 at [109]- [111].

[21] [2021] UKPC 24; [2022] 2 WLR 703 at [111].

[22] [2021] UKPC 24; [2022] 2 WLR 703 at [113].

[23] [2022] FCA 215 (Viterra).

[24] [2022] FCA 215 at [27].

[25] [2022] FCA 215 at [35].

[26] (1999) 198 CLR 380 (Cardile).

[27] [2022] FCA 215 at [47].

[28] (1999) 198 CLR 380 at [57].

[29] [2022] FCA 215 at [73].

[30] [2022] FCA 215 at [101]- [106].

[31] [2022] FCA 215 at [108]- [111].

[32] [2022] FCA 215 at [113]- [116].

[33] [2022] FCA 215 at [118].

[34] [2022] FCA 215 at [120].

[35] [2022] FCA 215 at [122]; see also B__CBC Singapore Pte Ltd v PT Bayan Resources TBK (No 3) [2013] WASC 239; (2013) 276 FLR 273 at [116]- [120].

[36] [1774] EngR 2; (1774) 1 Cowp 63 at 65.

[37] (1929) 43 CLR 163 at 178.

[38] [1957] HCA 28; (1957) 97 CLR 367 at 371-372.

[39] (1987) 9 NSWLR 546 at 560 (citations omitted); see also R v Byckso (No 2) (1977) 17 SASR 460 at 466 per Bray CJ and Chant v Curcuruto [2021] NSWSC 751 at [274]- [277] per Hallen J.

[40] [2014] EWCA Civ 636; [2015] 1 WLR 291 at [27].

[41] [2014] EWCA Civ 636; [2015] 1 WLR 291 at [34]- [35].

[43] [2021] QSC 279.

[44] [2021] QSC 279 at [25], citing Re Jorss' Caveat [1982] Qd R 458 at 465 and Cousins Securities Pty Ltd v CEC Group Limited [2007] QCA 192; [2007] 2 Qd R 520 at [38].

[45] Queensland Law Reform Commission, Consolidation of Real Property Acts, Report No. 40, March 1991 at pp. 36-37. See also Re Worrell's Caveat [2001] 2 Qd R 108 at 109.

[47] MG Corrosion Consultants Pty Ltd v Gilmour [2012] FCA 568 at [14].

[48] Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 178, but see Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46 and Nichols v Manietta [2022] FCA 39 at [62]- [64].