Federal Court of Australia

Simmons v Giezekamp [2024] FCA 649

ORDERS

THE COURT ORDERS THAT:

1.    The freezing orders against the first and second respondents made on 2 April 2024 (as varied) be continued until further order.

2.    Reserve liberty to the parties to apply on 24 hours’ notice.

3.    Costs be reserved in relation to Mrs Giezekamp’s application.

4.    Costs as against the respondents be the applicants’ costs in the cause.

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

REASONS FOR JUDGMENT

(Revised from transcript)

THAWLEY J:

INTRODUCTION

1    On 2 April 2024, following an ex parte hearing, Halley J (as duty judge) made freezing orders against Mr Paul Jacque (or Jacques) Giezekamp and U Money Australia Pty Ltd, being the first and second respondents in proceedings instituted by Ms Julie Ann Simmons and 11 other applicants: Simmons v Giezekamp [2024] FCA 334 (hereafter “J”). There are now 13 applicants named in a Further Amended Originating Application. The case is pleaded in an Amended Statement of Claim (ASOC).

2    Mr Giezekamp is the sole director of U Money. He holds 950 of 1,000 issued shares. His mother, Mrs Astrida Giezekamp, holds the remaining 50 issued shares. Mr Giezekamp is engaged in property development.

3    Each of the applicants is a person or entity that has engaged in commercial dealings with Mr Giezekamp and has allegedly incurred significant losses from those dealings, essentially comprised of joint venture agreements and loan agreements with Mr Giezekamp and related entities with respect to the development of properties in New South Wales and Victoria. Halley J noted that the application “was supported by significant and extensive affidavit evidence from the applicants” and that the damages claimed exceeded $9 million: J[5], [7].

4    The “immediate catalyst” for the ex parte application was that a property at 238 Darling Street, Balmain, New South Wales (Balmain Property) had been listed for auction on 11 April 2024: at J[3]. This property was held in the name of both Mr Giezekamp and his mother as tenants in common in equal shares. Paragraphs 6(a) and 7(1)(i) and (iii)(A) of the freezing orders prohibit any dealing with the Balmain Property subject to paragraph 6(d), which otherwise provides that the whole of the surplus from any sale of the Balmain Property be frozen.

5    It is relevant to note at this stage that a second property affected by the freezing orders is a property located at 29 Henley Marine Drive, Five Dock (Five Dock Property) which is held in the names of Mr Giezekamp and Mrs Giezekamp as joint tenants. Paragraphs 6(a) and 7(1)(i) and (iii)(B) of the freezing orders prohibit any dealing with the Five Dock Property.

6    His Honour observed at J[9] to [12]:

[9]    For a freezing order to be made, the Court must be satisfied of three matters.

[10]    First, the applicant has established that there is a good or reasonably arguable case both on the law and the facts: Deputy Commissioner of Taxation v Vasiliades (2014) 323 ALR 59; [2014] FCA 1250 at [35] (Gordon J); Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18 at [68] (Gaudron, McHugh, Gummow and Callinan JJ); and r 7.35(1) of the Federal Court Rules 2011 (Cth) (Rules).

[11]    Second, having regard to all the circumstances, there is a danger that a judgment or a prospective judgment will be wholly or partly unsatisfied because, inter alia, the judgment debtor or prospective judgment debtor may abscond, or the assets of the judgment debtor or prospective judgment debtor are removed from Australia or from a place inside or outside Australia, or disposed of or dealt with or diminished in value: Vasiliades at [35] (Gordon J); r 7.35(4) of the Rules.

[12]    Third, the balance of convenience must favour the making of the orders: Vasiliades at [35] (Gordon J); BGS Contracting Pty Ltd v WA Construction Hire Pty Ltd [2010] WASC 25 at [22] (Le Miere J).

7    His Honour was satisfied “that the applicants have at least reasonably arguable cases on both the law and the facts”: J[13]. His Honour concluded that “[w]hat emerges from the affidavit evidence relied on by the applicants today is a course of conduct by a property developer who appears to be prepared to enter into arrangements which contain obligations which he has failed to perform and appears never had any intention to perform”: J[20].

8    Halley J was also satisfied “that there is a significant danger that both the judgment obtained by the twelfth applicant and the prospective judgments that are sought to be obtained by the first to eleventh applicants will be wholly or partly unsatisfied”: J[21]. His Honour’s reasons for that view were set out at J[22]-[25]:

[22]    First, the first respondent has left behind a large number of uncompleted projects with limited opportunities to realise any value from them. At least on the evidence in the applicants’ affidavits, that would not enable the applicants to recover the amount of the moneys that they had invested or advanced to the first respondent and his related entities to the extent that they had otherwise been able to obtain any security to support those investments or advances.

[23]    Second, the first respondent has, at least for the past several months, refused to respond to requests for information, clarification or recompense from the applicants and is currently located in Serbia. The first respondent has advised several of the applicants that he is currently in Serbia for the purpose of trying to secure the release of his two infant children in circumstances where his partner has allegedly fled to Serbia with the children and is refusing to allow them to return to Australia.

[24]    Third, the scale and significance of the amounts that the applicants claim are owed to them are in aggregate, a figure of in excess of $9 million.

[25]    Fourth, the refusal of the first respondent to engage in any meaningful communication with the applicants and his current indeterminate stay overseas combined with the imminent potential sale of his principal asset which has been valued on a valuation that he himself procured in 2023 of some $18 million.

9    Halley J was satisfied that the balance of convenience favoured the making of the freezing orders, stating at J[26]:

Finally, I am satisfied that the balance of convenience favours the making of the freezing orders. The orders sought by the applicants do not operate to prevent or otherwise hinder the potential sale of the Property. Rather, the orders only provide for the proceeds of the sale of the Property, if it proceeds, to be paid into an interest bearing account in the joint names of the solicitors for the first respondent and the solicitors for the applicants. In contrast, if the freezing orders are not granted, there is a danger that the first respondent will dissipate the proceeds of any sale of the property and remove them from the jurisdiction, particularly, given the current location of the first respondent and the extent of the amounts that are alleged to be owed by him to the applicants.

10    His Honour noted that the Balmain Property was held in the name of both Mr Giezekamp and his mother as tenants in common in equal shares and that it was therefore necessary to ensure that the freezing orders were brought to her attention as soon as possible so that she could consider what if any steps she wished to take with respect to the freezing orders: J[29].

11    The freezing orders were extended without admission on 5 April 2024 and 14 May 2024. The freezing orders were also varied by consent on 14 May 2024.

12    There are two matters at issue:

(1)    Mr Giezekamp submits that:

(a)    the interim freezing orders should not be extended or should be discharged; or

(b)    alternatively, the freezing orders should be limited to placing a restriction on Mr Giezekamp’s use of his interest (or entitlement) in the net proceeds of the Balmain Property.

(2)    Mrs Giezekamp opposes the continuation of the freezing orders to the extent that they directly affect property owned by her, namely the Balmain Property and the Five Dock Property.

13    It is logical to deal first with Mr Giezekamp’s position.

MR GIEZEKAMP

The jurisdiction to continue a freezing order

14    Rule 7.32 of the Federal Court Rules 2011 (Cth) provides:

Freezing order

(1)    The Court may make an order (a freezing order), with or without notice to a respondent, 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.

15    Rule 7.35 includes:

(1)    This rule applies if:

…

(b)    an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in:

(i)     the Court; or

(ii)     for a cause of action to which subrule (3) applies -- another court.

…

(4)    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 any of the following might occur:

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

(b)    the assets of the judgment debtor, prospective judgment debtor or another person are:

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

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

…

(6)    Nothing in this rule affects 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.

16    An applicant for freezing orders (or the continuation of freezing orders granted ex parte) in circumstances such as the present has to establish two matters:

(a)    first, that it has, relevantly for present purposes, “a good arguable case on an accrued or prospective cause of action”: r 7.35(1)(b); and

(b)    secondly, that there is a “danger” that a judgment or a prospective judgment will be wholly or partly unsatisfied “because” of one of the matters in r 7.35(4).

17    If the applicant for a freezing order establishes those two matters, the next question is whether, as a matter of discretion, it is in the interests of justice to grant or continue the freezing order: Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [53].

Good arguable case

18    A good arguable case is one which is “reasonably arguable … on legal as well as factual matters”: Cardile at [68]. It has been described as one “which is more than barely capable of serious argument, and yet not necessarily one which the judge believes would have a better than 50 per cent chance of success”: Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG [1984] 1 All ER 398 at 404. The test is not particularly onerous.

Danger of an unsatisfied judgment caused by a risk of disposal of assets

19    A freezing order may be made where – having regard to all the circumstances – there is a “danger” that a judgment or prospective judgment will be wholly or partly unsatisfied “because” any of the three events described in r 7.35(4) “might” occur. Those events are: the judgment debtor or prospective judgment debtor or another person absconds; the assets of those people are removed; or the assets of same are disposed of, dealt with, or diminished in value.

20    The word “danger” and the word “might” are not words which impose a requirement that the Court be satisfied that there is a probability that future events will occur before making a freezing order. It is not necessary that the risk of dissipation be more probable than not: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 325. Rather, the danger that a judgment or prospective judgment will be wholly or partly unsatisfied because of the risk of dissipation of assets must be of sufficient substance to justify a freezing order in the particular circumstances: Deputy Commissioner of Taxation v Huang [2021] HCA 43; 273 CLR 429 at [18].

21    The risk of dissipation of assets must be a present or future risk of dissipation, in which historical events may be informative. A risk of dissipation of assets can be inferred: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 at [12]. It is not enough simply to assert a risk that the assets will be dissipated; the risk must be demonstrated by evidence: Ninemia at 406. This evidence may take a number of different forms, including direct evidence that the respondent “has previously acted in a way which shows that his probity is not to be relied on”: Nimemia at 406. The evidence must establish facts from which a “prudent, sensible commercial” person would properly infer a danger of default if assets were removed from the jurisdiction or dissipated within the jurisdiction: Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 645 at 671-2. Where there is a good arguable case that a respondent has engaged in serious wrongdoing of a kind relevant to the question of dissipation of assets, the evidence which establishes the good arguable case may also support the inference that there is a risk of dissipation of assets: Patterson at 325-6.

Discretion

22    The question of whether the discretion should be exercised cannot be replaced by asking where the “balance of convenience” lies, at least as that expression is understood in the context of whether an interlocutory injunction should be granted in accordance with the principles established in cases such as Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57. A freezing order is not an injunction (Cardile at [25]) and its nature and purpose are different to an interlocutory injunction granted to preserve the status quo pending determination of a dispute. The purpose of a freezing order is to prevent abuse or frustration of the court’s process “by seeking to meet a danger that a judgment or prospective judgment will be wholly or partly unsatisfied”: r 7.32(1). The phrase “balance of convenience” was not used by the High Court in Cardile or Huang. Use of the phrase “balance of convenience”, instead of recognising that there is a discretion not to grant relief even where the two conditions for the relief are made out, risks addressing the wrong issue.

23    The relevant discretionary considerations are confined by the statutory context and purpose. In considering whether to exercise the discretion, it is necessary to bear in mind that the jurisdiction is to be exercised with a “high degree of caution”: Cardile at [50]. A freezing order imposes a severe restriction on a respondent’s right to deal with its assets in circumstances where the applicant’s status as a creditor is in dispute: Cardile at [51], referring to Frigo v Culhaci [1998] NSWCA 88. The jurisdiction is intended to be exercised in an appropriate case to prevent frustration of the Court’s processes by preventing dissipation of assets, not to alter the status quo in favour of an applicant or to provide security in advance of a judgment that an applicant hopes to obtain: Cardile at [51], referring to Frigo v Culhaci.

24    Discretionary considerations include whether the applicant has proceeded diligently and expeditiously in applying for the freezing order: Cardile at [53].

Onus

25    It is for the applicant to justify the granting of a freezing order and the continuation or renewal of an ex parte freezing order: Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730 at 731.

26    It is convenient first to address whether there is a “a good arguable case on an accrued or prospective cause of action”. The respondents initially disputed that there was a good arguable case in relation to nearly all of the applicants’ various claims, but later conceded that there was a good arguable case in relation to some of them.

Consideration

Good arguable case

27    What follows is drawn from the ASOC and various affidavits and exhibits. It is important to observe that the respondents have not yet filed a defence or detailed evidence in relation to the various allegations made against them. The findings I make are provisional. I have not dealt in these reasons with each and every claim because it is not necessary to do so. I have, however, considered each of them. Counsel for the applicants took the Court through each of the various claims, as he did when seeking ex parte relief. Two of the applicants were new to the proceedings since the ex parte relief was granted (Ms Davison and Ms De Souza) and one who was a party when the ex parte relief was granted is no longer a party (the ex-twelfth applicant).

28    I will, however, address in these reasons some of the dealings with respect to a property at 8 Eileen Street in Hadfield, Victoria and some of the loan arrangements relevant to some of the applicants.

8 Eileen Street

29    It is convenient to deal only with 8 Eileen Street, but it is relevant to note that what was contemplated was the development of 16 triple storey dwellings on 8 and 10 Eileen Street, namely 8 units on each of 8 and 10 Eileen Street. There was a “Joint Venture Agreement” between Mr Saunders (the third applicant) and Mr Giezekamp dated 23 August 2019 which related to 10 Eileen Street. It is not necessary for present purposes to address the claims made by Mr Saunders.

30    Mr Hamilton-Jessop met Mr Giezekamp on about 6 February 2020 at the Balmain Property. He says that Mr Giezekamp offered him the opportunity to engage in a 50-50 joint venture in relation to 8 Eileen Street. Mr Hamilton-Jessop says that Mr Giezekamp stated “you will invest $750,000 and you get $1.8 million profit”: Hamilton-Jessop at [4]. This gives rise to what is referred to in the ASOC at [56] as the “MHJ Oral Representation”.

31    On 4 March 2020, Mr Hamilton-Jessop and Mr Giezekamp became directors of MHPG Holdings Australia Pty Ltd. Mr Hamilton-Jessop and Mr Giezekamp initially held 50 shares each of 100 issued shares: MHJ Exhibit at 29.

32    Mr Hamilton-Jessop and Mr Giezekamp entered into a “Joint Venture Agreement” on 5 March 2020 (MHJ JVA). Mr Giezekamp is described as “JV1” and Mr Hamilton-Jessop as “JV2”. The MHJ JVA begins with a Schedule, which includes:

Item 3: The Property: (Background “A”)

Lot 43 on Plan of Subdivision 012805 being the whole of the land described in Certificate of Title Volume 8135 Folio 240 and known as 8 Eileen Street, Hadfield VIC 3046.

Item 4: Details of the Project (Background “A”)

It is intended to develop the properties into multi density townhouses for the purposes of ultimate sale

Item 5: Percentage of ownership of Joint Venturers: (Clause 1.1.2)

JV1 is to hold 50% ownership; and

JV2 is to hold 50% ownership

Item 6: Number of Lots on the Plan of Subdivision (Clause 1.1.3)

Town Planning approval confirms 8 units. Unit allocation is – JV1 units 2, 4, 6 & 8. JV2 units 1, 3, 5 & 7. Both JV1 and JV2 have the right to sell any/all of their allocated units ‘off the plan’ at any time before, during or after the build is completed without consent from either party.

Item 7: Sum to be paid by Joint Venturers:

The sum of the following:

a)    JV1 will contribute the following amounts in respect to the acquisition costs for 8 Eileen St, Hadfield:

I.    $213,750.00 being 15% Deposit (50% share)

II.    $35,625.00 Stamp Duty (50% share)

III.    $1,250.00 approx. Legal Fees. (50% share)

IV.    $750.00 Joint Venture Agreement (50% share)

V.    $7,995.00 Buy fee. (50% share)

VI.    $12,495.00 Development fees. (50% share)

VII.    $17,875.00 Development Approval Permits/ Architect fees

VIII.    $66,875.00 5% deposit to Builder (50% share)

IX.    $350,000.00 Prelim 2 deposit to builder $50% share)

b)    JV2 will contribute the following amounts in respect to the acquisition costs for 8 Eileen St, Hadfield:

I.    $213,750.00 being 15% Deposit (50% share)

II.    $35,625.00 Stamp Duty (50% share)

III.    $1,250.00 approx. Legal Fees. (50% share)

IV.    $750.00 Joint Venture Agreement (50% share)

V.    $7,995.00 Buy fee. (50% share)

VI.    $12,495.00 Development fees. (50% share)

VII.    $17,875.00 Development Approval Permits/ Architect fees.

VIII.    $66,875.00 5% deposit to Builder (50% share)

IX.    $350,000.00 Prelim 2 deposit to builder ($50% share)

c)    The Joint Venturers shall equally contribute to the servicing of any mortgage debt and all outgoings due and payable from time to time.

d)    The Joint Venturers shall contribute equally to the construction and development which will include all purchase costs, Architect costs and builder costs as per item 7a and 7b and Annexure “A” annexed hereto.

Item 8: Structure and Signatories to the Bank Account (Clause 2.2)

Both Joint Venturers agree to open a new Pty Ltd company to purchase 8 Eileen St Hadfield VIC 3046. The company will be called MHPG Holdings Australia Pty Ltd. Both JV1 and JV2 will be equal directors and shareholders. The bank account will be in the name of MHPG Holdings Australia Pty Ltd. Both JV1 and JV2 will be signatories to the bank account. To withdraw funds, both JV1 and JV2 will need to sign the cheques together or be present together at the bank to sign the withdrawal form. There will be no access to internet banking except for viewing purposes.

Item 9: Anticipated Project Borrowings (Clause 3.1)

Projected Borrowings will be approximately $926,000.00 for the Purchase of 8 Eileen St, Hadfield Vic 3046. Purchase price is $1,425,000.00..

Construction borrowings shall be generally in accordance with the attached spreadsheet from Mayfair Property marked annexure ‘A’.

Item 10: Management Fee (Clause 4.2.3.)

NIL

Item 11: Project Manager (Clause 1.1.4)

Project Manager:

Ms Aisa Subhi

National Project Manager

Mayfair Property

1300 238 410

Aisa@mayfairproperty.net.au

Builder:

Ozzie Homes Building & Construction Pty Ltd

2/789 Pascoe Vale Road

GLENROY VIC 3046

Ph. 0431 111 363

33    The “property manager” described in Item 11, Mayfair Property, is a reference to Mayfair Property Let’s Build Wealth Pty Ltd in which Mr Giezekamp appears to be heavily involved, although the full nature of his involvement remains unclear. Counsel for Mr Giezekamp submitted that Mr Giezekamp provided services to Mayfair Property and had a purely contractual relationship with that company. In his affidavit, Mr Shakespeare stated:

I had been looking to do a property development and in July last year (2023) I came across Mayfair Property Let’s Build Wealth Pty Ltd (Mayfair Property) offering online to Project Manage a development which appealed to me. I got in touch with Mayfair Property and was directed to the Defendant Paul Giezekamp (Paul), the General Manager at Mayfair Property.

34    Mr Giezekamp holds all the issued shares in Mayfair Capital Group Pty Ltd and in Mayfair Property Australia Pty Ltd: Phair Exhibit page 63. He is the director and secretary of both: Phair Exhibit page 64, 73-74.

35    In her affidavit, Ms Davison stated:

On 16 November 2021 the respondent sent to me an email from mayfairdevelopments.net.au which stated that he had purchased 5 Eileen Street Hadfield for the sum of $1,190,000 it was a bargain, agents in the area have advised that I can sell this property now for $1.8 to 1.9 million without building, the investment deal is $625,000, investment return of $125,000 guaranteed in 12 months, secured against the property at 5 Eileen Street Hadfield, joint-venture contract to secure my investment and 24% shareholding in the company which is buying the property. He will be 76% shareholder. Attached to this email is a picture of 3D design of the development.

36    Mr Giezekamp’s email sent on 16 November 2021, referred to by Ms Davison, contains a footer which describes him as the “General Manager – Construction Division” and is sent from an email address @mayfairdevelopments.net.au. The footer also refers to the website www.mayfairproperty.net.au. The email also refers to Mayfair Developments Pty Ltd.

37    Clause 1.1 of the MHJ JVA included:

1.    Outline of the Project:

1.1.    Subject to the provisions of this Agreement and as may be subsequently amended in -writing between the Joint Venturers from time to time, the Joint Venturers agree to undertake an incorporated joint venture (as joint venturers) to pursue the commercial development of the Project through the Syndicate in the manner set out in this clause 1.1:

1.1.1.    JV1 and JV2 agree that the entity MHPG Holdings Australia Pty Ltd will be the registered proprietor of 8 Eileen Street, Hadfield VIC 3046.

1.1.2.    JV1 and JV2 shall contribute equally to the project.

1.1.3.    JV1 shall, using the initial funds contributed by the Syndicate obtain all necessary permits and undertake all necessary surveying and preparatory works to facilitate the development of the Property into the number of developed lots set out in item 6 of the Schedule to this Agreement and to effect registration of an appropriate plan of subdivision {“the Plan of Subdivision”) so as to give effect to the intentions of the Parties pursuant to this Agreement.

1.1.4.    JV2 agrees that JV1 who has appointed an individual to be the project manager as denoted in item 11 of the schedule shall with the prior consent of JV2 secure a registered builder which will undertake the development, construction and completion of the project.

The registered builder is referred to in ltem11 or as otherwise mutually agreed upon.

38    Mr Hamilton-Jessop says he entered into the MHJ JVA in reliance on the representation made at the meeting on 6 February 2020: ASOC at [57].

39    The ASOC pleads at [58]:

In the MHJ JVA Mr Giezekamp represented that:

(a)    The fourth applicant’s townhouse allocation on completion of the development would be Units 1, 3, 5 and 7, 8 Eileen St, Hadfield, Victoria (Item 6 Schedule);

(b)    Mr Giezekamp would arrange for the joint venturers to open a bank account in the name of MHPG which would be used for all matters relating to the joint venture project and the property 8 Eileen St, Hadfield, Victoria and for no other purpose (item 8 Schedule and Clause 2.1);

(c)    No party would pledge, mortgage, charge or otherwise the property 8 Eileen St, Hadfield, Victoria without the express consent of all joint venturers (Clause 3.4);

(all of which representations are collectively called “the MHJ JV Representations”).

40    The reference to unit 3, which is referred to in Item 6 of the Schedule, is of some significance for reasons which will become apparent later.

41    The ASOC pleads at [62] that the representations relied on were representations as to future matters and pleads at [63]:

Mr Giezekamp did not have reasonable grounds for making the MHJ Representations [being the MHJ Oral Representation and the MHJ JV Representations].

Particulars

The fourth applicant relies upon s 4 ACL.

The fourth applicant says that the absence of reasonable grounds it is to be inferred from the following matters:

(a)    On 14 March 2023 Mr Giezekamp entered into the Simmons JVA, in which the first and second applicants were granted the option to purchase Unit 3, 8 Eileen St, Hadfield, Victoria for the price of $775,000;

(b)    On 28 July 2023 MHPG as borrower, Mr Giezekamp as guarantor and Shakespearean Pty Ltd as lender entered into a Loan Agreement bearing that date, whereby inter alia MHPG in consideration of the sum of $250,000 charged the property 8 Eileen St, Hadfield, Victoria with the repayment of that amount to Shakespearean Pty Ltd;

(c)    Upon payment of the said sum of $434,526 by the fourth applicant on 21 May 2020 and $307,000 by the fourth applicant to MHPG on 28 May 2021, as hereinbefore referred to, Mr Giezekamp immediately transferred or caused to be transferred the said sums to the bank account of U Money.

42    On 5 May 2020, MHPG as owner and Mr Giezekamp, Mr Saunders and Mr Hamilton-Jessop entered into a building contract with Ozzie Homes Building and Construction Pty Ltd for $4,596,000 for the construction of the homes on 8-10 Eileen Street: Saunders Exhibit at 43.

43    On 21 May 2020, Mr Hamilton-Jessop says he refinanced property owned by him and paid $434,526 to Mr Giezekamp or to MHPG at Mr Giezekamp’s direction: Hamilton-Jessop at [8]; MHJ Exhibit at 56; ASOC at [59].

44    Mr Hamilton-Jessop says that, on 23 November 2020, Mr Giezekamp sent him an email stating that the NAB wanted Mr Giezekamp to become sole director and for Mr Giezekamp to have a 51% shareholding. Accepting what Mr Giezekamp said at face value, Mr Hamilton-Jessop resigned as director on that day and transferred one of his shares to Mr Giezekamp: Hamilton-Jessop at [10].

45    Mr Hamilton-Jessop says that Mr Giezekamp represented to him, on 12 April 2021, that if Mr Hamilton-Jessop increased his investment to $732,000, Mr Giezekamp would guarantee a total return of $1,500,000: ASOC at [60]; Hamilton-Jessop at [13]. This is alleged to have been an oral representation in the ASOC, but it is alleged to be contained in an email in Mr Hamilton-Jessop’s affidavit. The email was not contained in the MHJ Exhibit.

46    Mr Hamilton-Jessop says he paid a further amount of $307,000 on 28 May 2021 in reliance on the further representation made on 12 April 2021: ASOC at [61]; Hamilton-Jessop at [14].

47    Mr Hamilton-Jessop states that, on 8 February 2022, after a conversation with Mr Giezekamp, he agreed to “sign over” his 49 shares in “the Respondent” (which I assume to be an incorrect reference to MHPG) to Mr Giezekamp, to be effected by Stratum Accountants: Hamilton-Jessop at [15]. Mr Hamilton-Jessop states that he received an email from Mr Giezekamp on 9 February 2022 which stated:

Marc, as discussed yesterday you and I our [sic] bound by our executed joint venture agreement. The company has no importance.

48    Again, the email was not in the MHJ Exhibit.

49    The construction was never completed and MHPG ultimately went into liquidation. Mr Hamilton-Jessop makes claims which include a claim for losses for misleading or deceptive conduct on the basis that he would not have entered into the MHJ JVA or made the payments which he did were it not for the misleading or deceptive conduct: ASOC at [66].

50    Mr Hamilton-Jessop also makes claims for breach of fiduciary duty and breaches of contract. The ASOC includes (at [69]):

(a)    On 28 July 2023 MHPG as borrower, Mr Giezekamp as guarantor and Shakesperean Pty Ltd as lender entered into a Loan Agreement bearing that date, whereby inter alia MHPG in consideration of the sum of $250,000 charged the property 8 Eileen St, Hadfield, Victoria with the repayment of that amount to Shakesperean Pty Ltd;

(b)    Upon payment of the said sum of $434,526 by the fomih applicant on 21 May 2020 and $307,000 by the fomth applicant to MHPG on 28 May 2021, as hereinbefore referred to, Mr Giezekamp immediately transferred or caused to be transferred the said sums to the bank account of U Money;

51    Mr Leggate says he had a conversation with Mr Giezekamp in April 2022 during which Mr Giezekamp offered for Mr Leggate to enter into a joint venture agreement in relation to 8 Eileen Street: Leggate at [3]. Mr Giezekamp (described as “JV1”) and Mr Leggate (described as “JV2”) entered into a “Joint Venture Agreement” on 27 April 2022 (“Leggate JVA”): Leggate Exhibit page 8. The Leggate JVA required Mr Leggate to pay $250,000 to U Money at which time the joint venture would commence: Item 5 of the Schedule. Item 6 included:

JV1 guarantees a 25% interest rate over a 12 month period on JV2’s investment of $250,000. The 25% equates to $62,500. As soon as the build is complete and subdivision is in place – then JV1 will pay JV2 their investment of $250,000 plus the agreed interest of $62,500 totalling $312,500.

52    Item 14 provided:

No party shall pledge, mortgage, charge or otherwise encumber the Property without the express consent of all Joint Venturers.

53    As will be seen, Mr Giezekamp later charged the property to Mr and Ms Simmons under a joint venture agreement and to Shakespearean Pty Ltd under a Loan Agreement.

54    Item 17 provided that the term of the joint venture was until the project was complete, namely when the building had been constructed and the subdivision granted. Item 17 stated that JV1 estimated that this would be 12 months.

55    Mr Leggate paid $250,000 to U Money on 27 April 2022: Leggate at [9]. He says he did so on the basis of the representations made to him, including those made in the Leggate JVA: ASOC at [119].

56    On 15 February 2023, Ms Simmons sent an email to Mr Giezekamp inquiring about whether Mr Giezekamp had any property opportunities. Mr Giezekamp responded that day stating that there were “absolute bargains available at the moment”: Simmons Exhibit page 11. Ms Simmons had met Mr Giezekamp in about 2020 through her daughter’s gymnastics class. He had presented an investment opportunity to her in an email on 2 November 2020, but Ms Simmons did not then take up any opportunity. By 15 February 2023, Ms Simmons and her husband had sold their business and had available funds.

57    Ms Simmons and her husband met Mr Giezekamp at the Balmain Property in late February or early March 2023 where he showed them his Lamborghini and presumably discussed the development opportunity at 8 Eileen Street. Mr Giezekamp later emailed Ms Simmons, providing a letter dated 31 January 2023 from Stratum Accountants setting out the taxable incomes of Mr Giezekamp and U Money for the 2019, 2020 and 2021 financial years: Simmons Exhibit page 15. These were said to be about $1 million and $2.5 million respectively in the 2021 year. Mr Giezekamp also provided Ms Simmons with a letter dated 31 January 2023 from Stratum Accountants stating that Mr Giezekamp’s assets totalled $50,700,000 and that his debt was $22,270,000: Simmons Exhibit page 17.

58    In her affidavit, Ms Simmons gave an account of a conversation Mr Giezekamp as follows:

[8]    In about early March 2023 Paul said to me words to the effect, “I have a development project at 8 Eileen Street, Hadfield, Victoria for the development of 8 multi density townhouses. It’s a 3 level modern design. I have already got the construction loans approved and settled. It is in the development stage and it will be competed in one to two years. It is going to be a very profitable development. You and Daniel will have a contract with me and you pay $500,000 for the deposit on unit 3/8 Eileen Street, Hadfield to be secured over the whole property at 8 Eileen Street, Hadfield, Victoria, and in 12 months you can elect to have the return of the $500,000 or you buy unit 3 in the development and the $500,000 will be part payment of the purchase price. You are totally protected either way. There is no way you can lose.”

59    It is relevant to break the Simmons narrative to observe that, on 7 March 2023, Mr Leggate sent a text message to Mr Giezekamp inquiring whether the development was still to be completed by April, being a reference to 27 April 2023 (as contemplated by the Leggate JVA): Legatte Exhibit page 26. Mr Giezekamp responded that delays the previous year had pushed out the completion until the end of October, which in context was intended to convey October 2023. This is inconsistent with what Mr Giezekamp is alleged to have stated to Mr and Ms Simmons. Mr Giezekamp also stated that he would pay Mr Leggate the interest which was owed by the end of April.

60    The ASOC pleads that Mr Giezekamp represented (“Simmons Oral Representations”):

(a)    He (Mr Giezekamp) is very wealthy and very successful and he (Mr Giezekamp) can guarantee a return of 20% on their (the first and second applicants) investment of $500,000 within 12 months and alternatively the $500,000 can be used as a deposit to purchase a unit at 8 Eileen Street, Hadfield. They (the first and second applicants) could not lose.

(b)    The development was going to be a very profitable;

(collectively “the Simmons Oral Representations”)

61    On 14 March 2023, Ms Simmons and her husband entered into a “Joint Venture Agreement” (“Simmons JVA”) with Mr Giezekamp in relation to 3/8 Eileen Street, Hadfield in Victoria. The front page stated that MHPG was also a party, but it is not stated to be a party in the terms of the agreement.

62    Mr Giezekamp is described as “JV1” and Ms and Mr Simmons as “JV2” and “JV3” respectively. The ASOC pleads that Mr and Ms Simmons entered into the Simmons JVA in reliance on the Simmons Oral Representations.

63    The Simmons JVA begins with a Schedule, which includes:

Item 3: The Property: (Background “A”)

Being the whole of the land described in Certificate of Title Volume 8135 Folio 240 and known as 8 Eileen St Hadfield Vic 3046. JV2/JV3’s unit allocation is 3/8 Eileen St Hadfield Vic 3046.

Item 4: Details of the Project (Background “A”)

It is intended to develop the properties into multi density townhouses for the purposes of ultimate sale. Town planning approval in place for 8 x 2 bedroom, 3 level modern design. Purchase and construction loans approved and settled.

Item 5: Percentage of ownership of Joint Venturers: (Clause 1.1.2)

Item 5a: JV1 holds 100% shareholding, sole director of MHPG Holdings Australia Pty Ltd. JV2/JV3 holds 0% shareholding. No serviceability required for JV2/JV3.

Item 5b: Security offered for JV2/JV3 are the entire 8 townhouses for 8 Eileen in the event of default, JV2/JV3 can sell all 8 townhouses to receive their investment of $500,000.00 if they choose option 1.

JV2/JV3 have 2 options available to them after 12 months.

Option 1: JV2/JV3 can receive their $500,000.00 investment back. The $100,000.00 interest has been paid already.

Option 2: JV2/JV3’s allocated unit is 3/8 Eileen St Hadfield Vic 3046. The $500,000.00 principal investment will be used as a deposit for the purchase of 3/8 Eileen St Hadfield Vic 3046. Agreed purchase price is $775,000.00. JV2/JV3 retains their interest of $100,000.00

Item 6: Number of Lots on the Plan of Subdivision (Clause 1.1.3)

DA approval/Town Planning in place for 8 x 2 bedroom townhouses. The unit allocation will be issued to the following entity.

Entity that owns 8 Eileen St Hadfield Vic 3046 is:

MHPG Holdings Australia Pty Ltd

ABN: 35 624 011 767

Address: 238 Darling Street Balmain NSW 2041

Director: Paul Giezekamp

Shareholder: Paul Giezekamp 100%

Townhouse allocation is unit 1, 2, 4, 5, 6, 7 & 8/8 Eileen St Hadfield Vic 3046.

Shareholder: Julie Anne Simmons and Daniel Ashuin Simmons 0%.

Townhouse allocation is 3/8 Eileen St Hadfield Vic 3046.

Item 7: Sum to be paid by JV2/JV3:

The sum to be paid by JV2 is $500,000.00.

Please note:

a)    JV1 will be solely responsible for the servicing of any mortgage debt and all outgoings due and payable from time to time.

b)    JV1 will be solely responsible for the construction and development which will include all purchase costs, Architect costs and builder costs, including any additional build funding.

Item 8: Bank Account

JV2/JV3 agrees to pay the $500,000.00 to the CSA bank account BSB 062110 A/C 10385258 for the entity MHPG Holdings Australia Pty Ltd. On receipt of this payment from JV2/JV3, JV1 will transfer the 20% interest ($100,000.00) immediately to JV2/JV3’s preferred bank account.

Item 9: Anticipated Project Borrowings (Clause 3.1)

Projected Borrowings is $2,000,000.00. Estimated end value is $6,200,000.00

Item 10: Management Fee (Clause 4.2.3.)

NIL

Item 11: Project Manager (Clause 1. 1.4)

Project Manager:

Ms Mandy Chaaya

Operations Manager

Mayfair Property

1300 238 410

Builder:

APEX Homes Pty Ltd

ABN: 30 126 702 903

Apexhomes.com.au

1300482724

64    Clause 1.1 included:

1.    Outline of this Project:

1.1.    Subject to the provisions of this Agreement and as may be subsequently amended in -writing between the Joint Venturers from time to time, the Joint Venturers agree to undertake an incorporated joint venture (as joint venturers) to pursue the commercial development of the Project through the Syndicate in the manner set out in this clause 1.1:

1.1.1.    JV1, JV2 & JV3 agree that the entity in item 6 of this agreement will be the registered proprietor of 8 Eileen St Hadfield Vic 3046.

1.1.2.    JV2/JV3 contribution to the project is $500,000.00

1.1.3.    JV1 has paid for all purchase costs, architect fees, permits and builder payments. The funds from JV2/JV3 will be used to buy new development sites. No additional funding is required from any jv partner. If additional funding for the build occurs, JV1 will be solely responsible for this.

1.1.4.    JV1, JV2 & JV3 agree that Mrs Mandy Chaaya will be the project manager as denoted in item 11 of the schedule shall with the prior consent of JV partners to secure a registered builder which will undertake the development, construction, and completion of the project. The registered builder is referred to in Item 11 or as otherwise mutually agreed upon.

65    Paragraphs 7 to 9 of the ASOC pleads:

[7]    In the Simmons JVA Mr Giezekamp represented to the first and second applicants that:

(a)    In the event that the first and second applicants exercised Option 2 in the Schedule to the Simmons JV A, the contribution to be paid by them of $500,000 under Item 8 of the Schedule would be used as a deposit towards the purchase of Unit 3, 8 Eileen St, Hadfield, Victoria for the price of $775,000 (Item 5(b) Schedule);

(b)    The first and second applicants’ townhouse allocation would be Unit 3, 8 Eileen St, Hadfield, Victoria (“the Simmons Unit”) (Item 6 Schedule);

(c)    Mr Giezekamp would be solely responsible for the servicing of any mortgage debt and all outgoings due and payable from time to time and would be solely responsible for the construction and development including all purchase costs, architect costs and builder costs including any additional build funding (Item 7 Schedule);

(d)    On payment of the said sum of $500,000 by the first and second applicants to MHPG, Mr Giezekamp would immediately transfer 20% thereof ($100,000) to the first and second applicants’ nominated bank account (Item 8 Schedule);

(e)    Mr Giezekamp had paid for all purchase costs, architect fees, permits and builder payments (Clause 1.1. 3);

(f)    The $500,000 contribution by the first and second applicants would be used to buy new development sites (Clause 1.1.3);

(g)    No additional funding was required from any joint venture partner (Clause 1.1.3);

(h)    If additional funding for the build occurred, Mr Giezekamp would be solely responsible for such (Clause 1.1.3, Clause 8.1);

(i)    Funding for the project had been approved and settled (Clause 3.1);

(j)    No party would pledge, mortgage, charge or otherwise the prope1iy 8 Eileen St, Hadfield, Victoria without the express consent of all joint venturers (Clause 3.4); and

(k)    If the first and second applicants paid the said sum of $500,000 to MHPG and under Option 2 paid the balance sum of $275,000, they would receive clear and unencumbered title to the Simmons Unit (“the Implied Representation”);

(all of which representations are collectively called “the Simmons JV Representations”).

[8]    Each of the Simmons Oral Representations and the Simmons JV Representations (collectively “the Simmons Representations”) was a representation with respect to a future matter.

[9]    Mr Giezekamp did not have reasonable grounds for making the Simmons Representations.

Particulars

The first and second applicants rely on s 4 ACL.

The first and second applicants further say that the absence of reasonable grounds is to be inferred from the following matters:

(a)    The property 8 Eileen St, Hadfield, Victoria was the subject of an earlier Joint Venture Agreement between Mr Giezekamp and Marc Hamilton-Jessop dated 5 March 2020 whereunder Mr Hamilton-Jessop was allocated Units 1, 3, 5 and 7, 8 Eileen St, Hadfield, Victoria with the right to sell any/all of the allocated units ‘off the plan’ at any time before, during or after the building is completed;

(b)    On 28 July 2023 MHPG as borrower, Mr Giezekamp as guarantor and Shakesperean Pty Ltd as lender entered into a Loan Agreement bearing that date, whereby inter alia MHPG in consideration of the sum of $250,000 charged the property 8 Eileen St, Hadfield, Victoria with the repayment of that amount to Shakesperean Pty Ltd;

(c)    Upon payment of the said sum of $500,000 by the first and second applicants to MHPG on 14 March 2023 as hereinafter referred to, Mr Giezekamp immediately transferred or caused to be transferred that amount to the bank account of U Money;

(d)    The said payment of $500,000 by the first and second applicants to MHPG on 14 March 2023 was not used to buy new development sites.

66    Paragraph 12 of the ASOC pleads that Mr and Ms Simmons paid $500,000 to MHPG in reliance on the Simmons Representations. Mr and Ms Simmons make a claim for $500,000 for misleading or deceptive conduct: ASOC at [13].

67    Mr and Ms Simmons also make claims for breach of contract and breach of fiduciary duty. By reference to the terms pleaded at [7] of the ASOC, [16] of the ASOC includes:

(a)    The Property was the subject of an earlier Joint Venture Agreement between Mr Giezekamp and Marc Hamilton-Jessop dated 5 March 2020 whereunder Mr Hamilton-Jessop was to receive title to the Property;

(b)    On 28 July 2023 MHPG as borrower, Mr Giezekamp as guarantor and Shakesperean Pty Ltd as lender entered into a Loan Agreement bearing that date, whereby inter alia MHPG in consideration of the sum of $250,000 charged the property 8 Eileen St, Hadfield, Victoria with the repayment of that amount to Shakesperean Pty Ltd;

(c)    Upon payment of the said sum of $500,000 by the first and second applicants to MHPG on 14 March 2023 as hereinbefore referred to, Mr Giezekamp immediately transferred or caused to be transferred that amount from the bank account of MHPG to the bank account of U Money;

68    Mr Leggate stated that he exchanged a number of text messages and emails with Mr Giezekamp between 26 April 2023 and 10 August 2023 in relation to payment of interest and repayment of his loan: Leggate at [12]. Mr Leggate states that he had a conversation with Mr Giezekamp on 23 May 2023 in which Mr Giezekamp said he would repay Mr Leggate from a refinance of the Balmain Property which was scheduled to take place on 26 May 2023: Leggate at [13].

69    On 27 June 2023, Mr Leggate sent a text to Mr Giezekamp asking whether settlement was “all good for today” to which Mr Giezekamp responded saying that they (presumably the lender) wanted a mental health check in relation to Mrs Giezekamp: Leggate Exhibit at 28. Mr Giezekamp stated that she was 80. He stated that the settlement was most likely tomorrow. Mr Giezekamp stated that Mrs Giezekamp was on title at Balmain “[o]n purpose so ex wife didn’t get the property”.

70    Mr Leggate continued to inquire of Mr Giezekamp by text message when he might be paid. By 13 July 2023, Mr Leggate sent a message asking to speak to Mr Giezekamp, but Mr Giezekamp responded stating that he had lost his voice due to flu: Exhibit Leggate page 33. Mr Giezekamp sent a text stating that he had “other cash coming in Tuesday next week [18 July 2023]”. The texts between Mr Leggate and Mr Giezekamp continued through July and August 2023. Mr Leggate was never repaid.

71    On 15 July 2023, Mr Shakespeare and his wife registered Shakespearean Pty Ltd. Mr Shakespeare stated that Mr Giezekamp emailed him a draft “Joint Venture Agreement” in relation to 8 Eileen Street on 15 July 2023: Shakespeare Exhibit at 32. This agreement included an option pursuant to which “JV2” would be allocated unit 3 at 8 Eileen Street. It contained other clauses which would either be impossible to perform if earlier agreements (including those with Mr and Ms Simmons and Mr Hamilton-Jessop) were subsisting or which, if performed in relation to an agreement with Mr Shakespeare or Shakespearean, would cause those earlier agreements to be breached.

72    Mr Shakespeare stated that Mr Giezekamp represented to him that 8 Eileen Street had a value of $1,700,000 and was subject to a loan with the Commonwealth Bank of Australia (CBA) for $545,000 and that it “had equity in the property before build of $1,155,000”: Shakespeare at [11]. Mr Shakespeare observed in his affidavit that there were apparently substantial borrowing to Australian Commercial Mortgage Corporation Pty Ltd (ACMC) as at July 2023 of $1,634,650.85. I note, however, that it is not clear that these borrowings relate solely to 8 Eileen Street. Mr Shakespeare also noted that Mr Hamilton-Jessop and Mr and Ms Simmons also had an interest in 8 Eileen Street, about which (inferentially) he was not aware at the time.

73    Mr Shakespeare stated that, in July 2023, he agreed with Mr Giezekamp that, instead of executing the proposed Joint Venture Agreement, they should sign a Loan Agreement with a “caveat as security” over 8 Eileen Street and a personal guarantee from Mr Giezekamp: Shakespeare at [14]. Mr Shakespeare had previously been given a valuation of the Balmain Property recording a value of $18,325,000: Shakespeare Exhibit at 92.

74    Mr Shakespeare and MHPG entered into a Loan Agreement, with Mr Giezekamp as guarantor: Shakespeare Exhibit at 139.

75    The Loan Agreement included:

2.4    Purpose

The Borrower warrants to the Lender that the Principal Amount will be applied solely for the Purpose.

2.5    Repayment of Finance

    The Finance must be repaid in full by the Expiry of the Loan Term.

2.6    Interest

(1)    In this document, “Interest” means the fixed amount of $75,000.

(2)    The Borrower agrees to pay Interest to the Lender as follows:

(a)    $37,500.00 on the Drawdown Date, which amount will be deducted from the Principal Amount provided to the Borrower by the Lender on the Drawdown Date; and

(b)    $37,500.00 on the Expiry Date or on the date of early repayment under clause 2.7.

(3)    For the avoidance of doubt, the Borrower acknowledges and agrees that as a result of clause 2.6(2), the total amount which will be:

(a)    loaned by the Lender to the Borrower under this document is $250,000.00; and

(b)    advanced by the Lender to the Borrower on the Drawdown Date is $212,500.00.

…

3.1    Security

In consideration of the provision of the Finance by the Lender, and to secure the repayment of the Finance to the Lender, the Borrower:

(a)    hereby charges the Secured Property in favour of the Lender and

(b)    agrees to provide to the Lender the Security; and

(c)    agrees to the Lender registering a caveat on the title to the Secured Property.

…

8.1    Option

(1)    The Borrower hereby grants the Lender an option to purchase the freehold in proposed Lot 3 (or such later Lot as may be agreed to between the parties) in the Development of the Secured Property on the following terms and conditions:

(a)    The agreed purchase price shall be $ 775,000 (“the Purchase Price”);

(b)    Any amount outstanding under this agreement shall be deducted from the Purchase Price;

(c)    Upon the Lender exercising the election to purchase the proposed lot in the Secured Property the parties are to enter into a Contract for Sale for that proposed lot.

(d)    The amount outstanding under this Agreement at the time the Contract for Sale is entered into shall be recorded as the Deposit, receipt of which will thereby be acknowledged;

(e)    The balance of the Purchase Price, after deduction of any amount outstanding under this agreement recorded as the Deposit, shall be paid by the Lender to the Borrower at the time the Development is completed and the lot registered together with any adjustments for rates, insurances and taxes.

(f)    The Lender shall pay any and all stamp duty payable pursuant to the Contract for Sale.

(g)    The Borrower shall ensure that the Lender received clear title on settlement.

(2)    The Lender may exercise its option under clause 8.1(1) at any time within 90 days prior to the Expiry Date by providing the Borrower with written notice to that effect.

(3)    The Borrower agrees to provide the Lender with a Contract of Sale and Vendor’s Statement for the lot purchased by the Lender within 30 days of the Lender exercising its option in writing under clause 8.1(2).

76    The definitions are in Schedule 1 to the Loan Agreement which must be read with Schedule 2. These make clear that the loan is for the development at 8 Eileen Street, which is also the “Secured Property”.

77    The ASOC pleads at [137]:

By his entry into and execution of the Shakespearean Loan Agreement Mr Giezekamp represented to the seventh applicant that:

(a)    The principal amount of the loan would be applied solely for the purpose of the development and construction of 8 x 2 bedroom townhouses situate at 8 Eileen St, Hadfield, Victoria;

(b)    If the seventh applicant exercised its aforesaid option to purchase Unit 3, 8 Eileen St, Hadfield it would receive unencumbered title to that unit; and

(c)    There were no encumbrances upon the property 8 Eileen St, Hadfield, Victoria in priority to the charge being granted to the seventh applicant;

(the “Shakespearean LA Representations”).

78    Mr Shakespeare transferred $250,000, less $37,500 interest which was due on the drawdown date: Shakespeare at [16]. A caveat was lodged on 28 July 2023: Shakespeare at [17]. There were no other caveats and Mr Shakespeare believed he was the only person with an interest in the property apart from the first mortgagee. The ASOC pleads that Mr Shakespeare paid the relevant amount in reliance on the various representations which had been made: ASOC at [138]. The ASOC pleads that the various representations were ones as to future matters and then, [140] includes:

Mr Giezekamp did not have reasonable grounds for making the Shakespearean Representations.

Particulars

The seventh applicant relies on s 4 ACL.

The seventh applicant further says that the absence of reasonable grounds is to be inferred from the following matters:

(a)    The property 8 Eileen St, Hadfield, Victoria was the subject of an earlier Joint Venture Agreement between Mr Giezekamp and the fourth applicant dated 5 March 2020 whereunder the fourth applicant was to receive title to Units 1, 3, 5 and 7, 8 Eileen St, Hadfield, Victoria upon completion of the development;

(b)    On 14 March 2023 Mr Giezekamp had entered into the Simmons JV A, in which the first and second applicants were granted the option to purchase Unit 3, 8 Eileen St, Hadfield, Victoria for the price of $775,000;

(c)    Upon payment of the said sum of $250,000 by the seventh applicant to MHPG on 28 July 2023 as hereinafter referred to, Mr Giezekamp immediately transferred or caused to be transferred that amount to the bank account of U Money;

(d)    The said payment of $250,000 by the seventh applicant to MHPG on 28 July 2023 was not used for the purpose of development and construction of townhouses on the property 8 Eileen St, Hadfield, Victoria;

(e)    The last payment made toward the construction loan on 8-10 Eileen St, Hadfield was 1 February 2023;

(f)    Construction work on the properties 8-10 Eileen St, Hadfield ceased in or about October 2023;

(g)    On 8 December 2023 Manuel Baima and Renee Sarah di Carlo were appointed to be Receivers and Managers of MHPG;

(h)    On 6 March 2024 MHPG was placed in provisional liquidation by order of the Federal Court of Australia;

(i)    On 7 March 2024 the Receivers and Managers of MHPG sold the properties 8-10 Eileen St, Hadfield, Victoria.

79    On 5 August 2023, Mr Giezekamp sent Mr Shakespeare a text offering 5% “investor referral commissions” in case Mr Shakespeare has “family, friends, colleagues or clients” interested in Mr Giezekamp’s “joint ventures”: Shakespeare Exhibit at 163.

80    On 9 August 2023, Mr Leggate discovered that the Balmain Property was listed for auction on 5 September 2023. On 22 August 2022, he instructed his solicitor to send a letter of demand: Leggate at [17]. Mr Leggate states that Mr Giezekamp sent an email on 9 October 2023 stating that the development would be completed in early 2024.

81    Ms Simmons stated that construction on 8 Eileen Street ceased in about October 2023.

82    On 23 October 2023, Mr Hamilton-Jessop was provided by Mr Saunders with a letter addressed to PGBS Holdings Australia Pty Ltd and MHPG from ACMC (on Balmain Fund Administration Limited letterhead). This referred (amongst other things) to first registered mortgages over 8 Eileen Street and 10 Eileen Street and noted that there were a series of events of default, including that: practical completion had not occurred; a caveat had been lodged over 8 Eileen Street without the lender’s consent; development had ceased for more than 15 days; and a judgment had been entered in the Federal Court against a company of which Mr Giezekamp was a shareholder, director and secretary and against Mr Giezekamp personally (related to 11 Eileen Street in Hadfield, Victoria).

83    On 25 October 2023, Mr Hamilton-Jessop was provided with a statement from ACMC which revealed that a number of repayments and line fees had been dishonoured from 1 October 2022: MHJ Exhibit at 72.

84    On 8 December 2023, receivers and managers were appointed to the whole of the undertaking, property and assets of MHPG. On 6 March 2024, a provisional liquidator was appointed to MHPG. MHPG is now in liquidation.

Mr Malcolm Brown

85    Mr Brown claims damages in relation to three transactions. I will mention two of them.

86    Mr Brown purchased 68 Cuthbert Street, Broadmeadows, Victoria on 28 September 2018: Brown at [5]. He paid Mr Giezekamp $15,990 as buyers’ agent and $24,990 for Mr Giezekamp to act as project manager: Brown at [5]. Mr Giezekamp represented to Mr Brown that a “preliminary 2 deposit” of $120,000 had to be paid to the proposed builder of the development, Snowden Homes: Brown at [6]. Mr Brown paid Snowden Homes $120,000. Mr Brown was later informed by an employee of Snowden Homes that the $120,000 had been transferred (unbeknownst to Mr Brown) to Mr Giezekamp: Brown at [9].

87    In December 2021, Mr Giezekamp represented that construction of the property was at the “lock-up” stage and that he should pay $300,405 to Snowden Homes: Brown at [7]. Mr Brown paid Snowden Homes $300,405. Mr Brown stated that Mr Giezekamp misrepresented the state of construction by leaning doors up against the construction and taking photographs to exclude areas that were not complete: Brown at [7]. Snowden Homes went into administration on 1 July 2022, shortly after Mr Brown had paid $300,405. Mr Brown had to engage a new builder to complete the development: Brown at [8], [10].

88    Mr Giezekamp acted as a buyer’s agent and project manager for the purchase and development of 112 Cuthbert Street, Broadmeadows, Victoria, which settled on 8 November 2018: Brown at [12]. Mr Giezekamp represented to Mr Brown that a “preliminary 2 deposit” of $150,000 had to be paid to Snowden Homes: Brown at [13]. Mr Brown paid $100,000 to Snowden Homes, and $50,000 to Mr Giezekamp, to be transferred to Snowden Homes. Mr Giezekamp did not transfer the $50,000 to Snowden Homes: Brown at [13].

89    Construction did not commence at the property and Mr Brown cancelled the building contract on 9 December 2021: Brown at [14]. Mr Brown requested return of the deposit. Mr Brown states that he was informed by an employee of Snowdon Homes that Mr Giezekamp directed the $100,000 to be transferred to him: Brown at [15]. This occurred, I infer, without Mr Brown’s knowledge.

90    Mr Brown claims damages for misleading and deceptive conduct in relation to these events – see: ASOC at [163]-[186].

Ms Catherine Sherrin Cochlin and Mr David Cochlin

91    Ms Cochlin’s affidavit dated 27 March 2024 alleges the following events. On 11 December 2018, Mr Giezekamp represented to Ms Cochlin that he required the sum of $976,000 for five weeks in order to complete the purchase of a property (10 Eileen Street): Cochlin at [6]. Mr Giezekamp represented that if Ms Cochlin lent him the sum of $800,000 he would repay that amount together with $50,000 interest within five weeks: Cochlin at [6].

92    On 12 December 2018, Ms Cochlin entered into a loan agreement with Mr Giezekamp and Mr Bruce Saunders (the third applicant) for a principal sum of $800,000 with a $50,000 interest payment and five week term (the first loan): Cochlin at [6]; Cochlin Exhibit page 2. Clause 1 of the relevant “Deed of Agreement” stated (Cochlin Exhibit at page 2):

The Borrower’s acknowledge receipt of the principal sum paid by direction to assist with their purchase of the property situated at 10 Eileen Street, Hadfield, 3046 in the State of Victoria, such sum being acknowledged as having been paid upon confirmation of the receipt of funds paid into the Trust account of Frank J Horvat & Co Pty Lawyers.

93    An extract from realestate.com.au shows that the purchase of 10 Eileen Street had occurred on 19 September 2017, over a year earlier: Cochlin Exhibit at p 6.

94    On 18 March 2019, ten weeks later, Mr Giezekamp paid $529,115.80 of the principal amount and $50,000 in interest: Cochlin at [11]. Between March 2019 and April 2023, Mr Giezekamp made various loan repayments and has since repaid the principal on the first loan. An amount of $42,498.59 remains outstanding on the interest for the first loan: Cochlin at [17].

95    On 21 May 2019, Mr Giezekamp on behalf of U Money, Ms Cochlin and Mr David Cochlin (the eleventh applicant) executed a further loan agreement for a principal sum of $400,000, plus $280,000 interest over a three-month loan term (the second loan): Cochlin Exhibit page 9. Clause 1 of the Loan Agreement stated (Cochlin Exhibit page 9):

The Borrower/s acknowledge receipt of the principal sum paid by direction to assist with their purchase [of 2 Meredith Street] on such sum being acknowledged as having been paid upon confirmation of the receipt of funds paid into the Trust account of Frank J Horvat & Co Pty Lawyers.

96    An extract from domain.com.au shows that the purchase of 2 Meredith Street occurred on 3 March 2018, over a year earlier: Cochlin Exhibit page 17.

97    On 23 October 2023, Ms Cochlin caused her solicitor to lodge a caveat on 10 Eileen Street and 2 Meredith Street: Cochlin at [34]; Cochlin Exhibit page 29. On 27 November 2023, Mr and Ms Cochlin sent a letter to Mr Giezekamp requesting a plan to pay the outstanding loans. Mr Giezekamp did not respond: Cochlin at [35]; Cochlin Exhibit page 32. As at 29 February 2024, the total amount outstanding under the first and second loans was calculated to be $730,650.67: Cochlin Exhibit page 40.

98    Ms Cochlin and Mr Cochlin claim damages for misleading and deceptive conduct and breach of contract – see: ASOC at [200]-[223].

Mr Stig Brixen

99    Mr Brixen’s investment vehicle, SJB Investment Holdings Pty Ltd, was (but is no longer) the twelfth applicant in the proceedings. Mr Brixen’s affidavit dated 28 March 2024 describes the following events.

100    In May or June 2019, Mr Giezekamp approached Mr Brixen and his wife with an “investment offer”, seeking a loan to complete the development of houses at 4 and 6 Eileen Street in Hadfield, Victoria: Brixen at [4].

101    On 4 July 2019, SJB executed a loan agreement with Mr Giezekamp and Mayfair Property for a principal sum of $300,000, plus $150,000 interest, with a 24-month term: Brixen at [7]; Exhibit Brixen-1. The loan was secured by 4 and 6 Eileen Street and a personal guarantee from Mr Giezekamp: Brixen at [7]; Exhibit Brixen-1, clause 5. Mayfair Property and Mr Giezekamp defaulted on the loan, following which Mr Brixen attempted to exercise his right to register a mortgage over 4 and 6 Eileen Street. At that time, Mr Brixen was informed that 4 Eileen Street was owned by Mr Brown (the eighth applicant), not Mr Giezekamp: Brixen at [8].

102    On 7 December 2023, SJB and Mr and Mrs Brixen obtained default judgment against Mayfair Property and Mr Giezekamp in the County Court of Victoria for the sum of $504,944.26: Brixen Exhibit page 29 (see also Exhibit Brixen page 31 in relation to the District Court of New South Wales). The judgment debt remains outstanding.

103    As mentioned, Mr Brixen is no longer an applicant, but his evidence was relied upon (without objection) on this application as relevant to whether or not a freezing order should be granted.

Conclusions on good arguable case

104    The Court is satisfied that the applicants have, within the meaning of r 7.34(1)(b), “a good arguable case on an accrued or prospective cause of action”. As mentioned, SJB is no longer an applicant. The total of the various claims exceeds $9 million.

Risk of dissipation of assets

105    Mr Giezekamp noted that he was not overseas when the freezing orders were made on 2 April 2024. He travelled to Serbia on 3 April 2024 for child custody proceedings. Mr Giezekamp submitted that:

    he had travelled to Serbia on four occasions since October 2023 to commence and maintain child recovery proceedings pursuant to the Hague Convention on the Civil Aspects of International Child Abduction. The evidence indicates that Mr Giezekamp’s ex-partner has remained in Serbia with their children since July 2023 and that she has refused to return to Australia with the children;

    the overseas travel was unconnected to these proceedings and is not evidence of, or evidence that supports, or raises, a danger that assets will be dissipated overseas; and

    neither Mr Giezekamp nor U Money has any assets located overseas or have any overseas assets: First Giezekamp Affidavit at [48], [50]-[52]. Additionally, Mr Giezekamp has accounted for his expenses overseas: Giezekamp 2 at [12], [26]-[28].

106    Mr Giezekamp’s overseas travel was related to issues concerning his children. Although the applicants submitted that I should, I do not consider that his overseas travel provides any real foundation for a conclusion that he might “abscond” within the meaning of r 7.35(4)(a) or that he might dissipate his assets by removing them to Serbia.

107    Mr Giezekamp observed that, whilst the Balmain Property had an auction date of 11 April 2024, it had been listed for sale from July 2022, before these proceedings had been commenced. Mr Giezekamp stated that the reason for the listing of the Balmain Property related to the increase in interest rates and the need to reduce the interest liability on the loan secured against the property. This may be so, at least in part, but the events described earlier indicate that Mr Giezekamp plainly had a need for cashflow to support the various development activities, his various promises, and to fund repayment of loans.

108    Mr Giezekamp noted that the applicants relied on the recent sale of three properties owned by companies on which Mr Giezekamp is a shareholder, including the sale of:

    62 Isla Street, Glenroy VIC 3046 by KWCWPG Holdings Australia Pty Ltd on 30 August 2023;

    102 Snell Grove, Oak Park VIC 3048 by 102 Snell Enterprises Pty Ltd on 14 September 2023; and

    5 Autumndale Avenue, Reservoir VIC 3073 by 5 Autumndale Holdings Pty Ltd on 10 June 2023.

109    Mr Giezekamp observed that he is a property developer with an extensive property portfolio in either his name or through special purpose companies: Mr Giezekamp 2 at [21]. Mr Giezekamp submitted that it was not out of the ordinary, and nor was it evidence of a danger of dissipation of assets, that companies in which Mr Giezekamp is a shareholder have sold real property in the past.

110    Mr Giezekamp stated that the builder for some of the developments, Apex Homes Pty Ltd, has been placed in liquidation and stated that this had impacted some developments and caused the land to be sold: Giezekamp 2 at [21]. Mr Giezekamp stated that he has sought where possible to avoid the sales and maintain his interest in the properties he owns directly or indirectly. It was observed that the sales relied upon by the applicants occurred in a period of three months starting eleven months ago, well before these proceedings commenced. It was submitted that this did not indicate a pattern of dissipating assets.

111    I accept that the three sales of properties referred to are not particularly probative of a current risk of dissipation of assets given that those sales appear to represent ordinary sales in the course of a property development business or, at least, there is nothing to suggest otherwise.

112    Nevertheless, as mentioned earlier, a risk of dissipation of assets can be inferred from the facts upon which the good arguable case is based. Accepting the evidence which is relied on by the applicants at face value for the purposes only of this interlocutory dispute, some of which I have referred to earlier, there is a sufficient risk of dissipation of assets to warrant continuing the freezing orders. The evidence on this application reveals a history of conduct of a nature which readily supports an inference that there is a risk of dissipation of assets, in particular from the proceeds of sale of the Balmain Property.

113    I note also that Mr Giezekamp’s text message to Mr Leggate to the effect that his mother was on the title to the Balmain Property only to prevent a claim or future claim by his ex-wife suggests a willingness on the part of Mr Giezekamp to structure his affairs with a view to avoiding making good on his financial responsibilities.

Discretion

114    Mr Giezekamp submitted that the freezing orders had placed significant financial restrictions on the respondents and that the burden imposed on him was more onerous than might be the case for the typical respondent, because his business was as a property developer.

115    Mr Giezekamp submitted that:

(a)    the allowance for personal expenses of $2,500 per week was “grossly inadequate”; and

(b)    the orders limited the ability of Mr Giezekamp and his mother to meet their ongoing financial obligations, which include servicing the NAB loan and the motor vehicle loans: Giezekamp 2 at [23].

116    I have taken these matters into account, but conclude that the freezing orders should continue and should continue up to the current limit. Freezing orders are always capable of appropriate modifications to take into account changing circumstances as they arise.

MRS GIEZEKAMP

Further factual background

117    On 4 December 2015, Mrs Giezekamp and Mr Giezekamp entered into a contract (Balmain Contract) for the purchase the Balmain Property for $5.5 million: Exhibit 2 page 1. A deposit of $275,000 was paid on 4 December 2015 by a drawing of $275,000 from a loan facility with Macquarie Bank in Mrs Giezekamp’s name: Exhibit 2 page 20. This facility was secured by a mortgage granted over a property in Queensland in Mrs Giezekamp’s name. The drawing took the debit balance of the Macquarie Bank facility from about $50,000 to about $325,000: Exhibit 1 page 23. There were regular monthly repayments recorded as being made. There were three larger credits made before the facility was repaid on 28 June 2016. These were:

    $5,000 on 9 December 2015 from “U Money”;

    $35,000 on 6 January 2016 from “Cando Recruitmen Harry Giezekamp”; and

    $25,000 on 23 February 2016 from “Cando Recruitmen From H Giezekamp”.

118    I have proceeded on the applicants’ submission that Mr Harry Giezekamp is Mrs Giezekamp’s former husband. There was a redrawing of $125,000 on 9 June 2016, but the evidence does not disclose the purpose of that redrawing.

119    The Macquarie Bank facility was discharged on 28 June 2016 by a payment of $386,930.50: Exhibit 1 page 25. This facility had a limit of $386,500: Exhibit 5. Mrs Giezekamp had two other facilities with Macquarie Bank at the time, one with a limit of $50,000 and one with a limit of $459,000: Exhibit 5.

120    The three Macquarie Bank facilities were refinanced with effect on 28 June 2016: Exhibit 5. On 1 July 2016, the CBA wrote three letters to Mrs Giezekamp confirming that her home loan had been funded. The loans were in the amount of $296,000, $460,000 and $260,000, a total of $1,016,000: Exhibit 4. It would appear that $898,444.74 of this was used to repay the Macquarie Bank facilities on 28 June 2016, reflecting the total debit balances of the three Macquarie Bank facilities: Exhibit 5. The balance (less $450 which I infer to reflect a bank charge) of $117,105.26 was paid on 28 June 2016 into a CBA account held jointly by Mr and Mrs Giezekamp: Exhibit 2 at 33. A mortgage was granted over the Queensland property owned by Mrs Giezekamp to the CBA on 28 June 2016: Exhibit 2 page 133.

121    The Queensland property was sold, and a transfer of the land was lodged on 3 May 2022: Exhibit 2 page 43. On 3 May 2022, Mrs Giezekamp received an amount of $989,199.43 as proceeds from the sale into her Westpac account: Exhibit 2 page 64. There were two payments from this account on 4 May 2022, one of $400,000 and the other of $500,000: Exhibit 2 page 65. The amount of $400,000 was paid into a CBA account held by U Money: Exhibit 2 page 73. At least one loan-related payment was made from this account into U Money’s CBA facility which as at 1 October 2022 was in debit $5,137,000: Exhibit 2 page 95. It is not clear where the $500,000 was paid, however, the description in the bank statement of the two payments are the same, namely “Balmain”. It is reasonable to infer that the amount of $500,000 was paid to an entity associated with Mr Giezekamp. The evidence did not explain the reason for Mrs Giezekamp’s on-payment of almost the entirety of the proceeds of sale of the Queensland property to entities associated with Mr Giezekamp.

122    According to Mrs Giezekamp’s affidavit, the balance of the purchase price for the Balmain Property (after payment of the deposit of $275,000) was paid as to:

(a)    $3,824,000 by drawing down on the $3,850,000 interest only loan from CBA;

(b)    unspecified “additional funds provided by each of Paul and her”; and

(c)    unspecified “funds provided and/or borrowed from third parties”.

123    The CBA Loan was taken out by Mrs Giezekamp and Mr Giezekamp for $3.85 million, with $3.824 million being withdrawn to effect settlement on 29 June 2016 (the same time as the refinance of Mrs Giezekamp’s Macquarie Bank facilities): Exhibit 2 page 33. The CBA Loan was secured by a mortgage granted over the Balmain Property dated 22 June 2016: Exhibit 2 page 29.

124    The CBA Loan was refinanced as part of a finance facility (NAB Loan) granted by the National Australia Bank Limited to U Money. The NAB Loan is secured by guarantees given by Mrs Giezekamp and Mr Giezekamp and a mortgage granted over the Balmain Property.

125    The Balmain Property is currently listed for sale through the real estate agencies, Highland Property Double Bay and Colliers. It is expected that the Balmain Property will be sold shortly and that, after settlement, there will be a surplus available. Whilst an earlier valuation suggested a value of $18.35 million, the Court was informed that the sale was expected to be at a substantially lower price.

126    The second property affected by the freezing orders is the Five Dock Property, in which Mrs Giezekamp now lives. On 12 November 2022, Mrs Giezekamp and Mr Giezekamp entered into a contract (the Five Dock Contract) for the purchase of the Five Dock Property for $2.825 million.

127    The payment of the purchase price for the Five Dock Property was funded through a loan (Bankwest Loan) taken out by Mr Giezekamp and Mrs Giezekamp with the CBA trading as Bankwest for $2.26 million. The Bankwest Loan was secured by a mortgage granted over the Five Dock Property. In the loan application, Mrs Giezekamp stated that she was “retired” and that she earned a salary of $1: Exhibit 1 pages 180, 182. She stated that she owned a property at 45 Noble Street, Five Dock, although this does not appear on a Land Registry Services search: Exhibit 1 page 141, 180, 182. The application appears to have been prepared by a broker and contains a number of errors. It was signed by Mrs Geizekamp.

128    The Court was invited to, but does not, make adverse credibility findings in relation to Mrs Giezekamp by reason of what was contained in that application.

Mrs Giezekamp’s written submissions

129    In her written submissions, Mrs Giezekamp noted that the Originating Process was filed on 28 March 2024 and sought final relief against Mr Giezekamp and U Money in the form of orders that certain sums be paid by them to various of the applicants. Mrs Giezekamp emphasised in written submissions that the ASOC does not include any allegation or claim against her, and no relief is otherwise sought against her.

130    Mrs Giezekamp noted that the Interlocutory Application (IA) seeking the freezing orders was also filed on 28 March 2024. It sought freezing orders against Mr Giezekamp and U Money. Mrs Giezekamp emphasised that, although Mrs Giezekamp was nominated as a person who would be served, the IA did not include any relief sought against her. The orders ultimately made by Halley J on 2 April 2024 were orders made under r 7.35(4) against Mr Giezekamp and not under r 7.35(5) against Mrs Giezekamp.

131    Mrs Giezekamp submitted that, in these circumstances and without more, none of the necessary elements for freezing orders can be satisfied by the applicants in relation to Mrs Giezekamp. There is, as against Mrs Giezekamp: no prima facie case; no evidence establishing any wrongful dissipation assets; and no evidence addressing the “balance of convenience”.

The proposed Second Further Amended Originating Application

132    At the commencement of the hearing, counsel for the applicants stated that leave would be sought (at some unspecified future time) to file a Second Further Amended Originating Application which joined Mrs Giezekamp and sought the following additional relief:

13.    A declaration that the transaction whereby the Third Respondent acquired, or purportedly acquired, a one half interest in the property 238 Darling St, Balmain, NSW (“the Balmain Property”) is void against the Applicants pursuant to s 37A Conveyancing Act (NSW), 1919.

14.    A declaration that the transaction whereby the Third Respondent acquired, or purportedly acquired, a one half interest in the property 29 Henley Marine Bay Drive, Five Dock, NSW (“the Five Dock Property”) is void against the Applicants pursuant to s 37A Conveyancing Act (NSW), 1919.

15.    A declaration that the Third Respondent holds her interest in each of the Balmain Property and the Five Dock Property upon trust for the First Respondent.

133    The parties were content to proceed without an application for leave to amend being put forward or determined.

Consideration

134    The Court has jurisdiction to make a freezing order in relation to assets legally owned by a person, but in respect of which a potential judgment debtor has a beneficial interest. Indeed, the Court has jurisdiction to make a freezing order beyond that circumstance.

135    In Cardile at [57], the High Court stated:

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.

136    Rule 7.35(5) provides:

(5)    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.

137    Rule 7.34 provides:

The Court may make a freezing order or an ancillary order against a person even if the person is not a party in a proceeding in which substantive relief is sought against the respondent.

138    The applicants, however, have not sought an order against Mrs Giezekamp under r 7.35(5) or otherwise.

139    I will address the substance of the issue as argued by the parties by addressing whether the freezing orders should be amended in the way contended for by Mrs Giezekamp so as to permit Mrs Giezekamp to take certain steps with respect to the Five Dock Property and to receive any interest she has in the proceeds of sale of the Balmain Property.

Beneficial interest in the properties

140    Mrs Giezekamp submitted and I accept that:

(a)    upon settlement of the Balmain Contract on 29 June 2016, Mrs Giezekamp and Mr Giezekamp were registered as the owners as tenants in common in equal shares. At law, Mrs Giezekamp and Mr Giezekamp each held a 50% interest in the Balmain Property and in the proceeds realised from the sale of that property – see: Butt’s Land Law (7th ed) at [6.20] and Nullagine Investments Pty Ltd v Western Australia Club [1993] HCA 45; 177 CLR 635 at 643-4; and

(b)    upon settlement of the Five Dock Contract on 6 February 2023, Mrs Giezekamp and Mr Giezekamp were registered as the owners of the Balmain Property as joint tenants. At law, Mrs Giezekamp and Mr Giezekamp each held an equal interest in the Five Dock Property and in any proceeds realised from the sale of that property – see: Butt’s Land Law (7th ed) at [6.30] and [6.60] and Nullagine Investments at 643-4.

141    The argument proceeded by reference to whether Mrs Giezekamp had a beneficial interest in the Balmain Property and Five Dock Property, the applicants contending that she did not. The applicants’ primary position was that Mrs Giezekamp held the properties on resulting trust or, alternatively, that Mr Giezekamp held some other beneficial interest in the property greater than his legal interest.

142    A Court should only accede to the contention that assets legally belonging to a third party are in truth wholly or partly beneficially owned by another where there is sufficient reason to do so, grounded in the evidence. Likewise, a Court is not required to accept an assertion by an affected third party that assets are legally and beneficially owned by them without inquiry: SCF Finance Co Ltd v Masri [1985] 2 All ER 747 at 753.

143    Neither the parties, nor Mrs Giezekamp, advocated for a final determination of beneficial ownership in advance of trial in a manner contemplated as possible by cases such as Masri. In that case, it was argued that, where a third party claims an interest in assets the subject of a freezing order, the Court was bound to give effect to the claim without further inquiry: at 749. Lord Justice Lloyd rejected this argument and summarised the principles in the following way (at 753):

For convenience I would summarise the position as follows.

(i)    Where a plaintiff invites the court to include within the scope of a Merva injunction assets which appear on their face to belong to a third party, eg a bank account in the name of a third party, the court should not accede to the invitation without good reason for supposing that the assets are in truth the assets of the defendant.

(ii)    Where the defendant asserts that the assets belong to a third party, the court is not obliged to accept that assertion without inquiry, but may do so depending on the circumstances. The same applies where it is the third party who makes the assertion, on an application to intervene.

(iii)    In deciding whether to accept the assertion of a defendant or a third party, without further inquiry, the court will be guided by what is just and convenient, not only between the plaintiff and the defendant, but also between the plaintiff, the defendant, and the third party.

(iv)    Where the court decides not to accept the assertion without further inquiry, it may order an issue to be tried between the plaintiff and the third party in advance of the main action, or it may order that the issue await the outcome of the main action, again depending, in each case, on what is just and convenient.

(v)    On the facts of the present case, the judge was, in my view, plainly right to hold that he cannot decide the matter without further inquiry; for the reasons I have already mentioned he was not obliged to decide in favour of the second defendant, without further inquiry, by any rule or principle such as that suggested by counsel for the second defendant.

144    It is convenient to deal first with the Five Dock Property. As mentioned, this was purchased for $2.825 million. The Bankwest loan was for $2.26 million. The evidence does not disclose how the deposit was funded or how stamp duty or other costs were funded. I am not satisfied that Mrs Giezekamp paid any part of any deposit for the Five Dock Property. Mrs Giezekamp is a joint borrower under the Bankwest facility, but the evidence did not establish that she made any repayments. On the evidence before the Court on this application, it appears more likely that Mr Giezekamp, or entities associated with him, have funded the whole of the acquisition costs of the Five Dock Property and funded relevant borrowings.

145    It follows that I consider there to be a real issue about beneficial ownership of the Five Dock Property. I cannot accept the assertion of beneficial ownership on the part of Mrs Giezekamp without further inquiry, and accordingly, do not determine that issue on this application. The point is only relevant to my conclusion that the freezing orders should not be varied in so far as they affect Mrs Giezekamp’s interest in the Five Dock Property. Unless there is a material change in circumstances, and assuming the main action is prosecuted diligently, the issue can await the outcome of the main action.

146    In relation to the Balmain Property, I am not satisfied on the evidence as it stands that Mrs Giezekamp funded the deposit of $275,000. I have earlier set out the facts as presently known. I accept that the funds for the deposit came from a Macquarie Bank facility in Mrs Giezekamp’s name. However, a number of significant and as yet unexplained transactions in that account raise a real question as to whether that account was used wholly for Mrs Giezekamp’s purposes and, therefore, specifically for her purposes in relation to this transaction, by which I mean the payment of the deposit of $275,000. I refer in this regard in particular to the large repayments made by U Money and Harry Giezekamp after the withdrawal for the deposit. I also accept that the Macquarie Bank facility was refinanced by borrowings made by Mrs Giezekamp from the CBA at the same time as the Balmain Property was purchased. As previously mentioned, some of the CBA borrowings were paid into an account held jointly with Mr Giezekamp. Ultimately, at least $900,000 of the proceeds from the sale of the Queensland Property were paid out by Mrs Giezekamp, $400,000 to U Money and $500,000, more likely than not, to an entity associated with Mr Giezekamp.

147    It may be that Mrs Giezekamp did fund the deposit of $275,000, but the applicants have adduced evidence which raises sufficient doubt on that issue to warrant not varying the freezing orders against Mr Giezekamp at this stage.

148    To the extent it is relevant, I also have doubts about whether Mrs Giezekamp funded any holding costs in relation to the Balmain Property. Mrs Giezekamp’s taxation returns for various years disclose some rental income and deductions for interest. Rental income appears to have been received by Mrs Giezekamp in relation to the Balmain Property, which was leased to Mayfair Property, an entity in which Mr Giezekamp has substantial involvement: Exhibit 1, Tabs 5 and 6. It also appears that Mrs Giezekamp was receiving some rent in relation to the Queensland property before it was sold in 2022 – see, for example: Exhibit 1 pages 172, 215.

149    The evidence does not suggest that Mrs Giezekamp was earning wages (outside of what she received from entities associated with Mr Giezekamp) at least in recent years, in order to contribute to the purchase of the properties or the holding costs, including mortgage repayments. There is no substantial evidence that Mrs Giezekamp performed any work in respect of the amounts she returned in her income tax returns from entities associated with Mr Giezekamp.

150    It follows that I consider there to be a real issue about Mrs Giezekamp’s beneficial ownership of the Balmain Property. I do not need to, and do not, finally determine that issue on this application. The point is only relevant to my conclusion that the freezing orders should not be varied, at least at this stage, in so far as they affect Mrs Giezekamp’s interest in the Balmain Property. Again, unless there is a material change in circumstances, and provided that the main action is prosecuted diligently, the issue can await the outcome of the main proceeding.

151    In reaching these conclusions, I should make clear that I have assessed the evidence in accordance with the capacity of the parties to adduce evidence on the topic – see: Blatch v Archer (1774) 1 Cowp 63. Full knowledge of the relevant facts rests with Mrs Giezekamp and Mr Giezekamp. I note that Mrs Giezekamp’s counsel only read Mrs Giezekamp’s affidavit on the basis that she would not be called to give evidence. Counsel for the applicant sought leave to cross-examine, but leave was refused – see: Taylor v Diamand & Zikos Developments Pty Ltd (1997) 6 NTLR 164 at 167. The applicants obtained the evidence they adduced on the topic by subpoenas issued with some urgency.

152    I note that Mrs Giezekamp submitted that her registrations as one of the legal owners of the properties have the statutory protection of indefeasibility of title under s 42 of the Real Property Act 1900 (NSW). So much may be accepted, but it does not answer the point that Mr Giezekamp may have a beneficial interest in the properties exceeding his legal interest.

Risk of dissipation

153    Whilst no orders are sought against Mrs Giezekamp, it is relevant to consider the risk of dissipation of assets should the freezing orders be varied in the manner desired by Mrs Giezekamp. There is no direct evidence that Mrs Giezekamp would deal with the proceeds of the Balmain Property in a way that would frustrate enforcement of a judgment against Mr Giezekamp and U Money.

154    On the other hand, the evidence does lead to the inference that there is a risk that Mrs Giezekamp might deal with the proceeds of the Balmain Property with her son’s interests in mind or as directed or requested by him.

155    The applicants, referring to Mr Leggate’s evidence and s 37A of the Conveyancing Act 1919 (NSW), contended that the Balmain Property was purchased in the name of Mrs Giezekamp in order to put it “beyond the reach of creditors”. I reach no conclusion in that respect.

Discretion

156    Mrs Giezekamp has not given any evidence of any particular need for a share of the net proceeds from the sale of the Balmain Property. It is true, as Mrs Giezekamp submitted, that she was not obliged to give such evidence. However, the consequence is that – when it comes to determining what the appropriate orders are and whether the orders should be varied as she contended – there is little to suggest any particular prejudice to Mrs Giezekamp in being kept from the proceeds of sale of the Balmain Property for a period of time, provided she has access to those proceeds sufficient to meet her reasonable needs. The absence of evidence of any particular need is also of some relevance to the question of beneficial ownership and whether there is a risk of dissipation: the Balmain property is not being sold to meet any need of Mrs Giezekamp or because she wants to apply the proceeds elsewhere for her own purposes, but rather because of the financial difficulties faced by Mr Giezekamp.

157    I would not exercise a discretion not to continue the freezing orders for reasons associated with Mrs Giezekamp’s legal interests in the Balmain Property and the Five Dock Property. Nor should the orders be varied in the way contended by Mrs Giezekamp.

CONCLUSION

158    For these reasons, the freezing orders should be continued, including in so far as those orders affect properties in which Mrs Giezekamp has a legal interest, namely the Balmain Property and the Five Dock Property.

Associate:

Dated:    7 June 2024

SCHEDULE OF PARTIES