Federal Court of Australia

Austin Engineering Ltd v Podulova (No 4) [2025] FCA 523

ORDERS

THE COURT ORDERS THAT:

1.    Until 4.00 pm AWST on 5 May 2028 or further order and pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground set out in s 37AG(1)(a), the publication or other disclosure of Exhibit 2 and Exhibit 3 on the interlocutory application dated 15 May 2025 be prohibited.

2.    The application be adjourned to a date to be fixed.

3.    Costs be reserved.

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

REASONS FOR JUDGMENT

FEUTRILL J:

Introduction

1    These reasons concern an urgent ex-parte application the applicant (Austin Engineering) made for freezing orders against the first respondent (Ms Podulova). I refused but did not dismiss the application because I was not satisfied on the affidavit material filed in support of the application that there was a danger (in the sense of a real or substantial risk as opposed to a remote, speculative or theoretical possibility) that a prospective pecuniary judgment against Ms Podulova would be wholly or partly unsatisfied.

2    In an email from Ms Podulova to Austin Engineering’s legal representatives of 3 May 2025 she said: ‘Please, be advised on the 3rd July I am moving overseas, but will be available online.’ Austin Engineering submits that is a statement that Ms Podulova intends leaving Australia permanently and it should be inferred that she will remove all her assets from Australia. For reasons that will be explained, in context, I am not satisfied that the email is a statement of an intention to permanently depart Australia. Further, I do not infer from that statement, without more, an intention to remove all assets from Australia. Nonetheless, on the strength of Ms Podulova’s statement in her email, Austin Engineering applied for a worldwide freezing order that, if made, would have the effect of restraining Ms Podulova from disposing of, dealing with or diminishing her assets in Australia and anywhere else in the world up to a value of $210,000. I was not satisfied on the evidence adduced on the application that Ms Podulova might remove assets from Australia or, if she did so, that there was a real danger she would default in payment of a prospective judgment for that reason and, in any case, Austin Engineering had not demonstrated that it had a good arguable claim to a prospective pecuniary judgment let alone a judgment of $210,000 or more. I was also not satisfied that the balance of convenience favoured making a freezing order or any ancillary order at this time.

Preliminary matters

3    Due to the asserted ‘danger’, Austin Engineering made its application on an ex-parte and urgent basis and also sought to have the Court closed for the hearing on the ground that there was a risk that if Ms Podulova learned of the application that she would remove her assets from Australia, in effect, so as to defeat the application. For the reasons that follow, I refused to make an order to close the Court. I also do not consider that it was or would have been appropriate not to publish notice of the listing of the ex-parte hearing so as to permit members of the public to be aware of and view the hearing.

4    It is clear from s 17(1) of the Federal Court of Australia Act 1976 (Cth) that, in general, the Court is obliged to exercise its jurisdiction in open court. ‘This provision gives statutory force to the principle that justice must be administered publicly in open court and gives recognition to the weight of public interest which attaches to that principle’: Australian Broadcasting Commission v Parish [1980] FCA 33; 43 FLR 129 at 132 (Bowen CJ). Section 17(4) and Pt VAA of the Federal Court Act provide for limited exceptions to that principle. Under s 17(4) the Court may exclude the public where satisfied the presence of the public would be ‘contrary to the interests of justice’. Similarly, under s 37AG(1)(a) the Court may make a suppression or non-publication order where the order ‘is necessary to prevent prejudice to the proper administration of justice’. However, in so doing the Court must take into account the primary objective of the administration of justice is to safeguard the public interest in open justice: s 37AE. These are not empty words. Numerous authorities emphasise the importance of conducting proceedings in courts of justice publicly and in open view as an essential element of preserving public confidence in the judicial system. Accordingly, ‘courts must sit in public except in rare and exceptional cases narrowly defined’: Q v Seymour (1993) 69 A Crim R 514 at 516 (Foster J). Exposure to public scrutiny is regarded as ‘the surest safeguard against any risk of the courts abusing their considerable powers’: R v Davis (1995) 57 FCR 512 at 514 (Wilcox, Burchett and Hill JJ). Thus, the word ‘necessary’ in s 37AG(1)(a) is a strong word. It means more than that which is convenient, reasonable or sensible, or to serve some notion of the public interest or balancing of competing interests: Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 at [30]-[31]. Similar considerations apply to determining whether the presence of the public would be contrary to the interests of justice for the purposes of s 17(4).

5    An application for a freezing order may be made without notice (that is, without serving or advising another party or other person of the application): r 7.32(1) of the Federal Court Rules 2011 (Cth). A circumstance in which notice of the application may defeat the purpose of the application may justify making the application without notice (or ex-parte), but it would rarely justify an order to exclude the public from the Court. For the reasons given later, there was no proper justification for making the application without notice let alone closing the Court and thereby excluding the public on the ground that notice of the listing and hearing the application in public may have had the effect of defeating the purpose of the application. That is not to say that there are not circumstances in which it would be appropriate to apply for freezing orders without notice or that due to the degree of risk of frustration of the Court’s process that it may be appropriate to close the Court to the public. It is to say that this case is manifestly not one of those circumstances.

6    On the hearing of the application Austin Engineering read and relied upon the affidavit of Clancy Calder Bennett affirmed 15 May 2025. That was received as Exhibit 1 on the application. Austin Engineering also tendered certain confidential exhibits to the affidavit of John Olszewski affirmed 18 April 2023 and the affidavit of Kirsten Cadle sworn 18 April 2023. Those documents were received as Exhibit 2 and Exhibit 3 on the application. Mr Bennett’s affidavit also exhibited the non-confidential parts of the affidavits of Mr Olszewski and Ms Cadle. Those affidavits were read and relied upon on an earlier interlocutory application heard in the proceeding. The documents that were received as Exhibit 2 and Exhibit 3 were subject to an existing suppression and non-publication order made on 5 May 2023. Austin Engineering sought an extension of the existing order to Exhibits 2 and 3. As there was an existing order in place, I was satisfied that it was necessary in the proper administration of justice to make a suppression and non-publication order in the same terms with respect to Exhibits 2 and 3 on the application.

Applicable principles

7    Rule 7.32 of the Rules provides (note omitted):

7.32    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.

8    Here, Austin Engineering also brings its application under r 7.35. That rule applies, relevantly, if an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court: r 7.35(1)(b)(i). Subrule 7.35(4), then provides:

7.35    Order against judgment debtor or prospective judgment debtor or third party

…

(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.

9    While as a practical matter, in most cases the danger required by r 7.32 will be provided because one or more of the circumstances set out in r 7.35(4) is (are) present, r 7.35(4) does not ‘cover the field’ of events that might give rise to a danger of the kind necessary to enliven the power in r 7.32: Deputy Commissioner of Taxation v Huang [2021] HCA 43; 273 CLR 429 at [21]-[22] (Gageler, Keane, Gordon and Gleeson JJ).

10    Otherwise, the principles applicable to the circumstances in which a freezing order will be made are well established. I summarised these principles in UFC Enterprise Morley Pty Ltd v UFC Enterprise Northbridge Pty Ltd [2024] FCA 1396 at [13] in a manner that was cited with approval by a Full Court (Snaden J, Wheelahan and McElwaine JJ, agreeing) in Zirk-Sadowski v University of New South Wales [2025] FCAFC 64 at [46].

(1)    The language of r 7.32 of the Rules reflects what has been considered to be a general power of the Court to grant a Mareva injunction under s 23 of the Federal Court of Australia Act 1976 (Cth): Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612 at 622-623 (Deane J).

(2)    As a general proposition, a freezing order may be granted if the applicant demonstrates a prima facie or good arguable case for final relief and the circumstances are such that there is a danger of the respondent absconding, or a danger of the assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with so that there is a danger that the applicant, if it gets judgment, will not be able to get it satisfied: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 at [8] (Kenny J) and the authorities there cited.

(3)    The reference in r 7.32 to a ‘danger’ that a judgment or prospective judgment will go wholly or partly unsatisfied is a reference to a risk of that outcome. The risk must be real or substantial as opposed to a remote or speculative or theoretical possibility. The applicant must prove facts from which the Court can infer the existence of a real or substantial risk on the balance of probabilities: Duro Felguera Australia Pty Ltd v Trans Global Projects Pty Ltd (in liq) [2018] WASCA 174; 53 WAR 201 at [42]-[43] (Buss P, Murphy and Mitchell JJA) and the authorities there cited.

(4)    It is not necessary to establish that judgment will be unsatisfied unless a freezing order is made. Nor is it necessary to demonstrate that a respondent has a positive intention to frustrate a judgment. However, there must be facts from which ‘a prudent, sensible commercial’ person can ‘properly infer a danger of default if assets are removed from the jurisdiction’. That may include facts concerning a lack of available information about a respondent: Hua Wang Bank Berhad at [9]-[12] (Kenny J) and the authorities there cited. See, also, Severstal Export GmbH v Bhushan Steel Ltd [2013] NSWCA 102; 84 NSWLR 141 at [59]-[60] (Bathurst CJ, Beazley P and Barrett JA agreeing); Trans Global Projects at [45].

(5)    The mere fact of removal or danger of removal of assets from the jurisdiction will not necessarily give rise to a danger or risk that a judgment will go unsatisfied. In this regard, it is necessary to take into account any reciprocal regimes for the registration and enforcement of judgments and other means by which a judgment may be enforced: Trans Global Projects at [47]-[48]; Severstal Export at [63]-[65].

(6)    Ultimately, it is a question for evaluation by the Court as to whether the degree of the danger or risk is sufficient to justify an order in the terms made. In making that evaluative assessment, the Court will bear in mind that a freezing order is a drastic remedy which imposes a severe restriction on a respondent’s right to deal with its assets, and that the purpose of the order is not to provide security for a judgment which the applicant hopes to obtain and fears might not be satisfied: Trans Global Projects at [44] and the authorities there cited.

11    Where r 7.35(4) is engaged, the Court must be satisfied of three elements: (1) one or more of the events described in para (a) or para (b) might occur; (2) there is a danger that judgment or prospective judgment will be wholly or partly unsatisfied; and (3) that danger arises because of one or more of the events described in para (a) or para (b) might occur. Thus, it is not sufficient for the Court to conclude that one or more of the events described in r 7.35(4) might occur. The Court must be satisfied that the identified danger arises because one or more of those events might occur: Trans Global Projects at [40]-[41] (while addressing O 52A r 5(4) of the Rules of the Supreme Court 1971 (WA), that rule is in materially the same terms as r 7.35(4)).

Is there a good arguable claim for pecuniary relief?

12    Ms Podulova was an employee of Austin Engineering between December 2019 and 13 January 2023. She was employed pursuant to two written contracts of employment. The contracts contained express terms dealing with return of confidential information upon termination of her employment and maintaining and not using (misusing) confidential information of Austin Engineering.

13    Austin Engineering alleges that for the purposes of conducting its business it has created drawings, plans, diagrams, schematics, tenders, proposals, correspondence and other documents relating to its business and (or) products that it has designed, manufactured and (or) sold. These documents are referred to collectively as Austin Documents.

14    Austin Engineering alleges that during her employment Ms Podulova was provided with a computer, referred to as ENG39, for use at her home upon which Austin Documents were stored. In the period between December 2019 and 13 January 2023 Ms Podulova transmitted Austin Documents from her Austin Engineering email account to her personal email account and copied a number of Austin Documents onto external computer hard-drives. The hard-drives are referred to as the WD Elements Storage Device and Kingston Storage Device and collectively as the Electronic Storage Devices. In the period between 3.00pm on 12 January 2023 and 10.30am on 13 January 2023 Ms Podulova downloaded over 9,000 Austin Documents from Austin Engineering’s SharePoint file repository and copied them onto an electronic storage device. Ms Podulova retained the Austin Documents in her personal email account, on ENG39, and on the electronic storage devices without Austin Engineering’s knowledge or consent.

15    Austin Engineering alleges that on 16 January 2023 Ms Podulova commenced employment with the fifth respondent (Payload). Payload along with the second, third, fourth, sixth and seventh respondents are members of the Schlam Group of companies. During the period from 13 January 2023 until 17 February 2023 Ms Podulova accessed and used Austin Documents which she had retained. That conduct was during the course and for the purposes of her employment with Payload and for the benefit of Payload or one or more entities in the Schlam Group. The Austin Documents Ms Podulova retained contained information that meets the description of confidential information in her contracts of employment and, in any event, has the necessary quality of confidence such that Ms Podulova came under an equitable duty to maintain the confidentiality of that information.

16    Austin Engineering seeks a declaration against Ms Podulova to the effect that through the copying, retention, access and use of Austin Documents she breached her equitable duty of confidence. Austin Engineering also seeks an injunction to restrain Ms Podulova from using Austin Engineering’s confidential information and an order for her to deliver up or destroy that information. Additionally, Austin Engineering claims damages (including exemplary damages), an account of profits or equitable compensation. Austin Engineering also seeks a declaration to the effect that Ms Podulova breached certain provisions of her contract of employment and damages for breach of contract in connection with the copying, retention, access and use of Austin Documents.

17    Separately, Austin Engineering seeks a declaration to the effect that Ms Podulova has infringed its copyright subsisting in the Austin Documents in connection with her copying, retention, access and use of Austin Documents and an injunction restraining her from continuing to infringe that copyright. Additionally, Austin Engineering claims damages or an account of profits pursuant to s 115(2) of the Copyright Act 1968 (Cth) and additional damages pursuant to s 115(4) of that Act.

18    On 20 April 2023 the Court made orders on an ex-parte basis restraining Ms Podulova from doing certain things with the Austin Documents she is alleged to have retained and, insofar as it was stored in digital form, requiring her to produce that information to the Court. There was then an inter-partes hearing on 1 May 2023 at which a continuation of the orders was not opposed by the respondents and Ms Podulova consented to further orders requiring her to disclose, broadly, the whereabouts of certain information and how she has used it. However, the Schlam parties opposed Norwich Pharmacal orders requiring them to disclose details that were potentially relevant to the alleged misuse of the information by Ms Podulova. After a contested hearing, disclosure orders were also made against the Schlam parties: Austin Engineering Pty Ltd v Podulova [2023] FCA 419; 416 ALR 511.

19    There was no dispute for the purposes of the inter-partes hearing in May 2023 that Austin Engineering had established an arguable claim that Ms Podulova had retained possession of confidential information of Austin Engineering, that she had possession of that information during at least part of the period that she worked for Payload, and that she may have used that information in the course of her work. Put another way, it was not in issue that Austin Engineering had established an arguable claim that ‘wrongs’ had been carried out by Ms Podulova as an ‘ultimate wrongdoer’: Austin Engineering (No 1) at [3], [23] (Jackson J). For the purposes of the present application, I accept that Austin Engineering has a good arguable claim for breach of confidence, breach of contract and infringement of copyright against Ms Podulova. However, while Austin Engineering may have a good arguable claim for declaratory and injunctive relief, it has not demonstrated that it has an arguable claim for equitable compensation, account of profits or damages. Nor has it demonstrated that it may be entitled to anything more than nominal damages under s 115(2) of the Copyright Act. There was no evidence on the application of any loss or damage caused by Ms Podulova’s alleged breaches of duty nor of her gaining any profit as a result of the alleged breaches.

20    Notwithstanding the absence of any evidence of compensable loss or damage on the part of Austin Engineering or gain of profit on the part of Ms Podulova, Austin Engineering contends that the Court should make a freezing order restraining Ms Podulova from disposing of, dealing with or diminishing her assets in Australia and outside Australia up to the amount of $210,000. In its written submissions in support of the application Austin Engineering sought to justify such an order on the grounds that it has a good arguable claim for a prospective costs order in its favour with respect to, at least, the non-pecuniary relief claimed against Ms Podulova. In its oral submissions it sought to further justify such an order on the ground that additional damages were claimed under s 115(4) of the Copyright Act and, in respect of that claim, it was not necessary to prove actual loss or damage for the purposes of s 115(2) of that Act.

21    Section 115(4) of the Copyright Act provides:

115    Actions for infringement

…

(4)    Where, in an action under this section:

(a)    an infringement of copyright is established; and

(b)    the court is satisfied that it is proper to do so, having regard to:

(i)    the flagrancy of the infringement; and

(ia)    the need to deter similar infringements of copyright; and

(ib)    the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff’s copyright; and

(ii)    whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and

(iii)    any benefit shown to have accrued to the defendant by reason of the infringement; and

(iv)    all other relevant matters;

the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances.

22    In Facton Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9; 199 FCR 569 a majority of a Full Court (Lander and Gordon JJ) expressed the view that an owner of copyright would not be entitled to additional damages under s 115(4) without first making out an entitlement to damages under s 115(2), but nominal damages may be sufficient for that purpose. Further, additional damages under s 115(4) are punitive and are only awarded where a Court is satisfied of the matters referred to in s 115(4)(b). Those matters are of a kind which are taken into account in determining whether a party is entitled to aggravated or exemplary damages at common law. Additional damages will be awarded under s 115(4) when the conduct of the respondent is such that an award of punitive damages should be made to mark the Court’s recognition of the opprobrium attached to the respondent’s conduct: Facton at [32]-[37]. While I do not discount the possibility that the Court could ultimately be persuaded to make an order for additional damages under s 115(4), I was not taken to any evidence in the materials upon which Austin Engineering relies that supported the proposition that a punitive award of damages would be appropriate in the circumstances of this case. That is, I was not taken to evidence of any of the factors set out in s 115(4)(b) upon which Austin Engineering relies in support of its claim to additional damages. Therefore, I do not consider the possibility of Austin Engineering obtaining an award of additional damages meets the requirement of a good arguable claim on the evidence before the Court on this application.

23    I am not aware of any authority in which a freezing order has been granted because there is a danger that a costs award upon a claim for non-pecuniary relief may go unsatisfied or partly unsatisfied. In theory, a freezing order could be made for that purpose, particularly in aid of a judgment for costs that has actually been made. However, where no more than a good arguable claim for non-pecuniary relief is established, in making the evaluative assessment and taking into account the drastic nature of a freezing order and that the purpose of such an order is not to provide security for a judgment the applicant hopes to obtain, the balance of convenience would usually tend against ordering a freezing order merely to support a prospective costs order. The processes of the Court are not engaged for the purpose of obtaining costs orders in favour of applicants, but for the purpose of obtaining the relief claimed in proceedings. The award of costs is discretionary. Even a successful party may be denied its costs in certain circumstances. Therefore, unless the assets are the subject matter of the final relief claimed, in general, removal of assets from Australia would be unlikely to frustrate or inhibit the grant of non-pecuniary relief claimed in a proceeding. Without more, I am not persuaded that a good arguable claim to a costs award supplies a sufficiently compelling reason to exercise the Court’s draconian power to make a worldwide freezing order against Ms Podulova.

Might Ms Podulova remove assets from Australia?

24    In December 2024 Ms Podulova sent an email to my chambers in which she requested ‘a leave of absence’ from 10 January to 20 March 2025 for the purpose of travelling overseas to care for a family member. On 9 April 2025 Ms Podulova appeared, via telephone, at a case management hearing in the proceeding. Upon enquiry Ms Podulova informed the Court that she was in Australia and would not have any difficulty complying with orders to be made regarding discovery.

25    On 3 May 2025 Ms Podulova sent an email to Austin Engineering’s legal representatives in response to an enquiry about a possible change of date for a case management hearing listed on 21 May 2025. In that email Ms Podulova said: ‘Please, be advised that on the 3rd July I am moving overseas, but will be available online.’

26    In the context of Ms Podulova’s earlier communication with the Court and the parties concerning a ‘leave of absence’, I do not construe her email of 3 May 2025 as necessarily an indication of a permanent departure from Australia. The email is ambiguous. It may mean ‘moving [for an extended period of time] overseas’; ‘moving [indefinitely] overseas’; or ‘moving [permanently] overseas’. In any case, it does not convey, of itself, an intention to abandon all ties (emotional and financial) to Australia.

27    Further, Ms Podulova has not informed the Court of any intention to leave the jurisdiction permanently. If Ms Podulova were to leave the jurisdiction, that may create difficulties for her to continue to represent herself in the proceedings as the Court may, but need not, permit appearances to take place via video or audio link and it may also present other challenges for the Court to effectively exercise its power of control and supervision over the proceeding. Therefore, the Court would expect Ms Podulova, in conformity with her obligations under s 37N of the Federal Court Act, to bring to the Court’s attention any intention of hers to permanently depart the jurisdiction as it will have an impact on the future conduct of the proceeding. As Ms Podulova sought ‘a leave of absence’ in December 2024 in conformity with her obligations under s 37N, the Court has no reason to consider that she has a current intention to depart from the jurisdiction without notice or without continuing to co-operate with the Court and the other parties to conduct the proceeding consistently with the overarching purpose of the civil practice and procedure provisions set out in s 37M.

28    It follows that I do not infer from Ms Podulova’s email that she has an intention to depart Australia permanently on 3 July 2025. Likewise, I do not infer from her email that she intends to remove all her assets from Australia or that she has started the process of so doing. Even if Ms Podulova intended departing from Australia permanently, without more, I would not infer that she intended to remove all her assets from Australia. There was no evidence regarding Ms Podulova’s financial circumstances or the extent to which she is a person who has assets in the jurisdiction that would otherwise be available to satisfy a judgment debt. There is no evidence that Ms Podulova has an interest in real property situated in Australia. There was little evidence that Ms Podulova has moveable property in Australia. The only evidence was that she had held a bank account into which Austin Engineering paid her salary during her employment with that company.

29    There was no evidence regarding Ms Podulova’s citizenship or ability to relocate to another country. In Mr Bennett’s affidavit he deposes that he ‘understands’ that Ms Podulova is a ‘Russian national’ and she is ‘also an Australian citizen’. No factual foundation for that ‘understanding’ is deposed. At a case management conference on 11 December 2024 Ms Podulova informed the Court that she intended to travel to the Russian Federation to visit a family member that appears to have been in his or her last stage of life. Mr Bennett also deposes ‘given [Ms Podulova’s] ties to Russia and her recent trip there, I believe it is possible that she may have already commenced transferring her assets there’. That is no more than speculation. In short, there is no evidence of where Ms Podulova may move or her ability to reside permanently in that country. It is possible to ‘guess’ that she is again travelling to the Russian Federation, but without more, that is conjecture.

30    I also take into account that Austin Engineering produced no evidence of any communications with Ms Podulova by which it sought to clarify or confirm Ms Podulova’s intentions regarding her departure from Australia in July 2025. For instance, no steps were evidently taken to address the manner in which the proceeding would be conducted if Ms Podulova is out of the jurisdiction for any extended period of time including participation in case management hearings, mediation and, ultimately, a trial.

31    It follows that I do not infer from one sentence in one email, in context, that Ms Podulova intends to permanently depart from Australia on 3 July 2025. However, I expect Ms Podulova’s travel intentions to be clarified with the Court, for the reasons already given, at the next case management conference.

Is there a real danger that a prospective judgment will go unsatisfied?

32    I accept that if there were sufficient evidence to infer or otherwise conclude that Ms Podulova intends departing from Australia permanently, then it would be reasonable to infer that she would remove at least some moveable assets from the jurisdiction. However, the extent to which it may be inferred that she would remove all her assets would depend on what assets she has in Australia and the nature of the assets in question. As matters stand, there is no evidence from which any inference – one way or the other – can be drawn that assets of any significant value might be removed from Australia.

33    Further, regarding Ms Podulova’s financial circumstances, it is important to bear in mind that the purpose of a freezing order is not to provide security for a prospective judgment nor is it to prevent a prospective judgment debtor from sliding into insolvency. Austin Engineering’s application is founded on the assumption that if Ms Podulova were permitted to remove all her assets from Australia, that would ‘create a danger’ that a prospective judgment would go unsatisfied. However, if Ms Podulova is not a person of financial means, the danger is already present irrespective of where her personal assets might be located. In such circumstances, the removal of all her assets may not have any significant impact on the Court’s process, while preventing her from doing so may cause significant hardship for Ms Podulova.

34    There may be circumstances in which it can be inferred that there is a real danger that a judgment will go unsatisfied if a person departs Australia permanently and removes assets from Australia upon departure. Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 and Commonwealth Bank of Australia v Oswal (in his own capacity and atf The Burrup Trust) [2011] WASC 84; 82 ACSR 626 are examples of such cases. However, as Kenny J observed in Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 (at [12]) the fact that assets within the jurisdiction are moveable and that a respondent is incorporated (or relevantly resides) out of the jurisdiction is not enough to warrant an inferential finding of danger of dissipation. There must be facts from which ‘a prudent, sensible commercial’ person can ‘properly infer a danger of default if assets are removed from the jurisdiction’.

35    Accepting that it is not necessary to demonstrate a positive intention to frustrate a judgment, nonetheless there must be ‘solid’ evidence of the existence of the danger. The evidence may take many forms. For example, an inference may be drawn from Ms Podulova’s past conduct that she is not to be relied on to pay a judgment debt. An inference may also be drawn from the manner in which Ms Podulova has structured her financial affairs that she cannot be relied upon to pay. However, Austin Engineering has pointed to no evidence other than an assertion of an inference of removal of assets as to the existence of a ‘danger’ that Ms Podulova will default if assets are removed from Australia. The relevant evidence of her past conduct relates to taking, retaining and accessing Austin Documents. That is evidence of breaches of contractual, equitable and statutory obligations and of commercial immorality, but it falls short of dishonesty. Further, thus far, Ms Podulova has participated in the proceeding and co-operated with the Court and the other parties. There is nothing in her conduct in the proceeding to suggest that she would default in payment of a judgment debt, if she had the financial means to satisfy it, even if she were resident overseas and the majority or all her assets were also overseas.

Discretionary and other considerations

36    In my view, on the available evidence, Austin Engineering has not demonstrated that this is a proper case for freezing orders to be made even on an interim ex-parte basis. Despite the frequency with which freezing orders tend to be sought and granted, the authorities make it clear that freezing orders should be granted with caution and sparingly and having regard to the potential for oppression. In the absence of any evidence of Ms Podulova’s financial circumstances the potential to cause oppression is a significant factor that weighs against granting the order sought even on an interim basis. It is not a matter that can be adequately addressed by an undertaking as to damages. It is also significant that Austin Engineering has not demonstrated a good arguable claim for pecuniary relief. Therefore, at present, the risk of ‘harm’ to Austin Engineering should refusal of a freezing order turn out to be the ‘wrong’ decision is not significant.

37    I also record that there is no evidence before the Court to suggest that Ms Podulova is in the process of arranging her financial affairs in a manner that is intended to frustrate or inhibit the Court’s process or that removal of assets from Australia would likely have been accelerated if she had been given notice of this application. While such an intention is not necessary for the grant of a freezing order, it has relevance to the appropriateness of applying ex-parte for such orders and requesting the resources of the Court to be employed to deal with an application on an urgent basis. In my view, the application was not appropriately brought ex-parte or urgently. Ms Podulova has been quite open about her travel intentions and has expressed no intention directly or indirectly to not pay or evade any pecuniary judgment she may be ordered to pay.

38    Having regard to the paucity of evidence in support of the application, I have given consideration to the possibility of making an ancillary order under r 7.33 of the Rules for the purpose of determining whether a freezing order should be made, but do not consider that would be appropriate on the available evidence. Primarily, I do not consider it appropriate because Austin Engineering has not demonstrated a good arguable claim for pecuniary relief. Therefore, as matters stand, even if there were evidence of significant assets in Australia that might be removed, I would refuse the application on the ground that Austin Engineering has not demonstrated a good arguable claim for more than nominal pecuniary relief.

39    Nonetheless, rather than dismissing the application outright, I consider it appropriate to adjourn it to an inter-partes hearing on a date to be fixed. If Austin Engineering is able to overcome the evidentiary deficiencies in its application as set out in these reasons, it may file further affidavit evidence and apply to re-list the application for further hearing. That may provide a proper foundation for, at least, an order under r 7.33. In the meantime, as already mentioned, I expect Ms Podulova to clarify her intentions regarding her country of permanent residence at the next case management hearing.

Associate:

Dated:    20 May 2025

SCHEDULE OF PARTIES