FEDERAL COURT OF AUSTRALIA

Morcom Holdings Pty Ltd v Mountain Asset Partners Pty Ltd (in liquidation) (No 2) [2025] FCA 977

ORDERS

THE COURT ORDERS THAT:

1.    The freezing order made on 14 May 2025 by Justice Lee and extended until further order by Justice Derrington on 22 May 2025 (freezing order) be discharged to the extent that order operates upon each of the second and third defendants.

2.    Upon the undertaking of the fourth defendant, by his counsel, that he will not deal with any real property of which he is a registered proprietor by way of disposal or encumbrance without giving the plaintiff seven days’ notice, the freezing order be discharged to the extent that order operates upon the fourth defendant.

3.    Without admissions and upon the plaintiff continuing to give the usual undertaking as to damages, the freezing order continue to operate to the extent that order operates upon the fifth defendant, until further order of the Court.

4.    Without admissions and upon the plaintiff continuing to give the usual undertaking as to damages, the freezing order continue to operate to the extent that order operates upon the sixth defendant, until further order of the Court, unless the sixth defendant and the co-owner of the properties at Cronulla in New South Wales and Yanchep in Western Australia identified by the sixth defendant in his affidavit made on 27 May 2025 proffer a joint undertaking that they will not deal with any real property of which they are registered proprietors by way of disposal or encumbrance without giving the plaintiff seven days’ notice; and that undertaking is accepted by the Court within 14 days of the date of these orders, in which case the Court will make a further order discharging the freezing order in so far as it operates upon the sixth defendant.

5.    Costs be reserved.

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

REASONS FOR JUDGMENT

GOODMAN J:

A.    INTRODUCTION

1    These reasons for judgment address an application by the plaintiff for the continuation of a freezing order made in its favour against (relevantly) the second to sixth defendants on 14 May 2025 and subsequently extended.

A.1    Overview of the plaintiff’s allegations

2    Since the freezing order was made, the plaintiff has filed a statement of claim and further affidavit evidence; and the second to sixth defendants have filed defences, together with evidence addressing the freezing order. Some 30 affidavits were read on this application. Those affidavits and the documents exhibited thereto, with some other exhibits tendered during the hearing, comprise more than 4,500 pages. None of the deponents of the affidavits, including the second to sixth defendants, were cross-examined (and no application was made for such cross-examination to occur).

3    From the statement of claim and the plaintiff’s evidence on this application, it is apparent that the plaintiff’s complaint concerns two investments, each of $1,000,000, that it made in convertible notes issued by ALAMMC 4 Pty Ltd (receivers and managers now appointed) and SDA 3 Pty Ltd (now in liquidation), in circumstances where the second to sixth defendants were, in one way or another, intermediaries between the plaintiff on the one hand and ALAMMC 4 and SDA 3 on the other.

4    With respect to the investment in notes issued by ALAMMC 4, the plaintiff contends, in broad terms, that:

(1)    this investment was made as a consequence of conduct (principally representations or failure to correct representations made by another) engaged in by:

(a)    the first defendant (Mountain Asset Partners Pty Ltd (now in liquidation)), a company of which the fourth defendant (Mr Gardner), the fifth defendant (Mr Newman) and the sixth defendant (Mr Tanveer) were the directors and members;

(b)    the second defendant (Mr Ross), an employee of Mountain Asset;

(c)    the third defendant (Mr Lenton), another employee of Mountain Asset;

(d)    the ninth defendant (Mr McWilliams), the sole director and member of ALAMMC 4 (being one company within the ALAMMC group of companies);

(2)    by that conduct each of Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams contravened one or more of ss 18, 20, 21 and 29 of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL); ss 12DA, 12DB, 12CA and 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and ss 1041E, 1041F and 1041H of the Corporations Act 2001 (Cth) (together, the statutory provisions);

(3)    the following defendants were involved in contraventions of the statutory provisions by other defendants:

(a)    Mr Lenton, in the contraventions of Mr Ross;

(b)    Mr Gardner, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams;

(c)    Mr Newman, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams;

(d)    Mr Tanveer, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams;

(e)    Mr McWilliams, in the contraventions of one or more of Mountain Asset, Mr Ross and Mr Lenton; and

(4)    the plaintiff is entitled to recover its loss caused by the contraventions (such loss being the $1,000,000 investment less interest payments received, plus interest thereon and the lost opportunity to invest in another suitable business opportunity) from those alleged to have contravened the statutory provisions, and those alleged to have been involved in such contraventions.

5    With respect to the investment in notes issued by SDA 3, the plaintiff contends in broad terms that:

(1)    this investment was made as a consequence of conduct (principally representations) engaged in by:

(a)    Mountain Asset;

(b)    Mr Ross;

(c)    the seventh defendant (Mr Garrison), a director of SDA 3;

(d)    the eighth defendant (Mr McKellar), a director of SDA 3;

(2)    by that conduct each of Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar contravened one or more of the statutory provisions;

(3)    the following defendants were involved in the contraventions of the statutory provisions by others:

(a)    Mr Gardner, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar;

(b)    Mr Newman, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar;

(c)    Mr Tanveer, in the contraventions of one or more of Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar;

(d)    Mr Garrison, in the contraventions of one or more of Mountain Asset, Mr Ross and Mr McKellar;

(e)    Mr McKellar, in the contraventions of one or more of Mountain Asset, Mr Ross and Mr Garrison; and

(4)    the plaintiff is entitled to recover its loss caused by the contraventions (again, such loss being the $1,000,000 investment less interest payments received, plus interest thereon and the lost opportunity to invest in another suitable business opportunity) from those alleged to have contravened the statutory provisions, and those alleged to have been involved in such contraventions.

6    As noted above, the plaintiff’s case is for the most part based upon a series of representations allegedly made to the plaintiff before it purchased the convertible notes. There are many such representations pleaded. On this application, counsel for the plaintiff focussed upon a representation that no commission was to be payable by the plaintiff in respect of the investments (no commission representation).

A.2    Background

7    As noted above, Mr Gardner, Mr Newman and Mr Tanveer were the directors of Mountain Asset. As Mr Gardner explained in his evidence, Mountain Asset was a public facing company that marketed investment opportunities. A second company, Armada Assets Pty Ltd, was wholly owned by Mr Gardner. Armada entered into contracts with the providers of investment products, including ALAMMC 4 and SDA 3. There was, according to Mr Gardner, Mr Newman and Mr Tanveer a verbal agreement between them as to the relationship between Mountain Asset and Armada.

8    On 11 June 2020 an agreement titled “Service Agreement” was entered into by Armada and SDA AUST Pty Ltd. Relevantly that agreement, which appears to have been signed by Mr Gardner on behalf of Armada, provided for Armada to promote, distribute and sell certain products described as “SDA Property products”, in return for which SDA agreed to pay Armada 15 per cent of the total amount of all investor monies raised by Armada for SDA excluding GST, with such amounts to be paid after the clients’ funds were received by SDA (cl 7). The Service Agreement also recorded an undertaking by Armada to recruit and assign sub-agents to promote, distribute and sell the SDA Property products (cl 6).

9    On 26 February 2021, Armada and Mortgage Mutual Fund Pty Ltd entered into a similar agreement. Again, Mr Gardner appears to have signed on behalf of Armada. Mr Gardner’s evidence was to the effect that Mortgage Mutual was a company (as with ALAMMC 4) controlled by Mr McWilliams and the arrangement with Mortgage Mutual simply carried forward with respect to ALAMMC 4.

10    On 1 April 2022, an agreement titled “Agency Agreement” was entered into between Mr Ross, Armada and Mountain Asset. It appears to have been signed by Mr Gardner on behalf of Armada and Mountain Asset. This agreement relevantly provides that Armada and Mountain Asset (together as principal) will pay commission to Mr Ross (as agent) in an amount of five per cent of the funds received by the “Product Provider” (cl 4.1). The “Product” was expressed broadly enough to include the products offered by ALAMMC group of companies and SDA and “Product Provider” is defined by reference to the parties providing the Products. The “Agency Agreement” has some drafting infelicities but an available construction is that Mr Ross was entitled to a commission of five per cent with respect to products that he sold.

11    On 24 March 2023, an agreement in substantially similar terms was entered into by Mountain Asset and Mr Ross. This agreement, which appears to have been signed by Mr Newman on behalf of Mountain Asset and by Mr Ross on his own behalf was expressed to supersede all prior agreements.

12    In early December 2023, Mr Gardner, Mr Newman and Mr Tanveer became aware that SDA had ceased to make interest payments to investors.

13    Mr Gardner’s evidence was that he was informed by Mr Newman and Mr Tanveer around this time that Mountain Asset was receiving a substantial volume of daily communications from investors who had invested in SDA products.

14    On 16 February 2024, as part of an exchange of emails between Mr Morcom, a director of the plaintiff, and Mr Gardner, Mr Morcom wrote:

…the courts are very transparent when it comes to Ponzi schemes and misinformation You have been advised if Mountain Assets think they can walk away and have no accountability for $1000000 million (sic) of my funds without repercussions

15    In or around September 2024, an investor informed Mr Gardner and Mr Tanveer that the Australian Securities and Investments Commission (ASIC) was investigating Mr McWilliams for misuse of investor funds. Mr Newman’s evidence is that Mr Gardner passed this information on to him.

16    On 10 September 2024, ASIC commenced a proceeding in this Court (ASIC proceeding) in which it applied for, inter alia, asset preservation orders against ALAMMC 4, a number of other companies in the ALAMMC group, and Mr McWilliams and his wife.

17    On 11 September 2024, Justice Yates made orders in the ASIC proceeding including asset preservation and disclosure orders sought by ASIC, together with a travel restraint order against Mr McWilliams. His Honour published his reasons for doing so: Australian Securities and Investments Commission v ALAMMC Developments Pty Ltd, in the matter of ALAMMC Developments Pty Ltd [2024] FCA 1063.

18    On 27 September 2024, Figure 8 Capital Pty Ltd was registered, with Mr Gardner holding two of the four issued shares and Mr Newman and Mr Tanveer each holding one share. Each of Mr Gardner, Mr Newman and Mr Tanveer was appointed as a director of Figure 8. The evidence of Mr Gardner, Mr Newman and Mr Tanveer is that Figure 8 was registered because developers were concerned about dealing with Mountain Asset following the ASIC investigation and the ASIC proceeding.

19    On 22 October 2024, Justice O’Sullivan made orders in the ASIC proceeding for the appointment of receivers to the property of Mr McWilliams and his wife. On the same day, Mountain Asset wrote to investors providing information concerning the ASIC investigation and the ASIC proceeding.

20    On 4 November 2024, Justice O’Sullivan published his reasons for making the 22 October 2024 orders: Australian Securities and Investments Commission v ALAMMC Developments Pty Ltd (No 1) [2024] FCA 1275. Those reasons for judgment described: the underlying case brought by ASIC in terms which included allegations of misrepresentations having been made to potential investors in various companies in the ALAMMC group including ALAMMC 4; and as to the use of funds invested, including to fund extensive gambling on the part of Mr McWilliams.

21    Mr Gardner, Mr Newman and Mr Tanveer gave evidence of becoming aware of the judgment of Justice O’Sullivan in November 2024. At that time, Mr Gardner, Mr Newman and Mr Tanveer were, according to their evidence, each aware that Mountain Asset was receiving a substantial volume of daily communications from investors in MMF and ALAMMC 4 products.

22    Also on 4 November 2024, Mountain Asset sent an update to investors which addressed the action taken by ASIC and the judgment of Justice O’Sullivan.

23    On 20 November 2024, The Agent C Pty Ltd was registered, with Mr Gardner as its sole member and director.

24    On 22 November 2024, Mr Gardner opened an account in the name of Agent C with National Australia Bank (NAB) (#7758).

25    Between 22 and 29 November 2024, the balance in Armada’s Westpac bank account #3406 was reduced from approximately $1,779,000 to approximately $5,000. During that period Mr Gardner caused amounts totalling an amount of close to $1,685,000 to be transferred from Armada to Agent C. Mr Gardner’s evidence is that he believed at that time that Armada had no creditors and thus he was entitled to all of its funds as its sole member.

26    On 29 November 2024, Armada and Mountain Asset were placed into liquidation, upon the resolution of their respective directors that they considered those companies to be insolvent. According to Mr Gardner this occurred following a discussion he had with Mr Newman and Mr Tanveer about the effect of the ASIC proceeding. Each of Mr Gardner, Mr Newman and Mr Tanveer gave similar evidence that they were concerned as to the effect of that proceeding on the reputation of those companies.

27    The evidence suggests that Figure 8 came to be used as the public facing company to market investment opportunities, with Agency C performing the role formerly performed by Armada. Thus, an inference appears to be well available that the businesses formerly conducted by Mountain Asset and Armada were reincarnated, with Figure 8 replacing Mountain Asset and Agency C replacing Armada.

28    On 3 December 2024, the solicitors for the plaintiff issued letters of demand to Mountain Asset and to each of Mr Ross, Mr Gardner, Mr Newman and Mr Tanveer in respect of the investments made by the plaintiff and which, in broad terms, made allegations of misleading and deceptive conduct and involvement in such conduct.

29    On 13 May 2025, the plaintiff commenced this proceeding, and obtained orders: abridging the time for service of the originating process and other documents; for such service to be effected by email; and for the originating process to be returnable the following day.

30    On 14 May 2025, as noted above, the Court made the freezing order against, relevantly for present purposes, each of Mr Ross, Mr Lenton, Mr Gardner, Mr Newman and Mr Tanveer. The freezing order relevantly provides:

(7)    For the purposes of this order,

(1) your assets include:

(i)    all your assets, whether or not they are in your name and whether they are solely or co-owned;

(ii)    any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions)

(8)    Subject to paragraph 9, you must:

(a)    … to the best of your ability inform the applicant in writing of all your assets in Australia, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;

(b)    within 7 working days after being served with this order, swear and serve on the applicant an affidavit setting out the above information.

31    On 26 and 27 May 2025, the plaintiff notified various financial institutions of the freezing order.

32    On 13 and 20 June 2025, I heard an application (variation application) by the second to sixth defendants for a variation of the terms of the freezing order, principally by the excision of particular bank accounts from the operation of the freezing order, because of difficulties that the second to sixth defendants had experienced in obtaining access to such accounts by dint of the operation of the freezing order. On 25 June 2025, I dismissed the variation application and published my reasons for doing so: Morcom Holdings Pty Ltd v Mountain Asset Partners Pty Ltd (in liquidation) [2025] FCA 692 (Morcom (No 1)).

B.    RELEVANT PRINCIPLES

33    The principles to be considered on an application for the making (or continuance or discharge) of a freezing order are well-established and were not in issue on this application.

34    In summary, relevantly for present purposes, the Court must consider whether: (1) the plaintiff has established a good or arguable case against the relevant defendant (see r 7.35(1)(b)(i) of the Federal Court Rules 2011 (Cth)); (2) there is a risk that a prospective judgment against a relevant defendant will be unsatisfied in whole or part because the assets of that defendant will be disposed of, dealt with or diminished in value (see r 7.35(4)(b) of the Rules); and (3) as a matter of discretion, including consideration of the balance of convenience, the freezing order should remain in place. Where a freezing order is made in a proceeding in which substantive relief is sought against a defendant, the purpose of such an order is to prevent the defendant from disposing of their assets so as to frustrate the process of the Court by depriving the plaintiff of the fruits of any judgment obtained: Deputy Commissioner of Taxation v Huang [2021] HCA 43; (2021) 273 CLR 429 at 443 [17] (Gageler, Keane, Gordon, Edelman and Gleeson JJ), citing Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 at 625 (Deane J).

35    As Justice Cheeseman explained in Nicols as trustee of the bankrupt estate of Manietta v Manietta, in the matter of Manietta [2022] FCA 39 at [49], the plaintiff bears the onus of establishing that there is a good arguable case on legal and factual matters or a sufficiently realistic prospect of success on the proceedings: Basi v Namitha Nakul Pty Ltd [2019] FCA 743 at [8] (Wigney J), where the criterion of good arguable case is a lesser standard than the prima facie cause of action requirement favoured by the majority in Patterson v BTR Engineering (Aust) (1989) 18 NSWLR 319 (Gleeson CJ and Rogers AJA). As her Honour explained, a good arguable case is one which is “more than barely capable of serious argument, and yet not necessarily one the judge considers would have more than a fifty percent change of success”: Curtis v NID Pty Limited [2010] FCA 1072 at [6] (Edmonds J) citing Ninemia Maritime Corp v Trave Schiffahrtsgesselschaft mbH & Co KG (The Niedersachsen) [1983] Com LR 234 at 235 (Mustill J).

36    The plaintiff also bears the onus of establishing that unless the freezing order is continued, there is a reasonable apprehension that the assets of a relevant defendant will be dissipated so as to frustrate the Court’s process: see Cardile v LED Builders Pty Limited [1999] HCA 18; (1999) 198 CLR 380 at 393 to 394 [26], 399 to 401 ([41] to [42]) (Gaudron, McHugh, Gummow and Callinan JJ). As Justice Cheeseman explained in Hurst, in the matter of Lloyds Curry Shop Pty Ltd (in liq) v Prasad [2021] FCA 1562 at [56], it is not essential for the plaintiff to demonstrate a positive intention on the part of the relevant defendants to frustrate a judgment (see National Australia Bank Limited v Bond Brewing Holdings Limited [1990] HCA 10; (1990) 169 CLR 271 at 277 (Mason CJ, Brennan and Deane JJ); Cardile at 394 [26]) or that the risk of dissipation is more probable than not (see Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; (2010) 273 ALR 194 at 196 to 197 ([8] to [10]) (Kenny J); Deputy Commissioner of Taxation v Chemical Trustee Ltd (No 4) [2012] FCA 1064; (2012) 90 ATR 711 at 717 [23] (Perram J); Basi at [9]).

37    Rather, it is sufficient for the plaintiff to establish that, in the absence of a freezing order, there is a danger or real risk that a relevant defendant’s assets will be dealt with in a way which would frustrate the process of the Court, such that a freezing order is warranted. The risk of dissipation must, however, be demonstrated by evidence: see e.g., Fine China Capital Investment Limited v Qi (No 2) [2023] FCA 1059 at [22(b)] (Moshinsky J). Direct evidence is not necessary and the risk of dissipation of assets to avoid the consequences of a judgment may be inferred. The evidence supporting such an inference may include the evidence relied upon to establish a sufficiently arguable case for relief, particularly when that case includes “serious dishonesty involving the diversion of money from its proper channel”: see Patterson at 325F-G (Gleeson CJ).

38    Evidence of a defendant’s prior conduct is relevant to an assessment of whether there is a risk that that defendant may act in a manner that will frustrate the process of the Court, particularly if that defendant has previously acted in a way that demonstrates a lack of probity.

39    Where, as in the present case, a freezing order is accompanied by an ancillary order for disclosure of assets, full and frank compliance with the asset disclosure order is a matter of considerable importance. In Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2005] FCA 1587; (2005) 228 ALR 174, Justice Moore explained at 181 to 182 [20]:

[20]    Ancillary orders can be made to make the Mareva order more efficacious. One such order involves directing the party bound by the Mareva order to file an affidavit disclosing assets on which the Mareva order operates: see generally the judgment of Conti J in Kuan Han Pty Ltd v Oceanview Group Holdings Pty Ltd [2003] FCA 1063 at [45] and following. The reasons why such an affidavit can render the Mareva order more efficacious are helpfully described by Peter Biscoe QC in Mareva and Anton Pillar Orders: Freezing and Search Orders, LexisNexis Butterworths, Sydney, 2005, at [3.3]:

There are several reasons why an assets disclosure order is important to the efficacy the other freezing order. First, disclosure of the assets upon which the freezing order operates makes it more difficult for a respondent surreptitiously to disobey the freezing order. Secondly, disclosure identifies third parties such as banks who have custody of the assets and enables notice of the order to be given to them so as to bind them to the order, for third parties will be guilty of contempt of court if they knowingly assist a respondent to breach the order. Thirdly, disclosure may enable the freezing order to be framed by reference to specific assets rather than as a maximum some order, thereby minimising oppression to the respondent, and unnecessary exposure of the applicant to risk under its undertaking as to damages. Fourthly, disclosure assists an applicant to make a rational decision whether to continue its undertaking as to damages.

    It was noted in Hospital Products Ltd v Ballabil Holdings Pty Ltd [1984] 2 NSWLR 662 at 669:

… Mareva injunctions are granted to preclude the disposal of assets designed to render a defendant judgment proof. An affidavit of discovery of assets may be ordered in every case where the information in such affidavit will further the court’s purpose in defeating such a stratagem … The object must remain throughout to prevent disposal of assets in furtherance of the illegitimate aim of making oneself judgment proof and of stultifying the order of the court. Whatever needs to be done to achieve that objective, the court has power to order as part of its inherent jurisdiction.

    …

(bold emphasis added)

40    The passage cited with approval by his Honour from the learned author of Mareva and Anton Pillar Orders: Freezing and Search Orders remains as pertinent today as it was when first published some 20 years ago. It is to be found in Freezing and Search Orders (3rd Ed.), Lexis Nexis Australia, 2023 at [3.10].

41    In Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 273 CLR 235 at 249 [22], Justice Gordon explained:

A freezing order, and an asset disclosure order, have the same fundamental purpose: “to prevent the abuse or frustration of [a court’s] process in relation to matters coming within its jurisdiction”. Freezing orders may be made, and may continue to operate, after final judgment to protect the efficacy of the execution. And for freezing orders to be effective there needs to be timely disclosure of assets. The utility in both orders lies in ensuring that the court’s processes for enforcement of a judgment are not frustrated by assets being spirited away between the time of commencement of the proceedings and eventual enforcement.

(footnotes omitted; emphasis added)

42    A failure by a defendant properly to disclose their assets when required to do so by an asset disclosure order bears upon the assessment of the risk that the defendant will act so as to frustrate the process of the Court: Griffin Underwriting Ltd v Varouxakis [2021] EWHC 226 (Comm) at [39] (Calver J).

43    Finally, it is well-established that the imposition of a freezing order – which usually constitutes a serious interference with the rights of a person to deal with their assets as they wish – is a drastic step and not a step to be taken lightly.

C.    MR ROSS

44    Against that background, I turn to consider the position of each of the second to sixth defendants, commencing with Mr Ross.

C.1    Good arguable case

45    Mr Ross accepted, for the purposes of this application, that there is a sufficiently arguable case against him. The contest between the plaintiff and Mr Ross on this application is as to whether there exists a sufficient risk that absent a freezing order, he will act so as to frustrate the process of the Court; and if such a sufficient risk exists, then how the Court’s discretion should be exercised.

C.2    Risk of frustration of the process of the Court

46    On 27 May 2025, Mr Ross made an affidavit in response to paragraph 8 of the freezing order (Mr Ross’s disclosure affidavit). That affidavit disclosed the following assets:

(1)    cash in Australia and New Zealand Banking Group Limited (ANZ) accounts #9528 and #4338;

(2)    jointly owned real property at Burraneer (Burraneer property), with a loan balance of $1,600,000 subject to a mortgage; and

(3)    a Porsche motor vehicle.

47    As the plaintiff submitted, Mr Ross’s disclosure affidavit did not identify the existence of:

(1)    two mortgage accounts (being NAB accounts #6333 and #7700) which had as at 17 June 2025 a combined negative balance in the order of $2,910,000; and

(2)    two offset bank accounts (being NAB accounts #6102 and #3034) held jointly with his wife and which had as at 17 June 2025 a combined balance in the order of $1,420,000.

48    The existence of the mortgage and offset accounts was not identified until Mr Ross made and served a second affidavit on 17 June 2025 in connection with the variation application.

49    I acknowledge that the economic effect, for Mr Ross, of the mortgage and offset accounts was taken into account in Mr Ross’s disclosure affidavit in that he stated, as the amount owing under a loan secured by mortgage over the Burraneer property, was an amount of $1,600,000 (which amount approximates $2,910,000 less $1,420,000). Thus, the net equity position was disclosed, as Mr Ross explained in his fourth affidavit, made on 16 July 2025 in response to the plaintiff’s suggestion that he had not disclosed the offset accounts. Mr Ross has apologised for the lack of clarity.

50    However, as noted above, it is of critical importance that disclosure affidavits are accurate and complete. Mr Ross’s disclosure affidavit was not and in particular left the plaintiff unaware until the disclosure was subsequently made that Mr Ross held jointly owned accounts containing cash in the order of $1,420,000.

51    Nevertheless, it does not necessarily follow from such non-disclosure that Mr Ross presents a risk to the proper functions of the Court’s process. I am satisfied that it does not, in circumstances where he has explained the position and offered an apology.

52    Mr Ross’s fourth affidavit, which was prepared after he changed his legal representation, also disclosed the existence of the Ross Family Trust, a discretionary trust of which Ross Investments Pty Ltd is the trustee. Mr Ross and his wife are the directors and members of Ross Investments. Mr Ross apologised for not disclosing his shareholding in Ross Investments in his disclosure affidavit.

53    The beneficiaries of the Ross Family Trust include Mr Ross, his wife, their children and a company of which Mr Ross’s wife is the sole director and member.

54    The assets held on trust include shares in Blooms the Chemist Management Services Ltd (with an estimated value of $1,138,704) and units in a trust titled “Vegas Unit Trust” (the trust property in which is a piece of commercial property with an estimated value of $1,600,000). The Ross Family Trust has liabilities of an equivalent amount in loans due to Mr Ross and his wife. (The right to repayment of such loans is an asset of Mr Ross and he has apologised for not identifying these assets in his disclosure affidavit.)

55    Mr Ross also disclosed in his fourth affidavit that his wife is the registered pharmacist for five pharmacy businesses in which she is a part owner through intermediate companies including the company which is a beneficiary of the Ross Family Trust.

56    The plaintiff submits, with respect to the Ross Family Trust, that Mr Ross failed in his disclosure affidavit to identify that he has:

(1)    a joint interest in Blooms worth in excess of $1,000,000; and

(2)    joint beneficial ownership of a commercial property worth approximately $1,600,000.

57    I do not accept that submission. As the trust is discretionary, Mr Ross cannot be considered to have an interest in the underlying trust property: R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59 at 79 (Owen J). Further, it has not been established that Mr Ross (who is one of two directors of the trustee, Ross Investments) has the power to dispose of the asset as if it were his own for the purposes of paragraph 7 of the freezing order.

58    The plaintiff also submitted that Mr Ross’s evidence contains various inconsistencies, including that in his disclosure affidavit he deposed that his wife and children were dependent upon him for financial support, but he subsequently disclosed his wife’s interest in five pharmacy businesses. It may be accepted that there are apparent inconsistencies in his evidence. These are unable to be resolved on the present application but appear to fall well short of establishing that Mr Ross may act so as to frustrate the process of the Court by placing his assets out of the reach of the plaintiff.

59    Mr Ross also indicated in his disclosure affidavit that he had not sold, transferred, or otherwise disposed of any of the assets listed in that affidavit, nor does he have any intention to do so; in the last six months, he had not sold, transferred, or otherwise disposed of any major asset outside the ordinary course of business; he had not in the previous six months, relocated any assets offshore, nor does he have any intention to do so; he has no intention of relocating his residence, either within Australia or internationally; and he is the primary financial provider for his three children, all of whom are enrolled in schools within the local area. In this regard, his principal place of residence and his place of employment are also located within the same locality and as such relocation would be unreasonable for him and his family and is not a viable or desired option.

60    Taking all of the above into account, I am not satisfied that there exists the requisite risk that Mr Ross will act so as to frustrate the process of the Court.

C.3    Exercise of discretion

61    For the reasons set out above, the freezing order should be discharged in so far as it operates against Mr Ross.

D.    MR LENTON

62    I turn now to the position of Mr Lenton.

D.1    Good arguable case

63    The case against Mr Lenton involves two strands, direct liability and accessorial liability.

64    Common to each strand is the plaintiff’s contention that Mr Lenton was present at a meeting between Mr Ross and Mr Morcom on 10 May 2022 during which Mr Ross made a number of oral representations (10 May 2022 Representations) to Mr Morcom, including the no commission representation, which is expressed in this part of the statement of claim as a representation that: “there were no brokerage fees or commissions payable by an investor in the ALAMMC 4 Project and to the extent there were any costs in respect of fundraising for the ALAMMC 4 Project, those costs were contained in the ALAMMC 4 IM”. The ALAMMC 4 IM is an information memorandum concerning the ALAMMC 4 project, which Mr Morcom contends was provided to him by Mr Ross on 6 May 2022.

65    Mr Lenton, in his defence:

(1)    admits that Mr Ross made this representation in the presence of Mr Lenton “to the extent that it is true that no brokerage fees or commissions were payable by an investor in the ALAMMC 4 Project, and that all costs to an investor were contained in the ALAMMC 4 IM”; and

(2)    denies that by not correcting or expressing disagreement with the 10 May 2022 Representations, Mr Lenton engaged in conduct in contravention of the statutory provisions.

66    The plaintiff contends that Mr Lenton is directly liable to it because, by not correcting or expressing disagreement with the 10 May 2022 Representations, Mr Lenton engaged in conduct that was, in broad terms: (1) misleading or deceptive, and thus in contravention of ss 18, and 29 of the ACL, ss 12DA, 12DB, 12CA and 12CB of the ASIC Act, and ss 1041E, 1041F and 1041H of the Corporations Act; and (2) unconscionable and thus, in contravention of ss 20 and 21 of the ACL.

67    Essential to this aspect of the plaintiff’s case is proof that: (1) the no commission representation was false; and (2) Mr Lenton knew of such falsity.

68    As to (1), the plaintiff’s evidence as to the falsity of the no commission representation includes the agreements described at [8] to [11] above, including the agency agreement to which Mr Ross was a party. There is a sufficiently arguable case that the no commission representation was false.

69    As to (2), the plaintiff’s statement of claim appears to contain no material facts in support of the allegation that Mr Lenton had knowledge of the falsity of the no commission representation (or any other representation): cf r 16.43 of the Rules. There is a particular to paragraph 24 of the statement of claim – expressed in bald terms – that Mr Lenton “knew, ought to have known, or was recklessly indifferent to the falsity, untruthfulness or misleading or deceptive nature of the 10 May 2022 Representations”, which takes the matter no further.

70    However, this aspect of the application does not turn on the adequacy of pleadings, but rather upon the evidence and the inferences available from that evidence. Mr Lenton was a client manager. In circumstances where Mr Ross, another client manager, was party to an agency agreement with Mountain Asset pursuant to which he received commissions referable to products sold, an inference may be available that Mr Lenton was party to a similar agreement and thus had the requisite knowledge. As noted at [35] above, a good arguable case has a low threshold, and is one that is more than barely capable of serious argument, but not necessarily one with a better than even chance of success. This strand of the plaintiff’s case meets this description.

71    Thus, I am satisfied that the direct liability strand of the case against Mr Lenton is sufficiently arguable.

72    The other strand of the plaintiff’s case against Mr Lenton is its contention that Mr Lenton is accessorily liable to it because he was involved in various contraventions by Mr Ross in making the 10 May 2022 Representations.

73    The plaintiff contends that Mr Lenton was involved in contraventions of the statutory provisions by Mr Ross by dint the operation of s 2 of the ACL, s 5 of the ASIC Act and s 79 of the Corporations Act. The effect of each of these provisions is that:

A person is involved in a contravention if, and only if, the person:

(a)     has aided, abetted, counselled or procured the contravention; or

(b)     has induced, whether by threats or promises or otherwise, the contravention; or

(c)     has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d)     has conspired with others to effect the contravention.

74    The principles applicable to the operation of each of these provisions are well-established. A party alleging that a second party was involved in a contravention by a third party must prove that the second party intentionally participated in the third party’s wrongful conduct and to prove the requisite intent it must be shown that the second party had knowledge of the essential facts constituting the contravention: see e.g. Yorke v Lucas (1985) CLR 661 at 669 to 670 (Mason ACJ, Wilson, Deane and Dawson JJ); Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2023] FCAFC 54; (2023) 297 FCR 180 at 271 [300] (Wigney and O’Bryan JJ).

75    Thus, to succeed on this strand of its case against Mr Lenton the plaintiff will need to establish that Mr Lenton had knowledge of each of the essential elements of the alleged contraventions by Mr Ross which elements include, at least, the representations made (knowledge of which Mr Lenton has admitted) and the falsity of the representations (knowledge of which Mr Lenton has denied).

76    For the reasons set out at [70] above, I am satisfied that the evidence establishes that it is sufficiently arguable that Mr Lenton was aware of the falsity of the no commission representation. It follows that I am satisfied that the accessorial liability strand of the plaintiff’s case against Mr Lenton is sufficiently arguable.

77    Thus, both strands of the case against Mr Lenton are sufficiently arguable.

D.2    Risk of frustration of the process of the Court

78    I turn now to consider whether the plaintiff has established the requisite risk that Mr Lenton will act so as to frustrate the process of the Court.

79    On 28 May 2025, Mr Lenton made an affidavit in response to paragraph 8 of the freezing order (Mr Lenton’s disclosure affidavit).

80    On 18 June 2025, and in the context of the variation application, Mr Lenton made a further affidavit in which he explained that he had been unable, since about 26 May 2025, to gain access to or transact from an account held by NBAA Pty Ltd, a company of which he is the sole director and which is the trustee of the NBAA Family Trust. The company search for NBAA annexed to this affidavit records that Mr Lenton is also the sole member of NBAA.

81    The plaintiff relies upon the absence of evidence of Mr Lenton’s shareholding in NBAA in Mr Lenton’s disclosure affidavit as evidence of a failure to provide proper disclosure as required by paragraph 8 of the freezing order.

82    Undoubtedly, and for the reasons already articulated, Mr Lenton should have specifically and clearly disclosed his ownership of the NBAA shares and the existence of the NBAA Family Trust (in circumstances where he is the sole member and director of the trustee) as part of his disclosure affidavit. However, I do not consider his failure to do so to be a matter of significant moment when considering his probity, in circumstances where his disclosure affidavit attached a bank statement for an account in the name of NBAA, which account was referred to in the body of that affidavit as the “Family Trust Account”. That bank statement, with a closing balance of $4.90, was provided by Mr Lenton as part of his disclosure of cash assets that Mr Lenton considered to be his.

83    The plaintiff complains that Mr Lenton did not disclose the terms of the NBAA Family Trust in his disclosure affidavit. I do not regard Mr Lenton to have been under an obligation to do so.

84    The plaintiff also complains that Mr Lenton did not disclose that he is a director and secretary of NBAA. However, such disclosure is not required, as the holding of such positions is not an asset of Mr Lenton.

85    I pause to note that the plaintiff submitted that similar non-disclosure of officer positions by Mr Gardner, Mr Newman and Mr Tanveer are relevant in considering the risk that they will act so as to frustrate the process of the Court. Rather than address such submissions individually, it is sufficient to note in advance that I do not accept those submissions for the reasons given in the previous paragraph.

86    For the above reasons, I am not satisfied that there is a real risk that Mr Lenton will act so as to frustrate the process of the Court.

D.3    Exercise of discretion

87    As I am not satisfied that there is a real risk that Mr Lenton will act so as to frustrate the process of the Court, the freezing order, to the extent that it applies to Mr Lenton, should be discharged.

E.    MR GARDNER

88    I turn now to the freezing order as it operates against the directors of Mountain Asset, Messrs Gardner, Newman and Tanveer. There is, inevitably, an overlap in the analyses which follow.

89    I commence with Mr Gardner.

E.1    Good arguable case

90    The plaintiff’s case against Mr Gardner (as well as against Mr Newman and Mr Tanveer) does not involve any allegations that he contravened any of the statutory provisions. Rather, it is limited to allegations that he is accessorily liable to the plaintiff because of his involvement in contraventions of the statutory provisions by Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams (with respect to ALAMMC 4); and Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar (with respect to SDA 3).

91    The matters identified at [73] and [74] above concerning alleged accessorial liability are apposite.

92    The pleading of the alleged involvement of Mr Gardner is set out at paragraphs 41 to 43 of the statement of claim. It is not apparent that those paragraphs allege that Mr Gardner had knowledge of the making of the representations (including the no commission representation).

93    Again, the presence or otherwise of a good arguable case is not simply a pleading issue and falls to be determined primarily by reference to the evidence and the inferences available from the evidence. Thus, it is necessary to consider the evidence available showing that Mr Gardner was aware of the essential facts constituting the alleged contraventions.

94    As noted above, the representation the focus of the application is the no commission representation. Thus, it is necessary to consider the evidence concerning Mr Gardner’s knowledge of: (1) the making of the no commission representation; and (2) the falsity of that representation.

95    As to (1):

(1)    one of the pleaded instances of the no commission representation being made concerns an email dated 6 May 2022 sent by Mr Ross to Mr Morcom, which attached the ALAMMC 4 IM. There is an arguable case that the provision of the ALAMMC 4 IM constituted a representation in the form of the no commission representation;

(2)    Mr Ross has pleaded in his defence that the entirety of the substantive content of the 6 May 2022 email, including the content of the ALAMMC 4 IM, were provided to him by Mr Gardner, Mr Newman and Mr Tanveer. It is a reasonable assumption that Mr Ross will give evidence to that effect. I note that Mr Ross has made a similar allegation with respect to other written representations, including the provision of an information memorandum for SDA 3 to Mr Morcom on 30 May 2022; and

(3)    there is other evidence suggesting knowledge by Mr Gardner of the making of the no commission representation, including evidence of Mr Gardner, in May 2022, providing comments to SDA 3 upon a draft of an information memorandum for a similar project.

96    I am satisfied on the basis of these matters that there is a sufficiently arguable case that Mr Gardner had the requisite knowledge of the making of the no commission representation.

97    As to (2), as noted at [68] above, there is a sufficiently arguable case that the no commission representation was false.

98    Thus, there is a sufficiently arguable case that Mr Gardner had knowledge of the making of the no commission representation and of its falsity.

E.2    Risk of frustration of the process of the Court

99    The plaintiff relies upon the matters described at [12] to [27] above and in particular the steps apparently taken by Mr Gardner (together with Mr Newman and Mr Tanveer), in the face of potential claims, to remove approximately $1,685,000 in cash from Armada, to place Mountain Asset and Armada into liquidation and to continue their business through different companies (Figure 8 and Agent C) (the late 2024 conduct). This conduct suggests a preparedness on their part to take steps to insulate assets from claims made against them.

100    In addition to the above, the plaintiff relies upon Mr Gardner’s conduct with respect to providing disclosure of his assets in accordance with paragraph 8 of the freezing order.

101    On 27 May 2025, Mr Gardner made an affidavit in response to paragraph 8 of the freezing order (Mr Gardner’s disclosure affidavit). In that affidavit, he disclosed the following assets:

(1)    funds held in Commonwealth Bank of Australia (CBA) accounts #3799 and #5166 and ANZ account #6372;

(2)    investments in crypto currency;

(3)    properties at Gymea Bay in Sydney, Kallangur in Queensland, Banksia Grove and Webberton in Western Australia, all held solely in his name; and

(4)    a Harley Davidson motorcycle.

102    In his disclosure affidavit, Mr Gardner stated that he had not sold, transferred or otherwise disposed of any of the assets referred to in that affidavit and has no intention of doing so. He also stated that in the previous six months he had not sold, transferred or otherwise disposed of any major asset outside the ordinary course of business; and had not relocated any assets offshore and has no intention of doing so. He stated that he has no intention of relocating his residence either within Australia or internationally particularly in circumstances where his children, principal place of residence, and his company (Agent C) are within the same locality. He also stated that he is the financial provider for his two children.

103    On 17 June 2025, Mr Gardner made a second affidavit. In that affidavit, which was made in the context of the variation application, Mr Gardner disclosed that:

(1)    he holds four of the 12 issued shares in Big Bull Properties Pty Ltd (BBP), that he is a director of BBP, and that BBP: (a) was established as a holding company for a property at Caringbah; (b) holds NAB account #3643;

(2)    he is the sole member and director of Geo Char Enterprises Pty Ltd, which company holds ANZ accounts #2274 and #2135;

(3)    he is the sole member and director of Agent C, which company holds NAB accounts #7758, #6866, #3597 and #0515;

(4)    he holds Bank Australia offset accounts #3709 and #9819; and

(5)    he holds ANZ offset account #8783.

104    Mr Gardner’s failure to provide disclosure of his shareholdings in BBP, Geo Char and Agent C and of his offset accounts in his disclosure affidavit is a matter to be taken most seriously. As noted at [39] to [42], disclosure orders serve important functions and affidavits made in response thereto should reflect this; and a failure to properly disclose assets is relevant to the assessment of the risk that a defendant will act so as to frustrate the process of the Court. It is noteworthy that Mr Gardner has not provided any explanation for the failure to disclose these assets in his disclosure affidavit, despite making several further affidavits. These observations apply equally to Mr Newman and Mr Tanveer for the reasons discussed below.

105    Counsel for Mr Gardner placed reliance upon the fact that Mr Gardner disclosed his interests in BBL, Geo Char and Agent C of his own volition and not in response to any suggestion by the plaintiff that he had assets other than those identified in his disclosure affidavit.

106    In my view this is a matter of little moment in circumstances where:

(1)    the onus is on the deponent of the disclosure affidavit to provide full and frank disclosure in that affidavit;

(2)    it will usually be the case that a plaintiff will not know what has not been disclosed and thus cannot make a complaint of non-disclosure;

(3)    as noted above, no explanation has been provided for the omission of these assets from Mr Gardner’s disclosure affidavit, despite Mr Gardner filing a number of subsequent affidavits; and

(4)    an inference is available that the disclosure occurred only because of the difficulties that Mr Gardner was having in obtaining access to the accounts held by the entities in respect of which he did not disclose his shareholdings.

107    I pause to note that the same submission – that the further information was proffered voluntarily – was made with respect to the failure of Mr Newman and Mr Tanveer to include various shareholdings in their disclosure affidavits (as discussed below). For the reasons set out above with respect to Mr Gardner, which apply also to Mr Newman and Mr Tanveer, I also do not accept that submission as it applies to each of Mr Newman and Mr Tanveer.

108    The plaintiff also relies upon what it contends are various inconsistencies between statements made by Mr Gardner in his four affidavits. I have considered these contended inconsistencies but I am not satisfied that they are probative of a risk that Mr Gardner will dissipate his assets.

109    Taking all of the above matters into account and in particular:

(1)    the late 2024 conduct discussed at [99] above; and

(2)    Mr Gardner’s failure to provide proper disclosure in his disclosure affidavit, and his absence of explanation (and apology) for having done so,

I am satisfied that there is a real risk that Mr Gardner may act in a manner that will frustrate the process of the Court.

E.3    Exercise of discretion

110    In circumstances where the plaintiff has established that it has a sufficiently arguable case against Mr Gardner and that there is a real risk that he will act in a manner that will frustrate the process of the Court, and the plaintiff has proffered the usual undertaking as to damages, there should be a restraint on Mr Gardner’s ability to deal with his assets.

111    In an affidavit made on 18 July 2025, being Mr Gardner’s fifth affidavit, Mr Gardner offered an undertaking not to deal with any real property of which he is a registered proprietor by way of disposal or encumbrance without giving the plaintiff seven days’ written notice.

112    Mr Gardner provided the following estimates of the value of the net equity in such properties:

113    I note that these estimated values are based upon gross values for the properties derived from the purchase prices paid for those properties as at June 2018, February 2022, June 2022 and March 2024 respectively. Thus, these estimates might be considered conservative.

114    Given that the total of these estimated values exceeds the amount identified in the freezing order as referable to Mr Gardner ($1,985,225.29), the appropriate exercise of the discretion is to accept the undertaking proffered by Mr Gardner and to discharge the freezing order to the extent that it operates upon him.

F.    MR NEWMAN

115    I turn now to the position of Mr Newman.

F.1    Good arguable case

116    As noted above, the plaintiff’s case against Mr Newman also does not involve any allegations that he contravened any of the relevant statutory provisions. Again, it is limited to allegations that he is accessorily liable because of his involvement in contraventions of the statutory provisions by Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams (with respect to ALAMMC 4); and Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar (with respect to SDA 3).

117    The case as pleaded against Mr Newman is relevantly identical to that pleaded against Mr Gardner.

118    For the reasons set out at [91] to [94], [95(1) and (2)] and [96] to [97] above, I am satisfied that the plaintiff has a sufficiently arguable case against Mr Newman.

F.2    Risk of frustration of the process of the Court

119    Again, the plaintiff relies upon the matters described at [12] to [27] above and in particular the late 2024 conduct, in support of its contention that there is a sufficient risk of frustration of the process of the Court.

120    In addition, the plaintiff relies upon the following matters.

121    On 14 May 2025, the day on which the freezing order was made:

(1)    Mr Newman drew down on Westpac accounts:

(a)    #2038 in the sum of $150,000;

(b)    #5273 in the sum of $100,000;

(2)    the sum of $250,000 was deposited into Westpac account #1941; and

(3)    the sum of $200,000 was withdrawn from #1941 and deposited into a Westpac account held by The Careers Guy Pty Ltd (TCG), a company of which he is the sole member. A restriction on the amount able to be transferred prevented the transfer of the full $250,000.

122    Mr Newman’s explanation for these transfers is, in summary, that:

(1)    he had borrowed $250,000 from TCG early in the financial year ended 30 June 2025 in accordance with accounting advice he had received (and which advice he had implemented in the previous financial year);

(2)    he intended to return the $250,000 to TCG before 30 June 2025, again in accordance with his accounting advice;

(3)    on 14 May 2025, being concerned about potential restrictions on his ability to return the $250,000 to TCG before the end of the financial year to complete the intended strategy for the 2025 financial year, Mr Newman acted to make that transfer; and

(4)    the $200,000.00 paid to TCG remains in TCG’s bank account. The remaining $50,000 remains in Westpac account #1941.

123    I am not persuaded that these events reflect poorly upon Mr Newman in circumstances where it is not clear that the attempted service upon Mr Newman of the originating process and other documents on 13 May 2025 was successful.

124    On 27 May 2025, Mr Newman made an affidavit in response to paragraph 8 of the freezing order (Mr Newman’s disclosure affidavit). In that affidavit, Mr Newman disclosed the following assets:

(1)    Westpac account #1941;

(2)    a joint interest in real property at Caringbah (Caringbah property); and

(3)    a collection of vintage surfboards.

125    In his disclosure affidavit, Mr Newman also gave evidence that: he had not sold, transferred or otherwise disposed of any of the assets referred to in that affidavit and has no intention to do so; in the previous six months he had not sold, transferred or otherwise disposed of any major asset outside the ordinary course of business; or relocated any assets offshore; and that he had no intention of relocating his residence whether in Australia or internationally. He also gave evidence of his principal place of residence and of the residence of “my company”, Figure 8, being locally based, and that relocation was not a viable or desired option.

126    On 13 June 2025, ahead of the variation application, the solicitors for, inter alia, Mr Newman circulated proposed short minutes of order to which was attached a list of bank accounts for their clients, including Westpac accounts #5273 and #2038 in the joint names of Mr Newman and his wife and which had not been included in Mr Newman’s disclosure affidavit.

127    On 19 June 2025, in the context of the variation application, Mr Newman made a second affidavit, in which he disclosed that:

(1)    he is the sole member of TCG, which company holds Westpac accounts #2103 and #0255;

(2)    he holds four of the 12 issued shares in BBP, which company holds NAB account #3643; and

(3)    he is a director of Figure 8, which company holds NAB account #0732. I note that the affidavit did not disclose Mr Newman was a member of Figure 8 (although in his disclosure affidavit Mr Newman did describe Figure 8 as “my company”).

128    Mr Newman’s second affidavit did not address the Westpac accounts #5273 and #2038 held by Mr Newman and his wife that were included in the proposed short minutes circulated on 13 June 2025. However, in his fifth affidavit, Mr Newman explained that he did not include these accounts in his disclosure affidavit because he considered those accounts to be liabilities rather than assets.

129    On 19 June 2025, and again in the context of the variation application, Mr Newman made a third affidavit, which included an explanation of Figure 8 and exhibited the results of a search from the records of ASIC.

130    The plaintiff relies upon the failure of Mr Newman to provide full and frank disclosure in his disclosure affidavit. The comments that I have made at [39] to [42] and [104] above are again apposite.

131    The plaintiff also relies upon various contended inconsistencies in the evidence of Mr Newman. I have considered these contentions and whilst there are some apparent inconsistencies I do not regard them as a sufficient basis from which to draw the conclusion that there is a real risk that Mr Newman may act in a way which may frustrate the process of the Court.

132    Taking into account the matters set out above, and in particular:

(1)    the late 2024 conduct; and

(2)    Mr Newman’s failure to provide proper disclosure, including the absence of an explanation (and apology) for having done so,

I am satisfied that there is a real risk that Mr Newman may act in a manner that will frustrate the process of the Court.

F.3    Exercise of discretion

133    As I am satisfied that the plaintiff has established that it has a sufficiently arguable case against Mr Newman and the existence of the requisite risk that he may act in a manner that will frustrate the process of the Court, I turn now to the exercise of the discretion.

134    Mr Newman has offered an undertaking not to deal with any real property of which he is the registered proprietor by way of disposal or encumbrance without giving the plaintiff seven days’ written notice. The only real property which he has identified as property in which he has an interest is the Caringbah property. Mr Newman’s evidence is that the property was purchased in November 2018 for $1,200,000 and the outstanding balance owed to Westpac is in the order of $400,000, such that the net equity is in the order of $800,000. In view of the date of purchase, the estimated value may be conservative. As noted at [124] above, Mr Newman’s interest in the Caringbah property is a joint interest.

135    Thus, it does not appear that the undertaking is supported by property of sufficient worth for it to justify the removal or variation of the freezing order as it applies to Mr Newman.

136    I have also taken into account the difficulties that have arisen for Mr Newman from the operation of the freezing order. However, I do not find these persuasive for the reasons set out in Morcom (No 1). I have also taken into account the effect, generally, of freezing orders. Nevertheless, these matters do not outweigh the desirability that the freezing order continue, for the reasons set out above.

137    I have also taken into account the plaintiff’s undertaking as to damages.

138    It follows that the freezing order should continue as against Mr Newman.

G.    MR TANVEER

139    I turn now to the position of Mr Tanveer.

G.1    Good arguable case

140    As noted above, the plaintiff’s case against Mr Tanveer also does not involve any allegation that he contravened any of the relevant statutory provisions. As with Mr Gardner and Mr Newman, it is limited to allegations that he is accessorily liable because of his involvement in contraventions of the statutory provisions by Mountain Asset, Mr Ross, Mr Lenton and Mr McWilliams (with respect to ALAMMC 4); and Mountain Asset, Mr Ross, Mr Garrison and Mr McKellar (with respect to SDA 3).

141    The case as pleaded against Mr Tanveer is relevantly identical to that pleaded against Mr Gardner.

142    For the reasons set out at [90] to [94], [95(1) and (2)] and [96] to [97] above, I am satisfied that the plaintiff has a sufficiently arguable case against Mr Tanveer.

G.2    Risk of frustration of the process of the Court

143    Again, the plaintiff relies upon the matters described at [12] to [27] above and in particular the late 2024 conduct, in support of its contention that there is a sufficient risk of frustration of the process of the Court.

144    In addition, the plaintiff relies upon Mr Tanveer’s conduct with respect to providing disclosure in accordance with paragraph 8 of the freezing order.

145    On 27 May 2025, Mr Tanveer made an affidavit in response to paragraph 8 of the freezing order (Mr Tanveer’s disclosure affidavit). In that affidavit, Mr Tanveer disclosed the following assets:

(1)    CBA account #3830 and ANZ account #1637;

(2)    real properties owned jointly with his wife in Cronulla and in Yanchep, Western Australia;

(3)    a crypto currency wallet;

(4)    a Vanguard portfolio; and

(5)    a motor vehicle.

146    Mr Tanveer gave evidence that: he had not sold, transferred, or otherwise disposed of any of his disclosed assets, nor does he have any intention to do so; in the previous six months, he has not sold, transferred, or otherwise disposed of any major asset outside the ordinary course of business; he had not in the previous six months, relocated any assets offshore, nor does he have any intention to do so; he has no intention of relocating his residence, either within Australia or internationally; and his principal place of residence and that of “my company”, Figure 8 are located locally. He also says that relocation would be unreasonable for him and his wife and is not a viable or desired option.

147    On 19 June 2025, Mr Tanveer made a second affidavit in which he disclosed:

(1)    the existence of ANZ offset accounts #2341 and #7834 held jointly with his wife;

(2)    that he holds:

(a)    four of the 12 issued shares in BBP, which company holds NAB account #3643;

(b)    300 of the 600 issued shares in Aussie Managing Partners Pty Ltd (AMP), which company holds CBA account #3560; and

(c)    one of the four issued shares in Figure 8, which company holds NAB account #0732.

148    Thus, Mr Tanveer’s disclosure affidavit did not disclose two bank accounts in which he holds a joint interest, and shares in BBP, AMP and Figure 8.

149    The comments that I have made at [89] to [92] and [104] above are again apposite.

150    The plaintiffs also refer to contended inconsistencies in evidence provided by Mr Tanveer. I have considered these contentions and whilst there are some apparent inconsistencies I do not regard them as a sufficient basis from which to draw the conclusion that there is a real risk that Mr Tanveer may act in a way which may frustrate the process of the Court.

151    In light of:

(1)    the late 2024 conduct;

(2)    the failure by Mr Tanveer to provide full and frank disclosure in his disclosure affidavit and the absence of any explanation (or apology) for such conduct, despite the making of several affidavits,

I am satisfied that there is a real risk that he may act in a manner that will frustrate the process of the Court.

G.3    Exercise of discretion

152    I turn now to the exercise of the discretion in circumstances where I am satisfied that the plaintiff has a sufficiently arguable case against Mr Tanveer and that there is a real risk that he may act in a manner that will frustrate the process of the Court. I note that the plaintiff has proffered the usual undertaking as to damages.

153    Mr Tanveer, in his fifth affidavit, offered an undertaking not to deal with any real property of which he is a registered proprietor by way of disposal or encumbrance without giving the plaintiff seven days’ written notice.

154    In support of that undertaking he has provided evidence as to the net equity position in the properties at Cronulla and Yanchep as follows:

155    I note that these estimated values are based upon a gross value for the properties based upon their purchase prices and at July 2021 and August 2024 respectively. Thus, the estimate for the Cronulla property might be considered conservative. As noted above, Mr Tanveer is a joint owner of these properties.

156    The proffered undertaking is that of Mr Tanveer only. In circumstances where the properties are jointly owned, the undertaking should be proffered by each of the owners. Thus, I would be prepared to discharge the freezing order in so far as they apply to Mr Tanveer if an undertaking were to be proffered by Mr Tanveer and his wife (as co-owner). I propose to allow a short period of time for that choice to be made.

H.    CONCLUSION

157    For the reasons set out above: (1) the freezing order should be discharged to the extent that it operates upon Mr Ross and Mr Lenton; (2) the freezing order to the extent that it applies to Mr Gardner should be replaced by the undertaking proffered by Mr Gardner; (3) the freezing order should continue against Mr Newman; and (4) the freezing order should continue against Mr Tanveer in the absence of an appropriate undertaking proffered by both owners of the real property identified by Mr Tanveer. Costs should be reserved. I will make orders accordingly.

Associate:

Dated:    20 August 2025

SCHEDULE OF PARTIES