Federal Court of Australia

MG Homes Pty Ltd v Grocorp Homes Pty Ltd [2026] FCA 1090

ORDERS

THE COURT ORDERS THAT:

1.    The applicants’ interlocutory application filed on 1 June 2026 is dismissed.

2.    Insofar as the first and second respondents are concerned, costs follow the event.

3.    If the parties wish to make submissions on costs in relation to the third respondent, they may make submissions (of not more than two pages) within seven days.

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

ORDERS

THE COURT ORDERS THAT:

1.    There be no order as to the costs of the third respondent’s appearance on 5 June 2026 at the hearing of the applicants’ interlocutory application filed on 1 June 2026.

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

REASONS FOR JUDGMENT

MEAGHER J

introduction

1    By an interlocutory application (Interim Freezing Orders Application) filed on 1 June 2026, the applicants sought orders (Interim Freezing Orders) that, up to and including 15 July 2026, and subject to further order, the proceeds obtained by the first and second respondents from the sale of each lot in the development known as “The Mill Residences” in Pimpama, Queensland (Development), including funds received from sales to the date of the Interim Freezing Orders, be retained and not disbursed by the first and second respondents.

2    The Interim Freezing Orders were expressed to be subject to the first and second respondents having liberty to make payments (Allowed Payments) in respect of (1) costs associated with the construction of the Development, (2) costs associated with the sale of the lots in the Development, and (3) financing costs. The Allowed Payments were only able to be made to unrelated third parties, and to be directly related to the Development.

3    The Interim Freezing Orders would also have required the first and second respondents to provide the applicants with two business days’ written notice prior to making any Allowed Payment detailing the proposed recipient, the amount, and the business expense to which it related.

4    The Interim Freezing Orders Application was heard before me on 5 June 2026. At the hearing, I made orders dismissing the Interim Freezing Orders Application, with costs to follow the event insofar as the first and second respondents were concerned. An interlocutory hearing was, at that time, listed on 15 July 2026 in which the applicants sought, by an interlocutory application filed on 14 May 2026 (Freezing Orders Application), inter alia orders to the same effect as the Interim Freezing Orders. On 14 July 2026, I made orders by consent which dealt with the Freezing Orders Application.

5    After I made the orders in the Interim Freezing Orders Application, the parties were permitted to make submissions in respect of the costs of the third respondent which, though not a party to the Interim Freezing Orders Application, appeared at the hearing, though its counsel did not make submissions. These are the reasons for the orders dismissing the Interim Freezing Orders Application, and for the order regarding the third respondent’s costs.

Materials relied upon

6    The applicants relied upon:

(1)    Affidavits of Mr Thornton affirmed on 14 May 2026 (First Thornton Affidavit), 29 May 2026 (Second Thornton Affidavit) and 2 June 2026 (Third Thornton Affidavit).

(2)    The Freezing Orders Application, by which the applicants sought, in addition to orders to the same effect as the Interim Freezing Orders, discovery orders, orders joining Mr Bos, the director of the first and second respondents, as the fourth respondent in this proceeding, and orders granting the applicants leave to file a second further amended statement of claim.

(3)    The Interim Freezing Orders Application.

(4)    Written submissions sent to my Associate on 2 June 2026 and filed on 5 June 2026.

7    The first respondent relied upon:

(1)    An affidavit of Mr Freysen, the first and second respondents’ Chief Financial Officer, affirmed on 4 June 2026 (Freysen Affidavit).

(2)    An affidavit of Mr Romolo Bos, the director of the first and second respondents, affirmed on 4 June 2026 (Bos Affidavit).

(3)    Written submissions filed on 5 June 2026.

8    The second respondent did not file written submissions or make oral submissions at the hearing of the Interim Freezing Orders Application. It sought the same orders as those sought by the first respondent.

background

Procedural history

9    The applicants are a group of related companies carrying on business developing land in South-East Queensland. The first and second respondents are related companies that also carry on business developing land in South-East Queensland. The third respondent carries on business as an architecture practice.

10    By their further amended statement of claim filed on 20 April 2026, the applicants allege, in substance, infringements by the respondents of copyright which the applicants say they own in townhouse plans, such copyright having been allegedly assigned to them by one or more of several deeds of assignment. In particular, the applicants allege that the first respondent, and further or alternatively the second respondent, obtained copies of the plans and engaged the third respondent to amend plans in respect of which the first or second respondent already had a development approval, replicating the dimensions in the applicants’ plans. The applicants allege that the first and second respondents have copied and substantially reproduced the applicants’ plans, and constructed townhouses using them. They seek injunctive relief, orders for delivery up, damages or alternatively an account of profits, interest and their costs.

11    The first and second respondents have not filed a defence to the further amended statement of claim; however, in substance, by their amended defences to the amended statement of claim they do not admit the subsistence and ownership of copyright, contest the applicants’ standing in the substantive proceeding, deny any objective similarity and copying, say that a different set of plans was used to construct most of the townhouses at the Development, and say that no instruction to copy was given.

Background to the Interim Freezing Orders Application

12    As alluded to above at [4] and [6](2), on 14 May 2026, the applicants filed the Freezing Orders Application, by which they sought, in addition to orders to the same effect as the Interim Freezing Orders, discovery orders, orders joining Mr Bos, the director of the first and second respondents, as the fourth respondent in this proceeding, and orders granting the applicants leave to file a second further amended statement of claim. That application was set down for hearing on 15 July 2026. Before that application was heard, the applicants on 1 June 2026 filed the Interim Freezing Orders Application on the basis that the first and second respondents were continuing to sell the townhouses allegedly designed and constructed using plans which infringe the applicants’ copyright.

13    The applicants’ solicitor deposed, in the First and Second Thornton Affidavits, to his ongoing awareness of sales of the townhouses. His evidence was that he believed that at least 56 townhouses in the Development had been sold, that the first applicant did not have information regarding the timing of the sales, but that he estimated the remaining gross revenue to be derived from the Development to be between $60 million to $70 million. He stated that the first and second respondents had not discovered documents regarding the extent of construction and sale of the townhouses, any contracts of sale of, or offers to purchase or sell, the lots, or any documents relating to the financing for the Development or showing receipt and disbursement of proceeds of sale. In the First and Second Thornton Affidavits, the applicants’ solicitor annexed copies of property listings and title searches for the townhouses at the Development, which he referred to in order to demonstrate the ongoing completion and sale of the townhouses. As to the first and second respondents’ financial position, he deposed in the First Thornton Affidavit that they respectively had paid-up share capital of $1 and $100, that there was no evidence of the first respondent owning any asset beyond its interest in the Development, and that it was unclear whether the “Grocorp Home entities” were sole purpose vehicles. He also deposed that Mr Bos did not hold any real property in Queensland in his own name. Mr Bos is the sole director of the first and second respondents, and the sole shareholder of Romolo Corporation Pty Ltd, which is the sole shareholder of Bos Corporation Pty Ltd, which in turn is the sole shareholder of the first respondent. Romolo Corporation is the sole shareholder of the second respondent.

14    The factual background contended for by the first respondent was largely contained in the Freysen Affidavit and is as follows. The first respondent is a property developer, and the second respondent is a construction and development entity. The first and second respondents are parties to a development agreement which requires the first respondent to pay the second respondent the costs incurred in the Development plus a project management fee of 20% of the project costs. The Development has been undertaken without third-party finance, the unsold and unsettled lots are not encumbered, and the lots have not been sold “off the plan” which is a less transparent process.

15    As at 31 May 2026, 70 of 128 townhouses had settled, and as at 4 June 2026, approximately 83 of 128 townhouses had been sold. The remaining lots were expected to yield approximately $46,000,000.00, to be held in offset facilities (other than where existing debts and liabilities relating to the Development were required to be satisfied), with the Development anticipated to be completed and sold by 31 January 2027. The net asset position of the first and second respondents was approximately $46,500,000.00. The net proceeds of the Development had not been dissipated; rather, approximately $14,500,000.00 was held by Hammertime Holdings Pty Ltd, a company of which Mr Bos is the director and secretary, and a further $6,450,000.00 was held in offset facilities, and was available for immediate redraw. Other than money being held by related companies for the purposes of debt financing, there had been no removal of cash or assets in relation to the Development. The first and second respondents were tax-compliant, had never been audited and had never been the subject of allegations of asset-stripping or unlawful tax evasion.

16    The movement of funds between the first and second respondents had occurred for the purpose of paying the second respondent’s construction costs and its project management fee under its development agreement with the first respondent, and the holding of group funds in facilities for immediate redraw. In the Freysen Affidavit, Mr Freysen deposed that there was no intention to move funds out of the first respondent’s control other than to meet ordinary business expenses. Mr Bos, in the Bos Affidavit, deposed that he considered that the first respondent’s asset position would not be reduced below $15,000,000.00 during the course of this proceeding. He deposed that he confirmed that the contents of the Freysen Affidavit were accurate and correct.

Principles

17    At the hearing of the Interim Freezing Orders Application, the applicants relied on r 7.32 of the Federal Court Rules 2011 (Cth), as well as r 14.11(a) of the Rules, and the Court’s inherent jurisdiction. With respect to r 14.11(a) of the Rules the applicants contended that there was, in the circumstances of this particular case, “significant overlap between the principles to be applied under this limb and under the rule 7.32 limb”. The first respondent submitted that the Interim Freezing Orders Application did not concern a proprietary injunction, and therefore r 14.11(a) of the Rules had “no role to play”.

18    Rules 7.32 and 7.35 of the Rules provide as follows:

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.

…

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

(1) This rule applies if:

(a)     judgment has been given in favour of an applicant by:

(i)     the Court; or

(ii) for a judgment to which subrule (2) applies—another court; or

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

(i)     the Court; or

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

…

(4)     The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur:

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

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

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

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

…

19    In Basi v Namitha Nakul Pty Ltd [2019] FCA 743, Wigney J at [7] – [9] summarised the principles applicable to a freezing order as follows:

The purpose of a freezing order is to prevent an abuse or a frustration of the Court’s process by depriving an applicant of the fruits of any judgment obtained in the action. It is “no light matter” to freeze a party’s assets and there is, accordingly, a need for the Court to exercise caution. A freezing order is a “drastic remedy” which should not be lightly granted.

An applicant has a good arguable case if they have “a reasonably arguable case on legal as well as factual matters”. It has also been said that a “good arguable case” is one “which is more than barely capable of serious argument, and yet not necessarily one the judge considers would have better than a fifty per cent chance of success”.

Where a freezing order is sought on the basis of a danger of the dissipation of assets, it is not necessary for the Court to be satisfied that the risk of dissipation is more probable than not. Nor is it necessary for the applicant to adduce evidence of an intention on the part of the respondent to dissipate assets. The making of a freezing order involves a discretionary exercise of power. The Court retains a discretion to refuse relief even if the requirements in r 7.35 of the Rules are satisfied.

(Footnotes omitted.)

20    Whether there is a good arguable case only requires a “claim barely capable of serious argument, it need not have a better than even chance of success”: First Class Securities Ltd v Global Future Holdings Pty Ltd (Freezing Orders) [2026] FCA 48 at [35], citing Ninemia Maritime Corp v Trave GmbH & Co KG (The Niedersachsen) [1984] 1 All ER 398 at 404.

21    As to dissipation, the evidence must establish “facts from which a ‘prudent, sensible commercial’ person would properly infer a danger of default if assets were removed from the jurisdiction or dissipated within the jurisdiction”: Simmons v Giezekamp [2024] FCA 649 at [21], referring to Third Chandris Shipping Corp v Unimarine SA [1979] 1 QB 645 at 671 – 2; Hua Wang Bank Berhad v Deputy Commissioner of Taxation [2010] FCAFC 140; 81 ATR 66 at [21]; UFC Enterprise Morley Pty Ltd v UFC Enterprise Northbridge Pty Ltd [2024] FCA 1396 at [13]. The “danger” must be “real or substantial as opposed to a remote or speculative or theoretical possibility” and the applicant must prove facts from which the Court can infer the existence of a real or substantial risk on the balance of probabilities: UFC Enterprise Morley at [13]. The above principles were set out in Parbery v QNI Metals Pty Ltd [2018] QSC 107; 358 ALR 88 at [22] – [39], to which the first respondent referred me in oral submissions.

22    The applicant in an application for freezing orders must give appropriate undertakings to the Court, which will almost always include an undertaking to pay any damages which the respondent may sustain: see TJ & P Pty Ltd as trustee for the Post Family Trust v Agrinova Pty Ltd (No 2) [2024] FCA 1496 at [26]; Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [43]; Frigo v Culhaci [1998] NSWCA 88 at 7. This is reflected in the Court’s Freezing Orders Practice Note (GPN-FRZG) at [2.16], which states:

As a condition of the making of a freezing order, the Court will normally require appropriate undertakings by the applicant to the Court, including the usual undertaking as to damages (see Schedule A of Annexure A of this practice note).

23    The usual undertaking as to damages must be given unless there are special circumstances: McCann, in the matter of Walton Construction (Qld) Pty Ltd (in liq) v QHT Investments Pty Ltd [2016] FCA 1092 at [20]; Weribone on behalf of the Mandandanji People v Queensland [2013] FCA 255 at [81]. Further, the Court should be wary of an undertaking that may prove to be illusory, and must be satisfied that the condition is “not a mere form”: First Class Securities at [73] and ENRC Marketing AG v OJSC “Magnitogorsk Metallurgical Kombinat” [2011] FCA 1371; 285 ALR 444 at [12], referring to Myring v Beale [1899] NSWLawRp 21; 20 LR (NSW) Eq 6 at 7. The Court may consider the existence or extent of any assets in determining the sufficiency of an undertaking: Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279 at [69].

24    This position is reflected at [2.17] of the Freezing Orders Practice Note, which is as follows:

If it is demonstrated that the applicant has or may have insufficient assets within the jurisdiction of the Court to provide substance for the usual undertaking as to damages, the applicant may be required to support the undertaking by providing security. There is provision for such security in the example form of freezing order.

25    When weighing the balance of convenience, factors that may be considered include the absence or inadequacy of any undertaking as to damages: Zuckermann AAS, Wilkins S, Adamopoulos J, Higgins A, Hooper S, Vial A, Zuckerman on Australian Civil Procedure (LexisNexis Butterworths, 2018) at 399 [10.116].

26    When a Court considers whether to make a freezing order, the Court must be satisfied that it is in the interests of justice, in all the circumstances of the case, for the freezing order to be made: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014; 273 ALR 194 at [4] – [5]. The question is ultimately one of discretion. As Feutrill J stated in UFC Enterprise Morley at [13]:

…

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.

    (Footnotes omitted.)

27    Rule 14.11 of the Rules provides as follows:

14.11  Preservation of property

(1)     A party may apply to the Court for an order:

(a)     for the detention, custody, preservation or inspection of property; or

(b)     authorising a person to do any act or thing for the purpose of giving effect to an order[.]

Note: A party may apply in a proceeding concerning property, or in a proceeding in which any question may arise as to any property.

(2)     In a proceeding about the right of any party to a fund, a party may apply for an order that the fund be paid into Court or otherwise secured.

Note: Division 14.1 deals with the inspection of property.

28    The Court has an inherent jurisdiction, confirmed in r 14.11 of the Rules, to grant an injunction in order to preserve the subject matter of, and relief sought in, a proceeding: CIP Group Pty Ltd v So (No 3) [2023] FCA 518 at [28]. At [31], Derrington J considered that:

The usual issues that arise in relation to this form of injunctive relief are: (a) is there a serious question to be tried; (b) will the applicant suffer irreparable injury, for which damages will not be adequate compensation, unless the injunction is granted; and (c) does the balance of convenience favours granting the injunction: Slea [Pty Ltd v Connective Services Pty Ltd [2019] VSC 201] at [195].

submissions

Good arguable case

Applicants’ submissions

29    The applicants relied, in support of a good arguable case, on the following correspondence annexed to the First Thornton Affidavit:

(1)    An email dated 10 May 2023 from Mr Whincop, an employee of the second respondent, to the third respondent, attaching a floor plan which the applicants submitted was “similar if not identical” to a plan created for the applicants, alleged by them to be material in which they own copyright. The email contained the following statement:

Please see attached the Staging idea for Jacobs Well Rd.

Also attached is a simple design for quads in the middle, Romolo was discussing with a marketing guy today earlier about this simple design.

Is this style of product suitable for the middle of the lot where the Quads are?

(2)    An email dated 12 May 2023 from Mr Whincop to Mr Bos, attaching a feasibility study for the development of 126 lots in the Development denoted as “Townhouse Sales 3 Bed Quadplex – MG Product”, showing a projected average profit per townhouse of $213,860.68 or $218,718.64 based on two scenarios. The applicants alleged that “MG Product” referred to “a product of the [a]pplicants”, sent to the third respondent “a few days earlier on 10 May 2023”. Mr Bos forwarded the email to “Caroline” at “c.bos@bigpond.net.au” with the following covering message:

Have a look at the feasibility for 126 MG product 650K-600K . shows big buck$$$$$$$$$$$$$$$$

(3)    An email dated 16 May 2023 from Mr Bos to National Australia Bank attaching a feasibility study for the development of 127 lots in the Development showing a projected average profit per townhouse of $202,349.92 or $208,375.00 based on two scenarios, referring to the “Townhouse Sales 3 Bed Quadplex – MG Product”. The covering email stated as follows:

Same design as MG Homes, you can go to their website and you can have a look.

30    The applicants submitted that the emails summarised above at (2) and (3) “seem to indicate an intention” by the respondents to copy the applicants’ designs.

31    The applicants submitted that an “objective analysis” of certain of the applicants’ plans and the respondents’ plans, revealed that the applicants’ plans were “copied and substantially reproduced”. They submitted that other documents containing copyright belonging to them were infringed, but that the particular example referred to in their submissions was, of itself, sufficient to show a good arguable case of subjective copying. The applicants also submitted that the second respondent obtaining an amended development approval for the allegedly infringing plans was sufficient to give rise to an inference that the first and second respondents had constructed, and continued to construct and sell, the lots based on the allegedly infringing plans. The applicants submitted that the allegedly infringing plans had copied and substantially reproduced the applicants’ floor plans, and this was sufficient to show a prima facie case of subjective copying rather than coincidental similarity.

32    In support of a submission that it was arguable that the applicants’ floor plans have been copied and substantially reproduced in the allegedly infringing plans, the applicants relied on the following passage in Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138; 87 FCR 415 at [91]:

… the issue of sufficient objective similarity simply poses in the case of project homes, as in other cases, the usual question whether the copyright drawing can still be seen embedded in the allegedly infringing drawing, that is, whether the allegedly infringing drawing has adopted the “essential features and substance” of the copyright work.

    (Footnotes omitted.)

33    The applicants also referred to the following statement in LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 584 at [29]:

… Where there is such a finding [of subjective copying], the remaining question is simply whether the copyright plan as a whole, or a substantial part of it, can be seen in the allegedly infringing plan. It is beside the point that the similarities between the two plans might not have been sufficiently strong to support an inference of subjective copying, or, to put the matter differently, might have been explicable as the product of two minds working independently of each other in the drawing of plans expressing commonplace ideas and concepts.

(Footnotes omitted.)

34    The applicants indicated, in relation to the remedy to be sought, that they had not yet made an election between damages and an account of profits, as to do so had not so far been appropriate given that discovery remained incomplete. However, they foreshadowed that an account of profits was likely to be sought. They submitted that the proceeds of sale were the subject matter of this proceeding, and in oral submissions contended that by the Interim Freezing Orders Application they “d[id] not seek to freeze all assets”, but rather the “one asset”: the “subject matter of the proceeding”.

35    They submitted that as the first and second respondents had not attempted to prove that the profit was derived from things other than the alleged infringement of the applicants’ copyright, “at present the proper restraint [was] over all net proceeds”. The applicants relied on the following passage in Robert J Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd (1995) 59 FCR 49 at 68:

… the taking of the account should be directed to the ascertainment of the amount of profit (realised and unrealised), if any, derived by [the infringer] in building its units and the extent to which the substantial reproduction of the Drawings and the applicant’s units contributed to the generation of that profit.

…

I believe it would be unconscionable for the applicant to receive judgment for a sum which did not appropriately represent that proportion of [the infringer’s] profit which is fairly attributable to the infringement of the applicant’s copyright. In other words, to the extent that such infringement caused profit to be made then, in my opinion, it should be ordered to disgorge that profit. Problems of causation and proof are adjusted by placing the onus on the respondents …

…

To the extent that the respondents are able to establish that factors other than such infringement caused such profit then they will only have to account for a lesser amount. The relevant comparison would appear to be between the profits which [the infringer] would have made if it had not used the Drawings and the profits which they did in fact make. …

(Emphasis added.)

36    The applicants also submitted orally that there had been inadequate discovery such as to allow the applicants to “make an estimate of the global profit”, and for this reason, no dollar figure was sought in the Interim Freezing Orders Application. They gave, as examples of categories of documents to be discovered, contracts of sale, building contracts and invoices from builders, as well as documents listed in the development agreement between the first and the second respondents.

First respondent’s submissions

37    The first respondent did not squarely address the issue of a good arguable case; instead, it directed its submissions to whether the applicants had established that there was a risk of dissipation, and whether the balance of convenience lay in favour of granting the Interim Freezing Orders Application. It specifically noted, in its submissions, that it was unnecessary to persuade the Court that the applicants lacked any arguable case, because the considerations of the risk of dissipation and the balance of convenience (considered below) would each be decided against the applicants. The first respondent accepted, referring to Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238, at [61] – [63] and Williams v Albarran [2026] FCA 680 at [38], that the strength and quantum of a claim formed part of the discretionary balancing exercise when deciding an application of this kind, and that the adequacy of damages was “at the heart of, but not determinative of, the discretionary balance”. However, it submitted that the strength of a claim could not supply the risk of dissipation required by r 7.35(4) of the Rules.

Risk of dissipation

Applicants’ submissions

38    The applicants’ written submissions were directed generally to the balance of convenience; however, a portion of them appeared to be directed to the risk of dissipation. They submitted that (1) relying on the Second Thornton Affidavit, there was evidence that further lots will be sold; (2) the first and second respondents had an unknown asset position, but low paid-up share capital of $1 and $100, respectively; (3) the first and second respondents had not disclosed documents that could show the amount of proceeds obtained and to be obtained, such that an account of profits could not be accurately estimated; and (4) the first and second respondents had refused to give an interim undertaking until 15 July 2026. The applicants submitted that there was a risk of the account of profits (in their submission, the subject matter of the litigation) being dissipated pending the hearing of the interlocutory application listed (at that time) on 15 July 2026.

39    In oral submissions, the applicants drew attention to the fact that in the Freysen Affidavit, it was noted that in the first respondent’s balance sheet, approximately $14,500,000.00 was recorded as “inter company loans”, which funds were held in Hammertime. The applicants pointed to the absence of any “loan agreement or other document” which would enable them to understand that arrangement, and submitted that this indicated that “the dissipation … has already begun”. They also referred to approximately $13,200,000.00 recorded in the first respondent’s balance sheet as current year earnings, which they said had not “made their way up into a current asset”, and instead there was “the loan to Hammertime”. The applicants said that the value of Hammertime and its ability to repay the first respondent were not “explored or explained in the evidence”. Further, they submitted that the references in the Freysen Affidavit to “reasonably incurred project costs” paid by the first and second respondents, and the “profit” derived from the Development were not particularised, despite the applicants’ request in correspondence.

First respondent’s submissions

40    The first respondent submitted that the applicants had not established any danger that a prospective judgment would be wholly or partly unsatisfied because the first respondent’s assets may be “removed, disposed of, dealt with or diminished in value”. They submitted that the premise of the Interim Freezing Orders Application (that the first and second respondents respectively had paid-up share capital of $1 and $100, and that their “assets position [was] otherwise unknown”) was shown to be false because:

(1)    The Freysen Affidavit established that:

(a)    The first and second respondents’ asset position was $18,867,430.70 and $27,650,016.50, respectively.

(b)    The Development had been built without third-party finance.

(c)    The unsold and unsettled lots were unencumbered.

(d)    The net proceeds of the Development had not been dissipated.

(2)    Mr Bos, in the Bos Affidavit, deposed that the first respondent’s net position would not be reduced below $15,000,000.00 during the proceeding.

41    As to the payment of the second respondent’s construction costs and “group treasury arrangements”, the first respondent submitted that these were “ordinary-course dealings of a solvent development group”, not the removal of assets to defeat a judgment. Further, as set out above, it noted that the first and second respondents were tax-compliant and had not been the subject of an asset-stripping allegation. It drew attention to the fact that r 7.35 of the Rules required, in its words, “a real risk that assets will be dealt with so as to frustrate enforcement”. Such a risk was not to be inferred from the mere fact of modest share capital or from its ordinary conduct as a solvent business. The first respondent accordingly submitted that there was no risk of dissipation.

42    As to the applicants’ oral submissions about the opacity of the arrangements between the first and second respondents and Hammertime, the first respondent’s counsel accepted that Hammertime’s role was not explicitly deposed to. However, Mr Freysen, in the Freysen Affidavit, deposed to Hammertime holding approximately $14,500,000.00, which was recorded as intercompany loans and that $6,450,000.00 was held in an offset account. The first respondent’s counsel stated, from the bar table, that Hammertime exercised a “treasury function” within the first and second respondents’ corporate group to offset the group’s debt, and that this was an unremarkable arrangement. It did not involve the removal of funds to defeat a judgment such as to give rise to a risk of dissipation.

43    The first respondent additionally rejected the applicants’ characterisation of the proceeds of sale as the “fruit” of the alleged infringement of copyright and the “subject matter” of the proceeding, stating that an account of profits was a personal remedy, and that no proprietary, constructive trust or tracing claim was pleaded. It relied on the remarks in Dart Industries Inc v Décor Corp Pty Ltd [1993] HCA 54; 179 CLR 101 at 111. There, a majority of the High Court stated as follows:

… an account of profits retains its equitable characteristics in that a defendant is made to account for, and is then stripped of, profits which it has dishonestly made by the infringement and which it would be unconscionable for it to retain. An account of profits is confined to profits actually made, its purpose being not to punish the defendant but to prevent its unjust enrichment. …

(Footnotes omitted.)

44    The first respondent submitted that, by taking this approach, the applicants “seek to avoid the dissipation requirement” in the Interim Freezing Orders Application. The first respondent referred to Zupanovich at 67 – 68, for the proposition that the sum recoverable “would fall to be ascertained by apportioning to the alleged infringement only that part of the profit fairly attributable to it”, and therefore that the ordinary principles for freezing orders applied. It submitted that the Interim Freezing Orders Application thus sought freezing orders without demonstrating the basis therefor.

45    Additionally, the first respondent submitted orally, in relation to the risk of dissipation, that the applicants’ delay in bringing the Interim Freezing Orders Application was noteworthy and showed that there was in fact no danger of dissipation. It noted, by reference to the emails set out in [29], that the alleged infringements were known to the applicants in May 2023 (which was not made out on the material), that the applicants commenced the proceeding in March 2025, and that no application for a freezing order was sought until 14 May 2026, when the Freezing Orders Application was brought. It also referred to the applicants’ further amended statement of claim, filed on 20 April 2026, in which it is alleged, relevantly, that “[c]onstruction has continued and townhouses have been completed and have been sold since this proceeding commenced”, for the submission that the applicants “knew of the circumstances to which they point to say there was dissipation or is a risk of dissipation”. It submitted that if there was “something in the risk alleged”, the relevant time to bring an application was March 2025, not June 2026, when the Interim Freezing Orders Application was filed.

46    Relying on Capgemini US LLC v Case [2004] NSWSC 674 for the proposition that “[d]elay is an admission by conduct”, it submitted that the delay outlined at [45] also weighed against the grant of discretionary relief in the form of the Interim Freezing Orders, cast doubt on the urgency and necessity of such orders, and was unexplained by the applicants. In Capgemini, Campbell J at [40] stated as follows:

If interlocutory relief is to be sought, it should always be sought promptly: Zuellig [Credit Insurance Brokers Ltd] v Pulver [2000] NSWSC 7 at [36] – [37]. The court is always entitled to use, as a litmus test of the seriousness of the infringement of a plaintiff’s rights which is occurring, how fast the plaintiff reacts to the infringement of its rights. It is not only as an example of the equitable doctrine of laches that delay is relevant on an application for an interlocutory injunction; it is also as an admission by conduct about how serious the infringement of the plaintiff’s rights is. Thus, it is a matter which goes to the balance of convenience and not merely to the question of whether there is a serious question to be tried, which might be met by a defence of laches at the trial.

(Emphasis added.)

47    It also referred in this regard to Scyne Advisory Business Services Pty Ltd v Heaney [2024] NSWSC 275; 329 IR 461, where a delay in seeking interlocutory relief “tip[ped] the scale” against the grant of relief, though Parker J did not consider whether delay went to the balance of convenience or whether it was a separate defence to the interlocutory application: see at [65], [68], [81]. In reply on this point, the applicants seemed to submit that the relevant dissipation of profits only occurred once profits accrued and townhouses began to be sold. They pointed to the portion of the Second Thornton Affidavit wherein it was deposed that Mr Thornton, on 22 May 2026, performed a search in respect of the Development and identified a listing stating, inter alia “Due to high demand, allocations for Stage 4 are already filling up fast. Limited stock remains for July settlement”. In their submission, this was “evidence which came to light showing potential settlements of some lots at least in mid-July”.

48    The first respondent further rejected, by its written submissions, that any allegation of “mischievous” conduct in allegedly copying the plans was a basis for inferring a risk of dissipation. In this regard, they referred to, inter alia, Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, where at 325 – 326 Gleeson CJ referred to the plaintiff’s claim of the defendant “fraudulently misappropriat[ing] a large sum of money” under a scheme in which the defendant appeared to have engaged, the nature of which gave rise to the reasonable inference that “he [was] not the sort of person who would, unless restrained, preserve his assets intact so that they might be available to his judgment creditor”. It submitted orally that the applicants’ case was, at its highest, one of “deliberate copying”, and not of dishonest dealing with assets. In any event, it submitted that the first and second respondents were “demonstrably solvent”, had assets that were unencumbered, and noted that Mr Bos had committed to maintaining a significant fund pending the outcome of the proceeding.

49    The first respondent characterised the applicant’s “true complaint” as being that the first and second respondents had not yet discovered the documents necessary to quantify the proceeds and profits, and submitted that a freezing order was not a substitute for this, or a means to “provide the [a]pplicants with security for a claim they cannot presently quantify”, relying on Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612 at 625.

Balance of convenience

Applicants’ submissions

50    The applicants stated that they could proffer an undertaking at least until 15 July 2026, being the date upon which the Freezing Orders Application was due to be heard. An undertaking was given by the first applicant in the First Thornton Affidavit, but was not particularised. The undertaking referred to in the applicants’ submissions was that given by the fourth applicant, deposed to in the Third Thornton Affidavit, which was supported by six lots held by the fourth applicant with a combined purchase price of $55,825,000.00, five of which were subject to registered mortgages in favour of Westpac Banking Corporation securing a facility with a limit of $20,000,000.00. A letter from Westpac dated 26 May 2026 annexed to that affidavit confirmed that the facility was undrawn, and had been since December 2023, when it was drawn upon for four days. In the Third Thornton Affidavit, Mr Thornton deposed to the developments on the six lots nearing various levels of completion. In oral submissions, the applicants submitted that the question of the adequacy of the undertaking was whether it is adequate until the hearing listed on 15 July 2026.

51    The applicants submitted that any prejudice that became “tangible” before 15 July 2026 was remedied by the Interim Freezing Orders including liberty to apply. In oral submissions, the applicants submitted that there was no prejudice to the first and second respondents because they did not submit that there was an intention to use the funds subject to the Interim Freezing Orders Application in any other way, pending the trial. Further, they said that there was a “carve-out” in the Interim Freezing Orders for third parties and construction costs.

First respondent’s submissions

52    The first respondent submitted that “the balance of convenience is decisively against” the Interim Freezing Orders, which it says are “disproportionate to any realistic judgment, oppressive in [their] terms, and supported only by an inadequate undertaking”.

53    First, it submitted that the absence of any risk of dissipation was decisive, and that in any event, damages were an adequate remedy. In this regard, it noted that $6,450,000.00 was available for immediate redraw, and its net position would not fall below $15,000,000.00, so any judgment would be readily satisfied. In oral submissions, following a complaint by the applicants that in the Bos Affidavit, Mr Bos did not firmly commit or undertake to maintaining such a fund, the first respondent’s counsel described this as “a director’s commitment … that the net position will not fall below” $15,000,000.00.

54    Second, it submitted by its written submissions that the order which the applicants sought “vastly exceed[ed] any reasonable estimate of judgment”, as it sought to quarantine all net proceeds of the Development, “without any attempt to estimate the maximum amount recoverable”. It note[d] that on the applicants’ own feasibility material, the projected profit [was] approximately $213,000.00 per townhouse, and “only the portion fairly attributable to the alleged infringement could be recovered on an account”.

55    Third, it submitted that the Interim Freezing Orders were “oppressive and uncertain in [their] terms”, because:

(1)    The “net proceeds” the subject of the Interim Freezing Orders were not defined, exposing the first and second respondents to uncertainty and the risk of contempt.

(2)    The Allowed Payments would not allow the first respondent to pay the second respondent its project costs and project management fee under the development agreement between these parties, because the second respondent was not an “unrelated third part[y]”. The Interim Freezing Orders would thereby “sterilis[] a legitimate, solvent business”.

(3)    The requirement to give two business days’ notice would impose an “intrusive and continuing supervisory burden” on the first and second respondents’ ordinary trading, with no corresponding benefit.

56    Fourth, it referred to the recent judgment of Needham J in Williams at [69] for the proposition that the worth of the applicant’s undertaking was a strong factor weighing against relief. It submitted that the evidence failed to establish the worth of the undertaking given by the first applicant “to support the vast freezing order sought”. As to the undertaking given by the fourth applicant, it noted that it was “supported by development land that is largely mortgaged … its value [was] uncertain and [would] diminish as the land is developed and converted to cash”. It pointed out that no bank guarantee or payment into Court was offered. In these circumstances, it submitted that “where the worth of a[n] undertaking [was] in doubt, the Court should decline the order or, at least, require it to be fortified”.

57    Fifth, the first respondent submitted that the Interim Freezing Orders were disproportionate, and that a less intrusive course was for the first and second respondents to offer an undertaking to maintain a net-asset fund and give notice of any extraordinary dealing outside the ordinary course. At the hearing, the first respondent’s counsel indicated that the first respondent had not offered an undertaking, and that should the Court require one, the evidence was that $15,000,000.00 would be set aside. In oral submissions in reply, the applicants stated that this was insufficient because it asked the Court for “an advisory opinion before making an order”.

consideration

58    For the following reasons, I agreed with the first respondent that the Interim Freezing Orders Application should be dismissed. The applicants did not establish that there was a risk of dissipation, or that the balance of convenience warranted the Interim Freezing Orders being granted.

Risk of dissipation

59    As to the risk of dissipation, first, I accepted the first respondent’s submissions that the applicants’ characterisation of the proceeds of sale as the “fruit” of the alleged copyright infringements was misguided. The remedies pleaded by the applicants, being damages or an account of profits, in respect of which no election has yet been made, are personal remedies. To adopt the words used in Zupanovich at 68:

… the taking of the account should be directed to the ascertainment of the amount of profit (realised and unrealised), if any, derived by [the infringer] in building its units and the extent to which the substantial reproduction of the Drawings and the applicant’s units contributed to the generation of that profit.

…

… to the extent that such infringement caused profit to be made then, in my opinion, [the infringer] should be ordered to disgorge that profit. …

If upon the taking of the account in this matter the respondents are unable to establish that the whole of the profit (if any) made by [the infringer] was not attributable to the infringement of the copyright in the Drawings and the applicant's buildings then the result will be an order that they pay all of those profits to the applicant.

60    Rule 14.11 of the Rules was not applicable to the Interim Freezing Orders Application, because the subject matter of that application was not the proceeds of sale themselves, but the first and second respondents’ allegedly infringing conduct. The fact that remedies may flow from that conduct does not render the proceeds of sale themselves the subject matter of this proceeding, such that they could be the subject of an order under r 14.11 of the Rules: see Bell v Bell [2023] WASC 471 at [28] – [30], referring to O 52, r 2 of the Rules of the Supreme Court 1971 (WA); Wentworth v Rogers (No 8) (1986) 7 NSWLR 207 at 208 – 209, referring to Pt 28, r 2 of the Supreme Court Rules 1970 (NSW); Parakalo Pty Ltd v E M Redmond & Co Pty Ltd [1983] 2 Qd R 604 at 610 – 612, referring to O 58, rr 1, 4 of the Rules of the Supreme Court (Qld); Centre Refrigeration & Air-Conditioning Services Pty Ltd v Lincoln (1983) 70 FLR 200 at 204 – 205, referring to O 52, r 3 of the Rules of the Supreme Court of the Northern Territory; Catalfamo v Hersfield Holdings Pty Ltd (1981) 52 FLR 343 at 366, referring to O 25, r 2 of the Federal Court Rules 1979 (Cth), the predecessor to r 14.11 of the Rules; Pizzey Properties Pty Ltd v Edelstein [1977] VR 161 at 162 – 163, referring to O 50, r 3 of the Rules of the Supreme Court of the State of Victoria. Accordingly, I agreed that the applicants must satisfy the Court that there was a risk of dissipation.

61    Second, I note that it was accepted by the applicants and the first respondent that further lots will be sold. However, the applicants’ submission that the first and second respondents’ asset position is unknown, is not accepted. As the first respondent submitted, the evidence in the Freysen Affidavit established that the first and second respondents are “demonstrably solvent”. Their combined net asset position is approximately $46,000,000.00. Additionally, the Bos Affidavit indicated an intention not to reduce the first respondent’s net position below $15,000,000.00 before the end of the proceeding. In the above circumstances, and where Mr Bos is also the director of Hammertime, I was not persuaded that the fact of intercompany loans being made to Hammertime demonstrated a danger that any prospective judgment will go wholly or partly unsatisfied. I was also not satisfied that the arrangements involving the first and second respondents, and Hammertime, demonstrate a risk of dissipation. As the first respondent submitted, they appeared to be ordinary arrangements between related companies in a development group.

62    As the authorities bear out, there must be “facts from which a ‘prudent, sensible commercial’ person can ‘properly infer a danger of default if assets were removed from the jurisdiction’ or dissipated within the jurisdiction”: Simmons at [21]; Unimarine at 671 – 2. The “danger” of a prospective judgment being unsatisfied must be “real or substantial”: UFC Enterprise Morley at [13]. The above arrangements did not give rise to an inference of a danger of default. Further, the fact of the first and second respondents not having disclosed documents to the applicants that could show the amount of proceeds obtained, and to be obtained, did not of itself show a risk of dissipation.

63    Whether taken individually or cumulatively, none of the facts to which the applicants pointed gave rise to an inference of a real risk of any judgment going unsatisfied because of assets being removed or dissipated.

64    Third, to the extent that the applicants submitted that the first and second respondents’ alleged infringements demonstrated a risk of dissipation, I do not consider that such alleged conduct indicates, in and of itself, a propensity to deal with assets in such a way as to frustrate enforcement. In this regard, I consider that the remarks of Gleeson CJ in Patterson at 325, summarised above, do not apply. The conduct alleged by the applicants is copyright infringement, which is materially different from an allegation of dishonest dealing with financial assets. In my view, such allegations do not give rise to a reasonable inference that the first and second respondents would, unless restrained, fail to preserve their assets so that they are available to the applicants in the event of a judgment in the applicants’ favour.

65    Fourth, as to the first and second respondents’ allegation regarding the applicants’ delay in seeking the Interim Freezing Orders, it may be accepted that the circumstances giving rise to the asserted risk of dissipation were known to the applicants at the latest by 20 April 2026, when the applicants’ further amended statement of claim containing the paragraph referring to the completion of sale of the townhouses, referred to at [45], was filed. The evidence contained in the First Thornton Affidavit is that the first email referred to above at [29] was discovered to the applicants by the third respondent on 26 May 2025, and the second and third emails by the second respondent on 28 January 2026. None of those emails directly indicated an intention to construct and sell townhouses such that a risk of dissipation could be inferred. In these circumstances, I was not persuaded by the first respondent’s submissions in this application insofar as it alleged that the abovementioned emails showed, by themselves, that:

(1)    The applicants were aware of the alleged copyright infringements in May 2023.

(2)    There had been more than 15 months of delay in bringing the Interim Freezing Orders Application since the proceeding was commenced.

(3)    There had been more than three years of delay since the allegedly infringing conduct and the applicants’ knowledge of it.

66    In any event, I did not consider that any alleged delay was determinative in this application because, as already indicated, the applicants had not demonstrated that there is a risk of dissipation.

Balance of convenience

67    As to the balance of convenience, first, I accept that the adequacy of any undertaking as to damages is an important consideration. The Court may consider the existence or extent of any assets in determining its sufficiency: Organic Marketing at [69]. In this regard, I note that the applicants’ undertaking was not supported by a bank guarantee or payment into Court. Rather, it was supported by development land owned by the fourth applicant with a combined purchase price of $55,825,000.00, subject to a mortgage (which mortgage had, it should be noted, not been drawn upon since December 2023). I accept the first respondent’s submission that the value of the undertaking was uncertain and would diminish over time, particularly in light of the fact that the lots were subject to developments at various levels of completion, and presumably those lots would eventually be converted to cash. In these circumstances, I was not satisfied that the applicants’ undertaking might not prove to be illusory or a mere form: see First Class Securities at [73]. While the period for which the applicants seek that the first and second respondents be enjoined in the Interim Freezing Orders Application was short, the more appropriate course would have been, as the first respondent submitted, for the applicants to have provided a bank guarantee or made payment into Court in order to support their undertaking.

68    Second, in light of the fact that a personal, rather than proprietary, remedy, is sought by the applicants in the substantive proceeding, I consider that damages are an adequate remedy in the event that the applicants are successful in any of their claims. In this regard, I consider that the first and second respondents’ financial position and Mr Bos’ indication of his intention to maintain substantial cash reserves pending the conclusion of the proceeding provided comfort that any order for damages or an account of profits will be able to be satisfied.

69    Third, I agree with the first respondent that, given that the Interim Freezing Orders seek to quarantine the entire proceeds of the Development, they were disproportionate to any judgment to which the applicants may be entitled. I accept its submission that if the applicants were successful, they would, if they make an election for an account of profits, be entitled to a portion of the profits obtained by the first and second respondents as a result of the alleged infringement.

70    Fourth, for the reason that the Interim Freezing Orders seek to quarantine the entire proceeds, I was also not persuaded by the applicants’ submission that the first and second respondents would suffer no prejudice in the event that the Interim Freezing Orders are made. Under the proposed orders, the Allowed Payments did not permit the first respondent to pay the second respondent its project costs and project management fee, and contained a requirement that two business days’ notice be given before the making of any Allowed Payment. On those bases, the Interim Freezing Orders would unduly hamper the first and second respondents’ business operations. Given the breadth of the Interim Freezing Orders, I was not persuaded that there being liberty to apply would cure the prejudice faced by the first and second respondents. Mr Bos’ indication of his intention to maintain substantial cash reserves, noted above, was a course which provided comfort that any judgment will be satisfied, and operated less oppressively than the orders sought by the applicants. Similarly, the first and second respondents’ respective combined net asset position provided comfort that any judgment will be satisfied.

71    As noted at [64], the first respondent’s submissions about the applicants’ knowledge of, and delay in bringing any application regarding, any dissipation, were not accepted. To the extent that any alleged delay informs the consideration of the balance of convenience, I consider that in light of the above factors, even absent any finding of delay, the balance of convenience weighs against the grant of the Interim Freezing Orders.

Good arguable case

72    Whether or not the applicants had satisfied the element of a good arguable case in the Interim Freezing Orders Application was therefore not an issue that needed to be considered because, assuming it had been established (and noting that the threshold for that element is low), the abovementioned considerations militated against the grant of relief in any event.

73    Therefore, the Interim Freezing Orders Application was dismissed.

Costs

First and second respondents

74    As to the first and second respondents, there was no reason why costs should not follow the event. Accordingly, the applicants were ordered to pay the first and second respondents’ costs of and incidental to the Interim Freezing Orders Application.

Third respondent

75    The third respondent sent, by email, submissions to my associate that its costs of appearing at the hearing of the Interim Freezing Orders Application should be its costs in the cause or, alternatively, that there should be no order as to costs. It accepted that there was no real basis for the applicants to pay its costs of the appearance. The bases for its submission that costs be in the cause were that:

(1)    It was reasonable and appropriate for the third respondent to attend the proceeding, in circumstances where it had an interest in the conduct of the proceedings, and where the Court might have been minded to make procedural orders that might affect the matter.

(2)    The third respondent had an interest in any submissions made by the applicants regarding a strong prima facie case of copyright infringement against the first and second respondents, given that the same conduct is pleaded as against the third respondent, though any finding in relation to the applicants’ prima facie case would not be binding.

76    No authorities were referred to in support of this position. Section 43 of the Federal Court of Australia Act 1976 (Cth) provides a broad discretionary power to award costs, to be exercised “judicially, not arbitrarily or capriciously, having regard to the relevant principles and the justice of the case in all the circumstances and cannot be exercised on grounds unconnected with the litigation”: Summers v Repatriation Commission (No 2) [2015] FCAFC 64 at [13] – [14].

77    In my view, there should be no order for the costs of the third respondent’s appearance at the hearing of the Interim Freezing Orders Application. The third respondent was not a party to the Interim Freezing Orders Application. No orders were made providing for the third respondent to make any written submissions, nor were any oral submissions advanced at the hearing. To the extent that the Court might have made findings which were relevant to the third respondent’s case in the substantive proceeding, the third respondent accepted that these would not be binding on it. The fact that the Court might have made procedural orders affecting the conduct of the proceeding does not persuade me that there should be an order that the third respondent’s costs of the appearance should be its costs in the cause. Had the need to make procedural orders arisen, the third respondent’s view would have been sought. In any event, it would have been able to seek to vary any orders made: see rr 39.04 and 39.05(a) of the Rules. See by analogy Forbes Engineering (Asia) Pte Ltd v Forbes (No 5) [2009] FCA 873 at [14] and The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 2) [2020] FCA 333 at [47].

conclusion

78    For the above reasons, I dismissed the Interim Freezing Orders Application, with costs following the event insofar as the first and second respondents were concerned. I will order that there be no order as to costs in respect of the third respondent’s appearance.

Associate:

Dated:    6 August 2026

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