Federal Court of Australia

Banerjee (Liquidator), in the matter of Eastside Formwork Pty Ltd (in liq) v Stojic (Application for Freezing Order) [2026] FCA 1594

ORDERS

THE COURT ORDERS THAT:

1.    The Plaintiffs’ interlocutory application filed on 25 September 2026 (Interlocutory Application) be dismissed.

2.    The Defendants provide a written undertaking by 5:00pm today reflecting Needham J’s ex tempore reasons delivered today, on the condition that the Defendants abide in the interim by the undertaking proffered on 18 September 2026 and extended on 25 September 2026.

3.    The Plaintiffs pay the Defendants’ costs of the Interlocutory Application.

4.    The parties have liberty to apply on two days’ notice by email to the Associates of Needham J.

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

REASONS FOR JUDGMENT

Ex tempore, revised from transcript

NEEDHAM J:

1    I gave judgment in this matter on 14 August 2026 in Banerjee (Liquidator), in the matter of Eastside Formwork Pty Ltd (in liq) v Stojic (Trial Judgment) [2026] FCA 1140, and final orders were made on 16 September 2026. The appeal period for the defendants to file an appeal from my judgment, therefore, expires on 14 October 2026. While Mr Fernon SC, who appears with Mr Nagle for the first and fifth defendants, indicates that an appeal and an application for a stay pending appeal will be made, that has not yet occurred.

2    The plaintiffs now seek a freezing order by interlocutory application dated 25 September 2026, which would allow the defendants, Mrs Stojic and Buildquip Pty Ltd, to refinance the loan over the property owned by Mrs Stojic at 6 Fowler Crescent, South Coogee NSW (the Property), but not to use her assets for any other purpose.

3    On 26 March 2021, Mrs Stojic gave an undertaking, which was noted by Markovic J in her orders of 29 March 2021, not to encumber or deal with the Property except on 21 days’ notice to the plaintiffs. Mrs Stojic gave such notice on 7 September 2026. The loan secured over the Property expires on 30 September 2026, which is tomorrow. The purpose of the new loan is to refinance the existing loan secured over the Property, which has a current outstanding balance of $3.02 million. The plaintiffs have valued the Property at $6.7 million. Mrs Stojic proposes to borrow further funds to a total of $3.7 million to meet the outstanding loan balance, the various costs of refinancing, living costs of $1,500 per week for 12 months, and future legal costs associated with the prospective appeal against the orders of 16 September in these proceedings. Those costs are estimated at around $350,000-$450,000. The trial was substantial, and Mr Fernon submitted that the appeal would be similarly substantial.

4    The questions which arise are: should a freezing order be granted, or should the defendants’ proffered undertaking be accepted instead; and, in either case, should the arrangements be subject to an exception that would allow the costs of living and future legal costs to be retained and paid?

5    The matter has been brought on urgently, supported by a certificate of urgency, and I was unable to hear it before this morning. These reasons are, accordingly, brief.

Freezing order or undertaking

6    The interlocutory application of 25 September 2026 was accompanied by an affidavit of Mr O’Neill and, as I have said, a certificate of urgency. The plaintiffs pointed to a number of factors which they said support a freezing order. These include the credit findings made against Mrs Stojic in the trial judgment, and her accountant’s certificate in support of her application for finance, which indicates that she would be able to repay the substantial interest estimated at around $6,000 a week without substantial hardship. That certificate has been given by her accountant on a number of occasions since April last year. Significant amounts have been loaned to her by her husband, Mr Stojic, who has now been discharged from bankruptcy.

7    Mr Weinberger SC, who appears with Ms Nguyen, submitted that there were clear sources of income which had not been disclosed and pointed to the failure by the defendants to provide the source documents upon which the accountant’s certificate had been based. The defendants contended that there is no pool of funds or other sources of income apart from the funds lent to Mrs Stojic from Mr Stojic and the equity in the Property. They said that there is no need for a freezing order, given Mrs Stojic’s consistent and longstanding compliance with the undertakings given in 2021 and as noted by me in Banerjee (Liquidator), in the matter of Eastside Formwork Pty Ltd (in liq) v Stojic (No 2) [2025] FCA 427. The defendants’ proffered undertaking, it was submitted, protects the plaintiffs and provides Mrs Stojic the ability to provide for her family and to prepare for the appeal.

8    I have determined not to grant the plaintiffs’ freezing order. A freezing order is an extraordinary remedy that requires a high degree of caution. It is a drastic remedy that should not lightly be granted: see Stewart J in Viterra BV v Shandong Ruyi Technology Group Co Ltd [2022] FCA 215 at [118]. This approach is reflected in the terms of the Court’s Freezing Orders Practice Note (GPN-FRZG) at paragraph 2.6. At paragraph 2.5, the Practice Note says:

The purpose of a freezing order is to prevent frustration or abuse of the process of the Court, not to provide security in respect of a judgment or order.

9    French J described the discretion to grant a freezing order as an exercise in “risk assessment and risk management” (see Australian Securities and Investments Commission v Carey (No 3) [2006] FCA 433; 232 ALR 577 at [26]). Here, it does not seem to me that the risks outlined by the plaintiffs are so significant that the defendants should be subject to a freezing order. The credit findings against Mrs Stojic, while significant, do not form the base of a risk which can only be managed by the imposition of a freezing order. While the amounts ordered to be paid by Mrs Stojic and Buildquip in the 16 September orders are much larger than the equity in the Property, there is no indication that Mrs Stojic is seeking to deal with her assets or Buildquip’s assets so as to dissipate or hide them.

10    The undertaking at page 291 of Mr O’Neill’s Exhibit BJON-5 has a broad definition of “assets” and an equally broad undertaking not to dispose of them pending further order of the Court or the written consent of the plaintiffs, subject to exceptions. I do not consider that there is sufficient evidence demonstrating that there is a requirement for the extraordinary remedy of a freezing order in these circumstances. The plaintiffs have been protected by the existing undertaking and will continue to be protected by the proffered undertaking, as to which more below. I decline to make the freezing order sought by the plaintiffs.

Exceptions

11    The defendants proposed that the loan funds, in excess of the loan refinance and costs thereof, be retained in their solicitors’ trust account. The plaintiffs, in their interlocutory application, proposed exceptions of $1,500 per week for reasonable living expenses and payment of reasonable legal expenses. Those exceptions appear in paragraphs 1(a)(ii) and 2(a)(ii), which relate to Mrs Stojic and Buildquip respectively in the proffered undertaking. That undertaking envisages that $78,000 be paid to the trust account of Mr Lancaster, solicitor for the defendants, for living expenses and that the balance of the funds be paid into his trust account for legal fees. The total loan would not be more than $3.7 million. The undertaking specifies that there is no limit on enforcement rights to enforce the judgment, subject, of course, to any stay that might be granted.

12    The plaintiffs contended that Mrs Stojic has not explained why she needs either the $1,500 per week in living expenses nor the estimated legal costs, given that no appeal has yet been filed, and it is contended that the legal costs estimated are unnecessarily high. In Mrs Stojic’s affidavit of 10 September 2026, which was read by Mr Fernon but upon which she was not cross-examined, she said that she was not currently employed and had not been employed since 17 August 2026. At paragraph 33, she said that:

[Mr Stojic] has agreed to meet the family’s ordinary living expenses while I seek further employment, but his income varies because of his medical condition.

13    There is no other real evidence of Mr Stojic’s financial position other than the fact that he received insurance payout funds, which were not divisible funds in his bankruptcy, and that he has lent Mrs Stojic more than $1 million. Recently, Mr Stojic lent her $50,000, which Mr Lancaster said she has spent and will spend on the costs of this application.

14    The plaintiffs rely on the decision of Wheatley J in Yu v Commissioner of Taxation [2026] FCA 1344 at [12], where her Honour said:

… the Applicant taxpayers the subject of the freezing orders must establish that they have no other source of funds on which they can draw. In this regard, also see [Deputy Commissioner of Taxation v Karas [2011] VSC 673 (Bell J)] at [12], [13] and [19].

15    I note that, at [3] in Karas, Bell J noted that the freezing orders in the Victorian Supreme Court included a standard order for payment of ordinary living expenses and reasonable legal expenses. The plaintiffs relied on the words “another source of funds” as being the test and noted that, as a necessary implication of Mr Stojic’s largesse and the terms of the accountant’s certificate, there must be another source of funds available to Mrs Stojic; however, it seems that their submission is relying on one sentence in Karas rather than the context of the judgment and the authorities to which her Honour points. At [9]-[16] of Karas, her Honour referred to there being no other assets out of which those permitted expenses could be paid, and her Honour cited Deputy Commissioner of Taxation v Manners and Terrule Pty Ltd (No 2) (1985) 81 FLR 131 at 134, which also referred to assets out of which legal fees could be paid.

16    There is no evidence that Mrs Stojic has any other assets apart from the Property, despite some correspondence about her current and prior vehicle and a previous sale of an apartment in Hurstville, the subject of Banerjee (No 2). Mrs Stojic was subject to significant cross-examination about her assets in the trial. The loan over the Property needs to be refinanced and, as I have noted, quickly. The onus is on the defendants to show that they have no other assets out of which they can pay legal fees and living expenses. As I have said, I am satisfied that there are no other assets. It is, as noted, standard to allow reasonable living expenses out of the assets of a person subject to a restriction of their use of their assets pursuant to an order of the Court. Normally, and as I previously did in Banerjee (No 2), I would allow Mrs Stojic to use her assets for her reasonable living expenses, being mindful that she has two young daughters; however, given that Mrs Stojic swore an affidavit on 10 September 2026 deposing that her husband had agreed to fund the family’s living expenses pending her finding further employment, it does not seem to me that, in those circumstances, an exception for that purpose should be made.

17    As for the legal fees, these are also a usual and ordinary exception to freezing orders. As the defendants have informed me that they intend to appeal, I am prepared to accept that it is appropriate that the refinance of the loan, in addition to the payout of the loan and the costs of the refinance, include a sum for legal expenses. The reasonableness of the figures proposed by the defendants was questioned by the plaintiffs. For instance, it was contended that 10 to 12 days for submissions, each, for two Counsel was unnecessary. I am not sure that is the case; the matter has an enormous expanse of evidence and I am only too mindful of the complexities of the judgment. I would be prepared to allow some $350,000 for reasonable legal fees, given that there may be some efficiencies in both submissions and the length of the hearing, which is estimated at three full days.

18    On 17 September 2026, Mr Lancaster calculated the sums which would be paid out of the proposed loan. These were on the basis of an advance of $3.6 million, calculated as follows:

19     The elements of the loan payout, $3,020,000 plus prepaid interest, an establishment fee, legal costs, and valuation allowances, plus $350,000 for legal expenses, brings the loan advance which I would be prepared to allow to $3,513,600, which I will round up to $3,520,000. The balance of the funds remaining after the loan payout and costs of the refinance should be held in Mr Lancaster’s trust account and may be expended on legal fees for any appeal.

20    Should no notice of appeal be filed, the plaintiffs should relist the matter shortly after 14 October 2026, although the date specified by Mr Fernon for the filing of the appeal was 9 October 2026. The defendants should provide a written undertaking to the Court reflecting the terms of this judgment by 5:00pm today, on condition that the defendants abide by the proffered undertaking in the interim.

21    The parties have liberty to apply on two days’ notice to my Associates by email, which may include any application for a stay of the judgment pending appeal, if that route is sought to be taken by the defendants.

Orders

22    The orders that I make will be:

(a)    the interlocutory process filed on 25 September 2026 be dismissed;

(b)    the parties have liberty to apply to my chambers on two days’ notice; and

(c)    the defendants provide a written undertaking to the Court reflecting the terms of this judgment by 5:00pm today, on condition that the defendants abide by the proffered undertaking in the interim.

Costs

23    The parties have made submissions on costs.

24    Mr Fernon submitted that, as no freezing order was granted, the defendants should have their costs.

25    Mr Weinberger said that the outcome has been one of mixed success and there should be no order as to costs or they should be the parties’ costs in the appeal.

26    The application was for a freezing order and that has been dismissed. While there has been a mixture of success, in my view, the plaintiffs should pay the defendants’ costs.

Associate:

Dated:    23 October 2026

SCHEDULE OF PARTIES

NSD 246 of 2021