Case: Virgtel Ltd v Zabusky [2006] QSC 66
Outcome: cited
statement of all transactions made in all assets of all transactions made in all assets listed in subparagraphs (a) to (e) from 1 November 2000 until the date of service of this order. An order granting leave to service documents on the Respondents by email to James Conomos Lawyers email address James@jcl.com.au and/or the Respondents email addresses hvl@broadnetcommunications.co.uk and/or dokeb@skynet.be and/or global.agt@tiscali.nl and/or rgcbv@worldonline.nl. An order granting leave to represent Amalia Investments Ltd to the third Applicant assisted by the Second Applicant. BACKGROUND On 14 January 2009 Mr Zabusky filed a lengthy affidavit some 303 paragraphs in support of the interlocutory application. The affidavit sets out in some detail Mr Zabusky's evidence as to the background of these proceedings. No evidence has been filed by other witnesses in respect of these proceedings. I have already noted the identity of the applicants. The first respondent is a company incorporated and registered in the Netherlands; the second respondent is director of both the first and fourth respondents, and the third respondent is the wife of the second respondent. In summary, the applicants claim that, notwithstanding a shareholder protocol executed on 20 October 2000 between the first applicant and the fourth respondents, shares of the first applicant in the first respondent were fraudulently misappropriated as a result of actions of the second, third and fourth respondents in 2003 and 2004. The second and third applicants and the first respondent to these proceedings have already been parties to extensive litigation in the Supreme Court of Queensland in respect of matters arising from the breakdown in relations between the parties: Virgtel Ltd v Zabusky [2006] QSC 66 , Virgtel Ltd v Zabusky [2006] QSC 241 , Virgtel Ltd v Zabusky [2008] QSC 213 and Virgtel Ltd v Zabusky (No 2) [2008] QSC 316. Other than the claims of the applicants as to the conduct of the respondents in 2003 and 2004, which are not substantiated otherwise than in the affidavits of Mr Zabusky, this is not a case where, for example, there is compelling evidence that funds previously have been inappropriately dissipated (cf Elderslie Finance Corporation Ltd v Newpage Pty Ltd (No 4) [2007] FCA 500 , Bridges Financial Services Pty Ltd v Brown [2008] FCA 992). No evidence has been produced to me that the respondents are in any way at risk of disappearing or dissipating their assets, other than the suspicions of the applicants. Indeed in his affidavit sworn 30 January 2009 and filed in Court this morning, Mr Zabusky identified extensive properties in Europe and Africa, including real properties, which he submitted were assets of the respondents potentially available to satisfy a judgment against the respondents. I am fortified in this conclusion by the fact, as demonstrated both by the submissions of the applicants and the publicly-available decisions of the Supreme Court of Queensland in related litigation, the respondents have submitted themselves to the Supreme Court of Queensland over a period of several years (as is clear from such decisions as Virgtel Ltd v Zabusky [2006] QSC 66 , Virgtel Ltd v Zabusky [2006] QSC 241 , Virgtel Ltd v Zabusky [2008] QSC 213 and Virgtel Ltd v Zabusky (No 2) [2008] QSC 316) ; have, I understand from the submissions of the applicants, paid significant sums of money into the trust account of their solicitors as ordered by the Supreme Court; and currently retain solicitors in Queensland. Second, the assets of the respondents which are the subject of the applicants' claims include moneys ordered by the Supreme Court of Queensland to be paid to the first respondent by the applicants in related litigation: Virgtel Ltd v Zabusky [2006] QSC 66. I need make no findings at this stage as to the overlap (if any) between issues raised in the substantive proceedings in this Court and the litigation conducted in the Supreme Court of Queensland. However to the extent that an order of this Court can potentially frustrate a costs order made by another Court, no submissions have been made which suggest that such an order by this Court is either necessary or desirable. I do not accept that there is anything sinister associated with what I understand from Mr Zabusky's submissions to be the intention of the first respondent to transfer the proceeds of its successful costs orders from Australia indeed this strikes me as unexceptional given that it is likely the costs orders merely reimburse the first respondent for legal costs already paid. Further, although Mr Zabusky submitted in Court that the applicants' debt to the first respondent in respect of costs constituted an asset which could be the subject of a freezing order, I am not persuaded on these facts that it is an asset which could be the subject of such an order within the terms of O 25A. I make this observation particularly in light of the ex parte nature of the application before me. In any event, I note the proposition advanced in the Practice Note that a freezing order should exclude dealings by the respondent with its assets for legitimate purposes including payment of reasonable legal expenses. Any monies paid by the applicants to the first respondent in respect of legal costs incurred in respect of related litigation in my view falls into the category of assets used by the respondents to pay "reasonable legal expenses", and prima facie should not be the subject of a freezing order. The fact that the applicants may suffer financial difficulties conducting the litigation in this Court once they have paid the first respondent the monies ordered by the Supreme Court is not germane to the grant of a freezing order within the terms of O 25A.