In The Owners – Strata Plan No 97938 v Golden Rain Development Pty Ltd [2026] NSWSC 37, Griffiths AJ made a freezing order against Golden Rain prohibiting it from disposing of, dealing with, or diminishing the value of its assets in Australia up to the unencumbered value of $29m, in circumstances where defect proceedings remained on foot, due to the specific risk of asset depletion.
Golden Rain developed the land for the "Sugarcube Apartments" and "Honeycomb Terraces" in Erskineville. Both developments are complete but have not received a final occupation certificate. The SP commenced proceedings against Golden Rain and others seeking damages for defective works involving breaches of the HBA statutory warranties. The SP sought a freezing order restraining Golden Rain from disposing of, dealing with, or diminishing the value of its assets in Australia up to the unencumbered value of $29m, or alternatively an order restraining Golden Rain from dealing with its proprietary interest in 18 lots in the "Honeycomb Terraces" without giving notice to the SP.
His Honour considered r 25.11 and 25.14 of the UCPR which provide for the Court making a freezing order if there is a danger that a judgment or prospective judgment will be wholly or partially unsatisfied because the assets of the judgment debtor are disposed of, dealt with or diminished in value. His Honour also referred to the cases containing the relevant principles and noted that while each case turns on its own facts there were broad principles that generally applied.
Applying those principles to the circumstances of the case, his Honour was satisfied that it was appropriate to make a freezing order because the requisite danger of an unsatisfied judgment existed, Golden Rain’s financial records showed it had negative equity and liabilities (approximately $27 million) that outweighed its assets (approximately $23 million), Golden Rain's liabilities were mostly owed to related-party lenders (shareholders and directors), Golden Rain had recently converted previously unsecured loans from related parties into secured loans (giving those lenders priority over the SP's claim), and Golden Rain's ability to pay any judgment mostly depended on future sales of the Honeycomb Terraces which would likely be used to repay the related-party loans first.