Cardile v LED Builders

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Citation: Cardile v LED Builders [1999] HCA 18.

This information can be found in the Textbook: Dorne Boniface, Miiko Kumar and Michael Legg, Principles of Civil Procedure in NSW (2d ed 2012) Thomson Reuters, pp. 310-5.


Background facts

  • The Respondents [LED Builders] commenced proceedings against Eagle Homes, which was owned entirely by the Appellants [Mr. and Mrs. Cardile].
  • The Appellants started diminishing the assets of Eagle Homes by giving them to themselves (through large dividends) and another company they set up, Ultra Modern.
  • The Respondents obtained a judgment against Eagle Homes, however damages were not yet quantified.
  • The Respondents sought freezing orders from the court against Eagle Homes as well as Ultra Modern and Appellants in their personal capacity so they won't be able to diminish Eagle Homes' assets.
  • The freezing order was made and the Appellants appealed against it.


  • The Appellants argued freezing orders against the third party can only be made when the third party holds, is about to hold, or disposes of property owned by the defendant in the proceedings.

Legal issues


  • The court discusses freezing orders against third parties and how they should not be made out easily.
    • Relying on the Court of Appeal of New South Wales in Frigo v Culhaci: The purpose of a Mareva order “is to preserve the status quo, not to change it in favour of the plaintiff. The function of the order is not to “provide a plaintiff with security in advance for a judgement that he hopes to obtain and that he fears might not be satisfied; nor is it to improve the position of the plaintiff in the event of the defendant’s insolvency”.
  • Whilst the court does not accept the Respondents view that freezing orders can be made so easily against third-parties, the Appellants' proposition is too narrow.
  • Instead, the correct proposition is that a court may only grant a freezing order against third parties in circumstances in which:
    1. That party holds power of disposition over assets of potential judgment debtor, or
    2. When some process enforceable by courts may be available to judgment creditor pursuant to which third party may be obliged to contribute funds to help satisfy judgment debt (for example, a guarantor).
  • According to this formulation, in this case, freezing orders can be made against the Appellants in respect of the dividends which they received from Eagle Homes (not the rest of their assets). Additionally, Ultra Modern is restrained from dealing in anyway in the business name "Eagle Homes", but its assets are not frozen.


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