When an owners corporation in Austinmer, in Wollongong’s northern suburbs, learned that the developer it was suing was selling its main assets, it had days to act. The NSW Supreme Court has since ruled that $12 million of the sale proceeds should be frozen. That keeps the money within reach for a building defects claim that began in 2023.
The decision matters for any owners corporation pursuing a developer. A judgment is of little value in a defects claim if the developer has nothing to pay it. Here the court accepted that a vague intention to lend money to related companies could justify a freezing order. It also accepted that an owners corporation with negative net assets could give the undertaking as to damages that a freezing order requires, because it can raise levies from its lot owners (similar to the approach taken by the courts on security for costs applications against owners corporations in other cases).
A sale discovered almost by chance
The owners corporation represents 61 serviced apartments across two buildings. Its claim includes major waterproofing issues. In 2024 the owners corporation joined the developer to the proceedings, alleging it is liable under the Design and Building Practitioners Act 2020 (NSW) due to the facts of the matter. In August 2026 the owners corporation learned almost by chance that the developer was selling the adjoining pub and function centre built as part of the same project, as well as 2 lots making up part of the building management and letting agent part of the business. That property made up the vast majority of the developer’s assets.
Paul Jurdeczka‘s team wrote to the developer seeking an undertaking, and then filed an urgent application for a freezing order two days later when the demand was rejected. Three days after that, the developer agreed to interim orders that held the $20 million in sale proceeds until the court could hear the application in full.
How the developer fought the application
The developer opposed the application. It called the claim “novel” and “speculative”. It attacked the preliminary evidence obtained for the freezing order on quantum. It also questioned whether an owners corporation with negative net assets could honour an undertaking as to damages. The developer’s own evidence indicated a vague plan for the money: likely lend it to other companies in its corporate group.
What the court decided
Justice Brereton found the owners corporation had a good arguable case, the threshold for a freezing order. He also found a real risk that, if the money was loaned to related companies, the developer would be left “a worthless shell“.
The court put the figure at $12 million in the first instance, close to what the application had eventually sought. It may reduce that figure if the expert evidence on quantum comes in lower, or if the owners corporation does not add the variation claims it is considering within a reasonable time.
“Owners corporations often find out about a developer’s asset sales late, sometimes after the money has already moved,” says Partner Paul Jurdeczka. “Timing matters in these applications. A court can only freeze money the developer still holds.”
The Owners – Strata Plan No 92125 v Barker [2026] NSWSC 1315
