In a dispute over a $530,000 loan, George Stathopoulos asked the Victorian Supreme Court for an interim freezing order to prevent Welner Lawyers and principal David Welner from removing from Australia or disposing of assets up to the value of $938,100.

After the firm assisted Stathopoulos with securing a $1,250,000 settlement in a separate matter, Welner asked his former client to lend him $500,000 so it could be given to an unidentified client. He also asked for a $25,000 establishment fee and $5,000 for legal fees.

The loan was for one month with a high interest rate of 20 per cent per month, or 30 per cent if in default. With the August deadline now passed, Stathopoulos said he is owed the $938,100.

Justice Jim Delany, duty judge in the Commercial Court, said there was no contest that Stathopoulos has an “arguable case”.

He submitted, and Welner Lawyers has not contested, that the firm breached the loan agreement and engaged in misleading or deceptive conduct in contravention of Australian Consumer Law.

Stathopoulos alleged Welner breached an express or implied retainer, and/or breach of fiduciary duty, and/or breach of duty of care, in addition to engaging in alleged misleading or deceptive conduct in contravention of the Australian Consumer Law.

The “critical issue” in the freezing order application is whether Stathopoulos discharged the burden of proving there is a risk of dissipation of assets by the firm or Welner.

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Stathopoulos has also submitted that the evidence suggested Welner is a “person who does not have assets of substance”.

However, Justice Delany said he does not consider the evidence could support a finding of false representation by Welner and extreme carelessness by putting forward the loan agreement.

“While I accept Welner and the first defendant may have no assets and that Welner may be accurately described as a ‘paper tiger’, that does not mean that a freezing order should be made,” he said.

Given it appeared there were no defences to the claim, Justice Delany made an order for the “prompt provision of pleadings and for a summary judgment application to be made”.

“I have determined it is appropriate to provide for a summary judgment application as although I am not satisfied circumstances exist such as would warrant the grant of a freezing order, I am not satisfied that either defendant has a defence to the substantive claims made against them,” Justice Delany said.

The case is George Stathopoulos v Welner Lawyers Pty Ltd & Anor [2024] VSC 591 (20 September 2024).