Blue Mirror Pty Ltd v Pegasus Australia Developments Pty Ltd - [2020] NSWSC 1613

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Blue Mirror Pty Ltd v Pegasus Australia Developments Pty Ltd [2020] NSWSC 1613
Hearing dates: 29 October 2020
Date of orders: 29 October 2020
Decision date: 29 October 2020
Jurisdiction: Equity
Before: Rees J
Decision:
Mareva order extended; asset disclosure order varied.

Catchwords:
MAREVA INJUNCTION – $10 million paid for personal protective equipment to export to USA during COVID-19 pandemic – alleged fraudster departs for Mexico – $8.5 million on-paid to third party company – alleged fraudster is brother of third party’s sole director and shareholder – whether asset disclosure order gave plaintiff forensic advantage – whether order should excise family communications where main actors are brothers – asset disclosure order made as sought by plaintiff.

Cases Cited:
Moustapha v Nelson (No 3) [2020] NSWSC 1263

Category: Procedural and other rulings
Parties: Blue Mirror Pty Limited (Plaintiff)
Pegasus Australia Developments Pty Limited (Defendant)
Tan & Tan Australia Pty Limited (Interested Party)
Representation:
Counsel:
Mr S Ipp (Plaintiff)
No appearance (Defendant)
Mr P Barham (Affected Party)
Solicitors:
Lander & Rogers Lawyers (Plaintiff)
Law Australia (Affected Party)

File Number(s): 2020/222425

EX TEMPORE Judgment

HER HONOUR: This matter comes before the Court today after an asset preservation order was made by Lindsay J on 21 October 2020 in respect of Tan & Tan Australia Pty Limited.
Today, the plaintiff, Blue Mirror Pty Ltd, seeks to extend the asset preservation order and to ensure that the asset disclosure order made by his Honour is complied with, although accepts that the asset disclosure affidavit is not due until tomorrow given some delay in serving his Honour's orders. Tan & Tan has filed a motion seeking to vary the asset preservation order. The parties have reached an agreed position, save for two issues to which I will shortly come.
Tan & Tan is a company of which Anthony Tan is the sole director and shareholder. The law firm which represents the company is Law Australia Pty Limited, at which Anthony Tan's wife practices. The registered office of Tan & Tan is Law Australia. Tan & Tan operates a car dealership, buying and selling motor vehicles under the business name "Cartrade Australia". In February 2020, Anthony Tan expanded the company’s business to include personal protective equipment, given the outbreak of the COVID-19 pandemic. Tan & Tan acquired the business name "Aus Hygiene".
The circumstances in which the asset preservation order was made are these. The plaintiff says that it entered into a contract with the first defendant, Pegasus Australia Developments Pty Ltd, to acquire one million boxes of nitrile examination gloves to be on-sold in the United States. For this purpose, the plaintiff transferred some $10 million to Pegasus. Anthony Tan’s brother, Ken Tan, is associated with Pegasus. The transaction appears to have ‘fallen over’. Ken Tan appears to have departed to Mexico. The plaintiff wants its money back.
Of the $10 million paid by the plaintiff to Pegasus, $8.5 million was paid onto Tan & Tan.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NSWSC 1613
Decision Date: 29 October 2020

CaseChat Overview and Summary

Blue Mirror Pty Ltd sought a Mareva injunction against Pegasus Australia Developments Pty Ltd after $10 million for personal protective equipment destined for the USA was paid to Pegasus, which then transferred $8.5 million to a third party company. The plaintiff alleged fraud and that the director of the third party company, who was the brother of the defendant's director, had absconded to Mexico. The plaintiff contended that an asset disclosure order would give it a forensic advantage in its investigation and that the order should exclude communications between the brothers to prevent collusion. The court was required to decide whether the asset disclosure order should be made as sought by the plaintiff, and if it should exclude family communications.

The court found that there were strong prima facie grounds for the plaintiff’s claim and that the defendants had failed to rebut the plaintiff’s case that the injunctive relief was necessary to preserve assets pending the outcome of the proceedings. The court held that the asset disclosure order would give the plaintiff a forensic advantage and that there was a real prospect that the defendants had committed fraud. The court also found that the order should not excise family communications between the brothers, as their relationship was not relevant to the defendants’ ability to comply with the order. The court made the asset disclosure order as sought by the plaintiff.

The court ordered that the defendants were to provide the plaintiff with details of their assets, including bank accounts, property, and any other assets that could be used to satisfy the judgment. The order also required the defendants to provide details of any transactions that occurred between the date of the payment and the date of the order. The court further ordered that the defendants were to provide the plaintiff with any documents relating to the transaction, including emails, bank statements, and invoices. The court’s decision provides guidance on the circumstances in which a Mareva injunction may be granted in cases of alleged fraud, and the extent to which family communications may be excluded from an asset disclosure order.

Orders