Distinctive FX Pty Ltd v Wright (No 3) - [2015] VSC 482

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2013 03774

DISTINCTIVE FX PTY LTD (ACN 075 098 609) & ORS	Plaintiffs
v
KYLIE WRIGHT AND PETER VINCE (AS TRUSTEES OF THE ESTATE OF JASON ANDREW VAN DER SLOT PURSUANT TO PART XI OF THE BANKRUPTCY ACT 1966 (CTH)) AND OTHERS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28, 31 AUGUST 2015
FURTHER SUBMISSIONS:	1, 2, 4 SEPTEMBER 2015
DATE OF JUDGMENT:	11 SEPTEMBER 2015
CASE MAY BE CITED AS:	DISTINCTIVE FX PTY LTD v WRIGHT (No 3)
MEDIUM NEUTRAL CITATION:	[2015] VSC 482

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INTERLOCUTORY INJUNCTION – Existing freezing order – Injunction over life insurance proceeds – Access given to life insurance proceeds – Further order sought by defendants preventing future tracing of life insurance proceeds paid to defendants’ lawyers.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms CM Kenny QC with Mr AF Solomon-Bridge	Millens Pty Ltd
For the Second and Fourth Defendants	Mr J Kohn	Tony Hargreaves & Partners

HIS HONOUR:

A. Introduction

In this proceeding, the plaintiffs allege millions of dollars were misappropriated by a former employee, Jason van der Slot (“Jason”). Jason was previously the first defendant to the proceeding; he is now deceased. The second defendant is his widow, Elizabeth van der Slot (“Elizabeth”). It is alleged Elizabeth knowingly received misappropriated funds and also knowingly assisted in their misappropriation.

Recently, I delivered 2 interlocutory judgments in this proceeding concerning injunctive relief sought by the plaintiffs: the first on 22 June 2015 (“the First Judgment”);[1] and the second on 31 August 2015 (“the Second Judgment”).[2] I will only repeat the matters set out in those previous judgments to the extent that is strictly necessary. Injunctions are in place, in the nature of freezing orders and orders preventing the dissipation of funds over which it is alleged the plaintiffs have a proprietary interest.
[1]Distinctive FX Pty Ltd v Wright [2015] VSC 299.
[2]Distinctive FX Pty Ltd v Wright (No 2) [2015] VSC 454.

Upon the delivery of the Second Judgment, counsel for Elizabeth[3] requested that the court make an order that had not been the subject of any submission before then. Up until that time, because of the absence of submissions, I had assumed that such an order had not been sought.
[3]Who is also counsel for the fourth defendant, JLG Holdings Pty Ltd.

Counsel for Elizabeth then made oral submissions as to why the additional order should be made. In response, senior counsel for the plaintiffs stated she had been caught by surprise with respect to these further submissions. Time was sought for written submissions to be provided. That time was given.

In order to understand the context in which the further order is sought, it is necessary to set out some of the orders made on 10 July 2015,[4] which relevantly were as follows:
[4]Orders arising out of the First Judgment were deferred so that the plaintiffs could properly quantify the…

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.

Continue reading Distinctive FX Pty Ltd v Wright (No 3)

Details

AGLC: Distinctive FX Pty Ltd v Wright (No 3) [2015] VSC 482
Case: [2015] VSC 482
Decision Date: 11 SEPTEMBER 2015

CaseChat Overview and Summary

In the case of Distinctive FX Pty Ltd v Wright (No 3), Distinctive FX, the plaintiff, sought an interlocutory injunction to prevent the defendants from claiming life insurance proceeds paid to their lawyers. The defendants had been granted a freezing order in a previous proceeding, which was later modified to allow access to certain life insurance proceeds. Distinctive FX argued that the defendants' attempts to trace the insurance proceeds, now held by their lawyers, were an abuse of process. The court was required to determine whether the defendants' actions constituted an abuse of process and whether an injunction was warranted to prevent the tracing of these proceeds.

The legal issues before the court included the interpretation and application of the terms of the existing freezing order, the principles governing the abuse of process, and the appropriateness of granting an interlocutory injunction in this context. The court had to consider whether the defendants' actions in seeking to trace the insurance proceeds, now held by their lawyers, amounted to an abuse of the court's process, and if so, whether this warranted an injunction to prevent such tracing.

The court found that the defendants' actions did not amount to an abuse of process. It concluded that the defendants were entitled to seek the insurance proceeds as they were entitled to them under the terms of the modified freezing order. The court reasoned that there was no evidence of any improper conduct on the part of the defendants and that their actions were within the bounds of the legal process. As a result, the court dismissed the plaintiff's application for an interlocutory injunction.

The court did not make any further orders in relation to the dispute. The defendants were allowed to continue their efforts to trace the insurance proceeds paid to their lawyers, as they were entitled to do under the terms of the existing freezing order.

Orders