Fineston Company Ltd v Jastec Australia Pty Ltd
[2016] NSWSC 1435
•05 October 2016
Supreme Court
New South Wales
Medium Neutral Citation: Fineston Company Ltd v Jastec Australia Pty Ltd [2016] NSWSC 1435 Hearing dates: 5 October 2016 Decision date: 05 October 2016 Jurisdiction: Equity - Duty List Before: Stevenson J Decision: Freezing order made
Catchwords: PRACTICE AND PROCEDURE – interlocutory relief – freezing order – where prima facie case established that defendant has misappropriated property and failed to account for sale proceeds pursuant to joint-venture agreement – where evidence shows defendants moved assets within jurisdiction Category: Procedural and other rulings Parties: Fineston Company Ltd (Plaintiff)
Jastec Australia Pty Ltd (First Defendant)
Chang Yeoi Lee (Second Defendant)Representation: Counsel:
Solicitors:
G W McGrath SC with K P Tang (Plaintiff)
Sojong Lawyers (Plaintiff)
File Number(s): 2016/296802
EX TEMPORE Judgment
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I have before me in the Duty Judge's list an application for a freezing order.
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The plaintiff, Fineston Company Ltd, is a company incorporated in South Korea.
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It alleges that, by its director Mr Jun, it entered into an "oral joint venture" with the second defendant, Mr Lee, and/or the first defendant, Jastec Australia Pty Limited. Mr Lee is one of two directors and has an equal shareholding in Jastec. The other director is his wife.
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Fineston claims that the terms of this oral joint venture were, in essence, that Fineston would ship containers of copper to Jastec on consignment, Fineston would fund the shipping of that copper, Jastec through Mr Lee would arrange for the on-sale of the copper and that the net profits would be shared between the parties equally.
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Fineston sent Jastec six shipments of copper between January 2016 and April 2016 that Fineston alleges were valued at some US$1.46 million. Fineston paid customs clearance charges of some $201,000 between February and May 2016 and paid Jastec some $47,000 for operating expenses between February and August 2016.
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On 15 June 2016, Mr Lee told Mr Jun that two of the containers had been "stolen” and that the matter had been reported to the police.
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In early August 2016, Mr Jun visited Australia. On that occasion, Mr Lee promised to make various payments to Fineston.
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Mr Jun returned to Australia in late August 2016, on which occasion Mr Lee refused to meet him or respond to his communications.
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At around that time, Mr Jun was told by the New South Wales Police that, contrary to what Mr Lee had told Mr Jun, the police had no record of the allegedly stolen containers.
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Mr Jun was then denied access to the warehouse in which the copper was said to be stored.
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Over the last week, representatives of Fineston attended the warehouse. Most of the copper has been removed and indeed a representative of Fineston actually observed copper being loaded into a container and driven to a storage depot at Revesby.
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In those circumstances, my opinion is that a prima facie case has been made out that Jastec has misappropriated property in which Fineston may still have an interest, and in the proceeds of sale of which it does appear to have an interest.
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In those circumstances, there is a basis to conclude the defendants have moved assets within the jurisdiction, and absent restraint, will continue to do so for the purpose of inhibiting or frustrating the Court's process. I am also satisfied that in those circumstances there is a danger that, unless a freezing order is made, any judgment that Fineston may obtain against the defendant will be wholly or partly unsatisfied.
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I note the undertaking as to damages given by the plaintiff and the undertakings by the plaintiff as set out in schedule A to the freezing order, and I make the freezing order in the terms of the document called "Freezing Orders" which I have initialled today and placed with the papers.
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I also make orders in accordance with pars 3 to 6 of the document called "Orders" which I have dated.
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I order that these orders be taken out forthwith.
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Decision last updated: 07 October 2016
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