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KTC v Singh

KTC v Singh

Case [2018] NSWSC 1510 10 October 2018

Injunction

Standing

Delay

Admissibility of Evidence

Costs

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: KTC v Singh & Ors [2018] NSWSC 1510
Hearing dates: 10 September 2018
Decision date: 10 October 2018
Jurisdiction: Equity
Before: White J
Decision:
Application dismissed with costs.

Catchwords: CIVIL PROCEDURE – Interim preservation – Freezing orders – No prima facie case that defendant knowingly assisted in a fraudulent design – Where no risk that assets will be dissipated – Delay in bringing proceedings – Inadequate undertaking as to damages – Application dismissed
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 25.11
Cases Cited: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Frigo v Culhaci [1988] NSWCA 88
Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG (The Niedersachsen) [1984] 1 All ER 398
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
TZ Limited v ZMS Investments Pty Ltd [2010] NSWSC 196
Category: Procedural and other rulings
Parties: KTC (Applicant)
Naveen David Singh (1st Respondent)
XALT Pty Ltd (2nd Respondent)
Belinda Gai Singh (3rd Respondent)
Endy’s Enterprises Pty Ltd (4th Respondent)
Representation:
Counsel:
M B Loughnan QC with B Carew (Applicant)
A S Bell SC with JJ Hutton and R A Jedrzejczyk (Respondents)
Solicitors:
HWL Ebsworth Lawyers (Applicant)
Ashurst (1st & 2nd Respondents)

File Number(s): 2018/229073

Judgment

HIS HONOUR: This is a contested application for freezing orders brought by the applicant, KTC (a company incorporated in the Cayman Islands) against four respondents. KTC is the plaintiff in proceedings in this Court brought by way of statement of claim filed 25 July 2018 against five defendants. Two of these defendants are respondents to this application. The other respondents are the wife and an associated company of the second defendant, Mr David Singh.
KTC does not contend that there is an imminent risk of the respondents’ dissipating assets with the intention of frustrating a judgment. No ex parte application was made for a freezing order. KTC submits that it should be inferred from the conduct of two of the respondents that, unless restrained, the respondents will dissipate assets so as to put them outside the reach of KTC should they become the judgment creditor.
The application for a freezing order is made under r 25.11 of the Uniform Civil Procedure Rules 2005 (NSW). That rule provides:

“25.11   Freezing order
(cf Federal Court Rules Order 25A, rule 2)
(1)    The court may make an order (a freezing order), upon or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the court’s process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied.
(2)    A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.”

In Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 the plurality (at [51]) approved what was said by the Court of Appeal in

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 KTC v Singh

Details

AGLC: KTC v Singh [2018] NSWSC 1510
Case: [2018] NSWSC 1510
Decision Date: 10 October 2018

CaseChat Overview and Summary

In the Federal Court, the plaintiff, KTC, sought to obtain an interim freezing order against the defendant, Mr Singh, on the basis that he had knowingly assisted in a fraudulent scheme. The plaintiff alleged that Mr Singh had assisted in a fraudulent design that led to financial losses. The plaintiff argued that an interim freezing order was necessary to prevent Mr Singh from dissipating his assets before the final determination of the case. The court was required to determine whether the plaintiff had established a prima facie case that would warrant the grant of an interim freezing order. Additionally, the court needed to consider whether there was a risk that the defendant's assets would be dissipated and whether the delay in bringing the proceedings and the adequacy of the undertaking as to damages were relevant factors in the decision.

The court found that the plaintiff had not established a prima facie case that Mr Singh knowingly assisted in a fraudulent design. There was no evidence presented that suggested Mr Singh was aware of the fraudulent scheme or that he had acted with the requisite knowledge to be held liable. The court also determined that there was no risk that Mr Singh's assets would be dissipated, as he had provided satisfactory evidence of his financial situation. Furthermore, the court considered the delay in bringing the proceedings and the inadequacy of the undertaking as to damages as relevant factors in its decision. Given these findings, the court dismissed the plaintiff's application for an interim freezing order. The court concluded that the plaintiff had not met the necessary threshold to warrant the grant of such an order and that the risk of dissipation of assets was not present.

Orders