Maharaj v Wilson
[2011] VCC 1498
•29 September 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION
APPLICATIONS DIVISION
Case No. CI-11-03235
| SEEMA MAHARAJ | Applicant |
| v | |
| SCOTT DARYL WILSON | Respondent |
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| JUDGE: | HIS HONOUR JUDGE SMITH |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 28 September 2011 |
| DATE OF JUDGMENT: | 29 September 2011 |
| CASE MAY BE CITED AS: | Maharaj v Wilson |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1498 |
REASONS FOR JUDGMENT
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Catchwords: Order 37A of the County Court Civil Procedure Rules 2008 – freezing order – arguable case against the respondent – risk of dissipation of assets – danger of unsatisfied judgment – balance of convenience.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M A Nightingale | Opie & Co |
| For the Respondent | Mr C G Juebner | Christopher Bunnett Lawyers |
| HIS HONOUR: |
1 The applicant, Seema Maharaj, alleges that in September 2007, at Christchurch, New Zealand, the defendant intentionally assaulted her, causing injuries to her left arm, scarring and psychological damage.
2 The respondent does not deny that he assaulted Ms Maharaj and indeed pleaded guilty in New Zealand to a charge of deliberately causing her injury.
3 Ms Maharaj seeks to recover damages from the respondent in respect of the assault and injuries caused by it.
4 On 18 July 2011, Ms Maharaj caused to be issued a Writ in this Court in respect of her claim for damages.
5 Some three days earlier, on 15 July 2011, Ms Maharaj sought and was granted a freezing order against the respondent pursuant to Order 37A of the Rules of the Court. In summary, the respondent was ordered not to remove from Australia or in any way dispose of, deal with or diminish the value of any of his assets which are in Australia up to the unencumbered value of $150,000. The order specified the following assets in particular:
(a) the property known as 15 Bentley Road, McCrae (“the McCrae property”) or, if it has been sold, the net proceeds of the sale; (b) the property known as 121A Sayers Road, Williams Landing (“the Williams Landing property”) or, if it has been sold, the net proceeds of the sale; and (c) any shares held by him or, if they have been sold, the net proceeds of the sale. 6 That freezing order was obtained by Ms Maharaj on an ex parte basis. It specified that it had effect up to and including 12 August 2011 (“the return date”). I was told by the parties that they had consented to one or more adjournments of that return date until 28 September 2011, the date of this hearing.
7 At the outset, counsel for Ms Maharaj informed me that the applicant sought a continuation of the freezing order only insofar as it related to the two identified parcels of real estate, but not in relation to any other assets of the respondent which were included in the freezing order made.
8 The respondent submitted that there were no grounds for continuing the freezing order or any part of it. For the reasons set out below, I agree.
9 Rule 37A.02 provides:
“(1) The Court may make an order (a freezing order), upon or without notice to the 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 diminishing the value of, those assets. …”
10 Relevant legal principles in relation to such freezing orders were enunciated by Forrest J in Zhen v Mo & Ors:[1]
[1] [200] VSC 300
“[22] First, that a freezing order, by its very nature, is a drastic remedy and a court must exercise a high degree of caution before taking a step which will interfere with a party’s capacity to deal with his or her assets. [23] Second, the order is not designed to provide security for the applicant’s claim. It is solely directed to preserving assets from being dissipated, thereby frustrating the court process.
[24] Third, the applicant bears the onus both in satisfying the Court that the order should be continued and in satisfying the Court as to the amount which is to be the subject of the order.
[25] Fourth, that an order can only be made on the basis of admissible evidence which supports the contentions made by the party seeking the order. Speculation and guesswork is no substitute for either the facts or inferences properly drawn from proved facts.
[26] Fifth, that before such an order can be made it is necessary that the applicant establish —
(a) an arguable case against the defendant;7 and (b) that there is a danger that the prospective judgment will be wholly or partly unsatisfied as a result of the defendant’s actions in either removing the assets or disposing or dealing with them so as to diminish their value. 27] Sixth, the balance of convenience must favour the granting of the
freezing order.[28] Seventh, that there is no set process determining the exact nature of an order. The order will be framed according to the circumstances of the case.
[29] Eighth, the applicant must establish with some precision the value of prospective judgment. The order should not unnecessarily tie up a party’s assets and property.
[30] Finally, there may be discretionary considerations which militate against the granting of a freezing order, such as delay in bringing the application on before the court or a lack of candour in the materials placed before the court.”
Risk of Dissipation
11 A risk of dissipation cannot be inferred merely from the fact that the applicant has a prima facie cause of action. One may, in some cases, having regard to the nature of the claim, infer the existence of a risk of dissipation partly or wholly from the fact that the applicant has a good, arguable case. Where the applicant’s prima facie case against a defendant involves proof of allegations of serious dishonesty, such an approach may be appropriate.[2]
[2] Victoria University of Technology v Wilson & Ors [2003] VSC 299
12 Here, Ms Maharaj’s submissions regarding the existence of a risk of dissipation are as follows:
(a)
The respondent is the registered proprietor of two parcels of land – the McCrae property and the Williams Landing property.
(b)
Title searches show that the respondent and one Bridey Susan Leggatt were registered as tenants-in-common in equal shares in respect of the McCrae property in April 2002. In May 2004, the respondent became the sole registered proprietor of that land.
(c)
The respondent has never shown remorse for his actions. In particular, it is said that he has never apologised, nor shown regard for the welfare of Ms Maharaj.
(d)
During the course of the relationship between Ms Maharaj and respondent between 2005 and 2007, the respondent is alleged by her to have exhibited great care with his finances and was not generous with his money, but parsimonious. She has a belief that the respondent will take all avenues open to him to quarantine his assets from any judgment in her favour.
13 It is said to follow from (a) and (b) above that the respondent had been engaged in a previous property dispute arising out of a personal domestic relationship involving a female co-proprietor of the McCrae property and that this raises the reasonable likelihood that the respondent understands the processes and legal consequences of claims being made which may affect property and that he would be alive to the potential threat to his property that the Ms Maharaj’s claim presents.
14 I reject that submission. The fact of an historical joint ownership of land with another female, and the later sole ownership, does not indicate a dispute of any kind, let alone a propensity or an intention to dissipate assets to frustrate legal process.
15 Likewise, neither the alleged lack of remorse on the part of the respondent nor his alleged lack of generosity could enable me to infer a likelihood on his part to dissipate assets.
16 I consider that the matters referred to above do not constitute evidence that there is any danger that the prospective judgment against the respondent will be wholly or partially unsatisfied as a result of actions by him to either remove assets or in disposing or dealing with them, so as to diminish their value.
17 It is clear from the affidavit material that there has been a significant breakdown in the relationship between the applicant and the respondent in and from about September 2007. I do not consider that this enables me to infer that the respondent will take any steps to dispose of his assets so as to frustrate or inhibit the Court process. There is simply no evidence before the Court to demonstrate any likelihood that assets of the respondent would be disposed of or reduced in value.
18 Counsel for Ms Maharaj points to the failure of the respondent to give any indication in his affidavits as to what plans he has (if any) with regard to the two parcels of land. One might have expected him to disclose that he had no intention to dispose of either parcel if that was the case. However, the onus of showing the likelihood of dissipation of assets lies squarely upon Ms Maharaj.
19 The respondent is and always has been a resident of Victoria. He is employed by BlueScope Steel Limited in Hastings in Victoria and earns approximately $1,500 per week gross. His assets consist of the McCrae property, the Williams Landing property, company shares to the value of approximately $1,143, a car valued at approximately $1,000, and household items and personal effects valued at approximately $15,000. There is no evidence that he has any connection with any State other than Victoria or any other nation outside Australia. There is no evidence that he intends to leave the jurisdiction, or that he has attempted to dispose of assets to date, or that he intends to do so.
20 The fact that the respondent is not indemnified by any insurer in relation to any potential award of damages against him is, in my opinion, not a matter of which I should take account.
21 This finding is, in my opinion, sufficient to dispose of the matter. The freezing order should be discharged.
22 However, in case I am later held to be wrong on this point, I shall consider the other grounds raised by the respondent.
An Arguable Case Against the Defendant
23 The requirement for a good arguable case has been construed to mean that it must be sufficiently plain that there is a serious question to be tried and that the applicant has a realistic prospect of success. This has been interpreted as requiring the applicant’s case to be more than barely capable of serious argument, but does not require a case which has a better than a fifty per cent chance of success.[3]
[3] Ma & Ors v Luo [2010] VSC 329 at paragraph [22]
24 Here, the applicant deposes that she was assaulted by the respondent. The respondent admits that he pleaded guilty to charges arising from that assault.
25 Nevertheless, the respondent submits that the applicant is unable to establish that she has an arguable case against him for damages arising out of that assault. It is submitted that:
(a) the assault occurred in New Zealand; (b) the proceeding is governed by the laws of New Zealand; (c) under New Zealand law, the proceeding is statute barred and can only proceed if there is leave of the Court (for which no application has been made, as yet); (d) under New Zealand law, no claim may be brought for compensatory damages but only for exemplary damages, subject to an extension of time being granted in which to commence the proceeding. 26 The respondent relies upon an affidavit sworn by Nicholas Allen Till, a solicitor and barrister of the High Court of New Zealand since 1983. In his affidavit, Mr Till deposes that under New Zealand law, claims for compensatory damages in respect of injuries are now barred by legislation. Further, he deposes that claims for exemplary damages can be brought by a person as a consequence of conduct by a defendant that has resulted in personal injury, even though the defendant has been charged with or convicted of an offence involving the conduct concerned in the claim for exemplary damages.
27 The applicant was served with a copy of the affidavit sworn by Mr Till two days ago, and has not had the opportunity of investigating the matters about which he deposes. However, it is clear from that affidavit that, under New Zealand law, the applicant is likely to be entitled to exemplary damages as a consequence of injuries sustained by her in the assault by the respondent, subject to any defence brought pursuant to the Limitation Act 2010 (NZ). Mr Till deposes that exemplary damages, under New Zealand law, are likely to be modest. He referred to awards of damages made by New Zealand courts in some five decisions. They ranged from $10,000 to $30,000.
28 I consider that the applicant does have a good arguable case. The fact of the assault is admitted. I accept the affidavit material that the applicant has suffered significant physical injuries to her arm, including damage to the ulnar nerve and scarring. The applicant has served reports of two psychologists indicating that she has suffered mental and psychological injury.
29 The fact that the applicant may only be entitled to exemplary damages and that such damages might be modest, does not lead to a conclusion that there is no arguable case against the respondent. Such evidence may, in an appropriate case, be relevant to the quantum of assets ordered to be frozen.
30 I accept, for the purposes of this application, that under New Zealand law the proceeding is statute-barred and can only proceed with the respondent’s consent (which he does not give) or with the leave of the Court. No leave has been sought as yet. However, at this time, I do not consider that this is a matter of importance. The Defence of the respondent was filed on 21 September 2011, approximately one week ago. Until that time, it would not have been obvious to the applicant that the defendant would rely upon such a Defence. It is clear from the contents of Mr Till’s affidavit that an application for an extension of time in which to issue the proceeding may still be brought by the applicant pursuant to s.4(7) of the Limitation Act 2010 (NZ). The fact that such an application may or may not be granted does not, in my opinion, lead to a conclusion that there is no arguable case against the respondent.
Evidence of Value of the Claim
31 I was advised by counsel that at the ex parte hearing evidence was led from the Bar table that the potential value of the applicant’s claim was approximately $150,000. I would not consider such information to constitute adequate evidence as to the potential value of such claim. Notwithstanding the apparently obvious physical injuries suffered by the applicant, the defendant indicated that it relied on the fact that there was no admissible evidence before the Court concerning the value of the applicant’s claim. Accordingly, I granted leave to Ms Maharaj to call evidence as to that value.
32 Her solicitor, Alan Donald Opie, gave oral evidence that he had been a solicitor in Victoria since approximately 1969 and had specialised ever since in personal injury claims. Having regard to the matters set out in Ms Maharaj’s affidavit in relation to the injuries suffered by her and to the reports of the psychologists, Ms Amos and Dr Heffernan (referred to in the defence of the respondent), he estimated that her claim for damages was in the range of $100,000 to $150,000.
33 In the circumstances, I consider that there is evidence before the Court as to the potential value of the applicant’s damages claim. I acknowledge that Mr Opie’s opinion was based upon an award of compensatory, aggravating and exemplary damages. I also note that he admitted that he had no knowledge of such awards of damages in accordance with New Zealand law.
Conclusion
34 For the reasons expressed above, I am not satisfied, on the evidence put before me, that Ms Maharaj has established that there is any risk of the respondent dissipating assets so as to frustrate or inhibit the Court process or, more particularly, to dissipate assets so as to deprive her of damages that may be awarded in her favour against him.
35 Accordingly, the freezing order made on 15 July 2011 in respect of the respondent’s assets shall be discharged.
36 This ruling will not prevent Ms Maharaj from bringing a further application if, at some future time, there is evidence indicating that there is a risk of dissipation or quarantining of assets by the respondent so as to frustrate the legal process.
37 I shall hear the parties in respect of costs.
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