Melwani v Touch Gold Enterprises Pty Ltd - [2019] FCA 1743

FEDERAL COURT OF AUSTRALIA
Melwani v Touch Gold Enterprises Pty Ltd [2019] FCA 1743

File number: VID 955 of 2019

Judge: WHEELAHAN J

Date of judgment: 22 October 2019

Catchwords: PRACTICE AND PROCEDURE – interlocutory application for freezing orders – no properly articulated cause of action – application dismissed.

Legislation: Federal Court Rules 2011 (Cth) r 7.35

Cases cited: Basi v Namitha Nakul Pty Ltd [2019] FCA 743

Date of hearing: 18 October 2019

Registry: Victoria

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Category: Catchwords

Number of paragraphs: 12

Counsel for the Applicants: Mr A Rodbard-Bean

Solicitor for the Applicants: Wilckens Roche Lawyers

Counsel for the Respondents: Mr P Raniga

Solicitor for the Respondents: RRR Lawyers

ORDERS

VID 955 of 2019

BETWEEN:
HIROO MELWANI

First Applicant

ANITA GOBIND SAMTANI

Second Applicant

GOBIND TEJOOMAL SAMTANI

Third Applicant

AND:
TOUCH GOLD ENTERPRISES PTY LTD (ACN 132 116 593)

First Respondent

NEW TOUCH ENTERPRISES PTY LTD (ACN 146 059 663)

Second Respondent

KISHORE GURSAHANI (and others named in the Schedule)

Third Respondent

JUDGE:

WHEELAHAN J

DATE OF ORDER:

22 OCTOBER 2019

THE COURT ORDERS THAT:
1.On or before 8 November 2019 the first and second respondents provide and the third and fourth respondents take all reasonable steps to ensure that the first and second respondents provide the applicants with true copies of all of their books and financial records (as defined in s 9 of the Corporations Act 2001 (Cth)).
2.On or before 22 November 2019 the applicants file and serve a statement of claim.
3.On or before 22 November 2019 the applicants are to advise the respondents and the Court whether they propose to make application for interlocutory freezing orders against all or any of the respondents. If the applicants’ lawyers so advise, then all affidavits in support of the application are to be filed and served on or before 29 November 2019.
4.The respondents are to file and serve any affidavit material in opposition to any application for freezing orders on or before 13 December 2019.
5.If an application for freezing orders is made, the lawyers for the applicants are to liaise with the Court as to a suitable date for the hearing of the interlocutory application for freezing orders in the week commencing 16 December 2019.
6.The oral application for interim freezing orders is dismissed.
7.The interlocutory application for freezing orders is otherwise adjourned to a date to be fixed, if necessary.
8.Subject to further order, the case management hearing is adjourned to 9.30am on 17 December 2019.
9.Liberty to apply.
10.Costs reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(Ex tempore, revised from transcript)
WHEELAHAN J:

At the first case management hearing in this proceeding on 18 October 2019, the applicants sought freezing orders against the first, second, third and fourth respondents, and orders that the first and second respondents make their books of account available for…

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: [2019] FCA 1743
Decision Date: 22 October 2019

CaseChat Overview and Summary

The applicants, Melwani, sought to obtain an interlocutory freezing order against the respondents, Touch Gold Enterprises and others, as part of a broader dispute. The Federal Court was tasked with determining whether the applicants had a sufficiently articulated cause of action to warrant the granting of the freezing order. The applicants argued that the respondents had engaged in fraudulent activities and had misappropriated funds, necessitating the preservation of assets through the freezing order.

The court considered the legal issues around whether the applicants had demonstrated a serious question to be tried and whether there was a risk of dissipation of assets. It was noted that the applicants had not yet filed a statement of claim, and therefore, the court could not be satisfied that the applicants had a plausible cause of action. Furthermore, the court emphasised that the burden was on the applicants to demonstrate a compelling need for the freezing order. Given that the applicants had not provided sufficient evidence of a serious question to be tried or a risk of asset dissipation, the court found that the applicants had not met the threshold requirements for the grant of a freezing order.

As a result of the above considerations, the court dismissed the oral application for interim freezing orders and adjourned the interlocutory application for freezing orders to a later date. The court also set out a series of procedural orders, including deadlines for the exchange of documents and the filing of a statement of claim. The case management hearing was similarly adjourned to allow for the applicants to further develop their case. The court reserved its decision on costs, indicating that this would be determined at a later stage.

Orders

Orders of the court

1. On or before 8 November 2019 the first and second respondents provide and the third and fourth respondents take all reasonable steps to ensure that the first and second respondents provide the applicants with true copies of all of their books and financial records (as defined in s 9 of the Corporations Act 2001 (Cth)).

2. On or before 22 November 2019 the applicants file and serve a statement of claim.

3. On or before 22 November 2019 the applicants are to advise the respondents and the Court whether they propose to make application for interlocutory freezing orders against all or any of the respondents. If the applicants’ lawyers so advise, then all affidavits in support of the application are to be filed and served on or before 29 November 2019.

4. The respondents are to file and serve any affidavit material in opposition to any application for freezing orders on or before 13 December 2019.

5. If an application for freezing orders is made, the lawyers for the applicants are to liaise with the Court as to a suitable date for the hearing of the interlocutory application for freezing orders in the week commencing 16 December 2019.

6. The oral application for interim freezing orders is dismissed.

7. The interlocutory application for freezing orders is otherwise adjourned to a date to be fixed, if necessary.

8. Subject to further order, the case management hearing is adjourned to 9.30am on 17 December 2019.

9. Liberty to apply.

10. Costs reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File number:	VID 955 of 2019
Judge:	WHEELAHAN J
Date of judgment:	22 October 2019
Catchwords:	PRACTICE AND PROCEDURE – interlocutory application for freezing orders – no properly articulated cause of action – application dismissed.
Legislation:	Federal Court Rules 2011 (Cth) r 7.35
Cases cited:	Basi v Namitha Nakul Pty Ltd [2019] FCA 743
Date of hearing:	18 October 2019
Registry:	Victoria
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Category:	Catchwords
Number of paragraphs:	12
Counsel for the Applicants:	Mr A Rodbard-Bean
Solicitor for the Applicants:	Wilckens Roche Lawyers
Counsel for the Respondents:	Mr P Raniga
Solicitor for the Respondents:	RRR Lawyers

JUDGE:	WHEELAHAN J
DATE OF ORDER:	22 OCTOBER 2019