SK Developments (Aust) Pty Ltd v Vansan Construction Pty Ltd
[2025] VSC 402
•4 July 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2025 01664
| SK DEVELOPMENTS (AUST) PTY LTD (ACN 602 503 097) | Applicant/First Plaintiff |
| and | |
| BHARATHAN KANAGAIYAN | Second Plaintiff |
| and | |
| VANSAN CONSTRUCTION PTY LTD (ACN 104 934 732) (and others according to the attached schedule) | First Respondent/Defendant |
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JUDGE: | Nichols J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 2 July 2025 |
DATE OF RULING: | 4 July 2025 |
CASE MAY BE CITED AS: | SK Developments (Aust) Pty Ltd v Vansan Construction Pty Ltd |
MEDIUM NEUTRAL CITATION | [2025] VSC 402 |
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PRACTICE AND PROCEDURE — Ex parte freezing order — Whether there is an arguable case — Whether there is a risk of dissipation of assets — Where applicant is judgment creditor of first to fifth respondents — Where sixth to sixteenth respondents not party to primary proceeding — Where fourth and fifth respondents director and shareholder of third party corporate respondents — Whether freezing order ought to extend to third party entities — Freezing order granted against first to fifth respondents — Fourth and fifth respondents refrained from diminishing their assets — Supreme Court (General Civil Procedure) Rules 2015 order 37A — Rozenblit v Vainer [2019] VSCA 164 — Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 — Viterra BV & Shandong Ruyi Technology Group Co Ltd (2022) 291 FCR 640 — Resort Lifestyle Developments Pty Ltd v NGI Savannah Living Communities Pty Ltd [2022] QSC 194 — Varangian Pty Ltd v OFM Capital Limited [2003] VSC 444 — Convoy Collateral Ltd v Broad Idea International Ltd [2022] 2 WLR 703 — BCBC Singapore Pte Ltd v PT Bayan Resources TBK and Another (No 3) (2013) 276 FLR 273 — Application granted in respect of primary respondents but refused in respect of third party respondents.
PRACTICE AND PROCEDURE — Application to restrain fourth and fifth respondents from leaving jurisdiction — Order appropriate where there is risk of plaintiff not obtaining information required to be disclosed — Power restricts individual freedom of movement and to be exercised with caution — Risk of oral examination rendered ineffective if fourth and fifth respondents leave jurisdiction — Risk may be less than proof on the probabilities but must be more than fear — Order granted for short period of time — Talacko v Talacko (No 2) [2009] VSC 444 — Bayer AG v Winter [1986] 1 WLR 497 — Rhino Trading Pty Ltd v Lotte Enterprise Pty Ltd [2024] VSC 52.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | A Trichardt | HWL Ebsworth Lawyers |
| For the Respondents | No appearance |
HER HONOUR:
Introduction
The applicant (SKD) seeks freezing and ancillary orders against the first to fifth respondents (primary respondents) against whom it has obtained judgment from this Court. SKD also seeks freezing and ancillary orders against third parties (the sixth to sixteenth respondents, or third party respondents) who are entities related to the primary respondents. The application was made on an ex‑parte basis.
SKD and the primary respondents settled a dispute between themselves by entering into a settlement deed which provided that if two specified properties were not transferred by the second defendant to the plaintiff by 31 December 2022, the second respondent irrevocably consented to SKD entering default judgment against the primary respondents jointly and severally for the sum of $1,581,000. SKD filed an originating motion seeking rectification of the settlement deed and payment of the sum of $1,581,000. In that proceeding SKD sought, and was granted, judgment in default of appearance. Matthews J gave judgment for SKD on 27 June 2025 (Judgment), having been satisfied that the second respondent had not transferred the properties and that the default provisions in the settlement deed applied. The primary respondents were jointly and severally ordered to pay fixed sums of interest and costs. The total amount to which SKD is entitled is $1,986,101.60.
SKD now seeks freezing orders on the basis that there is a danger that judgment will not be satisfied because the respondents may dissipate their assets or reduce their value.
SKD seeks substituted service on all the respondents of the freezing and related orders and the Judgment.
SKD also seeks orders for examination pursuant to Supreme Court Rules 67.02 and 67.03 and an order restraining the fourth and fifth respondents from leaving the jurisdiction. The fourth and fifth respondents are directors of the remaining respondents.
In support of its application SKD relied on the affidavits of Kugan Kanagaiyan, dated 1 July 2025, Finian Neaves (the applicant’s solicitor) dated 30 June 2025 and Matthew Bliem (the applicant’s solicitor) on 2 July 2025.
For the reasons that follow, I will grant freezing and ancillary orders in respect of the primary respondents but not the third party respondents. I will allow substituted service. I will grant orders restraining the fourth and fifth respondents from leaving the jurisdiction until they are orally examined.
These orders will remain in place until the return date of 11 July 2025 (one week from the date of the orders). On the return date I will fix the date of the oral examinations, which are to occur within a short period of time after the return date. On the return date the respondents may apply to vary or discharge the orders.
Freezing orders against primary respondents
This Court has both inherent and statutory power (under Order 37A of the Supreme Court (General Civil Procedure) Rules 2015 (Vic)) to make freezing orders. Order 37A expressly preserves the Court’s inherent jurisdiction and addresses the minimum requirements that an applicant for a freezing order must meet. Its terms closely reflect the governing principles enunciated by the High Court in Cardile v LED Builders Pty Ltd.[1] Accordingly, the same principles govern the exercise of the statutory and inherent powers.[2] The principles were summarised by the Court of Appeal in Rozenblit v Vainer.[3] They are as follows:
[1]Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 (Gaudron, McHugh, Gummow and Callinan JJ) (Cardile).
[2]Rozenblit v Vainer [2019] VSCA 164 [14], [19] (McLeish and Niall JJA) (Rozenblit).
[3]In Rozenblit the Court of Appeal was considering a freezing order pending the determination of an appeal, but in most respects (and in all respects for present purposes) the principles to be applied are the same, regardless of the stage at which a freezing order is sought.
(a) A freezing order by its very nature is a drastic remedy which will not be granted lightly. 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.[4]
[4]Cardile, [50].
(b) The rationale for freezing orders is to prevent the frustration of the court’s processes and ensure the effective exercise of the jurisdiction invoked, or, in the case of a non‑party, to prevent interference with the administration of justice.[5] Conversely, a freezing order is not designed to provide security for the applicant’s claim. It is solely directed to preserving assets from being dissipated, thereby frustrating court processes. A freezing order is not to be used to circumvent insolvency laws.[6]
[5]Cardile [42].
[6]Jackson v Stirling Industries Ltd (1987) 71 ALR 457, 460 (Wilson and Dawson JJ), 465 (Deane J).
(c) The applicant bears the onus of satisfying the court that the order should be made, in the amount the subject of the order.
(d) An applicant must establish that there is a ‘good arguable case’ against the defendant, and there is a danger that the prospective judgment will be wholly or partly unsatisfied as a result of the defendant’s actions in dealing with assets. It must be shown that there is a reasonable possibility, not necessarily more than 50 percent chance, that assets may be disposed of or dealt with or diminished in value if an order is not made.
(e) The exercise of the power is discretionary. Accordingly, other considerations including the balance of convenience may bear upon the court’s decision. However, the balance of convenience favouring the making of the order is not a distinct requirement.
(f) The value of the assets covered by a freezing order should not exceed the likely maximum amount of the applicant’s claim, including interest and costs.
(g) As a condition of a freezing order it will ordinarily be appropriate to require the applicant to give undertakings to the court, including the usual undertakings as to damages, supported if necessary by the provision of security.
Particular considerations apply to the granting of freezing orders against third parties, i.e. persons against whom no substantive relief is sought or proposed. Those principles are set out below.
SKD has a judgment of this Court in its favour, against the primary respondents.
As to the danger that the Judgment will remain unsatisfied the evidence was that:
(a) The second respondent entered into a contract of sale for a property at 2 Chava Place Springvale South on 24 April 2025. Settlement was due to occur on 16 June 2025. SKD issued an interlocutory injunction in this Court to restrain the sale of that property and the sale of 7 Chava Place Springvale South which was resolved by consent on terms including an undertaking given to this Court on 20 June 2025 by the second respondent that it would, upon settlement, pay the residue of any sale proceeds in respect of 2 Chava Place into its solicitor’s trust account until the determination of that proceeding. SKD does not know and does not have means of ascertaining whether that contract of sale was completed and whether any moneys were paid into or if so, remain in the solicitor’s trust account. That proceeding has been determined upon the grant of default judgment (i.e. the Judgment now the subject of this application).
(b) The second respondent undertook to this Court to give SKD seven days’ notice before selling, disposing of or otherwise dealing with 7 Chava Place. It has given that notice. There is no existing restraint on the second respondent’s ability to deal with that property.
(c) The fifth respondent owns a property at 3 Short Street Glen Waverly. That property is currently listed for sale.
(d) The primary respondents do not appear to own any other real property in Australia.
(e) The first respondent is the subject of a winding up application by an unrelated creditor, returnable in mid‑July 2025.
On the basis of that evidence, SKD has to my satisfaction, established that there is a danger that the judgment will be wholly or partly unsatisfied as a result of the defendant’s actions in dealing with assets. I am satisfied that there is a reasonable possibility that assets may be disposed of or dealt with or diminished in value if an order is not made.
I note for completeness that I regard the evidence of Mr Kanagaiyan to the effect that ‘[in] discussions within our shared community it has been observed and commented on’ that the fourth and fifth respondents are selling their properties and moving money to overseas business ventures, as unreliable. Although hearsay evidence in an application of this kind is permitted, the evidence is extremely general in nature.
Freezing orders against third parties
Principles
Order 37A.05, which is understood to express the test laid down in Cardile,[7] expressly provides for relief against third parties, on three alternative bases:
[7]Cardile, 401 [42], 402 [46]–[47], 403 [50]; Deputy Commissioner of Taxation v AES Services (Aust) Pty Ltd (2009) 77 ATR 414, 420 [22].
(a) 37A.05(5)(a): there is a danger that a judgment of the Court will be wholly or partially unsatisfied because—
(i) the third party hold or is using or has exercised or is exercising a power of disposition over the assets of the judgment debtor;
(ii) the third party is in possession of or in a position of control or influence concerning assets of the judgment debtor; or
(b) 37A.05(5)(b): a process in the Court is or may ultimately be available to the applicant as a result of a judgment under which process the third party may be obliged to disgorge assets or contribute towards satisfying the judgment.
The High Court in Cardile articulated the following principles:
(a) The principle which informs the exercise of the power to grant a Mareva type of order is that the court may make such orders as are needed to ensure the effective exercise of the jurisdiction invoked. Where the orders affect parties against whom final relief is sought the court’s focus is on the frustration of the court’s process.[8]
[8]Cardile, 401 [42].
(b) If relief is available against non‑parties, the focus must be on the administration of justice.[9] As the High Court said, ‘there are significant differences between an order protective of the court’s processes set in train against a party to an action … and an order extending to the property of persons who are not parties and who cannot be shown to have frustrated, actually or prospectively, the administration of justice’.[10] Mere intermingling of the affairs of a third party and those against whom primary relief is sought is not a sufficient basis for an order against a third party. The Court considered cases in which relief against third parties has been justified where third‑party assets have become ‘mixed up’ in the arrangements of a judgment debtor. It concluded that they were not not mere cases of intermingling affairs, but rather the evidence in those cases sufficiently demonstrated ‘the deliberate blurring, and attempts at the transferring, of property rights and interests’ as the basis for granting relief.[11]
[9]Ibid.
[10]Cardile, 403 [50].
[11]Cardile, 402 [47].
(c) The High Court noted that the making of a freezing order is bound to have a significant impact on the property of the person against whom it made, because practically it operates as a very tight ‘negative pledge’ species of security over property and attracts the contempt sanction:
It requires a high degree of caution on the part of a court invited to make an order of that kind. An order lightly or wrongly granted may have a capacity to impair or restrict commerce just as much as one appropriately granted may facilitate and ensure its due conduct.[12]
[12]Cardile, 403 [50].
The examples cited in Cardile need not be read as defining a limited class of case in which a freezing order may be made against third parties, in view of the broad nature of the Court’s jurisdiction to protect its processes and to protect the administration of justice. However, in such instances it may be seen that the third party is (actually or prospectively) frustrating the administration of justice. Returning to Order 37A, a party who holds a power of disposition over or is in a position of control or influence concerning the assets of a judgment debtor, may frustrate the court’s process and the administration of justice by its dealing with those assets. Separately (under rule 37A.05(5)(b)) where it is demonstrated that a third party may be obliged to disgorge its assets or contribute towards satisfying the judgment, a freezing order against that party may be seen as protecting the administration of justice.
It is well established that a freezing order does not extend to the assets of a third party merely because the respondent is its sole or controlling shareholder and director.[13] This reflects the foundational principle of company law that a company is a separate legal entity from the persons who own and control it.[14] Absent particular circumstances, a company’s assets are not owned or controlled by its shareholders or directors. As Steward J said in this very context in Viterra v Ruyi (adopting the reasoning of the Court of Appeal in Lakatamia Shipping Company v Su[15]), ‘an asset of a company of which a single person is the sole director and shareholder is not an asset of that person … which they have the power, directly or indirectly, to dispose of or deal with as if it were their own.’[16] The company alone has authority to deal with its assets.[17] When a director causes a company to deal with its assets he does so (assuming he is acting properly) acting in right of and on behalf of the company.[18]
[13]See, eg Viterra BV & Shandong Ruyi Technology Group Co Ltd (2022) 291 FCR 640, [101]–[103] (Stewart J) and Resort Lifestyle Developments Pty Ltd v NGI Savannah Living Communities Pty Ltd [2022] QSC 194 (Resort Lifestyle) [76]–[79] (Cooper J).
[14]Salomon v Salamon & Co Ltd [1897] AC 22.
[15]Lakatamia Shipping Company v Su [2015] 1 WLR 291 (Lakatamia)
[16]Viterra, 755 [82], citing Lakatamia at [28], [31], 41], [50]–[51].
[17]Lakatamia, [51] (Rimer LJ).
[18]Resort Lifestyle, [76]–[77].
An applicant might make out a case that the assets of the company are in truth assets to which the applicant is beneficially entitled. However, that contention is fact‑specific and must be proved to the relevant standard.[19]
[19]Shagang Shipping Co Ltd v Ship ‘The Bulk Peace’ (2014) 314 ALR 230, [22]; Lakatamia, [33]; Resort Lifestyle, [78], [86]–[87].
In Convoy Collateral v Broad Idea International Ltd[20] the Privy Council said that, ‘the ordinary prerequisite for granting an injunction against a third party (before taking account of discretionary factors) is that the third party is in possession or control of an asset against which judgment could be executed, and that test may be satisfied where there is good reason to suppose that the asset is beneficially owned by a defendant against whom judgment has been obtained.’ However, ‘it may also be satisfied in other ways: for example, where the defendant would have a right of indemnity against the third party which could be enforced by a receiver, or where a transaction by which the defendant transferred an asset to the third party might be avoided … or where enforcement of a judgment against a defendant might lead to its liquidation whereupon the liquidator would be able to pursue the claim against a third party. … In each case the key question is whether the assets are or would be available to satisfy a judgment through some process of enforcement.’[21] The Privy Council cited Cardile, among other authorities, in support of its reasoning. One sees that proposition reflected in rule 37A.05(5)(b) (the third basis under the rule, for a freezing order against a third party).
[20]Convoy Collateral Ltd v Broad Idea International Ltd [2022] 2 WLR 703 (‘Broad Idea’).
[21]Broad Idea, [88], citations omitted. Broad Idea was applied by Steward J in Viterra at [85]–[105].
While Cardile sets out the circumstances where freezing orders may be appropriate, the High Court did not expressly state that they are the only circumstances. In BCBC Singapore Pte Ltd,[22] the Supreme Court of Western Australia made this point.[23] Nonetheless, it concluded in the circumstances that a judgment debtor holding a controlling interest in a third party was not sufficient to make a freezing order against that third party, because it did not demonstrate the third party’s control or power of disposition of the judgment debtor’s assets.[24]
[22]BCBC Singapore Pte Ltd v PT Bayan Resources TBK and Another (No 3) (2013) 276 FLR 273.
[23]At [119] (Le Miere J). See also Viterra, [73].
[24]Ibid.
A ‘good arguable case’ must be shown against a third party. Where relevant, it must be shown that there is a good arguable case that the third party may be obliged to disgorge assets or contribute towards satisfying a judgment or prospective judgment.[25]
[25]See the discussion of the authorities in Manda Capital Holdings Pty Ltd v Pappas [2024] VSC 495 at [103]–[107].
It is recognised that a freezing order directed to a judgment debtor (prospective or actual) might properly restrain a defendant who is a shareholder in and director of a third party company, from causing the company to take steps that would diminish his shareholding in that company, including by disposing or diminishing the company’s assets. Such actions are properly characterised as indirect dealings with the defendant’s assets (i.e. its shareholding) that would otherwise be available to satisfy a judgment.[26] SKD did not apply for such an order.
Evidence and submissions
[26]Broad Idea, [110], Resort Lifestyle, [88].
The relationship between the entities may be depicted as follows:
The evidence established that:
(a) For the sixth respondent, K&S Sutharsan Superfund Pty Ltd, the only directors are Sutharsan Shanmuglingam (the fourth respondent) and Kogulavani Sultharsan (the fifth respondent). The only shareholders are the fourth and fifth respondents.
(b) For the seventh respondent, K&S Asset Holdings Pty Ltd, the fourth and fifth respondents are the sole shareholders and the only directors.
(c) For the eighth respondent, Vansan Construction (Sydney) Pty Ltd, the fourth respondent is the sole director and sole shareholder.
(d) For the ninth respondent, K&S Asset Holdings 1 Pty Ltd, the fourth and fifth respondents are the sole shareholders and the only directors.
(e) For the tenth respondent, Shan Real Estate Pty Ltd, the fourth respondent is the sole director and sole shareholder.
(f) For the eleventh respondent, VKAS Design Group Pty Ltd, the fifth respondent is the sole director and sole shareholder.
(g) For the twelfth respondent, Koogul Industries Pty Ltd, the fifth respondent is the sole director and sole shareholder.
(h) For the thirteenth respondent, Vansan Holdings Pty Ltd, the fifth respondent is the sole director and sole shareholder.
(i) For the fourteenth respondent, Sarva Sampattee Roopeenee Pty Ltd, the fifth respondent is the sole director and sole shareholder.
(j) For the fifteenth respondent, Vibhuti Property Pty Ltd, fifth respondent is the sole director and sole shareholder.
(k) For the sixteenth respondent, Keshava Flowers Pty Ltd, fifth respondent is the sole director and sole shareholder.
The orders granting the Judgment that SKD has obtained record that the second defendant did not comply with the agreement to transfer the properties the subject of that agreement, to the plaintiff. However, beyond that there was no evidence about the conduct of the respondents’ businesses, or the respondents’ conduct more generally. The evidence was limited to the fact that they were owned and controlled in the manner revealed by company searches, that they own and have listed for sale certain properties (see below) and that the fourth and fifth respondents are also directors of a company registered in India.
The applicant submitted that:
(a) The fourth and fifth respondents have control over the assets of third party respondents directly or indirectly, such that the assets or proceeds of the sale or the assets could be required to be applied in discharge of the Judgement debt.
(b) The assets of the third party respondents are beneficially owned by either of the fourth or fifth respondents ‘or controlled for their benefit’ such that the assets or proceeds of the sale or the assets could be required to be applied in discharge of the Judgement debt. A shareholder’ shares represent their ownership in a company. ‘The company’s assets are those of the company but the shareholder who ultimately benefits for the shares in the company, whether directly or indirectly, is the beneficial owner.’
(c) The third party respondents have possession, control or ownership of assets which may, because of the process of execution of the Judgment, be obliged ultimately to disgorge to help satisfy the judgment;
(d) The third party respondents hold or are using or have exercised, a power of disposition and encumbrance over assets beneficially owned by the fourth or fifth respondents;
(e) The third party respondents are the alter ego of the fourth and fifth respondents who are their directors and shareholders. To regard the separate existence of the third party respondents as companies would lead to an unfair and unjust outcome. In the circumstances the court can infer that the third party respondents are used as tools to avoid personal liability for debts or obligations.
(f) The third party respondents may dissipate their assets or reduce their value. The evidence was (I accept) that the thirteenth respondent owns a factory and warehouse complex in Cheltenham Road Dandenong which has been listed for sale and the fifteenth respondent owns land on which a development comprising 16 townhouses has been built, four of which are listed for sale. The sixteenth respondent owns a property at East Street in Pearcedale. There was no evidence of an intended sale. SKD also relied on the evidence described earlier, of ‘shared discussions’.
Consideration
SKD’s application was in respect of the third parties was misconceived. Whilst relief of the kind it sought was theoretically open, it did not establish any proper evidence basis for the its contentions. More particularly:
(a) By reference to the principles set out earlier, the fourth and fifth respondents’ status as directors and shareholders of the third party respondents did not confer on them beneficial interests in the company’s assets. Those assets belong to the respondent companies.
(b) There was no evidence whatsoever that the assets of the third party respondents were otherwise beneficially held for fourth and fifth respondents. The nature of a purported beneficial interest was not described in SKD’s submissions. A good arguable case was not established.
(c) The existence or exercise of powers of disposition and encumbrance of assets owned (legally or beneficially) by the fourth and fifth respondents was merely asserted. No attempt was made to establish such powers. Given the tenor of the submission I infer that it was intended to say that the third party companies had power over their own assets which were beneficially owned by the fourth and fifth respondents. I have rejected the premise of that submission.
(d) The proposition that The third party respondents have possession, control or ownership of assets which may, because of the process of execution of the Judgment, be obliged ultimately to disgorge to help satisfy the judgment was merely asserted and not the subject of evidence. No attempt was made to establish a good arguable case. The process that might unfold, on facts concerning these entities, was not even described in SKD’s case.
(e) There was no factual basis on which it could be properly inferred (to the good arguable case standard) that the third party respondents ‘are used as tools to avoid personal liability for debts or obligations’. The factual basis for that contention was limited to the corporate structure itself – the ownership and control of the third party respondents by the fourth and fifth respondents. There was no attempt to connect that proposition with the liability the subject of this application, i.e. the Judgment debt.
The contention that the third party respondents are the alter ego of the fourth and fifth respondents and ‘to regard the separate existence of the third party respondents as companies would lead to an unfair and unjust outcome’ was, to say the least, unsound. As it was put in oral argument, the point was an appeal to ‘pierce the corporate veil’. The recognition of the separate legal personality of a corporation, as distinct from that of its members and as distinct from companies to whom it is related, is a basic principle of Anglo‑Australian law company law.[27] Once a company is legally incorporated it must be treated like any other independent person, whatever the scheme of those who brought it into existence. For example, the fact that a company may be understood to carry on business for its shareholders ‘certainly does not in point of law constitute the relation between principal and agent’.[28] On occasion courts will disregard the legal separation between parent and subsidiary. There is no accepted unifying principle in Australian law that describes or determines when that may occur, absent statutory fiat.[29] Courts seldom look past the separate personality of related entities and when that occurs, more commonly than not, separate legal personality will have been ‘used to defeat public convenience, justify wrong, protect fraud or defend crime.’[30] No basis for doing so was established in this case. The asserted basis was a general claim of ‘unfairness’, not founded in any specific conduct of the any of the respondents. Furthermore, the power to grant freezing orders ought is not properly exercised by reference to a general intuition about what is fair and just, but on the basis of the well principles established in the authorities, as set out earlier.
[27]Varangian Pty Ltd v OFM Capital Limited [2003] VSC 444, [142], citing Walker v Wimborne (1976) 137 CLR 1, 6; Industrial Equity v Blackburn (1977) 137 CLR 567.
[28]Salomon v Salomon, 43.
[29]See, e.g. Briggs v James Hardie and Co Pty Ltd (1989) 16 NSWLR 549, 556 (Meagher JA) (‘Briggs’).
[30]Briggs, 575, citing United States v Milwaukee Refrigerator Transit Co 142 F 247 (1905), 255.
Substituted Service
The Applicant seeks an order for substituted service on all the respondents, by way of email to the fourth and fifth respondents’ email addresses and notification SMS messages to their mobile phone numbers.
Rules 6.10(1), (2) and (3) of the Rules provide as follows:
Substituted service
(1) Where for any reason it is impracticable to serve a document in the manner required by these Rules, the Court may order that, instead of service, such steps be taken as the Court specifies for the purpose of bringing the document to the notice of the person to be served.
(2) Where the Court makes an order under paragraph (1), the Court may order that the document be taken to have been served—
(a) on the happening of any specified event; or
(b) on the expiry of any specified time.
(3) The Court may make an order under paragraph (1) notwithstanding that the person to be served
(a) is out of Victoria; or
(b) was out of Victoria when the proceeding commenced.
It is not necessary for an applicant for an order for substituted service to prove that personal service is impossible or futile. Urgency is a relevant factor in assessing the impracticability of service. For substituted service to be ordered, the Court must be satisfied that the steps proposed to be taken are likely to bring the originating process to the attention of the relevant defendant.[31]
[31]Rhino Trading Pty Ltd v Lotte Enterprises Pty Ltd [2024] VSC 52, [26] (M Osborne J).
The evidence established that there were five prior unsuccessful attempts to serve the originating motion and supporting affidavit in this proceeding on the defendants. Attempts included the attendance of a process served at what is believed to be the residential address of the fourth and fifth respondents. On Friday 26 April 2025, the process server called the fourth respondent’s mobile phone and told him he had legal documents to issue him and his wife. He stated that he did not live at that address and to call him on the following Monday to arrange service at his business address. He stated that he would give the Process Server one hour to come and see him and his wife to arrange service, but the process served did not hear from the fourth respondent. The documents were eventually served, after two months.
I am satisfied that the documents the subject of this application are likely to come to the respondents’ attention if served by email and SMS. I will grant the application for substitute service.
Oral examination
The applicant seeks an oral examination of the fourth and fifth respondents in their personal capacities and as officers of the other respondents. The applicant seeks an examination on two material questions, and the production of any document or thing in their possession, custody or power relating to the material questions. The material questions are:
(a) whether they or any of them has any and, if so, what other property or means of satisfying the Judgment of this Court dated 27 June 2025; and
(b) Any questions concerning or in aid of the enforcement or satisfaction of the Judgment specified in the order for examination or production.
I will grant the order. Such orders are granted in the usual course.[32] They may be understood as serving the administration of justice by facilitating the enforcement of a judgment of the court.
[32]Brown v Stafford [1944] 1 KB 193.
‘No Departure’ Orders
SKD seeks an order restraining the fourth and fifth respondents from leaving the jurisdiction of the Court until the conclusion of the proceedings for the oral examinations of them as to their assets and the assets of the other primary respondents, on the basis that if such orders are not made there is a real risk that the orders for oral examination will be defeated because the respondents will leave the jurisdiction.
In Talacko v Talacko (No. 2) Habersberger J considered the juridical basis for orders restraining a party from leaving the jurisdiction. His Honour concluded relevantly that the court has power under s 37(1) of the Supreme Court Act 1986 (Vic) to restrain a person from leaving Victoria if it is just and convenient to do so.[33] That sub‑section provides that, ‘the Court may by order, whether interlocutory or final, grant an injunction or appoint a receiver if it is just and convenient to do so.’
[33]Talacko v Talacko (No 2) [2009] VSC 444 (Talacko), [43].
The cognate power under s 37(1) of the Supreme Court Act 1982 (UK) has been construed the same way. In Bayer AG v Winter[34] Fox LJ considered that such an order was appropriate in circumstances where there was a risk to the plaintiff that they may not obtain the information that the court had ordered be disclosed unless the order were granted.
[34]Bayer AG v Winter [1986] 1 WLR 497.
In Talacko, Haberberger also concluded that Rule 37A.03 is a possible source of such power. The rule provides,
Ancillary order
(1)The court may make an order (an ancillary order) to a freezing order or prospective freezing order as the Court considers appropriate;
(2)Without limiting the generality of paragraph (1), an ancillary order may be made for either or both of the following purposes –
(a) Eliciting information relating to assets relevant to the freezing order or prospective freezing order;
(b)determining whether a freezing order should be made.
His Honour said of r 37A.03 that,
It seems to me that a court might consider it “appropriate” that a no departure injunction be granted as an ancillary order to a freezing order in order to prevent its orders being abused. I therefore conclude that r 37A.03 is a possible source of power for the making of a no departure injunction.
M Osborne J made a ‘no departure’ order in Rhino Trading,[35] reasoning that,[36]
… I am satisfied that the No Departure Orders may be appropriate in circumstances where there is a concern that the person otherwise required to make the affidavit may abscond from the jurisdiction, thus resulting in the order for the provision of the disclosure affidavit being ignored. In appropriate circumstances the making of No Departure Orders may be necessary to ensure that the respondent to the order remains in the jurisdiction and hence can provide an affidavit which provides information relating to assets relevant to the freezing order. Further and in any event, I note that the discretion conferred by r 37A.03 of the Rules is very broad with the matters set out in subparagraph (2) of the order being only examples of the types of orders that can be made. I agree with his Honour’s conclusion in Talacko v Talacko (No 2) that a court might consider it appropriate that a no departure injunction be granted as an ancillary order to a freezing order in order to prevent its orders being abused.
[35]Rhino Trading Pty Ltd v Lotte Enterprise Pty Ltd [2024] VSC 52, [31]–[42] (‘Rhino Trading’).
[36]Rhino Trading, [34].
Orders of this kind must be exercised with caution because they restrict a person’s individual freedom of movement.[37]
[37]Talacko, [50].
I am mindful of the requirement to exercise the power cautiously. Nevertheless on the evidence I am satisfied that there is a there is a real risk that if the order is not made the orders for oral examination will be rendered ineffective because the fourth and fifth respondents will leave the jurisdiction. The standard of satisfaction required in relation to the risk has been expressed as, ‘something less than proof on the probabilities … but more than fear.’[38] As M Osborne J said in Rhino Trading, the jurisdiction lends itself to ‘a broad evaluative judgment as to whether the circumstances of the case are such that there is a real risk of the Court’s powers being abused or rendered ineffective if an order is not made. As part of that evaluative judgment a court will … take account of the fact that such an order interferes with the liberty of an induvial and will not lightly make such an order.’[39]
[38]Kea Investments Ltd v Wikely [2023] QSC 79, [66].
[39]Rhino Trading, [43].
The real risk that the orders for examination will be rendered inutile is established on the evidence, as follows:
(a) the difficulty in serving the fourth and fifth respondents with the process commencing the proceeding on which the Judgment was obtained is consistent with their attempting to evade service;
(b) the respondents were served with the proceedings but failed to appear (resulting in the plaintiffs obtaining the Judgment in default of appearance);
(c) the respondents (who are controlled by the fourth and fifth respondents) have listed for sale their real property held in Australia;
(d) the fourth and fifth respondents are directors of a company registered in India, have ongoing business interests in India and regularly travel there. Mr Kanagaiyan’s evidence was that recently they have travelled to and from India approximately once a month.
Mindful of the incursion on the respondents’ liberty, I will make these orders returnable within a very short period (a matter of days). On the return date I will fix a date for the oral examinations which will occur within a very short time of the return date. The fourth and fifth respondents may apply to vary or discharge the orders on the return date.
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SCHEDULE OF PARTIES
SK DEVELOPMENTS (AUST) PTY LTD (ACN 602 503 097)
First Applicant/Plaintiff
BHARATHAN KANAGAIYAN
Second Plaintiff
AND
VANSAN CONSTRUCTION PTY LTD (ACN 104934732)
First Respondent/Defendant
DHRUVA DEVELOPMENT LTD (ACN 636 875 628)
Second Respondent/Defendant
FORTUNE STAR DEVELOPMENT PTY LTD (ACN 618 921 976)
Third Respondent/Defendant
SUTHARSAN SHANMUGLINGAM
Fourth Respondent/Defendant
KOGULAVANI SUTHARSAN
Fifth Respondent/Defendant
K&S SUTHARSAN SUPERFUND PTY LTD (ACN 153 487 542)
Sixth Respondent
K&S ASSET HOLDINGS PTY LTD (ACN 153 487 784)
Seventh Respondent
VANSAN CONSTRUCTION (SYDNEY) PTY LTD (ACN 609 040 968)
Eight Respondent
K&S ASSET HOLDINGS 1 PTY LTD (ACN 618 537 698)
Ninth Respondent
SHAN REAL ESTATE PTY LTD (ACN 650 967 409)
Tenth Respondent
VKAS DESIGN GROUP PTY LTD (ACN 163 823 149)
Eleventh Respondent
KOOGUL INDUSTRIES PTY LTD (ACN 163 823 096)
Twelfth Respondent
VANSAN HOLDINGS PTY LTD (ACN 124 634 644)
Thirteenth Respondent
SARVA SAMPATTEE ROOPEENEE PTY LTD (ACN 600 787 906)
Fourteenth Respondent
VIBHUTI PROPERTY PTY LTD (ACN 645 596 836)
Fifteenth Respondent
KESHAVA FLOWERS PTY LTD (ACN 650 354 779)
Sixteenth Respondent
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