Avtar Kaur Singh v Porsche Portsmount Porizakova

[2022] NZHC 3249

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-2263

[2022] NZHC 3249

IN THE MATTER

of a claim under Part 18 of the High Court Rules

BETWEEN

AVTAR KAUR SINGH

Plaintiff

AND

PORSCHE PORTSMOUNT PORIZAKOVA

Defendant

Hearing:	On the papers
Appearances:	S Grant for Plaintiff
Judgment:	7 December 2022

JUDGMENT OF LANG J

[on without notice application for freezing orders]

This judgment was delivered by me on 7 December 2022 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:

Carter Atmore Law, Auckland S Grant, Barrister, Auckland

SINGH v PORIZAKOVA [2022] NZHC 3249 [7 December 2022]

[1]     In this proceeding Ms Singh, who sues through her property manager, seeks freezing orders on a without notice basis in relation to bank accounts operated by the defendant, Ms Porizakova. The purpose of the freezing orders is to prevent Ms Porizakova from dissipating or transferring overseas the proceeds of sale of a house property that she sold in September 2022.

[2]     Ms Singh also seeks orders for non-party discovery against the ANZ Bank Limited (ANZ) and the Bank of New Zealand Limited (BNZ).

Background

[3]     Ms Singh is 55 years of age. She has suffered from an intellectual disability since childhood. On 31 October 2022 the Family Court appointed her son, Mr Manpreet Singh, as her property manager for a period of three months. He says she has never been capable of managing property or monitoring how her assets are handled.

[4]     Ms Singh inherited a property situated at 15 Poaka Avenue, Hamilton from her great aunt, who passed away in 1998. This was sold in 2005. Mr Singh contends that Ms Porizakova arranged the sale of the property without his mother’s knowledge and then converted the proceeds of sale to her own use.

[5]     The net proceeds of sale amounted to $205,819.03. The solicitors who acted on the sale of the property deposited these funds to an account with the Bank of New Zealand (BNZ). Mr Singh says his mother did not have an account with the BNZ at this time. He believes the defendant operated this account. Thereafter, Ms Porizakova bought and sold four further properties before acquiring a property at 90 Lawrence Crescent for the sum of $736,000 on 14 December 2015. She sold that property for the sum of $890,000 on 14 September 2022. The property was subject to a mortgage to ANZ. Mr Singh therefore believes the net sale proceeds are likely to be held in accounts held by Ms Porizakova with ANZ.

[6]     Mr Singh alleges that Ms Porizakova mingled the proceeds of sale of the Poaka Avenue property with her own funds and bank loans when she purchased all five properties after June 2005. The Poaka Avenue property has a current rateable value of $870,000. On his mother’s behalf Mr Singh advances a claim in equity against Ms Porizakova for that sum. He seeks to trace the funds that Ms Porizakova allegedly converted to her own use in 2005 through to the proceeds of sale of the Lawrence Crescent property.

[7]     Mr Singh believes Ms Porizakova will either dissipate the sale proceeds of the Lawrence Crescent property or that she will move to Australia in the near future. He bases this belief on discussions he has had with two of his uncles. They have told him Ms Porizakova has discussed the possibility of moving to Australia.

[8]     Mr Singh also points to the fact that Ms Porizakova advertised the sale of the Lawrence Crescent property as being an urgent sale. This occurred after he had discussed the possibility of lodging a caveat against the property with his uncles. He believes they may have told Ms Porizakova that this was likely to occur and she reacted by selling the property as a matter of urgency. Ms Porizakova also sold the property for $200,000 less than its current rateable value.

Decision

[9]     Rule 32.2 of the High Court Rules 2016 permits the Court to make freezing orders over assets held by parties to a proceeding. An applicant for a freezing order must establish a good arguable case. This means Mr Singh must demonstrate that the claim is capable of tenable argument and is supported by sufficient evidence, bearing in mind the early stage at which the application is made.1 He must also establish that there are assets to which the orders can apply.

[10]    The claim against Ms Porizakova rests entirely on the allegation that Ms Porizakova operated the BNZ account into which the sale proceeds of the Poaka Avenue property were paid in 2005. The application for non-party discovery against BNZ will obviously provide significant assistance regarding this issue because it seeks an order that BNZ must disclose the identity of the person into whose account the sale proceeds of the Poaka Avenue property were paid in 2005.

[11]    Even at this early stage there is considerable support for the possibility that Ms Porizakova was the person who operated the BNZ account into which the proceeds of sale were paid. She had full control of Ms Singh’s financial affairs between 2004 and 2021 and in this capacity she operated Ms Singh’s bank accounts.

[12]    Mr Singh has also obtained a letter from the purchaser of the Poaka Avenue property. This person says he was approached by Ms Porizakova about the sale of the property and dealt exclusively with her when he purchased the property. He believed Ms Porizakova was acting on behalf of the owner of the property.

1      Dotcom v Twentieth Century Fox Film Corp [2014] NZCA 509 at [18] and [31].

[13]    This evidence suggests Ms Porizakova played a key role in organising the sale of the property in circumstances where it appears Ms Singh was incapable of managing her own affairs. If that is so there must be a reasonable possibility that Ms Porizakova directed that the sale proceeds were to be paid into her bank account with BNZ. Mr Singh has been unable to find any evidence that his mother received the proceeds of sale and, as I have already observed, he believes she did not have an account with BNZ during this period. Viewed overall, I am satisfied Mr Singh has established a good arguable case.

[14]    The sale of the Lawrence Crescent property was concluded approximately three months ago. Part of the sale proceeds would have been used to settle the mortgage in favour of ANZ. However, Ms Porizakova sold the property for approximately $150,000 more than she purchased it in 2015. She would also have been required to provide part of the purchase price before she could obtain a loan from ANZ. I therefore consider there are reasonable grounds to believe Ms Porizakova would have received funds from the sale of the property and that these are likely to be held in accounts she operates with ANZ.

[15]    An applicant for a freezing order must also establish a risk that the assets will be dissipated or removed from the jurisdiction if a freezing order is not made. In the present case I am satisfied that this risk exists through the conversations Mr Singh has had with his uncles and through the urgency with which Ms Porizakova sold the Lawrence Crescent property.

[16]    Finally, the Court must be satisfied that it is appropriate to make the orders on a without notice basis. I am satisfied it is appropriate to proceed in this way because there is a risk that service of the application on Ms Porizakova would prompt her to transfer the funds offshore or into accounts she holds, or will open, with other institutions.

[17]    It follows that Mr Singh has established the grounds necessary to enable the Court to make the orders he seeks.

Result

[18]    I make orders as sought in paragraphs 1 of the without notice application dated 5 December 2022.

[19]    Mr Singh is to arrange for the proceeding and a copy of this judgment to be served on Ms Porizakova promptly. The proceeding is to be listed for review in the Duty Judge List on 14 December 2022 at 10 am. The parties have leave to ask the Registrar to list the proceeding for mention in an earlier Duty Judge List if they require the assistance or intervention of the Court prior to 14 December.

Lang J