Kiwi Joint Limited v Buttar - [2024] NZHC 1459

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2023-470-000058

[2024] NZHC 1459

UNDER Part 32 of the High Court Rules 2016

BETWEEN

KIWI JOINT LIMITED

Applicant

AND

DALJEET SINGH BUTTAR

First Respondent

ROOP KIRAN KAUR

Second Respondent

Judicial Telephone Conference: 4 June 2024

Appearances:

D P Weaver and D S Howell and for Applicant First respondent in person

Judgment:

4 June 2024

JUDGMENT OF VAN BOHEMEN J

[application for freezing order]

This judgment was delivered by me on 4 June 2024 at 4:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar Date…………………………

Counsel/Solicitors:
D P Weaver, Tauranga
Holland Beckett, Tauranga

Copy to: Daljeet Singh Buttar Roop Kaur

KIWI JOINT LTDD v DALJEET SINGH BUTTAR [2024] NZHC 1459 [4 June 2024]

[1] Kiwi Joint Ltd (Kiwi Joint) applies without notice, under pt 32 of the High Court Rules 2016, for an order freezing the property at 7 Allanah Place, Te Puke (Lot 133, DP 404821) (the property) and for any other orders the Court deems just.

[2] An affidavit sworn by Jaswinder Singh, a director of Kiwi Joint, has been filed in support of the application, together with a draft order, an undertaking as to damages and a memorandum of counsel for Kiwi Joint.

[3] According to the affidavit and exhibits filed by Mr Jaswinder Singh, the property is owned by Daljeet Singh Buttar, the other director of Kiwi Joint, and Roop Kiran Kaur, together the respondents named in the application. Mr Jaswinder Singh says the property has been listed for sale on TradeMe and with Harcourts Real Estate and provides evidence that the property has been advertised for sale by auction on 5 June 2024.

[4] Kiwi Joint’s application relates to a proceeding (the substantive proceeding) brought by Mr Jaswinder Singh by derivative action on behalf of Kiwi Joint against Mr Singh Buttar. In that proceeding, Kiwi Joint alleges misappropriation of company funds and equitable fraud by Mr Singh Buttar and seeks damages for various alleged breaches of Mr Singh Buttar’s duties as a director and fiduciary duties owed to Kiwi Joint and, in the alternative, equitable compensation. The substantive proceeding is set down for a five-day hearing commencing on 15 July 2024.

[5] In his affidavit, Mr Jaswinder Singh says he is concerned that Mr Singh Buttar will dispose of the property and that there will be no property or assets to satisfy any judgment against Mr Singh Buttar.

[6] In March 2021, prior to the commencement of the substantive proceeding, Kiwi Joint applied for charging, freezing and ancillary orders against the property and other properties purchased by Mr Singh Buttar using funds which, Mr Jaswinder Singh believes, were wrongfully taken from Kiwi Joint’s bank account.

[7] In the event, that application was not proceeded with after Mr Singh Buttar signed an undertaking that he would not sell, transfer or dispose of, or enter into an

agreement to sell, transfer or dispose of any property or shares…

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: [2024] NZHC 1459
Decision Date: 4 June 2024

CaseChat Overview and Summary

Kiwi Joint Limited sought a freezing order against Daljeet Singh Buttar and Roop Kiran Kaur in relation to a property at 7 Allanah Place, Te Puke. The application was made under Part 32 of the High Court Rules 2016, and Kiwi Joint claimed that Mr Buttar was attempting to dispose of the property in anticipation of a judgment against him. The substantive proceeding involved allegations of misappropriation of company funds and equitable fraud by Mr Buttar, with Kiwi Joint seeking damages and equitable compensation. The property in question was owned jointly by Mr Buttar and Ms Kaur, and it was advertised for sale by auction on 5 June 2024, despite an earlier undertaking by Mr Buttar not to dispose of the property without court approval or the written consent of Kiwi Joint's director, Mr Jaswinder Singh. The court had to determine whether there was a danger that the prospective judgment in favour of Kiwi Joint would be unsatisfied due to the alienation of Mr Buttar’s assets.

The court considered the principles established in Liu v Kang, which stated that freezing orders could be granted if there was a good arguable case on an accrued or prospective cause of action and a danger of assets being removed or dealt with in a way that may frustrate the judgment. The court found that there was a significant risk that the property would be sold, thus frustrating any judgment in favour of Kiwi Joint. The court also considered the balance of convenience, finding it more prejudicial to Kiwi Joint to be without recourse to Mr Buttar's assets than for Mr Buttar to have his assets frozen. Consequently, the court was satisfied that there was a danger of alienation and granted the freezing order as sought by Kiwi Joint.

The High Court made a freezing order in the terms sought by Kiwi Joint, preventing the sale, transfer, or disposal of the property by Mr Buttar and Ms Kaur. This order was made to ensure that the asset would be available to satisfy any judgment that might be entered in favour of Kiwi Joint in the substantive proceeding.

Orders