Mockingbird Properties Ltd v Jhim Homes Ltd - [2022] NZHC 3247

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-002242

[2022] NZHC 3247

BETWEEN
MOCKINGBIRD PROPERTIES LIMITED

Plaintiff

AND

JHIM HOMES LIMITED

First Defendant

LASHMAN RAM JHIM

Second Defendant

Hearing: 2 December 2022

Counsel:

P Muir for the Plaintiff

Lashman Jhim for the First Defendant and in Person

Judgment:

6 December 2022

JUDGMENT OF HARVEY J

This judgment is delivered by me on 6 December 2022 at 2 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Solicitors:
Steindle Williams Legal, Auckland

Copy to:
The Second Defendant

MOCKINGBIRD PROPERTIES LTD v JHIM HOMES LTD [2022] NZHC 3247 [6 December 2022]

Introduction

[1] Mockingbird Properties Limited (MPL) has filed a without notice interlocutory application on 28 November 2022 for freezing orders over two properties located in Manurewa and owned by the defendants, Jhim Homes Limited (JHL) and Lashman Jhim. Contemporaneously, MPL filed an application for summary judgment on the basis that there is no viable defence to its claim concerning the default by the first defendant on a property purchase of 32 Heathdale Crescent, Papakura and claims damages of $412,109.1

[2] Regarding the application for freezing orders, to ensure that any prospective judgment arising out of a claim against the defendants may be satisfied, the plaintiff argues that freezing orders are necessary because there is a danger the Manurewa Properties may be disposed of before the summary judgment proceedings had concluded.

[3] By a minute dated 1 December 2022, I directed that an urgent teleconference be arranged with notice on a Pickwick basis.2 That occurred on Friday 2 December 2022 at 10.00 am. Mr Muir was present along with the second defendant, Lashman Jhim representing himself.

[4] Mr Jhim submitted that the Heathdale Crescent property dispute occurred because of the unwillingness of the plaintiff to negotiate in difficult and deteriorating market conditions. He pointed out that neither of the Manurewa properties had been sold, because the mortgages over them exceeded sale offers by a significant margin. Mr Muir noted that this was the first time he had heard of the financial arrangements of the defendants and that, in any event, these assertions from Mr Jhim did not alter the situation regarding the plaintiff’s application for freezing orders.

[5] Following that, I gave Mr Jhim until 2 pm Friday 2 December 2022 to file evidence of his current liabilities regarding the properties in question. Soon after Mr

1 The property has been erroneously described as “Heathcote” in paragraph 32 the affidavit of Megan Lattie sworn 25 November 2022 in support of the summary judgment application.
2 Mockingbird Properties Limited v Jhim HC Auckland CIV-2022-404-002242, 1 December 2022 (Minute of Harvey J).

Jhim filed copies of statements and loans outlining the extent of both defendants’ indebtedness.

[6]The issue for determination is whether the freezing orders should be issued.

The freezing orders sought

[7]MPL applies for a freezing order on the following terms:

(a)JHL is to direct their solicitor…

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: [2022] NZHC 3247
Decision Date: 6 December 2022

CaseChat Overview and Summary

Mockingbird Properties Limited (MPL) has filed an application for freezing orders over two properties located in Manurewa, owned by the defendants, Jhim Homes Limited (JHL) and Lashman Jhim. The application was made without notice. Contemporaneously, MPL filed an application for summary judgment on the basis that there is no viable defence to its claim concerning the default by the first defendant on a property purchase of 32 Heathdale Crescent, Papakura and claims damages of $412,109.1. The issue for determination was whether the freezing orders should be issued.

The court considered the principles governing the grant of a freezing order. A plaintiff must demonstrate a good arguable case in the substantive claim against the respondent; assets to which the order can apply; and a real risk of dissipation. The court must also consider where the overall justice of the case lies. The heart of the jurisdiction is where there is a real risk that the order may go unsatisfied. The court accepted that the plaintiff had a good arguable case, that the defendants had assets over which a freezing order could apply, and that there was a real risk of dissipation of those assets.

Accordingly, the court granted the plaintiff’s application for freezing orders over the defendants’ Manurewa Properties on the terms as sought. The orders require JHL to direct their solicitor to hold the proceeds of any sale of the two properties in trust pending further order of the Court on the terms sought. The orders were made on the basis that the plaintiff had provided an undertaking as to damages and evidence of its means.

Orders