SINGH v PORIZAKOVA [2022] NZHC 3249

SINGH v PORIZAKOVA [2022] NZHC 3249 [7 December 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-2263[2022] NZHC 3249IN THE MATTER of a claim under Part 18 of the High CourtRulesBETWEEN AVTAR KAUR SINGHPlaintiffAND PORSCHE PORTSMOUNT PORIZAKOVADefendantHearing: On the papersAppearances: S Grant for PlaintiffJudgment: 7 December 2022JUDGMENT 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 RegistrarDateSolicitors:Carter Atmore Law, AucklandS Grant, Barrister, Auckland[1] In this proceeding Ms Singh, who sues through her property manager, seeksfreezing orders on a without notice basis in relation to bank accounts operated by thedefendant, Ms Porizakova. The purpose of the freezing orders is to prevent MsPorizakova from dissipating or transferring overseas the proceeds of sale of a houseproperty that she sold in September 2022.[2] Ms Singh also seeks orders for non-party discovery against the ANZ BankLimited (ANZ) and the Bank of New Zealand Limited (BNZ).Background[3] Ms Singh is 55 years of age. She has suffered from an intellectual disabilitysince childhood. On 31 October 2022 the Family Court appointed her son, MrManpreet Singh, as her property manager for a period of three months. He says shehas never been capable of managing property or monitoring how her assets arehandled.[4] Ms Singh inherited a property situated at 15 Poaka Avenue, Hamilton fromher great aunt, who passed away in 1998. This was sold in 2005. Mr Singh contendsthat Ms Porizakova arranged the sale of the property without his mother's knowledgeand then converted the proceeds of sale to her own use.[5] The net proceeds of sale amounted to $205,819.03. The solicitors who actedon the sale of the property deposited these funds to an account with the Bank of NewZealand (BNZ). Mr Singh says his mother did not have an account with the BNZ atthis time. He believes the defendant operated this account. Thereafter, Ms Porizakovabought and sold four further properties before acquiring a property at 90 LawrenceCrescent for the sum of $736,000 on 14 December 2015. She sold that property forthe sum of $890,000 on 14 September 2022. The property was subject to a mortgageto ANZ. Mr Singh therefore believes the net sale proceeds are likely to be held inaccounts held by Ms Porizakova with ANZ.[6] Mr Singh alleges that Ms Porizakova mingled the proceeds of sale of thePoaka Avenue property with her own funds and bank loans when she purchased allfive properties after June 2005. The Poaka Avenue property has a current rateablevalue of $870,000. On his mother's behalf Mr Singh advances a claim in equityagainst Ms Porizakova for that sum. He seeks to trace the funds that Ms Porizakovaallegedly converted to her own use in 2005 through to the proceeds of sale of theLawrence Crescent property.[7] Mr Singh believes Ms Porizakova will either dissipate the sale proceeds ofthe 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 toldhim 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 theLawrence Crescent property as being an urgent sale. This occurred after he haddiscussed the possibility of lodging a caveat against the property with his uncles. Hebelieves they may have told Ms Porizakova that this was likely to occur and shereacted by selling the property as a matter of urgency. Ms Porizakova also sold theproperty 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 freezingorders over assets held by parties to a proceeding. An applicant for a freezing ordermust establish a good arguable case. This means Mr Singh must demonstrate that theclaim is capable of tenable argument and is supported by sufficient evidence, bearingin mind the early stage at which the application is made.1 He must also establish thatthere are assets to which the orders can apply.[10] The claim against Ms Porizakova rests entirely on the allegation that MsPorizakova operated the BNZ account into which the sale proceeds of the PoakaAvenue property were paid in 2005. The application for non-party discovery againstBNZ will obviously provide significant assistance regarding this issue because it seeksan order that BNZ must disclose the identity of the person into whose account the saleproceeds of the Poaka Avenue property were paid in 2005.[11] Even at this early stage there is considerable support for the possibility thatMs Porizakova was the person who operated the BNZ account into which the proceedsof sale were paid. She had full control of Ms Singh's financial affairs between 2004and 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 Avenueproperty. This person says he was approached by Ms Porizakova about the sale of theproperty and dealt exclusively with her when he purchased the property. He believedMs 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 thesale of the property in circumstances where it appears Ms Singh was incapable ofmanaging her own affairs. If that is so there must be a reasonable possibility that MsPorizakova directed that the sale proceeds were to be paid into her bank account withBNZ. Mr Singh has been unable to find any evidence that his mother received theproceeds of sale and, as I have already observed, he believes she did not have anaccount with BNZ during this period. Viewed overall, I am satisfied Mr Singh hasestablished a good arguable case.[14] The sale of the Lawrence Crescent property was concluded approximatelythree months ago. Part of the sale proceeds would have been used to settle themortgage in favour of ANZ. However, Ms Porizakova sold the property forapproximately $150,000 more than she purchased it in 2015. She would also havebeen required to provide part of the purchase price before she could obtain a loan fromANZ. I therefore consider there are reasonable grounds to believe Ms Porizakovawould have received funds from the sale of the property and that these are likely to beheld in accounts she operates with ANZ.[15] An applicant for a freezing order must also establish a risk that the assets willbe dissipated or removed from the jurisdiction if a freezing order is not made. In thepresent case I am satisfied that this risk exists through the conversations Mr Singh hashad with his uncles and through the urgency with which Ms Porizakova sold theLawrence Crescent property.[16] Finally, the Court must be satisfied that it is appropriate to make the orderson a without notice basis. I am satisfied it is appropriate to proceed in this way becausethere is a risk that service of the application on Ms Porizakova would prompt her totransfer the funds offshore or into accounts she holds, or will open, with otherinstitutions.[17] It follows that Mr Singh has established the grounds necessary to enable theCourt to make the orders he seeks.Result[18] I make orders as sought in paragraphs 1 of the without notice applicationdated 5 December 2022.[19] Mr Singh is to arrange for the proceeding and a copy of this judgment to beserved on Ms Porizakova promptly. The proceeding is to be listed for review in theDuty Judge List on 14 December 2022 at 10 am. The parties have leave to ask theRegistrar to list the proceeding for mention in an earlier Duty Judge List if they requirethe assistance or intervention of the Court prior to 14 December.__________________________________Lang J