Allianz Australia Insurance Limited v Yu (No 3) [2020] NSWSC 1916

Supreme Court New South Wales

Medium Neutral Citation: Allianz Australia Insurance Limited v Yu (No 3) [2020] NSWSC 1916 Hearing dates: 16 December 2020 Date of orders: 16 December 2020 Decision date: 16 December 2020 Jurisdiction: Common Law Before: Campbell J Decision: 1. Orders pronounced by Wright J on 11 December 2020 are continued until further order or the disposition of the principal proceedings, whichever first occurs 2. The costs of the parties in relation to this application are costs in the cause Catchwords: CIVIL PROCEDURE – interim preservation – freezing orders – against third parties – continuation of the freezing order Legislation Cited: Motor Accidents Compensation Act 1999 (NSW) s 118 Uniform Civil Procedure Rules 2005 (NSW) rr 25.11, 25.13, 25.14 Cases Cited: Not applicable Texts Cited: Not applicable Category: Procedural and other rulings Parties: Allianz Australia Insurance Limited (Plaintiff) Soo Yeon YU (Defendant) Hyun Sook Chung (Respondent) Representation: Counsel: J. Catsanos SC (Plaintiff) P. Berg (Defendant)

Solicitors: Sparke Helmore (Plaintiff) Cambridge Lawyers Campsie (Defendant) No appearance (Respondent) File Number(s): 2020/232929

Judgment 1. I am hearing an application for the continuation of freezing orders or asset preservation orders pronounced by Wright J on 11 December 2020. At least so far as the interests of one party to the motion, a Ms Chung is concerned, those orders were made ex parte. 2. I have, earlier today, given reasons for making orders that the motion and affidavit should be taken to have been served on Ms Chung on no later than Monday afternoon, and I will say no more about that now. These reasons will proceed on the basis of some familiarity with the reasons given by Wright J on 11 December for making the interim orders as then sought. 3. The principal proceedings between the plaintiff and the defendant are for the recovery of moneys paid by the plaintiff to the defendant as motor accident damages in respect of personal injury allegedly received by him in a motor accident on 31 July 2013. As I understand the evidence before me, liability was admitted with respect to his claim for damages and the matter was dealt with as an assessment only. 4. The principal injury claimed by the defendant was a severe psychiatric injury. The proceedings were ultimately settled following a settlement conference on or about 9 March 2015 in the sum of $750,000 inclusive of costs. I think I should say that it is accepted that that settlement was arrived at in the context of a claim propounded on the defendant's behalf by his solicitors totalling a little more than $1.6 million plus costs and disbursements. 5. The plaintiff's case against the defendant depends upon the tort of deceit or, in the alternative, the statutory cause of action for misleading or false statements created by the provisions of s 118 of the Motor Accidents Compensation Act 1999 (NSW). 6. On the basis of the material contained in the affidavit of Jack Jones, affirmed on 10 December 2020, I am satisfied that the plaintiff has a good arguable case against the defendant. The real question that has been agitated before me is whether the other conditions of a freezing order have been satisfied to the requisite degree including where the balance of the convenience lies. 7. I should say at the outset that the plaintiff has given the usual undertaking as to damages as recorded by Wright J on 11 December 2020. Given that the plaintiff is a large general insurer, there is no question about the viability of that undertaking. I should also say that the principal area of contention between the parties relates to real property at Terrigal. 8. The plaintiff's contention is that the proceeds of the settlement of the defendant's damages claim have been diverted into that property and ultimately can be traced to that property. A source of the dispute is that the property is registered in the name of the applicant's wife and Mr Berg of counsel, who appears for the defendant, strongly argues that it cannot be said that there is evidence, even to the degree necessary at this interlocutory stage, to satisfy me that there is a good arguable case that the defendant has a beneficial interest in the property, and I will return to that principal issue directly. 9. As Wright J recorded, the plaintiff relies principally upon the provisions of r 25.11 Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'). It provides that: the court may make an order (a freezing order), upon or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the court's process by seeking to meet a danger that a judgment or prospective judgment of the court will be wholly or partly unsatisfied. 1. The circumstance that the plaintiff relies upon as demonstrating that there is a danger that the judgment or prospective judgment will be unsatisfied are, first, the nature of the cause of action alleging, as it does, a species of fraud; and, secondly, facts which are deposed to by Mr Jones that Mr Catsanos SC, who appears for the plaintiff, argues demonstrate that, upon receiving wind, I will say, of these proceedings, the defendant, with a great deal of celerity disposed of real property at Thornleigh and I am asked to infer that that was for the purpose of avoiding the prospect of an adverse judgment. 2. It is true to say that, even in the Sydney market, the facts deposed to by Mr Jones, which are not in contest, demonstrate a very quick turnaround of about three weeks for sale by auction of that property. And that that occurred while the plaintiff was attempting to serve the defendant with the statement of claim. 3. As I have said, Mr Berg says there was just no evidence from which I could be satisfied that the Terrigal property is property of the defendant. The plaintiff relies upon a number of different factors. Those factors include the quick disposition of the property at Thornleigh and the circumstance that this property at Terrigal is in the name of the defendant's wife only. 4. The defendant says, on the basis of affidavit evidence of 11 December 2020, that the property was purchased by his wife and that the funds, so far as she has equity in the property, were hers entirely and that they came from her own savings and money from persons known to her in South Korea. Mr Catsanos says there is a mortgage on the property to an Australian bank which is not referred to in the defendant's affidavit. 5. Ms Chung was examined by a medical assessor for a claim that she brought for nervous shock as a result of her husband's injuries and it is quite apparent from the history that she provided that it was the nature of her relationship with her husband, even though they were said to be separated at the time, that he still managed all of the family's household affairs, finance and properties. Mrs Chung told the doctor that Mr Yu managed all her finances and that he allocated to her a fixed sum or allowance from which she was to pay her expenses. 6. She also told the medical assessor about the Thornleigh property which has now been sold and the Terrigal property. In relation to the Thornleigh property she said that, to the extent to which she had an interest in the property and had signed legal documents in relation to it, she had done so because her husband requested her to sign these forms. 7. In relation to the Terrigal property, the doctor records that: "Mrs Chung reported, at the time of this assessment, that she had complied with her husband's requests to sign these forms". These forms being the documentation in relation to the acquisition of the property that the psychiatrist had been asked to consider in relation to his examination of Mrs Chung to assess the degree of permanent impairment, if any, that she may have suffered as a result of her alleged nervous shock. 8. It is also apparent, although the defendant was said by his estranged wife not to be working, from the history that Ms Chung gave that the family had been dependent upon the defendant and she did not report any employment herself since her migration to Australia in 2007. Rather, she told the doctor that she had been involved in several recreational and social activities including with her church, swimming and golf. She participated in school activities. 9. Moreover, the evidence of Mr Jones is that in order to obtain a mortgage, the defendant had represented to the financier that he was employed in secure, well-paid employment, earning as much as $130,000 per annum. I acknowledge the defendant disputes this. 10. It is also said that there will be evidence at the hearing that an architectural firm had been engaged in relation to work at the Thornleigh property, now sold, and that the defendant was actively involved, contrary to his claims of severe disability, with the improvement of the property and that the builder will give similar evidence. 11. Notwithstanding the consideration that the Terrigal property was acquired prior to the settlement, I am satisfied that there is a good arguable case, given all of the facts I have referred to, supporting an inference, in the absence of any persuasive evidence of independent means on the part of Ms Chung, that that property is one in which the defendant has a beneficial interest, either wholly or, perhaps, jointly with Ms Chung. 12. So far as the balance of convenience is concerned, I am of the view that, given that this is real property in the name of Ms Chung, there is no great inconvenience to her in the continuation of the freezing order. It seems to me that the risk of a dissipation of the asset is greater than any inconvenience she might suffer because property in her name is subject to a freezing order. 13. I should also refer to r 25.13 UCPR which empowers the Court to make a freezing order against a person even if that person is not a party to the principal proceedings and to UCPR r 25.14 which applies in relation to this application. 14. I am satisfied, in accordance with UCPR 25.14(5), as I have said, given the nature of the claim and given the other circumstances in relation to the defendant's control of the family assets, that there is a real risk, if the order is not made, that the asset will be disposed of, that is to say, the Terrigal property in particular, will be disposed of in an attempt to defeat the legitimate interests of the plaintiff in satisfying any judgment it obtains from this Court. The order is therefore, in my judgment, necessary for the purpose of preventing the frustration or inhibition of the Court's process. 15. For these reasons, my order is that the orders pronounced by Wright J on 11 December 2020 are continued until further order or the disposition of the principal proceedings, whichever first occurs. 16. The second order is that the costs of the parties in relation to this application are costs in the cause.