Authentico Transnational Pty Ltd v Nagpal [2004] NSWSC 12

New South Wales Supreme Court

CITATION : Authentico Transnational Pty Ltd v Nagpal [2004] NSWSC 12 HEARING DATE(S) : 21, 22 and 23 January 2004 JUDGMENT DATE : 23 January 2004 JURISDICTION: Equity JUDGMENT OF : Hamilton J DECISION : Warrant for arrest issued.

CATCHWORDS : PROCEDURE [112] - Supreme Court procedure - Practice under Supreme Court Rules - Evidence - Other matters - Order to attend for cross examination - Disobedience - Whether warrant may issue for arrest of person under Part 47 r 2 without service of notice of motion. LEGISLATION CITED : Bankruptcy Act 1966 (Cth) s 274B(1) Supreme Court Rules Part 19 r 2, Part 42 r 7, Part 43 r 1 CASES CITED : Re Skase; Ex parte Donnelly (1992) 114 ALR 303 Schnabel v Lui (2002) 56 NSWLR 119 Authentico Transnational Pty Ltd (P1) Anthony Milton Sims (P2) PARTIES : Scott Darren Pascoe (P3) Ajay Nagpal (D1) Arora Mohit (D2) Gulati Sumit (D3) FILE NUMBER(S) : SC 1073/04 COUNSEL : P M Biscoe QC (Ps) No appearance (Ds) SOLICITORS : Piper Alderman (Ps) No appearance (Ds)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

FRIDAY, 23 JANUARY 2004

1073/04 AUTHENTICO TRANSNATIONAL PTY LTD (Receivers & Managers Appointed) & ORS v AJAY NAGPAL & ORS JUDGMENT 1 HIS HONOUR: This is an application by notice of motion filed on 21 January 2004 for the issue of warrants under Part 42 r 7 of the Supreme Court Rules 1970 ("the SCR") for the apprehension of the first, second and third defendants in order to have them brought before the Court to permit their cross examination. The matter arises in the following circumstances. The application is brought by the plaintiffs. Anthony Milton Sims and Scott Darren Pascoe, who are the second and third plaintiffs, have been appointed receivers and managers of the first plaintiff. They have, in their capacity as receivers, attempted to recover from the three defendants, who are directors of the first plaintiff, the first plaintiff's financial books and records. 2 The first plaintiff was up to the time of the appointment of the receivers conducting at Berala and at Parramatta a business of selling shoes. The evidence shows that the defendants failed to cooperate with the receivers. Although some books and papers of the company reached the receivers in various ways a great body of the financial records was not delivered. The evidence shows that although the receivers and their representatives did not come face to face with the second defendant, they did come face to face with the first defendant and the third defendant and that those defendants not only did not deliver the books but engaged in a course or courses of conduct designed to prevent the receivers from getting the books and records and obtaining proper information about the operations of the company, which had been in full swing until the receivers' appointment. 3 The motion came before Dowd J last week. His Honour on 14 January ordered the defendants to deliver all relevant books and records and restrained them from preventing the receivers from taking possession of them. His Honour ordered that service of all documents in the proceedings on the defendants might be effected by serving them on Frank Ngo, solicitor, or leaving them at his office. On 15 January 2004 Dowd J further ordered that each of the defendants serve an affidavit by 4.00 pm on 19 January 2004 identifying all the books and records of the company, specifying the current residential and postal addresses, telephone numbers and email address of the defendants, and providing details of the company's bank accounts. His Honour further ordered the defendants to attend on Wednesday 21 January 2004 before the Equity Registrar "for cross examination ... in relation to the abovementioned affidavits." None of the defendants did so attend. Hence the present application. 4 The orders of 14 January 2004 were made ex parte, but on 15 January 2004 Mr Frank Ngo, solicitor, was engaged to represent the defendants and Mr Wan of counsel attended before Dowd J on that day. However, Mr Ngo has subsequently ceased to act for the defendants and has filed a notice of ceasing to act. 5 Part of the conduct which has led me to the conclusion expressed above, that certainly the first defendant is attempting actively to keep the company's records and information concerning it from the receivers, is the extreme sparseness with which he is prepared to give out his address to any relevant people. Subpoenas were served by leave I granted on Mr Ngo and on the principal of the company's accountants, Mr Avenish Nichkawde. Those gentlemen attended in answer to those subpoenas and gave evidence before me. 6 Mr Ngo's evidence confirmed his engagement and dismissal by the three defendants. The engagement was effected not by the defendants themselves, but by Mr Som Bhatia, an employee in Mr Nichkawde's firm. Mr Ngo never met any of the defendants. He spoke to the first defendant by telephone on at least two occasions. He was never given an address of any of the defendants. The contact details he was given were a mobile telephone number for the first defendant and a mobile telephone number for the first defendant's wife. After the last telephone conversation that he had with the first defendant he tried repeatedly to contact the first defendant again on his mobile phone but was unable to do so, the phone on each occasion ringing out and being unanswered. Mr Ngo had been given $500 by Mr Som Bhatia as an advance on the defendants' costs. In the above circumstances Mr Ngo decided that he would act no longer and filed the notice of ceasing to act. 7 Mr Nichkawde produced written records of his firm (which no doubt included any relevant notes Mr Bhatia made) in answer to a subpoena to produce. None of those was tendered and I infer that none of them showed a street address for any of the defendants. Mr Nichkawde had not met the defendants until after the appointment of the receivers, but did meet at least the first defendant on a Sunday in the midst of those events. Previously the company's affairs had been dealt with, so far as Mr Nichkawde's firm was concerned, by Mr Som Bhatia. Mr Nichkawde was unaware of the defendants' street addresses and had only mobile telephone numbers. Mr Nichkawde made it plain that the $500 given to Mr Ngo by Mr Bhatia was not, so far as Mr Nichkawde was concerned, given by his firm and payment of that amount certainly was not made from a bank account of the firm. 8 On the first day the matter was before me there was no evidence as to the actual whereabouts of any of the three defendants and I was not inclined to issue any warrant, which seemed to me in those circumstances totally futile. But further investigations were made. They revealed, in the case of the first defendant, a street address in Sydney of his home provided by a person who had visited the home. The further evidence also included evidence that another person had recently spoken to the first defendant by phone and he had stated baldly that he was in India. 9 It is upon that state of the facts that application is made for the issue of a warrant under Part 42 r 7, which provides as follows: "(1) Where the Court by subpoena or otherwise, makes an order in any proceedings for the attendance of a person: (a) for the purpose of giving evidence, (b) for the production of any document or thing, (c) to answer a charge of contempt, or (d) for any other purpose,