Supreme Court New South Wales Medium Neutral Citation: KTC v Singh & Ors [2018] NSWSC 1510 Hearing dates: 10 September 2018 Decision date: 10 October 2018 Jurisdiction: Equity Before: White J Decision: Application dismissed with costs. Catchwords: CIVIL PROCEDURE – Interim preservation – Freezing orders – No prima facie case that defendant knowingly assisted in a fraudulent design – Where no risk that assets will be dissipated – Delay in bringing proceedings – Inadequate undertaking as to damages – Application dismissed Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 25.11 Cases Cited: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Frigo v Culhaci [1988] NSWCA 88 Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG (The Niedersachsen) [1984] 1 All ER 398 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 TZ Limited v ZMS Investments Pty Ltd [2010] NSWSC 196 Category: Procedural and other rulings Parties: KTC (Applicant) Naveen David Singh (1st Respondent) XALT Pty Ltd (2nd Respondent) Belinda Gai Singh (3rd Respondent) Endy's Enterprises Pty Ltd (4th Respondent) Representation: Counsel: M B Loughnan QC with B Carew (Applicant) A S Bell SC with JJ Hutton and R A Jedrzejczyk (Respondents) Solicitors: HWL Ebsworth Lawyers (Applicant) Ashurst (1st & 2nd Respondents) File Number(s): 2018/229073 Judgment 1. HIS HONOUR: This is a contested application for freezing orders brought by the applicant, KTC (a company incorporated in the Cayman Islands) against four respondents. KTC is the plaintiff in proceedings in this Court brought by way of statement of claim filed 25 July 2018 against five defendants. Two of these defendants are respondents to this application. The other respondents are the wife and an associated company of the second defendant, Mr David Singh. 2. KTC does not contend that there is an imminent risk of the respondents' dissipating assets with the intention of frustrating a judgment. No ex parte application was made for a freezing order. KTC submits that it should be inferred from the conduct of two of the respondents that, unless restrained, the respondents will dissipate assets so as to put them outside the reach of KTC should they become the judgment creditor. 3. The application for a freezing order is made under r 25.11 of the Uniform Civil Procedure Rules 2005 (NSW). That rule provides: "25.11 Freezing order (cf Federal Court Rules Order 25A, rule 2) (1) 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. (2) A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets." 1. In Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 the plurality (at [51]) approved what was said by the Court of Appeal in Frigo v Culhaci [1988] NSWCA 88 in relation to the Court's inherent jurisdiction to grant a Mareva order; that the order is a drastic remedy not to be granted lightly, and its purpose is to preserve the status quo, not to change it in favour of the plaintiff. The plurality lamented (at [52]) that a reason rarely adverted to for care in exercising the power to grant a Mareva order was that there may be difficulties associated with the quantification of recovery of damages pursuant to the undertaking of damages that is required for the grant of such an order should it turn out that the order should not have been granted. The plurality also referred to the importance of discretionary considerations, including whether the applicant seeking the order has proceeded diligently and expeditiously (at [53]). 2. The purpose of the grant of a Mareva order and its statutory counterpart under UCPR r 25.11 is to prevent the frustration of the processes of the Court by a defendant whom it is apprehended will seek to put his or her assets out of the reach of the plaintiff so as to prevent enforcement of a judgment. In Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 Gleeson CJ said at 321-322: "The remedy is discretionary, but it has been held that, in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant's absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied." 1. In TZ Limited v ZMS Investments Pty Ltd [2010] NSWSC 196 Barrett J said (at [26]): "A general law freezing order is warranted only if, in the words of Bryson J in Acquasun Pty Ltd v Coverdale Ram Pty Ltd [2000] NSWSC 1146, there has been 'conduct on the part of the defendants which can reasonably be interpreted as potentially having the effect of frustrating the ordinary processes of the court and the enforcement of its judgments or of being intended to do so or of being in any way evasive indicating dishonesty or otherwise indicating actually or potentially that the assets of the company have been or will be dealt with in an irregular way'." 1. The respondents emphasise what was said by Mustill J in Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG (The Niedersachsen) [1984] 1 All ER 398 (at 406) that was approved in Frigo v Culhaci at 8 that: "It is not enough for the plaintiff to assert a risk that the assets will be dissipated. He must demonstrate this by solid evidence. This evidence may take a number of different forms. ... But the evidence must always be there." 1. In many cases the risk of dissipation of assets to avoid a judgment will be evident from the plaintiff's strong prima facie case of the defendant's having fraudulently misappropriated assets or of serious dishonesty. As the Court held in Patterson v BTR Engineering (Aust) Ltd such evidence may establish that it can reasonably be inferred that the defendant is the sort of person who would, unless restrained, not preserve his or her assets intact so that they might be available to a judgment creditor (at 325-326). 2. KTC seeks to bring its case within that principle. But it does not say that it has a prima facie case that the respondents themselves engaged in fraudulent activity. Rather, it says that two of the respondents, who are defendants to its claim, participated with knowledge in a fraudulent design and breach of fiduciary duties allegedly owed by another defendant, a Mr David, to KTC. 3. The facts in relation to this claim are complex. For the reasons which follow I do not accept that KTC has shown that it has a prima facie case that the relevant defendants (that is, relevant to its present application for freezing orders) knowingly assisted in a fraudulent design of Mr David's or in a breach by him of fiduciary duties owed to KTC. The evidence does not establish a risk that assets will be dissipated. Accordingly, the claim for the grant of a freezing order fails in limine. In any event the freezing order would be refused on the grounds of KTC's delay in bringing the proceedings and the inadequacy of the proffered undertaking as to damages. 4. KTC's claim concerns dealings in shares of Global Renewables Ltd ("GRL"), a Cayman Islands company. On 21 January 2009 GRL acquired the shares in Global Renewables Australia Pty Ltd ("GRA") that conducted a waste management facility at Eastern Creek. As at 27 January 2010 the shares in GRL were held as to 80 per cent by another Cayman Islands company called Emergent Capital Limited ("ECL") and as to 20 per cent by a Cayman Islands company called Singh Investments Limited ("SIL") of which Mr David Singh was the director and shareholder. Mr Singh is a defendant in the proceedings and one of the respondents to the application for a freezing order. Mr Singh had been the managing director of the former owner of the waste management facility. 5. KTC's directors were Mr Charif Kazal and his brother Mr Tony Kazal. KTC had a 50 per cent shareholding in ECL. The other 50 per cent of the shares in ECL were held by another Cayman Islands company called RAAL Limited ("RAAL"). That was a company controlled by a Mr Roderic David. Mr David is a defendant to the present proceedings. He is not a respondent to the present application. 6. In broad terms Mr Charif Kazal contends that KTC's arrangement with RAAL was that the Kazal brothers would contribute to ECL by doing consultancy work and making introductions and opening doors through contacts in the United Arab Emirates in respect of a joint venture with a company in the United Arab Emirates for the management of a workers' city in Abu Dhabi. ECL's other investment was its indirect investment in the waste facility at Eastern Creek. During 2009 there were disputes between Mr Kazal and Mr David about the funding of ECL. In later proceedings in the Cayman Islands a judge of the Grand Court of the Cayman Islands, Mr Justice Jones, held that prior to a meeting of directors of ECL that took place on 28 January 2010 Mr David and Mr Kazal were at loggerheads. Mr David contended that RAAL's loan accounts with ECL stood at approximately $5.8 million and KTC's stood at $600,000. KTC had acknowledged it was obliged to contribute further capital and said it would do so once proper financial statements had been prepared and agreed upon. A company associated with Mr David was responsible for the preparation of ECL's financial statements. Mr David regarded this as a hollow promise or an excuse. 7. At a board meeting of ECL held on 28 January 2010 two directors were present, Mr David and a Mr Mavromanulakis (known as Mr Mavro) who had been appointed as a director in 2009. According to Mr Charif Kazal he and his brother jointly held the third directorship. They did not attend. Mr David and Mr Mavro passed resolutions for the issue of additional shares in ECL that had the effect of diluting KTC's shareholding from 50 per cent to less than one per cent. KTC alleges that on 29 March 2010 Mr David and Mr Mavro also resolved to remove him and his brother as directors of ECL and they were so removed. 8. KTC does not allege that Mr Singh or his company, SIL, participated in these transactions. On 14 May 2010 KTC presented a winding-up petition of ECL in the Cayman Islands. On 4 October 2010 a judge of the Grand Court of the Cayman Islands, Mr Justice Jones, made an order to the effect that ECL's shareholding in GRL could be sold on terms that the net proceeds of sale be paid into court pending the outcome of KTC's winding-up petition. 9. KTC alleges that in or about December 2010 all of the shares in GRL were sold to Ironbridge Capital Pty Ltd ("IBC") for $25 million. By the time of the sale ECL held only 50 per cent of the shares in GRL. This was the result of an issue of shares in GRL to SIL made on or about 23 April 2010. KTC alleges that the share issue was for no consideration. For the reasons below, that contention is without substance. 10. Half of the proceeds of the sale of shares in GRL, representing ECL's share of the proceeds, were paid into court in the Cayman Islands. In his judgment of 23 November 2011 Jones J records that the net proceeds of sale paid into Court were about A$12 million. Jones J concluded that the issue of shares in ECL that diluted KTC's equity from 50 per cent to 0.01 per cent was invalid and the result of the directors of ECL breaching their fiduciary duty by issuing shares for the only purpose of eliminating KTC's interests and passing ownership of ECL to RAAL. His Honour directed the liquidators of ECL to rectify the register of members to reflect that KTC and RAAL each owned 50 per cent of the shares in KTC. I was told that KTC's 50 per cent share of the moneys paid into court in the Cayman Islands was remitted to it. 11. GRL acquired the shares in GRA in January 2009 for $1 plus the obligation to assume GRA's debts. The reason the shares in GRL became valuable such that they were sold for about $25 million in December 2010 was that in February 2009 a government entity known as Waste Recycling and Processing Corporation ("WSN") commenced proceedings that concerned the proper construction of terms of a Waste Processing Deed entered into between WSN and a related company of GRA. (When the deed was entered into the ultimate holding company of the waste facility was a public company called GRD Limited.) A company in the GRD group had been required to build the facility in return for a fee paid by Waste Service New South Wales and WSN was obliged to pay a performance-based fee for the processing of waste. Litigation concerning the proper construction of the Waste Processing Deed was ultimately resolved by the Court of Appeal on 6 October 2009. The result was favourable to the owners and operators of the waste facility. That led to the entry into a new deed that had the effect of making a company called Global Renewables Eastern Creek Pty Ltd ("GREC") profitable. GREC is a subsidiary of GRL. 12. As part of the purchase of ECL's and SIL's shares in GRL another company controlled by Mr Singh, XALT Pty Ltd ("XALT") acquired an indirect 50 per cent shareholding in GRL. Mr Charif Kazal deposes that the terms of IBC's offer required that SIL agree to reinvest its entire proceeds from the sale of its 50 per cent shareholding into the company (GR Holdco Pty Ltd) that acquired the shares in GRL. XALT is a defendant and respondent to KTC's application for freezing orders. The other two respondents to that application are Mrs Singh and another company controlled by Mr Singh, Endy's Enterprises Pty Ltd. They both hold real property. KTC contends that it can be inferred (although no evidence was led about this) that the moneys used by Mrs Singh and Endy's Enterprises, to acquire real property registered in their names has come from the 50 per cent shareholding in GRL controlled by Mr Singh. 13. The statement of claim alleges that on or about 28 November 2013 all of the shareholding in GR Holdco was sold to Global Renewables Holdings Pty Ltd and that XALT acquired 50 per cent of the shares in Global Renewables Holdings. KTC pleads that the transfer of shares from GR Holdco to Global Renewables Holdings was for more than $119 million. It also alleges that separately XALT sold its shares in GR Holdco to Global Renewables Holdings Pty Ltd for more than $58 million. 14. KTC's claim against Mr Singh depends upon its being able to attack the issue of shares in GRL in April 2010 to SIL that increased SIL's shareholding in GRL from 20 per cent to 50 per cent and the subsequent sale of the shares in GRL to GR Holdco. These transactions took place when KTC's interests in ECL had purportedly been diluted to 0.01 per cent of ECL. The board of ECL at the time comprised Mr David and Mr Mavro. KTC does not allege that Mr Singh has accessorial liability for the dilution of KTC's shareholding in ECL. 15. KTC alleges that RAAL engaged in a dishonest and fraudulent design by, amongst other things, "[causing] ECL to execute the second GRL shareholders' agreement, in which it was agreed that GRL would issue 60 ordinary shares to SIL for no consideration, and did so accordingly, thereby equalising SIL's shareholding in GRL with that of ECL". It also alleges that RAAL engaged in a dishonest and fraudulent design by causing ECL to execute two other documents called the First Side Deed and the Second Side Deed and causing ECL to join with SIL to direct GRL to join in what it called the "GRL Consortium Bid" that resulted in the sale of the shares in GRL to GR Holdco. It alleges that RAAL engaged in a dishonest and fraudulent design by causing ECL to join with SIL to cause GRL to arrange for GRA to engage PriceWaterhouse Coopers to carry out a valuation and then causing GRL to accept PriceWaterhouse Coopers' valuation. KTC alleges that Mr Singh procured the acts and transactions alleged to constitute a fraudulent design or fraudulent breach of trust by RAAL and that he participated with knowledge in the fraudulent design. KTC alleges that Mr Singh is liable to pay equitable compensation to it or to account for alleged secret profits made. It says that it has lost the opportunity to continue to participate as a 40 per cent stakeholder in the waste facility. 16. A remarkable feature of KTC's evidence and submissions on the application was the absence of any evidence to impugn the issue of 60 shares in GRL to SIL that gave SIL a 50 per cent shareholding in GRL which must be the focus of its complaint. In opening the case counsel for KTC made no attempt to explain the transactions that preceded the issue of 60 shares and, prima facie, explain it. 17. The issue of 60 shares in about April 2010 to SIL was preceded by a shareholders' agreement entered into on or about 29 November 2009 called the "Global Renewables Limited Shareholders Deed". It was executed by Mr David for ECL and GRL and by Mr Singh for SIL. 18. The deed recited that ECL held 80 per cent of the shares in GRL and SIL held 20 per cent of the shares. Clause 9 provided in substance that on the date a new waste processing deed was entered into between WSN and GRC, the board would conduct a review to establish whether or not the Eastern Creek Facility had a positive EBTDA or would have a positive EBTDA under the amended waste processing deed. If so, GRL was required to issue redeemable preference shares to SIL to a value equal to 37.5 per cent of the adjusted net present value of the facility as determined by the auditor on the basis of various assumptions set out in clause 9.2. The deed included a note setting out the basis upon which the figure of 37.5 per cent had been arrived at. It was to give SIL an economic interest equal to half of the value of the Eastern Creek Facility while still retaining 20 per cent of the ordinary shares. 19. Mr Kazal deposed that the shareholders' agreement was executed without the knowledge of either him or Tony Kazal and was executed by Mr David on behalf of ECL without reference to him. He deposed that he only learned of the execution of the shareholders' agreement, and other documents Mr David and Mr Singh had created without his knowledge or input, during the litigation in the Grand Court of the Cayman Islands. 20. The proposal that Mr Singh would acquire a 50 per cent economic interest in the Eastern Creek facility through the issue of redeemable preference shares was the subject of email correspondence that was copied to Mr Kazal on 16 and 17 December 2008. On 5 May 2009 Mr Singh sent to Mr David an email under the heading "Subject: Shareholder agreement Consulting Agreement". The email was forwarded by Mr David to Mr Kazal. The email explained in some detail the terms of what became clause 9 of the first shareholders' agreement. 21. On 14 November 2009 Mr Singh sent an email to Mr Kazal attaching the updated draft of "the GRL shareholders' agreement" that included the substance of clause 9. In Federal Court proceedings referred to below, Mr Singh deposed that in around December 2008 Mr David provided him with a copy of minutes of the ECL board of directors' meeting that took place on 5 December 2008 which was signed by Mr David, Charif Kazal and Tony Kazal. He deposed that the minutes referred to Mr David's being authorised to "sign any type of document, contract, undertaking or agreement on behalf of [ECL] on any issue." The minutes were not tendered on the present application, but there was no evidence from KTC that contradicted what Mr Singh had deposed to. 22. On 1 December 2009 Mr Singh sent an email to Mr Kazal attaching a "summary explanation of how the GRL shareholders' agreement works as regards SIL and ECL". The explanation included the following: "Assume a hypothetical example where the calculation determines that the Net Present Value of Eastern Creek is $20.1m and the amount of loans from ECL to GREC are $2.4m. SIL would then be awarded RPS to the value of 37.5% of ($20.1m - $2.1m) = $6.75m. The remaining value of Eastern Creek to GRL would then be $13.35m (i.e. $20.1m - $6.75m) of which $2.1m are ECL Loans and the remaining $11.25m is owned $9m by ECL and $2.25m by SIL. SIL's total value is the RPS worth $6.75m plus [its] 20% of GRL worth $2.25m which equals $9m (i.e. 50% of the value of Eastern Creek). ECL's total value is it's [sic] 80% of GRL worth $9m (i.e. 50% of the value of Eastern Creek)." 1. In his affidavit in the Cayman Islands proceeding Mr Singh deposed that on 29 November 2009 an agreement was made between GRL and SIL effective from 1 December 2008 until 30 October 2009 that provided for payment of a monthly consultancy fee to SIL. He deposed that a further consultancy agreement was executed between GRL another company he owned called R3Con Pty Ltd for services provided to GRL from 1 November 2009 at a lower rate of remuneration. He deposed that the second shareholders' agreement that was entered into on 23 April 2010 between ECL, SIL and GRL was entered into because: 1. GRL could not meet its payment obligations for consultancy fees because ECL was unable or unwilling to contribute further funding to GRL and without further funding GRL would not be able to pursue its business plan; 2. the time for issue of the redeemable preference shares pursuant to the first shareholders' agreement was imminent, but it would be difficult for GRL to pursue additional projects in the immediate time with what would effectively be a debt on its balance sheet; and 3. ECL was unable to deliver the projects in the United Arab Emirates that Mr Singh had been told were available when he agreed to ECL's joining with him in the acquisition of GRL. 1. There was no contrary evidence on this application. 2. As the second shareholders' agreement replaced the earlier agreement, SIL lost its entitlement to rights provided for under the first shareholders' agreement to redeemable preference shares and benefits which would accrue from them. In Federal Court proceedings Mr David deposed to the benefits of the second shareholders' agreement to ECL as follows: "91. First, the Second Shareholders' Deed obliterated the RPS mechanism that had been put in place under the First Shareholders' Deed. This entailed SIL giving up its rights to receive the RPS and to be paid pursuant to RPS in priority to the payment of dividends to shareholders and the repayment of shareholder loans. This had the effect of bringing forward the time that dividends could be paid on GRL's ordinary shares. According to cashflow forecasts which I saw in early 2010, had the RPS been issued pursuant to the First Shareholders' Deed, GRL would not have been in a position to pay dividends on its ordinary shares until the RPS had been fully paid, which would likely have been some time in 2023. Under the Second Shareholders' Deed, no RPS would be issued to SIL, which meant that GRL would likely be in a position to pay dividends on its ordinary shares by 2012 or 2013. 92. The other advantage, as I understood it, of scrapping the RPS mechanism was that the RPS would no longer have to appear as a debt on GRL's balance sheet, which would make it easier for GLR to obtain finance and to pursue new projects. 93. Secondly, the Second Shareholders' Deed provided that the $678,333.33 in outstanding fees owed to SIL under the SIL Consultancy Agreement would be treated as a shareholder loan by SIL to GRL, on the same terms as the existing shareholder loan by ECL to GRL (clause 7.1). This served to reduce the pressure on GRL in terms of cashflow, and also removed the need for GRL to call on further loans from ECL. 94. Thirdly, ECL was relieved of its obligation under the First Shareholders' Deed to provide an additional $7.8 million in funding to GRL. 95. Fourthly, the Second Shareholders' Deed provided for SIL to increase its shareholding in GRL from 20% to 50%. This was effected by the resolution and issuance of additional shares referred to in paragraph 98 below. The effect of these arrangements was that SIL gave up its rights to the RPS (as referred to in paragraphs 91-93 above) in exchange for an increased equity stake in GRL. The equalisation of SIL's and ECL's ownership interests in GRL was also, as I understood it, intended to reflect a mutual arrangement whereby SIL and ECL would operate as equal partners, not only in terms of sharing the proceeds of the business, but also in bearing the costs of growing and improving GRL, and exploring new opportunities for the business. 96. Fifthly, I agreed to move to Australia and to become an Australian resident so that I could be the Australian-based director of GLR." 1. There was no contradiction of this evidence on the present application. Indeed, KTC did not seek to grapple with it. Rather, it ignored the benefits to ECL and GRL of the surrender by SIL of rights it enjoyed under the first shareholders' agreement. 2. KTC's complaint is that the dilution of its shares in ECL meant that the Kazals were not able to participate in any of the subsequent decision-making. In the Federal Court proceedings Mr Singh deposed that he had received a telephone call from Mr David on 2 February 2010 during which Mr David said to him: "KTC and the Kazals have failed to honour their funding obligations to GRL. RAAL called in its loans to ECL but the loans have not been repaid. The board has therefore decided to capitalise RAAL's loans into equity. As a result RAAL now owns 99.9 per cent of Emergent Capital". 1. Mr Singh deposed that he accepted what Mr David told him and he was not aware of or involved in communications between Mr David and any of the Kazal brothers regarding RAAL's loans to ECL. He deposed that he received a further call from Mr David in March 2010 in which Mr David told him that "Charif and Tony have been voted off the board of Emergent Capital. So the only two directors now are me and Niko". Mr Singh deposed that he accepted what he was told. He was not aware of or involved in communications between Mr David and any of the Kazal brothers regarding the makeup of the ECL board. 2. The conversations Mr Singh deposes to are inherently probable. They reflect the position that Mr David had taken. There is no contrary evidence on the present application. On the evidence adduced on the application there is not a prima facie case that at a final hearing KTC is entitled to the final relief it claims against Mr Singh or XALT. 3. KTC referred to two side agreements entered into at the same time as the second shareholders' agreement was entered into. Mr Kazal deposed that in his opinion the matters dealt with in the two side deeds were of great advantage to Mr Singh. It does not appear that the possibilities provided for in the two side agreements ever came to pass, nor that they are material to KTC's complaint that it was deprived of the value of its shareholding in GRL. In his affidavit in the Federal Court proceeding Mr Singh provided his explanation for the agreements. The explanations are not implausible. It is unnecessary to pursue this matter further in these reasons. 4. No evidence was adduced to establish impropriety of a valuation carried out by PriceWaterhouse Coopers. 5. KTC also complains that when ECL and SIL invited offers for their shares in GRL, KTC offered more for the shares than the offer ultimately accepted. But there is no evidence that Mr Singh was under any obligation to sell SIL's shares to KTC. 6. As KTC has not shown a prima facie case for final relief its claim for freezing orders must fail. But there are additional grounds why that result must follow. 7. First, there is no evidence that Mr Singh would attempt to put assets beyond the reach of KTC or that there is a risk that that might happen. Mr Singh's wife and children have always lived in Australia. Mr Singh has also lived in Australia, except for a period of approximately three years when he worked in the United Kingdom overseeing the construction of new recycling facilities and for two brief periods in 1995. His responsibilities as managing director of GRL Pty Ltd (a subsidiary of the then publicly listed Australian company GRD Limited) included running both the Australian and UK arms of the Global Renewables business and supervising the operation of the Eastern Creek waste facility. Mr Singh lives in Sydney with his wife and two children who are at school. He is the managing director of another company that is engaged in the business of developing, operating and funding infrastructure projects in New South Wales and around Australia that facilitate the recycling and reuse of waste products. The company has over 200 employees. In his capacity as chairman of Global Renewable Group he remains involved in the operation of the Eastern Creek waste facility. He is an established businessman with strong ties to New South Wales. There is no evidence that would support a finding that there were reasonable grounds to apprehend that he would deal with his assets so as to put them beyond the reach of KTC. 8. Secondly, KTC's delay in bringing its claim is extraordinary. The events giving rise to the proceedings took place in 2010. The statement of claim was filed on 25 July 2018. Proceedings in the Cayman Islands were concluded on 23 November 2011. There is no satisfactory explanation for the delay. The delay is particularly concerning because proceedings have been on foot in the Federal Court between Re. Group Pty Ltd and Mr Singh and Mr Charif Kazal since 2 December 2016. Those proceedings raise the same issues as KTC seeks to raise in this proceeding insofar as they consider the transactions concerning GRL. In the Federal Court proceedings Mr Singh seeks final injunctions and damages for injurious falsehood in respect of publications said to have been made by Mr Charif Kazal and a Mr Adam Kazal that accuse Mr Singh of being a corporate thief who robbed his business partners of $180 million (amongst other allegations). Mr Singh says that the allegations contained in the publications were false. Mr Kazal has filed a defence denying that the publications were false. If there is some reason that KTC did not bring its claim in a timely fashion after 23 November 2011, one would at least expect it to have brought its claim in early 2017 to be heard with the current Federal Court proceeding. Both claims evidently arise out of the same matrix of facts and would encompass the same matter. 9. Thirdly, an undertaking as to damages is offered (as I understand it) by KTC, but it acknowledged that it had no assets with which to meet the undertaking. Counsel for KTC also advised that Mr Charif Kazal did not have assets that could support an undertaking as to damages. I was told that KTC could procure a bank guarantee in three days to secure an undertaking as to damages up to a sum of $500,000. There was no evidence to that effect and no such bank guarantee was proffered. I was invited to make a freezing order conditional upon such a bank guarantee being provided. Why those standing behind KTC could not proffer an undertaking as to damages supported by at least the approximately $5.5 - $6 million that was received in 2012 was not explained. Counsel for KTC submitted that the proffered bank guarantee should amply cover any damages that might arise as a result of the grant of freezing orders, given that the respondents would have liberty to apply to discharge the orders and the orders would have the usual carve-out in respect of dealings in the ordinary and proper course of business, or in the payment of ordinary living expenses (up to an amount to be nominated per week), or paying reasonable legal expenses (up to an amount to be determined). No submission was made as to the amounts that should be allowed for ordinary living expenses or reasonable legal expenses. 10. KTC submitted that if particular expenditure outside these parameters was sought then an application could be made to the court. In effect KTC sought that the Court supervise the respondents' dealings with their assets. The position taken by KTC failed to recognise the drastic and extraordinary nature of freezing orders. Moreover, as the plurality said in Cardile v LED Builders Pty Ltd at [52], there may be difficulties associated with quantifying the damages that might be payable pursuant to the undertaking for damages if it should turn out that the freezing order should not have been made. Having regard to the extensive nature of Mr Singh's business interests, the difficulties of quantifying, for example, the value of a lost opportunity, or the loss of credit standing when a freezing order was served on his bank, and any consequential losses that might accrue, would be very difficult to quantify and, if quantifiable, might well exceed the amount of the bank guarantee to be proffered. 11. For all of these reasons the application should be dismissed. 12. I order that the plaintiff's notice of motion filed on 22 August 2018 be dismissed with costs. ******** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 October 2018