Australian Competition and Consumer Commission v Unique International College Pty Ltd

FREEZING OF ASSETS 6. You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia or overseas. 7. For the purposes of this order, your assets include: (a) all of your assets, whether or not they are in your name and whether they are solely or co-owned; (b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions).

PROVISION OF INFORMATION 8. Subject to paragraph 9, you must: (a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicants in writing of all your assets world-wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets; (b) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of every transaction between 1 September 2015 and 31 May 2016 in which payments were made by you to any of the following persons and the amount of the payment and the reason for the payment: (i) UIC Development Pty Ltd ACN 134 151 054 (ii) Khela Pty Ltd ACN 140 775 588 (iii) Manmohan Singh (iv) Surinder Kaur (v) Amarjit Singh (aka Amarjit Khela) (vi) Jasmeen Kaur (vii) Baljeet Singh (viii) Mandeep Kang (the related parties) (c) by 4:00pm on Friday 3 June 2016, serve on the applicant an affidavit setting out the above information; (d) by 4:00pm on Friday 3 June 2016, provide to the applicant copies of bank statements for all accounts operated by you. 9. (a) This paragraph 9 applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (b) This paragraph 9 also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (c) You must: (i) disclose so much of the information required to be disclosed to which no objection is taken; and (ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and (iii) file and serve on each other party a separate affidavit setting out the basis of the objection.

EXCEPTIONS TO THIS ORDER 10. Subject to further order, this order does not prohibit you from making payments to cover reasonable business expenses provided that those payments do not exceed $20,000 in total and does not prohibit you from paying any legal costs relating to this application and these proceedings.

COSTS 11. The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENTS 12. Set off by banks This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order. 13. Bank withdrawals by the respondents No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order. 14. Persons outside Australia (a) Except as provided in subparagraph 14(b) below, the terms of this order do not affect or concern anyone outside Australia. (b) The terms of this order will affect the following persons outside Australia: (i) you and your directors, officers, employees and agents (except banks and financial institutions); (ii) any person (including a bank or financial institution) who: (A) is subject to the jurisdiction of this Court; and (B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and (C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and (iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person's assets. 15. Assets located outside Australia Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant. 16. Liberty to apply You have liberty to apply on 24 hours' notice in writing.

THE COURT ORDERS THAT: TO: UIC Development Pty Ltd ACN 134 151 054; and Khela Pty Ltd ACN 140 775 588 This is a 'freezing order' made against you on 30 May 2016 by Justice Flick at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this Order.

INTRODUCTION

1. (a) The application for this order is made returnable immediately. (b) The time for service of the application, supporting affidavits is abridged and service is to be effected by 5.00pm on 31 May 2016.
2. Subject to the next paragraph, this order has effect until further order. There will be a further hearing in respect of this order before Justice Perram on 7 June 2016 (the Return Date), at 10.15am or at such other time as is convenient to the Court. This order expires at 4:00pm on that day.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order: (a) 'applicant', means the Australian Competition and Consumer Commission and the Commonwealth; (b) 'asset', means assets held or owned by you which originated (either directly or indirectly) from Unique International College Pty Ltd ACN 120 557 851 (Unique) whether as a consequence of payments made to you or assets transferred to you or as a result of any other kind of transaction. (c) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation; (d) 'third party' means a person other than Unique and the applicant; (e) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions. (b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or other acting on your behalf or on your instructions or with your encouragement or in any other way.

FREEZING OF ASSETS 6. You must not remove from Australia or in any way dispose of, deal with or diminish the value of any asset whether held in Australia or overseas. 7. For the purposes of this order, your assets include: (a) all of the assets, whether or not they are in your name and whether they are solely or co-owned; (b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions).

PROVISION OF INFORMATION 8. Subject to paragraph 9, you must: (a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all funds received by you from Unique, and all funds paid out by you to any person, including the following persons in the period 1 September 2015 to 31 May 2016 and the amount of the payment and the reason for the payment; (i) Khela Pty Ltd ACN 140 775 588 (ii) Manmohan Singh (iii) Surinder Kaur (iv) Amarjit Singh (aka Amarjit Khela) (v) Jasmeen Kaur (vi) Baljeet Singh (vii) Mandeep Kang (the related parties) (b) by 4:00pm on Friday 3 June 2016serve on the applicant an affidavit setting out the above information. (c) by 4:00pm on Friday 3 June 2016 provide the applicant with copies of all bank statements for the period 1 September 2015 to 31 May 2016 for all bank accounts held by you; 9. (a) This paragraph 9 applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (b) This paragraph 9 also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (c) You must: (i) disclose so much of the information required to be disclosed to which no objection is taken; and (ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and (iii) file and serve on each other party a separate affidavit setting out the basis of the objection.

COSTS 10. The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENTS 11. Set off by banks This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order. 12. Bank withdrawals by the respondents No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order. 13. Persons outside Australia (a) Except as provided in subparagraph 13(b) below, the terms of this order do not affect or concern anyone outside Australia. (b) The terms of this order will affect the following persons outside Australia: (i) you and your directors, officers, employees and agents (except banks and financial institutions); (ii) any person (including a bank or financial institution) who: (A) is subject to the jurisdiction of this Court; and (B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and (C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and (iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person's assets. 14. Assets located outside Australia Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant. 15. Liberty to apply You have liberty to apply on 24 hours' notice in writing.

THE COURT ORDERS THAT: TO: Surinder Kaur Manmohan Singh Amarjit Singh Jasmeen Kaur Baljeet Singh Mandeep Kang This is a 'freezing order' made against you on 30 May 2016 by Justice Flick at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this Order.

INTRODUCTION

1. (a) The application for this order is made returnable immediately. (b) The time for service of the application, supporting affidavits is abridged and service is to be effected by 5.00pm on 31 May 2016.
2. Subject to the next paragraph, this order has effect until further order. There will be a further hearing in respect of this order before Justice Perram on 7 June 2016 (the Return Date), at 10.15am or at such other time as is convenient to the Court. This order expires at 4:00pm on that day.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order: (a) 'applicant', means the Australian Competition and Consumer Commission and the Commonwealth; (b) 'asset', means assets (including cash) held or owned by you which originated (either directly or indirectly) from any of the following parties who are not you: (i) Unique International College Pty Ltd ACN 120 557 851 (Unique); and/or (ii) UIC Development Pty Ltd ACN 134 151 054 (iii) Khela Pty Ltd ACN 140 775 588 (iv) Manmohan Singh (v) Surinder Kaur (vi) Amarjit Singh (aka Amarjit Khela) (vii) Jasmeen Kaur (viii) Baljeet Singh (ix) Mandeep Kang whether as a consequence of payments made to you or assets transferred to you or as a result of any other kind of transaction. (c) 'you', where there is more than one of you, includes all of you and includes you if you are a corporation; (d) 'third party' means a person other than you and the applicant; (e) 'unencumbered value' means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through partners, employees, agents or others acting on your behalf or on your instructions. (b) If you are ordered not to do something, you must not do it yourself or through partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.

FREEZING OF ASSETS 6. You must not remove from Australia or in any way dispose of, deal with or diminish the value of any asset whether held in Australia or overseas. 7. For the purposes of this order, your assets include: (a) all of the assets, whether or not they are in your name and whether they are solely or co-owned, or held in trust; (b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own, including as a trustee (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions).

PROVISION OF INFORMATION 8. Subject to paragraph 9, you must: (a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the applicant in writing of all funds received by you in the period 1 September 2015 to 31 May 2016, the amount of the payment and the reason for the payment from the following persons: (i) Unique; (ii) UIC Development Pty Ltd; (iii) Khela Pty Ltd; (b) inform the applicant in writing of all payments exceeding $20,000 received by you in the period 1 September 2015 to 31 May 2016, the amount of the payment and the reason for the payment from the following persons: (i) Manmohan Singh (ii) Surinder Kaur (iii) Amarjit Singh (iv) Jasmeen Kaur (v) Baljeet Singh (vi) Mandeep Kang, (the related parties) (c) inform the applicant in writing of your relationship to Manmohan Singh and to Amarjit Singh (d) by 4:00pm on Friday 3 June 2016 swear and serve on the applicant an affidavit setting out the above information. (e) by 4:00pm on Friday 3 June 2016 provide the applicant with copies of all bank statements for the period 1 September 2015 to 31 May 2016 in relation to any account operated by you including overseas accounts. 9. (a) This paragraph 9 applies if you are not a corporation and you wish to object to complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that you: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (b) This paragraph 9 also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object to your complying with paragraph 8 on the grounds that some or all of the information required to be disclosed may tend to prove that they respectively: (i) have committed an offence against or arising under an Australian law or a law of a foreign country; or (ii) are liable to a civil penalty. (c) You must: (i) disclose so much of the information required to be disclosed to which no objection is taken; and (ii) prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and (iii) file and serve on each other party a separate affidavit setting out the basis of the objection.

EXCEPTIONS TO THIS ORDER 10. Subject to further order, this order does not prohibit you from making payments to cover reasonable living expenses provided that those payments do not exceed $2,000 in total and does not prohibit you from paying any legal costs relating to this application.

COSTS 11. The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENTS 12. Set off by banks This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order. 13. Bank withdrawals by the respondents No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order. 14. Persons outside Australia (a) Except as provided in subparagraph 16 below, the terms of this order do not affect or concern anyone outside Australia. (b) The terms of this order will affect the following persons outside Australia: (i) you and your directors, officers, employees and agents (except banks and financial institutions); (ii) any person (including a bank or financial institution) who: (A) is subject to the jurisdiction of this Court; and (B) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and (C) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and (iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person's assets. 15. Assets located outside Australia Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant. 16. Liberty to apply You have liberty to apply on 24 hours' notice in writing. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT 1 On 26 October 2015, the Australian Competition and Consumer Commission (the "ACCC") and the Commonwealth of Australia filed an Originating Application in this Court. The Respondent to that proceeding is Unique International College Pty Ltd ("Unique"). An Amended Statement of Claim was filed on 9 May 2016. 2 From about July 2014 to September 2015 Unique was a Vocational Educational and Training Provider ("VET Provider") within the meaning of cl 4 of Sch 1A to the Higher Education Support Act 2003 (Cth). During that period it offered a number of courses as a VET Provider. 3 The Amended Statement of Claim alleged (inter alia) that Unique "targeted particular locations, including rural and remote towns and indigenous communities and areas with significant populations of low socio-economic status for marketing and enrolling consumers in its courses". 4 Between January 2014 and about October 2015 the Commonwealth made payments to Unique of about $140,000,000. 5 The Originating Application claims relief alleging (inter alia) that Unique engaged in unconscionable conduct and false and misleading conduct. The Originating Application seeks relief, including declarative and injunctive relief; the imposition of pecuniary penalties; and orders for non-party consumer redress. Although difficult to quantify at this stage, the non-party consumer redress may amount to the repayment from Unique to the Commonwealth of a sum in excess of $100,000,000. 6 The proceeding is currently listed before another Judge of this Court for a two-week hearing commencing on Monday 6 June 2016.

THE PRESENT APPLICATION 7 The matter comes before the Court as presently constituted as a duty matter. 8 The ACCC and the Commonwealth seek ex parte orders pursuant to rr 7.32 and 7.35 of the Federal Court Rules 2011 (Cth) against: Unique; its two shareholders, being UIC Development Pty Ltd ("UIC") and Khela Pty Ltd ("Khela"); its two directors, Mr Manmohan Singh and Mr Amarjit Singh (Manmohan Sign being the father of Amarjit Singh); and persons who reside with those two directors, being Mr Baljeet Singh, Ms Serinder Kaur, Ms Mandeep Kang and Ms Jasmeen Kaur (the last being the partner of Mr Amrijit Singh). All of these persons, it would appear, reside at the same address. 9 The present application also seeks orders against a number of banks, including the Commonwealth Bank of Australia; National Australia Bank; and Westpac Banking Corporation, in order to clarify the nature of the transfer of $30,000,000 out of Australia. 10 The matter assumes some urgency by reason of the transfer by Ms Surinder Kaur on or about 3 May 2016 of a sum of $30,000,000 from a bank account in Australia to a bank account in Mumbai. The Applicants became aware of this transaction on 16 May 2016 as a result of the Commonwealth monitoring the transfer of large sums of money from Australia. 11 It is concluded that the Court should make orders in the form sought by the Applicants, against Unique, its shareholders UIC and Khela, its two directors, and the other named individuals.

THE PRINCIPLES TO BE APPLIED 12 The relevant principles to be applied recently have been summarised by Gleeson J in BCI Finances Pty Ltd (in liq) v Binetter (No 3) [2015] FCA 1336 at [30]: (1) A freezing order is a drastic remedy which should not be granted lightly. It imposes a severe restriction upon a party's right to deal with his or her assets … (2) The purpose of a freezing order is to preserve the status quo, not to change it in favour of the plaintiff … (3) A reason for care in exercising the power to grant a freezing order is that there may be difficulties associated with the quantification and recovery of damages pursuant to the undertaking if it should turn out that the order should not have been granted … (4) A freezing order may be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor … This principle is reflected in rule 7.35(5)(b). 13 A Court may make a freezing order even though there is no evidence establishing any positive intention to frustrate a judgment: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 at [10] per Kenny J.

CONCLUSIONS IN THE PRESENT CASE 14 For the purposes of the present ex parte application, and for the purposes of rr 7.32 and 7.35, it is concluded that: (a) the ACCC has established a "good arguable case" against Unique. The threshold of a "good arguable case", it should be noted, is a very low one: Curtis v NID Pty Ltd [2010] FCA 1072 at [6] per Edmonds J. As against Unique it is concluded that the threshold is exposed by reference to the pleadings in the main proceeding and by reference to such of the facts as are presently known, including the otherwise unexplained transfer of a significant sum of money; and that: (b) as against the shareholders and directors, there is a real risk that, if an order is not made, monies will be transferred (or indeed may already have been transferred) out of Australia, and that as a result monies may be "removed from Australia" and that there is a danger that any judgment or order of the Court may be wholly or partly unsatisfied. 15 The conclusion that the Court's processes may be frustrated if orders are not made as against Unique is founded largely on the size of the judgment which may be obtained by the Applicants, and the fact that Unique's assets (although large in quantum) are extremely liquid. As at September 2015 it was said that the amounts deposited to the Commonwealth bank account of Unique was a sum in excess of $92,000,000, and the company had other assets worth about $6,000,000. Unique's directors, it is further considered, have the capacity through an associate to move large sums of money offshore very quickly. 16 The conclusion that orders should be made as against the directors, shareholders and other non-parties, is founded in large part upon the fact that each of the individuals have some common bond by reason of their all living together at the same residence and in large part upon the transfer of the $30,000,000 on or around 3 May 2016 by one of those individuals, Ms Serinder Kaur.

MATTERS OF DISCRETION 17 As a matter of discretion, the Orders should be made, and made returnable before the trial Judge on 7 June 2016. They will be expressed to expire on 4.00pm that day. As was the case before Middleton J in Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (in liq) (No 3) [2016] FCA 284, it is further considered that the ACCC and the Commonwealth should be relieved from the requirement to give an undertaking as to damages. 18 Any information which is sought from the three banks mentioned is best pursued by way of subpoena rather than ancillary order. It is noted that the freezing orders as against the entities which have been approved include an ancillary order requiring the provision of further information. The further information should be provided by no later than 4pm on Friday 3 June 2016. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.