KITAY AS LIQUIDATOR OF DISABILITY DR PTY LTD -v- MIGWI [2026] WASC 131 (14 April 2026)

1. In support of the application, the plaintiff read three affidavits, being:

(a) two affidavits of the plaintiff filed 25 February 2026 and 10 March 2026; and

(b) an affidavit of Ryan Eamonn Lennon, a partner of the plaintiff's lawyers, filed on 10 March 2026.

1. I note that the plaintiff has filed an undertaking as to damages, as well as a memorandum filed pursuant to O 59, r 9(2) of the Rules of the Supreme Court 1971 (WA) (Rules), which requested that the chambers summons be listed for hearing at the court's 'first availability' and without notice having first been given to the defendants. On this basis, the chamber summons was listed before me this morning on an urgent and ex parte basis.
2. I have also had the benefit of a written outline of submissions, as well as oral submissions from counsel for the plaintiff who appeared before me this morning.

1. Disability Dr Pty Ltd (Company) was incorporated on 24 July 2020. Its registered address is 19 Allison Drive, Girrawheen, a property owned by the defendants as joint tenants. The first defendant, Mr Migwi, is the sole director and secretary of the Company. The Company has 100 shares on issue: 50 owned by the first defendant, and 50 by the second defendant, Ms Kinyua.[1]
2. Despite Ms Kinyua not being appointed as a director of the Company, the evidence before the court is that she was a signatory on the Company's bank accounts with both the Commonwealth Bank and the ANZ. There is also evidence that she communicated by text with a guardian of a client of the Company on behalf of the Company.[2]
3. On 8 April 2025, the plaintiff was appointed as liquidator of the Company by the Federal Court of Australia, on the application of the Australian Taxation Office (ATO), following the failure to comply with a statutory demand issued by the ATO.[3]
4. The evidence before the court is that the defendants are currently the registered proprietors of three properties in Western Australia, including the Property.[4] On 9 March 2026, Mr Kitay observed that the Property was being advertised for sale for $739,000 and, on the basis of public searches, believes that the Property is currently under offer.[5]

Should the freezing orders sought by Mr Kitay be made?

1. The plaintiff's application is made pursuant to O 52A, r 5 of the Rules, which relevantly provides that:

(a) the rule applies if an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the court (r 5(1)(b));

(b) the court may make a freezing order or an ancillary order, or both, against a prospective judgment debtor if the court is satisfied, having regard to all of the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied, because the assets of the prospective judgment debtor are disposed of, dealt with, or diminished in value (r 5(4)(b)(ii)).

1. The purpose of a freezing order is to prevent frustration or abuse of the process of the court; it is not to provide security in respect of a judgment or an order, nor to substitute for the use and methods of execution.[6]
2. Before the discretion to make a freezing order is enlivened, the court must be satisfied that:

(a) the plaintiff has a good arguable case against the defendants on either an accrued or prospective cause of action that is justiciable in the court; and

(b) there is a danger that the prospective judgment will be wholly or partly unsatisfied because assets of the defendants might be removed, or otherwise disposed of, dealt with, or diminished in value.

1. The danger of dissipation must be sufficiently substantial and not merely a suspicion. It is necessary for the plaintiffs to establish by evidence and not assertion that the defendant is likely to remove assets from the court's jurisdiction.
2. The fact that assets within the jurisdiction are movable is not sufficient to warrant an inferential finding that there is a danger of dissipation. There must be evidence before the court from which a prudent, sensible commercial person can properly infer a danger of default if assets are removed from the jurisdiction.[7]
3. The remedy is discretionary. The strength of the plaintiff's case, the danger of frustration of a prospective judgment, the balance of convenience, and any other relevant discretionary factors are all considered together in the exercise of the discretion whether to grant the orders sought.[8]

Does Mr Kitay have a good arguable case against the defendants on an accrued case of action justiciable in this court?

1. Mr Kitay's evidence is that, since its inception, the Company failed to keep the financial records required under s 286(1) of the Act. The basis for this includes that there are two sets of management accounts maintained by the Company that cannot be reconciled. As such, pursuant to s 588E of the Act, the Company is presumed to be insolvent from 24 July 2022.
2. Mr Kitay's evidence is that, in addition to this presumption, he believes the Company is in fact insolvent. The basis for this opinion includes that the Company failed to comply with its taxation obligations at any time.
3. Between 24 July 2020 and 9 July 2025, the Company incurred debts of more than $1.8 million. The plaintiff does not seek repayment of the entirety of this amount under s 588E(4) of the Act. The plaintiff's claim is limited to $1,462,956 which comprises:

(a) the priority creditors (employee entitlements) of $94,918;

(b) statutory creditors being the ATO of $1,321,362;

(c) trade creditors of $24,118; and

(d) what is described as financial shortfalls of $22,558.

1. On the basis of Mr Kitay's evidence, to which I have already referred, I consider that Mr Kitay has a good arguable case that the second defendant was a director of the Company. On this basis, I also consider that Mr Kitay has a good arguable case against each of the defendants for insolvent trading, based on the presumption that arises under s 588E of the Act. I accept this cause of action has accrued and is justiciable in this court, which is evidenced by the commencement of these proceedings.
2. The plaintiff also contends that various sums advanced to each of the defendants are either unreasonable director related transactions (as defined in s 588FD of the Act) or uncommercial transactions, as defined in s 588FB of the Act. Mr Kitay says that the first defendant caused at least $1,063,482 to be transferred from the Company to him or to his benefit; and that the second defendant caused at least $2,207,37.24 to be transferred from the Company to her or for her benefit.
3. Ultimately, given the narrow compass of the application before me, I consider that it is unnecessary for me to express any view on these additional claims, and I decline to do so at this stage.

Is there a risk that the defendants will dissipate their assets and/or remove assets from the jurisdiction?

1. I turn then to the question as to whether there is a risk the defendants will dissipate their assets and/or remove their assets from the jurisdiction.
2. The evidence before the court is that the defendants have placed the Property on the market for sale, and that it is under offer. This evidence supports a conclusion that there is a risk the defendants' assets may be dealt with or diminished in value.
3. In addition to this, Mr Kitay believes there is a risk the defendants will remove assets from the jurisdiction based on the following matters:[9]

(a) Mr Migwi was uncooperative during the Company's administration, and did not fulfill his duties under the Act;

(b) it was necessary for Mr Kitay to personally attend Mr Migwi's house and to engage lawyers to cause Mr Migwi to provide the information he was obliged to provide under the Act;

(c) Mr Migwi frequently travels between Africa and Australia, and has made comments to Mr Kitay's staff which suggests he regularly transfers money out of Australia to members of his family located in Africa; and

(d) despite request, the defendants have not agreed to provide undertakings not to sell, encumber, or otherwise deal with their assets until the claims in these proceedings have been resolved.[10]

1. In addition to these matters, the claims made against the defendants include claims of dishonesty involving the diversion of company money, and the failure to comply with taxation obligations. Taking into account all of these matters, I accept that there is a risk that a prospective judgment will be wholly or partly unsatisfied because the defendants' assets might be removed from the jurisdiction or otherwise disposed of, dealt with, or diminished in value.[11]

Are there any discretionary considerations which mitigate against the granting of a freezing order?

1. In considering whether to grant the orders sought by the plaintiff, it is necessary to consider whether there are any discretionary considerations which mitigate against the granting of a freezing order, such as delay in bringing the application, or a lack of candour in the materials placed before the court.[12]
2. In this case, I am satisfied there is no relevant delay. The plaintiff became aware the Property was advertised for sale on or about 9 March 2026 and filed this application the following day.
3. In respect to the question of candour, on the evidence before me, I am satisfied there has been appropriate candour in both the affidavit evidence and the submissions of the plaintiff. In my view, the submissions appropriately consider what arguments could be raised by the defendants in opposing the applications.
4. In exercising my discretion, I am required to consider the balance of convenience, taking into account the interests of all parties. In all of the circumstances of this case, I consider it is appropriate to grant the freezing order sought, on the basis that a prompt return date is fixed, and the defendants have liberty to apply at short notice. In exercising my discretion, I have also taken into account the relatively narrow compass of the application, and the protection afforded to the defendants from the undertaking as to damages that has been filed.

What value of assets should be covered by the freezing order?

1. In considering the value of assets that should be covered by the freezing order, I note that the value should not exceed the likely maximum of the plaintiff's claim, which may include interest and costs.[13] In this case, given the maximum value of the plaintiff's claim for insolvent trading far exceeds the likely net sale proceeds of the Property, I am satisfied that the value of assets covered by the freezing order sought by Mr Kitay does not exceed the maximum value of his claim, putting to one side the question of interest and costs.

1. For these reasons, it is my view that it is appropriate to grant the freezing order sought in relation to the Property.
2. Mr Kitay also seeks ancillary orders that the defendants file and serve affidavit evidence disclosing the details of their Australian assets. In the exercise of my discretion, I do not propose to make these orders on an ex parte basis. In my view, the question as to whether the proposed disclosure orders are appropriate can be raised by the plaintiff on the return date of an inter partes hearing.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Mervyn Jonathon Kitay filed 25 February 2026 [6],'MJK2'.

[2] Affidavit of Mervyn Jonathon Kitay filed 25 February 2026 [11], 'MKJ3'.

[3] Affidavit of Mervyn Jonathan Kitay filed 25 February 2026 [2], 'MJK1'.

[4] Affidavit of Mervyn Jonathan Kitay filed 10 March 2026 [8] - [10], 'MJK3' - 'MJK5'.

[5] Affidavit of Mervyn Jonathan Kitay filed 10 March 2026 [12], 'MJK5'.

[6] Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd [2011] WASC 188 [135].

[7] Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 [12].

[8] Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd [142].

[9] Affidavit of Mervyn Jonathan Kitay filed 10 March 2026 [14] - [18].

[10] Affidavit of Mervyn Jonathan Kitay filed 10 March 2026, 'MJK6'.

[11] BGC Contracting Pty Ltd v WA Construction Hire Pty Ltd [2010] WASC 25 [15].

[12] Zhen v Mo [2008] VSC 300 [30].

[13] Rimex Wheel Pty Ltd v Wulff [2018] WASC 180 [48], referring to Consolidated Practice Directions PD 9.6.1 [11].