A court has blocked an attempt by Sargon's Chinese lender to freeze the assets of Phil Kingston, as the latter heads towards public questioning next month.
China Insurance Finance Group Ltd commenced court proceedings on August 24, seeking repayment of a debt it says Kingston-related companies defaulted on.
It asked for a freezing order against Kingston and an order requiring him to file an affidavit of his assets, in a notice of motion filed in the New South Wales Supreme Court on September 11 and rejected six days later.
To back its request, China Insurance, which was represented by Ashurst Australia, made five key points.
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First, it said it had a strong prima facie case against Kingston. The judge accepted this for the purpose of the motion, saying China Insurance had a good arguable case to recover the $122 million loan.
Second, the lender said receivers (appointed by Taiping Trustees on January 29 to three companies where Kingston was a director) had expressed "concern that funds many have been misappropriated or misdirected" by Kingston from one of other Sargon companies. The judge said Ashurst couldn't point to any imminent threat that Kingston would dissipate his assets, and looked at three transactions to conclude they did not suggest Kingston's probity could not be relied upon.
Third, it argued Kingston has "not acceded fully" to requests for books and records of Sargon companies. The judge said there were few particulars of Kingston's alleged failure to cooperate with receivers but there was evidence solicitors (HWL Ebsworth) had been communicating with the receivers since April. Plus Kingston is to be publicly examined by the receivers next month.
Fourth, China Insurance and Ashurst said Kingston does not own any real estate in Australia and "may" have structured his affairs to avoid his assets being identified readily. The judge said Ashurst did not identify the "structure" or change to it that may impede the lender's enforcement.
Lastly, they argued Kingston "appears" to have evaded the service of these proceedings, to which the judge decided that multiple no-responses from his Melbourne's residence's intercom (among other things) did not total to an evasion. Kingston was eventually served the orders on September 9, the judge noted.
Kingston last Friday was successful in moving the proceedings to Commercial Court of the Supreme Court of Victoria.