Head Investments Pty. Ltd. v Paean Holdings Pty. Ltd.
[2003] QDC 286
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- Unreported Judgment
- Head Investments Pty. Ltd. v Paean Holdings Pty. Ltd.[2003] QDC 286
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Head Investments Pty. Ltd. v Paean Holdings Pty. Ltd.[2003] QDC 286
Head Investments Pty. Ltd. v Paean Holdings Pty. Ltd.[2003] QDC 286
DISTRICT COURT OF QUEENSLAND
CITATION: | Head Investments Pty Ltd v Paean Holdings Pty Ltd & Anor [2003] QDC 286 |
PARTIES: | HEAD INVESTMENTS PTY LTD ABN 66 093 419 419(Plaintiff) AND PAEAN HOLDINGS PTY LTD ACN 074 431 501(First Defendant) AND MULGREW RECREATION AND EDUCATION RETREAT PTY LTD ACN 100 395 597(Second Defendant) |
FILE NO/S: | 298 of 2002 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Maroochydore |
DELIVERED ON: | 20 August 2003 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | 30 July 2003 |
JUDGE: | Judge J.M. Robertson |
ORDER: |
|
CATCHWORDS: | MAREVA INJUNCTION – whether there is a danger that assets will be dissipated by the defendant so that the plaintiff, if successful at trial, will be unable to have the judgment satisfied. DAMAGES – Undertaking as to damages (r. 264 UCPR) – undertaking must have value to be sufficient. Cases Cited Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 Jackson v Sterling Industries Ltd (1987) 162 CLR 612; 71 ALR 457 North Corp Ltd v Allman Properties (Aust) Pty Ltd [1994] 2 Qd R 405 Charters Towers Goldmine NL (Receivers and Managers Appointed) and Anor v Suncorp-Metway Ltd (unreported) QSC 946 of 1998 Statutes considered Uniform Civil Procedure Rules, rr 260, 264 |
COUNSEL: | Mr G Garrick (for the plaintiff) Mr R Fryberg (for the defendants) |
SOLICITORS: | Boyce Garrick Lawyers (for the plaintiff) Butler McDermott & Egan Solicitors (for the defendants) |
- [1]The plaintiff seeks an injunction to restrain the first defendant from disposing of its interest in certain land at Yandina, and the second defendant from disposing of its interest in an educational and recreational facility conducted on that land.
- [2]The plaintiff conducted a business know as the Maranatha Recreation and Education Centre on the land from the 1 July 2000 until 28 March 2002. There is dispute as to the nature of the agreement between the plaintiff and the first defendant during that period.
- [3]The plaintiff argues that it was evicted from the land unlawfully on 28 March 2002. The first defendant alleges that it resumed control of the business and land on that date as a result of the plaintiff’s repudiation of its agreement with the first defendant.
- [4]It is common ground that prior to 28 March 2002, the plaintiff issued a number of invoices to various educational facilities for services provided during the plaintiff’s occupation of the land and conduct of the business. The plaintiff’s claim is for monies paid into the first defendant’s bank as a direct result of a number of those invoices being paid after 28 March 2003; and in respect to the balance of monies owing, the plaintiff seeks a declaration that it is entitled to these monies.
- [5]Particulars of the invoices are set out in paragraph 7 of the Amended Statement of Claim filed 2 September 2002:
7.The Plaintiff had, prior to 28 March 2002, rendered accounts in respect of camps conducted prior to 28 march 2002 particulars of which are as follows:-
Date | Amount | |
Cleveland Primary School (invoice number 34) | 25/03/2002 | $18,119.00 |
Springwood Central School | 06/03/2002 | $10,143.00 |
Hendra Secondary College | $400.00 | |
Job’s daughters | $2,579.00 | |
Albany Creek State School (invoice number 32) | 22/03/2002 | $12,600.00 |
Mudgeeraba Creek School (invoice number 31) | 20/03/2002 | $11,992.00 |
QUT (invoice number 30) | 10/03/2000 | $6,600.00 |
- [6]Relevantly, the Amended Statement of Claim states as follows:
8.On or before 9 April 2002 the Cleveland Primary School drew a cheque in the sum of $18,119.00 in favour of the Plaintiff.
9.On or about 9 April 2002 the First and/or Second Defendant collected the cheque from the Cleveland Primary School and banked it into its own account.
10.In or about early April 2002 the Springwood Central State School drew a cheque in the sum of $10,143.00 in favour of the Plaintiff.
11.In or around early April 2002 the First and/or Second Defendant received from the Springwood Central State School a cheque in the sum of $10,143.00 and banked it into its own account.
11AIn or about June 2002 Job’s daughters drew a cheque in the sum of $2,069.50 in favour of the Plaintiff, First Defendant and/or Second Defendant.
11BOn a date, which cannot be particularised until interrogatories have been delivered or disclosure has taken place, the First and/or Second Defendant received the cheque from Job’s daughters and banked it into its own account.
11CIn or about June 2002, Hendra Secondary College drew a cheque in the sum of $400.00 in favour of the Plaintiff, First Defendant and/or Second Defendant.
11DOn a date, which cannot be particularised until interrogatories have been delivered or disclosure has taken place, the First and/or Second Defendant received the cheque from Hendra Secondary College and banked it into its own account.
- [7]These allegations of fact were the subject of non admissions or denials in the Defence filed 26 September 2002, however these facts are now positively admitted in the amended defence filed 4 July 2003. Mr Fryberg submits that as the earlier defence was accompanied by an extensive request for further and better particulars, no adverse inference can be drawn against his clients as a result of the late admissions.
- [8]The injunction sought is of the mareva type contemplated by Rule 260 of the Uniform Civil Procedure Rules. The orders sought are very wide:-
1.Until trial or earlier order, the First Defendant by itself, its servants or agents or otherwise howsoever, be restrained from transferring, charging or otherwise disposing of or attempting to transfer, charge or otherwise dispose or its interest in land described as Lot 1 Crown Plan CG 836621 County of Canning, Parish of Maroochy (“the land”).
2.Until trial or earlier order, the First Defendant by itself, its servants or agents or otherwise howsoever, be restrained from transferring, charging or otherwise disposing of or attempting to transfer, charge or otherwise dispose of its interest in the educational and recreational business conducted on the land.
3.Further, or alternatively, until trial or earlier order, the Second Defendant by itself, its servants or agents or otherwise howsoever, be restrained from transferring, charging or otherwise disposing of or attempting to transfer, charge or otherwise dispose of its interest in the educational and recreational business conducted on the land.
4.Such further or other order as the Court considers appropriate.
5.The First Defendant and/or Second Defendant pay the costs of and incidental to this application to be assessed.
- [9]The affidavits in support of the application establish (relevantly) the following matters:
- The first defendant is the owner of the land the subject of the application, otherwise neither defendant owns any realty in Queensland.
- The second defendant has been operating the business “Maranatha Camp” from the land since at least 25 June 2002.
- On 12 March 2002 the Solicitors for the first defendant stated their client desired to sell the property.
- On 13 April 2002 the property was advertised in the Sunshine Coast Daily Property Week.
- In May 2003, the first defendant’s agent informed the plaintiff’s solicitors that the property was still for sale, and active marketing and advertising would restart in a couple of weeks.
- In July 2003, the agent told the solicitor that he would be contacting interested parties from when the property was advertised, and the owner wanted to sell the land and business as a going concern.
- [10]The evidence as it stands is sufficient to satisfy me that the plaintiff has an existing cause of action which is justiciable within Australia, and that the applicant plaintiff has a good arguable case: Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264. The plaintiff, to succeed, must go further. It must show a danger that by reason of the defendant disposing of the land, it (i.e. the plaintiff), if successful at trial, will be unable to have the judgment satisfied: Jackson v Sterling Industries Ltd (1987) 162 CLR 612; 71 ALR 457. However, it is not necessary for the plaintiff to show that the purpose of the defendant’s disposition of assets, whether occurring or apprehended, is to prevent recovery of the amount of any judgment which might be obtained. A proper basis for a mareva injunction arises where the plaintiff shows that there is a danger of dissipation of assets by the defendant which is likely to prevent recovery: North Corp Ltd v Allman Properties (Aust) Pty Ltd [1994] 2 Qd R 405. As the Court noted, it is the effect of the dissipation which is important.
- [11]Not surprisingly, Mr Fryberg for the defendants submits that the evidence falls well short of establishing such a danger in this case. As he notes, in his submission the evidence establishes that the property has been on and off the market for some time. There is no evidence that a contract has been signed, or even that there are any prospective purchasers for the land.
- [12]Mr Garrick’s submissions in response, is that the conduct of the defendants since the plaintiffs removal from the property, supports his contention that there is a danger of dissipation. Firstly, he points to the pleading point referred to above. I have to say I agree with him that facts such as this could surely be easily ascertained, and if uncontroversial, admitted. I do not think the defendants can hide behind a particulars argument. The pleading was clear. The facts are now admitted, and it does not reflect well on the first defendants that it has until recently, denied what must have been obvious.
- [13]Secondly, on this point, Mr Garrick refers to what he says is an adverse inference that can be drawn from the evidence of the defendants dealing with the business name after the 28 March 2003. At that date, the plaintiff owned the business name “Maranatha Recreation and Education Centre”. On 25 June 2002, Mr Mulgrew (on behalf of the second defendant) requested the registration of that name be cancelled and the name “Maranatha Camp” be registered. On 27 June 2002, the Deputy Registrar of Business Names wrote to Maranatha Recreation and Education Centre pursuant to section 18 (1) of the Business Names Act. I infer that this came about as a result of the second defendant’s application and a statutory declaration sworn by Mr Mulgrew on the 25 June 2002. I am satisfied that Mr Mulgrew, or someone on behalf of the defendants, received the Notice under section 18 (1) and did not pass it on to the plaintiff. As a result, the name registered to the plaintiff was cancelled. In the absence of any evidence to the contrary, I am prepared to accept that this conduct shows a willingness on the part of the defendants to act without regard for the plaintiff’s rights.
- [14]The cumulative effect of the defendant’s conduct satisfies me to the requisite standard that if the property is sold, there is a danger that the defendants will dissipate the proceeds, which in turn could frustrate any judgment in favour of the plaintiff.
- [15]Having said that, the plaintiff’s application is far too wide. There is no evidence of the property’s value, but it is likely to be well in excess of any successful judgment sum. The injunction should therefore be confined to the quantum of any successful judgment, together with any interest, and estimated costs.
- [16]UNDERTAKING AS TO DAMAGES
Mr Fryberg, in his written submission, made a telling argument as to the nature of the plaintiff’s undertaking. At the start of the hearing, it consisted of a bald statement in the affidavit of Marjorie Gail Head filed 18 July 2003:-
53. If the orders sought are made, the Plaintiff gives the usual undertaking as to damages.
Rule 264 of the Uniform Civil Procedure Rules provides,
“Unless there is a good reason, the Court must not grant (a mareva order)….without the usual undertaking as to damages having been given.”
- [17]It is not sufficient that a bare undertaking be given. It must have value: see for example Charters Towers Goldmine NL (Receivers and Managers Appointed) and Anor v Suncorp-Metway Ltd (unreported) QSC 946 of 1998 per Williams J (as His Honour then was). Mr Barr’s affidavit sworn on 29 July and filed by leave at the hearing, shows that the Plaintiff has a paid share capital of $10.00. Mr Garrick conceded this point, and, by leave, an affidavit by Marjorie Gail Head sworn 30 July 2003 was filed in which she gives the appropriate undertaking personally and refers to a number of properties in her name. The resolution of this issue at the hearing may have relevance to the question of costs.
- [18]COSTS AND FORM OF ORDER
- [19]Prior to delivering judgment, I provided the parties with copies of the above reasons in draft, and asked for further submissions on the scope and form of the orders to be made and costs. Mr Garrick objects to the filing of the affidavit of Mr Barr sworn 14 August 2003, on the basis that it refers to without prejudice discussions between he and Mr O'Dea leading up to the hearing, which did not result in final agreement. I will disregard the matters referred to in paragraphs 3 – 8 of Mr Barr’s affidavit for that reason. Paragraph 2 relates to costs estimates and is relevant to the form of the order. As far as pre-hearing negotiations are concerned, the reality is that Mr Garrick made a general open offer during the hearing, which Mr Fryberg was not instructed to accept. I agree with Mr Fryberg that it was for the plaintiff to provide more than a bare form of usual undertaking as to damages, and there was no obligation on the defendants to alert the plaintiff to what would otherwise have been a potentially fatal flaw in its application. On the other hand, the plaintiff has substantially succeeded in its application. In that event, the appropriate order in my view is that there should be no order for costs of the application. In the order, it is appropriate to allow for costs up to the first day of hearing and I will rely on the letter from the costs assessor annexed to Mr Garrick’s submission dated 11 August 2003. I will round off the sum to be secured to $52,600.00.
- [20]The Order of the Court is that:
- Until further order of this court, in the event that the first defendant sells, transfers, charges or encumbers its interest in the land situated at 273 Wappa Falls Road, Yandina, more particularly described as Lot 1 Crown Plan CG 836621, County of Canning, Parish of Maroochy, (“the land”), it will forthwith deposit into the trust account of Butler McDermott & Egan Solicitors the sum of $52,600.00, such sum to be invested and held by Butler McDermott & Egan Solicitors pending order of the court or the agreement of all parties provided always that in the event the said sum, or part thereof, is previously paid by or on behalf of the second defendant pursuant to this order, then the sum to be paid by the first defendant under this order shall be such amount as is sufficient to ensure that the total amount deposited into the trust account of Butler McDermott & Egan Solicitors is $52,600.00.
- Until further order of this court, in the event that the second defendant sells, transfers, charges or encumbers its interest in the educational and recreational business conducted on the land situated at 273 Wappa Falls Road, Yandina, more particularly described as Lot 1 Crown Plan CG 836621, County of Canning, Parish of Maroochy, (“the land”), it will forthwith deposit into the trust account of Butler McDermott & Egan Solicitors the sum of $52,600.00, such sum to be invested and held by Butler McDermott & Egan Solicitors pending order of the court or the agreement of all parties provided always that in the event the said sum, or part thereof, is previously paid by or on behalf of the first defendant pursuant to this order, then the sum to be paid by the second defendant under this order shall be such amount as is sufficient to ensure that the total amount deposited into the trust account of Butler McDermott & Egan Solicitors is $52,600.00.