AE Brighton Holdings Pty Ltd v UDP Holdings Pty Ltd
[2020] VSC 564
•3 September 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2020 03408
| AE BRIGHTON HOLDINGS PTY LTD (ACN 166 492 306) | Plaintiff |
| v | |
| UDP HOLDINGS PTY LTD (Subject to Deed of Company Arrangement) (Receivers and Managers Appointed) (ACN 167 100 692) | Defendant |
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JUDGE: | MOORE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 2 September 2020 |
DATE OF JUDGMENT: | 3 September 2020 |
CASE MAY BE CITED AS: | AE Brighton Holdings Pty Ltd v UDP Holdings Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 564 |
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PRACTICE AND PROCEDURE – Application for interlocutory injunction to restrain transfer of property – Where transfer of property is imminent – Where plaintiff alleges that defendant breached duties as mortgagee in exercising power of sale – Where plaintiff failed to give a reasonable explanation for extensive delay in seeking interlocutory – No prima facie case of sufficient likelihood of success established – Balance of convenience weighs against the grant of an injunction – Damages are an adequate remedy – Application dismissed – Supreme Court (General Civil Procedure) Rules 2015, rr 38.01, 38.02 – Australian Broadcasting Corporation v O’Neil (2006) 227 CLR 57, applied – Bradto Pty Ltd v Victoria (2006) 15 VR 65, applied – Samsung Electronics Company Ltd v Apple Inc (2011) FCR 238, applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J Levine | The Law Professionals |
| For the Defendant | C Young SC with P Annabell | Ashurst |
HIS HONOUR:
Introduction
Shortly before 6.00pm yesterday, I made an order dismissing a summons filed by the plaintiff which sought to enjoin the defendant from taking any steps to complete contracts of sale in respect of properties located at 2 Kinane Street and 92 The Esplanade in Brighton (the Brighton properties). The Brighton properties are developed as one, with a house on 2 Kinane Street, a pool on 92 The Esplanade and a tennis court that spans both lots. These are my reasons for dismissing the summons.[1]
[1]A total of 10 affidavits were relied on by the parties in the hearing of the plaintiff’s claim for interlocutory relief, which affidavits extended over more than 1,000 pages including exhibits. In the time available (see [5] above) it is not possible to address all of the detailed arguments advanced by the parties orally and in their written submissions dated 28 August, 1 September and 2 September 2020.
The plaintiff is the registered proprietor of the Brighton properties. Violeta Esposito is the holder of all of the shares in the plaintiff, as well as being its sole director. The plaintiff’s previous sole director is Ms Esposito’s husband, Antonio Esposito. Mr Esposito transferred his sole shareholding in the plaintiff to Ms Esposito on 3 July 2019. Mr and Ms Esposito both swore affidavits in support of the plaintiff’s summons.
The defendant is the assignee of a mortgage over the Brighton properties (the JM mortgage).[2] The JM mortgage was assigned to the defendant by JM Nominees Pty Ltd on 18 November 2019.[3]
[2]On 10 July 2018, Craig Shepard and Andrew Knight were appointed by Cooperative Rabobank UA Australia Branch (Rabobank) as joint and several receivers and managers of the defendant (the Receivers).
[3]The JM mortgage was entered into by the plaintiff and JM Nominees Pty Ltd on 18 December 2015. The total value of the JM mortgage, across both Brighton properties, is approximately $3.4 million.
The defendant obtained a warrant of possession of the Brighton properties on 19 November 2019. It took possession of them on 12 March 2020.
The urgency of the application arises because, on 20 July 2020, the defendant entered into contracts of sale for the Brighton properties for a price $16.5 million, which contract has a completion date of Friday, 4 September 2020 (the contracts of sale). After I pronounced orders in the matter late yesterday, counsel for the plaintiff indicated that his client intended to challenge my ruling in the Court of Appeal.
The plaintiff’s claims in the general indorsement of claim on the Writ filed on 25 August 2020 may be summarised as follows:
(a)That the defendant breached its duty to provide a payout figure in respect of the JM mortgage upon request and to accept a tender of any amount due and owing pursuant to that mortgage;
(b)That, in taking possession of the Brighton properties, the defendant failed to take reasonable care to secure the properties and reasonable care to pack up and deliver certain chattels to the plaintiff, thereby breaching duties owing under the JM mortgage;
(c)That the defendant wrongfully exercised its power of sale in selling the Brighton properties;
(d)That, by entering into the contracts of sale, the defendant breached the mortgagee duties to which it was subject because:
· it should have only sold 92 The Esplanade, Brighton;
· the Brighton properties were sold at an undervalue;
· the Brighton properties should have been sold separately;
· the Brighton properties should have been sold to an independent person;
· the defendant failed to properly advertise the Brighton properties;
· the defendant failed to pursue all of the expressions of interest to maximise the sale price;
· the defendant failed to obtain expert advice and valuations; and
· the defendant failed to follow expert advice and valuations;
(e)The defendant sold the Brighton properties for an ulterior purpose including the third party enforcement of a registered mortgage over the Brighton properties held by the Westpac Banking Corporation (the Westpac mortgage),[4] to impact upon an application for leave to appeal brought by the plaintiff in another proceeding[5] and to have any surplus funds placed in court to secure the defendant’s claim for the said funds pursuant to constructive trust;
(f)By reason of its conduct outlined above, the defendant engaged in unconscionable conduct in contravention of s 20(1) of the Australian Consumer Law and/or s 12CB of the Australian Security and Investment Commission Act 2001.
[4]The Westpac mortgage was entered into in December 2013 and is in the amount of approximately $7.5 million secured against 2 Kinane Street Brighton. On 18 November 2019, the defendant and Westpac entered into a deed of priority which gives priority to Westpac’s mortgage over the JM mortgage.
[5]In AE Brighton Holdings Pty Ltd v UDP Holdings Pty Ltd [2019] VSC 688 (the caveat proceeding), the Court dismissed an application by the plaintiff for an order requiring the defendant to remove its caveats over the Brighton properties and other properties held by the plaintiff. The Court of Appeal heard the plaintiff’s application for leave to appeal on 31 August 2020. The Court of Appeal’s judgement is reserved.
Legal principles – interlocutory injunction
The principles which guide the Court in considering an application for an interlocutory injunction were set out by the High Court in Australian Broadcasting Corporation v O’Neil.[6] Those principles may be summarised as follows.
[6](2006) 227 CLR 57. I refer in particular to [19] in the joint judgment of Gleeson CJ and Brennan J and [65]–[83] in the joint judgment of Hayne and Gummow JJ.
First, an applicant for an interlocutory injunction must demonstrate a prima facie case. This requirement is to be understood as being whether there is a serious question to be tried as to the plaintiff’s entitlement to relief, not whether it is more probable than not that the plaintiff will succeed at trial. The sense in which the test is understood is that the plaintiff must prove prima facie a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial. In context, a plaintiff must show that it has a putative legal or equitable right in respect of which final relief is sought which would justify the restraint sought. The requisite strength of the probability of ultimate success depends on the nature of the rights asserted and the practical consequences likely to flow from the interlocutory orders sought.
Secondly, the balance of convenience must also favour the granting of an injunction. The balance of convenience requires a consideration of matters favouring and militating against the grant of an injunction and may involve a consideration of the strength of the plaintiff’s case, assuming that a serious issue has been identified. In determining whether to grant an interlocutory injunction, the Court will consider whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’ in the sense of granting an injunction to a party who fails to establish his right at the trial or in failing to grant an injunction to a party who succeeds at trial.
The third aspect, which is sometimes considered as part of the balance of convenience, is that the injury which the plaintiff is likely to suffer must be one for which damages will not provide an adequate remedy.
The above principles are interdependent. The strength of a party’s prima facie case may be relevant to the evaluation of the balance of convenience.[7] Similarly, the issue as to whether damages is an adequate remedy may be considered as part of the assessment of the balance of convenience.[8]
[7]Bradto Pty Ltd v Victoria (2006) 15 VR 65, [39]; Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238, [67].
[8]Samsung Electronics Company Ltd v Apple Inc (2011) FCR 238, [61]–[62].
Prima facie case
The plaintiff’s submission that there was a prima facie case warranting the grant of interlocutory relief was developed by reference to the contentions outlined below.
Payout figure/tender of payment
Central to the plaintiff’s claims is the allegation that, between 12 March 2020 and 23 April 2020, the defendant refused to provide it with a payout figure and/or to accept tender of the amount due under the JM mortgage. The plaintiff submitted that, as a mortgagor, the defendant was obliged to provide a payout figure upon reasonable request and to accept a tender of any amount due and owing pursuant to the JM mortgage.
The evidence does appear to establish that, in the above period, the defendant refused to provide the plaintiff with a payout figure and/or to accept tender of the amount due under the mortgage.
However, the evidence does not establish the making of any offer by the plaintiff to redeem the mortgage. What the evidence establishes is the making of an offer by an unnamed third party (whose identity the plaintiff’s solicitor refused to disclose to the defendant’s solicitor) to pay out the JM mortgage.
The defendant relied on the following statement of principle by the learned authors of Fisher and Lightwood’s Law of Mortgage:[9]
The persons entitled to redeem are, of course, able to make a good tender of the mortgage money, but a good tender cannot be made by a stranger, or, generally, by anyone not entitled to the equity of redemption.[10]
To similar effect, Murphy JA and Sofronoff AJA recently stated in Rowe v National Australia Bank Limited that, ‘Where the mortgagor offers to redeem the mortgage, it is entitled to a redemption statement or payout figure from the mortgagee….’.[11]
[9]3rd Australian edition, 2013 at [32.48].
[10]Pearce v Morris (1869) LR 5 Chancery Appeal 227.
[11][2019] WASCA 140, [116] (emphasis added).
I consider these statements to be orthodox statements of principle. They were not controverted by the authorities relied on by the plaintiff.
Further, the evidence discloses that the defendant did provide the plaintiff with an estimated payout figure of the mortgage. On 14 May 2020, the defendant’s solicitors informed the plaintiff’s solicitors that the amount owing was ‘approximately $3.234 million, exclusive of enforcement costs’. The plaintiff submitted that the exclusion of enforcement costs rendered this communication as meaningless. However, as was observed by Robb J in Almona Pty Ltd v Parklea Corporation Pty Ltd, the obligation to provide a payout figure may in some circumstances be satisfied by an estimate:[12]
… What is contemplated is that the mortgagor must know what amount to tender at the time appointed for redemption. However, in most cases the mortgagor should be capable of estimating the likely payout figure with sufficient precision to permit the mortgagor to arrange finance for the redemption payment, subject to refinement in the period immediately before the time appointed for redemption, by the mortgagee providing a firm payout figure. Where the mortgagor is unable to estimate the payout figure with sufficient accuracy for the purpose of arranging finance, the mortgagor could request an approximate figure from the mortgagee, subject to a precise payout figure being given when there are reasonable grounds to believe that the redemption can be implemented.
[12][2019] NSWSC 1868, [514].
For the above reasons, I do not consider that the plaintiff has established that there is a serious question to be tried as to its entitlement to relief at trial in respect of its claims concerning the defendant’s alleged refusal to provide it with a payout figure and/or to accept tender of the amount due under the mortgage.
Exercise of power of sale
The principal matter relied on by the plaintiff in support of its allegation that the defendant failed to comply with its obligations in exercising the power of sale over the Brighton properties was the failure of the defendants to obtain separate valuations for each of the Brighton properties and to sell them separately. The evidence before the Court is that, on 13 July 2020, the defendant obtained a formal valuation of the Brighton properties which identified them as having (as a single property) a current market value of $15.2 million.
The plaintiff referred to various authorities said to establish that, in exercising its power of sale, the defendant was subject to various duties including: to take appropriate steps to obtain a proper market price for the properties being sold;[13] to take reasonable steps to obtain the best possible price for the properties being sold;[14] and to take all reasonable care to sell the property for the best price that is reasonably obtainable having regard to the circumstances existing when the property is sold.[15]
[13]MBF Investments Pty Ltd v Nolan [2011] 37 VR 116, [47].
[14]MBF Investments Pty Ltd v Nolan [2011] 37 VR 116, [100].
[15]Kravchenko v The Rock Building Society [2009] VSCA 292, [19].
The plaintiff argued that the defendant acted wrongfully in failing to obtain a market appraisal of the value of the Brighton properties considered separately. The defendant was therefore not in a position to property evaluate the fairness of offers made to purchase the properties. The obtaining of a market appraisal for the Brighton properties separately as well as jointly was said to be necessary in order to evaluate the proper method to proceed with the sale of the Brighton properties and to determine whether both properties had to be sold.
In support of these contentions, the plaintiff referred to the Receivers’ current estimate of the apportionment of the sale proceeds following the settlement of the sale of the Brighton properties. That apportionment indicated that the total amount of the JM mortgage together with enforcement costs is approximately $4.2 million, with the sale proceeds attributed to 92 The Esplanade being $5.5 million. It was therefore submitted that the sale of 92 The Esplanade alone would have been more than sufficient to pay out the JM mortgage and the relevant enforcement costs. It followed, so it was submitted, that there was no need for the defendant to sell 2 Kinane Street.
There are a number of difficulties with these submissions.
First, the Receivers’ apportionment assessment relied on by the plaintiff was exactly that: the apportionment of a sale price of the Brighton properties and costs across the two properties. It was not a valuation of either of the properties and, on the current state of the evidence, I am unpersuaded that one can infer reliable estimates of value from it. This in part reflects the unusual nature of the Brighton properties and in particular the property at 92 The Esplanade. There is no habitable structure on that property, only a swimming pool and part of a tennis court. Significantly, it is also subject to a restrictive covenant relevantly in the following terms:
… I, the said Transferee my heirs, executors and transferees shall not develop, or permit to be developed, the Land or any part or parts thereof so that any form of dwelling, residence or habitable building is constructed on the Land, even where such use would otherwise be permitted under planning and zoning laws and regulations applicable to the Land while the registered proprietor of the land comprised in Certificate of Title Volume 7010 Folio 975 or Nikola Babic reside at the property situated at 90 The Esplanade, Brighton, …, provided that nothing in this restrictive covenant shall prevent or prohibit I, the said Transferee my heirs, executors and transferees from constructing outbuildings on the Land including but not limited to cabanas, pergolas and verandahs and similar amenities relating to the swimming pool and tennis court currently situated on the Land.
…
Secondly, evidence was given by Grant Sutherland, a licenced estate agent and certified practicing valuer who has had extensive professional experience as a valuer. Mr Sutherland’s evidence was that, in his opinion, it was more appropriate to sell the Brighton properties as a single, combined property notwithstanding that they were made up of two titles. His reasons for that opinion were cogent and persuasive:
(a) the existence of a restrictive covenant over 92 The Esplanade had a significant impact on the property in that it prevented the construction of any ‘dwelling, residence or habitable building’, giving it a greatly reduced value on its own;
(b) 92 The Esplanade has a swimming pool and one half of a tennis court straddling both titles. Marketing a property for sale with a swimming pool and half a tennis court and a covenant preventing the construction of a dwelling would, in Mr Sutherland’s opinion, have attracted limited interest;
(c) 92 The Esplanade could continue to be utilised in conjunction with the adjoining property at 2 Kinane Street and had the benefit of strongly contributing to its value by increasing the overall land area and providing an outdoor swimming pool and a usable tennis court, whereas in isolation 92 The Esplanade had limited utility, given the existence of the covenant.
Although Mr Sutherland had been engaged on behalf of the Receivers, I have no reason to doubt that, in providing his evidence, he has done so in accordance with the expert witness code of conduct (which he deposed to having read and agreeing to be bound by).
Thirdly, Mr Sutherland’s opinion is also consistent with the evidence that, on two occasions in about the past 18 months when the plaintiff has purported to sell the Brighton properties, it has done so on the basis of selling both of the properties. In one of those instances, a variation in the contract terms appeared to indicate that the purchaser attributed zero value to the 92 The Esplanade property.
Fourthly, the evidence before the Court said to support a conclusion that the two Brighton properties should have been sold separately is, I consider, weak and problematic. I have already referred to the plaintiff’s reliance on the Receivers’ apportionment analysis. In addition to that evidence, the plaintiff relied on a statement made by Matthew Pillios a director and auctioneer with the real estate agency Marshall White. Relevantly, Mr Pillios told Mr Esposito on about 13 August 2020 that a market appraisal for the Brighton properties sold individually ‘would be $18 million plus’. He also sent an email to Mr Esposito saying ‘My accurate appraisal of 2 Kinane Street, Brighton would be $12.5m - $13.5m. For the separate title of 92 The Esplanade alone it would be $5.5m to $6.5m for the land’.
There are various difficulties associated with relying on Mr Pillios’ communications with Mr Esposito to establish that the Brighton properties should have been sold separately, or that a separate valuation of them should have been obtained. Unlike Mr Sutherland, Mr Pillios is not a qualified real estate valuer and has only six years’ experience as a real estate agent. He did not purport to provide a formal valuation of the Brighton properties. Mr Pillios has deposed that, in his communications with Mr Esposito, Mr Esposito did not ask him to give an opinion about whether the Brighton properties should be sold separately and he did not give such an opinion. Further, Mr Pillios’ evidence was that his estimates of the value of the two properties was in the context of the market having had recovered, that is, at a future point in time.
Fifthly, having regard to the matters to which I have referred, the following response by the solicitors for the defendant to a claim made by the plaintiff’s solicitor that 92 The Esplanade should be sold separately, has an apparent logical and practical appeal:
... 92 Esplanade is inextricably linked to 2 Kinane Street. There is a covenant restricting construction on 92 Esplanade, meaning that it cannot be sensibly sold other than in conjunction with 2 Kinane Street. It is one property on two titles. AE Brighton itself did not pursue this option. Both purported sales were for both titles. It makes no commercial sense to sell them separately. Indeed the most recent purported and allegedly arms-length sale of the two titles attributes no value at all to 92 Esplanade (the first contract provided to us by you related only to 2 Kinane Street for a value of $12.5m, when we wrote asking about 92 Esplanade a further contract was provided for both titles with no change to the purchase price).
Sixthly and further to the above, my general impression from the voluminous materials filed by the defendants relating to the sale of the Brighton properties since it took possession of them in March 2020 is that the process which has been adopted to sell the properties and to maximise the return from the sale has been professional and thorough. The criticisms advanced on behalf of the plaintiff about the defendant’s evaluation of the offers made on the Brighton properties lack substance.
Two measures of the success of the process which has been adopted by the defendant in selling the Brighton properties are that, notwithstanding the uncertainty created by COVID-19, the price of the Brighton properties under the contracts of sale ($16.5 million) is:
(a) $1.3 million more than their current valuation; and
(b) significantly more than the price obtained for the properties when the plaintiff sought to sell them in February 2019 (for a sale price of $15,006,789) and then in March 2020 (for a sale price of $12.5 million).
For the above reasons, in relation to the plaintiff’s principal claim that the defendant acted wrongfully in failing to obtain a market appraisal of the value of the Brighton properties considered separately and by failing to sell them, I do not consider that the plaintiff has established a prima facie case with a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial.
Neither do I accept that the plaintiff has established a prima facie case in relation to the other grounds upon which it sought to impugn the defendant’s exercise of the power of sale. The plaintiff submitted that the defendant had demonstrated a lack of good faith in exercising the power of sale by engaging in tactics designed to undermine the plaintiff’s prospects of obtaining leave to appeal in the caveat proceeding. The plaintiff relied upon the contents of a letter sent by the defendant’s solicitor on 31 July 2020. The letter relevantly stated as follows:
AE Brighton’s application for leave to appeal in the S EAPCI 2019 0120 proceeding concerns our client’s constructive trust claim over 2 Kinane Street.
Given that AE Brighton will not receive any surplus of the sale of the 2 Kinane Street property there appears to us to be little point in AE Brighton pursuing the appeal. For that, and the following reasons, we consider the appeal is rendered nugatory:
(a)The sale of the Brighton Properties to Ms Yang for $15,006,789 has been superseded;
(b)The underlying factual basis in relation to the appeal has changed in a substantial manner;
(c)A superior price has been achieved by the receivers and due to the mortgagee’s ability to “sell through” the caveats on title, all caveats will be removed over the Brighton Properties upon settlement; and
(d)The finding of Ginnane J relating to a prima facie entitlement in relation to UDP’s caveat in the context of the sale to Ms Yang, and any finding of the Court of Appeal, whilst persuasive, will not be binding upon the court in the S ECI 2019 04810 caveat proceeding.
It therefore makes sense if you conferred with counsel and your client in the next 7 days and advise us whether you wish for the appeal to be pursued in light of the above circumstances. We think the court would expect us both to reconsider the utility of the appeal given that developments traversed above.
In the interim we will be preparing a further affidavit and providing a memorandum to the court concerning the matters raised in the correspondence. We will be submitting that given the matters have progressed to such a significant extent since the appeal was filed, there is little utility served in the appeal being pursued. If your client decides to withdraw the appeal our client will not seek costs. We will be exhibiting this letter to the foreshadowed further affidavit including any response if a decision is made to continue with the appeal.
No improper purpose on the part of the defendant is revealed by this correspondence. There is nothing improper in the parties to litigation informing the Court about changes in the factual background in which the litigation is conducted. To the contrary, in many circumstances, such communications will be consistent with the parties’ obligations under the Civil Procedure Act 2010.
It was also submitted by the plaintiff that the defendant sought to exercise the power of sale for the ulterior purpose of improving its position in respect of its caveats over the Brighton properties by seeking to have all funds paid into court. There is no substance to this allegation. The plaintiff’s solicitors had in fact proposed the same course to the solicitors for the defendant on 2 March 2020.
Balance of convenience
Even if, contrary to my view, the plaintiff had established a prima facie case justifying the grant of interlocutory relief of the type it seeks, the balance of convenience is decisively against the grant of such relief.
The principal foundation of the plaintiff’s submissions on the balance of convenience was that the sale of 2 Kinane Street would involve the sale of Mr and Ms Esposito’s family home; once it was sold, it would be gone forever.
This submission is fundamentally at odds with the evidence before the Court that the plaintiff has, as I have already noted, actively sought to sell the Brighton properties over the last 18 months.[16] This reveals that, in truth, the controversy is not about the retention of something with intangible value such as a family home; it is about money. In that regard, the position is clear. As I have noted, the sale price under the contracts of sale not only exceeds the valuation of the properties, it is also significantly greater than the amounts which the plaintiff had purported to contract to sell the Brighton properties in the last 18 months.
[16]See [33(b)] above.
In light of these considerations, the defendant’s submission that the plaintiff will not suffer any harm if the injunction is not granted is irresistible. The Brighton properties will be sold. The defendant has confirmed that it will pay any surplus funds into court pending the outcome of the caveat proceeding of which the plaintiff is a party.
By contrast, if the injunction was granted, the completion of the contracts of sale would be delayed pending the outcome of the proceeding and the defendant would be prevented from exercising its rights to security as mortgagee. As the defendant submitted, that course cannot be justified where, amongst other things, the plaintiff does not contest the defendant’s interest as mortgagee, where the defendant has confirmed that it will pay any surplus funds into court and where the plaintiff itself has sought to sell the Brighton properties.
Furthermore, the interests of third parties, namely the purchaser of the Brighton properties under the contracts of sale, as well as the various persons who have caveats over the Brighton properties, also weigh against the grant of interlocutory relief
Adequacy of damages as a remedy
The plaintiff submitted that damages are an inadequate remedy because 2 Kinane Street is the family home and because there can be no confidence in the capacity of the defendant to pay damages given that it is subject to a deed of company arrangement and has had receivers and managers appointed. The first of these points is rejected for the reasons I have already given; the plaintiff’s interests in the Brighton properties is fundamentally economic in light of its efforts to sell the properties. The second point advanced by the plaintiff is also rejected. The Receivers have secured an indemnity from Rabobank which has very substantial assets.
Discretion
In Bradto Pty Ltd v State of Victoria, the Court of Appeal stated that ‘the issue of delay is usually regarded as a matter going to the court’s discretion once the grounds for the grant of an interlocutory injunction (including balance of convenience) have been made out’. [17]
[17](2006) 15 VR 65, [81].
The plaintiff’s delay in commencing this proceeding and filing its summons for interlocutory relief is extraordinary and unexplained.
The plaintiff was notified that the defendant was taking steps to conduct a mortgagee sale of the Brighton properties on 19 November 2019. Since then the parties, through their solicitors, have engaged in extensive correspondence in relation to the exercise of the defendant’s powers of sale. On 26 March 2020 and on 9 April 2020, the plaintiff’s solicitors threatened that an application would be made for an injunction following the defendant’s continued efforts to sell the property and its refusal to provide a payout figure for the mortgage. The plaintiff could have then readily brought a redemption proceeding in relation to its complaints about the defendant’s refusal of to provide it with a payout figure in respect of the JM mortgage. No such application was filed. Neither was any application for injunctive relief brought until the present summons was filed some 4 months later on 25 August 2020, about a week before the settlement of the contracts of sale for the Brighton properties. In that period, there can be no doubt that the plaintiff, through Ms and Mr Esposito, was well aware of the public marketing campaign to sell the Brighton properties which proceeded over 6 weeks.
The plaintiff has not provided any evidence to explain its delay in commencing the proceeding. The reasons advanced from the bar table were, with respect, vague and unpersuasive.
For these reasons, even if I was satisfied that the plaintiff had established a prima facie case and that the balance of convenience favoured the grant of interlocutory relief, in the exercise of my discretion, I would have refused the plaintiff’s application given the unexplained and extensive nature of the delay in bringing this proceeding.
Subject to any submissions the parties may wish to make, I propose to order that the plaintiff pay the defendant’s costs of the summons on a standard basis, to be taxed in default of agreement. An order in those terms will be made in the absence of any submissions which are to be filed within seven days.
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