Aushome Developments Pty Ltd v Ausline Group Pty Ltd - [2009] NSWSC 1477

CITATION: Aushome Developments Pty Ltd v Ausline Group Pty Ltd [2009] NSWSC 1477

HEARING DATE(S): 3 & 10 December 2009

JUDGMENT DATE :
10 December 2009

JURISDICTION: Equity

JUDGMENT OF: Brereton J

DECISION: Interlocutory injunction restraining completion of sales discharged; orders for preservation of proceeds substituted.

CATCHWORDS: INJUNCTIONS – Interlocutory injunctions – variation – where interlocutory injunction restrains completion of contracts for sale to third party – where contracts not impugned in proceedings – where seriously arguable case for final relief, but not final injunction to like effect to interlocutory injunction - where third party has issued notice to complete – where preservation of proceeds of sales will sufficiently protect plaintiff’s position.

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 232 & 233

CATEGORY: Procedural and other rulings

CASES CITED: Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95
Smith Martis Cork & Rajan Pty Ltd v Benjamin Corp Pty Ltd (2004) 207 ALR 136

PARTIES: Aushome Developments Pty Limited (P)
Ausline Group Pty Limited (D1)
Jianbo Yu (D2)

FILE NUMBER(S): SC 4735/09

COUNSEL: J O Anderson (P)
R Washington (Ds)

SOLICITORS: F C Bryant Thomas & Co (P)
Benjamin & Khoury (Ds)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Thursday, 10 December 2009

4735/09 Aushome Developments Pty Limited v Ausline Group Pty Limited & anor

JUDGMENT (ex tempore)

1 HIS HONOUR: On 28 September 2009, the plaintiff Aushome Developments Pty Ltd instituted proceedings for the winding up on the just and equitable ground, or for oppression, of the first defendant Ausline Group Pty Ltd - in which it holds one-third of the shares and the second defendant Jianbo Yu is the other shareholder and director – and/or an order pursuant to Corporations Act, s 233, for the purchase of the plaintiff’s shares in Ausline.

2 On 1 October 2009, an application for an interlocutory injunction came before the court in circumstances where Ausline, which is the registered proprietor of strata units at 8 to 10 Lachlan Street, Liverpool, had contracted to sell the ten or so residual units that remain unsold (the others already having been sold) in one line to Infinity One Investment Pty Ltd. Aushome alleged that the residual units were being sold to Infinity One at an undervalue, and that completion of the sales would frustrate or jeopardise the remedies which it might obtain, if successful, in the substantive proceedings. Then the defendants consented to an order that they not deal with the units the subject of the application, in accordance with the terms of paragraphs 4 and 5 of the summons, until further order of the court; liberty to apply on two days notice was reserved.

3 Subsequently, the purchaser Infinity One has served a notice to complete, which expires tomorrow, 11 December 2009. On 1 December 2009, the defendants filed an application, by notice of motion, to dissolve the injunction restraining them from completing the sales, but providing for the proceeds to be paid into their solicitors’…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Aushome Developments Pty Ltd v Ausline Group Pty Ltd

Details

AGLC: Aushome Developments Pty Ltd v Ausline Group Pty Ltd [2009] NSWSC 1477
Case: [2009] NSWSC 1477
Decision Date: 10 December 2009

CaseChat Overview and Summary

Aushome Developments Pty Ltd sought to vary an interlocutory injunction against Ausline Group Pty Ltd that had been previously granted. The injunction prevented Ausline from completing sales contracts to a third party. The contracts themselves were not disputed in the proceedings. The court had to determine whether the interlocutory injunction should be varied given that there was a seriously arguable case for final relief, but no final injunction to the same effect as the interlocutory injunction. Additionally, the third party had issued a notice to complete, and the court needed to consider how preservation of the proceeds of the sales would protect Aushome's position.

The court examined the nature of interlocutory injunctions and the principle that they should not be granted unless there is a serious question to be tried. It noted that while there was a seriously arguable case for final relief, the circumstances did not justify a final injunction that would be identical to the interlocutory injunction. The court also considered the effect of the third party's notice to complete and concluded that preserving the proceeds of the sales would adequately protect Aushome's position. This preservation would ensure that Aushome would not suffer an irreparable loss if the final outcome was in its favour.

After weighing the factors, the court found that varying the interlocutory injunction was not appropriate in these circumstances. It ruled that preserving the proceeds of the sales would sufficiently protect Aushome's interests and prevent any potential loss. The court maintained the interlocutory injunction as it stood, with the condition that the proceeds of the sales would be preserved until the final determination of the proceedings. This decision balanced the need for interim relief with the protection of the third party's rights and interests.

Orders