Australian Receivables Ltd v Tekitu Pty Ltd

CITATION:	Australian Receivables Ltd v Tekitu Pty Ltd & 2 ors [2008] NSWSC 433
HEARING DATE(S):	3 April 2008
JURISDICTION:	Equity Division Expedition List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	4 April 2008
DECISION:	Interlocutory and limited Mareva injunction granted.
CATCHWORDS:	INJUNCTIONS – interlocutory injunctions – to preserve subject matter of proceedings – distinction from Mareva injunction – where plaintiff has strongly arguable claim to beneficial entitlement to fund – where defendant has arguable set-off – whether set-off available – balance of convenience. - INJUNCTIONS – Mareva injunctions – where restraint in respect of only some and not all of defendant’s assets – where injunction only restrains dispositions without notice – whether exception should be permitted for legal and living expenses. - INJUNCTIONS – undertaking as to damages – whether sufficient notice to require plaintiff to show capacity to pay – evaluating potential risk of damage.
CATEGORY:	Procedural and other rulings
CASES CITED:	Batiste v Lenin [2002] NSWSC 233; (2002) 10 BPR 19,441 Batiste v Lenin [2002] NSWCA 316; (2002) 11 BPR 20,403 Carrathool Hotel Pty Ltd v Scutti [2005] NSWSC 401 Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501 Edlington Properties Ltd v J H Fenner & Co Ltd [2006] EWCA Civ 403
PARTIES:	Australian Receivables Limited (plaintiff) Tekitu Pty Limited (first defendant) Ross Edward Smith (second defendant) Lynette Mary Smith (third defendant)
FILE NUMBER(S):	SC 5258/07
COUNSEL:	Mr R J Brender (plaintiff) Mr M Green w Ms E Elbourne (defendants)
SOLICITORS:	Forbes Dowling Lawyers (plaintiff) Rodd Peters Lawyers (defendants)

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

BRERETON J

Friday 4 April 2008

5258/07 Australian Receivables Ltd v Tekitu Pty Ltd & 2 ors

JUDGMENT (ex tempore)

1 HIS HONOUR: By contract dated 9 January 2007 the plaintiff Australian Receivables Ltd (“ARL”) purchased from the first defendant Tekitu Pty Limited, of which the second defendant Ross Edward Smith and the third defendant Lynette Mary Smith are the directors and shareholders, the assets of a mercantile collection business formerly carried on by Tekitu. Clause 17.5 of the contract provided as follows:

At Completion:

(1) the Vendor shall immediately account to the Purchaser at the Purchasers [sic] direction, for all client moneys received by the Vendor into the Vendors [sic] bank accounts and trust accounts after Completion and without deduction;
(2) pay to the Purchaser all money of Clients held in the Vendor's bank accounts or trust account and thereafter remit daily (or as otherwise required by the Purchaser), all payments received into the Vendor's bank accounts and trust accounts and to keep bank accounts and trust accounts open for a period of nine months following Completion and permit the Purchaser to verify the bank account and trust account transaction for this 9 month period.

2 On 19 October 2007, Donaldson Trumble lawyers, then acting for ARL, wrote to Tekitu and its directors, asserting that in breach of clause 17.5 Tekitu had failed to account for…