FEDERAL COURT OF AUSTRALIA
CIP Group Pty Ltd v So (No 9) [2025] FCA 694
File number: QUD 93 of 2022 Judgment of: DERRINGTON J Date of judgment: 15 May 2025 Date of publication of reasons: 15 July 2025 Catchwords: PRACTICE AND PROCEDURE – injunctions – variation of injunction to avoid frustration of original intention – turns upon own facts – no point of principle Cases cited: CIP Group Pty Ltd v So (2022) 164 ACSR 566
CIP Group Pty Ltd v So (No 3) [2023] FCA 518
CIP Group Pty Ltd v So (No 5) [2024] FCA 1373
CIP Group Pty Ltd v So (No 8) [2025] FCA 482
Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 18 Date of hearing: 15 May 2025 Counsel for the Applicants and the Second to Thirteenth Respondents: Mr A Pomerenke KC with Mr A Psaltis and Ms D Tay Solicitor for the Applicants and the Second to Thirteenth Respondents: Bartley Cohen Counsel for the First and Fourteenth to Twentieth Respondents: Mr S Couper KC with Mr D Marckwald Solicitor for the First and Fourteenth to Twentieth Respondents: Colin Biggers & Paisley Counsel for the Twenty-First Respondent: The Twenty-First Respondent did not appear Counsel for Twenty-Second and Twenty Third Respondents: Mr G A Thompson KC with Mr T Pincus Solicitor for Twenty-Second and Twenty Third Respondents: Hall and Wilcox ORDERS
QUD 93 of 2022 BETWEEN: CIP GROUP PTY LTD ACN 610 483 577
First Applicant
CIP PTY LTD ACN 611 408 710
Second Applicant
PYRMONT PORTFOLIO PTY LTD ACN 608 496 617
Third Applicant
AND: SHAN NGAI SO
First Respondent
GGPG PTY LTD ACN 609 675 505 (RECEIVER AND MANAGER APPOINTED)
Second Respondent
PARK RIDGE 94 PTY LTD ACN 616 893 924 (RECEIVER AND MANAGER APPOINTED) (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
DERRINGTON J
DATE OF ORDER:
15 MAY 2025
UPON THE UNDERTAKING OF THE NINETEENTH RESPONDENT to take all steps necessary to ensure that the mortgages granted over the properties known as Flat J on 14th Floor of Tower 7, Harbour Place No 8 Oi King Street Kowloon, Hong Kong and Flat B on 9th Floor of Tower 7, Harbour Place No 8 Oi King Street Kowloon, Hong Kong, in favour of the applicants and the second to thirteenth respondents (Mortgages), are registered (including by addressing any requisition notices issued by the Hong Kong land registry to the best of her ability),
THE COURT ORDERS THAT:
1.Paragraph 1 of the orders of Justice Derrington of 9 December 2024 be varied as follows:
“
Subject to the Mortgages being registered,paragraph 1 of the Orders made by Justice Derrington on 24 May 2023 be varied such that the first and fourteenth to twentieth respondents…
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- Case
- [2025] FCA 694
- Decision Date
CaseChat Overview and Summary
The court was required to decide whether the variation of the injunction was warranted given the substantial change in circumstances since the injunction was first granted. The primary issue was whether the variation of the injunction would avoid the frustration of the original intention behind the injunction, which was to maintain the status quo pending the resolution of the underlying claims. The court had to balance the need to protect the interests of the Clancy Interests against the potential for the injunction to become ineffective if the value of the undertaking as to damages had diminished significantly.
The court concluded that the variation of the injunction was appropriate in the circumstances. The significant reduction in the assets available to Mr Clancy meant that the injunction could no longer effectively protect his interests, as there was a real question as to the nature and extent of any property to which he might have recourse to satisfy his undertaking. The court found that the circumstances had markedly changed since the injunction was first granted, and thus, a partial release of the injunction was necessary to avoid its frustration. The court did not see this as a point of principle but rather a decision based on the unique facts of the case.
The final orders of the court included a partial release of the injunction, with certain provisions taking effect seven days after the date of the order. The entry of these orders was governed by Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. Paragraph 1 of this Order is not to take effect until 7 days after the date of this Order.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The Injunction, as varied in December 2024, is referred to forthwith as the Relaxed Injunction. Some short context: Rationale for the grant, and variation, of the Injunction The Injunction arose in the context of a dispute as between, on the one hand, a Mr Marc Clancy and his corporate interests (the Clancy Interests) and, on the other, a Mr Shan Ngai So and his corporate interests (the So Interests). In short, and as was noted in CIP Group Pty Ltd v So (No 3) [2023] FCA 518 (at [4]) (CIP No 3), the Clancy Interests:[4]… sought injunctive relief to prevent the dissipation by Ultimate [being a member of the So Interests] of the proceeds of any further sale of the Carver’s Estate land, which Ultimate is able to realise pursuant to the mortgages it holds over that land. Similar relief is sought against UIP [being another member of the So Interests] in respect of the loan, mortgages and securities that it received by way of assignment from another company, IJ Financial Services Ltd … By way of context, the relevant parties, of which there are too many to enumerate here, hold claims vis-à-vis the proceeds of sale of land known as the “Carver’s Reach Estate”, derivative upon their claims to a proprietary interest in that land. That sale occurred in circumstances where certain corporate entities, through which finance flowed for the purposes of developing the Carver’s Reach Estate, purported to exercise their rights under existing loan facilities and associated securities: CIP Group Pty Ltd v So (2022) 164 ACSR 566, 570 – 571 [17]. That led to the appointment of receivers, who then sold certain “stages” of the Carver’s Reach Estate land: see CIP No 3 [13] and CIP No 5 [1]: and held both the proceeds of sale and any yet-to-be sold property (namely, “Stages 7 to 11” of the development) at the time the Injunction was granted. That is of no small moment, as it was, in my opinion, the status quo anti. On the transaction documents that exist – although there are challenges to them – loans were made and securities given such that the receivers, on behalf of the lending companies, have a prima facie right to the funds. There is no utility, at least at this stage, in traversing the array of claims made in relation to the veracity of those transactions. It suffices to observe that the Clancy Interests assert, inter alia, that neither the loan agreements nor the securities are enforceable, or, to the extent they are, the monies are held by the receivers in trust for them: see, eg, CIP No 3 [3] – [5]. The merits of those allegations are yet to be determined, though they plainly disclose a serious question to be tried: see CIP No 3 [93]; CIP Group Pty Ltd v So (No 8) [2025] FCA 482 [38] (CIP No 8). At the time the Injunction was granted, some evidence existed as to the value of the undertaking as to damages offered by Mr Clancy: CIP No 8 [5]: that being commonly accepted as the price of an injunction: CIP No 8 [24]. At that time, the evidence of the value of the undertaking was relatively unchallenged, and the Injunction was granted. Subsequently, and that which led to the variation of the Injunction on 9 December 2024, was an apparent reduction in the assets which might be available to Mr Clancy were his undertaking to be called upon: CIP No 5 [51]; CIP No 8 [6]. Indeed, at that later date, the evidence disclosed that there existed a real question as to the nature and extent of any property to which Mr Clancy might have recourse to satisfy his undertaking: CIP No 5 [46], [48]. Some discussion occurred as to what property did exist: CIP No 5 [41] – [45], [47]. It was ultimately found to be “clear” that the value of the relevant undertaking “ha[d] been diminished significantly” and, therefore, the “necessary conclusion” was that “the circumstances surrounding the value of Mr Clancy’s undertaking as to damages ha[d] markedly changed since the granting of the injunction on 24 May 2023”: CIP No 5 [49], [51]. Accordingly, a partial release of the Injunction was ordered in the terms excerpted above.