Citadel Financial Corporation Pty Ltd v Elite Highrise Services Pty Ltd
[2014] NSWSC 1750
•04 December 2014
Supreme Court
New South Wales
Medium Neutral Citation: Citadel Financial Corporation Pty Ltd v Elite Highrise Services Pty Ltd [2014] NSWSC 1750 Hearing dates: 4 December 2014 Date of orders: 04 December 2014 Decision date: 04 December 2014 Jurisdiction: Equity Division Before: Brereton J Decision: Order 3 of 3 December 2014 varied.
Catchwords: PROCEDURE – amendment of orders – whether amendment would involve jeopardy to the purchaser or receiver. Category: Procedural and other rulings Parties: Citadel Financial Corporation Pty Limited ACN 106 654 844 (plaintiff/respondent)
Elite Highrise Services Pty Limited (Receivers and managers appointed) ACN 155 992 573 (first defendant/applicant)
Murray Roderick Godfrey and David Nicholas Iannuzzi in their capacity as receivers and managers of Elite Highrise Services Pty Limited (receivers and managers appointed) ACN 155 992 573 (second defendant/applicant)
CML Payroll Pty Limited ACN 150 688 476 (third defendant)
Skyline Apartments Pty Limited ACN 001 451 332 and Pacific Hoardings Pty Limited ACN 134 060 950 (fourth defendant/respondent)Representation: Counsel:
Solicitors:
S Somerville (plaintiff/respondent)
B Sewell (solicitor) (second defendant/applicant)
R McGrath (solicitor) (fourth defendant/respondent)
Bridges Lawyers (plaintiff/respondent)
Sewell & Kettle (second defendant/applicant)
McGrath Solicitors (fourth defendant/respondent)
File Number(s): 2013/372920
Judgment (ex tempore)
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HIS HONOUR: Yesterday on 3 December 2014, after an interim hearing in circumstances of relative urgency, I made orders inter alia as follows:
Until 12 December 2014 the first second & third respondents be restrained from by themselves their servants or agents alienating encumbering disposing of or otherwise adversely dealing with any further scaffolding equipment of the first respondent
Until 12 December 2014 the first, second and third respondents be restrained from by themselves their servants or agents alienating encumbering disposing of dispersing or otherwise adversely dealing with any scaffolding equipment of the first respondent sold to date other than by way of payment into a trust account or controlled moneys account in the name of the second respondent or their solicitors
Until 12 December 2014 the first and second respondents be restrained from by themselves their servants or agents allowing any scaffolding equipment from being removed from the premises at 138 to 158 Captain Cook Drive, Kurnell NSW (“the Kurnell Property”) and/or allowing any scaffolding equipment from being removed from any other location save for the purpose of returning it to the Kurnell property
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I have, in the course of the proceedings today, corrected, pursuant, to the Slip Rule, order 2, by inserting the words, "the proceeds of", and order 3 by amending the premises to, "238-258 Captain Cook Drive".
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By motion, leave to file which in court is sought today, the second defendants now seek an order varying orders 1 and 3 by adding, effectively, as a proviso, that scaffolding equipment sold before 3 December may be picked up by the purchaser, or delivered to the purchaser.
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As it seems, notwithstanding the receiver's assurance to the plaintiff by e-mail that, unless the issues were resolved, no scaffolding would be sold before 4 December, the receiver, by his auctioneers, sold certain scaffolding on or about 3 December 2014. This was reflected in the orders made on 3 December by the insertion in order 1 of the reference to "further" scaffolding equipment.
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Accepting that, to the extent that there had already been a sale, that was not the subject of restraint, it is difficult to see how it could have been unless the purchaser were joined, as it would interfere with rights acquired by third parties, namely, the purchasers under the contract for purchase. The equipment that had already been sold was dealt with by order 2, which required, in effect, preservation of the proceeds of any such sale. The difficulty has arisen, principally, in connection with order 3, which contains no qualification or limitation, and prohibits the removal from the Kurnell property of any scaffolding equipment absolutely.
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The evidence adduced on today's application indicates that the receiver has treated that order as if it excepted scaffolding equipment previously sold and that, as a result, in the course of today, semi-trailer loads of scaffolding equipment have been removed from the Kurnell property. There is some evidence that suggests that the selling price might be below that attainable in the ordinary market, but I would not give too much weight to that in the context of a receiver's sale and, in any event, if it be that the property has been sold at an undervalue and that it has been wrongly sold, then the creditors' remedies would be a claim for damages against the receiver. That would not itself vitiate the sale to the purchaser.
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The plaintiffs, however, contend that one reason why they wanted order 3 in the terms in which it was made was to enable the inspection referred to in order 5 of 3 December to take place so that they could identify all the scaffolding equipment located at the Kurnell property, including that which had been the subject of a sale. They and the fourth respondent have indicated that that inspection can take place tomorrow.
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In those circumstances, it seems to me that, without any serious interference to the rights of the purchasers, or the risk of visiting damages on the receiver by placing him in breach of contract, the position can be addressed by modifying order 3 to permit the equipment that had been sold by 3 December to be removed after Monday, 8 December, by which time the plaintiffs will have had a reasonable opportunity to inspect the equipment.
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To the extent that that involves any jeopardy to the receiver, then it must be borne in mind that, had the receiver adhered to the assurance he gave the plaintiff that he would not sell any scaffolding before 4 December, the problem would not have arisen.
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Accordingly, the Court orders that order 3 made on 3 December 2014 be varied by adding the following proviso:
Provided that it will not be a contravention of this order for the first and second respondents to allow scaffolding equipment that has been sold on or before 3 December 2014 to be removed from the Kurnell property after 8 December 2014.
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I grant leave to the first and second defendants to file a notice of motion in the form initialled by me, dated this day and placed with the papers.
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Upon the undertaking of Benjamin Sewell to pay the appropriate filing fees, I direct that the motion be returnable instanter.
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I dispense with further service of the motion.
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The Court orders that the applicants on today's motion pay the costs of the respondents, including of the fourth respondent Skyline Apartments Pty Ltd.
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Decision last updated: 20 March 2015
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