Donnelly v Porteous

Case [2001] FCA 345


FEDERAL COURT OF AUSTRALIA

Donnelly (Trustee), in the matter of the bankrupt estate of Hancock v Porteous
[2001] FCA 345


INJUNCTIONS – interlocutory injunctions – injunctions to preserve status quo and property pending determination of rights – Mareva orders – factors to be considered by the Court in determining whether orders should be made

BANKRUPTCY – administration of bankrupt estate under Part XI of the Bankruptcy Act 1966 (Cth) (Act) – transfer affected by s 120 of the Act – date on which the trustee’s claim arises – date from which interest payable by the transferee

Bankruptcy Act 1966 (Cth), s 40(1)(b), s120, s 247A(1)

Nippon Yusen Kaisha v Karageorgis [1975] 1 WLR 1093 referred to
Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509; [1980] 1 All ER 213 followed
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 followed
Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 followed
Pearce v Waterhouse [1986] VR 603 followed
Jackson v Sterling Industries Ltd (1987) 162 CLR 612 followed
Williams v Lloyd (1934) 50 CLR 341 followed

MAX CHRISTOPHER DONNELLY (AS TRUSTEE OF THE ESTATE OF THE LATE LANGLEY GEORGE HANCOCK) v ROSEMARIE PORTEOUS & ORS
N 8132 of 1999

STONE J
SYDNEY
2 APRIL 2001

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 8132 OF 1999

BETWEEN:

MAX CHRISTOPHER DONNELLY (AS TRUSTEE OF THE ESTATE OF THE LATE LANGLEY GEORGE HANCOCK)
APPLICANT

AND:

ROSEMARIE PORTEOUS
FIRST RESPONDENT

JOHANNA LACSON NOMINEES PTY LIMITED
SECOND RESPONDENT

BELLE ROSA HOLDINGS PTY LIMITED
THIRD RESPONDENT

JUDGE:

STONE J

DATE OF ORDER:

2 APRIL 2001

WHERE MADE:

SYDNEY

ON THE APPLICANT GIVING THE USUAL UNDERTAKING AS TO DAMAGES THE COURT ORDERS THAT:

1.        Pending the determination of these proceedings, the First Respondent be restrained by herself, her servants or agents from selling, charging, mortgaging, encumbering or otherwise disposing of or dealing with the property known as “Prix d’Amour” (being Lots 100 and 104, Wellington Street, Mosman Park in the State of Western Australia) without first giving twenty-one (21) days’ written notice to the Applicant.

2.        Pending the determination of these proceedings, the First and Second Respondents be restrained by themselves, their servants or agents from selling, charging, mortgaging, encumbering or otherwise disposing of or dealing with the property known as Lot 26, Alaqua, Phase 3 in the Country of Seminole, Florida in the United States of America (“the Orlando Property”) without first giving twenty-one (21) days’ written notice to the Applicant.

3.        Pending the determination of these proceedings that, in the event of sale of Prix d’Amour, the First Respondent give not less than twenty-one (21) days’ written notice to the Applicant prior to settlement of such sale.

4.        Pending the determination of these proceedings that, in the event of sale of the Orlando Property, the First and Second Respondents give not less than twenty-one (21) days’ written notice to the Applicant prior to settlement of such sale.

5. In the event of sale…

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AGLC
Donnelly v Porteous [2001] FCA 345
Case
[2001] FCA 345
Decision Date

CaseChat Overview and Summary

The case of Donnelly v Porteous involved a legal dispute between the Applicant, Donnelly, and the Respondents, Porteous, concerning the sale and disposition of two properties. The First Respondent, Porteous, was restrained from selling, charging, mortgaging, or otherwise disposing of a property in Mosman Park, Western Australia, known as “Prix d’Amour,” without providing the Applicant with twenty-one days’ written notice. Similarly, both the First and Second Respondents were restrained from dealing with another property in Florida, United States, known as “the Orlando Property,” without similar notice to the Applicant. The Supreme Court of New South Wales was tasked with determining these interim orders pending the outcome of the broader legal proceedings.

The court had to decide on the appropriate measures to ensure that the Applicant was adequately informed and could act upon any proposed sales of the properties in question. The legal issues included whether the Applicant had a sufficient interest in the properties to warrant such interim relief, and whether the Respondents had any justifiable grounds to oppose these measures. The court examined the terms of any agreements or understandings between the parties, as well as the implications of such sales on the Applicant’s rights and interests.

In its reasoning, the court noted that the Applicant had a significant interest in both properties and that any sale without proper notice could potentially prejudice the Applicant’s rights. The court held that the Respondents were required to provide the Applicant with adequate notice before proceeding with any sale, and that specific sums of money should be retained from the sale proceeds to account for the Applicant’s interest. This decision was made to protect the Applicant’s interests until the substantive issues in the case were resolved. The court also took into account the urgency of the situation and the potential for loss or prejudice to the Applicant if the interim orders were not granted.

Pending the determination of the broader proceedings, the court made several orders to protect the Applicant’s interests. These included restraining the Respondents from disposing of the properties without notice, and requiring specific sums to be retained from the sale proceeds and deposited into a joint bank account pending resolution of the case. These orders aimed to ensure that the Applicant was fairly treated and that their interests were safeguarded throughout the interim period.

Orders

Orders of the court

1. Pending the determination of these proceedings, the First Respondent be restrained by herself, her servants or agents from selling, charging, mortgaging, encumbering or otherwise disposing of or dealing with the property known as “Prix d’Amour” (being Lots 100 and 104, Wellington Street, Mosman Park in the State of Western Australia) without first giving twenty-one (21) days’ written notice to the Applicant.

2. Pending the determination of these proceedings, the First and Second Respondents be restrained by themselves, their servants or agents from selling, charging, mortgaging, encumbering or otherwise disposing of or dealing with the property known as Lot 26, Alaqua, Phase 3 in the Country of Seminole, Florida in the United States of America (“the Orlando Property”) without first giving twenty-one (21) days’ written notice to the Applicant.

3. Pending the determination of these proceedings that, in the event of sale of Prix d’Amour, the First Respondent give not less than twenty-one (21) days’ written notice to the Applicant prior to settlement of such sale.

4. Pending the determination of these proceedings that, in the event of sale of the Orlando Property, the First and Second Respondents give not less than twenty-one (21) days’ written notice to the Applicant prior to settlement of such sale.

5. In the event of sale of Prix d’Amour, there shall be retained out of the proceeds of such sale and placed in a joint bank account in the names of the Applicant and the solicitor for the Respondents, an amount of $3,242,581.80 together with interest on that amount calculated in accordance with the rates of interest prescribed under Schedule J of the Supreme Court Rules 1970 (NSW) from 8 April 1999 to the date of settlement of such sale.

6. In the event of sale of the Orlando Property, there shall be retained out of the proceeds of such sale and placed in a joint bank account in the names of the Applicant and the solicitor for the Respondents, an amount of $1,590,531.54 together with interest on that amount calculated in accordance with the rates of interest prescribed under Schedule J of the Supreme Court Rules 1970 (NSW) from 8 April 1999 to the date of settlement of such sale.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

STONE J

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Ratio Decidendi

Legal Principle Established

Established by: STONE J

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