Eddy Lau Constructions Pty. Ltd. v Transdevelopment Enterprises Pty. Ltd
[2001] NSWSC 82
•22 February 2001
CITATION: Eddy Lau Constructions Pty. Ltd. v. Transdevelopment Enterprises Pty. Ltd. [2001] NSWSC 82 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 2277/99 HEARING DATE(S): 22 Februry 2001 JUDGMENT DATE:
22 February 2001PARTIES :
Eddy Lau Constructions Pty. Ltd. - plaintiff
Transdevelopment Enterprises Pty. Ltd. - defendantJUDGMENT OF: Hodgson CJinEq at 1
COUNSEL : Mr. McVay for plaintiff
Mr. J. Simpkins SC for defendantSOLICITORS: James A. Moustacas & Co., Bondi Junction for plaintiff
Henry Davis York, Sydney for defendantCATCHWORDS: PROCEDURE - INJUNCTIONS - Mareva injunction - Limited injunction granted. CASES CITED: Patterson v. BTR Engineering (1989) 18 NSWLR 319 DECISION: See end of judgment
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORAM: HODGSON, CJ in Eq.
22nd February 2001
NO. 2277 OF 1999
EDDY LAU CONSTRUCTIONS PTY. LTD. V. TRANSDEVELOPMENT ENTERPRISES PTY. LTD.
JUDGMENT
1 I am dealing with an application for a Mareva injunction.
2 The case of Patterson v. BTR Engineering (1989) 18 NSWLR 319, to which I have been referred, supports the view that in such an application, the Court should consider the strength of the plaintiff’s case, the risk that the defendant’s assets will be dissipated, the balance of convenience question, and essentially on that basis decide whether justification is shown for the very serious step of interfering with the defendant’s rights to deal with its property.
3 Looking at the strength of the plaintiff’s case, the plaintiff does face the difficulty that the building contract in relation to which the plaintiff claims was apparently signed at a time when there was not in existence a contract of insurance complying with the Home Building Act 1989, as it then existed, so that the defendants have an argument that s.92(1) of that Act was contravened with the consequence set out in s.94(1) of that Act.
4 The plaintiff has arguments in relation to that, in particular an argument that a contract does not amount to a contract to do residential building work, for the purpose of s.92(1), until it, in effect, becomes unconditional, and the obligation to do work becomes a present obligation. It is not possible for me to express my view as to the likelihood of success. It seems to me that the plaintiff has an arguable case. It cannot be said that the plaintiff has a particularly secure or strong case, having regard to the difficulty I have outlined.
5 In relation to the risk of dissipation of assets, the plaintiff relies on earlier conduct of the defendant in paying out $3.35 million for land, as to which some evidence suggests the value was only of the order of about $2 million. There is evidence that, at the time of the purchase of the land, the defendant had a valuation putting the value of this land at around $2.1 million, although there is evidence of a less formal valuation obtained from a valuer putting the value at approximately the amount paid.
6 It was put for the plaintiff that no explanation was offered as to why the higher valuation was preferred to the lower valuation. On the other hand, for the defendant, it was put that the intention to rely on the lower valuation was only made clear at the actual hearing, so that the matter of explaining the preference was not entered into.
7 On the whole, it seems to me that this evidence gives rise to some suspicion, but does not justify a finding of such a degree of risk as would justify major interference with the right of the defendant to deal with its assets.
8 However, the defendants have indicated an intention not to deal with assets otherwise than in the ordinary course of the defendant’s business. On the whole, I think the material does justify imposing a restriction to that extent, and also a restriction against the transfer of assets overseas.
9 Submissions were made as to the value of an undertaking as to damages to be given by the plaintiff. It seems to me that the damages that might be caused by the restriction I am proposing are not likely to be great, and I think the substance of the plaintiff is sufficient for an undertaking as to damages to that extent.
10 For those reasons, I make these orders.
11 Upon the plaintiff by its Counsel giving to the Court the usual undertaking as to damages, I order that until further order the defendant not deal with or use it assets, including the property the subject of these proceedings and the proceeds of sale of units in that property, otherwise than in the ordinary course of its business, and that the defendant not transfer any of its assets outside Australia.
12 I order that the costs of this application, including reserved costs, be defendant’s costs in the proceedings.
13 The exhibits may be returned.
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