Fatimi Pty Ltd v Bryant

[2002] NSWSC 750

Reported Decision: (2002) Aust Torts Reports 81-677

New South Wales

Supreme Court

CITATION:	Fatimi Pty Ltd v Bryant & Ors [2002] NSWSC 750
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 1444/98
HEARING DATE(S):	29/7/02-1/8/02, 5/8/02
JUDGMENT DATE:	20 September 2002
PARTIES :	Fatimi Pty Limited (Plaintiff) Elizabeth Charlotte Bryant (First Defendant) Richard Michael Joseph Bryant (Second Defendant) NN&D Pty Limited (Third Defendant) Robert Bruce McCullough (Fourth Defendant) Nirmal Fernando (Fifth Defendant) Joseph Richard Bryant (Sixth Defendant)
JUDGMENT OF:	Campbell J

COUNSEL :	M B Evans (Plaintiff) F Kunc; M Henry (Defendants)
SOLICITORS:	John Cunningham (Plaintiff) John Samuel Sheehy (Defendants)
CATCHWORDS:	TORTS - MISCELLANEOUS TORTS - conspiring to injure - meaning of "predominent purpose to injure the plaintiff" - factual findings about whether plaintiff suffered any loss in consequence of any conspiracy - TORTS - MISCELLANEOUS TORTS - conspiracy to injure by unlawful means - meaning of "purpose to injure the plaintiff" - meaning of "common intention to use unlawful means" - whether "unlawful means" needs to be activity which, if committed by one person alone without any conspiracy, would be actionable in damages - JUDGMENTS AND ORDERS - order made "until further order" - PROCEDURE - miscellaneous procedural matters - Mareva Orders - duration of
LEGISLATION CITED:	Bankruptcy Act 1966 (Cth) Conveyancing Act 1919 Corporate Law Reform Act 1992 (Cth) Corporations Act 1990 (NSW) Crimes Act 1900 Evidence Act 1975 Industrial Relations Act 1996 (NSW) Law Reform Miscellaneous (Provisions) Act 1946 Real Property Act 1900 Supreme Court Act 1970
CASES CITED:	AG Australia Holdings Pty Ltd v Burton [2002] NSWSC 170 Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 Attorney General of the Commonwealth v Davids Holdings Pty Ltd (1993) ATPR 41-247 Balfour Williamson (Australia) Pty Ltd v Douter Luingner (1979) 2 NSWLR 844 Baxter v Obacelo Pty Ltd [2001] HCA 66 Belmont Finance Corporation v Williams Furniture Limited (No 2) [1980] 1 All ER 393 Blacktown Concrete Services Pty Ltd v Ultra Refurbishing & Construction Pty Ltd (in liq) (1998) 43 NSWLR 484 Bolton v London School Board (1878) 7 Ch D 766 Briginshaw v Briginshaw (1938) 60 CLR 336 Cabasi v Vila (1940) 64 CLR 130 Coal Miners' Industrial Union of Workers of Western Australia Collie v True (1959) 33 ALJR 224 Cox v Journeaux (No 2) (1935) 52 CLR 713 The Cunard Steamship Company Limited v Stacey [1955] 2 Ll R 247 Deputy Commissioner of Taxation v Winter (1988) 92 FLR 327 G Scammell & Nephew Limited v Hurley [1929] 1 KB 419 Devlin v Collins (1984) 37 SASR 98 Fylas Pty Ltd v Vynal Pty Ltd [1992] 2 Qd R 593 G Scammell & Nephew Limited v Hurley [1929] 1 KB 419 Galland v Mineral Underwriters Ltd [1977] WAR 116 Giblan v National Amalgamated Labourers' Union of Great Britain and Ireland [1903] 2 QB 600 Green v Pulsford (1839) 2 Beav 75; 48 ER 1105 Gold Coast City Council v Pioneer Concrete (QLD) Pty Ltd (1998) 157 ALR 135 Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 328 In the Marriage of I H & S A Millar (1983) 9 Fam LR 5 Inez Investments Pty Limited v Dodd (9 July 1979, unreported) Lane v Registrar of Supreme Court of NSW (1981) 148 CLR 245 LMI Australasia Pty Limited v Baulderstone Hornibrook Pty Ltd [2001] NSWSC 886 Lonrho Plc v Fayed [1992] 1 AC 448 Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 McKernan v Fraser (1931) 46 CLR 343 McWilliam v Penthouse Publication Ltd [2001] NSWCA 237 Michaels v Taylor Woodrow Developments Ltd [2001] Ch 493 Mogul Steamship Company v McGregor, Gow & Co [1892] AC 25 Northern Territory of Australia v Mengel (1995) 185 CLR 307 O'Brien v Dawson (1941) 41 SR (NSW) 295 O'Brien v Dawson (1942) 66 CLR 18 Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 13 ACSR 117 Pritchard v Briggs [1980] 1 Ch 338 R v Associated Northern Collieries (1911) 14 CLR 387 R v Churchill [1967] 2 AC 224 Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231 Said v Butt [1920] 3 KB 497 Sorrell v Smith [1925] AC 700 Southan v Grounds (1916) 16 SR 274 Stewart Chartering Ltd v C & O Managements SA [1980] 1 All ER 718 Williams v Hursey (1959) 103 CLR 30
DECISION:	Suit dismissed

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

CAMPBELL J

20 SEPTEMBER 2002

1444/98 FATIMI PTY LTD v ELIZABETH CHARLOTTE BRYANT & ORS

JUDGMENT

Nature of the Claim

1 HIS HONOUR: Fatimi Pty Ltd (“Fatimi”) obtained a judgment which required Rylegrove Pty Ltd (“Rylegrove”) to pay it money. Fatimi took some steps towards using the Court’s processes for execution of judgment to sell a block of land which Rylegrove owned. However, while those processes were still under way, Rylegrove transferred the land to another company. The terms of the contract under which the transfer was made were ones which Fatimi says were very disadvantageous to Rylegrove. Indeed, Fatimi says that the purpose of the transfer was to harm Fatimi by stopping it from levying execution on the block of land.

2 When Fatimi found out that the block of land had been sold, it decided to go ahead with a winding up summons which it had issued against Rylegrove, rather than continue trying to levy execution against the block of land. Ultimately, Rylegrove was wound up on that summons. However, when Fatimi proved in the winding up, it received much less money than it would have received if it had been able to sell the block of land and Rylegrove was not wound up.

3 The directors of Rylegrove, at the time the block of land was transferred from Rylegrove, were the first defendant in this case, Elizabeth Charlotte Bryant (“Mrs Bryant”), and her son, the second defendant (“Michael Bryant”). Mrs Bryant’s husband, Joseph Richard Bryant (“Mr Bryant”) had, by the time of that transfer taking place, become bankrupt, and had given up a position he had formerly held as a director of Rylegrove. However, Fatimi says he was still very actively involved in the decision to have Rylegrove transfer the land.

4 In these proceedings, Fatimi says Mrs Bryant, Michael Bryant, and Mr Bryant have committed the tort of conspiracy. Fatimi claims as damages the difference between the amount it actually received from the winding up of Rylegrove, and the true value of the land which Rylegrove transferred, minus the expenses Fatimi would have incurred in selling it. Fatimi says that if the transfer had not taken place, it would have been able to sell that block of land, and so have received the full value of the block of land (minus selling expenses) in partial satisfaction of its judgment. As well, Fatimi says that the circumstances in which the transfer occurred were such as to entitle it to exemplary damages, against each of these defendants.

Background to the Dispute

5 Rylegrove had operated since August 1987 as trustee of the Bryant Family Trust. In 1994 and up to August 1995 it had two parcels of Real Property Act land vested in it. The first was Lot 2 in Deposited Plan 733945, which was a parcel of vacant rural land located at Little Hartley (“Lot 2 Little Hartley”). The second was a parcel of land located at Kemps Creek. Rylegrove at no time engaged in transactions in its own right. The only asset it held in its own right was $2.00 paid up capital. Further, the only activities which it carried on as a trustee, were activities connected with the Bryant Family Trust. At all times from 1987 to 26 June 1995 there were two directors of Rylegrove, namely Mr Bryant, and Mrs Bryant.

6 On 30 September 1992 Rylegrove ceased to be trustee of the Bryant Family Trust. Synergy Concepts Pty Ltd, another company under the control of Mr and Mrs Bryant, became trustee of the Bryant Family Trust. However, the two parcels of land at Lot 2 Little Hartley, and Kemps Creek, remained vested in Rylegrove.

7 Now, Fatimi is effectively controlled by Robert William Dean (“Mr Dean”). Fatimi had, in 1987 and 1988, operated as a joint venture between Mr Dean, and interests associated with Mr Bryant, in the construction industry. Mr Dean held 400 shares in Fatimi, and (as Young J has held) J R Bryant (Holdings) Pty Ltd, a company controlled by Mr Bryant, held the remaining 600 shares. In 1988 Mr Bryant requested Mr Dean to arrange for some building work to be done on a property at Hunters Hill. That work was carried out.

8 From about June, July or August 1989, Mr Dean worked for Mr Bryant as Administration Manager for various companies which Mr Bryant controlled, connected with the construction industry. In January 1992, Mr Dean left that employment, after an incident where he was not prepared to carry out an instruction which Mr Bryant gave him relating to a dispute which Mr Bryant had with the Commonwealth Bank.

9 On 7 March 1992 Fatimi served on Rylegrove a notice under section 460 of the Corporations (New South Wales) Act 1990, demanding payment of a debt of $69,520, together with interest at the rate of 15% from 1 March 1988. The debt was an amount of money which Fatimi claimed was still owing to it from the building work which had been carried out at Hunters Hill in 1988.

10 On 7 September 1992 Fatimi filed a summons in proceedings number 4703 of 1992 in the Equity Division of the Supreme Court of New South Wales, seeking the winding up of Rylegrove. That summons was returnable on 22 October 1992. The Court made an order on 17 November 1992 that Rylegrove be wound up, and appointing a liquidator. However, on Rylegrove’s application, that winding up order was vacated on 27 November 1992. By this time, J R Bryant (Holdings) Pty Ltd was in liquidation. I would infer that Mr Dean has at some time purchased or in some other way acquired effective control over the 600 shares which that company held in Fatimi. Since at least September 1992 Mr Dean has been very closely involved in all litigation between Fatimi and Rylegrove, aware of every step taken in it by Fatimi, and present at every court hearing concerning that litigation.

11 On 22 April 1993 Fatimi filed an Amended Summons in proceedings 4703 of 1992. That summons named Rylegrove as the first defendant, J R Bryant (Holdings) Pty Ltd (which by this time had changed its name to “(Holdings) Pty Ltd (in liquidation)”) as second defendant, and Mr Bryant as the third defendant. That amended summons sought: an order that Rylegrove be wound up; that leave be granted to commence proceedings against (Holdings) Pty Ltd (in liquidation); a declaration that (Holdings) Pty Ltd (in liquidation) was the valid and beneficial holder of 600 shares in the capital of Fatimi; a declaration that Mr Bryant had been validly removed as a director of Fatimi on 27 November 1992; and an order that Mr Bryant be restrained from purporting to act or hold himself out as a director of Fatimi, or otherwise acting on behalf of Fatimi. As well, a Mareva Order was sought, that:

“… pending further order the first defendant be restrained from transferring, disposing of, encumbering, mortgaging or otherwise dealing with any real property of which it is registered proprietor so as to reduce the value thereof below the sum of $130,000 or such other amount as the court thinks fit.”

12 Prior to 6 August 1993, Fatimi had sued Rylegrove in the District Court, in connection with the same alleged debt to which the statutory demand which founded proceedings 4703 of 1992 related, and had obtained a default judgment. On 6 August 1993 that default judgment was set aside.

13 On 9 August 1993 Hodgson J made orders in proceedings 4703 of 1992. Those orders were ultimately made by consent. They included a requirement for Rylegrove to file and serve all affidavits on which it intended to rely to dispute Fatimi’s debt and to prove its own solvency and that of the trust of which it was trustee. Hodgson J granted Rylegrove leave to further amend its summons to make an alternative claim against Rylegrove in debt. As well, Hodgson J ordered:

“That, until further order, the first defendant be and is hereby restrained from disposing of, encumbering or otherwise dealing with any of its assets or assets of which it is trustee other than in the ordinary course of business, provided that the net value of all such assets must not in any event reduce below the value of $150,000.”

14 On 16 August 1993, pursuant to the leave which Hodgson J had granted, an amended summons was filed in proceedings 4703 of 1992, claiming an alternative order to the prayers for winding up, namely, that judgment be entered against Rylegrove “in the sum of $69,520 together with interest thereon at the rate of 15% per annum from 1 July 1988 or such other date as the court thinks fit to the date of judgment.” That was the only amendment made to the summons.

15 By consent of the parties, the whole of the proceedings in 4703 of 1992 were referred to a Master for hearing. The proceedings were heard by Master Macready over six days, three days in December 1993, and three days in May 1994. Master Macready delivered reasons for judgment on 20 May 1994. He found that Fatimi had made out its claim that it was owed $69,520 by Rylegrove, but (notwithstanding suspicions that he had about the solvency of the trust, and thus of Rylegrove) was not satisfied that Rylegrove was insolvent. The final paragraph of Master Macready’s reasons for judgment was:

“Accordingly, there will be judgment for $69,520 in favour of the plaintiff with interest at 15% from 31 March 1989. The balance of the amended summons is dismissed. I will hear argument on costs.”

16 An order to give effect to Master Macready’s judgment was not taken out until 13 October 1994.

17 Notwithstanding that the order had not been taken out, Rylegrove filed a Notice of Appeal against the decision of Master Macready on 17 June 1994, together with a notice of motion seeking a stay pending that appeal. On 11 July 1994 consent orders were made whereby Rylegrove would pay into court by 18 July 1994 $10,000 as security for its appeal, and, conditionally upon that security being provided, execution of the judgment “be stayed until determination of the said appeal”.

18 On 27 July 1994 Young J dismissed Rylegrove’s appeal from the decision of Master Macready.

19 On 24 August 1994, Rylegrove filed a Notice of Appeal Without Appointment in matter 4703 of 1992. It appealed against the decisions of Young J on 21 April 1992 [sic], Hodgson J on 9 August 1993, Master Macready on 20 May 1994, and Young J on 27 July 1994. That appeal became matter 40484 of 1994 in the Court of Appeal.

20 Also on 24 August 1994, Fatimi sought to issue a Writ for Levy of Property. A draft writ was filed in court, but no writ was actually issued. On 30 September 1994 Fatimi made another attempt to issue a Writ for Levy of Property, by filing a draft writ in the court. Again it was not issued. A sufficient reason for it not issuing was that the draft incorrectly stated that it was in respect of a judgment entered on 28 September 1994 – at this time no judgment had been entered at all in matter number 4703 of 1992 let alone entered on 28 September 1994.

21 On 26 October 1994 Fatimi finally succeeded in obtaining the issue of a Writ for Levy of Property against Rylegrove. That writ directed the Sheriff to levy the property of Rylegrove which is authorised at law to be taken in execution for the amount payable under the judgment (being $137,687.65 on 21 October 1994, plus interest from that date at the rate of 15% per annum, or on so much of $137,687.65 as is from time to time unpaid, subject to any payment in reduction thereof) together with the costs of the writ, and Sheriff’s fees. That writ came to be registered on the title of Lot 2, Little Hartley, as dealing U756810.

22 In the course of November 1994, Mr Dean sent the Writ for Levy of Property to the Sheriff’s office, together with a document which took the form of an affidavit sworn 3 November 1994, entitled as though it was for filing in proceedings 4703 of 1992. Notwithstanding the way that the affidavit was entitled, it was in fact not filed in proceedings 4703 of 1992, nor was it served on Rylegrove. That affidavit was sworn by Mr Dean, stated the amount of indebtedness which Rylegrove had to Fatimi pursuant to Master Macready’s judgment of 20 May 1994 and said, “Verily I say that the defendant does not own any property other than real property situated at Hartley in New South Wales.” He went on to give the title reference to Lot 2, Little Hartley.

23 On 18 November a Sheriff’s officer made a report that on 14 November 1994,

“Execution attempted at Lot 2 in Deposited Plan 733945, Great Western Highway, Hartley. This is a vacant block of land with no assets or dwellings situated on it. No assets found at this [illegible] which a seizure could be effected.”

24 On 8 March 1995 Fatimi filed in the Supreme Court, and sought to have issued, a Writ of Possession relating to the Lot 2 Little Hartley land. Unsurprisingly, in the circumstances where Fatimi did not have the benefit of an order for possession of that land, the Court Registry declined to issue the Writ.

25 On 9 March 1995 Mr Bryant lodged a caveat, registered number 075541 P against the title to Lot 2 Little Hartley. The estate or interest he claimed in the land was “Registered owner trustee for beneficial owner”.

26 On 5 May 1995 Fatimi served a Statutory Demand on Rylegrove, at its registered office. The Statutory Demand was served under cover of a letter from Mr Dean, which referred to the judgment of 20 May 1994, and stated that the total due inclusive of interest was, by then, $147,391.67. The letter went on:

“Accordingly please find enclosed section 459E notice in accordance with section 220(2) of the Corporations Law.
Your attention is drawn to paragraph 4 of the 459E notice which gives substantial benefits to us should you do nothing in relation to this notice.”

27 Paragraph 4 of the Statutory Demand said that:

“The creditor may rely on a failure to comply with this demand within the period for compliance set out in subsections 459F(2) as grounds for an application for a court having jurisdiction under the Corporations Law for the winding up of the company.”

28 On 30 March 1995 the Federal Court of Australia had made a sequestration order against Mr Bryant, on a bankruptcy notice which had been issued by the Commonwealth Bank. The date of commission of the act of bankruptcy on which the sequestration order was founded was 15 March 1994 – thus I infer that there had been some interlocutory proceedings in those bankruptcy proceedings, which had delayed the making of the final sequestration order. The sequestration order was stayed on the day it was made, and several further stays were obtained, until 27 June 1995, when Burchett J declined to further extend the stay of the sequestration order.

29 On 26 June 1995 Mr Bryant had resigned as a director of Rylegrove. David Bryant (an adult son of Mr and Mrs Bryant) was appointed as a director in his place, on 26 June 1995.

30 On 3 July 1995 matter 4703 of 1992 came before Brownie J. His Honour ordered, in substance:

– Fatimi be given leave to apply for the release of the $10,000 held in court as security for costs
- the caveat which Mr Bryant had filed against Lot 2 Little Hartley be removed, and Mr Bryant be restrained from filing any further caveat against Lot 2
- Rylegrove to pay the plaintiff’s costs of the motion
- the orders made that day be stayed until and including 17 July 1995.

31 On 11 July 1995, the Court issued, at Fatimi’s request, a notice in the form of Form 57A, addressed to Rylegrove. It said:

“To the judgment debtor:
1 A Writ of Execution has been registered against the title to your land described in the Schedule below and the land is bound by the writ.

2 Unless the writ is satisfied or you make arrangement as mentioned in paragraph 3 or obtain an order mentioned in paragraph 4, your land, described in the Schedule below, may be sold by the Sheriff under the Authority of the writ.
3 You may make arrangements for the sale or mortgage of the land by you subject to the judgment creditor’s consent. That consent will only be given on condition that an amount for the proceeds of the sale or mortgage, stipulated by the judgment creditor, is paid to the Sheriff towards satisfaction of the writ of execution. If you wish to make any such arrangements you should contact the judgment creditor’s solicitor immediately.
4. You may apply to the Court for an order staying proceedings on terms which may include terms as to payment by instalments of the money to be levied under the writ.”

32 On 13 July 1995 Fatimi’s solicitor handed to Rylegrove’s solicitor this Form 57A, in the waiting room of the Court of Appeal Registry, as purported service of the Form 57A on Rylegrove.

33 On 17 July 1995, Fatimi filed a winding up summons against Rylegrove, returnable on 15 August 1995. That winding up summons was the initiating process in proceedings number 2889 of 1995.

34 A notice of motion which Rylegrove had taken out in the Court of Appeal, in proceedings 40484 of 1994, was returnable on 17 July 1995. That summons sought the following orders:

“1. An Order that the judgment handed down by Master Macready on 20 May 1994 in proceedings ED 4703 of 1992 be stayed pending the final determination of the appeal against the Master’s decision.
2. An Order that the Order entered on 28 September 1994 pursuant to the judgment handed down by Master Macready on 20 May 1994 in proceedings ED 4703 of 1992 be stayed pending the final determination of the appeal against the Master’s decision.
3. An Order that the Writ of Levy of Property issued on 26 October 1994 pursuant to the judgment handed down by Master Macready on 20 May 1994 in proceedings ED 4703 of 1992 be stayed pending the final determination of the appeal against the Master’s decision.
4. An Order restraining the respondent from taking any further action to enforce the Order entered on 28 September 1994 pursuant to the judgment handed down by Master Macready on 20 May 1994 in proceedings ED 4703 of 1992 pending the final determination of the appeal against the Master’s decision.”

35 That notice of motion was adjourned by the Court of Appeal to 17 August 1995.

36 On 18 July 1995 Fatimi’s winding up summons, in proceedings 2889 of 1995, was served at the registered office of Rylegrove.

37 On 24 July 1995, Fatimi filed a notice of motion, in proceedings 2889 of 1995. That motion sought, in substance, the following:

- a declaration that a transfer of Lot 1, Deposited Plan 733945 from Rylegrove to Synergy Concepts Pty Ltd on 2 July 1993 is void
- orders to bring about the result that Rylegrove was once again the registered proprietor of Lot 1 in DP 733945

Lot 1 in DP 733945 is land which adjoins Lot 2 Little Hartley. Together, Lots 1 and 2 in DP 733945 are called “Killarney” . Lot 1 in DP 733945 had been transferred from Rylegrove to Synergy Concepts Pty Ltd after Rylegrove had ceased to be the trustee of the Bryant Family Trust. However, as Lot 1 DP 733945 had been an asset of the Trust at the time that Rylegrove’s debt to Fatimi had been incurred, resulting in the judgment debt found by Master Macready, Rylegrove would be entitled to seek indemnity for its obligations from Lot 1 DP 733945. It is clear enough that Fatimi’s purpose in seeking the orders in this Notice of Motion was to ensure that the land in Lot 1 DP 733945 was vested once again in Rylegrove, so that that land would be available to meet the judgment debt which Fatimi had against Rylegrove.

38 On 24 July 1995 Rylegrove filed a Notice of Appeal Without Appointment in the Court of Appeal, appealing against the decision of Brownie J made on 3 July 1995.

39 On 31 July 1995 an interlocutory process in that Appeal came before Meagher JA. His Honour asked Miss Black (counsel for Rylegrove), “You currently have a judgment against you for around $150,000 give or take, what security does the plaintiff have?” She replied, “There was at some stage an undertaking given by my clients not to dispose of assets below $150,000, it still has those assets.” Meagher JA also asked Miss Black, “Do you have any sworn evidence to show that Hodgson J’s order has been complied with?” She replied, “No, I did not expect that to be raised today, but I could get it, if it’s required.”

40 Mr Bryant gave evidence before Meagher JA on 31 July 1995. Mr Glissan, counsel for Fatimi, asked Mr Bryant, “What assets are there to comply with the orders of Hodgson J made on 9 August 1993?” Mr Bryant replied, “The Trust assets”. Mr Glissan asked, “What are they?”. Mr Bryant replied, “There is a parcel of land at Little Hartley, valued at approximately $300,000 to $400,000.” Mr Bryant said, in evidence, that one of the reasons why that land at Little Hartley had not been transferred from Rylegrove (to the new trustee of the Bryant Family Trust) was because there had been a writ on the title, which had lapsed. This referred to a writ which had been registered on the title in 1992 by Mann Judd. He also said that a second reason was that there was an order of Hodgson J, which he did not believe prevented the transfer, but certainly complicated it, so it was better to leave it there. Mr Dean was present in court when all these remarks were made.

41 On 1 August 1995 Rylegrove filed a notice of motion in proceedings 4703 of 1992, seeking to set aside the purported service of the Form 57A, which had occurred on 13 July.

42 On 3 August 1995, Brownie J heard three notices of motion in proceedings 2889 of 1995. Though Fatimi’s notice of motion, filed on 24 July 1995, was before him, Fatimi sought different relief to that foreshadowed by the notice of motion. On Fatimi’s application, but ultimately with Rylegrove’s consent, (after some argument) Brownie J made an order:

“The defendant within seven days of the date of this order file and serve on the applicant a list, verified by one of its directors, of all assets owned by it, whether as trustee or otherwise, showing the nature, location and value of each asset, and the net value of all assets presently owned by the respondent whether as trustee or otherwise, after allowing for all liabilities of the respondent whether as trustee or otherwise.”

43 Brownie J also had before him two notices of motion filed by Rylegrove (one seeking consolidation of 2889 of 1995 with 4703 of 1992, the other seeking security for costs) each of which his Honour dismissed. At a later date in August 1995, Rylegrove lodged an appeal (by a Notice of Appeal Without Appointment) against “the decision of Brownie J” on 3 August 1995.

44 In the course of evidence before Brownie J on 3 August 1995, Mr Gildea, the solicitor for Rylegrove, gave evidence. He was shown the orders of Hodgson J made on 9 August 1993, and asked what documentation there was to show that there had been compliance with those orders. He replied, “That order has been complied with, it has not been breached.” Mr Bryant also gave evidence on that occasion. He was shown the transcript of his evidence before Meagher JA, and asked whether that evidence was true, to which he replied, “Yes”. Mr Bryant stated that the order of Hodgson J of 9 August 1993 had been complied with. Mr Glissan asked him, “Where is the evidence to show that the order of Hodgson J has been complied with?” Mr Bryant replied, “The Trust assets”. Mr Glissan asked, “What are they?”, and Mr Bryant replied, “A parcel of land at Little Hartley, it is still there, it has not been moved.” Mr Bryant’s cross-examination continued:

“Q. You are aware that a Notice of Intention to Sell land has been served?
A. Yes.
Q. That has not come to fruition?
A. Correct.
Q. Would it be a good idea for the land to be sold and for the money to be placed in the Supreme Court, or into an interest bearing account, so that we might know what the value of the land is?
A. That would be a reasonable approach, but there is nothing to be gained by it, it is best to leave it there until the outcome of the appeal and it will be worth a lot more at a later stage, I don’t think there is anything to be gained by doing as you are suggesting.”

45 There was no suggestion, in the evidence given on 3 August 1995 by Mr Bryant, that any dealing with the land was proposed.

46 In his reasons for judgment delivered on 3 August 1995, Brownie J observed, in the course of giving reasons for judgment as to why Fatimi should not be required to provide security for costs,

“It is conceded today that the defendant did not comply with that statutory demand. In those circumstances Ms Black of counsel, who appears for the defendant, has been unable to suggest any basis on which the defendant can successfully resist the making of a winding up order. Section 459C(2)(a) of the Corporations Law appears to indicate that upon the hearing of the summons the court must presume a state of affairs from which it follows that there is a deemed insolvency.”

47 On 27 July 1995 David Bryant had ceased to be a director of Rylegrove. Michael Bryant, another adult son of Mr and Mrs Bryant, had, also on 27 July 1995, been appointed as a director of Rylegrove in his place. On 10 August 1997 Michael Bryant swore an affidavit, which was served on Fatimi. That affidavit said:

“1. I am a Director of Rylegrove Pty Limited.
2. Rylegrove Pty Limited acted as Trustee of the Bryant Family Trust until October 1992.
3. Rylegrove Pty Limited’s total assets have never exceeded $2.
4. I have made enquiries and have satisfied myself that at this time on the 10 August 1995 Rylegrove’s asset position remain and are $2.
5. Annexed hereto marked with the letter A is a true copy of the balance sheet 30 June 1995.”

48 The balance sheet of Rylegrove as at 30 June 1995, which was annexed, showed that it had a nominal capital of $2.00, represented by a current asset of cash on hand of $2.00.

49 On 8 August 1995 Shaw McDonald, solicitors acting for the Commonwealth Bank of Australia, wrote to Mr Cunningham. Mr Cunningham was Fatimi’s solicitor. Shaw McDonald gave notice of intention to appear at the hearing of the summons to wind up Rylegrove on 15 August 1995.

50 On 9 August 1995 Shaw McDonald wrote again to Mr Cunningham, referring to, “our discussions on 9th August 1995”, and continuing:

“We confirm that during discussions you advised as follows:-
1. You have not been served with a Notice of Appearance on behalf of the Defendant/Debtor, Rylegrove Pty Limited.
2. Rylegrove Pty Limited served upon you a Subpoena to Produce Documents on 14th August, 1995 and you are instructed to file a Notice of Motion to strike out the Subpoena.
3. You do not have an address for service for Rylegrove Pty Limited.
4. You will keep us informed of any further matters.”

51 On 15 August 1995, the first return date of Fatimi’s winding up summons against Rylegrove, the Commonwealth Bank appeared before Master McLaughlin as a supporting creditor. Rylegrove had at some time filed a Notice of Motion seeking to set aside the statutory demand, and also seeking dismissal of the winding up summons. All these processes were adjourned to 29 August 1995 for mention, to fix a hearing date.

52 On 15 August 1995, Master McLaughlin was told (as the learned Master records in a judgment he gave on 5 September 1995):

“… that there had been a number of appeals instituted by the defendant from that decision of Master Macready and that an appeal by the defendant to Mr Justice Young had been unsuccessful and had been dismissed by his Honour with costs on 27 July 1994, and that subsequently the defendant had lodged a notice of appeal in the Court of Appeal.
I was also informed that there was pending an application by the defendant to the Court of Appeal seeking a stay of execution upon the judgment entered at the direction of Master Macready and from the order of Mr Justice Young dismissing an appeal from the Master’s decision.”

53 On 17 August 1995 Bryson J had before him Rylegrove’s notice of motion, in proceedings 4703 of 1992, seeking to set aside the service of the Form 57A on Rylegrove’s solicitor. Notwithstanding the vigorous curial exercise which had been conducted in Fatimi’s name, Fatimi had in fact been deregistered on 2 September 1994. It was not until 3 July 1995 that the Court made an order that Fatimi be reinstated pursuant to section 574(3) of the Corporations Law. That court order was not entered until 28 July 1995, and the court order was not lodged with the Australian Securities Commission until 4 August 1995. From at least 3 July 1995 (the date when he referred to it in an affidavit) Mr Bryant had been aware that Fatimi had been deregistered. One of the grounds upon which Rylegrove sought to persuade Bryson J that the Writ for Levy of Property issued on 26 October 1994 was defective, was that at the time it was obtained Fatimi was deregistered, and hence did not exist. His Honour was unpersuaded. He said (at page 3 of his judgment delivered on 17 August 1995):

“Until the process of reinstatement was completed with lodgment with the Australian Securities Commission it was right to say that the action under the writ, including the delivery of the notice under section 57A, was not authorised by the company, as the company had no existence. Now the effect of sub-s 574(4) of the Corporations Law is that the reinstatement has retrospective effect and the company is deemed to have continued in existence. Under sub-s (4) the court has power, if need be, to make consequential orders affecting the rights of parties, arising during the interim, but it appears to me that the simple effect of sub-s (4) is enough to breathe life and effect into everything which was done purportedly for the company with respect to the writ of execution.”

54 Bryson J accepted that the service of the Form 57A on Rylegrove’s solicitor in the precincts of the court was irregular. On the basis that there was evidence that by 25 July 1995 Rylegrove had notice of the Form 57A, his Honour directed that service of that notice be deemed to have been effected on 25 July 1995, notwithstanding the requirement for personal service contained in Supreme Court Rules Part 45, Rule 15(3).

55 On 8 August 1995 Rylegrove had entered into a contract with NN&D Pty Ltd (“NN&D”) for the sale of Lot 2 Little Hartley, and had also executed a transfer of the land to that company. The transfer was registered promptly, and a new edition of the folio identifier was created on 14 August 1995. Mr Dean annexes to an affidavit which he swears, a search of the title of Lot 2 Little Hartley, which was made up to 8.00am on 18 August 1995. That search shows the registered proprietor as being NN&D Pty Ltd. Mr Dean had first discovered that the land had been transferred to NN&D Pty Ltd on 17 August 1995, when Mr Bryant, in cross examination before Bryson J, said that the land had been sold. (Mr Dean was aware that Lot 2 Little Hartley had previously been registered in the name of Rylegrove, because Mr Andrew, the liquidator of certain of the Bryant companies, had provided Mr Dean with a list of properties owned by Bryant companies in the course of 1994. As well, in November 1994 Mr Dean had directed the Sheriff’s attention to Lot 2 Little Hartley as an asset available to be executed against (see paragraph 22 above), and he had been instrumental in bringing the proceedings, which resulted in an order being made on 3 July 1995 for the removal of Mr Bryant’s caveat on the title to that land, and the injunction against Mr Bryant lodging a further caveat on it (see paragraph 30 above).)

56 On 21 August 1995 Fatimi returned to court in matter 4703 of 1992. On that day, Fatimi was granted ex parte relief in substance as follows:

- leave granted to join as defendants Mrs Bryant, David Bryant, Michael Bryant, and NN&D Pty Ltd

- until further order, Rylegrove, and each of the newly joined defendants, be restrained from disposing of, encumbering or otherwise dealing with the proceeds of sale of Lot 2 Little Hartley

- until further order, the newly joined defendants be restrained from disposing of encumbering or otherwise dealing with the land being Lot 2 Little Hartley.

57 Fatimi was also granted abridgment of time for service of a notice of motion seeking relief of the kind which had been granted on an ex parte basis, together with orders for all defendants to pay into court the net proceeds of sale of the land, and to deliver up to the Registrar the documents of title to the land.

58 On 24 August 1995 that Notice of Motion was before the court. On that occasion the injunctions which had been granted ex parte were, by consent, continued until 1 September 1995. As well, leave was given to join as sixth and seventh defendants Mr McCullough and Mr Fernando (the two directors of NN&D), and the ex parte injunctions were amended so as to apply to Messrs McCullough and Fernando. The joinder of these extra defendants prompted an application on their part for security for costs, which had not been resolved by the time Rylegrove was ordered to be wound up, on 7 September 1995.

59 On 27 August 1995, Michael Bryant swore a further affidavit. It said:

“1. I am a Director of Rylegrove Pty Limited.
2. Rylegrove Pty Limited acted as Trustee of the Bryant Family Trust until October 1992.
3. I have made enquiries and have satisfied myself that Rylegrove Pty Limited has registered in its name one parcel of land being Lot 125 in deposited plan 32140 at Kemps Creek NSW certificate of title 125/32140.
4. The above identified land is the property of the Bryant Family Trust.
5. The above identified land has not been at any time the property of Rylegrove Pty Ltd.
6. The above identified land at the time of purchase by the Bryant Family Trust was registered in the name of Rylegrove Pty Limited as trustee.
7. The above identified land is subject to a mortgage by the Commonwealth Bank of Australia. Annexed hereto and marked A is a true copy of certificate of title dated 23 August 1995.
8. My enquiries indicate that as the total borrowings secured by the said mortgage were the subject to a judgment included in the total against other securities that there is no current outstanding liabilities under the mortgage the [???] of legal [??] liability position I am so far unable [???].
9. My enquiries indicate that the current market value of the said property would be over $400,000.

(The copy of this affidavit in evidence has part of paragraph 8 illegible.)

60 On 29 August 1995, matter 2889 of 1995 was mentioned before Master McLaughlin.

61 On 29 August 1995 Master McLaughlin was informed that Rylegrove’s application for a stay of execution upon the judgment which Master Macready had given, and upon Mr Justice Young’s decision dismissing the appeal, would come before the Court of Appeal on 4 September 1995. Master McLaughlin fixed the hearing of the contested winding up proceedings for 5 September 1995 so as to not pre-empt the Court of Appeal’s decision about whether a stay should be granted.

62 On 1 September 1995, 4703 of 1992 was before Simos J, as Duty Judge. Fatimi made application to continue the injunctive relief in relation to Lot 2 Little Hartley. Mr Bryant asserted, in the course of cross-examination that day, that the Mareva Order of Hodgson J had not been breached. He reiterated that the evidence he had given before Meagher JA on 31 July 1995 was correct, though stated that putting the value of the Little Hartley land at $300,000 to $400,000 was an estimate. Mr Bryant was reminded of the order which Brownie J had made on 3 August 1995, requiring the supply of a list of assets within seven days. The following evidence was then given:

“Q. How is it that some five days after that order was made, this sale took place?
A. There had been negotiations for some considerable time, over a period of months and it was just the time, the culmination of the negotiations.
Q. It was a most inconvenient time to sell the land.
A. Any time would be a most inconvenient time to sell the land, on the basis of his Honour Justice Hodgson’s order.”

63 Simos J asked Mr Bryant how the price for the transfer of the land was arrived at. Mr Bryant replied that the figure was put at $161,000 so it did not contravene the orders of Justice Hodgson.

64 On 4 September 1995, Rylegrove’s application for a stay of execution of the judgment of Master Macready was in the Court of Appeal, but not heard. Rylegrove made no application for any interim stay of execution. Nor was the Court of Appeal informed that the contested winding up proceedings were listed before Master McLaughlin the next day, as a special fixture.

65 On 5 September 1995 the winding up summons came before Master McLaughlin. First, Rylegrove made an application for an adjournment of the hearing. Master McLaughlin refused that application, taking the view that Rylegrove had been given every opportunity to seek a stay of execution, and no explanation had been given to the learned Master as to why the Court of Appeal had not been informed of the hearing fixed before the Master, or of why no interim stay of execution had been sought from the Court of Appeal.

66 In the course of the morning, a representative of Rylegrove approached the Court of Appeal, and obtained a listing at 2.00pm for an urgent interim stay application. On being told of this development, Master McLaughlin adjourned the proceedings he was in the course of hearing, to a date to be fixed.

67 At 2.00pm on 5 September 1995 Sheller JA heard, and refused, Rylegrove’s application for a stay of execution.

68 On 7 September the winding up application was before Master McLaughlin again. By that time, Rylegrove had dismissed its lawyers. Mr Bryant sought leave to appear for the company, and was refused that leave. Michael Bryant then made an application for adjournment, which was also refused. On 7 September 1995 Master McLaughlin made an order that Rylegrove be wound up, and appointed Mr Andrew as its liquidator.

69 Undeterred, on 10 October 1995 Mr Bryant filed a Notice of Motion in proceedings 4703 of 1992, seeking orders that the judgment of Master Macready, the judgment of Young J given on 27 July 1994, and the Writ of Levy of Property issued on 26 October 1994, all be set aside on the ground of fraud. He also sought an injunction against Fatimi taking any further action pursuant to Master Macready’s judgment and orders. The evidence does not disclose what became of that application.

70 On 29 September 1995 Rylegrove (now in liquidation) took out a Summons against NN&D seeking to have declared void the transfer of Lot 2 Little Hartley. Bryson J heard those proceedings, and on 22 April 1996 ordered that Lot 2 Little Hartley be transferred from NN&D to Rylegrove.

The Transfer from Rylegrove to NN&D

71 NN&D was incorporated on 26 July 1995. On 26 July 1995 Mrs Bryant and David Bryant were appointed as directors of NN&D, but ceased to be directors on that same day. On 26 July 1995 Mr McCullough (who had been the accountant to Mr Bryant and the various Bryant companies for many years, and whose office was the registered office of Rylegrove) and Mr Fernando (a business acquaintance of Mr Bryant) were appointed as directors of NN&D. Also on 26 July 1995 Mr McCullough was appointed as secretary of NN&D. That day, two shares in NN&D were allotted to Kelbeam Pty Ltd. That company had its office at 760 Old Northern Road, Middle Dural, which was the place where Mr McCullough maintained his office. It was a company of which Mr McCullough had been a director since 1993, of which Rosemarie Alison McCullough had been a director since 1993, and the shares in which were beneficially held by Mr McCullough and Rosemarie Alison McCullough.

72 The reader will recall that it was on 27 July 1995 that David Bryant ceased to be a director of Rylegrove, and Michael Bryant was appointed as a director in his place.

73 On 8 August 1995 a contract was entered between Rylegrove and NN&D Pty Ltd, for the sale of Lot 2 Little Hartley. The contract is in the form of the 1992 edition of the Law Society/Real Estate Institute Standard Form, with two pages of special conditions. The contract discloses no vendor’s agent, no vendor’s solicitor, and no purchaser’s solicitor. In fact, no real estate agent acted in connection with the sale, nor did a solicitor act for either side in connection with the sale.

74 The contract makes provision for a price of $161,000, and a deposit of $1,000. There is no evidence that the deposit was actually paid.

75 The portion of Schedule 1 of the Contract concerning possession of the land shows a tenant “Classline Pty Ltd” which is said to have a “lease” with an expiry date of “1998.30.6”, an option period of “6 years 3 x 2 year” and a rent of $200 per anum. No evidence has been put before me that any such lease existed. A diary note of the Commonwealth Bank made on 10 October 1995 records that, as at that date, Classline had been deregistered due to failure to lodge returns. The evidence does not disclose how long before 10 October 1995 Classline had been so deregistered.

76 The Contract contained two separate pages of non-standard conditions. The first of them was as follows:

“1. Rylegrove Pty Limited as the registered proprietor of the vacant land identified as Lot 2 Great Western Highway Hartley New South Wales, Certificate of Title No 2/733945 the property of the Bryant Family Trust agrees at the request of the Trustee Synergy Concepts Pty Limited to sell the subject land on the terms as set out below.
2. NN&D Pty Limited agree to purchase the abovementioned property and to the terms as here set out.
3. Terms: deposit $1000.00 on exchange of contracts.
4. Annual interest $2000 pa each year 1996 to 2019 inclusive until final principal repayment.
5. 1st Principal repayment $8000.00 due on the 10th August 2000.
6. Subsequent principal repayments $8000.00 PA due on 10th August each year until 2019 inclusive.
7. Total principal repayments $160,000.00
8. Total interest $50,000.00
9. Default in the payment of one interest payment or one interest and principal payment or one principal payment for a period exceeding three calendar months will render this contract null and void, on default the ownership of the subject property will revert to the Bryant Family Trust.
10. Default by the purchaser in the payment of local Council rates and charges or other land ownership costs will invoke clause 9 & 11 of these conditions.
11. On default the purchaser agrees to complete the required forms and pay all the costs to transfer the subject property back to the outright ownership of the Bryant Family Trust within 6 months of any default.”

77 The second set of Special Conditions is as follows:

“1. This schedule sets out the arrangements entered into in the form of a lease back contract.
2. The arrangement governing all aspects of the sale of property is the lease back to the Bryant Family Trust or its nominee by NN&D Pty Limited of the completed development of the proposed Vineyard, orchard and retail/wholesale storage complex.
3. The lease back shall on practical completion transfer to the Bryant Family Trust the total operation of all aspects of the completed development.
4. The arrangement will provide that the total of all of the operational costs of the business connected with or in conjunction with the project including the cost of development spread over 20 years will be funded from the project income of which the remainder will be the net profit.
5. NN&D Pty Limited will participate in the net profits of the operation of the development on a fixed twenty five percent of net profit basis.
6. Should NN&D Pty Limited wish for any reason whatsoever to divest itself of ownership of the project the following conditions should be met.
1. First option of purchase must be provided to the Bryant Family Trust at cost price.
2. Any and all potential purchasers be subject to Bryant Family Trust or its nominee approval in writing prior to any agreement whatsoever.
3. The Bryant Family Trust retains a right at all times to the refusal of sale to a non approved purchaser.
7. Appointment of Accountants and or Auditors for the project, including the project associated ongoing businesses of the Bryant Family trust, or its nominee requires the written approval of NN&D Pty Limited and The Bryant Family Trust. Such approved persons are subject to replacement at the written request of either party.
8. The above arrangement to form the basis of any subsequent contract or agreements.”

78 Not only was this contract executed on 8 August 1995, but a transfer of the land to NN&D Pty Ltd was also executed on that day, very promptly stamped, and lodged for registration.

79 The Contract was entered into, on Rylegrove’s part, by execution under its common seal. Mrs Bryant and Michael Bryant signed as witnessing the affixing of the common seal. The common seal was affixed three times to the contract – once to the printed form, and once to each page of Special Conditions. Mrs Bryant and Michael Bryant signed alongside each such affixing of the common seal. Further, they each initialled each page of the printed form.

80 The transfer of the land was also executed under common seal, with Mrs Bryant and Michael Bryant signing alongside that common seal. The transfer stated the consideration for the sale as being $161,000. The box on the transfer form intended to be filled in by the person who lodges the document, was filled in by showing the name and address of Mr Bryant.

The Role of the Commonwealth Bank

81 On 27 October 1993 Levine J gave judgment in proceedings 11346 of 1992 in the Common Law Division of this Court. That was an action brought by the Commonwealth Bank against Mr Bryant. The bank was awarded judgment in the sum of approximately $2.427 million, and possession of five security properties. Those security properties did not include either Lot 2 Little Hartley, or the Kemps Creek property registered in the name of Rylegrove. Mr Bryant lodged an appeal against that judgment of Levine J. So far as the evidence reveals, that appeal never came on for hearing.

82 The Kemps Creek property registered in the name of Rylegrove, had at all relevant times been mortgaged to the Commonwealth Bank. That mortgage was a third party mortgage, which in its terms gave the bank security over the land for all monies owing by Mr Bryant. It also contained a personal covenant, whereby Rylegrove agreed to pay to the Bank all monies owing by Mr Bryant.

83 On 4 November 1994, Hulme J gave judgment in proceedings number 4938 of 1991 in the Equity Division of this Court. Those proceedings were ones brought by the Commonwealth Bank against various companies associated with Mr Bryant, including Rylegrove. On 4 November 1994, Hulme J made a declaration that certain chattels were held by Rylegrove on trust for the Commonwealth Bank, and that the Commonwealth Bank was entitled to delivery up of those chattels. The court ordered that Rylegrove pay the Commonwealth Bank damages which it had suffered in consequence of Rylegrove’s conversion of those chattels on or about 31 July 1990, that it be referred to the Master in Equity to assess the amount of damages, and that Rylegrove pay the Commonwealth Bank’s costs of the proceedings. That order was entered on 24 November 1994. On 30 November 1994, Rylegrove lodged a Notice of Appeal against that judgment, by filing a Notice of Appeal Without Appointment.

84 On 25 January 1995 consent orders were made in proceedings number 4938 of 1991, whereby the Commonwealth Bank gave up title to the chattels in return for $5,000, but otherwise the orders previously made would stand.

85 On 5 July 1995, notwithstanding the reference to the Master of the question of damages for conversion, Windeyer J delivered a judgment in proceedings 4938 of 1991, assessing the damages for conversion at $43,695.36 (made up of $29,847 principal, together with interest of $13,848.36). Rylegrove was ordered to pay the costs of those proceedings. The entry of judgment was postponed to 19 July 1995. On 25 July 1995 Rylegrove filed a Notice of Appeal against both the decision of Hulme J on liability, and the decision of Windeyer J on quantum, in that matter. Again, it was a Notice of Appeal Without Appointment.

86 Even though it had a guarantee from Rylegrove of the debts of Mr Bryant, the Commonwealth Bank had not, to this time, sought to take action against Rylegrove under the personal covenant in the mortgage relating to the Kemps Creek property. An internal record of the bank, dated 29 March 1994 explains why.

“At the time the mortgage was taken, we obtained an advising from your office on the trust aspects and conflict of interest. The advising indicated that conflict of interest and duty arose and that this conflict could not be resolved by either the articles of the trustee or the provisions of the trust deed.
Notwithstanding this advising, a commercial decision was taken and the transaction (the purchase of the Kemps Creek property) was allowed to proceed.”

87 This nervousness on the bank’s part, about whether its taking a mortgage of trust property to secure debts of a director of the trustee could be justified, also explains why the bank had not sought possession of the Kemps Creek property at the time it was obtaining possession of other security properties from Levine J. The judgment of Windeyer J given on 5 July 1995, however, put the bank on much firmer ground so far as being able to claim from Rylegrove was concerned. The bank set about taking advantage of that situation. A diary note of a bank officer on 10 July 1995 said:

“The bank has been awarded costs in this matter. Will now instruct Shaw McDonald to proceed with appointment of a cost consultant to prepare the bill of costs.”

88 On 31 July 1995 Shaw McDonald wrote to the bank saying:

“We are now arranging for Mr Justice Windeyer’s order of 5 July 1995 to be entered in the records of the Supreme Court.
Once the judgment against Rylegrove is formally entered we shall arrange for the issue to it of a notice to wind up the company seeking the sum of $43,695.36.
In our view it would be prudent for the order to be entered before any steps are taken to enforce it in case Mr Bryant sought to extend the stay directed by Justice Windeyer …”

89 In other words, by this time the bank was instructing its solicitors to issue a statutory demand for the amount which Windeyer J had held due, without waiting for costs to be assessed.

90 On 1 August 1995 an internal note of a bank officer records:

“In an action brought against Rylegrove by Fatimi P/L (former business partner), the matter proceeds to court on 15 August with Fatimi seeking orders to wind up Rylegrove and set aside transfers of a property at Hunters Hill and another at Little Hartley (not “Lyndoch”). Should Fatimi be successful then Rylegrove, with some real assets, would be under control of a liquidator. CBA recovery would be then more likely and sooner.”

( “Lyndoch” was land at Little Hartley which at all relevant times was held in Mr Bryant’s own name.)

91 On 3 August 1995 the Commonwealth Bank entered judgment in 4938 of 1991 against Rylegrove.

92 While there is no evidence which suggests that anyone from Rylegrove was aware that the Commonwealth Bank was actually taking the steps which I have just outlined, consequent on Windeyer J’s judgment of 5 July 1995, it would have been obvious to anyone who had followed the course of events up to Windeyer J’s delivery of judgment that the Commonwealth Bank was in a position where it would shortly be able to seek either to levy execution against the assets of Rylegrove, or to wind Rylegrove up.

93 There is no evidence that Rylegrove had any creditors, in August 1995, other than Fatimi and the Commonwealth Bank.

Evidence Against the Individual Defendants

94 None of the Bryants gave evidence before me.

95 Answers to interrogatories sworn by Mrs Bryant and Michael Bryant, were tendered. Those two defendants gave substantially identical answers to some of the interrogatories, as follows:

“Q. Do you understand that when a person accepts the responsibility of being a director of a company such as Rylegrove Pty Ltd, that person has to comply with the Corporations Law as far as it is relevant to that company?
A. Yes.
Q. Do you understand that when a Supreme Court judge makes an order preserving assets or restraining a company such as Rylegrove Pty Ltd from divesting itself of assets, that a person who has the position and responsibility as director of a company such as Rylegrove Pty Ltd is required to ensure that the order of the court is complied with?
A. Yes.
Q. Were you aware prior to 3 August 1995 of the order of Hodgson J made in the Supreme Court of New South Wales on 9 August 1993 in the following terms:
“That until further order, the first defendant be and is hereby restrained from disposing of, encumbering or otherwise dealing with any of its assets or assets of which it is trustee other than in the ordinary course of business, provided that the net value of all such assets must not in any event reduce below the value of $150,000.”
A. Yes.
Q. [Did] you understand that the order made by Hodgson J applied to assets in Rylegrove’s own name as beneficial owner, and as also to any assets held by Rylegrove as trustee?
A. Yes.
Q. At the 3rd August 1995 what assets did Rylegrove Pty Ltd have in its custody or power or control that complied with the order of Hodgson J made 9 August 1993?
A. The only asset beneficially owned by Rylegrove was $2.00 shareholding. It remained the registered proprietor of land known as Lot 2/2733945 Little Hartley and property at Lot 125 Mount Vernon Road Kemps Creek (FI 125/32140). However, the trustee of both parcels of land as and from 30 September 1992 was Synergy Concepts Pty Ltd for the beneficial owner, the Bryant Family Trust. A formal Real Property Act transfer of Lot 2 from Rylegrove to Synergy was effected on 2 July 1993. Stamp duty was paid on that day.
Q. What was the identity and type, location and estimated value of such asset or assets?
A. The [first/second] defendant relies on estimated values placed on the aforesaid properties by the Managing Director, Joseph Bryant at the time as follows:
Kemps Creek $450,000
Lot 2 Little Hartley $160,000 to $300,000, depending on the use to which the buyer wanted to use the property
After enquiries made by me, the Bryant Family Trust also owned land as follows:
Banners Lane - Little Hartley $100,000
Hunters Hill - $1.1 Million
Lot 1/733945 Little Hartley - $130,000
Hire Plant & Equipment $400,000 (subject to depreciation).
Q. Were you aware of the order of Brownie J made in the Supreme Court of New South Wales on 3 August 1995.
A. No.
Q. As at 11 August 1995 what asset or assets were being held to comply with the order made by Hodgson J made on 9 August 1993?
A. The answer to this interrogatory is the same as to question [numbered 2 previously] except that as at 11 August 1995, a joint venture business contract, had been entered into for the sale of Lot 2, Little Hartley at the direction of Synergy Concepts Pty Ltd, the Trustee of the Bryant Family Trust for the sum of $161,000. In addition the land at Hunters Hill was mortgaged for $250,000 on 25 September 1995.
Q. What was the identity and type, location and estimated value of such asset or assets?

(3) Where application is made under subsection (2) for the recording of a writ and it appears to the Registrar-General that the land to which the application relates is held by the registered proprietor in a fiduciary capacity the Registrar-General may refuse to record the writ unless it is proved to the Registrar-General's satisfaction that the writ was issued pursuant to a judgment against the registered proprietor in that fiduciary capacity.
(4) A writ recorded in the Register with respect to a registered mortgage, charge or lease may be executed by the sale and transfer, in the approved form, of the mortgage, charge or lease.
(5) Where a writ is recorded in the Register, the Registrar-General shall not, unless the Registrar-General cancels that recording, record in the folio of the Register, or upon the registered dealing, upon which the writ was recorded a renewal of the writ or a second or subsequent writ that was issued on the same judgment.
(6) Where, at the time of lodgment of an application for the recording of a writ, a dealing for valuable consideration affecting the land identified under subsection (2) (a) in the application is awaiting registration and is in registrable form, the Registrar-General shall not record the writ unless:
(a) the dealing is withdrawn from registration, or
(b) the dealing does not dispose of the whole estate and interest in the land so identified and the application indicates to the satisfaction of the Registrar-General that, unless the dealing is subsequently withdrawn from registration, its registration is to precede the registration of any transfer giving effect to a sale under the writ.”

221 Section 105A of the Real Property Act provides:

“(2) Where a writ is recorded under section 105 and a dealing (other than a dealing to which, by the operation of subsection (1), this subsection does not apply) that affects the land to which the recording relates is lodged for registration within the period of three months that next succeeds the recording of the writ, the Registrar-General shall not, during that period of three months, register the dealing unless the writ is referred to in the dealing as if it were a prior encumbrance.
(3) Notwithstanding anything in subsection (7), where a writ has been recorded under section 105 and a transfer by the judgment debtor is lodged for registration, being a transfer that:
(a) is in registrable form,
(b) comprises the whole of the land to which the recording relates, and
(c) bears an endorsement of a consent given under section 62B (3) of the Local Courts (Civil Claims) Act 1970 , section 112 (3) of the District Court Act 1973 or section 98A (3) of the Supreme Court Act 1970 ,
the Registrar-General shall register the transfer and cancel the recording of the writ.
(4) Notwithstanding anything in subsection (7), where a writ has been recorded under section 105 and a transfer or mortgage by the judgment debtor is lodged for registration, being a transfer or mortgage that:
(a) is in registrable form,
(b) in the case of a transfer, comprises part of the land to which the recording relates or, in the case of a mortgage, comprises the whole or part of that land, and
(c) bears an endorsement of a consent given under section 62B (3) of the Local Courts (Civil Claims) Act 1970 , section 112 (3) of the District Court Act 1973 or section 98A (3) of the Supreme Court Act 1970 ,
the Registrar-General shall register the transfer or mortgage.
(5) Where:
(a) a writ which has been recorded in the Register is referred to in a dealing as if it were a prior encumbrance, and
(b) a transfer in registrable form pursuant to a sale under the writ is lodged for registration,
the Registrar-General shall, whether or not:
(c) the dealing referred to in paragraph (a) has been registered, or
(d) the judgment debtor named in the writ is registered as proprietor of the land comprised in the transfer referred to in paragraph (b),
make such recordings in the Register as will register the transferee under the transfer referred to in paragraph (b) as proprietor of the land comprised in that transfer, freed from any estate or interest created by the dealing referred to in paragraph (a).
(6) Where a writ recorded under section 105 has not, within the period of three months that next succeeds that recording, been executed by sale of the land to which the recording relates, a dealing with that land lodged for registration before the writ is so executed may be registered notwithstanding the recording of the writ.

222 Section 105C provides:

“(1) Upon the registration of a transfer or other dealing that for valuable consideration disposes of the whole estate or interest in land affected by a recording of a writ (not being a transfer pursuant to a sale under the writ) the writ lapses in relation to that land unless the transfer or other dealing refers to the writ as if it were a prior encumbrance.
(2) Upon the registration of a dealing that for valuable consideration disposes of or creates an estate or interest less than the whole estate or interest in land affected by a recording of a writ, the writ lapses in respect of the estate or interest so disposed of or created unless the dealing refers to the writ as if it were a prior encumbrance.
(3) Upon the expiration of the currency of a writ recorded under section 105, the writ lapses in respect of the land to which the recording relates unless it was, during its currency, executed by sale of that land.”

223 In the present case, as at 8 August 1995 more than three months had elapsed since Fatimi had registered its writ against the title of Lot 2 Little Hartley. Section 105A(6) of the Real Property Act therefore permitted a dealing with the land to be registered, notwithstanding the recording of the writ. This reinforces the way that it is part of the statutory intent in s 98A of the Supreme Court Act that there is no prohibition on transferring land which is subject to a writ, at least once three months from registration of the writ has passed. Even before that three months has passed, s 105A(2) permits a transfer which is subject to the writ.

224 Nor is there anything in Part 45, Rule 15 which, of itself, made it unlawful for Rylegrove to transfer the land in August 1995.

225 I reject the submission that anything in s 98A of the Supreme Court Act or Part 45 Rule 15 of the Supreme Court Rules, made the transfer an unlawful act.

Transfer Contrary to the Mareva Order

226 When Hodgson J made the Mareva Order on 9 August 1993 (paragraph 13 above) it was in proceedings 4703 of 1992. It was an order expressed to be made, “until further order”. The suit in proceedings 4703 of 1992 was disposed of by Master Macready on 20 May 1994. The orders then pronounced are set out at paragraph 15 above. Thus, apart from the money judgment and the foreshadowed costs order, the Summons (including the prayer for Mareva relief) was dismissed.

227 Daniell’s Chancery Practice, 7th edition (1901), page 1369 says:

“An interlocutory injunction may be discharged at any time before the trial of the action, and is ipso facto discharged by the dismissal of the action ( Bliss v Collins 2 Mer 62, Green v Pulsford (1839) 2 Beav 75 [48 ER 1105]”.

See also, to similar effect, Seton’s Judgments and Orders, 7th edition (1912), page 517, Kerr on Injunctions , 5th edition (1914), page 679. Green v Pulsford was a case where a bill was dismissed entirely, not a case where one order was made in a suit, and the balance of the prayers for relief dismissed. For that reason, I would not regard the principle expressed by Daniell as governing the present fact situation.

228 Regardless of that general principle, the Mareva Order was expressed to be made, “until further order”. In Attorney General of the Commonwealth v Davids Holdings Pty Ltd (1993) ATPR ¶41-247 Drummond J said, at 41,349:

“The expression “until further order” in the restraint on Davids, imposed as it was at an interlocutory hearing, is the classic formulation of an order intended to have interlocutory operation only, ie intended to operate only until judgment in the action is given. That it was intended to have that effect is, I think, clear. The intent of the order was to restrain Davids only until the rights of the parties were determined by judgment. I cannot accept that it is open to a reading that would give the restraint a continuing operation even if Davids had obtained a final judgment in the action in its favour from the trial judge.”

See also In the Marriage of I H & S A Millar (1983) 9 Fam LR 5, at 6-7 per Nygh J, Fylas Pty Ltd v Vynal Pty Ltd [1992] 2 Qd R 593, at 399 per McPherson SPJ.

229 One application of the rule of construction that an order made, “until further order” is interlocutory is shown by authorities which decide that an injunction expressed to be made “until (a particular date, or the happening of some specified event) or further order” is one which stops automatically on that particular date or on the happening of that specified event, but can stop earlier if the court so orders: Bolton v London School Board (1878) 7 Ch D 766, at 771; In the Marriage of King (1976) 13 ALR 401, at 404-405:

230 A particularly persuasive reason why Hodgson J’s order should be construed in the fashion of most interlocutory orders, as lasting until judgment, is that, if that were not so, it would be, potentially, an order which had perpetual effect. If a perpetual order is within the scope of the Court’s power concerning the granting of Mareva Orders, it would only be in a rare case that it would be appropriate. There is nothing in the wording of this order to show it is perpetual. There is no other sensible end point for a non-perpetual order, which could be read into the order as a matter of implication, than the determination of the suit.

231 In Blacktown Concrete Services Pty Ltd v Ultra Refurbishing & Construction Pty Ltd (in liq) (1998) 43 NSWLR 484, at 491-2 Santow J said:

“To the extent that there is ambiguity in the orders, the authorities on construing court orders are usefully reviewed in a note by Justice Young (1998) 72 ALJ 117-118.
“The court order is construed according to accepted applicable guides of construction so that, in the case of real ambiguity extrinsic material such as the reasons for judgment may be considered: Gordon v Gonda [1955] 1 WLR 885; Australian Energy v Leonard Oil NL (No2) [1988] 2 QDR 230 at 232, and see also Repatriation Commission v Nation (1955) 57 FCR 25 at 33-34.””

232 The preferable construction of the order of Hodgson J, in my view, is that the order terminated in accordance with the usual principles for construing an order made “until further order”, upon the termination of the suit. However, if I be wrong in that, it would be possible to look to the reasons for judgment as an aid to construction. The reasons for judgment of Hodgson J contain no hint that he was intending to make an order which was anything other than a conventional interlocutory order.

233 It is, of course, possible for a Mareva Order to continue in force after judgment has been obtained, if there are reasons to fear that assets of a judgment debtor might be dissipated, and execution thereby frustrated: Balfour Williamson (Australia) Pty Ltd v Douter Luingner (1979) 2 NSWLR 844. However, in that case it is usual to make an express order at the time of judgment, that the Mareva Injunction continue in force in aid of execution (Stewart Chartering Ltd v C & O Managements SA [1980] 1 All ER 718 at 719, per Robert Goff J; Devlin v Collins (1984) 37 SASR 98 at 99 per King CJ, 105 per Zelling J, 116 per White J; Deputy Commissioner of Taxation v Winter (1988) 92 FLR 327 at 329-330 per Yeldham J).

234 Thus, the Mareva Order of Hodgson J had, in fact, ceased to apply at the time Rylegrove transferred the land to NN&D. The order cannot be a potential source of “unlawful means”.

235 Fatimi alleged that the Bryants were estopped from denying that the Mareva Order continued in effect. The estoppel pleaded was an estoppel by representation.

236 I have some doubt about whether, even if an estoppel of the type alleged could be made out, that would suffice for the proof of “illegal means” for the tort of conspiracy. However, I will not seek to resolve those doubts. I am not satisfied that Mr Dean relied upon any representations made by any of the Bryants to the effect that the Mareva Order was still on foot. Each of the Bryant defendants in fact, believed that the Mareva Order was still on foot, and there were some statements by Mr Bryant, in evidence which he gave around the time of the transfer, which manifested that belief of his. Mr Dean heard those statements. However, (regardless of whether the statement should be regarded as a representation that the Mareva Order was on foot and ignoring for the moment on whose behalf those statements were made) I do not find that Mr Dean relied on them. Mr Dean was himself of the view that the Mareva Order was still on foot. That view was one which was shared by his then counsel. While Mr Dean heard the evidence which Mr Bryant gave which betrayed his belief that the Mareva Order was still on foot, that did not cause Mr Dean to divert one whit from the course of action which he would otherwise have adopted. Mr Dean accepted, in cross-examination, that he would not rely on the Bryants for a legal opinion. In these circumstances, the alleged estoppel is not made out.

Causation of Damage

237 For the same reasons as I gave concerning the tort of conspiracy to injure, Fatimi has not proved it has suffered damage in consequence of any agreement between the Bryants which had a purpose of harming Fatimi by illegal means. That is a sufficient reason why Fatimi’s case of conspiracy by unlawful means should fail.

The Release of the Other Alleged Joint Tortfeasors

238 These proceedings, at one time, named as defendants NN&D, Mr McCullough, and Mr Fernando.

239 In October 2000 Fatimi settled with NN&D, McCullough and Fernando. A deed was entered between Fatimi, Dean, NN&D, McCullough and Fernando, which contained the following relevant provisions:

“1. NN&D, McCullough and Fernando will pay $10,000 to Fatimi on the date of this deed.
2. Upon NN&D, McCullough and Fernando complying with clause 1, Fatimi and Dean release NN&D, McCullough and Fernando and each of them from all claims and liabilities whatsoever and this deed may be pleaded in bar to any proceedings asserting such a claim or liability.
3. NN&D, McCullough and Fernando release Fatimi and Dean from all claims or liabilities whatsoever and this deed may be pleaded in bar to any proceedings asserting such a claim or liability.
4. The parties will do all things and sign all documents necessary to completion of the proceedings, on the basis of the Terms of Settlement annexed and marked “A” and “B”.
5. The parties agree that the terms of this deed are confidential and not to be disclosed to any other person without written agreement of the other party, other than for purposes of enforcement of this deed, or as required by law, except that the parties may disclose the settlement to professional advisers for the purpose of obtaining advice.”

240 The Terms of Settlement which were annexed and marked “A” were Terms of Settlement in proceedings 4703 of 1992 (to which NN&D, McCullough and Fernando had been added as defendants in the circumstances set out in paragraph 58 above). Annexure “B” were Terms of Settlement of the claim in these present proceedings, number 1444 of 1998. They read:

“By consent, order that:
1. Application by 3rd, 4th and 5th Defendants for security for costs is dismissed.
2. Judgment for the Plaintiff against the Third, Fourth and Fifth Defendants in the sum of $10,000.
3. No order as to costs of the proceedings or of any interlocutory applications made during the course of the proceedings.”

241 The Bryants had pleaded that section 5(1)(b) of the Law Reform Miscellaneous (Provisions) Act 1946, and the rule against double satisfaction, had the effect that this settlement with NN&D, Mr McCullough and Mr Fernando had the effect of disentitling Fatimi from recovering any further damages from the Bryant defendants. In light of the decision of the High Court in Baxter v Obacelo Pty Ltd [2001] HCA 66; (2001) 205 CLR 635 that defence could succeed only if the Deed of Settlement was construed as showing that Fatimi was accepting $10,000 in full satisfaction of the loss it claimed to have sustained. I do not construe the Deed of Settlement as showing any such intention on Fatimi’s part. Thus, if I were wrong in the conclusion I have come to concerning liability, the entering into of the release would not, of itself, provide the Bryants with a defence.

242 Fatimi has actually received the $10,000 payable under that Deed. If I were wrong in the conclusion I have come to concerning liability, $10,000 would need to be taken into account in any assessment of damages to which Fatimi is entitled in the present proceedings.

(1) Suit dismissed.

(2) Plaintiff to pay defendants’ costs.

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Last Modified: 09/25/2002