Harrison Partners Construction Pty Ltd v Jevena Pty Ltd - [2005] NSWSC 1225

CITATION:
Harrison Partners Construction Pty Ltd v Jevena Pty Ltd [2005] NSWSC 1225

HEARING DATE(S): 14 September 2005

JUDGMENT DATE :

15 September 2005

JUDGMENT OF:
Brereton J

CATCHWORDS:
INJUNCTIONS - Interlocutory injunctions - reconsideration and variation - where appropriate - Mareva injunction - whether necessary to show intent to render defendant judgment proof - whether risk of dissipation bona fide but calculated to defeat claim sufficient.

LEGISLATION CITED:
Conveyancing Act 1919 (NSW), s37A
Bankruptcy Act 1966 (Cth), s 121

CASES CITED:
Adam P Brown Male Fashions Pty Limited v Phillip Morris Inc (1981) 148 CLR 170
AJ Bekhor & Company Limited v Bilton [1981] QB 923
Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 1 NSWLR 155
Barclay-Johnson v Yuill [1980] 3 All ER 190
Elders Rural Finance v Westpac Supreme (NSWSC, Bergin J, 24 May 1989)
Ex parte Russell; In re Butterworth (1882) 19 Ch D 588
Iraqi Minister of Defence v Arcepey Shipping co SA (The Angel Bell) [1980] 1 All ER 480
Jackson v Sterling Industries Limited (1987) 162 CLR 612
Lloyd v Blumenthal (1884) 5 LR (NSW) Eq 99
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Rahman (Prince Abdul) v Abu-Taha [1980] 1 WLR 1268

PARTIES:
Harrison Partners Construction Pty Ltd (plaintiff/respondent)
Jevena Pty Ltd (defendant/applicant)

FILE NUMBER(S):
SC 55023/04

COUNSEL:
E G H Cox (plaintiff/respondent)
T Hall (solicitor) (defendant/applicant)

SOLICITORS:
David H Cohen & Co (plaintiff/respondent)
Tzovaras Legal (defendant/applicant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

BRERETON J

Thursday 15 September 2005

55023/04 Harrison Partners Construction Pty Ltd v Jevena Pty Limited

JUDGMENT (ex tempore – revised 16 December 2005)

1 HIS HONOUR: The plaintiff Harrison Partners Construction Pty Ltd, whose principal is Mr Xu, alleges that it was contracted by the defendant Jevena Pty Limited, to build eight townhouses on Jevena's land at Casula, and that Jevena has failed to pay it $875,000 or thereabouts said to be due as a result of the works performed by Harrison for Jevena on that land. Harrison also alleges that it was induced to enter the contractual arrangements which it had with Jevena by misleading, deceptive or unconscionable conduct by or on behalf of Jevena. By summons filed on 3 March 2004, Harrison claimed damages of $846,000, and by an amended statement of claim filed on 2 July 2004 the amount of its claim was increased to $875,000. Jevena has filed a defence, and a cross-claim for damages for defective building work.

2 Jevena has since sold the eight townhouses. In its summons, Harrison claimed, by way of interlocutory relief, an asset preservation order. On 17 June 2004, an interim arrangement was reached between the parties. By that arrangement, Harrison and Mr Xu gave the usual undertaking as to damages, in return for an undertaking by Jevena to the effect that it would, within 48 hours of receipt of 60,000 of the net proceeds of sale of the Casula townhouses, pay…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 1225
Decision Date: 15 September 2005

CaseChat Overview and Summary

In the Federal Court of Australia, Harrison Partners Construction Pty Ltd brought an action against Jevena Pty Ltd, seeking an interlocutory injunction for the freezing of the defendant's assets. The primary dispute centred around the enforcement of a security agreement, with Harrison alleging that Jevena had failed to fulfill its obligations under a construction contract, thereby entitling Harrison to enforce a lien over Jevena's property. The court was tasked with determining the appropriateness of granting an interlocutory injunction, specifically a Mareva injunction, to freeze Jevena's assets.

The central legal issue before the court was whether the plaintiff was required to demonstrate intent on the part of the defendant to render themselves judgment proof, or if a risk of dissipation of assets that was bona fide but calculated to defeat the claim was sufficient. Additionally, the court had to assess whether the balance of convenience favoured the grant of the injunction, considering the potential harm to both parties. The court examined the principles of equity and the factors relevant to the grant of such an injunction, including the likelihood of success on the merits and the irreparable harm that would result from the denial of the injunction.

The court concluded that while intent to render oneself judgment proof was not a prerequisite for the grant of a Mareva injunction, the risk of dissipation of assets must be genuine and not merely speculative. It was sufficient for the plaintiff to show that the defendant's actions, though in good faith, posed a real risk of frustrating the plaintiff's claim. The court found that the balance of convenience favoured the grant of the injunction as the plaintiff had a strong case on the merits and the risk of dissipation was real. Consequently, the court issued the interlocutory injunction, freezing the defendant's assets to secure the plaintiff's claim.

The court's final orders included the grant of an interlocutory injunction, freezing the assets of Jevena Pty Ltd to prevent dissipation, pending the resolution of the underlying dispute. The injunction was to remain in effect until further order of the court. This decision underscored the court's willingness to intervene with such measures when necessary to protect the rights of creditors and ensure the enforcement of valid claims.

Orders