In the matter of Fresh Fields Australian Dairy Pty Limited

[2016] NSWSC 1768

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Fresh Fields Australian Dairy Pty Limited [2016] NSWSC 1768
Hearing dates:	Friday, 10 June 2016
Date of orders:	10 June 2016
Decision date:	10 June 2016
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	1. Upon the plaintiff by their counsel giving to court the usual undertaking as to damages, the first and second defendants until and including 20 June 2016 be restrained from by themselves, their servants or agents alienating or encumbering the Powdered Milk Business Assets provided that this injunction does not prohibit any dealing in the ordinary course of the second defendant’s business in respect of any order, purchase, contract, withdrawal, sale or transaction to the value not exceeding $10,000 or any such transaction entered into with the prior written consent of the first plaintiff, such consent not to be unreasonably withheld. 2. The defendants to serve any affidavit evidence in opposition to the interlocutory application by 16 June 2016. 3. Proceedings are adjourned to 20 June 2016 at 9.45 in Corporations List Judge’s motions list.
Catchwords:	INTERIM RELIEF – whether there is a sufficiently arguable case – balance of convenience – whether injunction would inhibit second defendant’s ability to enter into prospective contract for overseas supply
Category:	Procedural and other rulings
Parties:	Potzar Boghossian (first plaintiff) PGB Group Pty Limited (second plaintiff) George Rofail (first defendant) Fresh Fields Dairy Pty Limited (second defendant) GMR Group Pty Ltd (third defendant) Fresh Fields Natural Australian Dairy Pty Limited (fourth defendant)
Representation:	Counsel: JP Vohralik (plaintiffs) F Ashworth (first to third defendants)   Solicitors: Hugh & Associates (plaintiffs) LAC Lawyers Pty Ltd (first to third defendants)
File Number(s):	2016/170910

Judgment (EX TEMPORE)

1. HIS HONOUR: Before the Court is the plaintiffs’ originating process filed on 3 June 2016 and made returnable 9 June 2016 pursuant to an abridgement of time for service, wherein the plaintiff seeks relief in respect of the alleged appropriation by the first and second defendants of the business – formerly conducted by the fourth defendant company – in which the first plaintiff and the first defendant are equal shareholders and directors. The defendants have applied for an adjournment of the interlocutory hearing which I have indicated that I will grant until 20 June 2016, with a view to an interlocutory hearing, if still required, on that day or so soon thereafter as can be arranged. That leaves the question of interim relief pending the interlocutory hearing.

2. As there is to be a more fulsome interlocutory hearing, it is best to say as little as possible about the merits at this stage on an interim application. It suffices to say that, on the affidavit evidence of the first plaintiff Potzar Boghossian sworn 2 June 2016, I am satisfied that there is, for the purposes of an interim injunction, a sufficiently arguable case that the powdered milk business, formerly conducted by the fourth defendant, has been appropriated by the first defendant and the second defendant without the plaintiffs' consent. If accepted, the opposing affidavit evidence of the first defendant George Rofail would show that the fourth defendant had ceased to carry on business; but it does not explain on what basis the second defendant now appears to be carrying on the business that was formerly carried on by the fourth defendant.

3. In regards to the balance of convenience, the injunction proposed in substance merely prevents the first and second defendants – or would prevent the first and second defendants – from alienating, encumbering, or diminishing the value of the powdered milk business except in the ordinary course of business.

4. I propose to make some minor amendments to the terms to remove the words "dealing with" and to substitute "alienating and/or encumbering" which I think sufficiently covers what the plaintiffs are arguably entitled to, at least at this stage. It has been suggested that this might inhibit the second defendant's ability to enter into a prospective contract for an overseas supply in the next week or so. I am not by any means sure that it would have that effect, amended in the way I propose, because the entering into a contract to supply milk would not amount to alienation or encumbrance of the business. In any event, if it did have that effect, the plaintiffs' undertaking as to damages would answer for it, and there is also provision for the defendants to seek consent to such a dealing, which would probably be a prudent course for them.

5. Therefore, the Court orders that:

1. Upon the plaintiff by their counsel giving to court the usual undertaking as to damages, the first and second defendants until and including 20 June 2016 be restrained from by themselves, their servants or agents alienating or encumbering the Powdered Milk Business Assets provided that this injunction does not prohibit any dealing in the ordinary course of the second defendant’s business in respect of any order, purchase, contract, withdrawal, sale or transaction to the value not exceeding $10,000 or any such transaction entered into with the prior written consent of the first plaintiff, such consent not to be unreasonably withheld.

2. The defendants to serve any affidavit evidence in opposition to the interlocutory application by 16 June 2016.

3. Proceedings are adjourned to 20 June 2016 at 9.45 in Corporations List Judge’s motions list.

6. These orders are to be entered forthwith.

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Decision last updated: 09 December 2016