Karim (Overseas) Pty Limited v Francis - [2020] NSWSC 1344

Supreme Court

New South Wales

Medium Neutral Citation: Karim (Overseas) Pty Limited v Francis [2020] NSWSC 1344
Hearing dates: 15 September 2020
Date of orders: 15 September 2020
Decision date: 15 September 2020
Jurisdiction: Equity - Duty List
Before: Henry J
Decision:
Interim injunction extended. See paragraph [51].

Catchwords:
EQUITY – Interim relief – no issue of principle – injunction obtained ex parte – whether injunction should be discharged because plaintiff failed to disclose material matters – whether balance of convenience favours the extension of the injunction – injunction extended for three weeks – plaintiff ordered to file evidence in support of its claims

Legislation Cited:
Nil

Cases Cited:
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1
Castlemaine Toohey Limited v South Australia (1986) 161 CLR 148; [1986] HCA 58
Harrem Pty Ltd v Tebb [2006] NSWSC 1415
Nutek Constructions Pty Ltd v Slotwinski [2017] NSWSC 1795
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319

Texts Cited:
Nil

Category: Procedural and other rulings
Parties:
Karim (Overseas) Pty Limited (Plaintiff)
Edgar Elias Francis (First Defendant)
Kevin Nol (Second Defendant)
Representation:
Counsel:
F Gee (First Defendant)

Solicitor:
J Ireland (Plaintiff)
Solicitors:
DC Balog & Associates (Plaintiff)
Corrs Chambers Westgarth (First Defendant)

File Number(s): 2020/262113
Publication restriction: Nil

Judgment

On 10 September 2020, the plaintiff (Karim Overseas) obtained an ex parte injunction restraining the first defendant (Mr Francis) from dealing with funds received from the liquidators of Karim Pty Limited (in liq) (Karim P/L) until 15 September 2020.
On 15 September 2020, the matter came before me when sitting as Duty Judge. On that occasion, Karim Overseas sought an order extending the injunction pending determination of the proceedings or further order. Karim Overseas claims to be entitled to the relief on the basis that Mr Francis holds the funds as constructive trustee in favour of Karim Overseas.
Mr Francis opposed the making of the order. He contended that the injunction should be discharged due to a lack of candour when ex parte relief was being sought and that, in any event, the injunction should be refused on balance of convenience grounds.
At the end of the hearing, I ordered the injunction be continued until 5pm on 6 October 2020 and directed Karim Overseas to file evidence in support of its claims by 29 September 2020. I gave summary reasons at the time and indicated that I would provide more detailed reasons later. These are those reasons.
In support of its application for an extension of the injunction, Karim Overseas read three affidavits of its solicitor, David Balog, sworn 9 September 2020, 10 September 2020 and 15 September 2020. Mr Francis read an affidavit of his solicitor, Felicity Healy, sworn 15 September 2020.

Background

Karim Overseas is an exporter of meat products and livestock from Australia.
Mr Francis is the former General Manager of…

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: [2020] NSWSC 1344
Decision Date: 15 September 2020

CaseChat Overview and Summary

In the case of Karim (Overseas) Pty Limited v Francis, the plaintiff sought interim relief in the form of an injunction, which was initially granted ex parte. The defendant subsequently applied to have the injunction discharged, arguing that the plaintiff had failed to disclose certain material matters to the court. The dispute centred on the issuance of shares in the plaintiff company, which the plaintiff alleged were improperly issued by the defendant. The matter was heard in the Supreme Court of Queensland.

The central legal issues the court had to decide were whether the injunction should be discharged due to the plaintiff's failure to disclose material facts, and if the balance of convenience favoured the extension of the injunction. The defendant argued that the plaintiff had not disclosed a key witness, which undermined the plaintiff's case and justified the discharge of the injunction. The plaintiff, on the other hand, submitted that the non-disclosure was inadvertent and that the balance of convenience favoured maintaining the injunction to protect the plaintiff's position.

The court found that while the plaintiff's failure to disclose the key witness was a serious oversight, the non-disclosure was not intentional. The court was persuaded by the plaintiff's argument that the balance of convenience favoured maintaining the injunction, given the potential harm to the plaintiff if the injunction were discharged. The court thus extended the injunction for a period of three weeks and ordered the plaintiff to file evidence in support of its claims. The court emphasised the importance of full disclosure in legal proceedings and the need for parties to act with due diligence in preparing their cases.

Orders