Katanga Developments Pty Limited v Bookarelli Pty Limited - [2013] NSWDC 237

District Court

New South Wales

Medium Neutral Citation: Katanga Developments Pty Limited v Bookarelli Pty Limited [2013] NSWDC 237
Hearing dates: 6 September 2013
Decision date: 09 September 2013
Jurisdiction: Civil
Before: P Taylor SC DCJ
Decision:
Upon the plaintiff giving the court the usual undertaking as to damages, the court orders:
(1) Until further order:
(a) Keith Crawford, in his capacity as deed administrator of ION Ltd (subject to Deed of Company Arrangement) (ACN 009 106 272) ("the Deed Administrator"), be ordered to provide the plaintiff (through its solicitors on the record):
(i) 5 days prior written notice of any distribution of dividend payments to be made to the second defendant in accordance with authorities provided to the Deed Administrator by the ION DOCA Group shareholders listed in amended schedule B contained in annexure F to the affidavit of Sally Webber sworn 6 September 2013 ("Amended Schedule B");
(ii) a schedule indicating which shareholders are to be paid and the total amounts to be paid; and
(b) the second defendant be restrained from disbursing or otherwise dealing with 25 per cent of any dividend distributions received from the Deed Administrator in respect of shareholders listed in Amended Schedule B, save that the second defendant is to hold those funds (that is, the relevant 25 per cent) separately in trust.
(2) Until further order the first defendant must not take any steps to alter the direction to pay in any authorities provided to the Deed Administrator by the shareholders listed in Amended Schedule B.
(3) I direct that the second defendant notify the plaintiff once per month of the total amount held separately in trust in accordance with order 1(b).
(4) The plaintiff's costs of the motion, including the costs of the Deed Administrator (as agreed with the defendants or as assessed), be the plaintiff's costs in the proceedings.
(5) Grant liberty to apply on 3 days' notice in relation to any matter arising in relation to these orders.

Catchwords: INJUNCTION - deed - agreement - entitlement to part of dividend distribution held by solicitor - non-payment - solicitor restrained - "fund" - "good arguable case" - risk of dissipation of assets - obligations after termination - balance of convenience - security for usual undertaking - costs
Legislation Cited: Civil Procedure Act 2005, s 90
Legal Profession Act 2004, s 255
Uniform Civil Procedure Rules 2005, r 25.3, r 25.14, r 42.1
Cases Cited: Cardile v LED Builders Pty Ltd [1999] HCA 18
Frigo v Culhaci [1998] NSWCA 88
Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249
Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730
Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279
Tagget v Sexton [2009] NSWCA 91
Category: Interlocutory applications
Parties: Katanga Developments Pty Limited (plaintiff)
Bookarelli Pty Limited (first defendant)
Marcel Joukador trading as Thomas Booler & Co (second defendant)
Representation: Ms A Munro (plaintiff)
Mr M R Gracie with Mr R Raffell (first defendant)

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: [2013] NSWDC 237
Decision Date: 09 September 2013

CaseChat Overview and Summary

Katanga Developments Pty Limited brought an action against Bookarelli Pty Limited in the Supreme Court of New South Wales. The plaintiff claimed that it was entitled to a portion of a dividend distribution held by a solicitor, Keith Crawford, who acted as the deed administrator for ION Ltd, a company in a deed of company arrangement. The plaintiff sought an injunction to prevent the defendant from receiving or disbursing a specific portion of the dividend, arguing that the non-payment constituted a breach of their agreement. The court was required to determine whether the plaintiff had made out a good arguable case and whether there was a risk of dissipation of assets, which would warrant the grant of an interlocutory injunction.

The court considered whether the plaintiff had established a good arguable case based on the terms of the agreement and the evidence presented. It found that the plaintiff had demonstrated a clear entitlement to part of the dividend distribution, and there was a real risk that the defendant would dissipate the assets if the injunction was not granted. The court further noted the balance of convenience favoured the plaintiff, given the potential loss to the plaintiff if the defendant were to dissipate the assets. The court was also satisfied that the plaintiff would provide security for the usual undertaking and that the costs of the motion would be borne by the plaintiff. Therefore, the court granted the injunction as requested.

The orders of the court were as follows: Keith Crawford, as the deed administrator, was required to notify the plaintiff of any dividend distributions to be made to the defendant and provide a schedule of payments. The defendant was restrained from disbursing a specific portion of any dividend received, which was to be held in trust. The first defendant was directed not to alter payment instructions provided to the deed administrator. The defendant was also required to report monthly on the amount held in trust. Finally, the plaintiff's costs of the motion were to be borne by the plaintiff. The court granted liberty to apply on short notice for any matters arising from these orders.

Orders

Orders of the court

Upon the plaintiff giving the court the usual undertaking as to damages, the court orders:

(1) Until further order:

(a) Keith Crawford, in his capacity as deed administrator of ION Ltd (subject to Deed of Company Arrangement) (ACN 009 106 272) ("the Deed Administrator"), be ordered to provide the plaintiff (through its solicitors on the record):

(i) 5 days prior written notice of any distribution of dividend payments to be made to the second defendant in accordance with authorities provided to the Deed Administrator by the ION DOCA Group shareholders listed in amended schedule B contained in annexure F to the affidavit of Sally Webber sworn 6 September 2013 ("Amended Schedule B");

(ii) a schedule indicating which shareholders are to be paid and the total amounts to be paid; and

(b) the second defendant be restrained from disbursing or otherwise dealing with 25 per cent of any dividend distributions received from the Deed Administrator in respect of shareholders listed in Amended Schedule B, save that the second defendant is to hold those funds (that is, the relevant 25 per cent) separately in trust.

(2) Until further order the first defendant must not take any steps to alter the direction to pay in any authorities provided to the Deed Administrator by the shareholders listed in Amended Schedule B.

(3) I direct that the second defendant notify the plaintiff once per month of the total amount held separately in trust in accordance with order 1(b).

(4) The plaintiff's costs of the motion, including the costs of the Deed Administrator (as agreed with the defendants or as assessed), be the plaintiff's costs in the proceedings.

(5) Grant liberty to apply on 3 days' notice in relation to any matter arising in relation to these orders.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Katanga Developments Pty Limited v Bookarelli Pty Limited [2013] NSWDC 237
Hearing dates:	6 September 2013
Decision date:	09 September 2013
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	Upon the plaintiff giving the court the usual undertaking as to damages, the court orders: (1) Until further order: (a) Keith Crawford, in his capacity as deed administrator of ION Ltd (subject to Deed of Company Arrangement) (ACN 009 106 272) ("the Deed Administrator"), be ordered to provide the plaintiff (through its solicitors on the record): (i) 5 days prior written notice of any distribution of dividend payments to be made to the second defendant in accordance with authorities provided to the Deed Administrator by the ION DOCA Group shareholders listed in amended schedule B contained in annexure F to the affidavit of Sally Webber sworn 6 September 2013 ("Amended Schedule B"); (ii) a schedule indicating which shareholders are to be paid and the total amounts to be paid; and (b) the second defendant be restrained from disbursing or otherwise dealing with 25 per cent of any dividend distributions received from the Deed Administrator in respect of shareholders listed in Amended Schedule B, save that the second defendant is to hold those funds (that is, the relevant 25 per cent) separately in trust. (2) Until further order the first defendant must not take any steps to alter the direction to pay in any authorities provided to the Deed Administrator by the shareholders listed in Amended Schedule B. (3) I direct that the second defendant notify the plaintiff once per month of the total amount held separately in trust in accordance with order 1(b). (4) The plaintiff's costs of the motion, including the costs of the Deed Administrator (as agreed with the defendants or as assessed), be the plaintiff's costs in the proceedings. (5) Grant liberty to apply on 3 days' notice in relation to any matter arising in relation to these orders.
Catchwords:	INJUNCTION - deed - agreement - entitlement to part of dividend distribution held by solicitor - non-payment - solicitor restrained - "fund" - "good arguable case" - risk of dissipation of assets - obligations after termination - balance of convenience - security for usual undertaking - costs
Legislation Cited:	Civil Procedure Act 2005, s 90 Legal Profession Act 2004, s 255 Uniform Civil Procedure Rules 2005, r 25.3, r 25.14, r 42.1
Cases Cited:	Cardile v LED Builders Pty Ltd [1999] HCA 18 Frigo v Culhaci [1998] NSWCA 88 Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249 Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22 NSWLR 730 Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 Tagget v Sexton [2009] NSWCA 91
Category:	Interlocutory applications
Parties:	Katanga Developments Pty Limited (plaintiff) Bookarelli Pty Limited (first defendant) Marcel Joukador trading as Thomas Booler & Co (second defendant)
Representation:	Ms A Munro (plaintiff) Mr M R Gracie with Mr R Raffell (first defendant)