Mercanti v Mercanti
[2015] WASCA 206
•9 OCTOBER 2015
MERCANTI -v- MERCANTI [2015] WASCA 206
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASCA 206 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:138/2015 | 9 OCTOBER 2015 | |
| Coram: | BUSS JA MAZZA JA | 9/10/15 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Injunctions granted pending the determination of the appeals or further order | ||
| B | |||
| PDF Version |
| Parties: | MICHAEL ANGELO MERCANTI TYRONE KANE MERCANTI PARRADELE PTY LTD SLONDIA NOMINEES PTY LTD CITYCOURT PTY LTD JASON DEAN MERCANTI |
Catchwords: | Practice and procedure Declaratory orders Injunction pending determination of an appeal or further order in respect of rights declared to exist by the trial judge |
Legislation: | Nil |
Case References: | Apache Northwest Pty Ltd v Agostini [2009] WASCA 147 Arnhem Land Aboriginal Land Trust v Northern Territory [2007] FCAFC 31; (2007) 157 FCR 255 Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342 Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 Koushappis v The State of Western Australia [2011] WASCA 245 Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 Mercanti v Mercanti [2014] WASC 64 Mercanti v Mercanti [2015] WASC 297 Montevento Holdings Pty Ltd v Scaffidi [2011] WASCA 146; (2011) 6 ASTLR 446 Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; (2012) 246 CLR 325 Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd [1988] HCA 53; (1988) 165 CLR 452 Smolarek v McMaster [2006] WASCA 216 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MERCANTI -v- MERCANTI [2015] WASCA 206 CORAM : BUSS JA
- MAZZA JA
- Appellant
AND
TYRONE KANE MERCANTI
First Respondent
PARRADELE PTY LTD
Second Respondent
SLONDIA NOMINEES PTY LTD
Third Respondent
CITYCOURT PTY LTD
Fourth Respondent
- Appellant
AND
SLONDIA NOMINEES PTY LTD
First Respondent
CITYCOURT PTY LTD
Second Respondent
TYRONE KANE MERCANTI
Third Respondent
PARRADELE PTY LTD
Fourth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : LE MIERE J
Citation : MERCANTI -v- MERCANTI [2015] WASC 297
File No : CIV 2186 of 2013, CIV 1276 of 2014
Catchwords:
Practice and procedure - Declaratory orders - Injunction pending determination of an appeal or further order in respect of rights declared to exist by the trial judge
Legislation:
Nil
Result:
Injunctions granted pending the determination of the appeals or further order
Category: B
Representation:
CACV 138 of 2015
Counsel:
Appellant : Mr S Penglis
First Respondent : Mr A Metaxas
Second Respondent : Mr A Metaxas
Third Respondent : No appearance
Fourth Respondent : No appearance
Solicitors:
Appellant : Jackson McDonald
First Respondent : Metaxas & Hager
Second Respondent : Metaxas & Hager
Third Respondent : No appearance
Fourth Respondent : No appearance
CACV 139 of 2015
Counsel:
Appellant : Mr S Penglis
First Respondent : No appearance
Second Respondent : No appearance
Third Respondent : Mr A Metaxas
Fourth Respondent : Mr A Metaxas
Solicitors:
Appellant : Jackson McDonald
First Respondent : No appearance
Second Respondent : No appearance
Third Respondent : Metaxas & Hager
Fourth Respondent : Metaxas & Hager
Case(s) referred to in judgment(s):
Apache Northwest Pty Ltd v Agostini [2009] WASCA 147
Arnhem Land Aboriginal Land Trust v Northern Territory [2007] FCAFC 31; (2007) 157 FCR 255
Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342
Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Koushappis v The State of Western Australia [2011] WASCA 245
Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203
Mercanti v Mercanti [2014] WASC 64
Mercanti v Mercanti [2015] WASC 297
Montevento Holdings Pty Ltd v Scaffidi [2011] WASCA 146; (2011) 6 ASTLR 446
Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; (2012) 246 CLR 325
Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd [1988] HCA 53; (1988) 165 CLR 452
Smolarek v McMaster [2006] WASCA 216
1 JUDGMENT OF THE COURT: The appellant in each appeal (that is, Mr Michael Mercanti in CACV 138 of 2015 and Mr Jason Mercanti in CACV 139 of 2015) has applied for the grant of injunctive relief pending the determination of the appeal or further order.
2 Each appellant has appealed from a judgment of Le Miere J after a joint trial in the Supreme Court of three actions including, relevantly, CIV 2186 of 2013 (in which Mr Michael Mercanti was the plaintiff) and CIV 1276 of 2014 (in which Mr Jason Mercanti was the plaintiff).
3 On 20 August 2015, his Honour delivered judgment and published his reasons. See Mercanti v Mercanti [2015] WASC 297.
4 The primary proceedings were concerned principally with the validity of:
(a) a deed of variation executed in 2004 by Slondia Nominees Pty Ltd (Slondia), in its capacity as trustee of the M Mercanti Family Trust (MMF Trust), pursuant to which Slondia deleted provisions in the trust deed of the MMF Trust with respect to the appointment of Mr Michael Mercanti as the guardian and appointor of the MMF Trust and substituted new provisions appointing Mr Tyrone Mercanti as the guardian and appointor;
(b) a written notice executed on 31 July 2013 by Mr Tyrone Mercanti and Parradele Pty Ltd (Parradele), a company controlled by Mr Tyrone Mercanti's wife, Vanessa, pursuant to which Mr Tyrone Mercanti, in his capacity as appointor of the MMF Trust, removed Slondia as trustee and appointed Parradele as the new trustee of the MMF Trust;
(c) a deed of variation executed in 2004 by Citycourt Pty Ltd (Citycourt), in its capacity as trustee of the Footwear Wholesale Trust (FW Trust), pursuant to which Citycourt deleted provisions in the trust deed of the FW Trust with respect to the appointment of Mr Michael Mercanti as the guardian and appointor of the FW Trust and substituted new provisions appointing Mr Tyrone Mercanti as the guardian and appointor; and
(d) a written notice executed on 31 July 2013 by Mr Tyrone Mercanti and Parradele, pursuant to which Mr Tyrone Mercanti, in his capacity as appointor of the FW Trust, removed Citycourt as trustee and appointed Parradele as the new trustee of the FW Trust.
5 Mr Michael Mercanti and his wife, Yvonne, are the directors of Slondia and the directors of Citycourt.
6 The MMF Trust and the FW Trust are discretionary trusts.
7 At all material times, the trustee of the MMF Trust has carried on a retail shoe repair business and the trustee of the FW Trust has carried on a wholesale shoe repair supplies business.
8 The trial judge made these findings:
1. On the proper construction of the MMF Trust Deed the trustee is empowered to vary the contents of the schedule so as to replace the Appointor and Guarantor and appoint a new Appointor and Guarantor.
2. The MMF Trust Deed of Variation was validly executed by Slondia.
3. The variation of the MMF Trust effected by the MMF Trust Deed of Variation was not made by Slondia in breach of trust.
4. Michael [Mercanti], as Guardian of the MMF Trust, consented to the exercise by Slondia of reserved powers to amend the MMF Trust deed to replace the Appointor and Guardian.
5. Tyrone [Mercanti] did not procure Michael [Mercanti] to sign the MMF Trust Deed of Variation or Slondia to execute the MMF Trust Deed of Variation in circumstances constituting equitable fraud or undue influence of Tyrone [Mercanti] over Michael [Mercanti].
6. The MMF Trust Deed of Variation is of legal force and effect.
7. The notice of removal of Slondia and acceptance of appointment of Parradele as trustee of the MMF Trust is valid and of legal force and effect.
8. The removal of Slondia and appointment of Parradele as trustee of the MMF Trust was not in breach of [Tyrone Mercanti's] duties as Appointor of the MMF Trust.
9. Parradele is and has been trustee of the MMF Trust since the execution of the notice of removal of Slondia and acceptance of appointment of Parradele as the trustee of the MMF Trust.
10. Tyrone [Mercanti] is, and has been since the execution of the MMF Trust Deed of Variation the Appointor and Guardian of the MMF Trust.
11. On the proper construction of the FW Trust Deed the trustee from time to time is not empowered to vary the trust deed by amending or replacing the Appointor.
12. The FW Trust Deed of Variation is of no force or effect.
13. The notice of removal of Citycourt and acceptance of appointment of Parradele as trustee of the FW Trust is of no legal force or effect.
14. Citycourt is and at all material times has been the trustee of the FW Trust.
15. Michael [Mercanti] is and at all material times has been the Appointor of the FW Trust [201].
9 So, his Honour held in essence that the deed of variation and the written notice in relation to the FW Trust were invalid and of no legal force or effect, but that the deed of variation and the notice in relation to the MMF Trust were valid and of legal force and effect.
10 The trial judge made declaratory and other orders which gave effect to his findings.
11 The parties sought to be restrained, pending the determination of the appeals or further order, are Mr Tyrone Mercanti (the first respondent in CACV 138 of 2015 and the third respondent in CACV 139 of 2015) and Parradele (the second respondent in CACV 138 of 2015 and the fourth respondent in CACV 139 of 2015).
12 The orders sought by each of the appellants, in their applications for injunctive relief, are, relevantly, as follows:
1. [Mr Tyrone Mercanti] be restrained from exercising or purporting to exercise any powers as Appointor or Guardian of the M Mercanti Family Trust (MMFT) until after judgement in this appeal, or until further order.
2. [Parradele Pty Ltd] be restrained from acting or from purporting to act as trustee of the MMFT, including (but not limited to) restraining it from dealing or purporting to deal with any of the assets of the MMFT or incurring or purporting to incur any liabilities on behalf of the MMFT, until after judgement in this appeal, or until further order.
13 The injunctive relief sought by the appellant in each appeal is, relevantly and in substance, identical to injunctive relief initially granted (by consent) by the trial judge on 7 August 2013 and extended, for 21 days, on 20 August 2015.
14 In addition to the usual undertaking as to damages of the appellant in each appeal, Mr Michael Mercanti and Mrs Yvonne Mercanti have proffered further undertakings in CIV 138 of 2015 that:
(a) as a director of Slondia or otherwise, he or she will not cause Slondia to:
(i) exercise or purport to exercise any powers to transfer, mortgage, sell or assign any real property without first providing 21 days' notice in writing to the solicitors for Mr Tyrone Mercanti and Parradele; or
(ii) change the terms, transfer or assign any lease of retail premises held by Slondia without first providing 7 days' notice in writing to the solicitors for Mr Tyrone Mercanti and Parradele; and
(b) as a director of Citycourt or otherwise, he or she will not cause Citycourt (as trustee for the FW Trust or otherwise) to demand or in any way seek to enforce payment by the MMF Trust of any monies due and payable by it to the FW Trust.
15 On 10 September 2015, the parties appeared before this court on the first return of the appellants' applications for injunctive relief pending the determination of the appeals or further order. Mr Tyrone Mercanti gave a written undertaking to the court that he would not exercise or purport to exercise any powers as appointor or guardian of the MMF Trust until the determination of the appellants' applications. Similarly, Parradele gave a written undertaking to the court that it would not act or purport to act as trustee of the MMF Trust, including (but not limited to) dealing or purporting to deal with any of the assets of the MMF Trust or incurring any liabilities on behalf of the MMF Trust, until the determination of the applications. The court accepted those undertakings and made programming orders for the substantive hearing of the applications.
16 The exercise of this court's discretion to grant an injunction pending the determination of an appeal requires an assessment to be made of the decision under appeal and also the balance of convenience, including whether refusal of the injunction would render the appeal nugatory. See Paringa Mining & Exploration Co Plc v North Flinders Mines Ltd [1988] HCA 53; (1988) 165 CLR 452, 460. The nature of the criteria which are ordinarily relevant to the exercise of this court's discretion to grant an injunction, pending an appeal, are analogous to those which are relevant to the grant of a stay. Although it is ordinarily necessary to establish that the appellant has reasonable prospects of success on the appeal, the appellant's prospects are, to some extent, interdependent with the balance of convenience. See Apache Northwest Pty Ltd v Agostini [2009] WASCA 147 [10].
17 The general principles which apply to an application for a stay are not materially different from those which apply to an application for a suspension order under s 15 of the Civil Judgments Enforcement Act 2004 (WA). Those principles were summarised in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 [9]. See also Ladang Jalong (Australia) Pty Ltd v Callander [2005] WASCA 203 [3].
18 It appears doubtful whether a declaratory order can be the subject of injunctive relief or a stay pending an appeal. However, this court has power, in an appropriate case, to grant injunctive relief or a stay, pending the determination of an appeal or further order, in respect of rights which have been declared to exist by the trial judge and which are challenged or sought to be impugned in the appeal. See Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342, 347; Smolarek v McMaster [2006] WASCA 216 [26] - [27]; Arnhem Land Aboriginal Land Trust v Northern Territory [2007] FCAFC 31; (2007) 157 FCR 255 [5] - [8]; Koushappis v The State of Western Australia [2011] WASCA 245 [18].
19 In the present case, the appellant in each appeal relies on seven grounds of appeal. Each appellant's grounds are identical to the other appellant's grounds. It is sufficient, for present purposes, to set out two of the grounds, being grounds 4 and 6:
4. The learned trial Judge erred in law in concluding that the MMF Trust Deed of Variation dated 20 October 2004 did not constitute a fraud on the power to amend the Trust and thus a breach of Slondia's fiduciary duty as trustee of the MMF Trust. The learned Judge should have concluded that:
4.1 given that Slondia's purpose in doing so was to transfer control of the MMF Trust to Tyrone [Mercanti] as 'an advance on (his) inheritance', and without the knowledge or consent of the other beneficiaries, Slondia's agreement to and execution of the MMF Trust Deed of Variation was a fraud on the power to amend the Trust and thus a breach of its fiduciary duty; and
4.2 Tyrone [Mercanti] was a knowing participant in, alternatively a knowing recipient of the benefit of, such breach of duty.
...
6. The learned trial Judge erred in law in concluding that [Tyrone Mercanti's] conduct on 31 July 2013 when, purportedly as Appointor of the MMF Trust, by a written notice of that date, he caused Slondia to be removed as Trustee of the MMF Trust and caused Paradelle Pty Ltd (Paradelle), being a company which he and his wife controlled, to be appointed as the new Trustee of the MMF Trust, did not constitute a fraud on the power of the Appointor, and thus a breach of duty. The learned trial Judge should have concluded that [Tyrone Mercanti's] conduct was a fraud on the power of the Appointor and a breach of duty by reason of the evidence given by Tyrone [Mercanti] at trial (particularly at T369, 380 and 381).
20 On 9 October 2015, the substantive hearing of the appellants' applications occurred before this court. The parties relied on a number of affidavits, including three affidavits, filed by the solicitors for the appellants, of Damon Harris, an accountant, and an affidavit, filed by the solicitors for Mr Tyrone Mercanti and Parradele, of Mehernosh Buhariwalla, an accountant. The parties filed written submissions before the hearing. Counsel supplemented the written submissions with oral argument.
21 In our opinion:
(a) upon the undertakings which have already been proffered by Mr Michael Mercanti, Mr Jason Mercanti and Mrs Yvonne Mercanti; and
(b) subject to the provision by each of Mr Michael Mercanti and Mrs Yvonne Mercanti of an additional undertaking to the court, as outlined later in these reasons,
interlocutory injunctive relief should be granted substantially on the terms sought by the appellants.
22 Our reasons are as follows.
23 First, we are satisfied that this court has power to grant injunctive relief, pending the determination of the appeals or further order, in respect of the rights of Mr Tyrone Mercanti and Parradele which the trial judge has declared to exist and which are challenged or sought to be impugned in the appeals.
24 Secondly, at this stage we consider that the appellants have sufficient prospects of success to justify the grant of injunctive relief pending the determination of the appeals or further order. The appellants appear to have at least a reasonably arguable case on at least two grounds of appeal, namely grounds 4 and 6.
25 Ground 4 is concerned with the exercise by Slondia of its power to amend the trust deed for the purpose of transferring ultimate control of the MMF Trust to a beneficiary, Mr Tyrone Mercanti, 'as an advance on [his] inheritance' (see [179] of his Honour's reasons) and without the knowledge and consent of all the other beneficiaries. The ground raises the doctrine of a fraud on the power, a matter which was not raised in Montevento Holdings Pty Ltd v Scaffidi [2011] WASCA 146; (2011) 6 ASTLR 446 [98]. It appears not to be disputed that if there was a fraud on the power then Mr Tyrone Mercanti was a knowing participant in Slondia's misconduct, alternatively a knowing recipient of the benefit of its misconduct.
26 Ground 6 is concerned with the efficacy of the exercise by Mr Tyrone Mercanti of his powers as appointor in removing Slondia as trustee of the MMF Trust and replacing it with Parradele. On the appellants' case, this was in breach of Mr Tyrone Mercanti's fiduciary duty, alternatively his quasi-fiduciary duty, as appointor in that, by his own admission at the trial, he exercised those powers solely for reasons personal to him; namely to reinstate himself as the managing director of the trustee of the MMF Trust (and the FW Trust) and as general manager of the businesses of the trusts (ts 380 - 381). Mr Tyrone Mercanti admitted, in cross-examination, that he exercised his powers as appointor without consulting any of the other persons with an interest in Slondia or the trusts because of his belief that, if he had consulted any of them, they would have opposed his intended course of action (ts 369). Also, Mr Tyrone Mercanti indicated, in cross-examination, that his intention, in exercising his powers as appointor, was to 'retain the status quo' (ts 380 - 381). He elaborated that 'it maintains my position within the group' and 'it puts me back to where I was the day before as a managing director' (ts 380 - 381). The duties of an appointor of a discretionary trust, when exercising his or her powers to replace a trustee, were considered by the majority of this court in Montevento. Although the decision of the majority was overturned by the High Court, the true issue in the appeal to this court and the issue in the High Court was the proper construction of the trust deed. It was unnecessary for the High Court to consider the observations of the majority in relation to the duties of an appointor. See Montevento Holdings Pty Ltd v Scaffidi [2012] HCA 48; (2012) 246 CLR 325 [1], [4], [22].
27 Thirdly, Slondia has acted as the trustee of the MMF Trust since the trust was settled in June 1979 and, in that capacity, Slondia has operated the business of the trust (including after the commencement of the primary proceedings as a result of the injunction initially granted (by consent) by his Honour on 7 August 2013 and extended, for 21 days, on 20 August 2015). Mr Tyrone Mercanti ran the business of the MMF Trust and the business of the FW Trust, in his capacity as managing director of Slondia, for about 9 years between 15 June 2004 and 31 July 2013. Mr Jason Mercanti has never been a director of Slondia but has some experience in running the businesses. Mr Michael Mercanti has substantial experience in the operation of the businesses. There is no basis on which this court can make adequate findings, on the material that has been filed, as to whether there has been any mismanagement of the MMF Trust business since his Honour granted the injunction in the primary proceedings on 7 August 2013 or whether there was any mismanagement of the MMF Trust business during the period when Mr Tyrone Mercanti was the managing director. For example, this court is unable to resolve, on the papers, the conflicts in the affidavit evidence of Mr Harris, on the one hand, and Mr Buhariwalla, on the other. Neither counsel for the appellants nor counsel for Mr Tyrone Mercanti and Parradele sought to cross-examine any of the deponents of any of the affidavits. The status quo, for the purposes of the granting of injunctive relief, is the situation which has prevailed since his Honour granted the injunction on 7 August 2013.
28 Fourthly, the businesses of the Mercanti family comprise two enterprises, namely the retail business of the MMF Trust and the wholesale business of the FW Trust. As we have mentioned, his Honour held that the appointment of Mr Tyrone Mercanti as appointor and guardian, and the appointment of Parradele as trustee, of the FW Trust were invalid and of no legal force and effect. Consequently, Citycourt continues to manage the business and affairs of the FW Trust. Historically, the two business enterprises have been operated in conjunction with each other. The trustee of each trust has given guarantees to Westpac Banking Corporation in respect of the liabilities of the other trustee for credit and other accommodation made available by Westpac. Also, the businesses have some shared or common employees and operating systems. It is commercially desirable that the status quo, as we have described it, continue in relation to both of the businesses until the appeals have been determined or further order.
29 Fifthly, if injunctive relief is not granted pending the determination of the appeals or further order there will be an immediate change in the day to day control and management of the business of the MMF Trust. If the appeals are successful then the day to day control and management of the business of the trust will revert to Slondia with ultimate control reverting to Mr Michael Mercanti. That disruption in the control and management of the business of the trust is undesirable, both commercially and from the perspective of the beneficiaries as a whole.
30 Sixthly, whether the appeals would be rendered nugatory, if injunctive relief were to be refused, is a relevant but not an essential factor in deciding whether to grant relief. In the present case, the refusal of injunctive relief would not render the appeals nugatory. However, the combined weight of the third, fourth and fifth points we have made, at [27] - [29] above, is materially greater than the weight to be given to the fact that the rights of appeal will continue to subsist in the event of injunctive relief being refused.
31 Seventhly, the value of the undertaking as to damages of Mr Michael Mercanti was attacked and alleged to be worthless. There is no evidence that the value of this undertaking was challenged in the primary proceedings. The worth of an undertaking as to damages is a relevant factor in determining whether interlocutory injunctive relief should be granted. It is not possible to make a finding, on the papers, as to the value of Mr Michael Mercanti's undertaking as to damages. However, we are not persuaded that his undertaking is worthless. In any event, Mr Jason Mercanti has also given an undertaking as to damages. Also, this point has to be weighed in conjunction with the third, fourth and fifth points we have made at [27] - [29] above, and with the absence of any evidence that the value of Mr Michael Mercanti's undertaking as to damages was challenged in the primary proceedings in the context that the injunctive relief granted by the trial judge subsisted for more than two years.
32 Eighthly, it was suggested by counsel for Mr Tyrone Mercanti and Parradele that Mr Michael Mercanti may have breached at least the spirit of an undertaking he had given in the primary proceedings. The undertaking was to the effect that Mr Michael Mercanti would not, 'as a director of [Slondia] or otherwise, cause [Slondia] as trustee of the [MMF Trust] to exercise or purport to exercise any powers to transfer, mortgage, sell or assign any real property' without first providing 21 days' notice in writing to the solicitors for Mr Tyrone Mercanti and Parradele. It appears that between 1 July 2013 and 30 June 2014 Slondia, as trustee for the MMF Trust, sold a trust asset, being 1 Granadilla Street, Duncraig. Mr Michael Mercanti gave the requisite notice prior to the sale of the Duncraig property. The trial judge refused an application by Mr Tyrone Mercanti and Parradele to restrain the sale of the property. See Mercanti v Mercanti [2014] WASC 64. It also appears from Mr Harris' affidavit that the sale of the Duncraig property realised a profit of $864,222, which was distributed by Slondia, in its capacity as trustee, to Citycourt as trustee of the FW Trust and a beneficiary of the MMF Trust. The distribution was effected by a resolution of the directors of Slondia and an entry in its books. The appellants contend that the distribution sought to take advantage of accumulated tax losses available to the FW Trust. Mr Tyrone Mercanti and Parradele assert that the appellants' contention is fallacious because no income tax or capital gains tax was payable on the profit. It is unnecessary to determine this point. The actual amount of $864,222 was used by Slondia to pay external creditors. This court is not satisfied, on these applications, that Mr Michael Mercanti breached the letter or spirit of his undertaking. We are unable to resolve, on these applications, whether the distribution would or might be caught by Mr Michael Mercanti's undertaking as to damages in the event that these appeals are ultimately unsuccessful. However, it will be a condition of the grant of injunctive relief, pending the determination of the appeals or further order, that each of Mr Michael Mercanti and Mrs Yvonne Mercanti undertake to the court that:
(a) they will not appoint any additional directors of Slondia (Mr Michael Mercanti and Mrs Yvonne Mercanti being the only directors of that company);
(b) they will not cause or permit Slondia, in its personal corporate capacity or as trustee of the MMF Trust or Mike's Multi Service Retail Trust (MMSR Trust), to pay themselves or any of their children or grandchildren any salaries, wages, superannuation, dividends or other remuneration at rates higher than those paid to them as recorded in the accounts for the 2014/2015 financial year;
(c) they will not cause or permit Slondia, as trustee of the MMF Trust or the MMSR Trust, to distribute, transfer or otherwise dispose of any money or any estate or interest in any property of the MMF Trust or the MMSR Trust, other than in the usual or ordinary course of business; and
(d) they will not cause or permit Slondia, as trustee of the MMF Trust or the MMSR Trust, to distribute, transfer or otherwise dispose of any money or any estate or interest in any property of the MMF Trust or the MMSR Trust to any existing or future beneficiary of those trusts or either of them (except as specified in par (b) above) without the prior written consent of Mr Tyrone Mercanti and Parradele or the prior approval of this court.
33 Ninthly, each appellant has an appeal as of right and any of the parties may, if the hearing and determination of the appeals is genuinely urgent, apply for urgent appeal orders. If a proper basis exists then this court will make the orders.
34 We will hear from counsel for the parties as to the precise form of the orders necessary to give effect to these reasons and, also, as to costs.
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