MJS Investment Services Pty Ltd trading as Santoro and Co v Peter Alexander Nemes

[2010] NSWSC 1278

CITATION:	MJS Investment Services Pty Ltd trading as Santoro & Co v Peter Alexander Nemes [2010] NSWSC 1278
HEARING DATE(S):	27 September 2010
JURISDICTION:	Equity Division Duty List
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	27 September 2010
DECISION:	Mareva injunction granted
CATCHWORDS:	EQUITY – Equitable remedies – Injunctions – Injunctions to preserve the status quo or property pending determination of rights – Mareva injunctions – Relevant considerations
CATEGORY:	Procedural and other rulings
PARTIES:	MJS Investment Services Pty Ltd (plaintiff) Peter Alexander Nemes (defendant)
FILE NUMBER(S):	SC 2010/317894
COUNSEL:	J E Thomson (plaintiff) T C Russell (solicitor) amicus (defendant)
SOLICITORS:	Sydney Property Lawyers (plaintiff) ERA Legal (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

BRERETON J

Monday, 27 September 2010

2010/317894 MJS Investment Services Pty Ltd t/as Santoro & Co v Peter Alexander Nemes

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiff MJS Investment Services Pty Ltd has sued the defendant Peter Alexander Nemes in the District Court of New South Wales at Sydney for a sum of about $200,000 in respect of accounting services said to have been rendered by the plaintiff to the defendant. Although the proceedings were issued in the District Court on 9 April 2010 they have not yet been served; apparently due to difficulties encountered in locating and serving the defendant. It is now evident that the defendant is, at least for the time being, abroad.

2 It appears that the defendant's only real property in Australia is 45-47 XXXXX X Road Fiddletown, which he owns in joint tenancy with his estranged wife and which is the subject of a contract for sale due to settle on 29 September, two days hence. In those circumstances, by summons filed on 24 September 2010, MJS applies to this Court for Mareva relief, restraining the defendant from adversely dealing with his Australian assets and, in particular, preserving his share of the proceeds of sale of the Fiddletown property.

3 On 24 September 2010, Rein J, sitting as Duty Judge, made orders for substituted service of the summons by service on a solicitor apparently acting for Mr Nemes in connection with the District Court proceedings, and the solicitor acting for Mr Nemes on the conveyance. Those orders were duly complied with by service of the summons on each of those solicitors prior to 2.30pm on 24 September 2010, and each of those solicitors has appeared before the Court today; neither appears on instructions from the defendant, nor seeks, at least at this stage, to file an appearance, but they have appeared out of courtesy to the Court and as amici curiae.

4 On an application for relief of this kind, the essential issues are, first, whether the plaintiff has a sufficiently arguable case for final relief on the principal cause of action against the defendant; secondly, whether there is a sufficiently serious risk of improper dissipation of the assets, such as would defeat a judgment obtained by the plaintiff in the principal proceedings; and thirdly, considerations relevant to the balance of convenience.

5 So far as a seriously arguable case is concerned, the evidence prima facie establishes a retainer between Mr Nemes as client and MJS as professional accountant. While an observation has been made that it is arguable that the client was, at least in respect of some of the work, not Mr Nemes personally, it seems to me that the contrary is strongly arguable, namely that Mr Nemes personally retained the accountants to do work in respect of his personal tax returns and tax returns of companies in which he was interested; the fact that the work involved the affairs of entities in which he was interested does not mean that he was not the client and the person to whom the accountant was entitled to look for payment.

6 It has also been suggested that the amount now claimed, which is some $200,000 plus interest and costs, substantially exceeds the initial quote. So it does, but that does not make it unrecoverable. There are in evidence invoices which particularise the work done and the amounts claimed over a period from September 2007 until February 2009.

7 Without for a moment suggesting that none might emerge in due course, at this stage there is no obvious defence to the claim. It seems to me that there is an amply sufficiently arguable case to satisfy that aspect of the test.

8 So far as risk of dissipation is concerned, the evidence establishes, first, that Mr Nemes is presently abroad; secondly, that his only real asset in Australia is presently for sale; thirdly, that over a considerable period of time since the District Court proceedings were issued, there has been difficulty in serving him; fourthly, that other than the Fiddletown property, no other significant asset of his in Australia is known; fifthly, that he was the subject of various recovery proceedings, resulting inter alia in bankruptcy notices, which resulted in his instructing MJS in the first place; and sixthly, and perhaps most tellingly, that the Court is informed today that he may have some agreement with his estranged wife that his share of the proceeds of sale of the property should be paid to her.

9 Taken together, those matters plainly establish a sufficient risk of dissipation of the proceeds of sale of the Fiddletown property and, thus, of his only known significant Australian asset.

10 So far as the balance of convenience is concerned, while it is true that, on what is known at present, his share of the proceeds of sale will not be sufficient to satisfy MJS's claim in the District Court, it would, nonetheless, go some way towards doing so and, no doubt, from the plaintiff's perspective, be better than nothing.

11 If an injunction not be granted, then there is a serious risk that even if MJS’s, claim were not entirely defeated, it, would at least be confronted with the need to make further applications to set aside dispositions of property made between Mr Nemes and his estranged wife. On the other hand, no apparent inconvenience – other than that he will not have the use of the money in the meant time – appears at this time, if an interlocutory injunction were granted. In any event, the plaintiff proffers the usual undertaking as to damages.

12 I am satisfied, therefore, that orders substantially to the effect of those sought by the plaintiff should be made.

13 Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages:

1.1 Order that until 18 October 2010, the defendant be restrained from by himself his servants or agents:


(a) alienating, encumbering, removing from Australia or otherwise adversely dealing with any of his assets in Australia, insofar as they do not exceed the unencumbered value of AUD$260,000;

(b) in particular, upon completion of the sale of the property situate at and known as 45-47 XXXXX X Road, Fiddletown in the State of New South Wales, being the land comprised in Folio Identifier 1/570XXX, alienating, encumbering, removing from Australia or otherwise dealing with his (50%) share of the nett proceeds (after payment of secured creditors, usual conveyancing adjustments, agent’s commission and legal costs of sale), otherwise than by payment thereof into and retention in the trust account of his solicitor acting on the conveyance (namely, Appleton & Company Lawyers) or payment into court to the credit of these proceedings or payment into such other account as may be approved in writing by the plaintiff’s solicitor such approval not to be unreasonably withheld,

provided that the foregoing order does not prohibit:


(i) completion of the sale of the Fiddletown property, or

(ii) the expenditure of up to $750 per week for ordinary living expenses.

1.2 For the purpose of calculating the defendant’s share of the nett proceeds of the Fiddletown property to which the foregoing injunction relates:


(a) his share shall be 50%; and

(b) any separate secured liability of the defendant or his wife which is required to be paid on settlement to obtain a discharge of mortgage insofar as the same is at the time of settlement capable of being identified as such (including for example any credit card liability of one or other of them that might be secured on the property) is to be deducted from the relevant party’s separate 50% share of the nett proceeds after division.

1.3 Order that by 8 October 2010, the defendant inform the plaintiff’s solicitor in writing of:


(a) in what account his share of the proceeds of the Fiddletown property is held, together with a copy of the deposit receipt or other record thereof;

(b) the whereabouts, form and estimated value of any other assets that the defendant may have in Australia and on which the defendant may rely for the purpose of demonstrating that his Australian assets are not less in value than $260,000


4. Adjourn to 18 October 2010 at 10 am before the Duty Judge

5. Reserve liberty to apply on two days’ notice.

6. Direct that this order be entered forthwith.

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