NT Consulting Services Pty Ltd v Own Investments Pty Ltd and Ors

IN THE SUPREME COURT OF VICTORIA AT MBLBOURNE

Not Restricted

COMMERCIAL AND EQUITY DIVISION

~~No.~~ S CI 2013 4516

BETWEEN:

NT CONSULTING SERVICES PTY LTD (ACN 123 801 874)	First Plaintiff
and
TERRY MORAD	Second Plaintiff
- and -
OWN INVESTMENTS PTY LTD (ACN 125 953 497) (Receivers and Managers appointed)	First Defendant
and
ROSS ANDREW BLAKELY	Second Defendant
And
ANDREW PETER SCHWARZ	Third Defendant

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 and 11 September 2013
DATE OF JUDGMENT:	20 September 2013
CASE MAY BE CITED AS:	NT Consulting Services Pty Ltd & Anor v Own Investments Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2013] VSC 508

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INTERLOCUTORY INJUNCTION – Planned sale of franchise business by receivers and managers appointed under debenture – Priority dispute with purchaser claiming earlier contract for the sale of the same franchise business – Consideration of the balance of convenience.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G McCormick with Ms S Bruhn	Francisdaniel Lawyers
For the Defendants	Mr H N G Austin	K & L Gates

HIS HONOUR:

Background

The Plaintiffs seek an interlocutory injunction restraining the Defendants from proceeding to sell, or from selling, a leasehold and franchise business at 239-241 Mickleham Road, Tullamarine in Victoria (‘Hungry Jacks Tullamarine’).

These proceedings were commenced by Writ on 29 August 2013 and injunctive relief is sought by summons of the same date.

The First Defendant is Own Investments, who is the operator of Hungry Jacks Tullamarine. The Second and Third Defendants are the receivers of the First Defendant, and were appointed by the Commonwealth Bank of Australia, trading as “Bankwest”, (“the Bank”) on 3 July 2013 pursuant to a Debenture. This Debenture was in the nature of a fixed and floating charge, and was dated 17 December 2007.[1] The Defendants, as they are empowered to do under the Debenture, are presently in the process of a sale by tender of the Hungry Jacks Tullamarine business. This sale process has reached the stage where a preferred bidder has been selected by the receivers.
[1]Exhibit AV-4 of Affidavit of Adam Vincent (sworn 5 September 2013).

The Plaintiffs have commenced action for urgent injunctive relief to prevent the sale, alleging that the First Defendant has already made a sale of the Hungry Jacks Tullamarine leasehold and franchise business to Terry Morad, the Second Plaintiff, for $2.230 million.

The Plaintiffs claim to have purchased Hungry Jacks Tullamarine pursuant to Heads of Agreement dated 23 November 2011 (“HoA”).[2] The First Plaintiff also claims that it has paid a total deposit of $500,000 towards the purchase of the subject business and that it has obtained consent from the franchisor, Hungry Jacks Australia Pty Ltd (“HJAs”), and the necessary finance from National Australia Bank (“NAB”) to enable completion of the purchase.
[2]Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

The HoA to purchase the business, including goodwill and stock, has undergone a number of variations since 23 November 2011. Settlement of this transaction is yet to occur.

Hungry Jacks Tullamarine is operated by the First Defendant pursuant to a franchise agreement dated 17 December 2007, with HJA as franchisor.[3]
[3] Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

Under the terms of the franchise agreement:

(i)the First Defendant must not directly or indirectly sell, transfer or otherwise dispose of any rights or obligations under the Franchise Agreement without the prior consent of HJA;[4]
(ii)if the First Defendant wishes to sell the franchise business, it must first offer to sell the business to HJA, or its nominee, at the same purchase price and otherwise on substantially the same terms and conditions as any bona fide offer which the First Defendant has received from an arms-length third party;[5]
(iii)before HJA consents to any transfer of the business, it is entitled to be satisfied, amongst other things, that a prospective purchaser possesses the financial resources necessary to conduct and operate the business and service any borrowings it makes in order to purchase the business.[6]

[4]Clause 17.2(b) of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

[5]Clause 17.4(a) of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

[6]Clause 17.5 of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

The receivers have entered into a Deed of Forbearance dated 4 July 2013 with the franchisor HJA. Under this Deed HJA has agreed to forbear from exercising a right to terminate the Franchise Agreement. Mr Blakely deposed that the Receivers therefore have a time limit of 90 days from 3 July 2013 to sell the business.[7] The period of forbearance will cease on 1 October 2013. Mr Blakeley further deposed that HJA may grant an extension, but provide any further information about discussions he has had with HJA about seeking an extension.[8] This circumstance adds urgency to this application.
[7]Affidavit of Ross Andrew Blakely (sworn 5 September 2013), [8].
[8]Affidavit of Ross Andrew Blakely (sworn 5 September 2013), [8]; [37–41].

The Defendants dispute the earlier contract of sale asserted by the Plaintiffs

At this point the Defendants have not filed a defence in the proceeding. However, by letter dated 21 August 2013[9] the solicitors for the Defendants have rejected the Plaintiffs’ assertion that there is a legally enforceable agreement between the Plaintiffs and the First Defendant. Furthermore, they say that damages, not specific performance, is the proper remedy. The receivers, by their solicitors, also assert that they are at liberty to “repudiate” the pre-receivership contract.
[9]Exhibit TM-24 of Affidavit of Terry Morad (sworn 27 August 2013).

Materials relied on by the parties

In support of their application for an interlocutory injunction, the Plaintiffs have filed and served the affidavit: of Terry Morad sworn 27 August 2013.

The Defendants have filed and served the following affidavits and materials:

(a)Affidavit of Adam Vincent of the Bank sworn 5 September 2013;
(b)Affidavit of Ross Andrew Blakely (the Second Defendant) sworn 5 September 2013;
(c)Affidavit of Mark Kneebone of the Bank sworn 6 September 2013;
(d)Affidavit of Anna Elizabeth Smith sworn 9 September 2013 (which exhibits the file of Messrs Frenkel partners who acted for the First Defendant);
(e)A Chronology of Summary Key Facts and Events deposed to at this interlocutory stage of the proceedings cross-referenced to the above affidavits and exhibits which is attached as Appendix “A” of these reasons for judgment.

General observations

There is a long and complicated history to the purported uncompleted contract to purchase Hungry Jacks Tullamarine which the Plaintiffs argue has given rise to contractual and proprietary rights, including a right to specific performance. There are, however, a number of features of the purported contract to purchase which prima facie give rise to substantial arguments against the enforceability of that agreement. These features also engender serious doubts about whether the unconditional effectuality of the agreement is likely to be established at trial.

However, at this interlocutory stage of the proceedings, the Plaintiffs’ assertions about the existence and effect of the asserted agreement, and the rights and entitlements arising there from, at least give rise to serious issues to be tried.

The Defendants submit that the receivers of the First Defendant are exercising the rights of the Bank pursuant to a fixed and floating charge which has crystallized. Accordingly, the Defendants argue that the Bank enjoys an equitable interest in Own Investments’ assets, and that interest has priority over the claims asserted by the Plaintiffs. The Bank’s interests have priority even if the contract of sale asserted by the Plaintiffs is effective. The Defendants also raise a number of other arguments against the granting of the injunction sought which will be addressed below.

Test for grant of interlocutory injunction

The parties to these proceedings substantially agree as to the test and approach to the grant or rejection of the interlocutory relief sought. The relevant test and considerations are:

(a)The Plaintiffs must show that there is a serious question to be tried.
The Defendants emphasise, and I accept, that the requirement on the moving party to establish a prima facie case requires that party to establish that if the evidence remains as it is at the interlocutory stage, there is a probability that at trial the moving party will be entitled to relief.
The moving party will have made out the requisite prima facie case if it shows a sufficient likelihood of success at trial to justify, in all the relevant circumstances, the necessity of the preservation of the status quo.
(b)The balance of convenience must favour the Plaintiffs: Beecham Group Ltd v Bristol Laboratories Pty Ltd,[10] Australian Broadcasting Corporation v O’Neill.[11]
(c)In relation to the balance of convenience, the Court should bear in mind that it should take whatever course appears to carry the lowest risk of injustice should it transpire that:
(i) the Court was wrong in that the grant of an injunction is not ultimately justified at trial; or
(ii) that there was a failure to grant an injunction to the party which ultimately succeeds at trial: Bradto Pty Ltd v State of Victoria.[12]

The two limbs of the above test are inter-dependant: the stronger the case for final relief, the lower the weight of the balance of convenience required in favour of the moving party and vice versa.[13]
(d) When assessing the balance of convenience, the Court should consider the adequacy of the moving parties’ undertaking as to damages. If the proffered undertaking is not worthwhile or meaningful, this may be a significant factor in the Court’s refusal to grant the injunction sought.
[10](1968) 118 CLR 618.
[11](2006) 227 CLR 57, [65] (Gummow and Hayne JJ). In addition, Gleeson CJ and Crennan J mention at [19] that it is necessary to show that the Plaintiff was likely to suffer injury that could not be remedied adequately by damages.
[12](2006) 15 VR 65, 35.
[13]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, [65]–[72].

The Plaintiffs’ position

The Plaintiffs submit that there is a serious question to be tried, with enough evidence to establish a prima facie case that:

(a)the HoA[14] gives rise to rights and equities in favour of the First Plaintiff, including an arguable right to specific performance of the contract of sale to establish its relevant prima facie case;
(b)the First Plaintiff has satisfied the conditions precedents by obtaining finance[15] and franchisor approval[16] of the contract of sale.[17] This is clearly a matter to be finally determined at trial, but exhibited to the affidavit of Mr Morad is a letter from his broker confirming finance dated 1 August 2013.[18] As such, the Plaintiffs submit the First Plaintiff stands ready willing and able to complete the purchase;
(c)the receivers cannot “repudiate” that contract of sale to the First Defendant. The Plaintiffs submit that repudiation requires acceptance by the other party, and the Plaintiffs have not, at any point, accepted repudiation by the receivers.

[14]Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[15]Clause 3(b) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[16]Clause 3(e) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[17]Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[18]See Exhibit TM-13 of Affidavit of Terry Morad (sworn 27 August 2013).

The Plaintiffs argue that at law the receivers have taken their interest and rights subject to all prior equities,[19] and that it is this principle which determines whether a receiver may disregard or ignore a company’s obligations under a pre-receivership contract.
[19]Company Receivers and Managers, O’Donovan, [8.4790].

Further, the Plaintiffs submit that, although typically prior equities arise with pre-receivership contracts for sale of land, such prior equities can also arise with sale of a business.[20] Here, the Plaintiffs submit they have partly performed the contract by payment of the deposit. In addition, the Plaintiffs also submit that part performance is evidenced by payment of $15,000 by way of legal fees paid to HJA’s solicitors on 13 February 2013.[21]
[20]The Plaintiffs relied on Freedale Ltd v Metrostore (Holdings) Ltd [1984] 1 Ch 199; Schering Pty Ltd v Forest Pharmaceutical Co Pty Ltd[1982] 1 NSWLR 286; Re Diesels & Components Pty Ltd [1983] 2 Qd R 456; Peter Young, Clyde Croft and Megan Smith, On Equity (Thomson Reuters, 2009) [16.960].
[21]Page 55 of Exhibit AES-2 of Affidavit of Anna Elizabeth Smith (sworn 9 September 2013).

The Plaintiffs also :

(a)Argue that damages are clearly not an adequate remedy in this case. They note that Mr Vincent deposes that as of 5 September 2013, the Bank is owed $2.280m[22]. It also appears from the affidavit of Mr Vincent that none of the $500,000 deposit of the First Plaintiff has been paid to the Bank.
(b)Asks the Court to infer that there will be nothing left from which the First Plaintiff could recover its $500,000 deposit. The Plaintiffs submit that this inference should be drawn because the Second Defendant has said nothing about how much the “preferred bidder” is offering to pay, instead asserting confidentiality.
However, at the hearing of the Plaintiff’s injunction application, the Plaintiffs were given access (subject to terms imposed by the Court) to the Defendants’ confidential exhibits. Accordingly, if those confidential exhibits revealed that the sale of the business would leave nothing from which the Plaintiffs might recover damages, it is reasonable to expect the Plaintiffs would have sought to put such materials before the Court. As such, I am unwilling to draw the inference promoted above by the Plaintiffs.
(c)Argue that the business is unique and that this feature is a relevant consideration: ANZ Executors v Humes Ltd[23].
(d)Argue that the fact that damages are not an adequate remedy is a relevant consideration to determining the effectiveness of any attempted repudiation by the receivers in this case.[24]
(e)Argue that the fact there will be nothing left in the company is also relevant to the assessment of the balance of convenience.
However, for the reasons discussed above in (b), I am not satisfied on the evidence that on the balance of probabilities it is open to infer or conclude, even in this interlocutory context, that “there will be nothing left” in the company.
[22]Affidavit of Adam Vincent (sworn 5 September 2013), [34].
[23][1990] VR 615.
[24]See Company Receivers and Managers, O’Donovan, [8.4870].

The Defendants’ position

The Defendants submit that the Plaintiffs have failed to show a prima facie case on the contractual claim because there is insufficient evidence of an enforceable agreement and the non-fulfilment of conditions precedent. The Defendants submit that prima facie and at this stage of the proceedings, the Plaintiffs’ legal position is that:

(a)       on 23 November 2011, Mr Morad entered into the HoA to buy a 50% interest in the Hungry Jacks Tullamarine subject to various conditions precedent. These included the requirement to obtain finance[25] and franchisor approval[26]. Mr Morad subsequently paid the $250,000 deposit. Under the agreement, settlement was to be on 19 December 2011;[27]
(b)      subsequent to November 2011, extensions were sought and obtained of the settlement date to enable Mr Morad to obtain finance. The final extension extended the settlement date to 30 June 2012;
(c)       just before the expiration of the final extension, in June 2012, Mr Morad asserts that there was an oral variation to the HoA pursuant to which he would buy 100% of Hungry Jacks Tullamarine for a purchase price of $2.230m, plus stock to a maximum value of $35,000. Otherwise, the terms in the HoA remained unchanged. The alleged agreement was still subject to various conditions precedent. On 27 June 2012, Mr Morad paid a further deposit of $250,000.[28]
However, as the Defendants highlighted, the Plaintiffs failed to adduce any evidence of any subsequent discussion regarding when the agreement would be concluded;
(d)on 24 September 2012, Mr Morad’s solicitors, Lloyds Legal, sent him a further contract with a purchase price of $3.650m, which he signed[29] but denies approving.[30] He says in effect that he signed certain pages of this contract by mistake;
(e)       on 4 January 2013, HJA gave “tentative” and conditional approval to Mr Morad becoming franchisee;
(f)       Mr Morad asserts approximately a year after the above variation to the contract of sale in June 2012 that in August 2013, he obtained approval from the NAB to borrow $1.550m toward the purchase.[31] However, Mr Morad has exhibited no application documentation to, or loan approval documentation from, the NAB.

[25]Clause 3(b) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[26]Clause 3(e) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[27]Clause 11 of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

[28]Affidavit of Terry Morad (sworn 27 August 2013), [10], [21] and [22].

[29]Exhibits TM-17 and TM-18 of Affidavit of Terry Morad (sworn 27 August 2013).

[30]Affidavit of Terry Morad (sworn 27 August 2013), [34] and [35].

[31]Exhibit TM-13 of Affidavit of Terry Morad (sworn 27 August 2013).

The Defendants note in their submissions that the HoA was subject to a number of conditions precedent, and say that the evidence shows that two important conditions have never been satisfied, namely the requirement to obtain finance[32] and franchisor approval[33].
[32]Clause 3(b) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).
[33]Clause 3(e) of Exhibit TM-4 of Affidavit of Terry Morad (sworn 27 August 2013).

The Defendants also observe that those conditions precedent were not expressed as a promise by either party that the relevant condition would actually be fulfilled, but rather that reasonable steps would be taken to fulfil the conditions.[34] The Defendants say, in those circumstances, that until such conditions precedent are complied with, neither party is entitled to specific performance to complete the sale.[35] The Defendants also submit that where there is an immediately binding contract in respect of which performance is postponed subject to conditions, then either party is free to withdraw where the time for fulfilment has passed.[36]
[34]In Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 566 Brennan J explained the difference between an obligation to fulfil the conditions and the obligation to take reasonable steps towards the completion of the condition. Cf Kennedy v Vercoe (1960) 105 CLR 521, 527-8.
[35]See Perri v Coolangatta Investments Pty Ltd (1982) CLR 537, 565 (Brennan J).
[36]LexisNexis, Halsbury’s Laws of Australia, [110-534].

The Defendants also submit that the alleged agreement is partly constituted by an oral variation of the HoA which did not specify a time for completion of the conditions precedent. As a result, according to the Defendants it would be implied that the conditions precedent were to be fulfilled within a reasonable time.[37]
[37]See Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 543 (Gibbs J).

The Defendants also argue that in relation to the “subject to finance” pre-condition, the affidavit evidence is that extensions of the finance period occurred up to 30 June 2012. Mr Morad says that there was an oral agreement shortly before this period expired to the effect that he would buy the entire business.[38] Therefore, Mr Morad needed to obtain finance for twice the amount. The Defendants correctly point out that there is no evidence of any discussion about the time within which he was required to obtain finance. As such, if it is accepted that there was an oral variation as alleged, a term requiring finance to be obtained within a reasonable time should be implied into that oral variation. However, according to the Plaintiffs, Mr Morad did not obtain approval for the $1.550m from the NAB, until August 2013[39] having received an ANZ Non-Binding Indicative Term Sheet in June 2013.[40] Although the Defendants accept that what is a reasonable time will depend on all the circumstances, they argue that the Plaintiffs will nevertheless fail to establish at trial that the condition was fulfilled or that it occurred within a reasonable time.
[38]Affidavit of Terry Morad (sworn 27 August 2013), [21].
[39]Exhibit TM-13 of Affidavit of Terry Morad (sworn 27 August 2013).
[40]Exhibit TM-12 of Affidavit of Terry Morad (sworn 27 August 2013).

In relation to the second precondition concerning “franchisor approval”, the affidavit evidence does not appear to establish that approval was ever unconditionally and unequivocally provided. I accept the Defendants’ submissions that the affidavit material provides evidence only of the “tentative”, and conditional approval of the franchisor.[41] Furthermore, a number of the conditions for the “tentative” approval have not been and are now unable to be fulfilled. In this regard, the Defendants point out that Mr Morad has clearly never been in a position to purchase the business under the proposed sale structure of $1.1m cash and $1.1m borrowings.[42]
[41]Exhibit TM-10 of Affidavit of Terry Morad (sworn 27 August 2013).
[42]Mr Morad says he was contemplating such a structure at the time, but he does not say that he is or ever was able to raise $1.1m in cash. The content of his affidavit makes clear that he is not able to raise it. His case is currently that he has approval to borrow $1.550m. The evidence is that he has $465,000 of existing borrowings on the two real properties.

The Defendant submits that the Franchise Agreement provides that the level of borrowings of the proposed franchisee is relevant to conditions for consent to transfer.[43] Mr Morad now proposes borrowings in the order of $1.98m to fund the acquisition. These borrowings will be made up of $1.55m from NAB, the existing borrowings for the deposit of $250,000 and further borrowings to fund the balance. I accept the Defendants’ submissions that on the current evidence, there is no evidence that HJA's tentative approval, which was on condition of borrowings of only $1.1m, would continue given the real level of borrowings now required by Mr Morad to acquire the Business. Similarly, no evidence appears to be available in relation to Mr Morad having progressed to obtain final (as opposed to “tentative”) or unconditional approval in the eight months since the HJA email.
[43]Clause 17.5(d)(i) and 17.5(f) of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

Accordingly, the Defendants appear at this stage of the proceeding to have a strong argument that a reasonable time for obtaining franchisor approval must be taken to have expired in the circumstances.

Therefore, it is strongly arguable that the time for fulfilment of the conditions precedent has passed. The agreement (if any) never became enforceable. This means that it is also strongly arguable that the Company is now free to withdraw from the agreement without providing formal notice.[44]
[44]Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 546 (Gibbs J), 570 (Brennan J).

Further it would appear to be strongly arguable that the First Defendant has already withdrawn from the conditional contract of sale to the First Plaintiff. This occurred, at the latest, by entering into the Sharma Contract of Sale on 1 July 2013.[45]
[45]Exhibit RB-3 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013).

It is thus likely that the appropriate remedy for Mr Morad in relation to the HoA is an action for the return of his deposit and damages.

Requirement that the Plaintiffs be ready willing and able to perform the contract

The Defendants submit that where a Plaintiff seeks specific performance of a contract, that party must be ready and willing to do equity and thus be ready and willing to perform the contract. The Defendants argue that Mr Morad has not adduced sufficient evidence of being ready and willing to perform the contract he alleges remains on foot.

On Mr Morad’s best case, the agreement was for a purchase price of $2.230m with a deposit of $500,000. Mr Morad asserts that he has paid $500,000. However, he has failed to provide sufficient evidence, even at a prima facie level, of his capacity to pay the balance of the purchase price, $1.730m, plus up to a maximum $35,000 for stock.

The ANZ’s “funding proposal”[46] was, it appears, based on the inflated contract price of $3.650m contained in the 24 September 2012 contract which Mr Morad[47] says he did not approve and which he says he signed by mistake.[48] The ANZ funding proposal includes a condition precedent for a valuation of the Business “at purchase price or no less than $3,655,000”.[49] The covering email[50] appears to convey low prospects of obtaining a valuation at a sufficient level effectively to satisfy the Bank’s Loan to Valuation Ratio (“LVR”), and was also predicated on paying out existing mortgages on the First Plaintiff’s properties at 21 Macedon Close, Caroline Springs in Victoria and 7/44 McLaren Road, Nerang, Queensland.
[46]Exhibit TM-12 of Affidavit of Terry Morad (sworn 27 August 2013).
[47]Affidavit of Terry Morad (sworn 27 August 2013), [34]-[35]; Exhibits TM-15, TM-16, TM-17, TM-18.
[48]Exhibit TM-18, 35 of Affidavit of Terry Morad (sworn 27 August 2013).
[49]I. Conditions Precedent (a) of Exhibit TM-12 of Affidavit of Terry Morad (sworn 27 August 2013).
[50]Exhibit TM-12 of Affidavit of Terry Morad (sworn 27 August 2013).

It should be noted that these are the two properties which Mr Morad refers to apparently as evidence of the adequacy of the Plaintiffs’ undertaking as to damages.[51] However, on Mr Morad’s evidence, the total value of those properties is insufficient. The property at 21 Macedon Close is valued at $600,000 with a mortgage of $250,000, leaving a net value $350,000. The property at 7/44 McLaren Road, Nerang, is valued at $350,000, with a mortgage of $215,000, leaving a net value of $135,000. Accordingly Mr Morad’s affidavit discloses net assets of approximately $475,000.[52] Further, these values have been asserted by the Plaintiffs without any persuasive supporting evidence. In my view, the Rates Notice provided in respect of the Victorian property does not add materially to persuasiveness of the Plaintiffs’ position.
[51]Affidavit of Terry Morad (sworn 27 August 2013), [43].
[52]Ibid.

The Defendants point out, and I accept, that there is also evidence that Mr Morad’s initial approach through Mr Franek to NAB in October 2012 was based on a purchase price/valuation of $3.650m.[53]
[53]Affidavit of Mark Kneebone (sworn 6 September 2013), [11].

Mr Morad’s evidence is that he obtained finance for $1.550m from the NAB.[54] However no letter of offer is exhibited. Furthermore, the letter from Mr Morad’s finance broker says nothing about the basis upon which funding was sought, including the LVR submitted and any conditions attached to the approval said to have come from the NAB.[55]
[54]Affidavit of Terry Morad (sworn 27 August 2013), [30]; Exhibit TM-13.
[55]Exhibit TM-13 of Affidavit of Terry Morad (sworn 27 August 2013).

The Defendants submit that the evidence before the Court is to the effect that the banking requirement is an LVR of 50% in relation to the franchise business, subject to additional security being offered.[56] If the NAB’s “approval” accords with that broad practice, then its basis for lending by way of the securities referred to in Part E of the ANZ Commercial Non Binding Indicative Term Sheet $1.550m is dubious. The loan of $1.550m is in excess of 50% of the alleged contractual purchase price of $2.230m.[57] Furthermore, as the Defendants submit, if the approval was predicated on Mr Morad proffering the two real properties as security, as Mr Morad did in his unsuccessful attempt to obtain finance from the ANZ, then the Plaintiffs will not be able to access the equity in those properties to pay anything over and above $1.550m. This also impacts on the equity of $475,000 referred by Mr Morad[58] and any substantiation of the Plaintiffs’ capacity to meet an undertaking as to damages.
[56]Affidavit of Terry Morad (sworn 27 August 2013), [33]; Exhibit TM-12.
[57]Exhibit TM-13 of Affidavit of Terry Morad (sworn 27 August 2013).
[58]Affidavit of Terry Morad (sworn 27 August 2013), [43].

The Defendants quite logically point out that if Mr Morad has obtained finance of $1.550m, and is also able to access the remaining equity in the two properties ($475,000), there still needs to be evidence that he can pay the remaining $180,000 balance and a sum of up to $35,000 for stock. The Defendants say that in addition the Plaintiffs would be required to pay transfer fees to HJA of $25,000. However, the Plaintiffs submit that under the terms that transfer fee is payable by HJA.

Receivers’ entitlement to sell free of Plaintiffs’ inferior interest

I am also persuaded that the Defendants have a strong arguable case that a receiver is free to disregard pre-receivership contracts subject to certain exceptions, including:

(a) where specific performance is available in respect of the contract;
(b) where the pre-receivership contract gives rise to “prior equities”, such as where it contains a negative stipulation.[59]

[59]James O’Donovan, Company Receivers and Administrators (Law Book Company, 2013) [8.4710], [8.4810], [8.4890], [8.4910], [11.1970].

The case law in support of this position concerns what are described as “trading contracts” and applies where the pre-receivership contract was permitted by the terms of the relevant debenture charge. In George Barker (Transport) Ltd v Eynon[60] it was explained that a floating charge allowed a company to deal with its assets in the ordinary course of business. Therefore, any dealing with a particular property will be binding on the debenture holders, provided that the dealing is completed before the debentures crystallise and is converted from a floating security to a fixed charge over the relevant asset. Under such a debenture, a Receiver’s appointment does not affect obligations under “ordinary trading contracts”.[61]
[60][1974] 1 WLR 462.
[61][1974] 1 WLR 462, 467-8.

However, the Defendants emphasise that a different position obtains where:

(a) the transaction concerns the sale of assets the subject of a fixed charge; or
(b)the pre-receivership contract involves dealing with floating charge assets otherwise than in the ordinary course of business or in a way otherwise permitted by the charge (so as to crystallise the floating aspect of the charge).

In such a case, the secured creditor is entitled to restrain the sale and the debenture holder’s pre-existing equitable interest in the assets (under the fixed charge) enjoys priority.

The Defendants point to Re Woodroffes (Musical Instruments) Ltd[62] where it was held that a floating chargee has a general right to restrain dealings outside the business dealing licence contained in the charge. The chargee can restrain transactions in respect to floating charge assets that are outside the ordinary course of the chargor’s business.[63] The Defendants submit that a receiver, who owes his or her primary duties to the secured creditor and is the person enforcing the security,[64] is therefore entitled to resist the completion of sale repugnant to the debenture.
[62](1986) Ch 366, 377-8.
[63]See also Hubbuck v Helms (1887) 56 LJ Ch 536.
[64]James v Commonwealth Bank of Australia (1992) 37 FCR 445, 446-7 (Gummow J).

I accept the Defendants’ submission that where property is the subject of a fixed charge, legal title remains with the chargor but its right to deal with the property comes to an end.[65]
[65]Vibex Industries Pty Ltd v Gaylor (1997) 15 ACLC 750, 753.

I also note that terms of the relevant Debenture[66] offer support for the position of the Defendants:
[66]Exhibit AV-4 of Affidavit of Adam Vincent (sworn 5 September 2013).

Fixed or floating?
3.1This charge is fixed over all present and future:
(a)capital;
(b)goodwill;
…
(g)interests in personal property that are not acquired by you for disposal by you in your ordinary course of business;
(h)any other property if clause 3.3 says the charge is to be fixed over that property.

3.3Where this charge is floating (whether under the terms of this charge or at law), it immediately and automatically becomes fixed:
(a)over any charged property we notify you is to be subject to a fixed charge;
(b)over any charged property affected if:
(i)you breach an obligation under clause 9; or

…
(e)over all the charged property if you cease carrying on business;
(f)over any charged property over which this charge is floating that you deal with except in the ordinary course of your business; and

…
9.1Without our consent you may not, and may not agree to, do any of the following:
(a)create or allow to exist another encumbrance in connection with the charged property;

9.2Without our consent you may not, and may not agree to, do any of the following in respect of charged property over which this charge is fixed:
(a)sell or dispose of it; or
…
(c)part with possession of it; or

9.3Without our consent you may not, and may not agree to, do anything in clause 9.2 in respect of charged property over which this charge is floating except in the ordinary course of your business.

The Defendants submit that where a chargor purports to sell or deal with fixed charge assets or floating charge assets otherwise than in the ordinary course of business, crystallising the floating charge, the debenture holder is not taken to be bound by the contract and any right or interest held by the counterparty is inferior to the equitable beneficial interest of the chargee.

Here, the majority of the assets of the Company have at all times been subject to the Bank's fixed charge. The floating charge automatically crystallised on the remaining assets of stock and debtors either when the Bourke Property Group Charge was granted on 31 July 2008 or, at the latest, when the Plaintiffs purported to sell Hungry Jacks Tullamarine to Mr Morad.[67] As such, the Bank's equitable interest in the First Defendant’s assets enjoys priority over any claims asserted by the Plaintiffs.
[67]Affidavit of Adam Vincent (sworn 5 September 2013), [18].

Given the above, I accept that it is strongly arguable that there is no contest on the facts between the priority of the any legal title acquired by Mr Morad and equitable title held by the bank by way of charge. Mr Morad has arguably acquired no title of any kind. The Bank holds an equitable interest in the property by way of charge. On the evidence available to the Court it appears that Mr Morad, even if it is accepted that the contract is enforceable, probably only has mere contractual rights against the First Defendant and no proprietary interest in the assets. There is no likely right to specific performance because it is probable that the conditions precedent of the HoA remain unfulfilled.

Further, the Plaintiffs are taken to be on notice of the Bank’s registered security[68] from 17 December 2007. Registration under the relevant Corporations Act 2001 (Cth) provisions[69] required lodgement of the document providing for the security. The registration of a fixed charge is probably constructive notice to the world of the Bank’s interest in the assets, which is sufficient to ensure that the prior specific charge takes priority as against a subsequent charge or any absolute interest acquired through purchase and assignment.[70] In this regard, the Defendants acknowledge that the legal position in respect of when constructive notice occurs in relation to floating charges is not settled.[71] However, Mr Morad himself acknowledges that he was aware of the Bank’s ability to take control of the business from discussions with Mr Raptis, a director of the First Defendant.[72]

Balance of convenience: Potential losses to the parties

[68]Exhibit AV-4 of Affidavit of Adam Vincent (Sworn 5 September 2013).

[69]These provisions applied as at the time of the alleged agreement in November 2011.

[70]Gough, Company Charges, Butterworths, 1996, page 818-9.

[71]Fire Nymph Products Ltd v The Heating Centre Pty Ltd (1992) 7 ACSR 365, 377 (Sheller JA); Ford’s Principles of Corporations Law, LexisNexis (online) [19.271].

[72]Affidavit of Terry Morad (sworn 27 August 2013), [21].

If the injunction sought is ordered, the contract of sale to the preferred bidder will probably not be able to be accepted and executed by HJA by 1 October 2013, which is when the Forbearance Period ends. If the Forbearance Period comes to an end, HJA would be in a position to immediately terminate the Franchise Agreement and cause the cessation of the Business.[73] For the Defendants (and ultimately the Bank), this would amount to a loss of the purchase price which would otherwise be obtained on a sale to the Preferred Bidder.
[73]Clauses 21.3, 21.5 of TM-4 of Affidavit of Terry Morad (sworn 27 August 2013). [Blakeley [37]-[41]]

The Defendants accept that if the Plaintiffs do not obtain an injunction, their ability to obtain the final relief they seek will likely become unavailable. In that case, the Plaintiffs will be left with an unsecured monetary claim against the First Defendant.

However, I reject the Plaintiffs’ submission that the correct way to identify the potential loss by the First Defendant and the Debenture holder is to calculate the difference between the $2,230,000 the First Defendant says that it has agreed to pay and the amount the preferred bidder has agreed to pay, or the alternative of the difference between what the First Plaintiff has agreed to pay and the current outstanding debt to the Bank. The current outstanding secured debt to the Bank is presently at least $2,280,357.88.[74] I do not accept this submission because I consider that if the injunction is wrongly granted, the more likely scenario is that Own Investments and the Bank will lose the preferred bidder because HJA’s agreed forbearance is exhausted. The injunction would effectively prevent any sale to a third party. This, coupled with the substantial risk of the First Plaintiff not completing, or not being able to complete the asserted contract of sale, means that the loss to the Defendants stands to be much greater than what is asserted by the Plaintiffs.[75]
[74]Affidavit of Adam Vincent (sworn 5 September 2013), [34].
[75]Affidavit of Terry Morad (sworn 27 August 2013).

I regard the likely loss scenario described in the above paragraph as instructive as to what course is likely to carry the lower risk of injustice should it turn out that the injunctive relief was wrongly ordered. In my view this is a very weighty factor in the balance favouring the refusal of the injunction sought by the Plaintiffs.

Balance of convenience: Plaintiffs’ undertaking as to damages

The Defendants assert that the Plaintiffs’ undertaking as to damages is not sufficient.

The Plaintiffs reject this submission, pointing to an absence of any evidence as to how much the preferred bidder is offering[76] due to the Defendants’ asserting confidentiality over these materials. However, as noted above, at the hearing of the injunction the documents over which the receivers assert confidentiality were provided to the lawyers for the Plaintiffs. Subsequent to this, the Plaintiffs have not sought to adduce documents from the sale process which would establish the likely sale price. In those circumstances, I am not willing to infer that the highest sale price offered to the receivers will leave no substantial residue after the First Defendant’s debt to Bank is satisfied.
[76]Affidavit of Ross Andrew Blakely (sworn 5 September 2013), [42]-[44].

The Plaintiffs further submit that their capacity to satisfy any undertaking as to damages is not determinative in this case. This is because where there is a strong case for interlocutory relief, that relief will be granted even where the undertaking might be described as “fragile”.[77]
[77]Hession v Rowson (unreported, Supreme Court of Victoria, Batt J, 21 September 1995).

In my opinion, on the evidence as to the Plaintiffs’ financial position referred to above, it is likely that the Plaintiffs’ undertaking as to damages is more than fragile. The undertaking is limited to, at best, $475,000. Given the Defendants’ potential losses if the injunction sought was to be granted, and the likely ramifications, this amount is inadequate.

The Plaintiffs also point out that the Bank has security over a property owned by Mr Raptis, director of the First Defendant, at Woolamai which the Bank has elected not to sell.[78] The Plaintiffs submit that it is appropriate to infer from the lack of evidence as to there being no equity available in this property that there is indeed some equity. I am unpersuaded that this inference is reasonably open on the facts.
[78]Affidavit of Adam Vincent (sworn 5 September 2013), [12] and [13].

Furthermore, because in my view the value of the Plaintiffs’ undertaking as to damages is probably illusory, the recovery of an amount for loss by the Defendants beyond about $475,000 is most unlikely. I consider that this factor also justifies refusal of the Plaintiffs’ application of an injunction.[79] The Plaintiffs have not offered any other security for the undertaking and, on the evidence of their financial position, it does not appear feasible for the Plaintiffs to provide such security.
[79]See South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120, [175]-[176] (Hely J).

Delay by the Plaintiffs in seeking injunctive relief

Mr Morad made threats on a number of occasions to commence proceedings to prevent the subject sale process from going ahead. However, he did not actually commence proceedings until almost two months after first raising the possibility of requesting an injunction. Moreover, he acted inconsistently with the rights and interests he claimed.

Mr Morad’s first letter to the Receivers on 5 July 2013 threatened proceedings for specific performance of the contract of sale.[80] In response, the Receivers communicated in unequivocal terms to Mr Morad on 11 July 2013 that his claim was rejected.[81]
[80]Exhibit TM-19 of Affidavit of Terry Morad (sworn 27 August 2013).
[81]Exhibit TM 20 of Affidavit of Terry Morad (sworn 27 August 2013).

Mr Morad wrote again on 15 July 2013 foreshadowing proceedings to protect what he considered were his rights. However, nothing further was done by the Plaintiffs.[82]
[82]Exhibit RB-6 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013).

On 19 July 2013, the Receivers set out their program to sell Hungry Jacks Tullamarine. Mr Morad was told of the timetable for the Receivers’ sale program.[83]
[83]Exhibit RB-8 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013).

On 29 July 2013, Morad again threatened to “injunct” the Receivers’ sale program. Yet again, no further action was taken by the Plaintiffs.[84]
[84]Exhibit TM-22 Affidavit of Terry Morad (sworn 27 August 2013).

In a manner inconsistent with the Plaintiffs’ earlier claims about their interests and rights, Mr Morad chose to participate in the Receivers’ sale program, making bids on 2 August 2013[85] and 8 August 2013.[86]
[85]Confidential Exhibit RB-10 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013), last two pages.
[86]Confidential Exhibit RB-11 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013), first three pages.

In the end, Mr Morad did not issue proceedings to restrain the sale process until 29 August 2013, over six weeks from first being made aware that the Plaintiffs’ claims were denied. Furthermore, the Plaintiffs stood by between at least 19 July 2013 and 29 August 2013, a period of approximately 6 weeks, and allowed the Receivers’ sale program to progress and about half of the Forbearance Period afforded by HJA to pass.

I consider that this conduct and inaction by the Plaintiffs over this extended period of time constituted unsatisfactory conduct and inordinate delay. In the circumstances, this in itself disentitles the Plaintiffs in relation to the interlocutory relief they seek.[87]
[87]In South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120, [177] (Hely J), delay of a month was regarded as significantly adverse.

On the basis of the nature of this conduct and delay, I reject the Plaintiffs’ submission that their delay should not be a disentitling factor in relation to this application.

Third party rights

Finally, it is appropriate to consider the impact of an interlocutory injunction on the rights of third parties.[88]
[88]Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 643, 666-7.

In this case, the Franchise Agreement specifies that HJA has a right of first refusal to buy the Business under the Franchise Agreement.[89] This position is unaffected by the Deed of Forbearance.[90] The subsisting right of refusal can be exercised by HJA in relation to the Preferred Bid submitted on 29 August 2013.[91] Furthermore, the Franchise Agreement entitles HJA to buy the Business and require the Company to sell the Business to HJA if the right of first refusal is invoked.[92]
[89]Clause 17.4 of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).
[90]Clause 2(a), (b) Deed of Forbearance, Exhibit RB-2
[91]Confidential Exhibit RB-12 of Affidavit of Ross Andrew Blakely (sworn 5 September 2013).
[92]Clause 17.4(h) of Exhibit TM-2 of Affidavit of Terry Morad (sworn 27 August 2013).

Because the injunction the Plaintiffs seek would stop the First Defendant observing the terms of the Franchise Agreement, it would also adversely affect the rights of HJA. These considerations give rise to additional reasons to refuse the injunctive orders sought by the Plaintiffs.

Conclusion

For the reasons I have referred above, although the Plaintiffs have identified serious issues to be tried, the strength of the Plaintiffs’ case on the material currently before the Court is weak. Conversely to this, the Defendants’ case is strong.

I also consider the balance of convenience strongly favours the refusal of the injunction applied for by the Plaintiffs. In particular, the parties’ potential losses, the delay by the Plaintiffs, the effect on HJA and the paucity of the Plaintiffs’ undertaking as to damages decisively tip the balance of convenience in favour of refusing to grant the injunctive relief.

I consider that for these reasons this urgent application by the Plaintiffs for an interlocutory injunction should be refused.

I shall, if necessary, hear the parties as to costs.

CHRONOLOGY OF KEY FACTS AND EVENTS

Item	Date	Event	Document
1	8 November 2007	First letter of offer from Bank	AV-3
2	17 December 2007	Company grants fixed and floating charge over its assets and undertaking in favour of Bank and mortgage of lease – note clauses 31.-3.3, 9.1-9.3	Vincent, [12(b)], AV-4
3	17 December 2007	Franchise Agreement for Hungry Jacks Tullamarine business at 239 Mickelham Rd, Tullamarine – Raptis was Director of Operations – note clauses 17.2, 17.4, 17.5, 21.2, 21.3, 21.5	TM-2; SoC, [6], [7]
4	30 May 2008	Second letter of offer from Bank	AV-3
5	31 July 2008	Bourke Property Group Charge granted by Company without the Bank’s consent – Bank’s Charge’s floating component crystallised over stock and debtors of Company	Vincent, [17], AV-7
6	20 November 2008	Raptis became director of NT Consulting	SoC, [3]
7	1 July 2010	NAB Credit Memorandum in relation to recommended lending guidelines to HJA franchisees – “franchisees can only finance 50% of the establishment costs” – “Financial approval is obtained via the franchisee’s ability to contribute a minimum of 50% toward store acquisition/set up, which can correlate up to $1.1m” – “HJA advise that franchisees require 50% equity contribution to the purchase of outlets ... [NAB] will be providing a LFVR of up to 50%”	NAB subpoenaed documents, pages 156-166
8	10 November 2011	Andrew McLynskey, HJA Victorian Franchise Manager, emailed Morad inviting him to participate in training program at the Tullamarine store on 16-18 November 2011	Morad, [10], TM3
9	18 November 2011	Raptis suggested that Morad buy a 50% of the business – explained that he had “bank issues”	Morad, [11]
10	18 November 2011	Morad told McLynskey that he did not want to buy Corio	Morad, [12]
11	21 November 2011	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) referring to purchase and seeking information	TM7, page 11
12	22 November 2011	Raptis and Morad became directors of NTCS	Morad, [7]
13	22 November 2011	Raptis and Morad became the holders of one $1 share each in NTCS	SoC, [4]
14	23 November 2011	Morad entered into HoA with Company (prepared by Kate Greenidge of Lloyd Meridien, Morad’s solicitor) to buy a 50% interest in the assets of the business valued at $2.230m and stock to a maximum of $35,000. 3. CONDITIONS PRECEDENT: This agreement is conditional on [matters including] being satisfied”: (a) [List of assets] (b) FINANCE: the Purchaser obtaining finance approval from a lending institution, within 14 days … for the amount of his Proportionate Interest … (c) [Due diligence] (d) [Trial period] (e) FRANCHISOR APPROVAL: the Franchisor of the Business … approving the Purchaser as a franchisee prior to the settlement date (if applicable). The process of approval by the Franchisor requires the satisfactory completion of a number of requirements … (f) LANDLORD APPROVAL: The Vendor must obtain the consent of the Landlord for the Purchaser to have a Proportionate Interest in the Business (either directly or indirectly on the same terms as the current lease … 7. LEGALLY BINDING The parties acknowledge and agree that the terms of this document incorporate the pro forma terms of the [LIV Contract of Sale]. The parties agree that the arrangements as set out in this document will be more formally documented using the LIV Contract of Sale as soon as possible unless the parties agree otherwise in writing. This document will terminate only upon the parties entering into the LIV Contract of Sale or another long form contract agreed to in writing by the parties. 10. GENERAL This document … may not be varied except by written agreement signed by the parties … 11. SETTLEMENT AND ACT IN GOOD FAITH The parties agree that settlement is to be effected on 19 DECEMBER 2011 or earlier by agreement between the parties or as directed by the Landlord/Franchisor (as applicable) The Purchaser will be immediately entitled to receive a full refund of the deposit paid should any of the conditions mentioned above not be satisfied within the relevant timeframe, resulting in the inability of the Purchaser to proceed with this transaction. Upon the signing of this agreement, the Purchaser will pay a deposit of $250,000 TO THE VENDOR …	TM4; Morad, [13]
15	23 November 2011	Raptis told Morad that he had told HJA about him	Morad, [14]
16	23 November 2011	Morad paid Company $150,000	TM5; Morad, [15]
17	6 December 2011	Morad paid Company $100,000	TM6; Morad, [15]
18	December 2011 to June 2012	Morad worked at Tullamarine store – Raptis told Morad that HJA would not agree to him having more than 49% interest – Raptis in separate dispute with HJA	Morad, [17], [18]
19	5 December 2011	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 9 January 2012 inter alia because Morad was still in the process of obtaining finance approval – extension granted	TM7
20	20 December 2011	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) attaching draft contract of sale.	TM7
21		Morad says that shortly after the HoA, Greenidge had prepared draft contract – purchase price of $2.230m and a deposit of $250,000	Morad, [32]; TM14
22		In late December 2011, Raptis told Morad that because a financier usually only lent up to $50% of the agreed purchase price, Adonis Raptis wanted to increase the purchase price in the HoA – later documents show increase to $3.650m to which he says he never agreed	Morad, [33]
23	5 January 2012	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 31 January 2012 inter alia because Morad was still in the process of obtaining finance approval and had instructed that the bank should be able to provide it “by the end of the month” – extension granted	TM7
24	27 January 2012	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 29 February 2012 – no response in bundle	TM7
25	8 February 2012	Company in default - Middletons sent Company demand for payment of Total Amount Outstanding of $2,031,683.63	Vincent, [27], AV-12
26	22 February 2012	Raptis emailed Morad saying “You can inform Chris to hold on to the file till finance is approved. The time is granted for however long it takes”	TM7, page 9-10
27	28 February 2012	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 31 March 2012 – no response in bundle	TM7, page 13
28	29 March 2012	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 30 April 2012 – no response in bundle	TM7, page 15
29	29 March 2012	Morad emailed Raptis asking for extension until 30 April 2012 – Raptis responds confirming extension “is granted until 30 April 2012”	TM7, page 14
30	30 April 2012	Morad’s solicitor (Chris Blake of Lloyd Meridien) emailed Raptis’ solicitor (Frenkels) seeking an extension of the settlement date of the HoA until 31 May 2012 – no response in bundle	TM7, page 17
31	4 May 2012	Morad forwarded this email to Raptis, who responds that the extension was granted and saying “Costs are escalating by asking my solicitors to ask me to grant approval. However much time is required is granted. Please in future correspond via myself …”	TM7, page 16
32	29 May 2012	Morad forwards email to Raptis seeking extension until 30 June 2012 by saying “Please do it for the last time bro” – Raptis responds saying that he agreed to the extension until 30 June 2012 – Morad forwards the email to Frenkels	TM7, page 18-20
33	May-June 2012	Adonis Raptis told Morad that all financiers he had approached would only approve if Morad was sole director/purchaser because Raptis had issues with the bank	Morad, [20]
34	June 2012	Alleged further Agreement by which NTCS would buy 100% of business for price of $2.230m plus stock up to $35,000: · Raptis to resign as director and transfer his shareholding; · NTCS to continue with purchase and pay additional deposit of $250,000. Raptis told Morad to pay $150,000 as he needed to pay the bank “otherwise they would take the business” - suggests other $100,000 be paid to his solicitors’ trust account	Morad, [21]; SoC, [13]
35	27 June 2012	Morad paid Company further $250,000	TM8, TM9; SoC, [11(c)]
36	28 June 2012	Raptis ceased to be director of NT Consulting	Morad, [22]; SoC, [3]
37	30 June 2012	Final extension of finance period in HoA expired
38	July 2012	Morad met with Adam Funnell of HJA to discuss purchase, who said he had no problems recommending Morad as an approved franchisee	Morad, [23]
39	July 2012	Morad retained different mortgage broker, Mark Franek of “212 the extra degree”	Morad, [24]
40	31 August 2012	Meeting between the Bank (Kneebone) its solicitors (Hume/K&L Gates), the Company (Raptis), its solicitors (Mercer/Frenkel) and the prospective IA (Blakeley). The Company and/or its solicitors advised the Bank that the Company would sell the business to NTCS for an amount equivalent to the debt owing to the Bank. NTCS had applied to the NAB for finance to fund the purchase price and expected to hear from the NAB within a day or so. If finance was not obtained, the Company would refinance with the Bank of Cyprus and HJA would automatically approve NTCS as a franchisee	Kneebone, [7] MK-1
41	3 September 2012	Middletons request the Company provide: the application for finance submitted by NTCS to NAB, plus copy of unconditional letter of offer from NAB to NTCS (sufficient to repay the Bank’s debt), plus approval letter from Hungry Jack’s and evidence there were no arrears owed by the Company to the landlord or HJA	MK-1, Kneebone, [8],
42	4 September 2012	Middletons chase Company’s solicitors for NTCS’s application for finance to NAB and approval.	MK-2, Kneebone [8]
43	6 September 2012	“212 the extra degree” (Franek) informs Morad that in relation to the finance for the purchase of Hungry Jack’s at Tullamarine, “we have met with the NAB and discussed your transaction at length. With the information provided to date, the NAB is satisfied that we can move forward to a formal submission and approval process. We expect this process to take 6-8 weeks. We are confident in our ability to assist you and obtain an approval”.	MK-3, Kneebone [8]
44	7 September 2012	(9.12am) Middletons request clarification of position from Frenkels by email.	MK-4, Kneebone [8]
45		Telephone conversation between Kneebone and Mark Franek of “212 the extra degree” who advised Kneebone preliminary discussions had occurred but no formal application had been made. If finance could be obtained, it would be 6–8 weeks away.	Kneebone [9],
46		(5.05pm) Middletons email Frenkel, refer to discussion with broker and request repayment of all arrears ($418,000), copy of approval of NTCS as franchisee from HJA, proof of no arrears owing by the Company to its landlord.	MK-5, Kneebone [10]
47	10 September 2012	Raptis transferred his one $1 share in NTCS to Morad	Morad, [26]; SoC, [4]
48	20 September 2012	Company in default – Middletons sent Company demand for payment of Total Amount Outstanding of $2,086,521.25	Vincent, [29], AV-13
49	24 September 2012	(1:15pm) Greenidge emailed Morad an execution page of an agreement and the body of the agreement which had a purchase price of $3.650m	Morad, [34], TM15
50	24 September 2012	(2:41pm) Adonis Raptis emailed Morad a scanned copy of an execution page of an agreement signed by Raptis and witnessed by Adonis and in its body attached another email Greenidge had sent to Frenkel Partners at 1:20pm – Morad signed the execution page and sent it back to Adonis – he also signed the copy sent by Greenidge and sent it back – he says he thought it was for a purchase price of $2.230m	Morad, [34]-[35], TM15, TM16, TM17, TM18
51	24 September 2012	Contract of Sale executed by Morad in NAB’s possession	NAB subpoenaed documents, pages 1-33
52	29 September 2012	NAB Business submission discussing proposed loan of $1.825m – “The purchase price has been negotiated at $3.65M and a copy of contract of sale has been supplied and attached to the ebl” – “nab Franchise Value (Sworn Valuation to confirm the purchase price to be completed by Rose Corporate $3,650,000” – “based on the above we are lending 50.0% on the business value” – condition precedent 5: “Valuation to return to a value of no less than $3,650,000”	NAB subpoenaed documents, pages 125-155
53	5 October 2012	NAB “Discussion paper” provided Morad dated 5 October 2012 about proposed provision of finance to NTCS. Facility requested facility $1,825,000 for purchase price of $3,650,000. Conditions precedent included sworn valuation at no less than $3,650,000 (plus other conditions as to franchise agreement).	MK-8A, Kneebone [11a - c]; Notice to Produce documents
54	7 October 2012	(12:11pm) Raptis emails Kneebone attaching copy of NAB “Discussion paper”	MK-8A, Kneebone [11a - c]
55	16 October 2012	6:15pm Bank (via Middletons) provides Company with extension until close of business, 18 October 2012, to provide: “1, letter from HJ confirming that it has or will approve NTCS as franchisee without undergoing the HJ franchisee training program; 2, a copy of the application submitted to NAB by NTCS; and 3. confirmation of the steps taken to satisfy the foreshadowed NAB funding CPs including the status of the valuation required by NAB for the HJ Tullamarine business”	MK-9, Kneebone [12]
56	24 October 2012	(6:30pm) Middletons email Frenkels re discussion between Kneebone and Raptis in which it was agreed that by 29 October 2012, the Bank would be provided with “1. A copy of all recent financial trading information that was included in the loan application submitted to NAB. 2. A letter from Hungry Jack’s confirming that it will approve the sale of NTCS and waive the requirement that NTCS participate in the Hungry Jack’s franchisee program. 3. Confirmation from Mark Franek that the valuers instructed by NAB have been provided with all requested information and the expected time frame for completion of the valuation”…	MK-10, Kneebone [12]
57	1 November 2012	Rose Corporate valuation of the Business at $2,925,000 plus stock – sources of information include “Contract of Sale of Business Agreement” – note $725,000 below NAB’s requirement of valuation at no less than $3,650,000	Notice to Produce documents
58	13 November 2012	(11:30pm) Raptis asks Frenkels by email to obtain a payout figure to give to NAB as “we are now in the home straight”	MK-11, Kneebone [12]
59	14 November 2012	(8:02pm) Middletons advise the payout figure for the commercial facilities is $2,101,000 plus costs.	MK-11, Kneebone [12]
60	14 November 2012	(8:05pm) Middletons advise amount owing to the Bank under the housing loan facilities is $1,072,405.71 (excluding any uncleared funds)	MK-11, Kneebone [12]
61	16 November 2012	(11:01am) Middletons ask Frenkels to confirm whether HJA has approved the incoming purchaser as a franchisee (and asks for copy of letter) and confirm if a settlement date for the refinance has been booked	MK-11, Kneebone [12]
62	30 November 2012	(5:43pm) Email from HJA to Raptis regarding meeting between Morad and John O’Brien (National Manager) of HJA: “Prior to that meeting Terry would need to provide further financial evidence of the $1.5m bank Bill in his name? He would also need to provide bank account evidence together with his properties? Please have Terry provide and send through via email the requested information ASAP”	MK-12, Kneebone [12]
63	6 December 2012	(2:21pm) Middletons notify Frenkels that seeking instructions to appoint investigative accountant.	MK-11, Kneebone [12]
64	11 December 2012	(5:15pm) Frenkels advise by email that Morad will meet with HJA on 21 December 2012 to formalise approval for franchise “once that is done, NAB will be instructed to prepare for settlement, together with all relevant parties”	MK-12, Kneebone [12]
65	13 December 2012	Bank serves s 76 notice on Raptis pursuant to mortgage (see email dated 19 April 2013, 3:24pm)	MK-16, Kneebone [12]
66	14 December 2012	Morad’s solicitors (FrancisDaniel) email Frenkels (Mercer) - getting in touch “to progress the necessary documentation. Our instructions are to have settlement occur asap”	MK-13, Kneebone [12]
67	18 December 2012	(12:07pm) Morad’s solicitors (FrancisDaniel) email the Company’s solicitors (Frenkels) saying “[w]e are instructed the purchase price is $3.1M with a deposit that has already been paid of $1.0M, leaving $2.1M to be paid at settlement, which we understand will all go to the bank in full satisfaction of their loan on the business. We will of course require a full release from the bank”	AES-2 (Frenkel documents), page 2
68	4 January 2013	HJA email Raptis: “We are tentatively approving the sale to proceed based on specific conditions, but not limited to the following”: · Mr Morad buys the business for $2.2m with $1.1m cash and $1.1m borrowings. · We will require confirmation that the current franchisee … that all creditors owed money will be paid in full, including trade creditors, employee entitlements, The ATO etc. · Nicholas Raptis will remain as director of operations for the new business. · HJA approved accountants must be utilised by the Newco. · The standard $25k transfer fee will be payable. · All legal costs associated with the sale process are payable by the franchise. · There may be a scope of work required (however my belief is that the restaurant is maintained very well and this will be minimalistic) Note – the above points and any further conditions as required by HJA will be included in the deed of surrender and release, sale agreement and franchise agreement. … I have emailed [our lawyers] & we will move forward with the sale process ASAP.	TM10; SoC, [16], [17]
69	14 January 2013	(12:02pm) HJA’s solicitors email Raptis and Morad’s solicitors (FrancisDaniel) saying “I understand that my client has approved the proposed transfer of franchised business to a new company to be owned by Mr Morad’ subject to conditions	MK-15, Kneebone [12]; AES-2 (Frenkel documents), page 9
70	15 January 2013	(12:40pm) K&L Gates email Frenkels enquiring about outcome of meeting between Morad and HJA on 21 December 2012 and whether approval given. Requests update on refinance with NAB, requesting whether proposed facilities available, unconditional and sufficient to repay Bank’s debt.	MK-14, Kneebone [12]
71		(5:48pm) Frenkels email indicating that conditional approval to transfer of the franchise given by HJA	MK-14, Kneebone [12]
72		(6:15pm) K&L Gates request clarification of approval and settlement details	MK-14, Kneebone [12]
73	16 January 2013	(11:05pm) Frenkels respond indicating Morad nominating new entity as transferee, only possess confidential email confirmation/approval from HJA’s lawyers and Company “instructed they are satisfied with Mr Morad’s ability to settle the transaction and does not require any evidence of finance approval”.	MK-14, Kneebone [12]
74	16 January 2013	(12:52pm) K&L Gates request redacted correspondence from franchisor’s solicitors with “objective evidence that the franchisor supports the sale and that the transaction is progressing”. Further, “not to the point whether your client is satisfied that Mr Morad has the ability to settle the transaction. The Bank needs to be satisfied he has the available funds sufficient to pay out the Bank’s facilities at settlement. If your client wants the Bank to refrain from taking steps under its securities it should seek and provide this information by close of business tomorrow”.	MK-14, Kneebone [12]
75	16 January 2013	(3:45pm) Company’s solicitors (Frenkels) emails Morad’s solicitors (FrancisDaniel) saying “[w]e are being out under enormous pressure from [the Bank] who are insisting on being provided with information that will satisfy them your client has available funds sufficient to pay out the Bank’s facilities at settlement. Would you please provide proof of same as soon as possible?”	AES-2 (Frenkel documents), page 16
76	16 January 2013	(3:51pm) Company’s solicitors (Frenkels) emails Bank’s solicitors (K&L Gates) saying “[w]e have requested Mr Morad’s solicitor provide us with proof that his client has available funds sufficient to pay out the Bank’s facilities at settlement to you”	AES-2 (Frenkel documents), page 15
77	17 January 2013	(9:56am) An email in which HJA’s solicitors say they “understand” that conditional approval had been granted is forwarded to K&L Gates	MK-15, Kneebone [12]
78	17 January 2013	(10:17am) K&L Gates request confirmation be sent when transfer fee paid/transfer document issued and settlement scheduled to occur	MK-15, Kneebone [12]
79	17 January 2013	(2:57pm) Company’s solicitors (Frenkels) emails HJA’s solicitors and asks that monies to be paid for transfer fee ($27,500) and legal costs ($33,000) will be held in trust and the transfer fee refunded if it did not proceed.	AES-2 (Frenkel documents), page 28
80	17 January 2013	(3:12pm) Morad’s solicitors (FrancisDaniel) acknowledge request for funds in trust by HJA	AES-2 (Frenkel documents), page 34
81	21 January 2013	(5:39pm) Adonis Raptis emails Company’s solicitors (Frenkels) referring to contract “that was submitted to the bank with the finance application”	AES-2 (Frenkel documents), page 42
82	29 January 2013	(6:00pm) K&L Gates chase confirmation of transfer documentation/settlement	MK-15, Kneebone [12]
83	5 February 2013	(5:30pm) K&L Gates chase confirmation of transfer documentation/settlement	MK-15, Kneebone [12]
84	7 February 2013	Discussion between Hume (K&L Gates) and J Goldsmith/Mercer (Frenkels). Hume asked Goldsmith to obtain urgent instructions on status of sale, transfer fees, transfer documentation, finance approval, (see email of 12 March 2013 at 2:46pm)	MK-15, Kneebone [12]
85	8 February 2013	(4:43pm) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) asking her to “forward another copy of contract at a purchase price of $2.1million”	AES-2 (Frenkel documents), page 57
86	13 February 2013	Morad paid HJA’s solicitors $15,000 on account of legal costs – followed telephone conversation between Morad and Funnell in which it was said that unless fee was paid, HJA would not proceed to have documents drawn up	Morad, [29]; AES-2(Frenkel documents), page 53-55; SoC, [18]
87	End of February 2013	Morad ceased working at Tullamarine	Morad, [28]
88	7 March 2013	(4:56pm) Travis Styles of Nash Financial Services emailed Anthony Sinclair (Growth Corp Solutions) setting out “basis of ANZ’s funding proposal” – amount of $2,200,000 (subject to satisfactory valuations) – discussion of need for valuations “to stack up” – further financial information was requested including further financial forecasts and more details about “Vendor commitment to stay with purchaser for 5 years”	TM11
89	7 March 2013	(5:43pm) Anthony Sinclair forwarded the email to Raptis and Morad	TM11
90	12 March 2013	(2:46pm) K&L Gates requested urgent update on settlement etc.	MK-15, Kneebone [12]
91	12 March 2013	(3:11pm) K&L Gates indicate Bank spoke to HJA and noted transfer fee not paid in full – otherwise waiting urgent instructions.	MK- 15, Kneebone [12]
92	19 March 2013	(6:19pm) K&L Gates inform Frenkels of appointment of Ross Blakeley as investigative accountant by the Bank	MK-15, Kneebone [12]
93	19 April 2013	(3:24pm) K&L Gates inform Frenkels that Bank will proceed to enforce mortgages over security properties in McLeod and Cape Woolamai.	MK-15, Kneebone [12].
94	24 April 2013	(9:29am) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) saying “We are instructed that the matter is now to proceed and request contract of Sale for a purchase price of $3.6million of which $1.5million has been paid, leaving a residual of $2.1million to be paid at settlement plus or minus adjustments. Please confirm that the amount of $2.1million will satisfy your client’s bankers. ... I suggest we allow 60 days for settlement ...”	AES-2 (Frenkel documents), page 65
95	24 April 2013	(3:43pm) Morad emails all parties referring to draft contract saying “this contract is more than a year old and things have been changed since so that contract needs to be updated”	AES-2 (Frenkel documents), page 67
96	24 April 2013	(5:21pm) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) saying “the price is $3.6M paid $1.5M, balance $2.1M. Subject to Finance of $2.1M. Please make these amendments”	AES-2 (Frenkel documents), page 73
97	24 April 2013	(5:24pm) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) saying “this is your contract I think you should prepare it. I have simply asked that the purchase price etc be corrected. Details submitted to our [client]’s bank is a contract for $3.6M against which they have approved $2.1M”	AES-2 (Frenkel documents), page 70
98	26 April 2013	(6:17am) Adonis Raptis emailed Raptis a contract of sale which was “the most recent contract that both banks (NAB & ANZ) have received to date. ... please amend accordingly ... Furthermore, it needs to be executed and dated September 6, 2012”	AES-2 (Frenkel documents), page 79
99	26 April 2013	(12:35pm) Raptis emails his solicitors saying that Morad had called and offered for his solicitors (FrancisDaniel) to prepare contract	AES-2 (Frenkel documents), page 77
100	29 April 2013	(4:59pm) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) referring to the draft contract sent through and saying it “is still incorrect, how many times [do] I have to say it. Can I get a version that I can correct”	AES-2 (Frenkel documents), page 83
101	30 April 2013	(10:44am) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) referring to amendments he had made to the contract’s “price and finance clause ... Also need to make sure his loan will be approved by 15 May” - Contract with handwritten annotation “Gaspare version” provides for a purchase price of $3.6m, a deposit of $1.5m and a finance clause requiring a loan of not less than $2.1m	AES-2 (Frenkel documents), pages 96-163
102	1 May 2013	(9:51am) Raptis emails Company’s solicitors (Frenkels) saying “Spoke to Terry yesterday and informed him that the figures put on by Gaspare were incorrect. Suggested he use original figures supplied to him”	AES-2 (Frenkel documents), page 164
103	2 May 2013	(9:04am) Company’s solicitors (Frenkels) emails Morad’s solicitors (FrancisDaniel) attaching draft contract saying “the price needs to be as reflected in this contract due to [Morad]’s financier’s requirements and I have been instructed that this has been discussed and agreed between our respective clients”	AES-2 (Frenkel documents), page 176
104	2 May 2013	(9:36am) Raptis emails Company’s solicitors (Frenkels) asking for a document for ANZ confirming that deposit of $500,000 had been paid	AES-2 (Frenkel documents), page 174
105	2 May 2013	(11:06am) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) saying “[y]our client’s instructions are totally incorrect in regards to our client’s financier. Our instructions are that the contract is to reflect a balance of $2,100,000 payable at settlement. We are instructed the price is $3.6M less deposit paid $1.5M, please have the contract reflect this”	AES-2 (Frenkel documents), page 175
106	2 May 2013	(4:09pm) Anthony Sinclair emails Company’s solicitors saying “Gaspare is incorrect”	AES-2 (Frenkel documents), page 181
107	3 May 2013	(12:33pm) Raptis emails Company’s solicitors (Frenkels) saying he spoke to Morad who said that Morad’s solicitor said Frenkels were using version 2 not version 7 of the contract – note Morad, [34]	AES-2 (Frenkel documents), page 180
108	15 May 2013	Company in default – K&L Gates sent Company demand for payment of Total Amount Outstanding of $2,188,813.83	Vincent, [31], AV-14
109	15 May 2013	Morad’s solicitors (FrancisDaniel) sent letter to Company’s solicitors (Frenkels) saying NTCS “had agreed to purchase the above business at an agreed price of $2.1million and that our client has paid $0.5million deposit ... [w]e understand that Bankwest are now considering the appointment of a liquidator and require that you immediately provide us with a contract signed by your client ... for the agreed figure of $2.1million and reflecting the deposit paid ... Our client reserves all its rights including enforcing specific performance of the contract, partly verbal and partly implied against your client and/or the liquidator and action to recover its full deposit of $500,000”	AES-2 (Frenkel documents), page 189
110	16 May 2013	(3:57pm) Company’s solicitors (Frenkels) receives draft contract from Anthony Sinclair with a purchase price of $2.570m and a deposit of $470,000 and a residue to be paid of $2.1m	AES-2 (Frenkel documents), page 191-225
111	17 May 2013	Company’s solicitors (Frenkels) sent letter to Morad’s solicitors (FrancisDaniel) – seeking instructions	AES-2 (Frenkel documents), page 226
112	22 May 2013	Morad’s solicitors (FrancisDaniel) sent letter to Company’s solicitors (Frenkels) saying “[w]e refer to our telephone conversation ... whereby you advised that your client’s instructions are that the agreed purchase price was $2.6million. ... We reaffirm our instructions that the agreed purchase price was $2.1million. Further you advised that your client is not prepared to proceed with a signed contract for $2.1million. Accordingly we are instructed to seek a full refund of our client’s $500,000. ... Our client reserves all its rights including enforcing specific performance of the contract, partly verbal and partly implied against your client and/or the liquidator and action to recover its full deposit of $500,000”

113	24 May 2013	(2:14pm) Company’s solicitors (Frenkels) emails Morad’s solicitors (FrancisDaniel) trying to arrange meeting with clients	AES-2 (Frenkel documents), page 228
114	27 May 2013	(9:05am) Morad’s solicitors (FrancisDaniel) emails Company’s solicitors (Frenkels) – not prepared to meet	AES-2 (Frenkel documents), page 229
115	31 May 2013	(10:18am) Raptis emails Company’s solicitors (Frenkels) and Anthony Sinclair saying “With regard to Gaspare’s email, can you ... respond and advise, that [Raptis] would like the original agreement that you both had made, to be honoured; which is the 2.1m to be paid at settlement. Do be careful not to accept any wording/email confirming that you received a deposit ...”	AES-2 (Frenkel documents), page 232
116	6 June 2013	Travis Styles emails Morad indicating attempts to secure a loan at an LVR of 55% but this had been refused – the email attaches a non-binding indicative term sheet – loan of $2.1m subject to conditions precedent including a valuation of the Business at no less than $3,655,000 and a financial covenant for the LVR to be no greater than 50%	TM12
117	12 June 2013	Morad’s solicitors (FrancisDaniel) sent letter to Company’s solicitors (Frenkels) saying “[i]f your client no longer wishes to proceed with the sale to our client we require the immediate return of our client’s deposit in the sum of $500,000 by 4:00pm Friday 14 June 2013, failing which we are instructed to commence proceedings for specific performance and in the alternative for a return of all deposit monies. ... Please confirm you have instructions to accept service.”	AES-2 (Frenkel documents), page 235
118	3 July 2013	Receivers appointed to Company	Soc, [5]
119	3 July 2013	K&L Gates receives letter from Company’s solicitors (Dellios West & Co) enclosing contract of sale of Business to Sharma for $2,150,000 executed on 1 July 2013 and photocopy of deposit cheque for $120,000	RB-3
120	4 July 2013	Deed of Forbearance (90 days) between HJA, Receivers, etc	RB-2
121	5 July 2013	Morad’s solicitors (FrancisDaniel) wrote to Blakeley advising that Morad had entered into agreement to purchase business for $2.1m of which $500,000 had been paid by way of deposit – “Our instructions are to pursue specific performance of the contract and we are instructed to issue proceedings failing your agreement to confirm our client’s contract”	TM19; SoC, [20]
122	10 July 2013	K&L Gates sent letter to Company’s solicitors stating that Receivers were assessing the Sharma Sale Contract	RB-4
123	10 July 2013	Receivers commence sale campaign	Blakeley, [26]
124	11 July 2013	K&L Gates sent letter to Morad’s solicitors (FrancisDaniel) responding to 11 July 2013 letter and disputing existence of concluded agreement	TM20; SoC, [21]
125	15 July 2013	K&L Gates receives letter from Company’s solicitors (Dellios West & Co) enclosing correspondence from Sharma’s solicitors seeking amendments to terms of Sharma Sale Contract	RB-5
126	15 July 2013	Morad’s solicitors (FrancisDaniel) sent letter to K&L Gates asserting existence of binding contract and saying “If you do not accept our client’s position as a bona fide purchaser we are instructed to commence proceedings”	RB-6
127	18 July 2013	K&L Gates sent letter to Sharma’s solicitors stating inter alia that Receivers would not be completing the Sharma Sale Contract	RB-7
128	19 July 2013	K&L Gates sent further letter to Morad’s solicitors (FrancisDaniel) rejecting existence of binding contract and outlining timetable for Receivers’ sale program	RB-8
129	19 July 2013	Blakeley wrote to Morad c/- FrancisDaniel - preparing Information Memorandum and enclosing confidentiality deed	TM21; SoC, [22]
130	26 July 2013	Information Memorandum released - Due diligence by prospective purchasers began	Confidential RB-9; Blakeley, [30]
131	29 July 2013	Morad’s solicitors (FrancisDaniel) wrote providing further details of agreement – “Our instructions are to resolve this matter with you failing which we have instructions to injunct the sale”	TM22
132	1 August 2013	Morad received letter from Franek (“212 the extra degree”) stating “We can confirm that we obtained approval for [Morad] from National Australia Bank for the amount of $1,550,000” – Morad says confirmation received six weeks earlier (i.e. around 20 June 2013)	TM13; Morad, [30]
133	2 August 2013	Morad’s solicitors (FrancisDaniel) sent letter to Receivers making bid to purchase business – encloses 1 August 2013 Franek letter	Confidential RB-10 (last two pages)
134	2 August 2013	Morad’s solicitors (FrancisDaniel) wrote to K&L Gates again noting that Morad had submitted an offer to the Receivers to purchase the business “which if accepted would avoid the issue of proceedings. However if our client’s offer is not accepted we are instructed to commence proceedings to injunct any sale”	TM23
135	7 August 2013	Five of the Interested Parties had submitted bids – Revised Offers from two bidders subsequently received	Blakeley, [31]-[32]
136	8 August 2013	Morad’s solicitors (FrancisDaniel) sent letter to Receivers making further bid to purchase business – “This is an unconditional offer with funding already in place and therefore settlement can occur quickly ... We trust we will be shortlisted and can continue to have discussions with you”	Confidential RB-11 (first three pages)
137	21 August 2013	K&L Gates sent letter again disputing the existence of a binding contract and noting Bank’s prior interest – also says that Morad’s current offer was insufficient and that the Receivers were negotiating with alternative preferred bidders	TM24; SoC, [23]
138	29 August 2013	K&L Gates wrote to HJA’s solicitors presenting Preferred Bidder to HJA	Blakeley, [35]; Confidential RB-12
139		Proceedings issued
140		HJA’s solicitors estimated that response to Preferred Bidder would be “within two weeks”	Blakeley, [35]; RB-13
141	2 September 2013	Subpoena served on NAB by Defendants
142	4 September 2013	Notice to Produce served on Morad’s solicitors (FrancisDaniel) by Defendants
143	5 September 2013	(2:42pm) Franek emails Morad’s solicitors (FrancisDaniel) a copy of the 1 November 2012 valuation by Rose Corporate
144	9-11 September 2013	Hearing of injunction application
145	1 October 2013	Forbearance Period under Deed of Agreement lapses	Blakeley, [38]

[2013] VSC 508

20 September 2013