Paul Douglas Williams v Abbott Australasia Pty Limited - [2002] NSWSC 950

No judgment structure available for this case.

CITATION: Paul Douglas Williams & Anor v Abbott Australasia Pty Limited & Anor [2002] NSWSC 950

FILE NUMBER(S): SC 50095/02

HEARING DATE(S): 03/10/02

JUDGMENT DATE: 3 October 2002

PARTIES :

Paul Douglas Williams (First Plaintiff)
Serenity Cove Business Pty Limited (Second Plaintiff)
Abbott Australasia Pty Limited (First Defendant)
Abbott Laboratories (Second Defendant)

JUDGMENT OF: Einstein J

COUNSEL : Mr T Tobin QC, Mr M Condon (Plaintiffs)
Mr F Douglas QC, Mr TGR Parker (Defendants)

SOLICITORS: Walsh & Blair (Plaintiffs)
Clayton Utz (Defendants)

CATCHWORDS: rights pursuant to mortgage or guarantee and exercising purported power of sale under mortgage - Security for costs - Order sought by defendants seeking security for costs from second plaintiff

LEGISLATION CITED: Contaminated Land Management Act 1997 (NSW)
Corporation Act 2001 (Cth)
Fair Trading Act 1987 (NSW)
Legal Profession Act 1987 (NSW)
Real Property Act 1900 (NSW)
Supreme Court Act 1970 (NSW)
Trade Practices Act 1974 (Cth)

CASES CITED: American Cyanamid Co v Ethicon Ltd [1975] AC 396
Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208
Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Bell Wholesale Co Pty Ltd v Gates Export Corporation (No. 2) (1984) 2 FCR 1
Bryan E. Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497
Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301
Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Aust) Pty Ltd (1986) 13 FCR 46
Caruso Australia Pty Ltd v Portec (Aust) Pty Ltd (1984) 8 ACLR 818
Clark Equipment (Australia) Limited v Covcat Pty Limited (1987) 71 ALR 367
Clyde Industries Ltd v Ryad Engineering Pty Ltd (1993) 11 ACLC 325
Cunningham v National Australia Bank (1987) 15 FCR 495
Eng Mee Yong v Letchumanan [1980] AC 331
Gentry Bros Pty Ltd v Wilson Brown and Associates Pty Ltd (1992) 8 ACSR 405
Grant v The Banque Franco-Egyptienne (1876) 1 CPD 143
Harvey v McWatters (1949) 49 SR (NSW) 173
Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in liq) (1979) ACLC 32,446
Hession v Century 21 South Pacific Ltd (in liq) (1992) 28 NSWLR 120
Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 744
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Interwest Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621
Magna Alloys & Research Pty Ltd v Coffey (1981) VR 23
Mainbanner Pty Ltd v Dadincroft Pty Ltd (1988) ATPR 40-896
Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304
M A Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97
Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364
Petera Pty Limited v EAJ Pty Limited (1985) 7 FCR 375
PS Chellaram and Co v China Ocean Shipping Co (1991) 65 ALJR 642
Rosenfield Nominees Pty Ltd v Bain and Co (1988) 14 ACLR 467
Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201
Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729
Smail v Burton [1975] VR 776
Spiel v Commodity Brokers Australia Pty Ltd (in liq) (1983) 8 ACLR 410
Stollznow v Calvert [1980] 2 NSWLR 749
Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480
Town & Country Sport Resorts (Holdings) Pty Limited v Partnership Pacific Limited (1988) 20 FCR 540
Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542

DECISION: Orders restraining enforcement of security documents.

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

Einstein J

Thursday 3 October 2002 ex tempore
Revised 18 October 2002

50095/02 Paul Douglas Williams & Anor v Abbott Australasia Pty Limited & Anor

JUDGMENT

The Subject Transaction

1 These proceedings arise by reason of a contract of sale of the land described as Lot 6 in Folio identifier 732258, Lot 1 in Folio identifier 732257 and Lot 1 in Folio identifier 225973 known as the Abbott Australasia site at Captain Cook Drive, Kurnell, New South Wales ["the land" or "Abbott Park"] occupying some 67 hectares. Exchange of contracts and settlement took place simultaneously on 31 May 2000.

2 The vendor was the first defendant Abbott Australasia Pty Ltd [“Abbott”] which had been the owner of the land from 1964 until May 2000. It currently carries on the business of manufacturing medicines and pharmaceutical products from premises erected upon the land. The second defendant Abbott Laboratories Chicago Corporation, has at all material times been the holding company of the first defendant.

3 The purchaser was the second plaintiff, Serenity Cove Business Park Pty Ltd ["Serenity Cove" or "SCBP"]. The first plaintiff, Mr Williams has at all material times been the sole director of Serenity Cove and the sole shareholder of the company.

4 The purchase price was $26.5 million.

5 Simultaneously with the exchange and settlement of contracts:

· Serenity Cove mortgaged the land to Abbott as security for a loan of $23,850,000, the term of a loan being until 30 November 2001.

· Mr Williams guaranteed performance by the mortgagor of its obligations under the mortgage

· Serenity Cove leased the land to Abbott for a term to expire on 31st December 2000 (by provisions whereunder on and from that date the Fermentation Building and the Chemical Building would be excised from the premises, with the balance of the developed portions continuing to be leased to have the result that the lease repayments were reduced by $331,650 to $1,521,450 per annum.

6 Also on 31 December 2000 Serenity Cove entered into a contract for the sale of approximately 20 hectares of the undeveloped land for $7.5 million. Settlement of this contract occurred in April 2001 at which time $2 million was paid to Abbott in reduction of the principal secured by the mortgage, so the secured amount was reduced to $21.85 million.

The proceedings

7 The plaintiff's claims cover a number of discrete heads. Essentially the proceedings were brought pursuant to sections 82 and/or 87 of the Trade Practices Act 1974 and/or sections 68 and/or 72 of the Fair Trading Act 1987 and rely upon:

· alleged misrepresentations by both defendants regarding the environmental condition of the land and its past history;

· the thrust of the earlier of the representations, being representations that there had effectively been no chemical spills nor contamination of the land nor problems concerning contamination;

· alleged misrepresentations by both defendants as to the extent to which they knew the history of land use and as to an inquiry said to have been made of employees and officers of the defendants, in relation to environmental issues.

8 The plaintiffs also seek to rely upon an alleged later misrepresentation made to a company of environmental advisers retained by the plaintiffs, ‘Golder and Associates’:

· that that there was one location onsite which contained carbon filter cake;

· that the area had been tested for soil contamination and that the material was “clean”;

· that a selenium spill was contained within a shed;

· that the Abbott Laboratories Environmental Self-Assessment Manual indicated that approximately 40 tonnes of carbon filter cake was buried along the north-eastern boundary of the developed area of the site;

· that the area had been tested for soil contamination and that the results of the assessment indicated that the material was clean.

9 The plaintiffs’ claims include allegations:

· of a failure to disclose material information concerning contamination;

· the plaintiffs had a reasonable expectation that particular matters would be disclosed to them;

· that in reliance upon the pleaded representations and conduct Mr Williams caused Serenity Cove to be registered as his nominee for the purchase of the land;

· that the land was purchased by Serenity Cove;

· that the mortgage was entered into;

· that the lease was entered into;

· that the guarantee was entered into and that Serenity Cove agreed to be named as the insured in an insurance policy limited to an indemnity of $5 million in respect of any remediation to the lands which may prove to be necessary.

10 The plaintiffs claim that after 31 May 2000 they became aware that Abbott Park was significantly contaminated with a number of different chemicals which included hazardous waste and comprised in part products and bi-products from the medicine and pharmaceutical manufacturing processes carried out by the first defendant which ought to have known of such contamination. The particular allegations include:

(a) there was at least 500 tonnes of buried hazardous waste which contained inter alia, hazardous levels of toluylene, ethyl benzene, petroleum hydrocarbons and codeine;

(b) there was a large area of selenium contamination both in soil and ground water;

(d) the first defendant knew or ought to have known that selenium contamination extended over an area of soil of approximately 400 sq m which contamination had reached the water table.

11 The claims are that by reason of these matters the plaintiffs have suffered loss and damage. The particulars are as follows:

(a) the first plaintiff paid a deposit of $100,000;

(b) the first plaintiff has entered into a contingent liability to the first defendant pursuant to the guarantee;

(c) the second plaintiff paid $26.5 million, which credit being given for the sum of $100,000.00 earlier paid, together with associated costs including stamp duty of over $2 Million assessed on that figure and other costs, including the costs of finance and interest thereon;

(d) diminution in value of Abbott Park by reason of the contamination;

(e) loss of opportunity to refinance the mortgage on more favourable terms to the second plaintiff and to discharge the guarantee;

(g) loss of opportunity on the part of the second plaintiff to derive income from the development of Abbott Park ;

12 Further claims are based upon an alleged duty of the defendants said to have been owed to the plaintiffs to exercise reasonable care, skill and diligence in formulating the subject representations and in ensuring that the subject representations were and remained accurate, upon the alleged breaches of that duty of care and resultant loss thereby.

13 Further or in the alternative a number of the representations pleaded are said to have constituted conduct by the defendants that was misleading or deceptive or likely to mislead or deceive in contravention of:

· section 52 of the Trade Practices Act and section 42 of the Fair Trading Act;

· Section 53A (i) (b) of the Trade Practices Act and section 45 of the Fair Trading Act.

14 A further allegation which is pleaded is that Abbott breached a contractual warranty to be found in special condition 43.3 (b) of the contract for purchase. Damages are claimed in this respect.

15 Claims are made in relation to the lease. The allegation being that on 21 June 2001 Abbott wrongfully and without lawful justification denied access to the Chemical and Fermentation buildings and that by reason of this conduct Serenity Cove has suffered loss and damage in terms of a loss of the opportunity to derive income from the use of these buildings.

The motions presently before the court

The plaintiffs’ motion

16 There are cross motions presently before the court. The plaintiffs seek interlocutory orders restraining Abbott by itself, its servants or agents from:

· exercising any rights pursuant to the mortgage or guarantee, with a view to compelling the plaintiffs to pay any money or to give possession of the land, including restraining them from demanding the payment of any moneys or issuing any notices under section 57 of the Real Property Act 1900 or issuing any statutory demands under the Corporation Act 2001;

· exercising its purported power of sale under the mortgage and such other powers as may be available to it under the mortgage as against the plaintiffs, by reason of any and alleged defaults on their part;

· from relying on or taking any action pursuant to a notice dated 23 July 2002 purportedly issued pursuant to section 52(2)(b) of the Real Property Act.

17 I note that the summons also seeks a declaration that the 23 July 2002 notice has not been served on the second plaintiff.

18 The plaintiffs alternatively submit that the trial of any claim by Abbott for possession should occur concurrently with the hearing of the plaintiffs’ claims in these proceedings.

The defendants’ motion

19 The defendants seek security for costs from the second plaintiff. They also seek to raise suggested problems with the manner in which the plaintiffs’ case has been pleaded and in relation to the particulars furnished. Those matters were briefly treated with in the defendants’ written submissions, but there has been no significant address from the bar table in relation to those matters which generally are dealt with by case management procedures.

The Principles

20 In approaching the interlocutory application it has seemed to me that the principles which govern the Court's approach to the question are those generally dealt with and set out in Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208. Of course, the references to plaintiff in those statements of principle are a reference to the applicant or moving parties seeking interlocutory relief.

21 In Appleton, McLelland J pointed out the importance of recalling that the Court here deals with a discretionary power conferred on the Court in very general terms, referring to section 66(4) of the Supreme Court Act, which provides that the Court may at any stage of proceedings, on terms grant, an interlocutory injunction in any case in which it appears to the Court to be just or convenient so to do.

22 As McLelland J made plain at page 216 citing from the judgment of Moffitt P in Stollznow v Calvert [1980] 2 NSWLR 749:

"While useful guidance is provided by the manner of exercise of the discretion in other cases and by the factors considered in those cases to favour the exercise of the discretion in a particular way, each case must depend upon its own facts. It would be contrary to what I understand to be the accepted law in this country to confine the exercise of a judicial discretion by judge made rigid formulae."

23 At page 214 McLelland J cited the full High Court Decision in Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622, 623 where the court had said that in dealing with an application for interlocutory injunctions:

"The court addresses itself in all cases, patent as well as other, to two main inquiries. The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be held entitled to relief....The second inquiry...is

whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted

24 At page 214 McLelland J further referred to Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 736, 737 where the Court of Appeal explained the special sense in which the expression " probability " was used by the High Court in the Beecham case and, in particular, had said that it did not refer either to a prediction as to the ultimate result or to a better than even chance of ultimate success. The Court said that:

"The degree of probability or likelihood of success is simply that which the Court thinks sufficient in the particular case to warrant preservation of the status quo."

25 As McLelland J reminds us at page 214, the Court had already stated that in that case the balance of convenience was very strongly in favour of the granting of interlocutory relief (to preserve the status quo), and accordingly the Court's statement, McLelland J believed, might be generalised by saying:

"that the degree of likelihood of success to be demonstrated is that which the Court thinks sufficient in the particular case to warrant consideration of where the balance of convenience lies."

26 McLelland J also cited from the Privy Council decision in Eng Mee Yong v Letchumanan [1980] AC 331 at 337 where the Privy Council had expressed the relevant principle in terms derived from the American Cyanamid case as follows:

"The Court's power to grant an interlocutory injunction is discretionary. It may be granted in all cases in which it appears to the Court to be just and convenient to do so. The guiding principle in granting an interlocutory injunction is the balance of convenience; there is no requirement that before an interlocutory injunction is granted the plaintiff should satisfy the Court that there is a 'probability', a 'prima facie case' or a 'strong prima facie case' that if the action goes to trial he would succeed. But before any question of balance of convenience can arise the party seeking the injunction must satisfy the Court that his claim is neither frivolous nor vexatious. In other words that the evidence before the Court discloses that there is a serious question to be tried...."

27 McLelland J at 215 expressed the view that what was said in the Eng Mee Yong case is not inconsistent in substance with what is said in the Shercliff case, notwithstanding that the form of words used in the two cases is different and in the Eng Mee Yong case, the expressions " probability " and " prima facie case " seem to be used in somewhat different senses to those in which the same expressions are used in the Beecham case as explained in the Shercliff case. McLelland J pointed out that it must be remembered that:

"no court should consider itself fettered by the form of words as if it were a phrase in an Act of Parliament which must be accepted and construed as it stands."

28 McLelland J further noted that in considering the question of the balance of convenience as contemplated in the Eng Mee Yong case and the American Cyanamid case, the relevant apparent strength of each party's case may be a relevant matter. As McLelland J pointed out, this accords with what the Supreme Court of Victoria said in Magna Alloys & Research Pty Ltd v Coffey (1981) VR 23 in the following passage relating to the High Court's Judgment in the Beecham Group case:

" Having regard to the fact that the High Court cited the Judgment of James LJ in Plimpton v Spiller with approval, the reference in Beecham's case...to a probability of success should not be understood as meaning that the plaintiff must show that at trial it is more probable than not that he will succeed. Indeed the High Court made it clear that that is not the issue for the judge to determine for in the passage already cited the Court said:

'...The Court does not give or withhold interlocutory relief upon a forecast as to the ultimate result of that case.'

Rather the High Court should be understood as referring to the degree of probability which may be high or low. No doubt the strength or weakness of the plaintiff's case will be relevant when the judge comes to the question of balance of convenience, if he ever does."

29 At page 216 McLelland J cited Lord Diplock's judgment in American Cyanamid Co v Ethicon Ltd [1975] AC 396in terms of the power to grant interlocutory injunctions. The passage was as follows:

"My Lords, when an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the plaintiff's legal right is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken

at a time when ex hypothesi, the existence of the right or the violation of it or both is uncertain and will remain uncertain until final judgment is given in the action

. It was to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved that the practise arose of granting him relief by way of interlocutory injunction but since the middle of the nineteenth century this has been made subject to his undertaking to pay damages to the defendant for any loss sustained by reason of the injunction if it should be held at the trial that the plaintiff had not been entitled to restrain the defendant from doing what he was threatening to do. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if uncertainty were resolved in his favour at the trial. But the plaintiff's need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages if the uncertainty were resolved in the defendant's favour at the trial."

30 At page 216 McLelland J pointed out that it is the task of the Court, on an application for an interlocutory injunction, to seek to fulfil this purpose in the manner best calculated to achieve justice between the parties in the circumstances of the particular case. McLelland J pointed out that with the possible exception of a passage in the Beecham Group case, which deals with what is said to be special considerations arising in a patent suit in which there is a substantial issue as to the validity of the patent which McLelland J then proceeded to consider:

"...the decisions to which I have already referred provide authoritative guidance (not however to be interpreted as rigid formulae) as to how this task of the Court should normally be approached but do not deny the proposition that the ultimate task of the Court is as I have described it.'

31 I have endeavoured to approach the present application for interlocutory relief applying the principles as expressed by McLelland J. The matter is put shortly by Meagher Gummow and Lehane, Equity Doctrines and Remedies, as follows:

"What the plaintiff must prove is that he has a serious not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardised if no interlocutory relief were granted. Then it comes a matter of seeing if in all the circumstances of the case the Court should nonetheless exercise its discretion by declining to issue an interlocutory injunction."

32 Likewise in Meagher Gummow and Lehane the learned authors say:

"What is meant by saying that the Court must take into account the balance of convenience and the question of hardship is that it must consider carefully what effects the granting of an injunction will have on both parties and in particular whether to grant one would cause hardship to the defendant or to refuse one would cause hardship to the plaintiff."

Injunctions to restrain the exercise by a mortgagee of powers given to it

33 The traditional rule that an injunction will not be granted to restrain the exercise by a mortgagee of powers given to it unless the amount claimed is paid into court (Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164) is subject to the equally traditional exception that the money need not be paid if there is a real dispute about whether the power of sale was presently exercisable at all (Harvey v McWatters (1949) 49 SR (NSW) 173).

34 In Town & Country Sport Resorts (Holdings) Pty Limited v Partnership Pacific Limited (1988) 20 FCR 540 the Full Bench of the Federal Court acknowledged that the requirements of the ‘ordinary’ rule may be relaxed where the mortgagor’s proceedings involved an attack upon the enforceability of the security document. Speaking of the Court’s statutory injunctive power, the Court stated at 545:-

“As a matter of power, rather than as an exercise of discretion in a particular case, the Court may grant interlocutory or final injunctive relief that does not correspond with what would follow from an application of the traditional rule. This is not to say that in cases such as the present, the rules devised in Equity for application in disputes between mortgagor and mortgagee may not provide ready guidance for what is appropriate. But as we have observed, the traditional rule was apparently relaxed when a mortgagor attacked the enforceability of the security. The powers of this Court under s.87 of the Act enables the mortgagor to obtain in an appropriate case orders varying the terms of agreements, or declaring them void as a consequence of the contravention of the provisions of the Act by the mortgagee. This may strengthen the inclination of the Court in an appropriate case to refrain from requiring the Applicant to provide adequate security for its indebtedness before restraining a mortgagee from exercising its powers.”

35 The Court in that case further observed that, as a matter of discretion, the relaxation of such a requirement could properly be asserted where the allegations which grounded the plea for the use of the Court’s powers under s.87 were clearly arguable and not merely colourable and, where there was an obvious nexus between the allegations of misleading or deceptive conduct and the formation of the security documents.

36 Whilst these observations of course remain pervasive, this Court clearly has power to restrain the exercise of the power of sale in appropriate circumstances, even where the amount claimed by a mortgagee is not paid into court, if there is a real dispute about whether the power of sale was presently exercisable at all. These proceedings are par excellence proceedings seeking to challenge and indeed to set aside the security instruments upon which the first defendant relies in its attempts to enforce the mortgage and the ancillary guarantee.

37 It seems to me that each case has to be determined upon its own facts, matters and circumstances and that there is only a limited extent to which previous authority may assist in terms of the appropriate exercise of the Court's discretion. In that regard this case is a very different case to MainbannerPty Ltd v Dadincroft Pty Ltd (1988) ATPR 40-896.

Dealing with the issues

38 Clearly enough the Court cannot determine disputed questions of fact on this interlocutory application.

39 The disputed issues are complex as well as matters in respect of which expert evidence will require to be taken. It is probably very likely that if these proceedings, in the fullness of time, depending upon what follows after the decision on this set of applications, continue, a number of issues will be referred out under Part 72, whether on application by the parties or one of them or by the Court of its own instance. Whether that is or is not the future in relation to these proceedings remains to be seen.

40 In relation to valuation evidence and amounts owing, the evidence before the Court is that on the basis that the plaintiffs failed to obtain any relief whatever in these proceedings and were obliged to pay the amounts owing to either or both of the defendants pursuant to the mortgage and pursuant to amounts which have not been paid under the relevant contracts including the lease, the amount owing would be approximately $23 million (the precise figures are to be found in the affidavit of Mr Robert Camfield made on 2 October 2002).

41 The evidence, albeit at an interlocutory level, adduced by the parties, is to the effect that there is a disparity as between the respective affidavits and reports, throwing up a range of in the area of, at the lower end, $14 million as the attainable value on a mortgagee sale [see the affidavit/report of Mr Frape] and at the upper end of that range, an amount of between approximately $27.625 million [see the affidavit/report of Mr Looby] or $31.5 million [Collier report Exhibit D2, tab 17 adjusted by 15 percent discount by reference to a mortgagee sale].

42 As both parties appear to have recognised in the course of their submissions from the Bar table, it is not possible for the Court on an interlocutory hearing to determine a dispute of that nature.

43 In terms of the necessity to show a serious case, the following matters are clearly relevant:

· that the plaintiffs’ case is that Mr Rogers made repeated representations to Mr Williams in answer to the latter’s inquiries concerning contamination vouchsafing the quality of the land. On the evidence the thrust of those repeated representations was that contamination was both limited and minor, that the undeveloped portion of the land had not been touched by Abbott and that Abbott knew of the history of the site;

· that Mr Williams has deposed to the relevant representations having been made;

· that (subject to the evidence given by Mr Walsh and otherwise referred to in these reasons) no evidence at least up to this point in time has been adduced by the defendants which directly contradicts the evidence given by Mr Williams about these representations;

· that in terms of the representations alleged to have been made to Golders who were carrying out a preliminary [for Phase 1] site inspection, the person principally alleged to have been responsible for these representations was a plant engineer with Abbott, Mr Harper, who has not made any affidavit up to this point in time on behalf of the defendants;

· that the person alleged to have been charged by Abbott with the conduct of the negotiations and said to hold the position of ‘Director, Corporate Real Estate’ for the second defendant, whose responsibilities are said to have included the negotiations by which Serenity Cove acquired the land, Mr Rogers, has not up to this point in time filed an affidavit on behalf of the defendants;

· that Abbott in the contract for purchase itself discloses the contents of various contamination reports.

[Clause 43.3 of the contract provided:-

(b) [Abbott] warrants that it is not aware of any Contamination other than that disclosed in this Contract.”]

[The contract will be referred to in more detail below]

44 Albeit at an interlocutory level, there is clearly evidence that the representations were made, both in September and in October 1999 and in May 2000.

45 By reference to Mr Williams’ affidavit:

· the representations made in October 1999 are said to have been to the effect that Abbott had always been careful at the sites and there were no problems with the land at Kurnell and that Abbott had never done anything with the undeveloped land, it was pristine and SCBP would not have any problems with it;

· the representations made in May 2000 are said to have been to the effect that Abbott had been at Kurnell since the site was developed, that the back land had not been touched and that the only work Abbott had ever done outside the fenced area in the undeveloped section was the laying down of the sewer line, maintenance works and spraying of weeds (paragraph 24); and, further, that the undeveloped site was ‘clean’.

46 The evidence suggests that Mr Rogers, the author of the representations responded to detailed and deliberate inquiries from Mr Williams – albeit this evidence is only before the Court at an interlocutory level.

47 Mr Rogers has not given evidence at the interlocutory level, either qualifying what was said nor explaining why he appears, on the evidence presently before the Court, to have said something in a business context which it is now asserted the plaintiffs will not be entitled to rely upon.

48 The defendants' explanation, on the evidence before the Court, as to their failure to call Mr Rogers is to be found in the evidence given by Mr Walsh at paragraph 23, which is to the effect that Mr Rogers' worldwide responsibility for acquisitions and divestments and base in North Chicago, when seen in the light of the fact that this is an interlocutory hearing, should suffice. I have some difficulty with this contention in the circumstances of the significance of the way in which this interlocutory application has been prepared, it clearly being the case that Mr Rogers' recollections and evidence and the strength of the materials which may have been able to have been put forward would have been a significant integer in weighing the subject serious case.

49 The plaintiffs clearly intend during the hearing to rely upon the proposition that Abbott cannot be said to have been open or candid about its position in circumstances where, so the plaintiffs submit, [submissions in reply, paragraph 5]:

· It is said to have initially held out to Williams that a thorough Phase 2 examination could be conducted;

· it is said to have concealed the true nature and extent of the contamination from both SCBP and Golders;

· it is said to have taken pains to belittle the role Golders could play. In this respect Mr Rogers’ representation on 21 May 2000 is said to have been disingenuous in circumstances where approximately 150,000 metres of landfill, including extensive areas of hazardous material had been dumped on the undeveloped section [the representation to be found in paragraph 24 of Mr Williams’ affidavit made on 21 August is said to have been in the following terms]:

“…even though I know how responsible Abbott have been worldwide, if you dig enough holes on any industrial site, you will find traces of something that will lead the environmental people to suggest more tests and so it goes on. We have been at Kurnell since it was developed, and we know that there are only a few housekeeping issues. The back land hasn’t been touched. There may be a few dumped cars or whatever around them, but I don’t want this dragging on for months and months while the environmental people make a fortune out of it.”

50 The defendants submit that the following matters set the background for an assessment of the strength of the plaintiffs’ case:

· The site is a large one, redevelopment of which would obviously require extensive work to comply with regulatory requirements. An important part of complying with such requirements would obviously involve addressing environmental issues.

· The initial statements by Mr Rogers are alleged to have been made prior to the execution of the heads of agreement. It is said to be apparent that if any such statements were made, they were not taken at face value, because the Heads of Agreement as signed, contained provision for the plaintiffs to undertake environmental investigations. No such investigations were undertaken at that time. No explanation is said to have been offered as to why. However paragraph 15 of Mr Williams’ first affidavit, as Mr Parker pointed out, does include evidence by Mr Williams that he was extremely busy in late 1999 and early 2000 as he had settled the purchase of some nearby land.

· Mr Williams did eventually retain Golders to undertake investigations. When Golders produced a report suggesting further testing, Abbott is said to have refused to co-operate. The summons complains about this, but it is said to be hard to see what cause of action would arise. Abbott is said to have been quite open about its position, and it is submitted by the defendants that no question of economic duress could arise. The submissions are that although Mr Williams must have been aware that the proposed investigation was not proceeding, his affidavit does not explain what his thinking was at the time.

· The sale contract contained an acknowledgement that the plaintiffs were not relying upon any pre-contractual statements or representations. Mr Williams was advised (as he was advised throughout) by a solicitor.

51 Notwithstanding the defendants’ submissions that:

· by reason of this suggested background the Court should "be highly sceptical of the claim by Mr Williams that when entering into the contract he was relying upon Mr Rogers' alleged statements about the state of the site",

· there are difficulties in the plaintiffs’ path in being in a position to demonstrate that any misleading statements which were made and relied upon actually caused their loss;

· the plaintiffs have failed to take the necessary steps towards developing the land, apparently for reasons that had nothing to do with contamination;

· the plaintiffs’ evidence to the effect that the mediation will cost $84 million is highly speculative.

52 I am satisfied for the reasons already given and for the reasons which follow, that a serious case, in terms of likelihood of success in a final hearing, has been shown by the plaintiffs such as justifies consideration of where the balance of convenience lies.

53 In relation to clause 32 of the Sale Contract, it seems to me that at least at an interlocutory level, there is substance in the plaintiffs’ submissions that its purpose is to do no more than to limit SCBP’s rights prior to completion [which was arguably irrelevant because the contract was exchanged and settled on the same day] and to terminate the Sale Contract. As the plaintiffs point out, SCBP does not seek to terminate the Sale Contract. The clause does not appear to affect the plaintiffs’ claims concerning the efficacy or enforceability of the mortgage. Further, as the plaintiffs point out, there is clear authority that such a clause may well have little effect in the cases of fraud or claims under the Trade Practices Act: In Clark Equipment (Australia) Limited v Covcat Pty Limited (1987) 71 ALR 367, Sheppard J stated at 71:

“Parties may agree that statements and representations made antecedently to their entering into a contract are not to form the basis of any remedy in the event of their being a subsequent disagreement. Except in case of fraud, the common law will give effect to that contract. But the remedy conferred by s.52 of the Trade Practices Act will not be lost, whatever the parties may provide in their agreement…If as a result of the conduct, a person is induced to enter into a contract and suffers loss, an action to recover [loss and damage] lies. The terms of the contract are irrelevant.”

54 Wilcox J Petera Pty Limited v EAJ Pty Limited (1985) 7 FCR 375-378 put the matter as follows:

55 The plaintiffs point out that Mr Smith has given evidence of his observations. His evidence includes the following:

“In August 2002 I caused seven new excavation holes to be dug in the land fill area in places where test pits were not previously dug. Two of the excavation holes were located in approximately the centre of the landfill area. These were approximately 20 metres away from the sample marked ‘A’ in my affidavit of 21 September 2002, which had disclosed benzo(a)pyrene contamination.

In these trenches I observed a black, odorous, granular material that was definitely not natural. This material was in substance the same to that identified some 20 metres away and referred to in my May 2001 report (noted as sample ‘A’ in that document). The newly identified area of hazardous contamination was about 9 metres wide, 40 metres long and 1.5 metres deep. I initially found this material in a random test-pit. I instructed the excavator operator to widen and lengthen the test-pit until the trench of the dimensions I have described above was constructed.

This hazardous material was loosely packed in the fill and looked as though it had been spread by a bulldozer. The odour was characteristic of a hydrocarbon. The material smelt and looked totally foreign to a clean landfill. It was not contained in any liner or bin of any sort.

I took samples in accordance with the NSW EPA guidelines and sent them to a NATA certified laboratory. The samples of this black odorous granular material were identified as S1AB and S2AB in the NATA certified laboratory analysis report no. SS 53267-1, a copy of which is annexed hereto and marked “A”.

The following acronyms are used in that annexure:

PAH – Poly Aromatic Hydrocarbons
BTEX – Benzene, Toluene, Ethyl Benzene and Xylene
TPH – Total Petroleum Hydrocarbons
C10-C36 – Hydrocarbons with ten hydrocarbon atoms to thirty-six atoms

The analysis report indicates under the section PAH, benzo(a)pyrene in sample S1AB and S2AB to be of such a level as to classify the material in the test-pit as hazardous waste (according to NSW EPA guidelines). The sample result under the heading C10-36 indicates a total concentration of C10-C36 in excess of NSW EPA guidelines for industrial development.”

56 In his affidavit of 1 October 2002, Mr Williams gave evidence in paragraph 19 that he had been informed in approximately April 2002 by Mr Matthews that he had been involved in the dumping of fill over a period of between four and five years during the 1990s; of his contacts with Abbott Australasia and the visits by persons who are named of Abbott Australasia at the fill site to inspect progress and of the number of trucks used to source material for the fill and that material dumped included black carbon material.

57 The plaintiffs strongly rely upon the Collex quotation of 21 November 2001 which provides for the removal of approximately 270,000 tonnes of mixed construction rubble which will require excavation and classification on site, which excavation is said alone to involve approximately 13,500 truckloads of material to be disposed of together with 1500 tanker loads of contaminated groundwater.

58 In his affidavit of 2 October 2002 Mr Walsh, who had commenced employment with Abbott in approximately January 1987 as engineering manager and was appointed as operations manager in approximately 1992, holding his position until appointed director of operations in 1997, gave evidence that the relevant fill in operation was conducted between 1986 and 1987 and that he had no knowledge of fill being dumped over a period of between four and five years during the 1990s.

59 The file note of the EPA dated 14 August 2001 quoted in the affidavit of Mr Ryall [paragraph 11] which suggests that the quality of the data in the Southern Environmental report is inadequate to determine whether the land posed a "significant risk of harm" may ultimately prove of assistance to the defendants in the final proceedings but to my mind does no more than throw up the impossibility of the Court presently determining disputed questions of fact of this nature in an interlocutory hearing.

60 Insofar as causation is concerned, the defendants have submitted inter alia as follows:

“The plaintiffs have also put on evidence to the effect that the contamination (or alleged contamination) on the land ruined their plans for developing it, but that evidence does not rise above mere assertion. If admissible at all, it is comprehensively debunked by the expert evidence presented by the defendants. In particular:

· the only contamination on the site which requires remediation is the filter cake area - this has been the subject of a determination by the EPA and remediation plans are well advanced;

· this remediation could easily be undertaken as part of a redevelopment of the site;

· on the other hand, the redevelopment plans foreshadowed by Mr Williams could not be implemented under the current zoning of the land and have been compromised by the sale to Fairstone;

· there are various steps which would have to be undertaken to develop the site in an efficient and timely way, such as preliminary negotiations with the Council - inexplicably, these have not been carried out.”

61 The plaintiffs claim that on the evidence adduced during the interlocutory hearing, because of the number of tonnes of hazardous materials said to have been dumped on the land, there is a very powerful prima facie case that the defendants must have known what was occurring. A case of deceit is pressed.

62 The submissions of the defendants in relation to this serious case issue travelled through the history of the dealings between the parties and treat closely with the sequence of events deposed to by Mr Walsh in his affidavit of 26 September wherein he had deposed inter alia as follows:

“I first became aware of the proposed sale of the Property to Williams in or about September 1999 when I was asked to provide some floor areas of various buildings on site to Bob Camfield, which I understood were required as part of the sale negotiations. A short time later I received a copy of the heads of agreement dated 2 October 1999 signed by Williams and Rick Rogers, a copy of which is exhibited hereto and marked “JW-5” (“the Heads”). I had no involvement in the formulation of the terms of the Heads. However, I note that:

(a) pursuant to paragraph C of the Heads the purchaser was to have a 90 day due diligence period to ascertain whether the Property was affected by any hazardous materials in excess of legally allowable limits; and

(b) final settlement was to occur by 31 March 2000.

Despite the Heads being signed on 2 October 1999, to the best of my recollection Williams did nothing over the next few months (until about early April 2000) to obtain an environmental assessment of the Property. Exhibited hereto and marked “JW-6” is a copy of an email from Bob Camfield to Rick Rogers dated 13 January 200, which was copied to me. I refer in particular to the penultimate paragraph of the email in respect of the failure of Williams to undertake an environmental assessment during the due diligence period.
On 27 January 2000, Bob Camfield sent an email to Rick Rogers (copied to me) which is exhibited hereto and marked “JW-7”. I note that third bullet point in which Bob Camfield says that he:

“….raised the question of environmental issues and [Williams] confirms that one of his associates will be visiting next week re this issue so I will continue to follow up on this point.”

In preparation for a meeting with Williams and his representatives I sought permission from Abbott Laboratories in late March 2000 to release Williams the results of soil sampling from a recent Abbott environmental training audit of the Property. Exhibited hereto and marked “JW-8” is a copy of an email from me to Rick Rogers dated 21 March 2000 together with Rick Rogers’ reply of the same date.
Exhibited hereto and marked “JW-9” is a copy of an email from Rick Rogers to me dated 23 March 2000. I refer in particular to the penultimate paragraph of the email.”
[Paragraphs 24 to 28 from the affidavit of Mr Walsh of 26 September 2000]

63 Importantly, the defendants rely upon a letter dated 4 April 2000 from Mr Rogers to Mr Williams [Exhibit P2A page 4], in which the following appears:

“This letter is for you and only you. It is not intended for your attorneys of consultants. I have not shared it with my attorneys, consultants, Chicagoland or Australian personnel. My intent is to make my position very clear without embarrassing you or going to battle. I’ll end with some suggestions about how you might want to proceed.

First, I was disappointed to hear your position on Sunday evening and to receive your fax today. You appear to blame Abbott for not conducting a thorough environmental audit on your behalf. In fact, conducting an environmental audit is clearly the responsibility of the Buyer. I have completed hundreds of transactions in over 40 different countries and the environmental audit in all cases, has been the responsibility of the Buyer. Why would any intelligent Buyer want or trust the Seller to conduct due diligence on the property that the Buyer will own? It doesn’t make sense and it is certainly not common practice. Don’t you personally, or your mechanic look under the hood when buying a used car.

Sections C and E of or October 2, 1999 letter Agreement gave you

90 days to conduct due diligence and environmental audits. I never promised to perform any due diligence or provide any reports. In fact, I was unaware of the existence of any environmental reports for that site. The reports that were given to you were never intended to be, nor represented as, thorough environmental reports for the purpose of evaluating a property for purchase. Those reports were simply information that we had on hand that we elected to provide to you. It was clearly your responsibility to conduct whatever tests and audits that you deemed necessary within your 90 day due diligence period.

Paul, I am disappointed to learn that you did not conduct any environmental audits during your due diligence period, and I’m even more disappointed that you’re now blaming Abbott for not doing so. It’s also very distressing to be having these conversations now rather than 6 months ago.”

64 This letter is said to provide contemporaneous evidence although indirect and although Mr Rogers was not called at the interlocutory hearing that he had never promised to perform any due diligence or to provide any reports and that the reports which were furnished to Mr Williams were never intended to be, nor represented as, thorough environmental reports for the purpose of evaluating the property for purchase.

65 The defendants further rely upon the terms of the contract for sale, most particularly upon the purchaser's acknowledgements in clause 32 and in clause 41.2(b)(i) and rely also upon the provisions in clauses 43.1 and 43.2 and rely particularly upon clauses 43.3, 43.4, 43.6(b)(ii) and 43.6(d):

“ 32. Purchaser’s Acknowledgements

The Purchaser cannot make a claim, objection or requisition or rescind or terminate in respect of:

(a) the presence of any sewer manhole or vent on the property;

(b) any rainwater downpipe being connected to the sewer;

(c) any environmental hazard or contamination including but not limited to the existence of asbestos and polychlorinated-biphenyls referred to in clause 43 and anything disclosed or referred to in the contamination reports which are listed in annexure “D” (Contamination Reports); and

(d) any latent or patent defect in the property.

43. Environmental Matters

43.1 Asbestos

The Vendor discloses the existence of asbestos in or connected to:

(a) the roof and/or walls of following improvements on the property:

(i) chemical building and annexe;

(ii) bike shed;

(iii) flammable liquid store;

(iv) cooling towers;

(v) fermentation building and annexe;

(vi) pharmaceutical building;

(vii) engineering building;

(b) the following pipes on the Property:

(i) irrigation pipes;

(ii) pipe gantries;

(iii) underground chilled water and cooling water pipes;

(iv) the underground pipework associated with the cooling towers;

(c) the cement sheeting and installation of the steam system and hot water calorifier in the administration building, and pharmaceutical building;

(d) the insulation on equipment and piping in the engineering building and in the sub-station;

(e) the cement sheeting in the cooling tower associated with the fermentation building and in the selenium sulphide shed; and

(f) the exhaust pipe from the diesel engine associated with the diesel pump house shed.

43.2 Transformers containing Polychlorinated - biphenyls

(a) The Vendor discloses the existence of polychlorinated – biphenyls in transformers located in:

(i) the Pharmaceutical Building;

(ii) the Engineering Building;

(iii) the Chemical Substation.

(b) The Purchaser acknowledges the existence of polychlorinated – biphenyls as set out in sub clause (a) and assumes all responsibility for their replacement and removal.

43.3 Contamination Reports

(a) The Vendor discloses those matters referred to in the Contamination Reports.

(b) The Vendor warrants that it is not aware of any Contamination other tan that disclosed in this Contract.

44.4 Environmental indemnity

(a) For the purposes of this clause 43 Contamination means the presence in on or under the land of a substance at a concentration above the concentration at which the substance is normally present in, on or under (respectively) and in the same locality, being a presence that presents an immediate or long-term risk of harm to human health or any aspect of the environment.

(b) Subject to clause 43.6, the Purchaser acknowledges that it has made full enquiries and investigations in relation to the property and in particular, without limitation, environmental matters. The Purchaser will on and form completion indemnify the Vendor against any liability, claim, damage or loss whatsoever in respect of any environmental hazard or Contamination relating to the property except in so far as such hazard or Contamination is caused directly by the Vendor.

……..

43.6 Insurance

(b) (ii) if the Vendor is refused insurance within 30 days after completion, the Vendor will indemnify the Purchaser to the extent set out in the draft AIG insurance policy annexed (AIG Policy) but only for Contamination directly caused by the Vendor;

(d) If an insurance policy issues then in the event of any claim against the Vendor which falls outside the exception to clause 43.4(b) the Purchaser must nevertheless indemnify the Vendor to the extent that it can claim under the insurance policy or any subsequent insurance policy.

66 The plaintiffs then took the Court to the annexed contamination reports and importantly to the terms of the draft report to be found at pages 63-104 of Exhibit P5 which provided in paragraph 4.12 as follows:

“4.12 Waste Disposal Sites, Dumps and Landfills

The Abbott Laboratories Environmental Self Assessment Manual, Kurnell, Australia (October 1998) indicated that approximately 400 tonnes of carbon filter cake was buried along the north eastern boundary of the developed area of the site. The burial occurred between 1979 and 1984. We inspected the area in which the filter cake was buried during the site inspection. The grass in the area appeared healthy, and in fact was growing faster than grass in the general vicinity.

We were informed by Mr Harper that the area had been tested for soil contamination and the results of the assessment indicated the material was clean. Golder were unable to verify this during the inspection.

The undeveloped portion of the site appeared to have been used for illegal dumping of car wrecks. Whilst driving around the perimeter of the site, it was observed that significant quantities of material (building rubble, furniture, mattresses, other material) had been dumped along the road. It is possible that material may have been dumped in areas of the site not visited during the inspection.”

67 I have taken into account the submissions which were strongly pressed by the defendants to the effect that in weighing the serious case, as well as the balance of convenience, the Court should be heavily influenced by the failure of the plaintiffs to make any claim for relief by way of the setting aside of the contract for sale or the rescission of the contract for sale or the avoiding of the contract for sale. In short the submission is this: that standing back from the whole of the litigation, the plaintiffs may be regarded as developers who seek, notwithstanding the claims for relief in terms of damages for misrepresentation, to simply set aside the security documents, that is to say the mortgage and guarantee, to have the Court restrain the defendants from, pending the final hearing, enforcing the security documents, to keep by the second plaintiff the ownership of the land and to obtain funding for its remediation from the defendants. The contention is that these proceedings make plain, and this manner of viewing the proceedings makes plain, that on the balance of convenience the injunctive relief should not be granted or if granted, should not be granted to the extent of a regime which would include there being no obligation pending final hearing on the plaintiffs to pay relevant interest.

68 Whilst these submissions are taken into account and represent an attractive way of looking at the litigation from the defendants' perspective, the truth is that the whole of the litigation requires to be weighed and that the evidence before the Court at an interlocutory level of the alleged misrepresentations, their type and, if they are made out, their significance, suggests that the defendants' attempt to so thumbnail sketch the proceedings, failed to do justice to the real nature and gravamen of the proceedings. They are deceit proceedings as well as proceedings based on misleading and deceptive conduct allegations. Whilst the Court is unable to deal with contested factual issues in the course of an interlocutory hearing, it has to be said that the plaintiffs have mobilised substantial materials to support at an interlocutory level, a finding of a serious case, which albeit at an interlocutory level, in my view, applying the conventional tests and including the balance of convenience test, does justify injunctive relief being granted.

69 In my view, at an interlocutory level the Court should accept that a serious case has been shown by the plaintiffs to the effect that the consequences of the contamination may well be that their plans to use the land and to refinance the mortgage have been affected. Mr Smith’s evidence albeit at an interlocutory level is to the effect that some 13,500 truckloads of material plus 1,500 tanker loads of contaminated ground water would probably have to be removed from the landfill area alone.

70 The plaintiffs’ case is that this huge area is unsuitable for construction activity.

71 As the plaintiffs’ further submit, at least at an interlocutory level the Court may take into account the evidence from which it may be inferred that the defendants recognised the importance of financiers being satisfied that the site was clean: cf Camfield email to Rogers of 6 April 2000 [Exhibit 14 to the affidavit of Walsh.] which stated:

“We now await confirmation or otherwise whether the April 14, 2000 close date will be extended to the Williams Group recognising a reasonable (2-3 weeks?) time frame would apply for the conducting of a full environmental audit on the site to satisfy all parties and in particular the Williams Group financiers.”

72 As to the defendants’ submissions that the plaintiffs’ case is effectively confined to oral misrepresentations, whilst it does appear that oral misrepresentations constitute the vast bulk of the plaintiffs’ case, it cannot be gainsaid that at least one written misrepresentation is apparently sought to be relied upon, namely, the warranty contained in the contract. The plaintiffs in their written submissions further make plain that they also seek to rely upon an alleged written misrepresentation, being that to be found in Harper's facsimile to Lloyd [page 105 of Exhibit P5].

73 I accept that there has been sufficient material mobilised by the plaintiffs on this interlocutory hearing to establish a serious case or a prima facie case in deceit.

74 Subject only to questions concerning the security for costs application, the balance of convenience is, it seems to me, heavily in favour of granting the injunctive relief which is sought. If the plaintiffs should prove successful then

(1) the first defendant will no longer have any entitlement to enforce the mortgage which will be declared void and/or set aside; and

75 Further, or in the alternative, if the plaintiffs succeed in obtaining the orders sought in paragraph (a) (x) of the summons, the defendants will be ordered to indemnify the plaintiffs against all costs and expenses which may be incurred by the plaintiffs or charged against them of and incidental to:

· the removal of contamination as defined by the contract and by the Contaminated Land Management Act1997;

· any activity of or requirement imposed by any government body or statutory authority in relation to the alleged contamination.

76 The defendants have claimed that a major factor in favour of refusing the injunctive relief concerns the prejudice to Abbott as mortgagee on the basis of the defendants’ evidence that the removal of contamination as defined by the contract value of the remainder of the property, is presently only $14 million. The proposition is that this is much less than the principal debt and that for this reason for the period of any injunctive relief which may be granted, Abbott will be out of pocket for the interest which accrues. The defendants’ submission is that this consideration should either persuade the Court to refuse the grant of injunctive relief, or, alternatively, at the very least, ensure that the Court grant such relief, but only conditional upon the plaintiffs paying the interest in the meantime.

77 I have referred above to the contest insofar as valuation is concerned. To my mind the defendants' submission is not of substance, relying as it does upon the proposition that the security documents should be regarded as, at least in part, on foot.

78 In the result, subject to the security for costs matter to be treated with below, generally the plaintiffs have succeeded in establishing that in terms of the duality and combination of the serious case to be tried and balance of convenience questions, it is appropriate for the Court to make orders effectively restraining the enforcement of the security documents, by which I mean to refer to the mortgage and the guarantee. That will involve a regime by appropriate short minutes of order, which by order, prevents the mortgagee from enforcing, by power of sale or by relevant statutory or other demand, any claim to breaches by the mortgagor or by the guarantor of those security documents.

Security for costs

79 The principles are reasonably well established. They received extensive treatment in Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 744: Paragraphs 44 through to 60 and 101 and 102. Those paragraphs were in the following terms:

“The ordinary rule is that costs follow the event in proceedings before the Court.

The rule has its rationale by way of a principle of compensation in respect of the successful party to the proceedings recovering the costs incurred in the proceedings. As Mr Gleeson SC for the defendants pointed out, the amendment to the Legal Profession Act 1987 (NSW) which specified that the appropriate test is “a fair and reasonable amount of costs” has the result that the benefit of a costs order in the Supreme Court becomes closer to full compensation than had been the case under the pre-existing practice. This result is consistent with the purpose of a costs order which I accept, is to provide not ‘perfect’ compensation but ‘substantial’ compensation.

The rationale for the general rule which has a public as well as a private dimension, was identified by McHugh J in Oshlack (supra) at 97:

“The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.”

Security for costs

It is clear that the discretion to award security for costs requires to take into account all of the relevant facts matters and circumstances and is a judicial discretion to be exercised following the adducing of all evidence by each party to an application seeking to have such an award made. As Giles J (as His Honour then was) made plain in Rosenfield Nominees Pty Ltd v Bain and Co (1988) 14 ACLR 467 at 470, in exercising the discretion as to whether or not to make an order for costs, the Court must have a concern to achieve a balance between ensuring that adequate and fair protection is provided to the defendant, and avoiding injustice to an impecunious plaintiff by unnecessarily shutting it out or prejudicing it in the conduct of the proceedings [cf Street CJ in Buckley v Bennell (1974) 1 ACLR 301 at 304]. Giles J referred to the debate over whether the discretion should be exercised with some predisposition in favour of the defendant and expressed the view with which I agree, that the debate is largely semantic. The principle which his Honour identified at 470 was that:

"the discretion must be exercised having regard to all the circumstances of the case, but the inability of the plaintiff to meet the costs of the successful defendant, being the occasion for invoking the exercise of the discretion, is likely to play an important if not decisive role".

Because the discretion to be exercised by the Court is a wide one which should remain unfettered, the circumstances in which the discretion should be exercised in favour of making the order cannot and should not be stated exhaustively: Spiel v Commodity Brokers Australia Pty Ltd (in liq) (1983) 8 ACLR 410 at 415. In Gentry Bros Pty Ltd v Wilson Brown and Associates Pty Ltd (1992) 8 ACSR 405, Cooper J stated:

“(i)t is not possible or appropriate to list all of the matters relevant to the exercise of the discretion. The factors will vary from case to case. The weight to be given to any circumstance depends upon its own intrinsic persuasiveness and its impact on other circumstances which have to be weighed: PS Chellaram & Co. v China Ocean Shipping Co (1991) 65 ALJR 642 at 643.” (at 415)

Notwithstanding the unfettered nature of the discretion, Beazley J in KP Cable Investments set out 7 guidelines which the Court is said to typically take into account when determining such an application:

“1. That such applications should be brought promptly. This is a principle of longstanding: see Grant v The Banque Franco-Egyptienne (1876) 1 CPD 143; see also Smail v Burton [1975] VR 776 per Gillard J at 777; Caruso Australia Pty Ltd v Portec (Aust) Pty Ltd (1984) 8 ACLR 818 at 820; Bryan E. Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 514…

2. That regard is to be had to the strength and bona fides of the applicant's case are relevant considerations: see M A Productions Pty Ltd v Austarama Television Pty Ltd and Anor (1982) 7 ACLR 97 at 100; Bryan E. Fencott Pty Ltd at 514. As a general rule, where a claim is prima facie regular on its face and discloses a cause of action, in the absence of evidence to the contrary, the court should proceed on the basis that the claim is bona fide with a reasonable prospect of success. (Bryan E. Fencott at 514).

3. Whether the applicant's impecuniosity was caused by the respondent's conduct subject of the claim: see M A Productions Pty Ltd v Austarama Television Pty Ltd at 100.

4. Whether the respondent's application for security is oppressive, in the sense that it is being used merely to deny an impecunious applicant a right to litigate: see M A Productions v Austarama Television at 100; Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542 per Clarke J at 545; Bryan E. Fencott at 513. In Yandil Holdings at 545 Clarke J stated the principle in these terms:

‘(t)he fact that the ordering of security will frustrate the plaintiff's rights to litigate its claim because of its financial condition does not automatically lead to the refusal of an order. Nonetheless it will usually operate as a powerful factor in favour of exercising the court's discretion in the plaintiff's favour.’

This factor is related to the next, namely:

5. Whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security: see Memutu v Lissenden (1983) 8 ACLR 364; Sent v Jet Corporation (1984) 2 FCR 201; Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1; Hession v Century 21 South Pacific Ltd (1992) 28 NSWLR 120 at 123; Bryan E. Fencott at 513; Yandil Holdings at 545. The combined effect of these two principles was summarised by Meagher JA in Hession at 123 as follows:

‘...a company in liquidation against whom an order for security for costs is sought cannot successfully resist such an order merely by proving that it cannot fund the litigation from its own resources if an order for security is made; it must prove that it cannot do so even if it relies on the other resources available to it (the company's shareholders or creditors)...Finally, whilst it is both true and important that poverty must be no bar to litigation, what that means is that the courts must be astute to see that no person pursuing a claim which is not frivolous is precluded from doing so by the erection of obstacles which poverty is unable to surmount; it does not mean that proof of insolvency automatically confers an immunity from statutory provisions which deal with insolvent plaintiffs.’

6. An issue related to the last guideline is whether persons standing behind the company have offered any personal undertaking to be liable for the costs and if so, the form of any such undertaking: see Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Aust) Pty Ltd (1986) 13 FCR 46 at 53; Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304; Clyde Industries Ltd v Ryad Engineering Pty Ltd (1993) 11 ACLC 325.

7. Security will only ordinarily be ordered against a party who is in substance a plaintiff, and an order ought not to be made against parties who are defending themselves and thus forced to litigate: see Interwest Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621 at 626; Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in liq) (1979) ACLC 32,446; Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480; Weily's Quarries v Devine Shipping Pty Ltd (1994) 14 ACSR 186 where Zeeman J stated at 189:

‘(t)he general proposition that security ought not to be ordered where the proceedings are defensive in the sense of directly resisting proceedings already brought or seeking to halt self-help procedures is no more than that, a general proposition. It ought not to be elevated to being a rule of law. In many cases of that nature it could be considered oppressive to require security and that in itself may be sufficient to refuse to make an order...(see) Sydmar Pty Ltd v Statewise Developments (supra) and Interwest Ltd v Tricontinental (supra).” (at para 39)

Clearly as Beazley J recognised, the possibility of stultification is a “powerful” factor to be taken into account by the Court in exercising its discretion as to whether an order is appropriate: Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542. However, Clarke J in Yandil observed that the fact that a plaintiff is financially unable to provide security does not lead to the inevitable conclusion that the making of the order will stultify the plaintiff’s claim nor does it lead to the automatic refusal of an order. He went on to cite a line of authorities (see Tulloch v Walker, Yeldham J, 8 December 1976, unreported; Bell Wholesale Co Pty Ltd v Gates Export Corp & Ors (No 2) (1984) 8 ACLR 588) in support of the view that it is generally inappropriate to refuse an order for security where:

“the personnel behind the corporate plaintiff, or other parties who will benefit if the plaintiff succeeds, are financially able to provide adequate security.” (at 545)

In other words, without fettering the Court’s discretion, it was said to be unlikely that a plaintiff could successfully resist a security order on the grounds of their own impecuniosity in the absence of evidence of the financial status of those who stand behind it (see Yandil at 545).

McHugh J in Oshlack also made plain at 97 that:

"[T]he jurisdiction to award security for costs should thus be seen as protecting the efficacy of the exercise of the jurisdiction to award costs. The discretion should be exercised with the same rationales in mind, namely that, to the extent it can be avoided, the court should not permit a situation to arise where a party’s success is pyrrhic."

The purpose of a security for costs order is therefore a protective jurisdiction to ensure that the primary purposes for having costs orders themselves, can be achieved. A defendant is protected against the risk that a costs order obtained at the end of the day may turn out to be of no value by reason of the impecuniosity of the plaintiff. The jurisdiction therefore assists both the compensation purpose as well as the public interest objective.

Plaintiffs: natural persons vs corporations

In relation to natural person plaintiffs, the mere fact that the plaintiff is impecunious does not provide a gateway into security for costs. However with respect to a corporation it has long been established in terms of the Corporations Act and its predecessors, and the rules of court as well as the inherent jurisdiction, that if there is good reason to believe that the corporation may be unable to pay costs at the end of the day, this provides a gateway by which an application for security for costs may be made.

Giles CJ in Rugby Union Players Association [30/7/1997, SCNSW, 50225/96, unreported] described the rationale behind the exceptions to the general rule that the impecuniosity of a plaintiff should not be a ground for making an order for security for costs (this principle having been well established by the authorities in relation to plaintiffs who are natural persons: Cowell v Taylor (1885) 31 Ch D 34), in the following terms:

“In both cases the rationale is that those who will benefit from success in the proceedings, as shareholders in or creditors of a corporation or as third parties for whose benefit the plaintiff (whether a natural person or a corporation) sues, should not be able to litigate and expose the defendant to the risk of irrecoverable costs while themselves shielded, by reason of the interposition of the impecunious plaintiff, from the burden of an adverse order for costs.” (at 11)

The Court in Harpur v Ariadne [1984] 2 Qd.R 523 at 532 described the rationale behind this principle in the following terms:

“The mischief at which the provision is aimed is obvious. An individual who conducts his business affairs by medium of a corporation without assets would otherwise be in a position to expose his opponent to a massive bill of costs without hazarding his own assets. The purpose of an order for security is to require him, if not to come out from behind the skirts of the company, at least to bring his own assets into play.”

The inability of a plaintiff company to pay the costs of the defendant not only opens the jurisdiction for the giving of security, but also provides a substantial factor in the decision whether to exercise it: Pearson v Naydler [1977] 1 WLR 899 at 906; cited with approval in Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201 at 215.

Where a winding-up order has been made in relation to the plaintiff company on account of its insolvency, the company will not prima facie be in a position to pay any costs ordered against it. The Court will generally treat this circumstance as a special factor justifying the making of an order for security for costs: Tricorp Pty Ltd (in liq) v Deputy Commissioner of Taxation (WA) 10 ACLC 474 at 475.

In considering an application under s1335, the Court is required to form an opinion about what the financial position of the plaintiff will be at the time of judgment and immediately after. An important consideration will be the financial position of the plaintiff at the time of the application, however this is not the sole consideration. Other factors may include the outcome of the trial, the costs associated with the trial and the success or otherwise of its business and investments in the meantime. When the Court is required to make a judgment involving the anticipation of future events, it must consider the degree of probability that a particular event might occur: Beach Petroleum NL & Anor v Johnson & Ors; Jingellic Minerals NL & Anor v King & Ors (1992) 10 ACLC 525 at 526-527.

With specific regard to security for costs against corporations, the Court in Pearson v Naydler recognised that the basic notion of security for costs empowers the Court to order the plaintiff to do something that it will likely find difficult to do, ie. to provide security for the costs which ex hypothesi it is likely to be unable to pay. Despite this, the Court noted that this discretionary power should not be used as an instrument of oppression “by shutting out a small company from making a genuine claim against a large company” (see also Equity Access Limited v Westpac Banking Corporation (1989) 11 ATPR 40-972 at 50,635). The Court must thereby strike a balance between this consideration and the notion that:

“…the court must not show such a reluctance to order security for costs that this becomes a weapon whereby the impecunious company can use its inability to pay costs as a means of putting unfair pressure on a more prosperous company. Litigation in which the defendant will be seriously out-of-pocket even if the action fails is not to be encouraged. While I accept that there is no burden of proof one way or the other, I think that the court ought not to be unduly reluctant to exercise its power to order security for costs in cases that fall squarely within the section.” Pearson v Naydler at 906-907.

Burden of proof

Whilst from one point of view it may seem inappropriate to approach the matter in terms of the strictures of burden of proof whether of a legal or forensic character [cf discussion in Mummery v Irvings (1956) 96 CLR 99 at 118ff], there is certainly substantial authority which is followed in these reasons, to the effect that the defendants, as applicants for security for costs, have an evidentiary burden of leading evidence to establish a prime facie entitlement to such an order and to such an order in relation to a particular amount. Normally, in any court, the party who asserts must prove in order to succeed: Scott Fell v Lloyd (Official Assignee) (1911) 13 CLR 230 at 241; Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 717 per Kirby P. In Warren Mitchell Pty Ltd v Australian Maritime Officers Union (1993) 12 ACSR 1 the word “credible” in s1335 was said to suggest that an evidentiary burden is undertaken by the party seeking the order who must show:

“…that the material before the Court is sufficiently persuasive to permit a rational belief to be formed that, if ordered to do so, the corporation would be unable to pay the costs of that party upon disposal of the proceedings.”

The rationale behind the distinction between natural persons and corporations as plaintiffs is based on the general rule (subject to certain exceptions) that a natural person should not be ordered to give security for costs, however poor he is: Pearson v Naydler at 904. This is premised on the basic rule that “poverty is no bar to a litigant”: Cowell v Taylor (supra) at 38. The same protection is not however conferred on a plaintiff company. In fact, as already noted, the basic rule in that regard is formulated in the opposite terms (ie Rule 2(1)(e) and s1335). The reasoning behind this distinction was articulated by Moffitt J in Pacific Acceptance Corporation Ltd v Forsyth (No 2) [1967] 2 NSWR 402 at 407:

“…the very basis of the exercise of jurisdiction to order security of costs against a company as distinct from an individual is that the company is impoverished. It recognises that if a company wins it will get the benefit of its verdict and an order for costs against the defendant to the advantage of those who have an interest in the assets of the company but that the defendant sued will, if successful, be at a disadvantage in being unable to recover his costs if the company is financially insecure, and that

it is fair that he be placed in an equal position with the company by the company providing or having provided by those concerned in the fruits of the litigation a means of the defendant sued recovering his costs, if he wins.”

As Burchett J said in Cunningham v Olliver (Federal Court of Australia, unreported 21 November 1994, NG 14/93) at page 4:

"It is an important principle…That an impecunious natural person is entitled to rely on the general rule that property is no bar to a litigant. The applicants impecuniosity should not close the door of the court against his claim. However, to the extent that the claim is put forward on behalf of others, it is appropriate to regard this principle as qualified".

80 The defendants, correctly as it seems to me, submit that it is necessary to consider which are the claims made by each of the plaintiffs. It does seem clear that the claims made by Serenity Cove go much further than those made by Mr Williams. True it is that the misrepresentation claims are pleaded in the names of both plaintiffs, but the only direct loss which Mr Williams claims to have suffered is that he put up the $100,000 deposit when the Heads of Agreement was signed. The balance of the purchase price was provided by Serenity Cove, which of course became the registered proprietor of the property. The contract claims, which do amount to over $80 million, are claims by Serenity Cove and, as the defendants correctly point out, Mr Williams appears to have no interest in that.

81 Serenity Cove appears to be a proprietary company with only nominal share capital. It is of course the registered proprietor of the remainder of the subject land, but there are very real questions, as I have indicated, as to the value of that land. If the valuations by the defendant prove pervasive, the value of that land is likely to be considerably less than the amount secured under the mortgage.

82 As the principles which are taken as a given, and in respect of which I did not understand from either side of the Bar table there to be any real exception taken, make clear, it is necessary to ensure that those who will benefit from success in the proceedings, in this case Mr Williams as shareholder, should not be able to litigate and expose the defendants to the risk of costs which may not be able to be recovered whilst themselves shielded by reason of the interposition of the impecunious plaintiff from the burden of an adverse order for costs. There has been, it seems to me, no sufficient reason shown as to why, notwithstanding that Mr Williams is personally a plaintiff insofar as the proceedings are concerned, in the expanse of claims pursued by Serenity Cove, he should not come out from behind the skirts of Serenity Cove and, in the absence of that occurring, it seems to me entirely appropriate to have a security for costs order generally of the nature sought by the defendants made against the second plaintiff.

83 The plaintiffs have sought to rely upon authority for the proposition that in an appropriate case no security need be provided as a precondition to obtaining injunctive relief. They cite Cunningham v National Australia Bank (1987) 15 FCR 495 where the matter was put as follows:

"If the claim for damages was so connected with the mortgages or any of them as to impeach the mortgagee's title, in the sense in which that concept is expounded in relation to equitable set-off, then it may be that the relief sought could be granted free of the condition that the amount secured be paid into court."

84 I have dealt with the question of the claimed injunction. It seems to me that the proper approach in terms of the security for costs regime is, accepting the evidence of Ms Vine-Hall, which was that an amount of $435,134.50 by way of security was a reasonable assessment, bearing in mind the facts, matters and circumstances put to her, to order that security for costs in an amount of $380,000 be paid, this involving some discount from Ms Vine-Hall's calculations in terms of the exigencies and lack of certainty as to the duration of the final hearing and actual costs in the event of preparation. In my view the appropriate order to be made with respect to security for costs is that the second plaintiff should be obliged within 30 days to pay $190,000 into Court or into an inter-solicitor interest bearing deposit by arrangement. In my view the appropriate order is then to require that the second plaintiff pay a further sum of $190,000 on the happening of the first of one of two events, either the fixing by this Court of hearing dates for the hearing by this Court of the proceedings or on the occasion when a Part 72 reference out order is made by this Court.

85 There has been some debate in terms of the effective regime to be accepted by the parties or put into place by Court order concerning so much of the subject land as is not the subject of the lease to the first defendant. The position with respect to that portion of the land is quite simply that the registered proprietor of that land is now the second defendant and that unless and until the security documents, if ever, be upset, the security documents extend over the whole of those lands. There does not seem to be any question but that the plaintiffs have an entitlement to treat with those lands as registered proprietor in terms of the usual entitlement of any registered proprietor.

86 In terms of the case management of the proceedings forward from this point in time, it is obvious to me that it will be necessary for the defendants, by their respective legal advisors and experts and witnesses, to be given a very full opportunity to have access to any part of the subject land for the purpose of carrying out tests and preparing experts reports. At the same time it is clear to me that the plaintiffs must be entitled to do precisely the same. At the same time, it is clear to me that neither party should be entitled to in any way, without proper notice to the other party, and presumably affidavit evidence in this respect to the Court, be in a position to tamper with or otherwise alter the status quo. So that it seems to me that the short minutes of order will need to embrace all of those matters.

87 If it be that the plaintiffs assert that by reference to legislation and the obligations of regulatory requirements, notwithstanding the pendency of these proceedings, it is necessary for some sort of work in relation to the lands by way of decontamination or otherwise to be carried out, that work should not be able to be authorised in the absence of proper notice to the defendants in writing and in the absence of the Court being duly apprised of precisely what it is that is to occur, and granting its imprimatur. Each party has every entitlement to litigate the issues in the case and each party has every entitlement to know precisely what the other is doing in relation to any changes to the current condition of that land, lest such changes, not notified, may alter the state of the evidence.

88 Finally, and although this has not been adverted to expressly up to this point in time, it has seemed to me that to a reasonable extent, the approach now being taken by the Court recognises the significance of a continuance of what I regard as the pragmatic status quo. There was some debate as to the efficacy of a section 57(2)B notice which had been said not to have been served correctly. In the events which have happened, that matter seems to have been entirely out-flanked by the way in which the motions have been argued.

89 In so far as questions of the two buildings are concerned, where the evidence before the Court has been that the defendants have effectively denied access to the plaintiffs to those two buildings following the commencement of the period when payments ceased, to my mind the status quo and the balance of convenience and respective prima facie cases likely mandate that those buildings remain in the same position as they have been up to this point in time, which has generally been that they have not been used by, as I understand it, either party. Apparently the plaintiffs had intended, in any event, to carry out certain refurbishing, or other works, in relation to these buildings. To my mind it is not appropriate that the buildings be dealt with in any fashion, pending a determination by the Court on final hearing of the net result of the issues sought to be litigated.

I certify that paragraphs 1 - 89
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on Thursday 3 October 2002
ex tempore and revised 18 October 2002

___________________
Susan Piggott
Associate
18 October 2002

Last Modified: 10/31/2002

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Citations

Paul Douglas Williams v Abbott Australasia Pty Limited [2002] NSWSC 950

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CITATION:	Paul Douglas Williams & Anor v Abbott Australasia Pty Limited & Anor [2002] NSWSC 950
FILE NUMBER(S):	SC 50095/02
HEARING DATE(S):	03/10/02
JUDGMENT DATE:	3 October 2002
PARTIES :	Paul Douglas Williams (First Plaintiff) Serenity Cove Business Pty Limited (Second Plaintiff) Abbott Australasia Pty Limited (First Defendant) Abbott Laboratories (Second Defendant)
JUDGMENT OF:	Einstein J

COUNSEL :	Mr T Tobin QC, Mr M Condon (Plaintiffs) Mr F Douglas QC, Mr TGR Parker (Defendants)
SOLICITORS:	Walsh & Blair (Plaintiffs) Clayton Utz (Defendants)
CATCHWORDS:	rights pursuant to mortgage or guarantee and exercising purported power of sale under mortgage - Security for costs - Order sought by defendants seeking security for costs from second plaintiff
LEGISLATION CITED:	Contaminated Land Management Act 1997 (NSW) Corporation Act 2001 (Cth) Fair Trading Act 1987 (NSW) Legal Profession Act 1987 (NSW) Real Property Act 1900 (NSW) Supreme Court Act 1970 (NSW) Trade Practices Act 1974 (Cth)
CASES CITED:	American Cyanamid Co v Ethicon Ltd [1975] AC 396 Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208 Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 Bell Wholesale Co Pty Ltd v Gates Export Corporation (No. 2) (1984) 2 FCR 1 Bryan E. Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301 Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Aust) Pty Ltd (1986) 13 FCR 46 Caruso Australia Pty Ltd v Portec (Aust) Pty Ltd (1984) 8 ACLR 818 Clark Equipment (Australia) Limited v Covcat Pty Limited (1987) 71 ALR 367 Clyde Industries Ltd v Ryad Engineering Pty Ltd (1993) 11 ACLC 325 Cunningham v National Australia Bank (1987) 15 FCR 495 Eng Mee Yong v Letchumanan [1980] AC 331 Gentry Bros Pty Ltd v Wilson Brown and Associates Pty Ltd (1992) 8 ACSR 405 Grant v The Banque Franco-Egyptienne (1876) 1 CPD 143 Harvey v McWatters (1949) 49 SR (NSW) 173 Heller Factors Pty Ltd v John Arnold's Surf Shop Pty Ltd (in liq) (1979) ACLC 32,446 Hession v Century 21 South Pacific Ltd (in liq) (1992) 28 NSWLR 120 Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 744 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 Interwest Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621 Magna Alloys & Research Pty Ltd v Coffey (1981) VR 23 Mainbanner Pty Ltd v Dadincroft Pty Ltd (1988) ATPR 40-896 Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1990) 8 ACLC 304 M A Productions Pty Ltd v Austarama Television Pty Ltd (1982) 7 ACLR 97 Memutu Pty Ltd v Lissenden (1983) 8 ACLR 364 Petera Pty Limited v EAJ Pty Limited (1985) 7 FCR 375 PS Chellaram and Co v China Ocean Shipping Co (1991) 65 ALJR 642 Rosenfield Nominees Pty Ltd v Bain and Co (1988) 14 ACLR 467 Sent v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201 Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 Smail v Burton [1975] VR 776 Spiel v Commodity Brokers Australia Pty Ltd (in liq) (1983) 8 ACLR 410 Stollznow v Calvert [1980] 2 NSWLR 749 Sydmar Pty Ltd v Statewise Developments Pty Ltd (1987) 5 ACLC 480 Town & Country Sport Resorts (Holdings) Pty Limited v Partnership Pacific Limited (1988) 20 FCR 540 Yandil Holdings Pty Ltd v Insurance Co of North America (1985) 3 ACLC 542
DECISION:	Orders restraining enforcement of security documents.