Reavill Farm v AR Mortgages Pty Limited

[2019] NSWSC 1194

Supreme Court

New South Wales

Medium Neutral Citation:

Reavill Farm v AR Mortgages Pty Limited [2019] NSWSC 1194

Hearing dates:

22 August 2019

Date of orders:

22 August 2019

Decision date:

22 August 2019

Jurisdiction:

Common Law

Before:

Ierace J

Decision:

(1)   The cross-defendant be restrained until further order of the Court from selling all livestock associated with Property Identification Code NJ534510, all livestock in Schedule B to the cross-summons filed by AR Mortgages on 18 April 2019 and all present and future livestock owned by the cross-defendant.

 

(2)   The cross-defendant to pay the cross-claimant’s costs of today and of Friday 16 August.

 

(3)   The matter is referred to the Registrar on 26 August 2019 to fix a date for the hearing of the notice of motion.

 (4)   Leave granted to the cross-defendant to file the amended summons.

Catchwords:

CIVIL PROCEDURE – interlocutory relief – application for restraining order over livestock

Category:

Procedural and other rulings

Parties:

Reavill Farm Pty Limited (Plaintiff/Respondent)
AR Mortgages Pty Limited (Defendant/Applicant)

Representation:

Counsel:
N Obrart (Plaintiff/Respondent)
M W Young (Defendant/Applicant)

  Solicitors:
Harper James Law Group (Plaintiff)
Bransgroves Lawyers (Defendant)

File Number(s):

2019/00122214

Judgment

1. HIS HONOUR: The applicant in this matter, AR Mortgages Pty Limited, is the defendant in proceedings in the Common Law Division brought by Reavill Farm Pty Limited (“the respondent”), as the plaintiff in respect of a mortgage in relation to a property and business operating under the respondent’s name.

2. The relevant history for the purposes of this application is that on 7 May 2019, orders were made by Kunc J which included an order that the respodent will not, other than in the ordinary course of business, deal with, sell or dispose of or otherwise remove livestock from their possession or control whether by themselves or their servants or their agents.

3. The applicant, on a Notice of Motion filed on 12 August 2019, seeks a number of orders in relation to various conditions that would apply until the primary issue is resolved in the other proceedings. The applicant has indicated that, since filing a notice of motion, it is proceeding on only one of the orders originally sought, which is as follows:

“An order restraining the cross-defendant, until further order of the Court, from selling all livestock associated with a particular property identification code and all livestock in a schedule to the cross-summons filed by AR Mortgages on 18 April 2019, and all present and future livestock owned by the cross-defendant.”

4. The relevant background, as I understand it, is that the respondent’s business involves the keeping of cattle, and according to the respondent, that business involves occasionally selling head of cattle and purchasing fresh cattle. The applicant submits that there has been, over the last month, a disposal of cattle that goes beyond what might be expected in the normal course of that business. In effect, it submits, the number of cattle is being significantly reduced so that the value of the property and the interest that the applicant has in the property is being reduced beyond what was anticipated and what was required of the respondent by the orders made on 7 May 2019.

5. The evidence that the applicant relies upon in support of that submission is to the effect that earlier this year, a valuer attended the property and in the company of Geoffrey Champion, who is a director of Reavill Farm, counted the number of cattle on the property. On an occasion on 19 July 2019, according to a later report by the valuer, he came to the conclusion that the number of cattle involved were as follows: 185 cows; 77 heifers; 15 steers; 149 calves and 5 bulls. A tally provided by Mr Champion in an affidavit sworn on 20 August 2019 for 15 August was as follows: 135 cows; 104 heifers; 8 steers; 100 calves and 5 bulls.

6. This indicates that over the period of approximately one month, there had been an overall loss of stock of 79 animals which is roughly one-fifth of the total herd. The applicant submits that that loss goes significantly beyond what was contemplated in the orders of Kunc J.

7. More particularly, the applicant submits that that reduction has not been explained by the relevant officers of the respondent. It further notes that an explanation that is offered by Mr Champion in his affidavit of a reduction, but not over that period, is at odds with the documentation relied upon and annexed to his affidavit which goes to changes in the herd kept on the property. For that reason, the applicant seeks the order which has the effect of stopping the respondent from further dealing in their stock.

8. The respondent submits that the effect of such an order would be to paralyse the business and imperil its future. The respondent submits that there should be an opportunity for the respondent to respond to these allegations of an unexplained and significant reduction in the size of the herd. The dispute between the parties is also to be understood in the context of other disputed issues which, although not directly relevant to the issue concerning the size of the herd, are relevant in my view in terms of the necessary degree of trust that needs to exist if the asset is to be kept in a way that preserves, in a reasonable sense, its value.

9. One of those other issues is whether the respondent has maintained payments as agreed, of interest on the outstanding loan. There is a considerable conflict between the parties as to whether that is the case. In an affidavit of Belinda Nott affirmed on 21 August 2019, that is yesterday, Ms Nott deposes that she is the daughter of Mr Champion and the joint manager of the office and administration affairs of the respondent. In her affidavit, as sought to be read, there were references to payments being made but, as I have indicated, cannot be relied upon by the respondent, and therefore, do not form part of her affidavit.

10. There is no evidence that has been admitted to the effect that the respondent has made the required interest payments for the months of June and July. Paragraph [11] of Ms Nott's affidavit, which is admitted into evidence, is a concession that the interest payment for the month of August has not yet been made, but that she intends to make it by the end of August, that is, the end of next week.

11. Tendered into evidence is the relevant bank account statement for the respondent for the period from May to the present. Counsel for the applicant submits that the statement for that period for the relevant bank account demonstrates that no payments have been received from the respondent company for the months of June and July, and as well, demonstrates that on multiple occasions in May of this year, the relevant payment bounced. In other words, the cheque was not honoured.

12. Counsel for the respondent, as I have indicated, has submitted that effectively the matter should be adjourned to enable them to put on further evidence.

13. However, I note that the respondent was effectively on notice of the discrepancy by virtue of their awareness of the content of the valuer’s report, which recorded the size of the herd as of 9 July 2019 and the figures provided by Mr Champion as to what changes in the herd had occurred since that date by virtue of the annexures to his affidavit, and I have already indicated that there is a discrepancy between the figures in the annexures and the content of the affidavit itself.

14. In view of the fact that the respondent should have been on notice of that discrepancy, it seems to me that a further adjournment is not warranted. I come to that view, having regard to the way in which the submission was developed by the respondent, which was to hypothesise theories that could perhaps explain the discrepancy; however, those theories appeared to come down to the scenario that the valuer had miscounted the herd. I note, however, that Mr Champion was with the valuer when the herd was counted by the valuer. In other words, any mistake could only have been in the allocation of the figures in the report from the figures kept during the count, which I regard to be remote in the extreme.

15. In any event, the changes to the herd which are explained in Mr Champion’s affidavit do not come close to explaining the discrepancy of 79. The sales and purchases that he refers to in his affidavit over the last month, even though in fact they occurred before the count by the valuer, only account for the reduction of the herd by nine.

16. For those reasons, I have come to the conclusion that it is appropriate to make an order in terms set out in the notice of motion at proposed order 1.

17. I should note for the sake of completeness that an interim order was made on 16 August 2019 by Walton J to the same effect, that is, that the respondent be restrained up to and including today from dealing with the livestock.

18. Accordingly, I make the following order: the cross-defendant is restrained until further order of the Court from selling all livestock associated with property identification code NJ534510 all livestock in schedule B to the cross-summons filed by AR Mortgages on 18 April 2019 and all present and future livestock owned by the cross-defendant.

**********

Decision last updated: 10 September 2019