Scarborough Hospitality 2000 Pty Ltd (in Liq) v Cabarita Pacific Holdings Pty Ltd

Scarborough Hospitality 2000 Pty Ltd (in liquidation) and two individuals, John William Cunningham and John Richard Park, filed an application for an interlocutory injunction against Cabarita Pacific Holdings Pty Ltd, Jenelle Sarah Kurvink, and Frederick John Brimlan. The plaintiffs sought to restrain the defendants from disposing of the business and assets of the plaintiff company, known as "The Scarborough Hotel." The dispute arose from the liquidation of Scarborough Hospitality 2000 Pty Ltd, and the defendants argued that the company had no business and did not hold any assets. The plaintiffs contended that the company had a business and was entitled to the proceeds from its sale.

The court had to decide whether the plaintiff company had a business and whether the injunction should be limited to the aggregate debts of identified creditors. The court also had to consider the damages undertaking provided by the plaintiffs, which was secured by a bank guarantee. The defendants argued that the company had no business and that the injunction should be limited to the amount of creditors' claims. The plaintiffs argued that the injunction should cover the full proceeds of the sale, as it was not possible to identify all creditors.

The court found that the plaintiff company did conduct a business, as evidenced by its lease, employees, and trading debts. The court also found that the liquidators had a duty to preserve the company's assets, which should not be limited to the amount of creditors' claims. The court rejected the defendants' argument that the injunction should be limited to the amount of creditors' claims, as it was not possible to identify all creditors. The court also found that the damages undertaking provided by the plaintiffs was sufficient, as it was secured by a bank guarantee.

The court granted the injunction, ordering the defendants to not dispose of the business and assets of the plaintiff company and to keep and maintain all proper accounts and records. The court also ordered that the defendants must pay into court the complete sale proceeds in the event that the first defendant seeks to complete the business sale contract. The court reserved costs.

This case highlights the importance of preserving a company's assets during liquidation and the role of the liquidators in doing so. The court found that the plaintiff company did conduct a business and that the liquidators had a duty to preserve its assets, which should not be limited to the amount of creditors' claims. The court also found that the damages undertaking provided by the plaintiffs was sufficient, as it was secured by a bank guarantee.