The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 12)

[2022] NSWSC 357

Supreme Court

New South Wales

Medium Neutral Citation:

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 12) [2022] NSWSC 357

Hearing dates:

28 March 2022

Date of orders:

28 March 2022

Decision date:

28 March 2022

Jurisdiction:

Equity

Before:

Stevenson J

Decision:

Application for freezing order refused; motion stood over to date on which judgment in main proceedings to be delivered

Catchwords:

INJUNCTIONS – freezing order – whether order should be made pending delivery of judgment in main proceedings restraining first plaintiff from reducing the balance in its bank account below a level to which defendants may be entitled if successful in proceedings – whether existing undertakings given by first plaintiff adequately protects defendants’ interests

Cases Cited:

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd [2020] NSWSC 1238

The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 2) (Supreme Court (NSW), Stevenson J, 17 September 2020, unrep)
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 3) [2020] NSWSC 1364
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 4) (Supreme Court (NSW), Stevenson J, 14 October 2020, unrep)
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 5) [2020] NSWSC 1516
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 6) [2020] NSWSC 1820
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 7) [2020] NSWSC 1883
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 8) [2021] NSWSC 703
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 9) [2021] NSWSC 714
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 10) (Supreme Court (NSW), Stevenson J, 21 July 2021, unrep)
The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 11) [2021] NSWSC 1477

Category:

Procedural rulings

Parties:

The Checkout Pty Ltd (First Plaintiff/Respondent)
Giant Dwarf Pty Ltd (Second Plaintiff)
Julian Francis Xavier Morrow (Third Plaintiff)
Cordell Jigsaw Productions Pty Ltd (First Defendant/Applicant)
Nicholas Harvey Murray (Second Defendant)

Representation:

Counsel:
C O’Neill (Plaintiffs/Respondent)
B F Katekar SC (Defendants/Applicant)

Solicitors:
Kay & Hughes (Plaintiffs/Respondent)
Bird & Bird (Defendants/Applicant)

File Number(s):

2019/343896

EX TEMPORE Judgment (REVISED)

1. The background to this application is set out in my earlier judgments[1] and that of Henry J[2] in these proceedings.

   1. The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 2) (Supreme Court (NSW), Stevenson J, 17 September 2020, unrep); The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 3) [2020] NSWSC 1364; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 4) (Supreme Court (NSW), Stevenson J, 14 October 2020, unrep); The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 5) [2020] NSWSC 1516; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 6) [2020] NSWSC 1820; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 7) [2020] NSWSC 1883; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 8) [2021] NSWSC 703; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 9) [2021] NSWSC 714; The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 10) (Supreme Court (NSW), Stevenson J, 21 July 2021, unrep); The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd (No 11) [2021] NSWSC 1477.

   2. The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd [2020] NSWSC 1238.

2. The trial of the proceedings took place before me between 29 November and 22 December 2021. I have reserved judgment and have recently received schedules from the parties which, in effect, comprise their final submissions in relation to a number of aspects of the matter.

3. I anticipate being in a position to give judgment in the next week or so.

4. One issue in the proceedings is whether a Share Sale Agreement made between Giant Dwarf Pty Ltd and Cordell Jigsaw Productions Pty Ltd on 8 April 2019 should be rescinded. If that is the correct result then Cordell Jigsaw will be entitled to 40% of the PDV Offsets received by The Checkout Pty Ltd from the Australian Taxation Office.

5. In that context, in August 2020, Henry J heard an application by Cordell Jigsaw for interlocutory relief in relation to the PDV Offsets. Ultimately, her Honour resolved that dispute by accepting an undertaking from The Checkout Pty Ltd which included that it would not reduce its cash at hand below an amount equal to 40% of the PDV Offsets received without first providing Cordell Jigsaw's solicitors three days’ notice by email that that was "about to occur"; and to provide "supporting documents in relation to that reduction". [3]

   3. The Checkout Pty Ltd v Cordell Jigsaw Productions Pty Ltd [2020] NSWSC 1238 at [80] (Henry J).

6. Now, by Notice of Motion filed on 24 March 2022, Cordell Jigsaw seeks a freezing order against The Checkout Pty Ltd on the basis of its apprehension that there is reason to believe that The Checkout Pty Ltd may act in contravention of that undertaking and reduce the balance in its bank accounts below what is agreed to be now the relevant limit: $488,198.

7. That is said to be because of the use by The Checkout Pty Ltd of funds in its accounts to pay more than its reasonable share of the costs of this litigation to date and to pay a salary to Mr Morrow when it is argued that The Checkout Pty Ltd is not currently engaged in any commercial enterprise.

8. The application was originally made to the General List Duty Judge but was referred to me at the suggestion of the Commercial List Duty Judge in view of my familiarity with the matter.

9. It would be a delicate task indeed for me to endeavour at this stage to make any assessment of the merits of the contentions advanced by Cordell Jigsaw in relation to this matter.

10. It may be, depending on what the result of the case is, that there are matters that will have to be investigated once judgment is delivered. Such investigation may well be factually dense and controversial.

11. My conclusion, at the moment, is that the interests of Cordell Jigsaw are adequately protected by the undertaking given to the Court.

12. If, between now and when judgment is delivered, for some reason The Checkout Pty Ltd anticipates that the amount in its bank account will fall below the critical amount then it will no doubt give notice in accordance with the undertaking and the Court will have to deal with any application, if and when that occurs.

13. It is common ground that a further sum of a number of hundreds of thousands of dollars for the PDV Offset is to be received by The Checkout Pty Ltd in the not too distant future, which provides another reason, in my view, why there is no need for the Court to intervene at the moment.

14. I make an order standing the first defendant's Notice of Motion of 24 March 2022 over to the date on which judgment is delivered.

15. I will reserve the question of costs and consider on that occasion what if anything further needs to be done in relation to this matter.

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Endnotes