Transworld Group Limited v Natcor Properties Pty Ltd

[2013] FCA 1467

FEDERAL COURT OF AUSTRALIA

Transworld Group Limited v Natcor Properties Pty Ltd [2013] FCA 1467

Citation:	Transworld Group Limited v Natcor Properties Pty Ltd [2013] FCA 1467
Parties:	TRANSWORD GROUP LIMITED and SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719 v NATCOR PROPERTIES PTY LTD ACN 108 477 299, JOHN POTTS AFFLECK and SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063; JOHN POTTS AFFLECK and SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063 v STEPHEN CUMMINS, TRANSWORLD GROUP LIMITED, JAMILLE CUMMINS, SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719, SOKEROL INTERNATIONAL PTY LTD ACN 074 342 63, SOKEROL GROUP LIMITED 006195V and PORTCOM LIMITED 007146V
File number:	QUD 668 of 2012
Judge:	DOWSETT J
Date of judgment:	3 September 2013
Date of hearing:	3 September 2013
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	6
Counsel for the Applicants:	Mr DV Ferraro
Solicitor for the Applicants:	Frankel Partners
Counsel for the Respondents:	Mr NF Coburn
Counsel for the Cross‑Claimants:	Mr NF Coburn
Counsel for the First, Second, Fourth, Fifth, Sixth and Seventh Cross‑Respondents:	Mr DV Ferraro
Solicitor for the First, Second, Fourth, Fifth, Sixth and Seventh Cross‑Respondents:	Frenkel Partners

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 668 of 2012

BETWEEN:

TRANSWORD GROUP LIMITED
First Applicant

SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719
Second Applicant

JOHN POTTS AFFLECK
First Cross-Claimant

SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063
Second Cross-Claimant

AND:

NATCOR PROPERTIES PTY LTD ACN 108 477 299
First Respondent

JOHN POTTS AFFLECK
Second Respondent

SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063
Third Respondent

STEPHEN CUMMINS
First Cross-Respondent

TRANSWORLD GROUP LIMITED
Second Cross-Respondent

JAMILLE CUMMINS
Third Cross-Respondent

SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719
Fourth Cross-Respondent

SOKEROL INTERNATIONAL PTY LTD ACN 074 342 63
Fifth Cross-Respondent

SOKEROL GROUP LIMITED 006195V
Sixth Cross-Respondent

PORTCOM LIMITED 007146V
Seventh Cross-Respondent

JUDGE:	DOWSETT J
DATE OF ORDER:	3 SEPTEMBER 2013
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.The respondents have leave to amend the notice of cross-claim in terms of exhibit one; 

2.the respondents have leave to amend the statement of cross-claim in terms of exhibit two; 

3.the application for substituted service (prayer three of the interlocutory application filed 1 July 2013) is dismissed;

4.prayers four to eight of the interlocutory application filed 1 July 2013 are dismissed;

5.time for the applicants to comply with order 3 of the orders made on 26 July 2013 is be extended to 4 pm on 6 September 2013;

6.any application for service out of the jurisdiction in relation to any respondents on the cross-claim be filed within 14 days of the hearing;

7.the costs of the hearing be the applicants’ costs in the cause.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 668 of 2012

BETWEEN:

TRANSWORD GROUP LIMITED
First Applicant

SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719
Second Applicant

JOHN POTTS AFFLECK
First Cross-Claimant

SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063
Second Cross-Claimant

AND:

NATCOR PROPERTIES PTY LTD ACN 108 477 299
First Respondent

JOHN POTTS AFFLECK
Second Respondent

SOKEROL (AUSTRALIA) PTY LTD ACN 106 011 063
Third Respondent

STEPHEN CUMMINS
First Cross-Respondent

TRANSWORLD GROUP LIMITED
Second Cross-Respondent

JAMILLE CUMMINS
Third Cross-Respondent

SOKEROL AUSTRALASIA PTY LTD ACN 147 632 719
Fourth Cross-Respondent

SOKEROL INTERNATIONAL PTY LTD ACN 074 342 63
Fifth Cross-Respondent

SOKEROL GROUP LIMITED 006195V
Sixth Cross-Respondent

PORTCOM LIMITED 007146V
Seventh Cross-Respondent

JUDGE:	DOWSETT J
DATE:	3 SEPTEMBER 2013
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. In the circumstances and for the reasons which I have given, I decline the application to revisit the question of the value of the undertaking. 

2. Insofar as concerns orders 4, 5, 6, 7 and 8 the respondents depend upon the assertion made in the principal proceedings, that the undertaking as to damages extracted on 26 April 2013 lacks substance.  As I have pointed out, interlocutory orders on the basis of undertakings were first granted by consent in December 2012.  The question of the value of the undertaking was only raised at a later stage.  It may have been appropriate for the respondents to raise the matter, if they had doubts as to the value of the undertakings, notwithstanding that such doubts had arisen since the original consent orders were made. 

3. However it seems to me that the evidence concerning the value of the undertaking is at best equivocal.  The second applicant appears to have significant assets in terms of debts owed by debtors who seem to be of some substance.  Further, there is in excess of $200,000 in stock on hand.  Whilst I agree that in other circumstances such assets might be easily disposed of, I see no reason so to treat them, given that the applicant has recently produced substantial amounts of product and appears to be developing a permanent presence at its place of business. 

4. When, in the initial stages of these proceedings, the respondents accepted the undertakings as to damages, they knew something about the affairs of the applicants, given that they had dealt with them at length in connection with the acquisition by the applicants of the respondents’ business.  In those circumstances it seems inappropriate now to revisit the question of the value of the undertakings. 

5. As to the merits of the case, the respondents’ evidence is equivocal.  The proceedings are well advanced and, prior to their commencement, there seems to have been no doubt that the chattels with which I am presently concerned had been transferred to the applicants.  The respondents’ current case is that they are entitled to recover them upon the basis that the relevant contract has been rescinded.  In those circumstances, I conclude that no proper basis has been demonstrated for revisiting the interim position which has been established and which has been in position, with some variations, for some time.  The prayers for relief in paragraphs 4 to 8 of the interlocutory application are dismissed.

6. I extend the time in which the applicants may comply with order 3 of the orders made on 26 July 2013 until 4 pm on 6 September 2013.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:       21 March 2014