Winau Australia Pty Ltd v LCC Property Development Pty Ltd - [2021] NSWSC 612

Supreme Court

New South Wales

Medium Neutral Citation: Winau Australia Pty Ltd v LCC Property Development Pty Ltd [2021] NSWSC 612
Hearing dates: 17 May 2021
Date of orders: 26 May 2021
Decision date: 26 May 2021
Jurisdiction: Equity
Before: Rein J
Decision:
See [21]

Catchwords:
EQUITY — Equitable remedies — Injunctions — Property sold pursuant to a purported first mortgage on the mistaken assumption that the mortgage secured amounts advanced — Proceeds of the sale of the property paid into Court — Previous hearing in this Court on a separate question, the outcome of which was that the purported first mortgage did not secure the amounts advanced — Agreement reached by the parties prior to the hearing of the separate question identifying to whom the proceeds of the sale of the property were to be paid following the Court’s judgment in respect of the separate question — In light of the Court’s judgment on the separate question, pursuant to the parties’ agreement, the amounts held in Court were to be paid to the former registered proprietor of the property — New claims made pursuant to a purported second mortgage — Purported second mortgagees sought an interlocutory injunction requiring the former registered proprietor to place the proceeds of sale of the property in a bank account and restraining the former registered proprietor from encumbering or making any withdrawal or transfer from that account — Held: The undertaking proffered by the Applicants on the Motion was ineffective — Consideration of the relative strengths and weaknesses of the parties respective claims and defences — Applicants did not have a strong case on estoppel and the Respondents had, at the very least, reasonable prospects on their case that the second mortgagees could not resile from their agreement in respect of the funds — Proceeds of sale of the property to be released to the former registered proprietor of the property, with a requirement that it give the Applicants on the Motion 14 days’ notice of its intention to disburse those funds to its unitholders

Legislation Cited:
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 360
Harvey v Phillips (1956) 95 CLR 235
IceTV Pty Ltd v Ross & Ors [2007] NSWSC 1232
Ippin Textiles Pty Ltd v WinauAust Pty Ltd [2021] NSWCA 9
Lavery-Fenelon v Nicholas [2014] NSWCA 342
Patakas v Bevan [2017] NSWSC 1592
Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264
Seaton v Burnand [1900] AC 135
Varley v Varley [2006] NSWSC 1025
WinauAust Pty Ltd & Ors v LCC Property Development Pty Limited & Ors [2020] NSWSC 434
WinauAust Pty Ltd & Ors v LCC Property Development Pty Limited & Ors (No 2) [2020] NSWSC 586
WinauAust Pty Ltd v LCC Property Development Pty Ltd [2019] NSWSC 499

Texts Cited:
Nil

Category: Principal judgment
Parties:
Winau Aust Pty Ltd (First Plaintiff/Fourth Cross-Defendant)
Shunjiyuan Investments Pty Ltd (Second…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 612
Decision Date: 26 May 2021

CaseChat Overview and Summary

Winau Australia Pty Ltd sought an interlocutory injunction against LCC Property Development Pty Ltd and others, arguing that a purported second mortgage secured the proceeds of a property sale. The property had previously been sold based on a mistaken assumption that a first mortgage secured the amounts advanced. The proceeds from the sale were paid into court. The case had previously been heard by the court on a separate issue, which concluded that the first mortgage did not secure the amounts advanced. An agreement between the parties had been reached before this issue was heard, stipulating that the proceeds of the sale would be paid to the former registered proprietor of the property following the court's judgment on the separate issue.

The legal issues the court needed to decide included whether the purported second mortgage was valid and enforceable, and whether the second mortgagees were entitled to an interlocutory injunction to restrain the former registered proprietor from encumbering or withdrawing funds from a designated bank account. The court also needed to consider whether the second mortgagees could rely on an estoppel argument to prevent the former registered proprietor from disbursing the funds to its unitholders.

The court found that the undertaking provided by the applicants was ineffective and, after considering the relative strengths and weaknesses of the parties' claims and defences, ruled that the applicants did not have a strong case on estoppel. The court concluded that the respondents had, at least, reasonable prospects of proving that the second mortgagees could not withdraw from their agreement concerning the funds. Consequently, the court ordered that the proceeds of the property sale be released to the former registered proprietor, with a requirement that it notify the applicants 14 days before disbursing the funds to its unitholders.

Orders