Woodman v Kudosa Pty Ltd
[2015] VSC 675
•16 November 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S CI 2015 05760
| TANIA WOODMAN | Plaintiff |
| v | |
| KUDOSA PTY LTD (ACN 114 367 234) (formerly East Qualify Homes Pty Ltd ACN 114 367 234) | Defendant |
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JUDGE: | T FORREST J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 November 2015 |
DATE OF RULING: | 16 November 2015 |
CASE MAY BE CITED AS: | Woodman v Kudosa Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2015] VSC 675 |
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EQUITY – Mortgage – Loan to business secured by mortgage over business properties – Further mortgage registered on default over plaintiff’s personal investment property – Whether or not loan agreement explained to plaintiff – Unconscionability - Solicitor’s certificate – Interlocutory injunction restraining sale of property sought – Whether or not plaintiff a volunteer – Whether security unenforceable.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P. Miller | Rosendorff Lawyers |
| For the Defendant | Ms M. Rozner | Ronayne Owens Lawyers |
HIS HONOUR:
By writ filed 9 November 2015, the plaintiff seeks declarations to the following effect:
(a) That the personal guarantee provided by her to the defendant on 27 June 2015 is invalid and otherwise unenforceable;
(b) That this personal guarantee be set aside; and
(c) That a mortgage provided by the plaintiff to the defendant be set aside.
This proceeding is the second return of a summons in which the plaintiff seeks an interlocutory injunction until final determination restraining the defendant from taking any steps to complete the sale of the relevant property or otherwise enforcing the mortgage it holds over that property. Alternatively, the plaintiff seeks the same restraint but until 27 November 2015.
Factual background
The plaintiff has been the proprietor of 16 Westwood Drive, Mill Park (‘the Mill Park property’). She bought that property in July 2000 for $50,000. Its current market value is $460,000 and there is a registered mortgage in favour of Perpetual Trustees Australia Ltd – about $140,000 is owed under that facility. The property has been tenanted since 2003.
The plaintiff has been romantically attached to Nathaniel Whitehall since 2001. They have five children together. They lived in the Mill Park property for a couple of years early in the 2000s. They have now lived in Sydney for many years.
Mr Whitehall is, according to an affidavit sworn by the plaintiff, a Qantas pilot, a property developer and a businessman. The plaintiff asserts that during their relationship Whitehall has bought and developed many properties. She says that, in the past, she did not involve herself in his business. She said that after the global financial crisis Whitehall advised her he owed millions of dollars to creditors, and in about 2012 he told her that he had been made bankrupt. Whitehall confirms this is in an affidavit sworn for these proceedings.
In her affidavit, the plaintiff sets out that Mr Whitehall effectively made her a ‘dummy front’ (my words) for his business activity from about December 2012 onwards. In short compass:
·She became the director and shareholder of Caprice Beach Pty Ltd, Kontrol Group and TCP Cudal Pty Ltd. Whitehall, in fact, controlled the activities of these businesses.
·In 2012, 2013 and 2014, Whitehall came to her with various documents to sign including trust documents. She signed these documents, she says, without reading them.
·In November 2014, the plaintiff purchased a property in Ellis Lane, a suburb near Camden in New South Wales. At Mr Whitehall’s insistence she is the sole proprietor of this property.
The plaintiff asserts in her affidavit that she at all times told Mr Whitehall that she did not wish him to borrow over the Mill Park property. In about June 2014, the plaintiff signed further documents. She understood these to be in relation ‘to a business loan that (Whitehall) wanted (her) to sign off on as director of the Caprice Beach Pty Ltd.’ The plaintiff now understands that she signed a mortgage over the Mill Park property in favour of Kudosa (the respondent). She says that it was only very recently (approximately a week ago) that she realised that she had in fact done so, when a friend alerted her to a ‘For Sale’ sign on the property.
It is undisputed that the defendant, Kudosa, advanced the sum of $260,000 to Caprice Beach Pty Ltd for the purchase of two units in Western Australia. The loan was secured by first mortgage over the two investment properties, together with inter alia a mortgage (to be registered only on default) over the Mill Park property. Both the plaintiff (Tania Woodman) and Nathan Whitehall were to provide personal guarantees.
As part of the borrowing arrangements the loan was procured from Kudosa by Tony Barbone – a loan originator. He has sworn an affidavit of a conversation that he held with Whitehall and the plaintiff, Ms Woodman. I reproduce the transcript of that conversation, dated 24 June 2014, provided in Mr Barbone’s affidavit:
NATE: Hello Tony
TONY: Hi Nate, how are you going?
NATE: Good I am going to flick you on speaker phone.
TANIA: Hello
TONY: Hi Tania, Tony here how you’re going?
TANIA Yeah good, how you’re going? (sic)
TONY:Well, thank you. Now Tania, this is a security call and I need to inform you that this call will be recorded, do you agree to proceed with recording this telephone call?
TANIA: Yes.
TONY: Great, thank you. Would you start with your full name please.
TANIA: Tania Marie Woodman.
TONY:Ok great, thank you. Now, Tania, this call is being conducted on 24th of June 2014 at approximately 4.52pm AE Standard Time
NATE: Tony, are you a detective?
TONY: No, I’m not a detective, this is all standard stuff.
TONY: I’m just confirming a few points.
I confirm that I’m Tony Barbone, Director of Transitional Funding.
I confirm that Transitional Funding does not act for you in relation to this proposed loan advance.
I confirm that Transitional funding acts on behalf of the lender to this proposed loan advance.
I confirm that a copy of this audio file will be made available to you upon request.
Now, Tania, Do you accept and agree to above points?
TANIA: Yes, I do.
TONY: Great, thank you.
Now, We’ll start confirming all your details as per your driver’s licence.
Can you please tell me your full name.
TANIA: Tania Woodman.
TONY: Thank you, and your date of birth?
TANIA: xxxx of the xxx xxxx.
TONY: Great, thank you. And your current residential address.
TANIA: xxx xxxx xxxx, Narellan.
TONY: Yup ok, do you have a postcode for that?
TANIA: 2567
TONY:Ok thank you, and your current driver’s licence number please.
TANIA: Sure, it’s xxx xxxx.
TONY: Yup, okay. And the driver’s licence expiry date?
TANIA: It’s the xxxx xxxx.
TONY: Ok great, and your best landline contact number please
TANIA: I only have my mobile really
NATETony, we hardly ever use the house number but its xxxx xxxx.
TONY: Okay, thanks.
NATE: You can ring it by now if you wish.
TONY: No, that’s fine. We can just keep on going.
Okay, Tania, is English your first language?
TANIA: Yes.
TONY:Great, so you have a really good understanding of everything I’m saying to you right now?
TANIA: Yeah, that’s fine.
TONY:Ok, thank you. Now, Tania, at the start of this call, I asked you if you agree to do a recording of this call. Do you Tania Marie Woodman still willingly agree to record of this telephone conversation?
TANIA: Yes, I do.
TONY:Thank you, now we’re just go through the main points of the signed letter of offer. So on the offer dated the 2nd of June 2014. You are entering into this proposed loan advance in the capacity of a Director on behalf of the borrowing company The Caprice Beach Pty Ltd CAN 161 896 368 in its own capacity and the Trustee for the Caprice Beach Trust is that correct?
TANIA: That’s Correct, yes.
TONY:Great and are you also entering into this, as per the loan, As per the letter of offer, you are also entering into this loan agreement as the capacity of a Guarantor, is that correct?
TANIA: Yeah, that’s correct with Nate of course.
TONY: Yeah, sure. Thank you.
Now, Tania, as per the letter of offer, could you please tell me the total loan amount including all fees and charges.
TANIA: $260,000.
TONY:Thank you. And as per the signed offer, can you please tell me the purpose of the loan advance.
TANIA:To buy units, sorry, Lot 4 and Lot 10 of, sorry, Lot 4 of SSP 55030 and Lot 10 of SSP 55030.
TONY: Okay, so the purpose of the units for resell, is that correct?
TANIA: That’s correct, yes.
TONY: Great, thank you.
Now, Tania, do you confirm that the funds will be applied wholly or predominantly for business and investment purposes?
TANIA: Yes I do.
TONY: Thank you.
Now, as per your signed letter of offer, can you please tell me what is the acceptable interest rate.
TANIA: 3%.
TONY: Could you be more specific
TANIA: 3% per month.
TONY: Great, thank you.
And what is the higher interest rate?
TANIA: 5% per month.
TONY: Thank you.
And as per the offer what is the prepaid loan term?
TANIA: 4 months.
TONY: Thank you.
Now, Tania, are you aware that you are able to extend the facility by prepaying 1 month’s acceptable interest rate in advance before the end of the prepaid loan term?
TANIA: Yes, I am.
TONY: Thank you.
Now, Tania.You will be able to extend on this month to month basis for a maximum of 3 months.
TANIA: Yes.
TONY: Is that clear?
TANIA: Yes.
TONY: Great.
TANIA: Yes it is.
TONY:Thank you, now we’ll just, we will confirm the fees associated with the proposed loan advance. As per the signed offer, can you please tell me what is the establishment fee?
TANIA: The establishment fee is 4.4% including GST.
TONY: Thank you.
Now, what is the legal/administrative fees.
TANIA: $4,400 including GST.
TONY: Thank you.
Tania, do you agree that the above reasonable compensation to Transitional Funding for the arranging proposed loan advance. (sic)
TANIA: Yes.
NATE: I think they are excessive.
TONY: Thank you.
Okay.Now, do you confirm that any adva…sorry, I’m moving along…
Tanya what is your exit strategy? In other words, how do you intend to repay the loan at the end of the 4 months prepaid loan term?
TANIA: Sell two (sic).
TONY: Sorry, say again?
TANIA: Sell them.
TONY: You intend to sell the units. Okay, thank you.
Now, Tania, do you agree that this is the reasonable time period for you to repay the loan in full?
TANIA: Yes, I do.
TONY: Thank you.
Now, can you (sic). Do you confirm that the onus to exit facility is your responsibility and the Transitional Funding has made no representation to assist you with the exit strategy.
TANIA: Yes.
TONY: Thank you.
Okay, that concludes the security call. We don’t really need to do Nate. It’s not really necessary.
NATE:Oh, c’mon Tony it sounds like so much fun let’s go over what we talked about.
I’ll conclude it there. I’ll let you go and I’ll call you right back in a couple of minutes. Okay.
NATE: Yeah.
TONY: Bye.
On 27 June 2014, the plaintiff signed loan and security documents which were returned to the lender. These documents included the following:
·The signed loan agreement (Exhibit TH-1 Tab 6);
·An acknowledgement of the memorandum of common provisions for the Mill Park property (Exhibit TH-1 Tab 7);
·The signed mortgage over the Mill Park property (Exhibit TH-1 Tab 8);
·A certificate of witness confirming the plaintiff had received advice on the loan documents (Exhibit TH-1 Tab 10); and
·An authority signed by the plaintiff to the first mortgage of the Mill Park property to register the defendant’s mortgage (Exhibit TH-1 Tab 11).
The loan advanced settled on 2 July 2014. It was due to be repaid on 2 November 2014. It has not been repaid to date. The mortgage was registered over the Mill Park property on 29 December 2014.
The plaintiff, last Friday, swore a second affidavit in which she deposed that she does not recall Mr Barbone explaining to her that she was giving a mortgage over the Mill Park property and further that she does not recall Ms Care, the solicitor who signed the certificate of witness (see Exhibit TH-1 Tab 10), explaining to her that she was giving a mortgage over the relevant property.
On Saturday 7 November 2015, the plaintiff sought an urgent interim injunction seeking to restrain the sale of the Mill Park property before Macaulay J. His Honour refused the application, however the auction proceeded on the basis that the contract of sale permitted the mortgagee to delay settlement if a proceeding had been commenced challenging the power of sale. In these circumstances, given that the proceeding has been commenced, I am unsure as to why an injunction is still being pursued. However, this is not a point taken by either party and I haven’t heard argument on it. Both parties are no doubt privy to a great deal more information than the court is.
I shall turn to the principles governing this type of application.
Interlocutory injunctions
The power to grant an interlocutory injunction is discretionary and may be exercised at any stage in the proceedings, or prior to the commencement of proceedings.[1] A court may order an injunction if ‘it is just and convenient to do so’[2] and such orders may be made ‘unconditionally or on such terms and conditions as the court thinks just.’[3]
[1]Supreme Court (General Civil Procedure) Rules 2005, r 38.01.
[2]Supreme Court Act 1986, s 37(1).
[3]Ibid, s 37(2).
Notwithstanding the broad terms of the discretion, courts have developed ‘organising principles having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed.’[4] Before the court will grant an injunction the plaintiff must generally demonstrate that:
[4]Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57 AT [19] (‘ABC v O’Neill’); Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-4; (1986) 67 ALR 553; [1986] HCA 58; bc8601376 per Mason CJ, approved of by Gleeson CJ in ABC V Lenah Game Meats (2001) 208 CLR 199; 185 alr 1; [2001] HCA 63; BC200107043 at [13]; Australian Broadcasting Corp v O’Neill (O’Neill) (2006) 227 CLR 57; 229 ALR 457; [2006] HCA 46; BC2006 07692); Samsung Electronics v Apple Inc (2001) 286 ALR 257; [2011] FCAFC 156; BC201109152.
(a) There is a serious question to be tried, or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be entitled to relief;
(b) The plaintiff will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and
(c) The balance of convenience or justice favours the granting of an injunction.
Often, the second consideration is expressed as a part of the third.[5] In any event, there is a long line of authority for the proposition that these ‘organising principles’ are interdependent and must be considered together.[6]
[5]See, for example, Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 (‘Beecham’): The second inquiry is…whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.’
[6]See, Nicholas John Holdings Pty Ltd v ANZ Banking GroupLtd [1992] 2 VR 715 at 73; Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464; 60 ALR 235; OD Transport Pty Ltd v Government Railways Comm (WA) (1986) 13 FCR 270; 71 ALR 190; Bradto Pty Ltd v Victoria (2006) 15 VR 65.
Prima facie case
In ABC v O’Neill, the High Court expressed a preference for the expression ‘prima facie case’ rather than ‘a serious question to be tried.’[7] To establish a prima facie case ‘it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial.’[8] The ‘requisite strength of the probability of success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.’[9]
[7]The majority did not, however, object to the use of the second expression provided the ‘seriousness of the question’ was understood to depend upon the nature of the rights asserted and the practical consequences of the order sought.’: ABC v O’Neill at [70]-[71].
[8]ABC v O’Neill at [67].
[9]Ibid at [71].
Where there is some uncertainty as to the final outcome that can only be resolved by a contested finding of fact, it is not appropriate for the court to determine that question on an interlocutory application.[10] Having regard to this principle:
It is also appropriate that the court assume that any conflicts between the evidence of the parties should be resolved in favour of the plaintiffs for the purpose of this interlocutory application, insofar as it goes to establishing whether or not there is a [prima facie case].[11]
[10]Kolback Securities Ltd v Epoch Mining NL (1997) 8 NSWLR 533 at 535-6; Brilliant Lightning (Aust) Pty Ltd v Baillieu [2004] VSC 248; BC200404517 at [8]; Otis Elevator Company Pty Ltd v Nolan [2007] NSWSC 593; BC200704533 at [7].
[11]BDO Group Investments (NSW-Vic) Pty Ltd v Ngo [2010] VSC 206; BC201003236 at [11] per Croft J referring to 1st Fleet Pty Ltd v Australian Cooperative Foods Ltd [2006] NSWSC 881; BC200606786 at [5] per White J.
Balance of convenience
In determining where the balance of convenience lies, the court should take whichever course appears to carry the lower risk of injustice if it should turn out to be have been ‘wrong’, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial.[12]
[12]See Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1WLR 670, at 680 – 681.
This principle applies whether the injunction sought is mandatory or prohibitive in nature.[13]
[13]Bradto at [35].
The usual undertaking as to damages
Almost invariably, a plaintiff will be required to give ‘the usual undertaking as to damages’, which will be an undertaking to be answerable for any damages caused to the defendant by the injunction, in the event of the court afterwards awarding any such damages. The requirement may be dispensed with in exceptional circumstances.
The parties’ submissions
Mr Miller, counsel for the plaintiff, submitted that the serious question to be tried was unconscionability according to the principles set out in Garcia v National Australia Bank Ltd[14]. He submitted the balance of convenience favoured the plaintiff and that damages were not an adequate remedy.
[14]Garcia v National Australia Bank Ltd [1988] 194 CLR 395.
The thrust of Mr Miller’s careful submissions centred around the serious question to be tried aspect of these proceedings. In short compass, Mr Miller contended that his client –
(a) did not understand, or was mistaken about the purport and effect of the mortgage she entered into over the Mill Park property;
(b) was not told by anybody that she was signing such a mortgage;
(c) did not stand to benefit from the transaction and thus was a volunteer to the transaction; and
(d) reposed trust and confidence in Mr Whitehall by reason of their relationship.
Further, Mr Miller contended that it would be unconscionable for the defendant to enforce the mortgage over the Mill Park property. Mr Barbone did not disclose it in the telephone conversation that I have reproduced in these reasons and Ms Care, the solicitor who signed the certificate of witness, did not explain it in the meeting of 27 June 2014.
Mr Miller submitted the balance of convenience favours the plaintiff. He accepted, I think, that his arguments in this respect were stronger if the injunction were confined to the fortnight initially sought. He submitted that if the plaintiff is successful in the proposed action, the mortgage will be set aside but by that time the sale may be complete and the plaintiff will have lost the indefeasibility of her title.
Further, Mr Miller submitted that damages were not an appropriate remedy because the plaintiff has an emotional attachment to this property and may need to move back in there if her relationship with Mr Whitehall deteriorates any further. Finally, Mr Miller submitted that this was not a case where it was appropriate that the plaintiff pay the secured amount into court as a condition of the injunction, given that the action, if successful, would result in the mortgage being set aside.[15]
[15]See Inglis v Commonwealth Bank of Australia (1972) 126 CLR 161; AED Oil v Puffin FPSO Limited (No. 5) [2011] VSC 60; Rawcliffe v Custom Credit Corporation & Ors (18 January, 1994) BC9401502.
Ms Rozner for the defendant essentially argued that a close examination of the evidence demonstrated that the claim was hopeless, the balance of convenience heavily favoured the defendant (particularly if the injunction were sought until trial) and damages were an entirely appropriate remedy in what was, after all, an investment property.
Serious question to be tried
I have concluded that the plaintiff has not demonstrated a prima facie case of Garcia unconscionability. I do so for the following reasons:
(1)The plaintiff knew that she was acting effectively as a dummy director for companies that carried on the business activities of her bankrupt partner;
(2)In her second affidavit (13 November 2015) Ms Woodman deposes, inter alia, ‘I do not recall Mr Barbone explaining to me that I was giving a mortgage over my property at 16 Westwood Drive, Mill Park’. The transcript of the call reveals that while the Mill Park property was not mentioned by name or title. Ms Woodman was directed to the signed letter of offer (p 2, lines 10 - 11) dated 2 June 2014. Mr Barbone then took Ms Woodman through the signed letter of offer and asked her questions as to the letter’s contents including the loan amount, its purpose, the two investment properties to be purchased pursuant to the loan, the interest and default rates per month, and the pre-paid loan term.
I am satisfied that Ms Woodman had with her the 2 June 2014 letter of offer during this call.
A copy of this letter was exhibited to the affidavit of Mr Tim Hart, the sole director of Kudosa (p 5ff of TH-1). At p 2 of the letter of offer, 16 Westwood Drive, Mil Park, Vic, is identified as being the subject of a mortgage to be held unregistered and only lodged against the title in the event of default. The plaintiff has initialled this page immediately below the reference to 16 Westwood Drive, Mill Park.
(3)It is apparent that on 27 June the plaintiff signed the following documents on behalf of herself and Caprice Beach –
(a)Loan Agreement which refers to the Mill Park property in the definitions and in Schedule 1 to the agreement. Additionally, as personal guarantor to that Loan Agreement, Ms Woodman covenanted that she had obtained independent legal advice.
(b)An acknowledgement of Memorandum of Common Provisions. This is not a lengthy document. After the recitals it reads:
I Tania Woodman (in my own capacity and as sole director and sole company secretary of the Caprice Beach Pty Ltd) hereby ACKNOWLEDGE having received a copy of the Memorandum of Common Provisions No.A1955 a true copy of which is annexed hereto in relation to my guarantee mortgage over 16 Westwood Drive, Mill Park.
The plaintiff’s signature appears immediately under this acknowledgement.
(4)On the same day that the plaintiff covenanted that she had received independent legal advice about the Loan Agreement, Adriana Care of Coutts Solicitors, Narellan, New South Wales, certified that she had witnessed the signatures of Tania Maree Woodman and Nathaniel Whitehall to the documents ‘in the matter’. She certified as follows:
I believe, having provided any necessary or appropriate advice, that each of Tania Maree Woodman and Nathaniel John Whitehall has:
(a)a sound working knowledge of the mortgages and hence a general understanding of the obligations undertaken by the Mortgagor and Guarantor in this matter.
(b)signed the loan agreement, mortgage guarantee and other documents voluntarily and not as a result of any undue pressure from any person.
The document concluded:
I acknowledge that the lender will rely on this certificate in advancing funds to the Mortgagor.
Dated 27 June 2014
A copy of the solicitor’s file was produced under subpoena. To my view, it shed no real light on the 27 June meeting referred to above. I do not accept Mr Miller’s submission that the absence of evidence on the file means I ought infer that nothing was explained to Ms Woodman. It is difficult to prove a negative in any litigious setting, and the solicitor’s acknowledgement speaks for itself.
In my view, the evidence I have reviewed in combination is sufficient to defeat the plaintiff’s assertion that she did not understand or was mistaken about the purport and effect of using the Mill Park property as security for the loans over the two units.
I am also of the view that it cannot sensibly be contended that the defendant did not take steps to explain to her that she was signing a mortgage over the Mill Park property. The high point of the plaintiff’s evidence is that she cannot recall meeting Ms Care on 27 June 2014, nor can she recall giving a mortgage over the Mill Park property. Assuming the certificate relates to the relevant transaction, then on its face it certifies that Ms Woodman has an understanding of the obligations she has undertaken as Mortgagor and Guarantor. It is true, as Mr Miller points out, that the solicitor’s certificate does not refer to the Mill park property, but the obligations are clearly stated in other documents executed by Ms Woodman on that day.
Mr Miller contends that the loan transaction was voluntary in the sense that the plaintiff stood to gain nothing from the transaction. I do not accept this submission. Ms Woodman was the sole director and shareholder of a company that purchased two investment properties for profit and borrowed to do so.
The plaintiff contends that she is a volunteer because the debtor company, Caprice Beach Pty Ltd, is the trustee of a discretionary trust: Caprice Beach Trust. Mr Whitehall is the appointor of that trust and the plaintiff is a beneficiary among a class of beneficiaries including parents, brothers, sister, spouses and the like. If Ms Woodman had the chance of benefiting from the transaction then I consider that she cannot be said to be a volunteer.
Finally, Mr Miller submitted that the plaintiff reposed her trust and confidence in Mr Whitehall by reason of their relationship. While this well may be so, by her own admission she agreed to become his dummy director. The plaintiff agreed to sign various pieces of paper that Whitehall asked of her, while he effectively ran the business of the property development company. In other words, she agreed to pretend to the corporate world that she owned and controlled Caprice Beach Pty Ltd when this was in fact untrue. Furthermore, this occurred at a time when she knew her partner – the true controller of Caprice Beach – was a bankrupt. In those circumstances, any argument asserting that it would be unconscionable to allow the defendant to enforce the mortgage is hard to sustain.
I regard the plaintiff’s proposed action as nigh on hopeless.
Balance of convenience
In the event that I am incorrect in my conclusions on whether there is a serious question to be tried, I am of the view that the balance of convenience lies with the defendant. The plaintiff initially sought an interim injunction for two weeks, the period being limited by an anticipation that the solicitor’s file would be available within a fortnight and then the injunction could be further pursued. In the event, the solicitor’s file became available during my hearing of this matter and both parties had the opportunity to peruse it.
The plaintiff then sought to extend the restraint sought until the final determination of the proceeding. Should I acquiesce to this, the partially completed sale may be deferred (probably for months) with the putative purchaser left ‘in limbo’ and the plaintiff continuing to accrue interest at the very, very high rate of 60 per cent per annum charged by what I presume is a last resort lender. Even if the period of restraint is confined to the fortnight initially requested, I consider that the balance of convenience still rests with the defendant, although obviously not as emphatically.
I should also say that in my view damages is an adequate remedy. The Mill Park property has been an investment property for more than 12 years. If I am wrong about the plaintiff’s prospects of success and she succeeds in establishing some or all of her case at trial, she will be entitled to damages for lost rental income and other out of pocket expenses. I am not persuaded by the argument that she has an emotional attachment to her first property investment. Whilst this may well be true, it does not mean that damages is not an adequate remedy even if it cannot be a perfect remedy.
It is unnecessary to consider the discussion that centred around a payment into court of the received amount as a condition of the injunction.
For these reasons, the plaintiff’s application for an interim injunction is refused.
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