Alarm New Zealand Limited v 15 Hopetoun Limited

Case

[2016] NZHC 152

12 February 2016

No judgment structure available for this case.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2014-404-001293 [2016] NZHC 152

BETWEEN

ALARM NEW ZEALAND LIMITED

Plaintiff

AND

15 HOPETOUN LIMITED Defendant

Hearing: 10 February 2016

Appearances:

B M Stainton for the Plaintiff/Applicant
R Butler for the Defendant/Respondent

Judgment:

12 February 2016

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

12.02.16 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

ALARM NEW ZEALAND LIMITED v 15 HOPETOUN LIMITED [2016] NZHC 152 [12 February 2016]

[1]      The  plaintiff  applies  for  particular  discovery  and  a  freezing  order.    The plaintiff is the tenanted occupant of Level 3, 15 Hopetoun Street, Freemans Bay, Auckland (Level 3).  It entered into a lease of Level 3 by deed dated 1 October 2013. Its lease is for 10 years.  It has a five year right of renewal.

[2]      The defendant acquired ownership of the building at 15 Hopetoun Street in

December 2013.

[3]      The  building  comprised  11  levels.    On  2  December  2013  the  defendant obtained resource consent for a change of use of the building from commercial offices to 91 residential apartments.  On 19 December 2013 the defendant applied to Auckland Council (the Council) for building consent to add a further three levels to the building and to convert each tower level to six self contained residential apartments.  The building consent application showed the plaintiff’s leased premises on Level 3 were divided into six residential apartments.

[4]      The   building   consent   application   plans   included   seismic   structural strengthening design construction features.

[5]      The evidence is that the plaintiff did not know nor was consulted regarding the plans for Level 3.

[6]      There  was  discussion  between  the  parties  in  February  2014  concerning disruption of the plaintiff’s quiet enjoyment of the lease during building renovation works.  On 23 February the plaintiffs sent an email to Mr Mahoney the defendant’s director and sole shareholder setting out possible terms and conditions for relocating including the requirement for assistance with expenses, costs and compensation. There was no reply.

[7]      On 24 February the defendant’s consultant engineers expressly acting as the defendant’s agents wrote to the Council’s building consent division advising they had carried out a review of the building and identified what they considered were

critical structural weaknesses, requiring to be addressed in the building consent.  The plaintiff says this and other communications on behalf of the defendant amounted to a request by the defendant for the Council to issue an earthquake prone notice when the defendant and its agents knew or ought to have known that the building did not meet the criteria required for the issue of such.

[8]      On 27 February 2014 the Council issued an earthquake prone notice (Council Notice) in respect of the building.  On 11 March 2014 the defendant forwarded the Council Notice with the defendant’s own notice as lessor citing clause 21.1 of the lease and requiring the plaintiff to give full and uninterrupted access to the leased premises to carry out the structural strengthening work as described in the Council Notice.

[9]      On 21 March 2014 the defendant’s solicitor wrote to the plaintiff stating that due to the Council Notice and advice from engineers stating the building could not be occupied while Council Notice work was carried out, that the plaintiff would be required to vacate the premises until that work was completed and to enable entry into the premises to carry out the repair work.

[10]     The defendant indicated work would be completed by 30 September 2014. [11]       The defendant refused to offer any compensation.

[12] On 15 August 2014 the Chief Executive, Ministry of Business Innovation and Employment (MBIE) determined pursuant to s 188 of the Building Act 2004 that the Council incorrectly exercised its power of decision in issuing the Council Notice and reversed that decision.

[13]     Issues arose regarding the need for the plaintiff to have relocated at all and regarding the sufficiency of proper reasons to justify any requirement for the plaintiff to relocate.  From the plaintiff’s point of view the removal process was manufactured by the defendant and the defendant refused to compensate the plaintiff for relocation costs, inconvenience costs and loss of profit.

[14]     The plaintiff’s initial statement of claim was filed on 29 May 2014.  It sought special damages of $255,000 for temporary relocation costs and $120,000 for loss of business profit.  At the same time the plaintiff filed an application for orders restraining the defendant from pre-selling any proposed apartments on Level 3 or from undertaking any work on Level 3 not related to earthquake structural strengthening, and preventing the defendant from removing the plaintiff’s fitout or from erecting any walls, partitions or otherwise reconfiguring the layout of Level 3. Those issues resulted in the defendant’s undertaking agreeing that Level 3 would not be converted to residential apartments while the plaintiff’s lease of the premises was on foot.

[15]     An amended statement of claim was filed on 23 January 2015.  That claimed damages of $530,277 for temporary relocation costs, loss of business profit and legal expenses.  Causes of action included, inter alia:

(a)      Breach of quiet enjoyment of the lease for failing to take all steps to arrange for the renovation work to be carried out in ways and by means that minimised disruption of access and due to having deliberately sought an incorrect and invalid notice from the Council in order to force the plaintiff to relocate.

(b)Misrepresenting   the   reasons   why   the   plaintiff   should   relocate temporarily by promising the work required to be done would be limited when the Council Notice did not require the property to be vacated at all.

(c)     That the defendant breached undertakings including permitting reoccupation on 30 September 2014 and failed to honour undertakings to consult in a timely way with the plaintiff as to additional work being done on Level 3 which had not been heralded.

(d)Misleading and deceptive conduct by the manner and means used to require the plaintiff to relocate by 31 May 2014 when no such proper reason existed.

(e)       Trespass – for all those various reasons already identified.

[16]     Mr  Stainton  for  the  plaintiff  summarises  the  position  as  the  defendant removing the plaintiff it having obtained and relied upon an invalid earthquake- prone notice issued by the Council and misrepresented the plaintiff would be in breach of its lease unless it vacated to enable building strengthening work required by the notice.   Further that it was in fact the defendant that carried out all the renovation work using Level 3 and having failed to reinstate Level 3 premises to the same standard as it undertook to this Court and to the plaintiff.  Further, the plaintiff says the defendant has lost the fitout the plaintiff had when it vacated Level 3.

The defence

[17]     The  defendant  filed  a  statement  of  defence  on  13  February  2015.    The defendant does not dispute the plaintiff’s lease “continues” in the sense that it runs with the title to Level 3.

[18]     Regarding the plaintiff’s claim that the defendant obtained and relied on the Notice in order to obtain possession over Level 3 and to undertake renovations for the remainder of the building, this is denied. The defendant does admit:

(a)      It wrote to the Council with respect to the presence of non-ductile, and therefore earthquake prone, columns within the building;

(b)      The Council for its part issued the Notice;

(c)      The plaintiff was served with the Notice, and a related notice under clause 22.1 of the lease, which, in effect, required the plaintiff to vacate the premises;

(d)      The parties entered into negotiations with respect to the plaintiff’s

relocation and the plaintiff relocated as a result;

(e)      The Notice was subsequently found by MBIE to have been invalidly issued; and

(f)      The defendant gave undertakings, dated 19 June 2014, to the effect that the renovations were without prejudice to the plaintiff’s rights under the lease.

The discovery and freezing order applications

Discovery application

[19]     On 17 August 2015 the plaintiff filed separate applications for particular discovery and freezing orders.  As to the latter application the plaintiff sought an order that the defendant retain title to Level 3 subject to the plaintiff’s lease, or an order restraining the defendant from disposing of its  rights, title and interest in Level 3, pending further order of the Court.

[20]     The   former   application   sought   documents   including   relating   to   the defendant’s purchase of the building and the Council consents obtained in relation to the partial demolition and renovation of the building.  Attached to that application was a schedule listing 21 categories of documents the plaintiff wanted discovery of. Categories included:

2.Documents received relating to the seismic strength and structural aspects of the building.

4.        Correspondence with the defendant’s financiers as to the plaintiffs

existing lease rights.

6.        Instructions issued to the construction company as to the plaintiff’s

existing lease rights.

9.        Correspondence/agreements for sale and purchase for proposed Level

3 apartments.

10.Correspondence with commercial tenants required to vacate while the building was being redeveloped;

11.      All   minutes   and   reports   of   the   defendant   board   relating   to redevelopment proposals for Level 3 – in conflict with the plaintiffs lease interest.

12.Documents  relating  to  the  plaintiff’s  lease  and  advice  received requiring Level 3 to be vacated.

13.Documents relating to the plaintiff’s request for alternative access for the plaintiff during construction;

14.Copies  of  contract  and  correspondence  with  subcontractors  who wrapped the concrete columns and braced the stairs and in particular correspondence explaining delay in relation to that work.

15.      Copy  of  building  consent  plans  and  specifications  approved  by

Auckland Council and copy of main contractor’s contract;

16.      A list of subcontractors and their subcontracts.

17.Correspondence relating to the removal of the electricity generator from the building;

18. Notes   and   communications   of   the   defendant’s manager/director/employee regarding removal of existing fitout, wiring, chattels, fixtures, partitions and external window alterations required to Level 3.

20.Correspondence by defendant and any associated entity and BGT Structures instructing such engineers to seek from the Council the

issue of a Council Statutory Notice requiring strengthening of the building structure.

[21]     Three days after those applications were filed the Court convened a telephone conference and in the outcome issued a minute which recorded:

[1]       …Mr Stainton confirms the plaintiff accepts assurances of goodwill on behalf of the defendant and an offer to provide security in the event it sells that part of its property which the plaintiff leases. The defendant agrees that the sum of $500,000 will be paid by it into its solicitor’s trust account to be held as security pending determination of the plaintiff’s claim in this proceeding.

[2]       Council agree the finer points of the undertaking are to be reduced into writing and up to 10 days may be needed for that purpose.

[6]       Counsel agree both parties are to supply the discovery documents informally within 21 days i.e. by 11 September 2015.

Court case management of the plaintiff ’s applications

[22]     The plaintiff’s applications were then directed to be called in a chambers list on 13 November 2015.   In advance of that call counsel for the plaintiff filed a memorandum dated 4 November 2015.  It noted having received an email from the defendant advising that progress was being made in providing relevant discoverable documents but that further time was required.

[23]     Regarding the freezing order application and the promise to place $500,000 in a solicitor’s trust account, the plaintiff advised no draft of such an undertaking had been provided.

[24]     On 30 November 2015 the Court allocated today’s hearing date to deal with the plaintiff’s outstanding applications.  The defendant’s notices of opposition were filed on 11 December 2015.   In opposition to the freezing order application the defendant pleaded the plaintiff was effectively seeking an order for security in its expectation of succeeding in its claim; that the plaintiff’s leasehold interest would run with the property if the defendant should sell it; and the plaintiff’s expectation of

limiting  the  defendant’s  ability  to  deal  with  the  property  was  unnecessarily

prejudicial. Considerations Discovery

[25]     Counsel advise, as indeed correspondence indicates, that ahead of the hearing upon the plaintiff’s applications the parties have reached some agreement in relation to the provision of further discovery and advise that the Court’s focus for present purposes shall be upon Schedule categories 4, 6, 9, 11 – 14, 16 – 18, and 20.

[26]     The plaintiff’s application is made pursuant to HCR 8.19 which provides inter alia that if the Court considers there are grounds for believing that a party has not discovered one or more documents or a group of documents that should have been discovered the Court may order an affidavit to be filed stating whether documents are of have been in the parties’ control and if they have been but no longer are, then for the deponent to state the parties’ best knowledge and belief as to when those documents ceased to be in the parties control and who now has control of them.

[27]     Asher J1 developed a four stage approach in considering Rule 8.19:

(a)       Are the documents sought relevant, and if so how important will they be?

(b)Are there grounds for belief that the documents sought exist?   This will often be a matter of inference.  How strong is that evidence?

(c)       Is  discovery proportionate, assessing proportionality in  accordance with Part 1 of the discovery checklist in the High Court Rules?

1 Assa Abloy New Zealand Ltd v Allegion (New Zealand) Limited [2015] NZHC 2760.

(d)Weighing  and  balancing  these  matters,  in  the  Courts  discretion applying r 8.19, is an order appropriate?

[28]     What is clear from the pleadings and the present applications is the focus upon  Mr  Mahoney’s  actions.    The  pleadings  level  significant  claims  about  the manner in which it is claimed the plaintiff was required to vacate Level 3, the purpose for which it was required to vacate, and the reasons for delay in permitting re-entry, and why the plaintiff’s occupation fittings and fixtures were meanwhile removed  and  not  replaced.    In  the  background  of  these  matters  Level  3  was developed and advertised for sale as providing six residential units – although that promotion has since been withdrawn.

[29]     Evidence in opposition to the particular discovery application has not been provided by Mr Mahoney but by Mr Love who deposes he is the Chief Financial Officer for the defendant.   He deposes that since the plaintiff’s application for particular discovery was filed the defendant has provided documents relating to categories 1, 2, 3, 5, 7, 15, 19, 20 and 21.  In particular he says the defendant has now obtained and discovered the Council’s file with respect to the development which file comprises over 750 documents but which he says specifically addresses the plaintiff’s request such as:

(a)      Documents that refer to the seismic strength and structural aspects of the building;

(b)Copies of the original plans and specifications and engineering calculations provided to the Council with the defendant’s application for building consent;

(c)       Initial architectural plans;

(d)Copies of building consent plans and specifications approved by the Council although the defendant has not discovered a copy of the main contractors construction contract because he says the defendant does not have a copy of this because it was not a party to it;

(e)      Correspondence between the defendant and/or their consultants with the Council;

(f)       A copy of the draft survey plan.

[30]     Regarding the category 6 documents relating to instructions issued to the construction company as to the use of Level 3 during the construction of other floors, Mr Love deposes the defendant does not have any of the documents in its possession or control.

[31]     In relation to category 9 documents being correspondence/agreements for sale and purchase for proposed apartments on Level 3, Mr Love states the defendant objects to the provision of these because they are irrelevant to the proceedings and says the contracts that did exist were cancelled and are of no legal effect.

[32]     Regarding the balance of the plaintiff’s request for further discovery Mr Love deposes:

(a)     The defendant opposes the request for category 4 documents (correspondence with financiers regarding plaintiff’s lease rights) on the basis that they are not relevant to the proceedings;

(b)Regarding category 10 documents (correspondence with commercial tenants terminating lease interests) Mr Love advises further enquiries are being made in this regard for some of those documents may have been provided as third party discovery in other and unrelated proceedings and so may be subject to an applied undertaking;

(c)      In relation to category 11 documents Mr Love deposes the defendant does not have a board and no minutes were kept;

(d)Regarding category 12 documents (concerning the plaintiff’s lease and advice to vacate the building) Mr Love deposes he has searched for material in this regard and says he can confirm the defendant does not have any of the documents requested.  [In submissions before the

Court, Mr Butler counsel for the defendant advised the plaintiff has a copy of the lease as it will have copies of the parties correspondence regarding same];

(e)      Concerning category 13 documents (relating to the plaintiff’s request for alternative access to level 13.  Mr Love deposes having searched for material but cannot locate any and says that likely many of the dealings in relation to the plaintiff’s lease would have been face to face or telephone discussions; and that it is likely any written material has been destroyed;

(f)      Regarding category 14, 16 and 18 documents, Mr Love deposes the defendant has no copies of contracts with subcontractors other than those disclosed by the Council’s file.  He says they were not contracts the defendant entered into.  [Mr Butler counsel for the defendant adds it is difficult to see how such agreements could be relevant for the length of the plaintiff’s relocation is now a known quantity];

(g)Regarding   category   17   documents   (correspondence   relating   to removal of the electricity generator) Mr Love deposes the plaintiff is already in possession of correspondence between the parties related to this issue, but that a small bundle of emails is now being reviewed by the defendant’s lawyers for discoverable material in this regard.

[33]     In his submissions in support of the defendant Mr Butler reminds the Court that the onus of proving a requirement for further discovery is upon the plaintiff.  He notes  it  is  important  to  appreciate  the  plaintiff  has  reoccupied  Level  3  since December 2015.   He suggests, correctly, an amended statement of claim may be required; that it is inevitable the plaintiff will need to reformulate its claim and, in particular, finalise its pleaded losses – the extent of which the plaintiff should now be able to assess and quantify.   Further, he submits the plaintiff itself will need to provide a reasonable significant further amount of material by way of discovery to support claims of losses.

Freezing Order

[34]     To succeed in relation to this application the plaintiff will need to show that: (a)      There are assets to which the order can apply; and

(b)There is a real risk that the defendant will dispose of the assets in such a way as to prejudice the plaintiff’s ability to enforce a prospective judgment.

[35]     There is no issue regarding the availability of assets to which the order could apply. The defendant owns the building and has title therein to Level 3.

[36]     Regarding elements of risk Mr Butler submits there is no evidence of an immediate intention by the defendant to dispose of its title in Level 3 other than to another related company.  Mr Butler submits correctly that the disposition of an asset on its own is not sufficient to justify a freezing order.  He submits it appears plain that the freezing order is not truly sought on the basis that there is a risk that dissipation will frustrate judgment; rather the order is sought on the basis that it is necessary to preserve the plaintiff’s rights under the lease and in relation to the defendant’s undertakings. As Mr Butler notes the notice of application states that the order is necessary to preserve the rights of the plaintiff particularly as to the preservation of rights under the lease. As Mr Clifton for the plaintiff deposed:

It is essential that the defendant remain as owner and title holder of the leased premises and is that landlord so that the plaintiff is able to seek remedies as between the landlord and tenant relying on the undertakings given.

[37]     Mr Butler submits that is not an appropriate use of the jurisdiction and is misconceived – the plaintiffs rights under the lease persist in the event of a transfer, and it is beyond dispute that the lease runs with the title to Level 3.

[38]     Mr Butler submits there is no basis to suspect that damages cannot be met by the defendant in the event that it transfers its interest in Level 3.  On the contrary he says the defendant has provided draft undertakings to the effect that if it does sell, or

transfer, the title to Level 3 it will deposit either $500,000 (as the Court’s minute

dated 20 August 2015 records) or $250,000 (as Mr Love deposed was later offered).

[39]     Mr Butler submits there is no suggestion the amounts proposed were not able to be paid and therefore there was no proper basis to suspect any judgment obtained could not be met simply because the defendant might transfer its interest in Level 3.

[40]     Mr Butler submits that what the plaintiff truly seeks is not a freezing order but an order for security for an, as yet, unobtained judgment – that such was not an appropriate use of the freezing order jurisdiction.

[41]     Mr Butler refers the Court to the judgment of Asher J in Oaks Hotels and

Resorts NZ Ltd v Body Corporate 3588512:

The jurisdiction is not designed to provide an applicant with pre-judgment security.  The general rule that a respondent can deal with its assets, without constraint, still reflected in [Rules 32.5 and 32.6].  Even if the disposal will result in insufficient funds to pay a plaintiff, a Court is unlikely to interfere if the disposition is genuine and in the ordinary course of business…   The prospective judgment debtor must be able to trade or carry on business in the same way.

[42]     Asher J3 went on to state:

In short, the common law restrictions on the ambit of a remedy remain, and it will not be permitted to be used by an applicant to force a respondent who could ultimately pay the judgment debt to hold funds for the benefit of its opponent.

[43]     Mr Butler submits that in this case as in Oaks there was no indication that any judgment may go unsatisfied or that the defendant is trying to defeat judgment. Counsel submits the Court needs to be satisfied that there is a danger of the prospective judgment being unenforceable because of the transfer.  Further, that the overall interests of justice did not favour restraining the defendant from dealing with its indefeasible interest in Level 3 for an indefinite period of time because the effect of the order sought would be to prevent the defendant from dealing with its title; that

it would give to the plaintiff, who as yet is not a judgment creditor, an influence over

2 [2013] NZHC 2695, [20].

3 Ibid [21].

the  defendant’s  title  which  is  arguably  inconsistent  with,  or  superior  to,  the

defendant’s mortgagee.

Conclusions

Discovery

[44]     The plaintiff’s application for particular discovery requested any affidavits in response be required from Mr Mahoney.  He is the sole shareholder and director of the plaintiff and who uses the email address  [email protected] for the defendant business.   It is clear the defendant is one of a number of companies operated under the umbrella of Tawera Group.

[45]     Mr Stainton suggests and the Court agrees it is likely emails affecting the defendant may not have been accessible or indeed have been known to Mr Love when he deposed there was an absence of written records to provide by way of discovery.   Mr Stainton complains, correctly the Court considers, that Mr Love’s affidavit in opposition to the plaintiff’s application was provided in general narrative form and not in form G 37 at it should have been; and therefore did not comply with the requirements of Rules 8.15(2) and 8.16 in that he did not give particulars of the steps he had taken to fulfil the defendant’s discovery obligations, or to refer to documents no longer in the defendant’s control, or to documents that the defendant knows would be discoverable if the defendant had control.

[46]     Instead as Mr Stainton submits and the Court agrees that when Mr Love advised that the building renovation was not contracted by the defendant, he ought to have said who contracted the work, who the contractors were, and who issued the construction documents relating to Level 3.

[47]     Mr Stainton submits that Mr Love’s affidavit actually raises more issues than it answers, such as why documents were destroyed and for not advising who was the principal in the construction contract and who holds all the construction documentation and who issued the necessary instructions in relation to  Level 3 where they differed from the consented plan.

[48]     The Court cannot make any assessment of that criticism except to say that perhaps Mr Mahoney could have provided appropriate evidence in that regard.  The actions of Mr Mahoney are very much the focus of the plaintiff’s claims.  Evidence suggests construction work directly affecting access to Level 3 may have been able to be completed within two weeks.

[49]     When clause 22.1 was utilised to require the plaintiff to vacate Level 3 an indication was given that the period of relocation would be six months.  In fact it was more than 18 months before the plaintiff regained possession of its leased premises. It is far from clear what reasons explain those promises or that outcome.   The plaintiff’s amended statement of claim speculates on possibilities which, for present purposes the Court is prepared to accept are provable.

[50]     In this background of matters the Court accepts there may be grounds for belief that all documents identified by the plaintiff’s schedule of documents sought, may indeed exist.  If they do not then a deposition to that effect ought to be provided by Mr Mahoney who best should know and in that regard clearly if such documents are not contained by the defendant but are elsewhere then evidence to that effect is required.

[51]     The Court will want to know why the Council issued its Notice, and whether in that regard any reliance was placed on information or material provided by the defendant or a person on its behalf.

[52]     In this case the Court does not consider it is unreasonable to suspect that there exist relevant documents which Mr Love has deposes are not retained by the defendant.

[53]     Such enquiry may be assisted by downloading emails from Mr Mahoney’s computer and going through the files and accounts of the defendant.   Whilst the defendant may not have kept relevant minutes pertaining to these events it does seem likely that Mr Mahoney would have kept a governance or correspondence file or even emails giving directions on such a large project that he was in control of.  Such communication  must  certainly  have  included  reports  to  financiers.    Issues  of

proportionality should not arise because emails are readily able to be downloaded;

the files and accounts of the defendant ought readily to be accessed.

[54]     Mr  Love  deposed  that  the  defendant  did  not  contract  with  the  main contractor.  If that is correct then he should have said, as surely he or Mr Mahoney would have known, just who did contract with the main contractor.  In fact Mr Love does not explain who of the defendant’s agents renovated the building.  Nor does he provide any documents in that regard whilst clearly that information would be before the defendant.   Mr Stainton submits the evidence points to Mr Mahoney’s Tawera Group as acting as agents of the defendant in this regard.

[55]     The Court accepts the submission that the defendant is able to provide more documents and information relevant for the Court’s purposes of enquiry into the plaintiff’s claims.

Freezing order

[56]     This application focuses upon the plaintiff’s rights of occupation pursuant to its lease.  The defendant says the lease and right of occupation are not in dispute. Consideration of this assurance needs to be measured against factors including:

(a)       Issues  surrounding  the  defendant’s  requirement  that  the  plaintiff relocate whilst renovation work was undertaken;

(b)      The defendant’s actions if any in effecting the issue of the Council’s

Notice;

(c)       The  period  of  time  that  elapsed  until  the  plaintiff  could  resume occupation;

(d)      The  defendant’s  actions,  initially,  to  advertise  for  the  sale  the

availability of Level 3 residential apartments;

(e)      The undertakings given by Queens Counsel on behalf of the defendant as recorded by the Court’s minute dated 20 August 2015 the terms of which were never questioned on behalf of the defendant;

(f)      The subsequent undertaking Mr Love deposes was provided namely that the defendant would not transfer title to Level 3 and associated areas without depositing $250,000 in its solicitors trust account and that if Level 3 was transferred to another [defendant] group company the defendant would ensure that the group company agreed to the terms of the undertaking.

[57]     Contrary to  the  plaintiff’s  view that  the undertaking to  the Court  on  20

August 2015 provided an unequivocal and binding undertaking, Mr Love and his affidavit refers to this as being an “original draft undertaking”.  In itself that may call into question the undertaking provided in Mr Love’s affidavit which allows for the transfer  of  the  asset  without  any  proposal  for  the  transfer  of  the  defendant’s liabilities.

[58]     Mr Butler submits lease obligations will transfer with any change of owner of Level 3.  However, and within recent weeks the title to Level 3 has been mortgaged. Also and because the 20 August 2015 undertaking does not cover any intercompany transfer of the legal and beneficial interest in Level 3 the plaintiff would, as Mr Stainton submits, need the transferee to sign undertakings to the plaintiff which are the same as the defendant’s undertakings previously given and as well the transferee shall have to undertake to protect the asset from other trading activities of that purchasing entity.

[59]     In the circumstances the Court considers there may be cause to hesitate to agree to any transfer that may undermine the strength of undertakings already given.

[60]     It is to be recorded that on 10 February 2016 the plaintiff provided to the Court an undertaking that if, by reason of the grant of a freezing order, the defendant sustains any damages that in the opinion of the Court the plaintiff ought to pay, the plaintiff will abide by any order that the Court may make in respect of such damages.

Result

[61]     There will be orders accordingly:

(a)      To provide an affidavit in routine form detailing to the extent the rules require those documents in the plaintiff’s schedule which have not been provided, and for any affidavit filed in that regard to be sworn/verified by Mr Mahoney.

(b)To restrain the defendant from disposing of or diminishing the value of its right, title and interest, (legal or beneficial) in Level 3, pending further order of the Court.

(c)      The defendant shall pay the plaintiff’s costs upon these applications on a 2B basis for which purpose hearing time of a half day is certified. If counsel cannot agree upon calculations of cost then they are to file memoranda  in  that  regard  for  determination  by  the  Court  on  the

papers in due course.

Associate Judge Christiansen

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