Craig v Woodland Brae Limited [2012] NSWSC 1632

Craig v Woodland Brae Limited [2012] NSWSC 1632

The first defendant had a plainly seriously arguable case that it was entitled to the settlement recoveries, because the funding agreement arguably secured recoveries for its benefit even if terminated, and any setting aside under the Contracts Review Act or for unconscionability would almost inevitably involve restitution. The balance of convenience favoured restraint because the claim was to a security interest in the moneys, the plaintiffs appeared impecunious, the proposed disbursements would dissipate the funds among unsecured creditors without substitute security, and the defendants had undertaken not to act on the receivers' appointment on an interlocutory basis.

Jurisdiction
Australia
Judgment Date
21 December 2012
Procedural Posture
Interlocutory Application for an Injunction / Notice of Motion Heard Ex Tempore
Outcome
Interlocutory injunction granted until 4 February 2013; costs of the notice of motion to be the first defendant's costs in the proceedings.
Legal Topics
['interlocutory Injunction' 'litigation Funding Agreement' 'contracts Review Act 1980' 'unconscionability' 'security Interest in Settlement Recoveries' 'receivers' 'balance of Convenience']
['equity' 'civil Procedure' 'contract Law'] ['interlocutory Injunction' 'litigation Funding Agreement' 'contracts Review Act 1980' 'unconscionability' 'security Interest in Settlement Recoveries' 'receivers' 'balance of Convenience']

Case Brief

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Procedural Posture

Interlocutory Application for an Injunction / Notice of Motion Heard Ex Tempore

Legal Issues

  1. 1 ['Whether the first defendant established a seriously arguable case for final relief in respect of the proceeds of the settlement agreement.' 'Whether the balance of convenience favoured restraining the plaintiffs from disbursing funds received or receivable under the settlement agreement.']

Ratio Decidendi

The first defendant had a plainly seriously arguable case that it was entitled to the settlement recoveries, because the funding agreement arguably secured recoveries for its benefit even if terminated, and any setting aside under the Contracts Review Act or for unconscionability would almost inevitably involve restitution. The balance of convenience favoured restraint because the claim was to a security interest in the moneys, the plaintiffs appeared impecunious, the proposed disbursements would dissipate the funds among unsecured creditors without substitute security, and the defendants had undertaken not to act on the receivers' appointment on an interlocutory basis.

Court Disposition

Interlocutory injunction granted until 4 February 2013; costs of the notice of motion to be the first defendant's costs in the proceedings.

Orders

  • ['Upon the first defendant by its counsel giving to the Court the usual undertaking as to damages, until 4 February 2013 the plaintiffs be restrained from, by themselves, their servants or agents disbursing or causing someone else to disburse any funds received or receivable by them on or their behalf pursuant to...