Inetstore Corporation v Southern Matrix International [2005] NSWSC 883

Inetstore Corporation v Southern Matrix International [2005] NSWSC 883

Although there was a serious question to be tried, the secured creditor did not discharge its onus of showing that the balance of convenience favoured a mandatory interlocutory injunction. The order would alter the status quo and effectively grant part of the final relief; the secured creditor offered no undertaking as to damages and had only $2.00 paid up capital; its proposed undertakings did not cover the scope of a conventional undertaking; it did not show it was better placed than the liquidator to preserve the assets; and damages would be an adequate remedy if the liquidator had wrongly withheld the assets.

Jurisdiction
Australia
Judgment Date
05 September 2005
Procedural Posture
Corporations Winding Up Proceeding Concerning Control of Sale of Company Assets Subject to Security / Interlocutory Application for Mandatory Injunction
Outcome
Application for mandatory interlocutory injunction refused.
Legal Topics
['winding Up' "liquidator's Lien" "secured Creditor's Rights" 'equitable Charges and Liens' 'mandatory Interlocutory Injunction' 'balance of Convenience' 'adequacy of Damages']
['corporations' 'equity' 'injunctions'] ['winding Up' "liquidator's Lien" "secured Creditor's Rights" 'equitable Charges and Liens' 'mandatory Interlocutory Injunction' 'balance of Convenience' 'adequacy of Damages']

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Procedural Posture

Corporations Winding Up Proceeding Concerning Control of Sale of Company Assets Subject to Security / Interlocutory Application for Mandatory Injunction

Legal Issues

  1. 1 ['Whether an interlocutory mandatory injunction should require the company and liquidator to deliver charged assets to the secured creditor so it could sell them.' "Whether the liquidator's asserted equitable lien for remuneration and expenses had priority over the secured creditor's rights." 'Whether the liquidator or the secured creditor had the superior right to realise the charged assets.' 'Whether the balance of convenience favoured granting interlocutory relief, including in light of absence of an undertaking as to damages and adequacy of damages as a remedy.']

Ratio Decidendi

Although there was a serious question to be tried, the secured creditor did not discharge its onus of showing that the balance of convenience favoured a mandatory interlocutory injunction. The order would alter the status quo and effectively grant part of the final relief; the secured creditor offered no undertaking as to damages and had only $2.00 paid up capital; its proposed undertakings did not cover the scope of a conventional undertaking; it did not show it was better placed than the liquidator to preserve the assets; and damages would be an adequate remedy if the liquidator had wrongly withheld the assets.

Court Disposition

Application for mandatory interlocutory injunction refused.

Orders

  • ['Paragraph 3 of the Interlocutory Process filed 25 July 2005 is dismissed.' 'The defendant is to pay the costs of the plaintiffs of this application.']