A1 Catering Services Pty Ltd v Manassen Holdings Pty Ltd [2024] NSWSC 178

A1 Catering Services Pty Ltd v Manassen Holdings Pty Ltd [2024] NSWSC 178

The costs Manassen would incur in defending anticipated disputes concerning the loan transaction, the receiver's conduct and legal fees were within the indemnity and secured money provisions of the loan agreement, mortgages and general security deed, and were contingently owing when discharge of the mortgages was sought. From 19 August 2016 it was reasonable for Manassen to anticipate likely litigation with A1 Catering or related entities. Mr Reese's evidence provided a rational and coherent basis for treating $300,000 as a reasonable estimate of the likely costs, so Manassen was entitled to retain that amount as security.

Jurisdiction
Australia
Judgment Date
27 February 2024
Procedural Posture
Equity Proceeding Concerning Mortgages and Securities / Principal Judgment After Hearing
Outcome
Prayers 3 and 4 of the amended statement of claim dismissed; parties to provide submissions on costs.
Legal Topics
['rights and Remedies of Mortgagee' 'retention of Surplus Sale Proceeds as Security for Costs' 'contingent Liabilities Secured by Mortgage' 'discharge of Mortgages']
['mortgages and Securities' 'equity'] ['rights and Remedies of Mortgagee' 'retention of Surplus Sale Proceeds as Security for Costs' 'contingent Liabilities Secured by Mortgage' 'discharge of Mortgages']

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Procedural Posture

Equity Proceeding Concerning Mortgages and Securities / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether Manassen, as mortgagee, was entitled to retain $300,000 as security for anticipated costs of litigation or other dispute with the borrowers.' 'If Manassen was entitled to retain security, whether $300,000 was a reasonable estimate of the likely costs Manassen would incur.']

Ratio Decidendi

The costs Manassen would incur in defending anticipated disputes concerning the loan transaction, the receiver's conduct and legal fees were within the indemnity and secured money provisions of the loan agreement, mortgages and general security deed, and were contingently owing when discharge of the mortgages was sought. From 19 August 2016 it was reasonable for Manassen to anticipate likely litigation with A1 Catering or related entities. Mr Reese's evidence provided a rational and coherent basis for treating $300,000 as a reasonable estimate of the likely costs, so Manassen was entitled to retain that amount as security.

Court Disposition

Prayers 3 and 4 of the amended statement of claim dismissed; parties to provide submissions on costs.

Orders

  • ["Prayers 3 and 4 of the plaintiff's Amended Statement of Claim are dismissed." 'The second defendant to file and serve submissions (of no more than five pages) and any affidavit evidence with a copy to be emailed to the Associate to Justice Richmond by Friday, 8 March 2024.' 'The plaintiff to file and serve...