Collins Marrickville Pty Ltd v Henjo Investments Pty Ltd & Anor [1987] FCA 282

T_FO s ON

N_THE FEDERAL COURT OF AUS LIA

NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION

No. NSW G.211 of 1985

wwevewwv

BETWEEN: COLLINS MARRICKVILLE PTY LIMITED

Applicant

AND: HENJO INVESTMENTS PTY LIMITED

First Respondent

SELES, HENRY _SAADE a an Second Respondent at NORMAN PETER GEORGE ~~ "198 Third Respondent es SAADE DEVELOPMENTS PTY LIMITED . Fourth Respondent CORAM: WILCOX J PLACE: SYDNEY DATE: 29 APRIL 1987

MINUTES ORDER

Upon the applicant giving to the Court the usual undertaking as to damages, THE COURT ORDERS THAT:

Note:

Pending further order, the first, second and fourth respondents and each of them be restrained from taking any action to recover any payments due under, or otherwise to enforce the rights granted by, a mortgage dated 1] May 1985 from the applicant to the first respondent, a copy of which is annexure A to

the affidavit of Ian Francis Dwyer dated 16 April 1987.

Liberty to apply be granted to any party in respect

of the said order on 48 hours' notice.

The costs of the notice of motion heard today is

reserved.

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY No. NSW G.211 of 1985

GENERAL DIVISION

BETWEEN: COLLINS MARRICKVILLE PTY

LIMITED

Applicant

AND: HENJO INVESTMENTS PTY LIMITED

First Respondent HENRY SAADE

Second Respondent NORMAN PETER GEORGE

Third Respondent

SAADE DEVELOPMENTS PTY LIMITED

Fourth Respondent

CORAM: WILCOX J PLACE: SYDNEY DATE: 29 APRIL 1987

EXTEMPORE REASONS FOR JUDGMENT

I am of the opinion that the Court should intervene to prevent enforcement action on the mortgage dated 1 May 1985, which is annexed to the affidavit of Mr Dwyer sworn on 16 April 1987. I have already found as against the first respondent, Henjo Investments Pty Limited, and the second respondent, Henry Saade, that a case has been made out; of conduct within s.52 of the Trade Practices Act 1974 in the case of the first respondent and, in the case of the second

respondent, knowing involvement in that conduct.

The applicant is entitled to such relief as may be appropriate when evidence in relation to relief is before the Court and a hearing on that matter has been undertaken. The amount which is due on the mortgage next Friday, 1 May, is $230,000. This is both a considerable sum in itself anda major proportion of the purchase price. Prima facie, it seems to me, the value of the business which was purchased is likely to be less than the purchase price, having regard to the limitations in the way in which it may lawfully be operated. Whether or not this is a case in which, in the end, there should be orders, in effect, setting aside the whole transaction or any particular parts of the transaction is a

matter about which I have formed no views whatever.

However, it seems to me that, liability having been established, it is most desirable that the options of the Court in relation to the ultimate form of relief be preserved

insofar as that is possible. The matter is complicated by the

fact that there was an assignment of the mortgage from Henjo Investments to Saade Developments Pty Limited, which is now

the fourth respondent, on some date after 17 July 1985.

I have no doubt that, before the negotiations between Mr Saade and Mr Collins, Mr Henry Saade had reached an agreement in principle with his brother George Saade that he, Henry Saade, would buy into the assets of Mr George Saade, held in Melbourne, and that the two brothers would work together. That was conditional upon the sale of the New York Deli.

I am not, at this stage, persuaded that this informal agreement was consummated by a written agreement made on 2 May 1985, as would appear to be the position pursuant to an agreement which has now been put in evidence. I note that this agreement was not stamped until 8 October 1985, and it may have been that the agreement came into existence at a later date and was backdated. It is now clear beyond any question that the assignment of the mortgage from Henjo Investments Pty Limited to Saade Developments pty Limited, which is dated 1 May 1985, was in fact backdated. The evidence indicates that this document was prepared after 17 July 1985; and by 3 July 1985 the solicitors for Henjo Investments were aware of a complaint made by the present applicant in relation to the matters the subject of this

action.

Mr Zucker has no diary note as to the date upon which he received instructions for the assignment and, although he says that his recollection is that it was before 3 July, there is nothing put before the Court to indicate that this is more likely than otherwise. Without any disrespect to Mr Zucker, it seems to me difficult to rely upon the unsupported recollection of a solicitor as to when he received instructions, apparently by telephone, to take a particular step in a conveyancing matter. I also have regard to the fact that, on the whole of the material I have seen, Mr Zucker appears to be in the habit of acting efficiently and promptly, and I would be a little surprised if he had waited for over two weeks to undertake such a small task as a transfer of the mortgage, particularly if he knew, as he did at that time, that there was some complaint made by the present applicant,

the mortgagor.

I do not think that I have to reach any view about this matter. What is quite clear is that the transaction between the first and fourth respondent, although in one sense at arm's length, was an inter-family transaction. It may be that there will have to be some renegotiation of current arrangements with Westpac if the payment due next Friday is not available to be paid to the bank, but there is no reason

to believe that this will occasion any problen.

I propose to make an order but to reserve liberty to apply in case some difficulty not presently foreseen does

arise. I do not think that it is appropriate to make order

(1) in the notice of motion, which is, in effect, a variation on an interim basis. I think that the appropriate course is to take the more usual course of making an interlocutory

injunction and the price for that is that the applicant must give the usual undertaking as to damages. Mr Moore has

informed me that he does have those instructions.

The order that I propose to make is as follows: upon the applicant giving to the Court the usual undertaking as to damages, I order that, pending further order, the first, second and fourth respondents and each of them, be restrained from taking any action to recover any payments due under or otherwise to enforce the rights granted by a mortgage dated 1 May 1985 from the applicant to the first respondent, a copy of which is annexure A to the affidavit of Ian Francis Dwyer

dated 16 April 1987.

I grant liberty to apply to any party in respect of

the said order on 48 hours' notice, and I reserve the costs of

this notice of motion.

I certify this and the four (4) preceding pages to be a true copy of the Reasons for Judgment of

his Honour Mr Justice Wilcox.

_ —* Assoctatey~ > — —~Ye edno~,

Date: 15 May 1987

Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondent:

Solicitors for the Respondent: Date(s) of hearing:

Mr G A Moore Laurence & Laurence Mr F G Lever

Swaab & Associates

29 April 1987