De Rucci International Pty Ltd v Zhu [2019] NSWSC 1375

De Rucci International Pty Ltd v Zhu [2019] NSWSC 1375

There is a serious question to be tried regarding the ownership of the stock, but the balance of convenience (justice) favours continuing the existing interlocutory regime: stock remains with HQ for sale with proceeds paid to a nominated account, subject to allowances for HQ's business liabilities. Removal of stock via mandatory injunction is not justified due to insufficient identification, potential harm to HQ's business, and weak plaintiff's case; instead, safeguards for management of sale proceeds are imposed.

Parties
Plaintiff: De Rucci International Pty Ltd; First Defendant: Lucy Zhu; Second Defendant: HQ Living Pty Ltd; Third Defendant: Singways (Moore Park) Pty Ltd
Jurisdiction
Australia
Judgment Date
11 October 2019
Procedural Posture
Interlocutory Application / Interlocutory Hearing
Outcome
Interlocutory relief granted in part: continuation of existing regime, some proceeds allowed to HQ; mandatory injunction for removal refused.
Legal Topics
Interlocutory Injunction, Balance of Convenience, Management Agreement, Ownership of Stock, Conversion of Chattels
Civil Procedure Equity Interlocutory Injunction Balance of Convenience Management Agreement Ownership of Stock Conversion of Chattels

Case Brief

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Parties

De Rucci International Pty Ltd

Plaintiff

Lucy Zhu

First Defendant

HQ Living Pty Ltd

Second Defendant

Singways (Moore Park) Pty Ltd

Third Defendant

Procedural Posture

Interlocutory Application / Interlocutory Hearing

Legal Issues

  1. 1 Whether there is a serious question to be tried as to the ownership of stock
  2. 2 Whether interlocutory mandatory injunction should be granted for removal and sale of stock
  3. 3 Balance of convenience and hardship in granting relief

Ratio Decidendi

There is a serious question to be tried regarding the ownership of the stock, but the balance of convenience (justice) favours continuing the existing interlocutory regime: stock remains with HQ for sale with proceeds paid to a nominated account, subject to allowances for HQ's business liabilities. Removal of stock via mandatory injunction is not justified due to insufficient identification, potential harm to HQ's business, and weak plaintiff's case; instead, safeguards for management of sale proceeds are imposed.

Court Disposition

Interlocutory relief granted in part: continuation of existing regime, some proceeds allowed to HQ; mandatory injunction for removal refused.

Orders

  • Orders 3, 4, 5 and 6 of the orders made on 20 September 2019 continued until further order subject to adjustments for payment of $20,000 out to HQ and addition of plaintiff's signatory to nominated account.
  • Liberty to apply.