Goulburn International Pty Limited v GEMI 160 Pty Limited [2021] NSWSC 796

Goulburn International Pty Limited v GEMI 160 Pty Limited [2021] NSWSC 796

The application was refused because the proposed order would restrain GEMI 160 from discharging real obligations to investor lenders entered into before the freezing order was made or contemplated, including obligations owed on the same terms to related-party and third-party investors. Any post-loan investor liability was at least a restitutionary liability arising from prior transactions. The plaintiffs' evidence supporting undervalue claims was weak, and cl 7.3 of the LRLAs provided a mechanism by which successful claims against GEMI 160 could be brought home to investors by indemnity. In those circumstances, payment to investors did not justify the extraordinary remedy of a freezing...

Jurisdiction
Australia
Judgment Date
28 June 2021
Procedural Posture
Application for a Freezing Order in Mortgage Proceedings / Notice of Motion for Continuation of Interim Freezing Order Refused
Outcome
Application for freezing order relief refused; notice of motion dismissed with costs.
Legal Topics
['interim Preservation' 'freezing Orders' 'mortgagee Power of Sale' 'exceptions to Freezing Orders' 'payment of Pre Existing Creditors' 'balance of Convenience']
['civil Procedure' 'equity' 'mortgage Law'] ['interim Preservation' 'freezing Orders' 'mortgagee Power of Sale' 'exceptions to Freezing Orders' 'payment of Pre Existing Creditors' 'balance of Convenience']

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Procedural Posture

Application for a Freezing Order in Mortgage Proceedings / Notice of Motion for Continuation of Interim Freezing Order Refused

Legal Issues

  1. 1 ['Whether the Court had power to make a freezing order restraining GEMI 160 from paying part of the proceeds of sale of mortgaged properties to investor lenders.' 'Whether payments to related-party investor lenders or investors who invested after the initial loan drawdown should be excluded from the ordinary exceptions to a freezing order.' 'Whether the plaintiffs had established a sufficient prima facie case and balance of convenience for continuation of freezing order relief.']

Ratio Decidendi

The application was refused because the proposed order would restrain GEMI 160 from discharging real obligations to investor lenders entered into before the freezing order was made or contemplated, including obligations owed on the same terms to related-party and third-party investors. Any post-loan investor liability was at least a restitutionary liability arising from prior transactions. The plaintiffs' evidence supporting undervalue claims was weak, and cl 7.3 of the LRLAs provided a mechanism by which successful claims against GEMI 160 could be brought home to investors by indemnity. In those circumstances, payment to investors did not justify the extraordinary remedy of a freezing...

Court Disposition

Application for freezing order relief refused; notice of motion dismissed with costs.

Orders

  • ['The notice of motion filed in the proceeding on 11 June 2021, as amended on 25 June 2021, is dismissed.' "The plaintiffs to pay the defendant's costs of, and associated with, the notice of motion (including the costs of the hearings on 15, 17 and 25 June 2021), as agreed or assessed." 'The proceeding to proceed by...