Russell v Desi Nominees Pty Limited [2023] FCA 1249

Russell v Desi Nominees Pty Limited [2023] FCA 1249

Although a prima facie case was conceded for the interlocutory application, the plaintiff had not shown that damages would be inadequate, her concern about an undervalue related-party sale was speculative, her undertaking as to damages was likely ineffective given her dire financial position, and the balance of convenience favoured refusing the injunction because restraint would likely increase the Westpac mortgage debt, incur further sale costs, and risk losing the opportunity to sell. The broader proceeds-holding order sought was inappropriate as an unsupported freezing order, but a limited holding period of 21 days was ordered to allow any proper freezing order application.

Jurisdiction
Australia
Judgment Date
18 October 2023
Procedural Posture
Inter Partes Application for an Interim Interlocutory Injunction in a Commercial and Corporations Proceeding / Interlocutory Application Heard by the Commercial and Corporations Duty Judge
Outcome
Application for interlocutory injunctive relief dismissed with costs; limited ancillary orders made preserving net proceeds of any sale for 21 calendar days and managing the proceeding.
Legal Topics
['interlocutory Injunction' 'guarantees and Indemnities' 'specific Security Agreements' 'power of Sale' 'garcia Principles' 'unconscionable Conduct' 'adequacy of Damages' 'usual Undertaking as to Damages' 'balance of Convenience' 'freezing Order']
['equity' 'commercial and Corporations' 'commercial Contracts, Banking, Finance and Insurance'] ['interlocutory Injunction' 'guarantees and Indemnities' 'specific Security Agreements' 'power of Sale' 'garcia Principles' 'unconscionable Conduct' 'adequacy of Damages' 'usual Undertaking as to Damages' 'balance of Convenience' 'freezing Order']

Case Brief

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Procedural Posture

Inter Partes Application for an Interim Interlocutory Injunction in a Commercial and Corporations Proceeding / Interlocutory Application Heard by the Commercial and Corporations Duty Judge

Legal Issues

  1. 1 ["Whether an interlocutory injunction should restrain the defendants from selling the Lot 2 shares by online auction pending determination of the plaintiff's substantive claim." 'Whether damages would be an adequate remedy for the plaintiff if she ultimately succeeds in setting aside the SSAs and guarantees.' "Whether the plaintiff's usual undertaking as to damages was sufficient to support the grant of an interlocutory injunction." 'Whether the balance of convenience favoured granting or refusing the injunction.' "Whether, in the alternative, the net proceeds of sale should be held in a solicitor's controlled monies account pending resolution of the substantive proceeding."]

Ratio Decidendi

Although a prima facie case was conceded for the interlocutory application, the plaintiff had not shown that damages would be inadequate, her concern about an undervalue related-party sale was speculative, her undertaking as to damages was likely ineffective given her dire financial position, and the balance of convenience favoured refusing the injunction because restraint would likely increase the Westpac mortgage debt, incur further sale costs, and risk losing the opportunity to sell. The broader proceeds-holding order sought was inappropriate as an unsupported freezing order, but a limited holding period of 21 days was ordered to allow any proper freezing order application.

Court Disposition

Application for interlocutory injunctive relief dismissed with costs; limited ancillary orders made preserving net proceeds of any sale for 21 calendar days and managing the proceeding.

Orders

  • ['Prayers 1 and 2 in relation to interlocutory relief contained in the originating process dated 16 October 2023 be dismissed.' "Subject to further order, the proceeds of any sale of the shares numbered 11 to 20 in Pialligo Horticulture Pty Ltd ACN 139 772 464 (Lot 2 shares), net of the amount required to discharge...