Balout v Bella Ikea Cronulla Pty Ltd [2024] NSWSC 775

Supreme Court New South Wales

Medium Neutral Citation: Balout v Bella Ikea Cronulla Pty Ltd [2024] NSWSC 775 Hearing dates: 13 June 2024 Date of orders: 28 June 2024 Decision date: 28 June 2024 Jurisdiction: Equity - Expedition List Before: Rees J Decision: Order return of security paid into Court. Dismiss application for compensation under the usual undertaking as to damages. Catchwords: USUAL UNDERTAKING AS TO DAMAGES – shareholder dispute resolved by consent orders, including sale of apartment building 'in one line' to maximise sale price – director alleged to have circumvented consent orders by arrangement with another developer and mortgagee – interlocutory injunction to restrain mortgagee sale of 3 apartments only – plaintiffs pay $2M into court as security under Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 – apartment building sold 'in one line' for higher price – mortgagee paid out – director seeks compensation of $980,000 for mortgagee's higher payout figure. COMPENSATION – whether to enforce undertaking where no final determination of the merits –defendants concede injunction properly granted – principles and case law review at [61]-[78] – mere discharge of interlocutory injunction before trial does not establish that it ought not to have been ordered – defendants fail to establish circumstances warranting exercise of court's discretion to enforce undertaking. Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 25.8 Cases Cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979) 146 CLR 249 Cheltenham and Gloucester Building Society v Ricketts [1993] 1 WLR 1545 Cirillo & Anor v Citicorp Australia Ltd & Ors [2004] SASC 293 Computer Accounting & Tax Pty Ltd v Professional Services of Australia Pty Ltd (No 5) [2012] WASC 382 European Bank Ltd v Evans (2010) 240 CLR 432 Fourie v le Roux [2007] UKHL 1 Graham v Campbell (1878) 7 Ch D 490 Griffith v Blake (1884) 27 Ch D 474 Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1985) 1 NSWLR 545 IceTV v Ross [2008] NSWSC 898 Indoor Holdings Pty Ltd v Bennett (No 2) [2010] WASC 307 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 Metropolitan Properties Pty Ltd v Caltex Petroleum Pty Ltd [1999] WASC 153 Mohamed t/as Billan Family Day Care v Secretary, Department of Education, Skills and Employment (No 3) [2021] FCA 1537 National Australia Bank Ltd v Garrett [2016] FCA 714 Rail Corporation New South Wales v Leduva Pty Limited [2007] NSWSC 571 Russell v Farley (1881) 105 US 433 Tucker v State of Victoria [2023] VSCA 126 Ushers Brewery Ltd v PS King and Co (Finance) Ltd [1972] 1 Ch 148 Texts Cited: Peter Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (2nd ed, 2008, LexisNexis) Category: Procedural rulings Parties: Alan Balout (First Plaintiff) Wisefox Holdings Pty Ltd (Second Plaintiff) Bella Ikea Cronulla Pty Ltd (First Defendant) Bella & SEB Holdings (Second Defendant) Joseph Touma (Third Defendant) Representation: Counsel: P Afshar (First and Second Plaintiffs) C P O'Neill / A Rizk (First to Third Defendants)