New South Wales Supreme Court CITATION : Makucha & Anor v Preslands Finance Pty Ltd & Ors [2004] NSWSC 1210 HEARING DATE(S) : 22 November, 2004 JUDGMENT DATE : 22 November 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Plaintiffs' motion dismissed with costs. CATCHWORDS : CONTRACT - INTERIM INJUNCTION - SPECIFIC PERFORMANCE - Whether specific performance of an alleged contract can be ordered by way of interlocutory mandatory injunction in terms which differ from the contract as alleged. Paul Makucha - First Plaintiff Mascot Administration Services Pty Ltd - Second Plaintiff Preslands Finance Pty Ltd - First Defendant PARTIES : Nothintoohard Pty Ltd (in liq) (receiver appointed) - Second Defendant Adam Shepard - Third Defendant Ronald John Dean-Willcocks - Fourth Defendant Sovereign Capital Ltd - Fifth Defendant FILE NUMBER(S) : SC 6063/04 Mr P.E. King - Plaintiffs Ms Woodlands (Sol) - First Defendant COUNSEL : N/A - Second Defendant M.J. Stevens - Third and Fourth Defendants M.W. Young - Fifth Defendant Paul Makucha (in person) - Plaintiffs Minter Ellison - First Defendant SOLICITORS : N/A - Second Defendant N/A - Third and Fourth Defendants Bransgroves - Fifth Defendant JUDGMENT – Ex tempore 1 By Summons filed on 10 November 2004, the Plaintiffs sought by way of final relief an order that each of the Defendants be restrained from preventing the Plaintiffs, their servants and agents from having unfettered access to premises in O'Riordan Street, Mascot, for a period of some sixty days from the date of the Summons, and a further order restraining the Defendants from using or removing certain assets of the First Plaintiff, Mr Makucha. 2 When the matter came on this morning, there was a considerable degree of confusion as to what it was exactly that the Plaintiffs were seeking today. It was made clear by the Defendants that none of the Defendants was claiming ownership of the two principal categories of property the subject of the dispute. 3 The first category may be called the office buildings. They are actually four modified containers which are sitting on the subject land in O'Riordan Street, Mascot. They have been converted to provide for office accommodation. The second category of assets may be described as documents and personal property of the First Plaintiff. 4 As I say, it was made clear by the Defendants that none of them claimed a right of ownership in either category of property, nor did they claim any right to detain that property as against the Plaintiffs. The personal property has been removed from the site after the appointment of the Third and Fourth Defendants as receivers of the property of the Second Defendant. The personal property has at all times, as I understand, been available for collection by the First Plaintiff or the Second Plaintiff as the case may be. 5 After, as I say, a great deal of confusion and discussion, the application which I have to decide has resolved itself thus. The Plaintiffs have been granted leave to amend their Summons. The Plaintiffs now seek an interlocutory injunction in the following terms: an order that the Fifth Defendant be restrained from preventing the Plaintiffs having access to the four containers on the subject land for such period as the Court considers appropriate. 6 The order sought is really for the enforcement of what is said to be an agreement reached in January 2003 between the Plaintiffs and the company, Nothintoohard Pty Ltd, then controlled by the First Plaintiff, and Preslands Finance Pty Ltd which held a second ranking security over the property of the Second Defendant, Nothintoohard. 7 The agreement was said to have been made at a meeting between the parties' representatives and Mr Makucha on 23 January 2003, in the following terms: if the First Defendant, Preslands, appointed receivers to Nothintoohard, then Mr Makucha would have unfettered access to the Mascot site to use and remove the assets of Mascot Administrations for sixty days. 8 What has happened is that receivers were indeed appointed to the Second Defendant. They are the Third and Fourth Defendants. However, on 2 November this year, the first ranking secured creditor, Sovereign Capital Limited, entered into possession of the property of Nothintoohard, and it is now in the course of arranging an auction of the subject land upon which the container offices are situated. The auction is due to take place on 24 November. 9 It is clear, in my opinion, that what the Plaintiffs are seeking, in effect and substance, is an order for specific performance of what is said to be a contractual licence entered into between themselves and the First Defendant, or else specific performance of a contractual licence said to have been entered into in a conversation between Mr Makucha and a Mr Witchurch on behalf of the Fifth Defendant, Sovereign Capital, after it entered into possession. 10 However, the agreement for which specific performance is sought on an interlocutory basis is not, in terms, the agreement which is said to have been made, that is, a contractual licence for sixty days. Some shorter licence is sought to be enforced. I do not think that this is permissible in an application for interlocutory relief. If any order were to be made for specific performance of an agreement on an interlocutory basis – which would be very unusual – it would have to be made according to the terms and tenor of the agreement between the parties, not according to terms which the Court itself has a discretion to manufacture. 11 There are many other reasons why this application should fail. Firstly, I am by no means satisfied that there is a serious question to be tried as to whether any alleged contract or contractual licence between the Plaintiffs and Preslands Finance was supported by consideration. None has been suggested in the evidence or in the submissions for Mr Makucha. 12 There is no suggestion in the evidence of any estoppel which could have arisen as a result of the conversation alleged on 23 January 2003. There is no alleged detrimental reliance upon any representation said to have been made on that occasion. 13 Still less is there any consideration suggested in the evidence or in submissions for the contract which is said to have arisen between the Plaintiffs and the Fifth Defendant by reason of the telephone conversations or conversation between Mr Makucha and Mr Witchurch. There is no evidence of any detrimental reliance upon any representation said to have been made by Mr Witchurch. 14 In short, I am far from satisfied that there is a serious question to be tried as to the existence of a contractual right in the Plaintiffs against either the First Defendant or the Fifth Defendant. 15 Secondly, on the balance of convenience, there is nothing which would indicate that any relief as sought should be granted to the Plaintiffs on an interlocutory basis. The essence of the complaint by the Plaintiffs is that they wish to remove from the subject land the four container offices which are presently situated on that land. Even if there were a contractual basis for a claim for specific performance against the Fifth Defendant, I do not see that there is any hardship to be suffered by the Plaintiffs if they are left to their rights to take the four container buildings from the subject land and use them for their own purposes, when there is no dispute as to the existence of those rights. 16 The Fifth Defendant, by its solicitor, has made it abundantly clear in the witness box that not only does the Fifth Defendant not seek to retain these four containers but, indeed, it wishes to get rid of them as soon as possible. It regards them as of no value and it wishes to sell the land unimpeded and unencumbered with their presence. 17 What seems really to be in issue and what seems really to be behind this application by the Plaintiffs is some attempt to enforce against the Fifth Defendant the alleged right of Mr Makucha to enter immediately upon the subject land and to remain there, occupying these offices for some time. As I have said, I do not think he has any contractual right to do so. 18 As to balance of convenience, there has been no evidence led as to why Mr Makucha's occupation of these four containers is only of value to him if he occupies them while they are on the present site. As I have said, the Fifth Defendant wishes to have them removed as soon as possible. It is a matter entirely for Mr Makucha to arrange for their removal from the site and to position them where he will. He may make such use of them as he then wishes. Nothing in the evidence demonstrates any balance of convenience in favour of Mr Makucha being able to occupy these offices while they are on the subject site and while the site is being subjected to auction and sale. 19 The application must also fail in my view because, if there is any agreement as alleged, it seems to me that no ground has been shown why damages would not be an adequate remedy for breach, if such breach has been committed. No evidence has been led to show that the use by Mr Makucha of these container offices located where they are is of any peculiar value to him such as to lead to damages for breach of contract not being an adequate remedy. 20 For all of those reasons, it seems to me that the application for the interlocutory injunction must be refused. 21 The First, Third and Fourth Defendants seek the costs of today and of 10 November when the matter first came before the Court. They seek those costs on a party/party basis. The Fifth Defendant seeks the costs of both days on an indemnity basis. 22 I am persuaded that the proper order for the costs of the First, Third and Fourth Defendants is that they should have their costs of today and of the first day, that is, 10 November 2004. 23 The evidence is that the Fifth Defendant went into possession of the assets of the Second Defendant on 2 November 2004. It was then, and thereafter, impossible for the First Defendant, as second mortgagee, and the Third and Fourth Defendants as receivers appointed by the second mortgagee, to give effect to any of the relief sought by the Plaintiffs in the Summons filed on 15 November 2004. 24 Accordingly, I think it is clear that those Defendants should have their costs of 15 November and of today on a party/party basis, which is all they seek. 25 The Fifth Defendant seeks indemnity costs. As I understand the basis of the application, it is that if the Plaintiffs had been properly advised, they would never have brought this application. In other words, the application was doomed from the start and that should have been apparent to the Plaintiffs, if properly advised. That is a common ground upon which indemnity costs orders are made. I think that that ground is made out in the present case. In saying that, of course, I do not wish to make any reflection upon Mr King himself who, it is obvious, has come into the matter after it was commenced by Mr Makucha in person as appears clear from the documents filed on 10 November. 26 However, despite Mr King's valiant endeavours, it seems to me that there was no basis at all for the claims made by the Plaintiffs for interlocutory relief. I think that is evidenced by the great difficulty experienced this morning by the Court in understanding exactly what was the scope and nature of the relief which was being sought. 27 I think this case is one where it is appropriate to order indemnity costs, as sought by the Fifth Defendant. Accordingly the orders of the Court are that the Plaintiffs' application for interlocutory relief is refused. The Plaintiffs will pay the costs of the First, Third and Fourth Defendants on a party/party basis, such costs being the costs of 15 November and of today. The Plaintiffs will pay the Fifth Defendant's costs of 15 November and of today on the indemnity basis. 28 The exhibits may be returned. ~ oOo ~ Last Modified: 12/17/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.