New South Wales Supreme Court CITATION : Brighten Pty Limited v Bank of Western Australia Limited [2009] NSWSC 1467 HEARING DATE(S) : 23 December 2009 JUDGMENT OF : Gzell J EX TEMPORE JUDGMENT DATE : 23 December 2009 DECISION : Injunction granted until end of interluctory regime. CATCHWORDS : PROCEDURE - Injunctions - receiver appointed to business with powers limited to gaining information as an interlocutory measure over vacation - bank seeks to enforce securities and put in an additional receiver for an act of default in payment one day late and on basis that interim report of receiver shows a substantial decline in takings since A Current Affair programme on the plaintiff's business was aired - bank argued this a material adverse change and an act of default not known to bank when interlocutory regime established - whether prima facie case for continuation of interlocutory during vacation - undesirable to have two receivers in one business CATEGORY : Procedural and other rulings Brighten Pty Limited (First Plaintiff) Noble Growth Investment Limited (Second Plaintiff) PARTIES : Michael Wilson Kwok (Third Plaintiff) Bank of Western Australia Limited (First Defendant) Graeme Veitch (Second Defendant) FILE NUMBER(S) : SC 50181/09 COUNSEL : D Robinson SC (Plaintiffs) P Dowdy (First Defendant) SOLICITORS : Philip A Biber, Lawyer (Plaintiffs) Gadens Lawyers (First Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J WEDNESDAY 23 DECEMBER 2009 50181/09 BRIGHTEN PTY LIMITED & ORS v BANK OF WESTERN AUSTRALIA LIMITED & ANOR EX TEMPORE JUDGMENT 1 Before the Court was an application for an interlocutory injunction restraining the Bank of Western Australia Limited from acting upon one or other or both of two alleged cases of default. 2 In the one case, a payment under the facility agreement was effectively one day late. Technically, that is an event of default. 3 The other alleged event of default arises from an interim report provided by the receiver appointed on 11 December 2009 by Einstein J. The report suggests that on the material thus far made available to the receiver there has been a decline in total revenue. In the calendar year to 31 December 2007 it was $8,421,000. It was $6,019,000 in the calendar year ending 31 December 2008. And it dropped to $2,286,000 in the period from 1 January 2009 to 17 December 2009. For the bank it was submitted that the decline constitutes a material adverse change and is an act of default. 4 For Brighten it was submitted that its internal accounts do not agree with those figures and the receiver should be provided with further information. Further information is also vouchsafed with respect to the Accor requirements in putting in a proper manager and to fire brigade requirements, matters mentioned by the receiver in his interim report. 5 There was a proposal that the matter should be taken to the Court of Appeal today and in order for that hearing to take place before I made any decision on the application for an injunction of some length, I granted a short injunction until 5.00 pm tomorrow and stood the matter over before me tomorrow. As the appeal is now not proceeding, I have vacated the hearing before me tomorrow and have heard the application today. 6 It was submitted that an A Current Affair programme on the York Fairmont Resort at Leura run by Brighten aired in April 2009 has had a devastating effect on the takings of the business and this was not known by the bank when Einstein J set up an interim regime to take the matter through the vacation. 7 It was submitted that Brighten could not establish a prima facie case. But, in my view, it has established a prima facie case for the continuation of the status quo based on the relative positions of the parties that were addressed by Einstein J in his orders of 11 December 2009. It does not seem to me to be appropriate to allow a second receiver into the affairs of this company, albeit that the receiver appointed by Einstein J has powers limited to the gathering of information and the day to day operations remain in the hands of Brighten. 8 It seems to me that the status quo should not be interrupted until next term. 9 I do not regard damages as an adequate remedy and the balance of convenience favours the continuation of the regime set in place by Einstein J. 10 For these reasons I extend the injunction that I granted yesterday until 5 pm on 25 February 2010. I reserve the costs of today's hearing. ***************** 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.