New South Wales Supreme Court CITATION : Cliffshaw Pty Limited v Betohuwisa Investments Pty Limited [2009] NSWSC 1470 HEARING DATE(S) : 30 December 2009 JUDGMENT OF : Gzell J EX TEMPORE JUDGMENT DATE : 30 December 2009 DECISION : Summons dismissed. CATCHWORDS : PROCEDURE - Injunctions - plaintiff sold leases to third party which on-sold to defendant - plaintiff unpaid and obtained judgment and leave to issue writ of possession - writ subsequently stayed permanently with consent of plaintiff - whether a prima facie case that plaintiff has lien over leases for unpaid purchases price - plaintiff also alleged sale to defendant at an undervalue - third party in voluntary administration - administrator investigating value of leases - whether injunction should go restraining defendant from mortgaging, encumbering or transferring lease LEGISLATION CITED : Conveyancing Act 1919 CATEGORY : Procedural and other rulings PARTIES : Cliffshaw Pty Limited (Plaintiff) Betohuwisa Investments Pty Limited (Defendant) FILE NUMBER(S) : SC 329714/09 COUNSEL : A Hill (Plaintiff) SOLICITORS : DibbsBarker Lawyers (Plaintiff) W Colbron (Amicus Curiae) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J WEDNESDAY 30 DECEMBER 2009 329714/09 CLIFFSHAW PTY LIMITED v BETOHUWISA INVESTMENTS PTY LIMITED EX TEMPORE JUDGMENT 1 In proceedings between Cliffshaw Pty Limited and Betohuwisa Investments Pty Limited an interlocutory injunction was sought restraining Betohuwisa from mortgaging, encumbering or transferring special leases transferred to it by the Old Kiama Wharf Company Pty Limited. 2 The leases had been sold by Cliffshaw to Old Kiama for which it obtained a judgment on 21 March 2007 in default of payment of the purchase price in the amount of $l,270,257.53. The judgment gave Cliffshaw leave to issue a writ of possession forthwith. That did not happen until some two years later on l5 July 2009. An interim stay of the order was obtained and thereafter Cliffshaw agreed to an order for a permanent stay. 3 Cliffshaw alleges that it has a lien over the leases held by Betohuwisa for the unpaid purchase price of its sale of the leases to Old Kiama. It has not been explained to me how a lien arises in circumstances where possession was given up and a writ for possession was, with the consent of Cliffshaw, stayed. 4 It is also submitted on Cliffshaw's behalf that the sale price of the leases from Old Kiama to Betohuwisa was at an undervalue. The sale price was $475,000 of which vendor finance secured by a mortgage was given by Old Kiama in the amount of $400,000. 5 There is no suggestion in the summons that a claim is being made in fraud with respect to that transfer under the Conveyancing Act 1919, s 37A. 6 A voluntary administrator was appointed to Old Kiama and, at the insistence of Cliffshaw, replaced by a new voluntary administrator. Both administrators were seized of the need to investigate whether the transfer of the leases to Betohuwisa was at proper value. 7 In these circumstances, I do not see that there is a prima facie case as the matter is thus far pleaded, and the balance of convenience would favour allowing the replaced administrator to investigate the question of value. If at some subsequent stage proceedings are commenced alleging fraud under the Conveyancing Act, s 37A or otherwise, Cliffshaw may have difficulty in establishing that damages are not a sufficient remedy. It has not established that proposition to my satisfaction in these proceedings. 8 The injunctions that I granted yesterday will expire this evening. 9 I dismiss the summons. ************************** 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.