Supreme Court New South Wales Medium Neutral Citation: Zel Management Pty Limited v JGS Holdings Pty Limited (No 2) [2011] NSWSC 1293 Hearing dates: Friday, 7 October 2011 Decision date: 07 October 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: First defendant restrained from dealing with or encumbering consideration from sale of real property. Catchwords: INJUNCTIONS - Interlocutory injunctions - reconsideration of prior refusal to grant interlocutory relief - plaintiff tenders moneys into court - defendant transfers subject property to parents for unknown consideration - no prejudice to defendant if relief granted - failure to grant relief could irretrievably prejudice plaintiff - departure from previous position warranted. Legislation Cited: (NSW) Conveyancing Act, 1919, s 37A Cases Cited: Marcolongo v Chen (2011) 274 ALR 634; [2011] HCA 3 Category: Procedural and other rulings Parties: Zel Management Pty Limited (plaintiff) JGS Investment Holdings Pty Limited (defendant) Representation: Counsel: R E Dubler with D Allen (plaintiffs) M J Dawson (defendant) Solicitors: Sterling Legal (plaintiff) Blackstone Waterhouse Lawyers (defendant) File Number(s): 2011/260470 Judgment (ex tempore) 1HIS HONOUR: I am not unconscious - for reasons which will be apparent from the judgment that I gave on refusing an ex parte application yesterday - of the powerful discretionary considerations that weigh against the grant of interlocutory relief in this case. That said, there have been a number of material developments since the relevant decision and orders of Ward J. The first is that the plaintiff now tenders the payment of $150,000, which is the option fee under the relevant option deed, alternatively on account or as security for its undertaking as to damages. The second is that in those circumstances the major reason for doubting that the plaintiff had a viable case for specific performance has now gone. The third is that the defendant is in default of the directions to put on a defence, and the defences as articulated today were, while not necessarily unviable, are on the evidence before me at least strongly contestable. 2In those circumstances, doubt more attends the viability of the defendant's defence than it does the viability of the plaintiff's claim. On top of that, the transaction which has now come to light, whereby the defendant has transferred the property to his parents, for a consideration which its representatives are unable to inform the Court today as to either its quantum or its whereabouts, raises the additional prospect that the plaintiff might be able to have that transaction set aside as one to defeat creditors [see (NSW) Conveyancing Act, 1919, s 37A and Marcolongo v Chen (2011) 274 ALR 634; [2011] HCA 3]. 3There would be no apparent prejudice to the defendants in an injunction for a short period of time - until they can explain the subject transaction, or put on evidence relevant to the balance of convenience -restraining the further alienation of the property, or restraining disposition of such consideration as there may be, whereas failure to do so might have the effect of permanently defeating the claim of the plaintiff. 4I am acutely conscious that this involves a departure from the position previously adopted by Ward J but, as I have said, the circumstances have changed, and a change of circumstances has always been a sufficient ground for re-opening an interlocutory decision. 5My orders are as follows. 6Upon the plaintiff by its counsel giving to the court the usual undertaking as to damages and upon the plaintiff paying into Court to the credit of these proceedings the sum of $150,000 by bank cheque as security for the undertaking as to damages and/or on account of any purchase price payable upon the transfer of the land comprised in folio identifier X/XXXXXXX, situate and known as unit X, X/X Short Street Homebush in the State of New South Wales ("the townhouse"): (1) Order that until 13 October 2011 the first defendant be restrained from, by itself, its servants or agents alienating, encumbering, disbursing or otherwise adversely dealing with any proceeds or consideration received or receivable by it or at its direction in respect of the transfer of the townhouse to Antoine Arraj, and Renae Arraj. (2) Order that the defendant by 12 October 2011 file and serve an affidavit setting out the facts and circumstances relating to the transfer of the townhouse to Antoine Arraj and Renae Arraj the consideration paid or payable and the whereabouts of the proceeds or consideration for the transfer. (3) Order that Antoine Arraj and Renae Arraj be added as second and third defendants respectively. (4) Order that the second and third defendants be restrained from by themselves their servants or agents alienating, encumbering, further encumbering or otherwise adversely dealing with the townhouse until 13 October 2011. (5) Order that the first defendant produce to the Court on 13 October 2011 all documents relating to the transfer of the townhouse to the second and third defendants and the consideration for the transfer and application thereof. (6) Direct that these orders be entered forthwith. (7) Adjourn the proceedings to 13 October 2011 at 10am before the duty judge. ********** 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. Decision last updated: 16 November 2011