In the matter of Idoport Pty Ltd ACN 075 318 106; In the matter of Idoport Pty Ltd (In Liq) (Receivers Appointed) [2012] NSWSC 524

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Idoport Pty Ltd ACN 075 318 106; In the matter of Idoport Pty Ltd (In Liq) (Receivers Appointed) [2012] NSWSC 524 Hearing dates: 26 and 27 April 2012 Decision date: 24 May 2012 Jurisdiction: Equity Division - Corporations List Before: Ball J Decision: 1 Declare that the rights of the Fifth Defendant under the Consulting Agreement between the Fifth Defendant and the Plaintiffs dated 13 September 1996 do not, by reason of any notice issued by the Third Defendant and/or the Fourth Defendant on 9 January 2007, or otherwise, constitute "Secured Property" pursuant to: (a) the Fixed and Floating Equitable Charge between the Fifth Defendant and the Third Defendant dated 30 March 2005; and/or (b) the Fixed and Floating Equitable Charge between the Fifth Defendant and the Fourth Defendant dated 30 March 2005, as that expression is defined in those Charges. 2 Declare that the appointment of the First Defendant and the Second Defendant as Receivers of the Fifth Defendant, insofar as that appointment relates to the rights of the Fifth Defendant under the Consulting Agreement entered into with the Plaintiffs dated 13 September 1996, is invalid. 3 Dismiss the interlocutory processes filed in proceedings 2007/254047 and 2011/85023 on 3 May 2011. 4 Order that the third and fourth defendants pay the plaintiffs' costs. Catchwords: CONTRACT - extension of charge over contractual rights - where contract required consent of other party - whether consent necessary for charging of rights - legal principles the same as for assignment of contractual rights - held consent necessary. CONTRACT - extension of charge over contractual rights - where extension of charge required consent of other party who refused consent - whether consent unreasonably withheld in the circumstances - relevant legal principles - whether reasonableness to be determined subjectively or objectively - whether party's actual reasons always relevant - whether court should have regard to events that occurred after consent was sought and refused - importance of unreasonable delay in responding to request for consent - where defendants effectively seeking to assign right to litigate and plaintiffs have the benefit of a barring order and undertaking not to institute proceedings outside the jurisdiction - whether possibility of assignee initiating litigation without complying with barring order a relevant consideration - held that consent was not unreasonably withheld. CONTRACT - whether assignee obtains assigned rights "subject to all equities" - meaning of "equities" - whether concept includes barring order and undertaking to the court. EVIDENCE - onus of proof - who bears onus of proving consent was withheld unreasonably - where plaintiff initiated proceedings seeking declaration that extension of charge was invalid - held onus is on the party asserting consent unreasonably withheld. EVIDENCE - hearsay - whether emails and letters discussing reasons for refusing consent inadmissible as hearsay - held admissible. Legislation Cited: Evidence Act 1995 Cases Cited: Ashworth Frazer Ltd v Gloucester City Council [2001] UKHL 59; [2001] 1 WLR 2180 Attorney-General v Rogers (1870) 1 VR (E) 132 Australian Maintenance and Cleaning Pty Ltd v AMC Commercial Cleaning (NSW) Pty Ltd [2011] NSWCA 103 Australian Olympic Committee Inc v The Big Fights Inc [1999] FCA 1042 Broadcast Australia Pty Ltd v Minister Assisting the Minister for Natural Resources (Lands) [2004] HCA 4; 221 CLR 178 Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 Colvin v Bowen (1958) 75 WN (NSW) 262 Eddadock Pty Ltd v Denning Properties Pty Ltd [2002] NSWSC 208 EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78 Glebe Island Terminals Pty Ltd v Continental Seagram Pty Ltd (1993) 40 NSWLR 206 Golden Strait Corporation v Nippon Yusen Kubishika Kaisha [2007] UKHL 12; [2007] 2 AC 353 Hendry v Chartsearch Ltd [1998] CLC 1382 Hume v Monro (No 2) (1943) 67 CLR 461 JA McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 Qd R 121 Janos v Chama Motors Pty Ltd [2011] NSWCA 238 Kizbeau Pty Ltd v WG & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281 Lewis & Allenby (1909) Ltd v Pegge [1914] 1 Ch 782 Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 Longhurst v Hunt [2004] NSWCA 91 Mackay v Dick (1881) 6 App Cas 251 Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657 Minister for Land & Water Conservation v NTL Australia Pty Ltd [2002] NSWCA 149 Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394 Omar Parks Ltd v Elkington (1993) 65 P & CR 26 Ordukaya v Hicks [2000] NSWCA 180 Provident Capital Ltd v Zone Developments Pty Ltd [2001] NSWSC 843 Provident Finance Corporation Pty Ltd v Hammond [1978] VR 312 at 319 Redman v The Permanent Trustee Company of New South Wales Limited (1916) 22 CLR 84 Sanpine v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Shepherd v Felt & Textiles (1931) 45 CLR 359 Tamsco Ltd v Franklins Ltd [2001] NSWSC 1205 Westgold Resources NL v St George Bank Ltd (1998) 29 ACSR 396 Williams v Frayne (1937) 58 CLR 710 Willis v The Commonwealth [1946] HCA 22; 73 CLR 105 Texts Cited: G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, 2006 Category: Principal judgment Parties: National Australia Bank Limited, National Markets Group Limited and Australian Market Automated Quotation (AUSMAQ) System Limited (NAB Parties) Fulham Partners LLC (Third Defendant) Portsmouth Partners LLC (Fourth Defendant) Representation: JT Gleeson SC / JR Williams (NAB Parties) TM Jucovic QC / Ms Tl Wong (Third & Fourth Defendants) Freehills (NAB Parties) Atanaskovic Hartnell (3rd & 4th Defendants) File Number(s): 2007/254047 and 2011/85023