In the matter of Oliver Brown Pty Ltd [2012] NSWSC 1046

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Oliver Brown Pty Ltd [2012] NSWSC 1046 Hearing dates: 16 July 2012 Decision date: 16 July 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Application to extend order declined Catchwords: INJUNCTIONS - application to extend - appointment of administrator to defendant company Legislation Cited: (Cth) Corporations Act 2001 Category: Interlocutory applications Parties: Min Kyu Kim (First Plaintiff) Min Jae Kim (Second Plaintiff) Don Woo Seo (Third Plaintiff) BMJ Chocolata Pty Ltd (Fourth Plaintiff) MTK Chocolata Pty Ltd (Fifth Plaintiff) Byung Sun (Eric) Song (First Defendant) Jacob Jihoon Kim (Second Defendant) Oliver Brown Pty Ltd (in liquidation) (Third Defendant) Representation: J C Hewitt (plaintiffs) C A Hagon (solicitor) (first defendant) Dahan Lawyers (plaintiffs) Clamenz Evans Ellis Lawyers (first defendant) File Number(s): 11/ 296647

Judgment 1HIS HONOUR: On 10 July 2012, on the ex parte application of the plaintiffs, I made an order as follows: Order that, upon the plaintiffs by their counsel giving the usual undertaking as to damages, until 16 July 2012, the Defendants be restrained from, by themselves, their servants and agents: (a) Alienating, transferring, disposing of, encumbering or otherwise adversely dealing with any assets of the Third Defendant other than in the ordinary course of operating the businesses of the cafes at Shop GRD-C3000 in the shopping centre known as Top Ryde City and Shop 212A in the shopping centre known as Westfield Chatswood; (b) Alienating, transferring, disposing of, encumbering or otherwise adversely dealing with lease registered number AF995202 in respect of Shop GRD-C3000 at Top Ryde City. 2The proceedings return before the court today. In the meantime, on 13 July 2012, the second defendant Jacob Kim caused the third defendant company to go into voluntary administration. The question today is whether the injunction should be continued, varied or discharged. 3The ex parte injunction was granted on the basis of evidence that disclosed that there was at least a threatened alienation of a lease under which the company occupied premises in which it carried on business - although it had been originally intended that one of the plaintiffs conduct that business under a sublease. The risk was that, by such an alienation, the value of the company and its assets might be diminished, and thus the value to the plaintiffs of an order that they effectively acquire the company would be reduced. 4Although a caveat had been lodged, which would have prevented registration of any transfer of the lease, it was argued, and for the purposes of the ex parte application I accepted, that if there were a pending transfer of the lease that might well be associated with an agreement for sale of the business, and that other assets as well as the lease might therefore be alienated, which alienation would not be prevented by the caveat. 5This risk is affected by the appointment of an administrator. One would apprehend that an administrator would take control of both shops and of all the assets in them, at least unless and until satisfied that any of those assets were not property of the company. The appointment of the administrator means that the ability of the first and second defendants to guide or control the alienation or transfer of any assets of either business is practically at an end. 6It was submitted that the injunction should nonetheless be continued or varied, in order to reinforce the position under (Cth) Corporations Act 2001 that the directors no longer had any powers in respect of the company, all of which were vested in the administrator. However, in circumstances where it would seem that the defendants must have approached the administrator, and they would have been advised by the administrator of the consequent limitations on their powers, it does not seem to me that that is a sufficient basis to continue an injunction, which was originally granted on a quite different basis. 7In my view, there is no sufficient cause for continuing the injunction, which will therefore expire, in accordance with its terms, today.