Supreme Court New South Wales Medium Neutral Citation: Elite Highrise Services Pty Limited (Receivers And Managers Appointed) v Murray Roderick Godfrey and David Nicholas Iannuzzi in their capacity as Receivers and Managers of Elite Highrise Services Pty Limited [2014] NSWSC 1900 Hearing dates: 17 December 2014 Date of orders: 17 December 2014 Decision date: 17 December 2014 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Application for interim injunction dismissed with costs. Catchwords: EQUITY – equitable remedies – injunctions – interim injunctions – requirement for expedition – delay – where third party rights have intervened Category: Procedural and other rulings Parties: Elite Highrise Services Pty Limited (applicant) Murray Roderick Godfrey and David Nicholas Iannuzzi in their capacity as Receivers and Managers of Elite Highrise Services Pty Limited (first respondent) CML Payroll Pty Limited (second respondent) Representation: Counsel: J P Donohoe (applicant) J A Rose (respondents) Solicitors: Gardner Ekes Lawyers (applicant) Sewell & Kettle (respondents) File Number(s): 2014/ 368785 Judgment (ex tempore) 1. HIS HONOUR: By an amended notice of motion leave to file which in court is sought today, the plaintiff seeks an interim injunction pending a proposed interlocutory hearing on Friday this week, in two days' time, restraining the first defendant receivers and the second defendant appointor from disposing of or dealing with the proceeds of property of the plaintiff. 2. In view of the pressures of the list and the circumstances, I will necessarily give these reasons in abbreviated form. I am satisfied that there is a seriously arguable question that the general security agreement is unenforceable due to the non-payment of stamp duty. I say that in the context of this interim hearing. On an interlocutory hearing, it might well be possible for that question of law to be resolved, but as things stand there are first instance decisions of three Judges of this division of the Court which favour the view that a security agreement is unenforceable to the extent that it is not stamped, at least until it is stamped, and that stamping does not operate to make it enforceable retrospectively, although it may prospectively. I acknowledge that there are recent decisions of Katzmann J in the Federal Court, and of Kunc J in this Division, which tend in the contrary direction. In those circumstances, I do not think it can be said that the proposition that the security agreement is unenforceable, or was unenforceable at the date of appointment of the receivers, for want of stamping, is other than seriously arguable. 3. However, the party primarily liable to pay such stamp duty is the mortgagor or grantor. For that party to seek or obtain an injunction restraining the enforcement of the charge or security on the ground, in essence, of its own default in paying the duty that it was liable to pay, is either a want of clean hands or otherwise so inequitable as to disqualify it from obtaining injunctive relief on that ground. 4. I am of the view that there is no seriously arguable case that no money is secured by the security agreement. The argument was put by the plaintiff in two ways but, in either way, depends on the proposition that though the security agreement nominates two parties as grantor, it is be construed as binding each of them severally only and not jointly and severally. In my view, the prima facie position is that the two grantors are liable jointly and severally and there is nothing in the agreement to displace that prima facie position. 5. In the light of those conclusions, it is unnecessary to consider the balance of convenience. Had it been necessary to do so, I would have found that it was relatively evenly balanced. The plaintiff will lose its proprietary claim and be relegated to a claim for damages if an injunction is wrongly refused, whereas the defendant will lose the contract it has negotiated and be exposed to a damages claim by the purchaser if an injunction is wrongly granted. 6. As opposed to the related cases in which I gave judgment on Monday of this week, that is more significant in this case because the defendants entered into that contract without notice of the present plaintiff's dispute of the security, whereas in the earlier cases they entered into the sale with notice of those disputes. 7. But aside from the balance of convenience, as a discretionary matter it seems to me that this is a case in which delay tells strongly against the grant of interim relief. 8. It is well established that a party seeking an injunction must act promptly in doing so, and particularly so in the case of an interim or interlocutory injunction. The receivers were installed for some three weeks before the control of the plaintiff apparently changed hands to Mr Koloupeaua, at whose instance the present application is brought. No dispute was raised as to the validity of the appointment during that three week period. At least in the absence of any evidence to the contrary, I would infer that Mr Koloupeaua and his interests were on notice of the appointment of the receivers when they acquired such interest as they may have acquired in the plaintiff. 9. Importantly, during the period of delay, third party rights have intervened in that the receiver has negotiated a sale of the scaffolding to a purchaser. The intervention of third party rights of that kind tells strongly against the grant of interim relief when it has occurred after a period during which the plaintiff has raised no objection to the appointment of the receivers. 10. Finally, the evidence in no way establishes that Mr Koloupeaua has been validly appointed as a director. Resolutions signed by him appointing himself do not establish the fact. What is necessary is either a resolution of the shareholders or, at least, a resolution of the sole existing director prior to his appointment, and there is no evidence of either such type of resolution. 11. For those reasons, the application for interim relief fails. I order that the amended notice of motion be dismissed with costs. ********** 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: 03 February 2015