Supreme Court New South Wales Medium Neutral Citation: Vannella Pty Limited atf Capitalist Family Trust v TFM Epping Land Pty Ltd [2019] NSWSC 1107 Hearing dates: 1 August 2019 Decision date: 01 August 2019 Jurisdiction: Equity - Technology and Construction List Before: Hammerschlag J Decision: Application for interim injunction refused Catchwords: EQUITY – interim injunction – balance of convenience – no issue of principle Category: Principal judgment Parties: Vannella Pty Limited Atf Capitalist Family Trust - First Plaintiff Decon Australia Pty Ltd - Second Plaintiff TFM Eppling Land Pty Ltd - First Defendant Katoomba Residence Investment Pty Ltd - Second Defendant Representation: Counsel: S. Goodman SC - First and Second Plaintiffs A Greinke - First and Second Defendants Solicitors: Piper Alderman - First and Second Plaintiffs Auyeung Hencent & Day - First and Second Defendants File Number(s): 2019/165506 EX TEMPORE Judgment 1. HIS HONOUR: On 27 May 2018, the plaintiffs took out a Summons seeking interim relief and final relief. The substantial part of the final relief is the second plaintiff's claim for a declaration that it has an equitable charge over certain lots of land, namely, lots 43, 47 and 48 in SP 98272, which are apartments in a building being developed by the plaintiffs in conjunction with, it seems, the defendants. 2. The matter came before Henry J, sitting as duty judge, on 27 May 2019. At that time the plaintiffs had lodged caveats over the three lots. 3. Before her Honour, the parties agreed that the caveats would be extended until further order of the Court. They noted that the three lots concerned were subject to contract and that the plaintiffs were to provide a withdrawal of caveat at settlement to permit settlement of those lots, strictly on the condition that the net proceeds of the lots after reasonable transaction costs would be paid into a controlled moneys account. Reasonable transaction costs were to be agreed by the plaintiffs in advance of settlement. 4. The caveats were unsound. They claimed an interest which was subsequently accepted (correctly) by the plaintiffs not to exist, although the plaintiffs assert that they have some other equitable interest arising out of a series of e-mails, conduct and conversations. 5. The ambit of the order is susceptible to debate. The defendants took the view that the moneys had to stay in the controlled moneys account until further order of the Court. I think that that was a conservative and appropriate attitude to take but even so, it does not seem to me that if there was an implied undertaking to hold those moneys in the controlled moneys account, it extended beyond the operation of the caveats which the orders made by her Honour extended. Those caveats were not extended. There is in my opinion now no inhibition on the defendants paying out the moneys in the controlled moneys account. 6. In my opinion the procedural regime in that order has come to an end. But, if it has not, I now so order. 7. The difficulty which then arises is that the plaintiffs claim an equitable interest arising out of some agreement for security over the lots, presumably to secure an amount which they say (but which is apparently in dispute) is owing under a building contract which the second plaintiff has with the defendants. The position in which the plaintiffs are now left, is that they must move the Court for an injunction to restrain the defendants from dealing with the defendants' own money. 8. The defendants owe third party, arm's length financiers significant amounts of money. One significant loan is already in default with potentially dire consequences if the default is not now assuaged. Mr Goodman, of senior counsel for the plaintiffs, valiantly argued that the balance of convenience favours his clients because they claim money from the defendants, the defendants have agreed to secure those moneys and the defendants have not established that they cannot meet their obligations to the financier out of other funds. 9. I do not think that the balance of convenience would favour granting the injunction, even if the defendants brought no evidence that they cannot meet their liabilities out of other funds. But there is such evidence. The affidavit of Vincent Zhi Qing Zhu (no. 4) affirmed on 12 July 2019 satisfies me sufficiently that this is not the case. 10. The relative prejudice to the defendants in not being able to use this money to settle their legitimate debts and the consequences that could follow as a result of a default, far outweigh the detriment to the plaintiffs in not getting their hands on, or at least having this money held, pending the determination of the main proceedings. 11. In those circumstances, the application by the plaintiffs for an interim injunction is refused. ********** Amendments 27 August 2019 - Para 1 - added "and final relief" to end of first sentence 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: 27 August 2019