Alamin v Islam

Mr Alamin, Mr Islam, the 2021 Proceedings and Their Aftermath

1. These reasons now set out a narrative of some facts relevant to the interlocutory issues. In such a hearing, the Court's reasons cannot encompass all the relevant facts. Except where the facts are uncontentious, the Court's narrative below should only be understood, and is mostly expressed, as a forecast of the kind of evidence that each party proposes to adduce at a final hearing.
2. The sole plaintiff in these proceedings is Mr Alamin. The nine defendants in the proceedings are respectively Mr Islam (first defendant), and eight members of the group of companies used by Mr Alamin and Mr Islam as vehicles for property development, the MH Group of companies. Mr Alamin and Mr Islam used individual companies as vehicles for each property development. But the whole group of companies is referred to collectively in these reasons as "the MH Group". Some of these entities are jointly controlled by Mr Islam and Mr Alamin by direct ownership of shares or through family trusts. There is no holding company for the MH Group.
3. At various times Mr Alamin and Mr Islam have been co-directors of entities in the MH Group. At the risk of slight inaccuracy, it is convenient in these reasons mostly to refer to Mr Islam and Mr Alamin as the contestants without seeking to distinguish them from their respective companies and family trusts.
4. Only a limited number of the MH Group of companies play a role in the contested events the subject of the present interlocutory application. These reasons will focus upon those entities by name. But for completeness the eight defendants in these proceedings other than Mr Islam are the following entities from the MH Group: MH Amin Homes Hadiqqat Woolgen Pty Ltd (formerly known as MA Signature Homes Pty Ltd) (second defendant), MH Amin Homes Murooj Woolgen Pty Ltd (third defendant), MH Affordable Homes Pty Ltd (fourth defendant), MH Affordable Homes on Woolgen Park Pty Ltd (fifth defendant), MH Affordable Homes on Dickson Pty Ltd (sixth defendant), MH Affordable Homes on Kelly Pty Ltd (seventh defendant), MH Affordable Homes on Angle Vale Pty Ltd (eighth defendant), and Amin Property Group (ninth defendant). As can be seen, many of the jointly owned members of the MH Group use the name "MH Affordable" in their titles. For convenience the parties, and the Court in these reasons, often contracts the longer names of these companies to avoid repetitive nomenclature. Thus "MH Affordable Homes on Kelly" becomes "MH Kelly".
5. An important subset of the MH Group is certain companies controlled solely by Mr Alamin. Mr Alamin is the sole director and shareholder in both the second and third defendants MH Amin Homes Hadiqqat Woolgen Pty Ltd, which was formerly known as MA Signature Homes Pty Ltd, and will be referred to here as "MA Signature" and MH Amin Homes Murooj Woolgen Pty Ltd ("Murooj Woolgen"). These companies together with Amin Property Group Pty Ltd are collectively referred to in these reasons as Mr Alamin's companies.
6. The starting point for analysis is the allegations of dishonest conduct that Mr Islam made against Mr Alamin in the 2021 proceedings. Mr Islam alleged in those proceedings that the affairs of the MH Group had been conducted contrary to the interests of its members or in a manner oppressive to, unfairly prejudicial to, or unfairly discriminatory against Mr Islam including by Mr Alamin dishonestly and without the knowledge of Mr Islam engaging in the following conduct: 1. Mr Alamin took and used the cash and other resources of several MH Group entities to fund a contract deposit which enabled a company that Mr Alamin controlled, MA Signature, to enter a purchase contract to acquire a property in the Sydney suburb of Leppington, which is conveniently identified as "11 Woolgen"; 2. Mr Alamin then on sold to an MH Group company, MH Woolgen Park, MA Signature's rights to acquire 11 Woolgen under the purchase contract for a profit of $2.363 million without disclosing Mr Alamin's interest in MA Signature; and 3. Mr Alamin then failed to apply presale payments made by purchasers of proposed subdivided lots of 11 Woolgen in an amount of approximately $950,000 for the benefit of MH Woolgen Park and diverted them to his own benefit to enable Mr Alamin's company, Murooj Woolgen to contract to acquire further assets, namely 82 Woolgen.
7. In his defence Mr Alamin denied the dishonest conduct alleged against him. The 2021 proceedings settled on 22 November 2022, shortly before Mr Alamin was cross-examined upon the terms of the settlement deed. The parties to the settlement deed were Mr Islam, Mr Alamin, Mr Alamin's companies and several MH Group entities.
8. The settlement deed defined (clause 1) the entities that have been described in these reasons as "Mr Alamin's companies" as the "Alamin parties". The settlement deed provided for the reappointment of Mr Islam as a director of certain MH Group companies (clause 2), the issuance of shares to Mr Islam in certain MH Group companies and the payment of the settlement amount in three tranches, $350,000 by 31 December 2022, $1 million by 30 June 2023 and $1.9 million by 28 February 2024.
9. As earlier indicated Mr Alamin defaulted on the first of these payments. The settlement deed provided (clause 5) for giving a notice to Mr Alamin of default which if not rectified would lead to the balance of the settlement sum becoming due. Mr Alamin does not contest that the full $3.25 million settlement amount is payable under the settlement deed. Mr Alamin has made no payments to date towards the settlement amount under the deed.
10. Clauses 6, 7 and 8 of the settlement deed provided as follows: "6. Restraint on Dealing The Amin Parties jointly and severally agree that up until the Settlement Sum has been paid in full, they will not transfer, dispose of, encumber or otherwise deal with all or any part of their interest in either or both of 11 Woolgen and 82 Woolgen, or any contract in respect thereof, other than for: (i) sale of lots in their respective plans for sub-division; and (ii) finance or encumbrance for the purposes of Completion of the Contract for Sale for 11 Woolgen and the Put & Call Option Deed for 82 Woolgen without the prior written consent of Istam (which consent shall not be unreasonably withheld). 7. Charge The Amin Parties charge their present and any and all future interest in: (a) all or any part of 11 Woolgen and 82 Woolgen, or any contract in respect thereof; and (b) shares held in any MH Group or Amin Companies (which for the avoidance of doubt includes rights and entitlements under or in respect of those shares such as any entitlement to receive or share in the profits by way of dividend or otherwise), as security for the payments of any amount payable under this Deed for the benefit of Islam and will execute all documents necessary to register or record such charge. 8. Caveat (a) The Amin Parties acknowledge and agree that Islam may lodge and maintain a caveat over each of 11 Woolgen and 82 Woolgen as and from the date any of them becomes registered proprietor of the property in question to protect Islam's interest as chargee (b) Islam acknowledges and agrees to temporarily withdraw his caveat(s), as and when required by the Amin Parties for the purposes of allowing the Amin Parties to refinance or encumber either property in accordance with a use of those properties for a purpose as consented to by Hamidul Islam under clause 6(ii) of this Deed. 9. Consequences of Default In the event of any default by the Amin Parties: (a) Islam may commence proceedings to enforce this Deed, and any and all rights and interest created by, under or in connection with it; and (b) in respect of any claim for payment under clause 4, the Amin Parties will not be entitled to, agrees not to, and hereby waives any right at law, equity or otherwise, to raise any defence, set off or cross-claim so as to delay, defer or reduce its obligation to pay the amount claimed by Islam, or otherwise."
11. The settlement deed, clause 6 gives a degree of control to Mr Islam over Mr Alamin's interests in 11 Woolgen and 82 Woolgen (the assets allegedly acquired through Mr Alamin's dishonest conduct) and MA Signature and Murooj Woolgen, two of Mr Alamin's companies that held 11 Woolgen and 82 Woolgen. Clause 7 not only charges the interests of Mr Alamin and Mr Alamin's companies in the land of 11 Woolgen and 82 Woolgen but also charges shares in any MH Group entity and Mr Alamin's companies, commonly referred to in these reasons as "Mr Islam's charges". And clause 8 supplements the rights in clause 7 (a) clearly conferring a right to caveat that interest.
12. Shortly after execution of the settlement deed, in early December 2022 Mr Islam registered the Islam charges over the various shareholdings and interests in entities through which Mr Alamin controlled 11 Woolgen and 82 Woolgen, including MA Signature. These Islam charges were over Mr Alamin's interests, his trustee company's interest, the MSAA Family Trust and one of Mr Alamin's companies, Amin Property Group Pty Limited. The charges also extended to other companies in the MH Group, in which Mr Alamin had a joint interest with Mr Islam, namely MH Affordable Homes, and MH Affordable Homes on Woolgen Park.
13. In more detail these PPSR registered charges constituting Mr Islam's charges, were as follows. PPSR 9100 recorded a security interest in Mr Alamin's shares in MH Affordable Homes on Woolgen and MA Signature. The next PPSR 8863 recorded a security interest in shares owned by the trustee of the MSAA Family Trust, Mr Alamin's family trust. This charge includes the following entities: MH Property Group, MH Affordable Homes on Kelly, MH Affordable Homes on Dixon, and MH Affordable Homes on Angle Vale. The last of Mr Islam charges (PPSR 8454) recorded a security interest over assets owned by Mr Alamin's company, Amin Property Group, which charged its interest in a range of its subsidiary entities.
14. Mr Islam's clause 7(b) charges are over valuable assets, notwithstanding Mr Alamin's submission to the contrary. A few examples will suffice. MH Affordable Homes owns properties with expected sales values of $4.37 million and $12.5 million, which are likely to achieve a very substantial surplus after paying out sales and financing costs. MH Kelly expects revenue from unsold lots of $16-$17 million. MH Angle Vale has sold most of its lots and has surplus cash of $1.5 million, with other unsold lots, potentially generating another $500,000. MH Angle Vale has liabilities of less than $500,000.
15. Mr Alamin now seeks to raise finance from Centuria Bass Financial Services Ltd (Centuria Bass) so that MA Signature can complete the acquisition of 11 Wolgan. Mr Alamin's correspondence asserts that he wishes to complete the acquisition of 11 Woolgen so MA Signature can generate profits to make payments under the settlement deed. But an obstacle to this objective has appeared. Centuria Bass will not advance further funds under a proposed facility agreement to MA Signature, unless Mr Islam's charges are removed and given a second ranking after Centuria Bass.
16. The correspondence from the legal representatives of Centuria Bass in April 2023 makes clear that Centuria Bass is requiring PPSR 9100 to "be removed as the final condition for the finance to be advanced and purchase settled". The solicitors for Centuria Bass note that Mr Islam's charge was granted in respect of shares held by Mr Alamin in the entity borrowing money, MA Signature. Centuria Bass requires the removal of the charge. The draft facility agreement in which Centuria Bass proposes terms for the advance to Mr Alamin's family trust only seeks security over MA Signature and no other assets.
17. At the time of the settlement deed the MH Group companies already had substantial advances from Centuria Bass secured over assets of each of the guarantors and obligors under those facilities, which included Mr Alamin and Mr Islam and their respective family trusts. One of these finance agreements was to provide funds to MH Kelly. One of the provisions of the MH Kelly finance facility (clause 14.14) was that until outstanding monies under the facility were fully paid that guarantors such as Mr Islam and Mr Alamin were entitled to grant or allow to exist any security interest in favour of the guarantor from any obligor to pay outstanding monies to Centuria Bass.
18. Mr Alamin argues in these proceedings that Mr Islam's charges were a breach of provisions such as this one in the MH Kelly finance facilities from Centuria Bass, and in similar Centuria Bass finance facilities to other MH Group entities. Mr Alamin argues that if there is a breach of the existing finance agreements that may provide a basis for Centuria Bass to call-up the loans from MH Group entities in full, leading to a financial catastrophe. He contends that Mr Alamin and Mr Islam must have overlooked such breaches and such consequences when making the settlement deed. The question of whether Mr Islam's charges were a breach of these facilities is open to argument on both sides. This can be assumed in Mr Alamin's favour for present purposes.
19. But on the evidence so far Centuria Bass shows no inclination to call-up any of these facilities. Centuria Bass seems to have ample security on the existing facilities, which probably explains its relaxed approach. This attitude on the part of Centuria Bass might have been anticipated by the settlement deed contracting parties. Even if a breach of the existing Centuria Bass facilities were established, the inference of the settlement deed contracting parties making a mistake, would not be the first that would be drawn from the terms of the existing facility agreements.
20. Mr Alamin says in his evidence at a high level of generality that Mr Islam's charge over MA Signature is an obstacle to him obtaining funding from Centuria Bass and that he cannot obtain funding elsewhere. This position is then repeated in submissions put on his behalf.
21. But he has not advanced thorough going evidence that sets out his overall asset and liability position, explains that he has pursued alternative sources of finance and been unable to secure an advance, and explains how it is that he is not able to utilise the substantial sums that are available to him through either the jointly owned entities in the MH Group or Mr Alamin's companies.
22. Mr Alamin controls MA Signature, which still holds the right to acquire 11 Woolgen and Muraaj Woolgen which has contracted to acquire 82 Woolgen. The Court is not prepared to accept general statements of Mr Alamin's incapacity to obtain finance to fulfil his obligations to Mr S Lamb under the settlement deed, in the face of evidence that he owns interests in a substantial suite of valuable assets.

Relief Sought

1. On 12 May 2023 Mr Alamin, commenced these proceedings against Mr Islam and the other defendants by Summons seeking rectification of Clause 7 of a Deed of Settlement and Release dated 22 November 2022 (the settlement deed), and in the alternative that a clause in the settlement deed under which Mr Alamin and his related companies charged their shares in various companies is void ab initio by reason of common mistake and can be severed from the settlement deed. Mr Alamin claims that the common mistake was that the secured charges that he and companies associated with him granted over shares owned by them were granted in error because the charges were not permissible under then existing external financial agreements.
2. Mr Alamin's Summons includes claims for the following interlocutory relief. 1. the removal of Mr Islam's charge over Mr Alamin's interest in the shares of the fourth defendant (MH Affordable Homes) from the PPSR (prayer 4 of the Summons); 2. an injunction to restrain Mr Islam from registering or causing to be registered any further charge against Mr Alamin until further order of the Court which would constitute a breach of various finance agreements binding the parties to these proceedings (prayer 5 of the Summons); and 3. costs.
3. The legal principles that apply to the grant of interlocutory injunction should be briefly discussed first.
4. The relief sought in prayer 4 of the Summons is for the removal from the PPSR of only one of the charges Mr Islam obtained under the settlement deed, the charge over Mr Alamin's shares in MH Affordable Homes. No similar relief is sought in relation to any of the other charges granted under the settlement deed in relation to shares owned by Mr Alamin.
5. Mr Elliott SC raised submissions that there appeared to have been a mistake in prayer 4 in that the charge that Mr Alamin had granted that he really wanted removed was that not over MH Affordable Homes, but over MA Signature. The correspondence from Centuria Bass, preceding the commencement of these proceedings indicates that it has stipulated for the removal of the charge over MA Signature, as a condition of providing an advance to Mr Alamin. There does appear to be an error in the Summons which seems to arise from the wrong company in charge 9100 given to Mr Islam being referred to. That charge covers Mr Alamin's interests in both MH Affordable Homes and MA Signature. It appears that the wrong company has been selected.
6. To counteract this situation at the opening of proceedings Ms Elizabeth sought to amend the Summons. The Amended Summons sought the removal of all Mr Islam's charges over MS Group entities and Mr Alamin's companies. The Court decided to proceed without ruling upon the amendment and has dismissed the plaintiff's application without dealing with the amendment. If Mr Alamin wishes to pursue the amendment he can do so separately at a later time.

Applicable Legal Principles

1. The Court has power to grant interlocutory injunctions under Supreme Court Act 1970, s 66(4), on terms, if necessary, in any case where "it appears to the Court to be just or convenient". The Court must consider whether the plaintiff's case presents a serious question to be tried and whether the balance of convenience, hardship and related factors warrant the grant of an interlocutory injunction. The applicable principles in relation to the grant of interlocutory relief are discussed in more detail later in these reasons.
2. This is an interlocutory hearing, not a final hearing. The Court has sought to arrange the earliest possible final hearing for these parties by placing it in the expedition list. In the meantime, the Court's task is not to undertake a preliminary trial and to give or withhold interlocutory relief upon some forecast as to the ultimate result of the factual dispute between the parties, although the relative strengths of the parties' cases are not irrelevant to the exercise of the Court's discretion.
3. The Court's task on an interlocutory hearing such as this one was well expressed by the English Court of Appeal in Francome v Mirror Group Newspapers Ltd [1984] 1 WLR 892; [1984] 2 All ER 408; (1984) 81 LSG 2225; (1984) 128 SJ 484 when Sir John Donaldson MR said (at 894H - 895A): "The defendants now appeal. It is of paramount importance that everyone should understand the exercise upon which the judge was, and we are, engaged. There is to be a speedy trial at which the rights of the parties will be determined. That has not yet happened. We are concerned, so far as we can, to preserve the rights of the parties meanwhile. It is not our function to decide questions of fact or law which will be in issue at the trial. If they are arguable, that is the time and the place when they should be argued."
4. Later in the same judgment his Lordship further explained the Court's duty in following terms (at 898E-898G): "What then should we do? I stress, once again, that we are not at this stage concerned to determine the final rights of the parties. Our duty is to make such orders, if any, as are appropriate pending the trial of the action. It is sometimes said that this involves a weighing of the balance of convenience. This is an unfortunate expression. Our business is justice, not convenience. We can and must disregard fanciful claims by either party. Subject to that, we must contemplate the possibility that either party may succeed and must do our best to ensure that nothing occurs pending the trial which will prejudice his rights. Since the parties are usually asserting wholly inconsistent claims, this is difficult, but we have to do our best. In so doing, we are seeking a balance of justice, not of convenience."
5. In deciding whether to grant an interlocutory injunction the Court must consider whether there is a serious question to be tried and then whether the balance of convenience and questions of hardship and related factors warrant the grant of an interlocutory injunction. First, the plaintiff must prove a serious, not a speculative, case which has a real possibility of ultimate success and that property or other interests might be jeopardised if no interlocutory relief is granted: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [21-350] ("Equity Doctrines and Remedies"), discussing the requirements of the Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618; [1968] ALR 469; (1968) 42 ALJR 80; [1968] RPC 301; [1968] HCA 1 prima facie case test. Put another way, the plaintiff must show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; (2006) 229 ALR 457; (2006) 80 ALJR 1672; [2006] HCA 46 at [70] - [71].
6. Then, it becomes a matter of analysing if in all the circumstances of the case, considering the balance of convenience and issues of hardship, the Court should nonetheless exercise its discretion by declining to issue an interlocutory injunction: Equity Doctrines and Remedies at [21-350]; and see also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; (2001) 185 ALR 1; (2001) 76 ALJR 1; (2001) 54 IPR 161; [2001] Aust Torts Reports 81-627; [2001] HCA 63 and Beese (Managers of Kimpton Church of England Primary School) v Woodhouse [1970] 1 All ER 769; [1970] 1 WLR 586. Other factors to which the Court will have regard include the adequacy of damages, the possibilities of alternative remedies, whether there has been any laches or delay, the strength of the grounds of defence suggested by the defendant, what, if any, undertakings the defendant is prepared to give, but hardship and the balance of convenience are very important: Equity Doctrines and Remedies [21 - 375]. If any infringement of a plaintiff's right between writ and hearing would be properly compensated in damages, that fact alone can, but not must, be a ground for declining an injunction: McCarty v Council of the Municipality of North Sydney (1918) 18 SR (NSW) 210; (1918) 35 WN (NSW) 85.

Mr Alamin's Contentions

1. Mr Alamin's written submissions sufficiently set out his main contentions. Mr Alamin explains that he has applied for funding from Centuria Bass so that MA Signature can complete the purchase of 11 Woolgen. Centuria Bass has indicated that, to advance new loan funds to purchase 11 Woolgen, it requires a first ranking charge over Mr Alamin's shares in MA Signature. Centuria Bass has indicated that if this first ranking charge is not arranged, the finance it is offering will not be approved.
2. After stating the principles applicable to the remedy of rectification Mr Alamin puts the following submissions about the availability of the remedy. "The common mistake is that the PPSR charge was permissible under the parties other financing arrangements. That was not the case, as has become apparent to the Applicant since the Deed was entered into. It is unconscientious for the First Respondent to insist upon the taking and registering of a charge which would place both parties in breach of the Financing Agreements. This is even more so when it appears that, despite having no value, proper basis and being in breach of the Finance Agreements, the charge is maintained. An inference that may be drawn is that this is so to obtain leverage. Where the charge was obtained because of mutual mistake, it is unfair for the First Respondent to now rely on that mistake for his benefit."
3. Mr Alamin's submissions provide the following submissions as to the necessary proof of a common intention: In the present case, the Plaintiff is able to meet the threshold of "clear and convincing proof" of a common intention: First, both the Plaintiff and Defendant were signatories to the Finance Agreements, as were companies of which they were each solely or jointly the controlling mind. They were also guarantors under those loans in their own capacity and in their capacity as trustees for their respective family trusts; Second, the Finance Agreements existed at the time the Deed was entered into; Third, the Finance Agreements expressly prohibited the granting of any security over the assets of Plaintiff and Defendant, which would amount to a breach event; and Fourth, had the clauses in the Finance Agreements outlined above at paragraphs 22 - 27 above been brought to the attention of the drafters of the Deed, including the Plaintiff and First Defendant, it is difficult to comprehend that Clause 7 would have been agreed to given the clear inconsistency."
4. Finally on the issue of the balance of convenience Mr Alamin submits as follows: "63 It is submitted that it is just for the orders sought to be made where the relief would prevent unintended breach of contracts which both parties are party two, which they presumably both wish to maintain, and where the financial consequences of not removing the Islam Charge are significant, ultimately for both parties. 64 On the one hand, the Respondent does not face any significant consequence if the Islam charge is removed: Second Alamin Affidavit [34]. On the other hand, the consequences for the Applicant are significant: a. First, if he cannot secure the re-financing then the entire project at 11 Woolgen will collapse. Loss of future profits would result, which was the basis upon which the Deed was entered. b. Third (sic), the PPSR Charge is a breach of the Finance Agreements and, if maintained, may provide a basis for the loans to be called in, in full. The consequences of this are outlined above. The financial catastrophe which would result cannot be met by damages where the Respondent has insufficient funds. The deposits received from purchasers of some of these projects in including MH Kelly have already been loaned out to other projects to fund land purchase. Those may be lost where the company went into insolvency, given that the financier is the secured party. This would also put the related projects in jeopardy. 65 For those reasons, the balance of convenience lies with granting the injunction sought, which would remove the Islam Charge."
5. Mr Islam's submissions have not been set out here. They are dealt with during the Court's consideration of the issues below.

A Serious Question to Be Tried

1. The Court approached argument in these proceedings on the basis that there was a serious question to be tried. During argument the Court asked Ms Elizabeth to assume in her client's favour that there was a serious question to be tried and to deal merely with issues of the balance of convenience. Mr Elliott SC spent little time arguing that there was not a serious question to be tried. The real issue here was the balance of convenience.
2. But there are several obvious weaknesses in Mr Alamin's rectification case that may be briefly mentioned here and which weigh against him on the balance of convenience.
3. The settlement deed on its face shows that Mr Alamin intended to grant, and Mr Islam intended to receive, the charges that were identified in the settlement deed. There is little evidence of any parallel communications antecedent to the deed from which a common understanding contrary to the settlement deed could be inferred. The normal groundwork for a rectification case seems to be absent.
4. Mr Alamin contends that a common mistake can be implied because granting the charges under the settlement deed was a breach of the loan facility agreement with Centuria Bass, which had advanced monies to MH Kelly to purchase other property. Therefore, it is said that the parties must have entered the settlement deed based on a common mistake.
5. But this case faces several intractable problems. Mr Alamin's case does not account for the distinct possibility that it was open to Centuria Bass not to oppose the creation and registration of Mr Islam's charges, which rank behind Centuria Bass where Centuria Bass already has its own charges. And indeed this is what happened, because Centuria Bass was aware of and was not demanding the removal of Mr Islam's charges notwithstanding the terms of the MH Kelly and other facility agreements.
6. Another of Mr Alamin's contentions in his common mistake case is that the parties to the settlement deed understood and intended that the settlement amount of $3.25 million would be paid from the sales of 11 Woolgen. Nothing in the settlement deed supports this contention. The settlement deed does not make any connection between the payment of the settlement amount and sales of 11 Woolgen. Moreover, the settlement deed was signed on 22 November 2022 and the first payment under it was due on 31 December 2022. At the time the settlement deed was executed 11 Woolgen was undeveloped land still being acquired by Mr Alamin's corporate vehicle. Neither party could have anticipated11 Woolgen sales would be the source of funding for the settlement amount under the settlement deed.

The Balance of Convenience

1. Consideration of the balance of convenience comfortably permits this claim for interlocutory relief to be dismissed. The principal relevant factors to be considered weigh against the grant of relief are the following.
2. First, Mr Alamin's continuing unremedied and unexplained default in payment under the settlement deed is a primary consideration weighing against the grant of relief. There is a degree of insouciance in a plaintiff in serious default of a settlement agreement coming to Court without explaining the default to seek urgent interlocutory relief.
3. Mr Alamin does not provide compelling evidence that he has no other sources of income to meet his obligations under the settlement deed to Mr Islam. Yet the evidence suggests that he controls entities of considerable value. He seeks the exercise of the Court's discretion to achieve a position which would significantly disadvantage Mr Islam by removing the security available to him to recover the $3.25 million due to him under the settlement deed. There is a strong connection between Mr Islam's right to the $3.25 million under the settlement deed and the relief claimed by Mr Alamin, which seeks to vary the same settlement deed, under which Mr Islam has accrued rights to payment.
4. A party who seeks equity must do equity. Were the Court otherwise minded to grant relief in this case it would be disinclined to do so except on the basis that Mr Alamin would pay $3.25 million into Court to neutralise the effect of his existing default under the settlement deed. Mr Alamin did not offer to pay the $3.25 million in which he was in default into the Court.
5. Secondly, Mr Alamin offers only an unsecured undertaking as to damages. Mr Alamin's financial affairs are opaque. Mr Alamin has not given a comprehensive asset and liability statement from which inferences could be drawn about his capacity to borrow. And he has not given information about the volume of presales that he has achieved in relation to 11 Woolgen and 82 Woolgen, which was said a method of raising funds which it was contended in the 2021 proceedings was very beneficial for Mr Alamin. Mr Alamin statements about not being able to borrow elsewhere to pay the $3.25 million cannot therefore be tested.
6. Mr Alamin has not offered security for his undertaking. It is difficult to see how an unsecured undertaking as to damages could address the balance of convenience in circumstances where the interlocutory relief sought involved the removal of a valuable security which prima facie appears to be regularly bargained for and incorporated in the terms of the settlement deed between the parties. An unsecured undertaking as to damages is hardly an adequate substitute for the security interest of which Mr Alamin seeks to deprive Mr Islam.
7. This issue is exacerbated by the fact that prior to the interlocutory contest Mr Islam's legal representatives put Mr Alamin on notice that the quality and substance of his undertaking to damages would be an issue at the interlocutory hearing. Yet Mr Islam has not only failed to provide adequate evidence as to his financial position but has failed to produce documents requested of him as to his capacity to meet any undertaking if called upon.
8. One out of date tax return was produced to the Court for the financial year ending 30 June 2020 (FY 20) plus a few bank statements showing limited funds in Mr Alamin's bank accounts. It was said that the tax returns for FY21 and FY22 had not yet been prepared. This level of disclosure hardly paints a picture of a plaintiff anxious to be candid with the Court about his financial position.
9. Thirdly, Mr Islam's financial position weighs in his favour on the balance of convenience. This poor level of disclosure is more troubling because of Mr Islam's evidence as to the value of companies in which Mr Alamin holds interests and other evidence that Mr Alamin keeps substantial quantities of cash at his home. The Court accepts that Mr Islam needs Mr Alamin and his companies to pay the settlement amount or at least a substantial portion of it without further delay. Mr Islam borrowed money from third parties to assist him to conduct the 2021 proceedings. He wishes to pay them back and stabilise his financial position. He would be financially disadvantaged by any orders which would reduce his prospects of recovering the $3.25 million due to him under the settlement deed by deferring Mr Islam's charges over MA Signature after Centuria Bass.
10. Mr Alamin contends that Mr Islam does not face any significant consequences if Mr Islam's charges are removed, in contrast to the financial effects which Mr Alamin contends he will suffer if the charges are not removed. But Mr Islam's charges are valuable and to lift them would disadvantage him.
11. Fourthly, Mr Alamin's claim for final relief is not compelling. Some of its problems have been discussed above under the heading "Serious Question to Be Tried". Weighing the strength of the plaintiff's case is often a difficult and therefore not a very productive exercise when considering balance of convenience issues. But it can at least be said here that the strength of Mr Alamin's case is not so obvious it weighs in his favour in the grant of interlocutory relief.
12. Fifthly, the construction of Mr Alamin's case tends to show that it is more directed at serving the present commercial convenience of Mr Alamin in securing further finance from Centuria Bass than in rectifying a common mistake arising from existing facility agreements from Centuria Bass. Mr Alamin wants Centuria Bass to approve a new advance to Mr Alamin's entity, MA Signature, so that MA Signature can purchase 11 Woolgen. As a term of granting this advance Centuria Bass is stipulating that Mr Islam's charge over Mr Alamin's shares in MA Signature needs to be removed, so that a new charge in favour of Centuria to secure the new borrowing would be a first ranking charge.
13. The charges imposed pursuant to the settlement deed are arguably either not in breach of Centuria Bass's existing facility agreements with MH Kelly, or if they are a breach, Centuria Bass does not seem to be concerned about such a breach. The lender to MH Kelly, Centuria Bass, has not required removal of any charges by reason of anything in any of those other facility agreements.
14. Moreover, it is difficult to accept that Mr Alamin really believes there is a breach of the existing MH Kelly facility agreement with Centuria Bass, for example. This facility agreement requires Mr Alamin to tell Centuria Bass if he believes that there has been a default under that agreement (clause 12.3(a)). But there is no evidence Mr Alamin has notified Centuria Bass, which would be expected if he genuinely believed there was a breach of these facility agreements and he wished to maintain the integrity of his position under them. The better explanation of events is that Mr Alamin has found that the charges are an obstacle to the fresh advance he needs so that MA Signature can complete the purchase of 11 Wolgan.
15. This inference is strengthened by the position that Mr Alamin is taking on these proceedings. Until he applied for an amendment of the Summons, Mr Alamin was not seeking orders for the removal of all the charges he had granted to Mr Islam but only the one the subject of Centuria Bass's condition for the new facility. This is a basis to infer these proceedings have little to do with breach of the MH Kelly finance agreements or about the consequences of such a breach. If Mr Alamin really had such fears, he would have sought the removal of Mr Islam's charges over the shares in MH Kelly, for example, right from the beginning.
16. Other balance of convenience issues apply to prayer 5 of the Summons, the claim for an injunction to restrain Mr Islam from registering or causing to be registered any further charge against Mr Alamin, until further order of the Court, such as would constitute a breach of various finance agreements entered into by the parties to these proceedings.
17. The Court will not grant an interlocutory or final injunction to restrain conduct that is not threatened or in prospect. Mr Islam has not threatened to register further charges against Mr Alamin in breach of existing finance agreements. Mr Islam's case is that he merely seeks to maintain his existing charges to which he was entitled under the settlement deed. He is contractually entitled to do so.
18. Mr Islam should have his costs of this application. Mr Alamin's claim for interlocutory relief has failed entirely. Not all contests in relation to interlocutory relief will attract immediate costs orders which are not conditional upon the outcome of the proceedings. Where a plaintiff succeeds in claiming interlocutory relief against a defendant, the plaintiff's ultimate entitlement to costs may well depend upon the outcome of the proceedings.
19. Mr Alamin did not have to seek interlocutory relief and when he chose to do so he failed. Even if he succeeds in obtaining final relief, that does not imply that he should have obtained interlocutory relief, pending final hearing. The Court will therefore order Mr Alamin to pay Mr Islam's costs of the application. Because the present contest is severable from the balance of the proceedings, the Court will order pursuant to Uniform Civil Procedure Rules 2005, r 42.4 that the costs of this interlocutory application should be assessed and paid forthwith.
20. In conclusion the Court observes that the situation left by the settlement deed is inherently unstable, leaving a structure in which two persons who do not trust one another continue to run the companies in the MH Group. To finally quell this dispute the parties should give serious consideration to bringing in a mediator to negotiate a wider settlement so that they can separate their interests from one another entirely.

Conclusion and Orders

1. For these reasons the Court makes the following orders and directions: 1. Note on the plaintiff's application for interlocutory relief that the Court 1. accepts that there is a serious question to be tried for final relief; but 2. is not satisfied on the balance of convenience that the interlocutory relief sought in prayers for relief (4) and (5) should be granted, because 1. the relief sought, involving as it does the removal from the Personal Property Securities Register (PPSR) of a charge benefiting the defendants over the plaintiff's interest in certain shares would imply the certain postponement of the defendants' arguably valuable charge over the said shares behind the substantial security interests of Centuria Bass Financing and behind the potential claims of other persons, and 2. against that financial risk to the defendants if interlocutory relief is granted, the plaintiff offers only an unsecured undertaking as to damages and no other alternative security; and 1. it is not necessary to grant the plaintiff leave to amend his summons on this application, in part because the amendment of the summons would not have allowed the plaintiff's application for interlocutory relief to succeed but that does not preclude the plaintiff from amending his summons on a future occasion; 1. Dismiss the application for interlocutory relief in terms of prayers for relief 4 and 5 of the Summons; 2. Order the plaintiff to pay the costs of the defendant of this application on an indemnity basis; 3. Order pursuant Uniform Civil Procedure Rules 2005, r 42.7, that the costs the subject of order (3) should be assessed and paid forthwith; and 4. List these proceedings before the Registrar in Equity at 9am on 6 June 2023.

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: 23 June 2023