Australian Receivables Ltd v Tekitu Pty Ltd & 2 ors

Batiste v Lenin [2002] NSWSC 233; (2002) 10 BPR 19,441 Batiste v Lenin [2002] NSWCA 316; (2002) 11 BPR 20,403 CASES CITED : Carrathool Hotel Pty Ltd v Scutti [2005] NSWSC 401 Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501 Edlington Properties Ltd v J H Fenner & Co Ltd [2006] EWCA Civ 403

Australian Receivables Limited (plaintiff) PARTIES : Tekitu Pty Limited (first defendant) Ross Edward Smith (second defendant) Lynette Mary Smith (third defendant)

COUNSEL : Mr R J Brender (plaintiff) Mr M Green w Ms E Elbourne (defendants)

SOLICITORS : Forbes Dowling Lawyers (plaintiff) Rodd Peters Lawyers (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

5258/07 Australian Receivables Ltd v Tekitu Pty Ltd & 2 ors JUDGMENT (ex tempore) 1 HIS HONOUR: By contract dated 9 January 2007 the plaintiff Australian Receivables Ltd ("ARL") purchased from the first defendant Tekitu Pty Limited, of which the second defendant Ross Edward Smith and the third defendant Lynette Mary Smith are the directors and shareholders, the assets of a mercantile collection business formerly carried on by Tekitu. Clause 17.5 of the contract provided as follows: At Completion:

(1) the Vendor shall immediately account to the Purchaser at the Purchasers [sic] direction, for all client moneys received by the Vendor into the Vendors [sic] bank accounts and trust accounts after Completion and without deduction; (2) pay to the Purchaser all money of Clients held in the Vendor's bank accounts or trust account and thereafter remit daily (or as otherwise required by the Purchaser), all payments received into the Vendor's bank accounts and trust accounts and to keep bank accounts and trust accounts open for a period of nine months following Completion and permit the Purchaser to verify the bank account and trust account transaction for this 9 month period.

2 On 19 October 2007, Donaldson Trumble lawyers, then acting for ARL, wrote to Tekitu and its directors, asserting that in breach of clause 17.5 Tekitu had failed to account for money received into Tekitu's bank accounts and trust accounts and despite repeated requests, failed to pay over client money, the property of ARL. The allegation was elaborated in that letter. On 23 October 2007, Rodd Peters, lawyers for Tekitu, responded, relevantly as follows: Our clients have instructed us to acknowledge that Tekitu Pty Ltd holds certain funds in a bank account to the credit of Tekitu Pty Ltd ("the set-off funds"). Our clients have recently discovered that Tekitu Pty Ltd holds certain funds in its B'Pay trust accounts that could not be transferred to your client because the "on-line" transfer capability had been recently cancelled by your client when the Frenchs Forest office was closed. Our clients are arranging Bank cheques in the total sum held in both accounts to be paid to your client, together with copies of all recent relevant bank statements.

3 The letter went on to demand payment from ARL of certain amounts said to be owing to the defendants or various of them, and to set off those amounts against the amounts standing to the credit of Tekitu's account. 4 Pursuant to a summons filed on 29 October 2008 and a subsequent order that the proceedings continue on pleadings, ARL claims an order that Tekitu account to it for the sum of $582,449 allegedly received by Tekitu from clients in circumstances in which clause 17.5 of the contract obliged the immediate remitter of these amounts to ARL. Further, it claims an order that Mr and Mrs Smith account to it for the same sum (or part of it) on the basis that they were knowing assistants in, or knowing recipients of the proceeds of, a breach of trust by Tekitu in disbursing those moneys or some of them, and/or in failing to remit them to ARL. Tekitu's defence is a set-off for sums said to be due to it by ARL under the contract or collateral arrangements, and a cross-claim for what is called the "earn out payments" in the contract, to which Tekitu contends it is entitled - or at least would have been entitled had ARL acted properly in accordance with its own obligations under the contract. The amount of the set-off asserted in the defence is at least $558,580, and the cross-claim for the earn out payments has been estimated on behalf of the defendants to be in the order of $1,523,553. 5 On 1 November 2007, when the summons was first returnable, ARL gave the usual undertaking as to damages and the defendants, without admissions, gave undertakings relevantly in the following terms: (a) To transfer immediately to its solicitors' trust account the sum of $300,000 from account 082-132, XXXX XXXX (the Tekitu account), where it will remain subject to further order; (b) The first defendant will not spend any money or enter into any transactions without giving three business days' notice to the plaintiff, except to the extent that the transaction consists of periodic payments not exceeding $5,000 in total;

(c) The second and third defendants own a property at 7/52 Griffith Street Fairlight, in which they have equity in excess of about $500,000, (based on estimate of market value at $800,000), and they will not further encumber or deal in any way with that property subject to further order;

(d) The defendants will give an irrevocable direction to its banker that upon completion of the release of any guarantees provided by the defendants in respect of property leases the subject of the proceedings, any amounts securing each guarantee be paid to the defendants' solicitors' trust account, and will provide a copy of the direction to the plaintiff within seven days. 6 The Court also noted that those undertakings were given until further order, and that it was agreed between the parties this would not change the onus of proof on any application for further interlocutory relief. 7 The defendants, in pursuance of the 1 November 2007 orders, paid into their solicitor's trust account a sum of approximately $300,000; subsequently that sum or the balance of it has been transferred to a controlled moneys account. 8 The undertakings of 1 November were continued on several interlocutory occasions between then and 6 December, when the matter was again before the Court and, upon ARL giving the usual undertaking as to damages, the Court noted undertakings given to the Court by the defendants without admissions, (a) to cause the amount $106,707 to be transferred from the trust account of its solicitors referred to in paragraph 2(a) of the orders made on 1 November 2007, and paid to the plaintiff care of its solicitors by bank cheque or solicitors trust cheque by 5pm that day; and (b) to cause any amount paid into the trust account pursuant to the undertaking referred to in paragraph 2(d) of the 1 November 2007 orders, to be paid to the plaintiff care of its solicitors by bank cheque or solicitors trust cheque within 48 hours of receipt. The Court noted that all prior orders or undertakings given by any party otherwise continued unaffected, without admissions or affecting any question of onus; and further noted the defendants' undertaking (without admissions) to make all reasonable efforts to pay by bank cheque to the plaintiff as soon as possible any amounts from any of the BPay accounts, to provide such particulars as they were able as to the daily debtor banking, and to authorise the plaintiff to seek such information as it may reasonably require from the National Australia Bank, advising the bank accordingly by 5pm the following day.

9 As well as the $106,000 referred to in the undertakings of 6 December 2007, a further sum of approximately $60,000 has also been released to ARL, as a result of the release of certain lease guarantees referred to in paragraph 2(d) of the 1 November 2007 orders. 10 On 14 December 2007, the defendants filed a motion seeking an order that the amount of approximately $224,000 still held in their solicitor's trust account under the 1 November undertakings be released to Tekitu, and that they be discharged from the undertakings (b) and (c) in the 1 November orders, as subsequently continued. On 17 January 2008, the plaintiff filed a motion claiming orders that the sum of $274,000 be released to the plaintiff, that Tekitu be restrained from disposing or dealing with any of its assets without first giving 14 days written notice to ARL, and that Mr and Mrs Smith be restrained from disposing or dealing with any of their assets except for the purpose of paying reasonable legal expenses of defending the proceedings and ordinary living expenses to a maximum of $1,000 per week without 14 days prior written notice to ARL. Certain other relief was also claimed, but has been superseded by subsequent developments. By motion filed on 12 March 2008, the plaintiff sought a further order that the defendants forthwith pay to ARL the amount of $16,858.16, that amount being moneys which had been in the BPay accounts but had been retained by the defendants and not paid over to ARL despite the 6 December undertakings. Those are the three motions which fall for consideration now. 11 Given that the undertakings hitherto given to the Court by the defendants were on a "without admissions" basis, and expressly on the footing that they would not affect any onus on any subsequent application for interlocutory relief, and given further that there has not previously been a contested interlocutory application - the issues to this point having been resolved on a consensual basis - I accept that I should approach the present application as if it were one in which ARL was seeking interlocutory relief and, in particular: first, an interlocutory injunction restraining Tekitu from dealing with the amount standing to the credit of its trading account other than by making payments into its solicitor's trust account; secondly, injunctions restraining Tekitu and the Smiths from alienating or encumbering their assets save on 14 days notice to ARL; and thirdly, an order compelling the Smiths and/or Tekitu to pay over the $16,000 in the BPay accounts. 12 The first of those has been at the forefront of the debate. As I have foreshadowed in the course of argument, it is not an application for a Mareva injunction, but one for a conventional interlocutory injunction to preserve the subject matter of a proprietary claim in the proceedings. It does not seek to prevent dissipation of the assets of the defendants generally, in order to prevent frustration of the plaintiff's ability to satisfy a potential money judgment for debt or damages; rather, it is calculated to preserve the very fund to which the plaintiff claims to be beneficially entitled. 13 Mr M Green, who firmly and sometimes fearlessly, courteously and capably advanced everything that could be said in support of the defendants' case, even under considerable judicial provocation at times, submitted that the funds in trust were not correctly characterised as Tekitu's receipts caught by clause 17.5, and that they were, in truth, to be regarded as funds of Mr and Mrs Smith: Tekitu having made payments to them out of the funds standing to its credit, in reduction of their directors' loan accounts, and they having then paid those amounts to their solicitor's trust account when the undertaking was given on 1 November 2007. I am unable to agree, however, with that characterisation of the funds, at least on the prima facie basis applicable for the purposes of the present interlocutory proceedings. The correspondence of 19 October and 23 October 2007, which I have briefly summarised, refers to funds standing to the credit of Tekitu's account. The undertaking given on 1 November was an undertaking to pay to the solicitor's trust account the funds from Tekitu's trading account. It is true that, in a subsequent affidavit, filed in response to an order of the Court to explain what had happened to various funds, the Smiths explained that Tekitu had earlier paid the moneys to them in reduction of their directors' loan accounts and that they had paid the moneys to their solicitors pursuant to the 1 November undertaking. However, given the correspondence of 19 and 23 October and the terms of the undertaking, I think it is plain that what happened in substance was that the payment to the directors in reduction of their loan accounts was reversed; the funds were notionally, if not actually, restored to Tekitu, where they had originally been; and, theoretically at least, the loan accounts were re-credited with that reversal. It was plainly intended at that time that the funds paid into the trust account of Rodd Peters Solicitors were funds that represented what had previously been in Tekitu's trading account. The intent was that the funds that Tekitu held (or had held, immediately prior to the payment to the Smiths, which does not appear to have been disclosed as at 1 November 2007) be paid into Rodd Peters trust account; as the Smiths had already withdrawn them, they reversed that withdrawal and restored the funds to Tekitu. 14 ARL's case is that Tekitu's trading account comprised the proceeds of payments which had mistakenly been made by clients to Tekitu, to which ARL was entitled under clause 17.5. On behalf of ARL, Mr Duncan undertook a detailed analysis of Tekitu's bank statements which, prima facie, plainly demonstrates that $552,235 was retained by Tekitu from client payments between 1 June and 5 November 2007. In its defence, Tekitu admits that there was an arithmetical difference between receipts into its trading account and transfers from it to ARL of $525,665. The difference between ARL's figure and that of Tekitu is, for present purposes, immaterial, since the lower figure significantly exceeds the sum of the amounts now retained in the controlled moneys account and the amounts already paid to ARL. 15 Tekitu does not admit that the amounts received into its trading account were remitted by clients, but it does not assert that they were anything else. Mr Duncan's analysis - which, on its face appears thorough and careful - stands unanswered. Moreover, Ms Smith, in an affidavit, deposes that the trading account was used only to receive amounts paid by customers. Despite these admissions, Mr Green has pointed to some transactions on the trading account which might possibly not be in that category, but there is no affirmative evidence as to what else they are, save that some are interest - and entitlement to interest would, ordinarily, go with entitlement to the principal. Accordingly, as the evidence stands, it appears to me that there is a very strong case that, of the admitted difference of $525,000 between receipts into Tekitu's trading account and transfers from it to ARL, at least the overwhelming proportion was comprised of payments from customers caught by clause 17.5. 16 ARL claims that, by reason of clause 17.5 of the contract, Tekitu is liable to account to it for that sum, and that it is beneficially entitled to it. Contrary to Mr Green's submission, I do not accept that the Statement of Claim does not sufficiently disclose a basis for that type of specific relief. The facts pleaded in paragraphs 4, 6, 7, 8, 9 and 10 of the Statement of Claim, if established, would found a liability to account and, as asserted in paragraph 14 of the Statement of Claim, a beneficial entitlement. Clause 17.5 is, it is at least strongly arguable, not just a promise to pay a sum of money, but vests a beneficial entitlement in each sum to which it applies in ARL, upon its receipt by Tekitu. Similarly, the allegations in the paragraphs of the Statement of Claim to which I have referred, if established, would found a liability on the basis of money having been received by Tekitu to the use of ARL - as is, though not quite accurately, alleged in paragraph 13 of the Statement of Claim - or of a constructive trust, as alleged in paragraph 16 of the Statement of Claim. 17 The fact that there is also asserted a liability in contract for debt does not exclude the availability of other remedies in every case, and does not limit the purchaser to a claim for damages or debt where the contract is such as also to create an equitable interest in the subject matter on which it operates. Equity, regarding as done what ought to be done, treats the moneys received by Tekitu as impressed with the obligation to transfer them under clause 17.5. It is not a necessary precondition to equitable relief of this type that the underlying relationship be a fiduciary one. 18 In those circumstances, the objection which otherwise might have been well taken to the adequacy of the pleading of unjust enrichment is beside the point. Ample other bases are disclosed in the pleading on which the plaintiff might succeed. 19 Accordingly, on the material presently before the Court, ARL has a strongly arguable case - indeed one that is virtually unanswered - that it is entitled to the money formerly standing to the credit of the Tekitu trading account and now in the defendants' solicitors controlled money account, subject only to Tekitu's set-off and cross-claim. 20 I readily accept that, for present purposes, Tekitu's set-off and cross-claim are to be regarded as seriously arguable. Moreover, if established in full, they would be sufficient in quantum to extinguish the claim and, indeed, to result in there remaining a balance payable by ARL to Tekitu. 21 However, where the balance of convenience lies is not ascertained simply by comparing the relative quantum of the asserted set-off and cross-claim (which might be in the order of $2 million) against that of the claim (in the order of $500,000). Any such comparison would overlook that ARL's claim is effectively unanswered, proprietary in nature, and at least arguably not amenable to a set-off and cross-claim; whereas the set-off and cross-claim are contentious, and are for debt or damages and not proprietary in nature. Thus, while I accept that the set-off and cross-claim are arguable - indeed, the contrary was not suggested - there are at least four factors which inform the evaluation of the relative strengths of the competing cases for present purposes. 22 First, as I have said, unlike ARL's practically unanswered substantive claim, the set-off and cross-claim are contentious. 23 Secondly, given the obligation under clause 17.5 to pay "immediately and without deduction", it is at least arguable that ARL's claim is not amenable to a set-off. On this, there are cases in both directions, with United Kingdom authorities tending to favour the view that such terminology might be insufficient to exclude the right to set-off [see Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501; Edlington Properties Ltd v J H Fenner & Co Ltd [2006] EWCA Civ 403], while recent New South Wales authority arguably tends in the opposite direction [see Batiste v Lenin [2002] NSWSC 233, [102]-[105]; (2002) 10 BPR 19,441, 19,468-19,169; cf on appeal Batiste v Lenin [2002] NSWCA 316, [49]; (2002) 11 BPR 20,403, 20,417; Carrathool Hotel Pty Ltd v Scutti [2005] NSWSC 401, [62]-[65]]. 24 Thirdly, at least some aspects of the proposed set-off and cross-claim appear, on a cursory view, to be claims by Mr and Mrs Smith as distinct from claims by Tekitu, in which case the requisite mutuality for a set-off would not be established, although I hasten to add that does not apply in respect of the large bulk of the set-off and cross-claim. 25 Fourthly, as I have foreshadowed, the set-off and cross-claim are for debt or damages, and not proprietary claims to a fund to which the defendants can assert a beneficial entitlement. 26 In short then, ARL has a very strongly arguable case that it is beneficially entitled to the fund. Tekitu has an arguable case that it has a set-off and/or cross-claim against ARL which would extinguish or exceed ARL's claim. 27 One critical feature of ARL's claim that it is beneficially entitled to the fund is that, if it succeeds in that claim, the fund will not be available to other creditors of Tekitu, such as the Australian Tax Office, or its directors Mr and Mrs Smith. That consideration is all the more significant in the light of the circumstance that Tekitu is no longer trading and its directors propose that it be wound up. This consideration is very telling on the balance of convenience: if Tekitu were wrongly restrained on an interlocutory basis from dealing with the fund, its ability to pay its other creditors - the Tax Office and the Smiths, so far as the evidence shows - would be deferred, but ultimately, if Tekitu succeeded, the fund would still be available to satisfy those creditors, albeit later than would otherwise be the case. But if interlocutory injunctive relief were wrongly refused, those creditors could be paid in the interim, resulting in the dissipation of the fund to which ARL claims a beneficial entitlement, and leaving any ultimate success of ARL as a potentially entirely hollow victory, with the fund having been dissipated, and ARL being relegated to an unsecured or a tracing remedy. To my mind, that consideration very strongly favours the grant rather than the withholding of the interlocutory relief sought. 28 Hardship to the defendants is a relevant consideration on the balance of convenience. Essentially, it is advanced on their part that the inability to access the funds will deprive them of the ability to defend the proceedings, to pay the second and third defendants' living expenses, and to service the second and third defendants' obligations in respect of their investment properties. But in this respect, it is first necessary to remember that what I am presently considering is, as I have said, not an application for a Mareva injunction. I accept that in a Mareva application, where what is sought is to prevent a defendant from rendering itself judgment proof by dissipating assets, it is virtually always appropriate to allow the defendant to make expenditure from its general assets for living expenses and legal costs. That is quite distinct from a case such as the present where what is sought is an injunction to preserve the subject matter of the proceedings, as distinct from preventing a defendant from alienating its assets generally so as to render itself judgment proof. To permit the expenditure of a fund, to which the plaintiff has a strongly arguable beneficial claim, on the defendants' living expenses and legal expenses would be, in effect, to permit the conversion of the subject matter of the claim to the defendants' personal use. 29 Further it must be appreciated that, subject to ARL's claim, the relevant fund was Tekitu's, not the Smiths. It is impossible to see why a fund to which ARL has a strong prima facie claim ought to be permitted to be expended by Tekitu, not even on payment of its own unsecured liabilities, but effectively to fund the personal expenditures of its directors. Indeed, the proposal that this is how the funds would be used increases the likelihood of jeopardy to the subject matter of the litigation and fortifies the case for an injunction. 30 I accept that without access to the fund, the ability of the defendants to defend the proceedings may be inhibited, but they are not without significant assets in which they appear to have substantial equity. I do not pretend that it will necessarily be easy to raise funds against that equity but, on balance, I do not see that, in the circumstances of this case, the hardship which that may occasion justifies allowing access to the fund in question. 31 Mr Green also contended that ARL had not established that it would be able to satisfy an undertaking as to damages, and that interlocutory relief should be refused on that basis. ARL gave an undertaking as to damages as long ago as 1 November last year. The defendants' submissions on the present motions touch, but only in a rather indirect way, on the ability of ARL to satisfy an undertaking as to damages. In any event, those submissions were delivered on 1 April 2008, two days before the hearing. That was hardly, in the context, sufficient notice that the capacity of ARL to satisfy an undertaking would be an issue to enable it to adduce appropriate evidence to meet it. 32 I readily accept that where an applicant is on notice that its ability to satisfy an undertaking as to damages will be in issue, it bears the onus of proving it has that capacity. But in the context of this case, given the length of time that the undertaking has already been on foot, and the length of time that the motion has been set down for hearing, against the time at which those submissions were received, and the less than direct manner in which the issue was raised, I do not think that sufficient notice of the issue has been given to attract that principle here. 33 In any event, the ability of ARL to satisfy an undertaking as to damages needs to be judged partly against what those damages are likely to be. The injunction in question will effectively defer the ability of Tekitu to access the funds in question. Tekitu is, on the evidence, to be wound up. It does have another creditor, the Australian Tax Office, but prima facie, any damage that Tekitu would suffer would be loss of use of the fund, which loss is normally measured in interest, and interest will presumably be earned on the fund while it remains invested in the meantime. Accordingly, prima facie, the fund and the interest it earns would meet any claim on an undertaking as to damages; or, put more accurately, if Tekitu were ultimately to be held entitled to the fund and interest earned on it, it is difficult to see what damage the injunction would inflict. 34 Accordingly - taking into account what I find to be the strength of ARL's prima facie case, and that it is a proprietary claim, weighing it against Tekitu's set-off and cross-claim and the vicissitudes which attend that set-off and cross-claim, and particularly having regard to the risk of injustice if ARL were left as unsecured creditor or to a tracing remedy, whereas the detriment to Tekitu is only deferral of its ability to access the fund to pay its other creditors in the meantime - the case is one in which the balance of convenience favours the grant rather than the withholding of the interlocutory relief sought. 35 Approaching the matter as if it were an application for an interlocutory injunction at the outset, I would therefore have granted such an injunction. 36 The defendants do not oppose the continuation of relief in respect of the lease guarantees, two of which remain outstanding, essentially in the terms of undertaking (d) of 1 November 2007. 37 If ARL ultimately succeeds on its claim, then there will remain a shortfall, between the fund held in Rodd Peters controlled moneys account and the total amount of its claim, of approximately $190,000, which it would have to enforce personally against Tekitu and/or the Smiths if it ultimately succeeds against them. The plaintiff seeks Mareva relief against Tekitu in respect of dealings with its assets, and against Mr and Mrs Smith in respect of dealings with their real property. 38 For reasons already given, ARL has a strongly arguable case against Tekitu. As against Mr and Mrs Smith, liability is said to arise from their having knowingly assisted Tekitu's breach of trust, or having knowingly received the benefit of it. The evidence establishes that they are the directors and shareholders of Tekitu and control its relevant activities and have received at least some of the funds - at least up to $88,000 - from the Tekitu accounts the subject of the claim. Indeed, they are implicated in receiving the benefit of some of those funds even since undertakings - which, prima facie, were inconsistent with that course - were given to the Court. In those circumstances, I think there is at least a seriously arguable case that Mr and Mrs Smith were knowing assistants and/or were knowing recipients in respect of at least some of the funds in question. The evidence further establishes that assets of Tekitu have been dissipated, in part for the benefit of Mr and Mrs Smith and, again, notwithstanding undertakings to the Court apparently inconsistent with that course. That amply establishes a sufficient risk of dissipation to justify Mareva relief. 39 As Tekitu is not trading and is apparently to be wound up, considerations of hardship to it are reduced, although I should take into account that it has a liability to the Australian Taxation Office. A Mareva injunction - as distinct from an ordinary interlocutory injunction to preserve the subject matter of a claim - ought not prevent Tekitu from paying its proper debts. However, as what I propose to do is simply to impose a requirement that Tekitu give notice of any proposed disposition, there will be little practical hardship involved. 40 When granting a Mareva injunction, it is ordinarily appropriate to exempt expenditure on legal and living expenses. However, an injunction is sought against Mr and Mrs Smith only in respect of some of their assets (namely, their real property), and not all of their assets. In those circumstances, I do not think such an exemption is necessary at the outset, but obviously if they were to give notice of a proposed expenditure from their real property for that purpose, opposition to permission to make such a payment would very likely fail. 41 That leaves the motion in respect of the funds retained from the BPay accounts. I have already referred to what the letter of 23 October and the undertaking of 11 December had to say on that topic. 42 If the present application is put as an application for an order that the defendants do what they are already bound to do by their undertaking to the Court of 11 December, then making an order that they do what they are already bound to do achieves nothing. If there is a dispute as to whether the undertaking binds them to pay over the contents of the BPay accounts without deduction, then the proper course is for that dispute to be resolved on an application to enforce the undertaking, rather than by seeking an order to the same effect as the undertaking. If the application were put, independently of that undertaking, on the basis that ARL was beneficially entitled to the moneys in the BPay accounts, then it is, in effect, an application for final relief, not interlocutory relief, and would not be granted on an interlocutory basis. I am not inclined to make the order sought on the BPay motion. 43 Accordingly, as seems to me, there should be orders to the following effect:

1. Discharge with effect from today all undertakings previously given to the Court by the defendants.

2. Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages: 2.1 dismiss the defendants' Notice of Motion filed on 14 December 2008. 2.2 order that the defendants be restrained until further order from, by themselves, their servants or agents, alienating, encumbering, disbursing or instructing or giving instructions for or suffering or permitting the alienation, encumbrance or disbursement of the fund held by their solicitors Rodd Peters Solicitor pursuant to the undertaking given by them on 1 November 2007.

2.3 order that until further order the first defendant be restrained from alienating or encumbering any of its assets save to the extent that they exceed $200,000 (excluding the amount in the Rodd Peters controlled moneys account) except upon having given seven days written notice to the plaintiff's solicitors of its intention to do so, any such notice to specify the parties to, quantum of and purpose of the proposed dealing and the application of the relevant funds. 2.4 order that until further order the second and third defendants be restrained from, by themselves, their servants or agents alienating or encumbering any real property asset or interest in real property which they might have, except upon having given seven days written notice to the plaintiff's solicitors of their intention so to do, such notice to specify the parties to, quantum of, and purpose of the proposed transaction and the application of the relevant funds. 2.5 order that the defendants do all things, execute all documents and directions and give all directions and consents necessary or convenient to procure that upon the release of any guarantee they may have given in respect of property leases, the subject of the proceedings, the amounts so released be paid to the plaintiff care of its solicitors by bank cheque or solicitor's trust cheque within 48 hours of such release.

3. Order that the plaintiff's Notice of Motion filed 12 March 2008 be dismissed. **********

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