Supreme Court of WA|1999-05-03|Before: Kennedy J, Kechnie J

Tudorshine Pty Ltd v Seabush Pty Ltd [1999] WASC 9 (3 May 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : TUDORSHINE PTY LTD -v- SEABUSH PTY LTD [1999] WASC 9

Mandatory injunction - Money paid by mistake - Balance of convenience - No new principle - Turns on own facts

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618

Chew v Satay House of WA Pty Ltd & Ors; unreported; SCt of WA; Library No 970570; 29 October 1997

Kettles and Gas Appliances Ltd v Anthony Horden & Sons Ltd (1935) 35 SR (NSW) 108

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 8 WAR 183

Parker v Camden London Borough Council [1986] Ch 162

State of Queensland v Australian Telecommunications Commission [1985] HCA 25; (1985) 59 ALJR 562

1 McKECHNIE J : Although the plaintiff and defendant are companies, trustees for family trusts, the real parties are Mr Reker and Mr Di Florio, to whom I shall refer hereafter. These gentlemen formed a partnership called Nancil Builders and Designs, which traded for several years as a builder. The partnership operated a bank account at ANZ, Morley, styled Tudorshine Pty Ltd as Trustee for the Reker Family Trust and Seabush Pty Ltd as Trustee for the Di Florio Family Trust, trading as Nancil Builders and Designs.

2 On or about 13 February 1999, Mr Reker and Mr Di Florio agreed to dissolve the partnership. The accounts are in the hands of their accountant Mr Napoli and have not been finalised. There is, from the affidavits what I apprehend to be, a bitter dispute as to the eventual finalisation and adjustments.

3 As part of the agreement Mr Reker was to continue to build several properties, including a property at 57 Monk Street, Kensington, at his sole risk and for his sole benefit.

4 On 25 March 1999 Mr Reker received a progress payment of $20,000 for Monk Street. This cheque was made payable to Mr H Reker. The next day his daughter mistakenly took the wrong bank deposit book and instead of depositing the cheque in the plaintiff's account at the ANZ Morley branch, styled "Tudorshine Pty Ltd as Trustee for the Reker Family Trust, trading as Reker Homes", she deposited it in the partnership account.

5 When the mistake was discovered Mr Reker asked Mr Di Florio, through Mrs Di Florio, to authorise the bank to withdraw the proceeds of the cheque and transfer the money to the plaintiff's account. Mr Di Florio refused. So today the plaintiff has sought a mandatory injunction to compel that authorisation.

6 The basic principle of an interlocutory injunction is to preserve the status quo ante pending trial, so that the trial is not rendered futile.

7 Normally, the status quo is preserved by a prohibitory injunction but on occasions the best way of preserving the situation may be to order a person to do an act in order to return the parties to equilibrium pending trial. In my opinion, the true principle is not that mandatory injunctions are by their nature rarely granted or that the plaintiff has a heavy onus, rather, as Kennedy J pointed out in Cash Converters v Hila (1993) 9 WAR 471 and 483:

"Such an injunction is usually more wasteful of time and money if it turns out in the end to have been wrongly granted."

8 The Court is always concerned to do justice between the parties, bearing in mind that at an interlocutory stage all the issues have not been fully ventilated and requisite findings have not been finally determined. For this reason there is an element of prediction in consideration for an injunction particularly a mandatory injunction. In Shepherd Homes v Sandham [1971] 1 Ch 340 at 351, Meggary J spoke of a high degree of assurance that at the trial it would appear that an injunction was rightly granted.

9 This passage was approved in Locabail International Finance Ltd v Agroexport Export & Anor (1986) 1 WLR 657 and cited with approval by Gibbs CJ in Queensland v the ATC [1985] HCA 25; (1985) 59 ALJR 562 at 563 and by Kennedy J in Cash Converters at 403:

"In this case the plaintiff has chosen to apply for a mandatory injunction rather than summary judgment. The standard of persuasion for each is probably similar."

10 I turn to the facts to determine whether I have a high degree of assurance that the plaintiff will succeed at trial. It is clear, as I have said, that the parties are in dispute as to what may be the final resolution of the partnership. As an example, Mrs Di Florio, in an affidavit filed on behalf of the defendant in opposition to the application states, at par 16:

(a) that Reker has advised Mr Napoli, the Partnership accountant, that the Partnership has creditors of approximately $40,000;

(b) that the Plaintiff is, on the basis of the draft accounts of the Partnership to 30 June 1998, in any event, liable to pay more to the Partnership than the amount of the subject cheque; and

(c) that the Plaintiff's liability to the Partnership arises, principally, as a result of a loan obtained from the Partnership by Reker Family Trust and the taking of substantial drawings by the Plaintiff

The ground and source of my belief is advice received from Mr Napoli."

11 This is denied by Mr Reker, who also disputes that he owes $38,479.89 in the loan account. Mr Di Florio deposes, amongst other things, that the plaintiff owes his business about $1600 for brick paving. However, the dispute as to the partnership seems to me, with respect, to have very little to do with the plaintiff's claim against the defendant; a claim characterised as unjust enrichment.

12 The most that can be said is that after the accounts have been finalised and the disputes resolved, Mr Reker may owe Mr Di Florio some money. No claim has yet crystallised into a present debt. On the other hand, $20,000 payable on its face to Mr Reker was accidentally deposited into the partnership account well after the partnership was dissolved. In the circumstances, the defendant does not assert a present entitlement to the money.

13 It is submitted that some of the money has already been applied in reduction of the partnership debt, by paying some accounts. I am not sure on the evidence that is so. In any event, that submission does not seem to take account of the fact that it is a joint account and the money deposited was Mr Reker's money alone.

14 I have formed a high degree of assurance that at trial the plaintiff would succeed for a declaration and an injunction. The money deposited belonged to the plaintiff.

15 It is not asserted to the contrary. The money was accidentally paid into the wrong account. As a result, the defendant gained a windfall advantage in its dispute with the plaintiff over the ultimate disposition of the partnership affairs.

16 There remains in the account in excess of $20,000. There seems to me to be little inconvenience to the defendant if the money were transferred back to the plaintiff.

17 On the other hand, Mr Reker has deposed to the serious and continuing burden the lack of the money is causing. I am firmly persuaded that this is one of the cases where equity should act promptly to restore the parties to their relative positions before the unfortunate mistake was made. Subject to one matter, therefore, I am prepared to grant the interlocutory injunction sought.

18 The defendant has attacked the plaintiff's undertaking as to damages. In my view, that attack has substance. The plaintiff is a trustee company for a family trust. No evidence has been adduced as to the ability of this incorporated body to meet an award of damages, if necessary. This lack of material is a significant omission. I would not be prepared to grant an injunction on the plaintiff's undertaking alone.

19 The matter has been remedied in part by the production of an undertaking by Mr Reker which counsel only produced "if necessary" after I had indicated that it was necessary. It has not yet been filed.

20 Mr Reker has filed an affidavit today. Paragraph 13 reads:

"As to my personal financial position, insofar as it may be relevant, I have a property, the details of which appear in Scovell's affidavit. The value of the equity in my property is approximately $30,000. I also have a boat which is unencumbered, and a motor car which is also unencumbered."

21 This is barely adequate. No values are given as to the boat or car, rendering the inclusion of them as assets meaningless. That leaves the land. I am prepared to accept Mr Reker's sworn assertion that the equity is about $30,000. However, this is in respect of a jointly owned property. His equity is half and would in practical terms be difficult to realise if in the event the undertaking was called upon, and therefore I am only prepared to grant an injunction on the basis that undertakings as to damages be filed by both Mr and Mrs Reker.

Tudorshine Pty Ltd v Seabush Pty Ltd [1999] WASC 9

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (40 paragraphs)

Tudorshine Pty Ltd v Seabush Pty Ltd [1999] WASC 9 (3 May 1999)

Parties

Cases Cited (4)