Waterwood Hotel Management Pty Ltd v KOP International Pty Ltd & Anor.

The facts

1. The first defendant ("KOP") is a company controlled by Ms Xiufeng Xu ("Ms Xu"). It is the trustee of the KOP Investments Trust.
2. The second defendant, MOOT Hotel Management Pty Ltd ("MOOT") was registered on 27 March 2014. Ms Xu was its sole director, secretary and shareholder (holding 100 ordinary $1.00 shares).
3. By contract made on 4 April 2014 KOP as trustee for KOP Investments Trust agreed to buy the Land from Bayfield Hotels Wharf Pty Ltd for $8,550,000. That purchase was settled in June 2014.
4. By a business sale agreement made on 4 April 2014, MOOT agreed to buy the Business from Bayfield Hotels Mirage Pty Ltd. The purchase price for the Business was $950,000 for the goodwill plus the value of stock on completion and some adjustments. The purchase of the Business also settled in June 2014. The evidence does not disclose the actual final figure for the purchase price.
5. For the purposes of completing the purchases referred to in paragraphs [12] and [13] above, Ms Xu applied about $4,000,000 of her own funds and borrowed a further $6,000,000 through a commercial loan facility with the ANZ Bank. The Court infers that ANZ has a mortgage over the Land to secure that commercial loan facility.
6. At the time of the transactions referred to in paragraphs [12] and [13] above Bayfield Hotels Wharf Pty Limited leased the Land to Bayfield Hotels Mirage Pty Ltd. The lease was for a term of 12 months terminating on 31 December 2014. Bayfield Hotels Mirage Pty Limited assigned its interests as lessee under that lease to MOOT. The annual rent payable under that lease was approximately $690,000 plus GST.
7. At the start of 2015 Mr Lit Moon Lye (also known as Corey Lye) was employed as manager of the Business. He is an accountant and tax agent and also operated an accounting consultancy known as AGC Advisory Pty Ltd.
8. Waterwood was registered on 9 January 2015. Mr Lye is its sole director, secretary and shareholder.
9. Between 10 and 13 January 2015 Mr Lye arranged for $15,000 to be paid to KOP for what his bank records at the time describe as "Hotel lease deposit".
10. On 5 February 2015 Mr Lye emailed Ms Xu's daughter: We would like to request of $100k to be deposited into MOOT Hotel Management ANZ account due to low cash on hand. Please be advise that we had recently paid PAYG instalment. FYI, the moot hotel will need extra $100k pay Dec14, Jan15 & Feb15 - PAYG as well as payroll tax by the end of Feb (latest). If there is any problem let me know. Thanks Kind Regards, Corey Lye Manager Newport Mirage Hotel
11. On 16 February 2015 Ms Xu arranged for $100,000 to be deposited into MOOT's bank account.
12. A series of unchallenged corporate records demonstrate that on 5 March 2015 with effect from 1 March 2015 a number of things happened. Ms Xu resigned as a director of MOOT. Mr Lye became a director of MOOT. Ms Xu transferred her 100 shares in MOOT to Waterwood for $100. Those appointments and transactions, all of which were signed by Ms Xu, were then apparently reversed on 5 March 2015 with effect from 1 March 2015. I use the word apparently because there is evidence the reversal may have occurred later, but nothing turns on this. Mr Lye says that those reversals were done without his knowledge or authority.
13. On 5 March 2015 Ms Xu on behalf of KOP (described as "Lessor") and Mr Lye on behalf of Waterwood (described as "Lessee") entered into identical agreements in Chinese and English entitled "Hotel Lease Agreement" (the "HLA"). There is a question, irrelevant for present purposes, as to whether the solicitors who prepared the HLA were acting solely for KOP or for both KOP and Waterwood.
14. The HLA included: RECITALS A. The lessor is the owner of the business conducted under the business name at the address appearing in the summary. B. The parties have agreed to the lease of the business to the lessee upon the terms and conditions herein contained. OPERATIVE PART 1. Definitions and interpretation This deed is governed by the laws of the state of New South Wales, and the parties, submit to the non-exclusive jurisdiction of the courts of that state. In the interpretation of this deed: (a) Business means the business conducted by the lessor under the name and at the business premises shown in the summary including: (i) The present goods, chattels, circulating assets, stock-in-trade, fittings, computer hardware and software, furniture and effects now used in connection with the business; (ii) All the fixtures and fittings situated at the business premises including wall fittings, counters, display units and stands, sinks, dispensary fixtures, carpets, light fittings and cash registers and all of the stock-in-trade; (iii) All right, title and interest which the lessor now has in and to any licence; (iv) All plant and machinery used in connection with the business; (v) The book debts, business and other debts which are owing, payable or accruing on any account to the lessor in the business and all books of account, promissory notes, bills of exchange and other instruments, negotiable or otherwise, representing or evidencing all or any of such debts; (vi) All intellectual property; and (vii) The goodwill of the business including the right to use any name or mark used in or associated with it. … 2. Summary (a) Name of Business Newport Mirage Hotel (b) Registration number of business name (c) Address of business 2 Queens Parade West, Newport NSW 2106 (d) Term (clause 3) Five (5) years Commencement date: 1 March 2015 Termination date: 29 February 2020 (e) Further term (clause 3) Five (5) years and a further term of five (5) years). (f) Rent and GST (clause 4) (i) Five hundred and fifty thousand dollars ($550,000.00) per annum by equal monthly instalments calculated for the year following the commencement day. (ii) The first monthly payment is due on 1 March 2015. If this is not the commencement day it is because a rent free period from the commencement day to that day has been allowed by the lessor. (iii) Rent payable by the lessee is inclusive of Goods and services tax. … (h) Outgoings (clause 4) (i) Defined outgoing payable under the lease of the premise in which the business is conducted, if the premises is subject to a lease by the lessor. Otherwise, the following are defined outgoings payable in respect to the premises in which the business is conducted: (1) Local council rates and charges; (2) Water sewerage and drainage charges; (3) Insurance; (4) Land tax; (5) All levies and contributions of whatsoever nature determined and/or levied by the owners corporation with the exception of any contribution to a sinking fund or special levy in respect of the strata scheme of which the premises forms part (if applicable) for the land or the building of which the premises is part, fairly apportioned to the period of this lease. (ii) Water usage, gas, electricity, telephone and other utilities that are provided to the property are to be paid by the lessee as they fall due. … (k) Description of the business (clause 8) Hotel and any associated business. … 3. Term, further term and holding over (a) The term of this lease is as stated in summary 2(d) hereto commencing and terminating on the days shown thereunder and hereinafter called the commencement date and the termination date. … (d) Upon the determination of this lease, the lessor shall compensate any assets purchased by the lessee in connection with the conduct of the business during the term of this lease, taking into account any adjustment for depreciation to such assets. 4. All agreements relating to money (a) Rent and reviews of rent (i) If the premises in which the business is conducted is subject to a lease by the lessor, then the rent payable hereunder is additional to the rent payable by the lessor to the owner of the premises under the terms of the lease of the premises in which the business is conducted. (ii) If the premises in which the business is conducted is subject to a lease by the lessor, then the lessee shall pay the rental for the premises and all other moneys due to the lessor of the premises as and when they fall due for payment. … (b) Outgoings Subject to clause 4(h), the lessee shall pay as and when they fall due all outgoings payable specified in summary 2(h). In the event of failure by the lessee to pay such outgoings then the lessor may pay them and recover the amount paid from the lessee who shall be in default hereunder. If summary 2(h) refers to land tax - (i) if the property is a strata lot, the relevant land tax is land tax on that lot; (ii) if the property is not a strata lot but is part of a building, the relevant land tax is land tax on the land on which the building is situated, plus any land of the lessor used or available for use by or for the benefit of the lessee conducting business in the building or in connection with trading in the building; and (iii) in either case, the land tax must be calculated as if the land was the only land owned by the lessor and there was no special trust or non-concessional company involved. (c) Other expenditure The lessee is to pay punctually for all water, gas, electricity, telephone, heat and other utilities that are provided to the premises. … (h) Adjustment Notwithstanding anything to the contrary, the parties must make, inter alia, the following adjustments within 14 days of the Commencement Date: (i) land tax; (ii) council rate; (iii) insurance; (iv) water, sewerage and drainage services and usage charges; and the following adjustments within 28 days of the Commencement Date: (v) accounts receivable and accounts payable; (vi) employee entitlements; (vii) taxation; (viii) cash in account; on the basis that the lessor is entitled to all benefits and responsible for all liabilities up to and including the Commencement Date after which the lessee will be entitled and responsible. 5. Risk of business The business shall be at the risk of the lessee during the currency of this lease and the lessee is responsible for and shall arrange and keep current and produce to the lessor all business insurances good business practices dictate. 6. Observing covenants in the lease of premises in which the business is conducted The owner of the premises in which the business is conducted has been notified of the arrangements embodied herein and has consented thereto. The lessor remains liable for the performance of the covenants in that lease. The lessee shall observe and perform all those covenants on the part of the lessor of the business to be performed under the terms of the lease of the premises in which the business is conducted including the payment of the rent to the lessor or as the lessor directs. The lessee has read the lease and sought such advise as is deemed necessary for a clear understanding of the lessees responsibilities there under. A copy of the lease is attached hereto. … 8. Type of business The lessee shall not change the nature, type or activities of the business as described in summary 2(k) but may increase the market opportunities of the business by expanding products or services provided the essential nature of the business remains unchanged. 9. Conduct of the business The lessee shall run the business in a business like, friendly and efficient manner with a view to maintaining its value. The stock shall be valued at cost at the commencement of this lease and the lessee shall at all times maintain stock levels at substantially the same. … 12. Insurance and indemnity (a) The lessee shall keep current at all times during the currency of this lease: (i) A policy of public risk insurance applicable to the demised premises and the building and the business carried on therein for an amount of not less than the amount specified in summary 2(l); … (c) Despite anything to the contrary in this lease, the lessee shall neither be responsible for the repair of any existing or latent defect(s) to the roof of the demised premises nor shall the lessee by responsible for any damages, either directly or indirectly, caused by such defect(s). For the avoidance of doubt, claims, actions, losses and expenses for which the lessor may become liable arising out of such defect(s) are expressly excluded from any indemnification of the lessor by the lessee under this lease. 13. Damage (a) If during the currency of this lease the demised premises or a substantial part thereof in which the business is conducted is destroyed so substantially as to be wholly unfit for the conduct of the business then the rental hereby reserved shall abate and this lease and the term hereby created may, if either the lessee or the lessor so elects and of its election in writing notifies the other within 1 month of the destruction or damage, be terminated and brought to an end. (b) In the event that the demised premises or any part thereof in which the business is conducted shall at any time during the continuance of the lease be damaged so as to render part of the same unfit for the conduct of the business then a proportionate part of the rent hereby reserved according to the nature and extent of the damage sustained shall abate until the premises shall have been rebuilt or made fit for the conduct of the business by the lessee. … 15. Default (a) If at any time during the term of this lease or any extension thereof the lessee shall fail, to comply with the essential terms of this lease, to pay any rent or other money payable by the lessee to the lessor within 14 days of the due date for payment of such money although no formal demand therefore has been made, or default in the fulfilment of any covenant condition or stipulation expressed or implied in his lease on the part of the lessee to be performed relating to essential matters such as the use and conduct of the business, assignment, subletting, repair and maintenance and such default is continued for the space of 14 days after written notice by the lessor to the lessee, at the business address appearing on the first page hereof, to rectify such default or if repairs required by any notice to repair are not completed within the time therein specified then in any such case the lessor may re-enter the business and thereby determine the lease. Within 7 days of determination of the lease the lessee shall remove its plant and equipment, fixtures and fittings and goods from the premises failing which such plant and equipment, fixtures and fittings and goods have not been removed by the lessee shall be forfeited to the lessor and shall become the property of the lessor. Stock shall be valued at cost and an adjusting amount paid by one party to the other to reflect the change in value of the stock since the commencement of the lease. The lessee shall pay any money owing and comply with any other requirements under the lease of the premises and shall make good any damage to the plant and equipment, fixtures and fittings belonging to the lessor. … … 17. General agreements (a) Hours The lessee shall open the business for trading during all normal business hours for such a business. (b) Signage The lessee shall maintain in good state and condition all signs and advertisements for the business. (c) Business name (i) The lessor hereby consents to the registration with the Australian Securities and Investments Commission (ASIC) of a notification of change of the persons conducting a business and the lessee will effect such registration thereby notifying all third persons that they are dealing with the lessee when dealing with the business. Alternatively, if the business name of the lessor has not been registered, the lessor authorises the registration of the lessee as proprietor of the business name. The business name at all times remains the property of the lessor and is only available for use by the lessee during the currency of this lease. (ii) The lessee will provide the lessor with the ASIC key for the business name and authorises the lessor to utilise such key for the purpose of cancelling the registration of the lessee as proprietor of the business name and registering the lessor as proprietor of the business name on termination of this lease.
15. At the same time, Ms Xu in her personal capacity (described as the "Indemnifier") and Mr Lye on behalf of Waterwood (Waterwood being described as the "Indemnified Party") executed a document entitled "Share Transfer Indemnity Deed", the purpose and operation of which is sufficiently described by its recitals: A. At the request of the Indemnifier, the Indemnified Party has agreed to become the owner of all issued share capital in [MOOT]. B. The Indemnified Party intends to continue the activity details of which are set out in the attached schedule. [The attached schedule nominates the activity as "Management of Business known as Newport Mirage Hotel".] C. The activity may result in claims, directly or indirectly, against the Indemnified Party. D. The Indemnifier has therefore agreed to indemnify the Indemnified Party against all and any losses to any persons or property claimed, directly or indirectly, against the Indemnified Party arising from activity conducted prior to 1 March 2015 (Transfer Date), being the date of transfer of all issued share capital to the Indemnified Party.
16. For reasons which are set out in paragraph [30] below, the copy of the Share Transfer Indemnity Deed which in evidence has been marked as "Cancelled".
17. From early March 2015 Waterwood, through Mr Lye, took control of the Land and the operation of the Business, including MOOT's bank account for the Business. Mr Lye at least had password access to operate the account by internet banking. Income received from the operation of the Business was paid into MOOT's bank account. Expenses were paid by Mr Lye from that account. The employees who up to March 2015 had been engaged in the operation of the Business continued to be paid from MOOT's bank account.
18. The first monthly rental instalment of $48,833 was due in advance under the HLA.
19. On 30 March 2015 KOP received $113,333.33 for what was described as "Deposit and Lease pay". This was paid from MOOT's bank account.
20. On 1 April 2015 the second monthly instalment and balance of rent was due. Therefore as at that date $97,666 in rent was payable and Waterwood submits that it had in fact paid $128,333.33 (comprising the $15,000 deposit - see paragraph [18] above - and the payment made on 30 March - see paragraph [28] above).
21. On 10 April 2015 Ms Xu (again on behalf of KOP and described as "Lessor") and Mr Lye (again on behalf of Waterwood and described as "Lessee") entered into a Chinese language document entitled "Supplementary Agreement" (the "SA"). They prepared the SA without legal assistance. Given its somewhat unusual terms, it is necessary to reproduce the entire operative terms of the SA in translation (including deletions). After an amicable negotiation between the Lessor (hereafter referred to as Part A) and the Lessee (hereafter referred to as Party B), both parties make the following amendments and additions of part of the clauses regarding to Hotel Lease Agreement, Share Transfer Indemnity Deed, Debts Responsibility Agreements etc., signed on 5 March 2015. 1. Party A will not transfer the shares of MOOT HOTEL MANAGEMENT PTY LTD which belong to Party A to Party B; therefore, Share Transfer Indemnity Deed signed on 5 March 2015 by both parties will be revoked. 2. The interest relationship between Party A and Party B is "responsibility contract", i.e. Party B has contracted with Party A for operating the hotel mentioned in Hotel Lease Agreement; therefore, the name Hotel Lease Agreement will be amended as Hotel Responsibility Contracting Agreement. The term "Rent" in the original Hotel Lease Agreement will be amended as the term "Contracting Fee". The term "Lease" in the original Hotel Responsibility Contract Agreement will be amended as the term "contract". The original Hotel Responsibility Contract Agreement has both Chinese and English versions, the content of those two versions are the same. 3. Apart from charging contracting fee, Party A shall have no involvement in other dividends of the hotel. The contracting fee Party B pays to Party A shall exclude GST. Party B shall deal with dividend payments cautiously on the premise that not affecting Party A's mortgage from the Bank. Party A shall not participate in Party B's management; however, Party A is entitled to often know Party B's operation of the hotel. 4. Party B shall provide Party A's bank with statements and reports upon request on time, so that Party A's bank loan amount and the loan term can be successfully continued. Party B shall take full account of the bank's loan requirements for Party A. If Party A's bank loan amount reduced or stopped or the loan term cannot be renewed, Party B shall bear all the responsibilities. 5. Cooperation period for both parties: five-year contract started from 1 March 2015 to 28 February 2020. Priority Contract Period will start from 1 march 2020 to 28 February 2030. Priority Contract Period is divided into two stages. Every stage has five years; both parties shall negotiate the rent in each stage. The definition of Priority Contract Period is: if there are two or more than two competitors, under the same conditions, Party B may be given the priority to sign the next period of the contract. (Follow previous contract; follow one of the terms in the original Hotel Lease Agreement) 6. Within the contracting period stipulated in the original Hotel lease agreement, Party B shall undertake and deal with all debts, legal liabilities and responsibilities regarding to the hotel operation; Party A does not assume any joint liability. Party B shall pay to Party A the Bond on time according to the original Hotel lease agreement, within the period stipulated by both parties (no longer pay to the third party). 7. Party A shall issue a Letter of Attorney to Party B, so that during its business operation period, Party B can deal with its daily business affairs and bank transactions, etc. 8. If accidents happen to hotel property, Insurance Company would have compensation. The compensation for the property itself shall return to Party A for maintenance services; the compensation for business shall return to Party B; however, Party B shall pay the Contract fee to Party A without deductions. If Party B causes the damage to the hotel, and the Insurance Company would not compensate for it, Party B shall bear corresponding responsibility for repairing and compensation. 9. When contract expires, and Party B will no longer operate, party B shall return the hotel to Party A, and ensure that all facilities in the hotel should be intact and Party A can continue to operate normally. Party B leaves the hotel, settles all the debts, within seven days after the completion of transfer of the hotel assets and the completion of fulfilment of the original Hotel lease agreement, Party A will return the Bond to Party B (without interest). The hotel assets list and photos save in both parties' USB flash disks. 10. For Party B's convenience, Party B could continually use the original bank account of Party A's subordinate company MOOT HOTEL MANAGEMENT PTY LTED, with no longer changes. From 28 February 2015 (including the day), Part A no longer use the above bank accounts and credit cards and assume the liability of the debt obligations before the date (including the day); from 1 March 2015, all the debt obligations arising from the use of the above mentioned bank account and the corresponding legal liabilities shall be borne by the Party B. 11. If the terms of the Supplementary Agreement shall not coincide with the terms of the other relevant documents signed by both parties, the terms of this Supplementary Agreement shall prevail. 12. Both parties shall strictly observe the terms and conditions as stipulated in the signed legal documents, if any disagreement arises, both parties shall friendly negotiate, exclude objection, close cooperation, avoid unnecessary litigation. 13. Both parties may also sign an English version of this Supplementary Agreement, and the English version shall be consistent with the contents of this agreement. 14. Both parties shall mutually respect and friendly cooperate with each other, jointly maintain and enhance the reputation of the hotel. If Party B does anything which would damage the reputation of the hotel or runs any business which is not related to the hotel, regardless of Party A's repeated reminds and inactively deal with it, and which leads to any consequence for the hotel, Party A can early terminate the agreement. At the same time, Party B shall pay the required default fine to Party A. 15. Both parties own USB flash disks which contain the hotel asset list and photos. This USB flash disk is attached in this agreement. 16. This agreement is done in duplicate. Each party holds one.
22. It is not necessary for present purposes to delve into the details of why the parties entered into the SA. Ms Xu says one reason was that she did not understand the effect of what was being done in relation to her ownership of MOOT and the operation of the Share Transfer Indemnity Deed. The Court makes no finding about that. However there is some agreement that another reason was difficulties encountered with ANZ as KOP and MOOT's banker. The Court takes judicial notice from its own knowledge of mortgage documentation that the transfer of the complete beneficial ownership of MOOT as mortgagor, without ANZ's consent, was probably an event of default under the relevant loan facility documents (see paragraph [14] above).
23. On 10 April 2015 KOP received a further $17,500 from MOOT's bank account described in the banking records as "Lease Payment; Newport Mirage".
24. Between October 2014 to early December 2014 Ms Lihua Lu (also known as Lucy Lu) had been MOOT's accounts manager. When she left she handed over MOOT's financial records to Mr Lye. In early May 2015 Ms Xu appointed Ms Lu to review MOOT's accounts up to February 2015. Ms Lu's evidence was that as far as she was aware the purpose of her appointment was "to assist with finalising the adjustments with respect to the settlement of the change-over between" KOP and Waterwood.
25. On 18 May 2015 Ms Lu emailed Mr Lye, copied to Ms Xu's daughter, with a number of accounting and other queries which, at least in part, are the sort of accounting queries made when parties are agreeing adjustments as to pre and post completion liabilities in connection with the sale of a business.
26. On 28 May 2015 Ms Lu emailed Mr Lye: Hi Corey Thank you very much for your time yesterday. The settlement sheet and the accounts payable list have been updated according to what was discussed. Please let me know if you have any queries. Kind regards, Lucy Lu
27. The attached settlement sheet includes a number of items under a heading "Corey calculation" next to another heading "Lucy comment" and "Lucy calculation". It appears from the document that Ms Lu agreed with most of Mr Lye's calculations. The literal bottom line was an entry described as "payment to be made to the new management" (presumably by KOP) of $202,873.27.
28. On 3 June 2015 Mr Lye responded to Ms Lu (again copied to Ms Xu's daughter) by an email headed "Settlement final" which included: Hi Lucy, I would like to confirm that the final settlement as below. As per Lucy settlement sheet $ 202,873.27 Plus adjustment as per discussed Romeo's Chair Event Stylists $ 6,316.16 Aberfeldie Systems Pty Ltd $ 2,750.00 Gas - Energy Australia $ 3,051.51 Valleview Pty Ltd $ 214,990.94 May15 Rent -$ 50,416.67 June15 Rent -$ 50,416.67 Payment to be made to the new management $ 114,157.61

1. According to Mr Lye, at a meeting at the Business on 5 June 2015 attended by Ms Xu and Ms Lu, Ms Xu told Mr Lye that she would not agree to the final settlement figures unless Waterwood agreed to pay tax liabilities of $138,631.00 which, according to Mr Lye, related to the operation of the Business prior to 1 March 2015. Mr Lye contended that those were not liabilities that Waterwood had to pay. His evidence is that in order to get Ms Xu's agreement to the final settlement figures, he caused Waterwood to pay those tax liabilities. Those liabilities were again paid out of MOOT's bank account for the Business. Mr Lye also says that it was not until 5 June 2015 that he was informed that he had been removed as a director of MOOT and that the transfer of Ms Xu's shares in MOOT had been reversed.
2. Despite paying the tax liabilities, later on 5 June 2015 Ms Xu, excluded Waterwood's executive staff and purported to take control of the Land and the Business.
3. On 6 June 2015 KOP gave a notice in Chinese addressed to Waterwood: About the termination between the parties. In relation to your company and your representative's breach of clause 15(a) of Hotel Management Agreement and clause 14 of Supplementary Agreement, our company decided to take back the business from 5 June 2015 and terminate the lease. Your company has to clear all the debts within the deadline, otherwise, our company will sue your company and your representative for all liabilities.
4. Also on 6 June 2015 Ms Xu wrote a long letter in Chinese to Mr Lye. With no disrespect intended, that letter is very discursive. In essence it makes allegations against Mr Lye of embezzling funds, refusing to pay taxes (this is a reference to the email of 5 February 2015 - see paragraph [19] above), failing to enter into appropriate insurances for employees and ignoring warnings from the Australian Taxation Office. The letter concludes (emphasis in original): For the purpose of preventing you breaching any laws, saving your political career and our hotel's reputation, according to Clause 14 of the Supplementary Agreement, I feel sorry that we have to inform you, from 5 June 2015, parties are to terminate all agreements, and all accounts and other breaches of the agreement will be investigated. We hope that you could understand this letter and reflect on it carefully. For your honour, your licence, your future life and happiness, you should know what to do. If you could repent of what you did, and could cooperate with our company for handover of all the accounts, out company will not pursue your legal liabilities or complain to Accountants Association against your problems. If you could not, our company shall reserve both rights and hold you liable for default fines.
5. On 9 June 2015 Waterwood's solicitors wrote to KOP setting a deadline of 5.00pm on Wednesday 10 June 2015 for KOP to restore possession of the Land and Business to Waterwood. Failing compliance, the letter threatened the commencement of proceedings including injunctive relief of the kind that was ultimately sought two days later.
6. Also on 9 June 2015 Ms Xu on behalf of KOP wrote another letter in Chinese to Waterwood generally restating, although more briefly, the contents of the letter referred to in paragraph [41] above.

Waterwood's difficulties

1. From a traditional conveyancing perspective, the history set out above can only be politely described as a mess. Insofar as Waterwood claims to be entitled to operate the Business on the Land, Waterwood has at least three fundamental legal problems.
2. Possibly the only clear and straightforward aspect of this matter is the initial legal position. KOP owned the Land. MOOT owned the assets which comprised the Business and employed the persons who worked in the Business. Waterwood's problems begin where that clarity ends.
3. First, by the HLA KOP purported to grant a lease of something it did not own (the Business) and failed to grant in terms a lease of what it did own (the Land). Clearly intended to be a lease of the Business, it is difficult to see how the HLA operates as a lease of the Land. The HLA contains no operative provision of demise of the Business or the Land, although this defect can be overcome in relation to the Business by reading Recital B (see paragraph [23] above) as an operative provision. While that course was anathema to an earlier generation of black‑letter lawyers, it is common enough today where the customary prohibition against including operative provisions in the recitals is often applied more in the breach than the observance. Even in what might be thought to have been stricter times it was accepted that "a recital in a deed may operate as a covenant, where it appears to have been the intention of the parties that it should so operate" (Norton on Deeds, Sweet & Maxwell Ltd, London, 1928, p 215).
4. Second, Waterwood has a problem of privity. MOOT, which does own the assets of the Business, is not a party to the HLA. Nor is it referred to anywhere in the HLA. For example, there is no express obligation on KOP to procure MOOT to do anything with the latter's assets for the benefit of Waterwood. Nor is there any pleading or evidence that there was any type of relationship between KOP and MOOT whereby KOP could bind MOOT (for example, agency or partnership).
5. Third, Waterwood no longer controls MOOT, the latter being the company which owns the assets and employs the employees of the Business. While perhaps technically cumbersome, what occurred on 5 March 2015 with effect from 1 March 2015 made legal and commercial sense: Waterwood acquired the shares in MOOT, Mr Lye became MOOT's sole director and Waterwood had the benefit of an indemnity from Ms Xu for MOOT's pre-acquisition liabilities. However, there is no evidence of any agreement pursuant to which those steps were taken. Paragraph 5 of Waterwood's Statement of Claim (see paragraph [50] below) pleads that those steps occurred "incidental to the [HLA]" but it does not specify by what legal obligation those steps were taken (for example collateral contract or implied term). In any event, Waterwood's rights in relation to MOOT, in particular the all important question of control of MOOT's bank account, are now governed by the unusual arrangements set out in clauses 4, 7 and 10 of the SA (see paragraph [30] above). However, to describe those arrangements as unusual is not to conclude that they are illegal or unenforceable.

Waterwood's claim

1. Waterwood's statement of claim needs to be read cognisant of the difficulties referred to in the preceding paragraphs. In order to maintain the ex parte orders and to obtain the additional order which it seeks, Waterwood must satisfy the Court that there is a serious question to be tried as to its entitlement to the final relief which it claims. That final relief is: Final Relief 1. An order that the first defendant by itself, its employees and agents be permanently restrained from interfering with possession, control, management, operations and ownership of the New Port Mirage Hotel located at 2 Queens Parade West Newport for the term of the lease, namely 5 years from 5 March 2015 and for each consecutive term of 5 years namely a total of 15 years. 2. An order that the first defendant by itself, its employees and agents be restrained from entering the premises at 2 Queens Parade West Newport and otherwise interfering with the lease and management rights of the plaintiff in respect of the Newport Mirage Hotel and its premises known as 2 Queens Parade West Newport for the term of the lease, namely 5 years from 5 March 2015 and for each consecutive term of 5 years namely a total of 15 years. 3. An order that the first defendant by its employees and agents not interfere with the shareholdings and the management and control of the second defendant for the term of the lease, namely 5 years from 5 March 2015 and for each consecutive term of 5 years namely a total of 15 years. 4. A declaration that the agreement being the hotel lease agreement as between the plaintiff as lessee and the first defendant as lessor made on the 5th March 2015 in respect of the lease of the business known as Newport Mirage Hotel is valid and enforceable and ought to be specifically performed. 5. A declaration that the agreement being the supplementary agreement made 10 April 2015 in part varying the Hotel Lease Agreement is valid and enforceable and ought to be specifically performed to the extent that the parties intended to create legal rights and obligations as between each other from it, namely as to the obligation to pay Goods and Services Tax bit (sic) otherwise that it be declared invalid and unenforceable and of no legal effect. 6. An order that the hotel lease agreement as so varied be specifically performed. 7. Orders and directions for the implementation of order 6. 8. An order that the lodgement of share transfers and directorship changes in the second defendant as lodged with ASIC was invalid and of no consequence. 9. Further and in the alternative damages for breach of contract and judgment against the defendants jointly and severally in an amount of $4,500,000.00 or such other amount as to be assessed by the Court. 10. Further and in the alternative a claim for monies had and received in the amount of $499,455.27. 11. Interest. 12. Costs.
2. Waterwood's claim for final relief must itself be understood by reference to the case which it pleads. The most pertinent parts of its Statement of Claim are: … 4. At all material times the plaintiff and the first defendant negotiated an agreement which agreement was in writing and executed on 5 March 2015 and styled the Hotel Lease Agreement. Particulars a. the agreement was in writing both in English and the Chinese Language; b. it was an essential term of the hotel lease agreement that the term of the agreement was for 5 years with a further term of 5 years and a further term of 5 years thereafter, namely 15 years; c. it was a further essential term of the hotel lease agreement that the lease provided for handover of the business namely the New Port Mirage Hotel and the premises at 2 Queens Parade West Newport from the first defendant to the plaintiff such that the plaintiff would have the lease and control of the premises and the business for the term; d. it was a further essential term of the Hotel Lease Agreement that the plaintiff would pay to the defendant the sum of $505,000 by equal monthly instalments inclusive of GST which was then varied to be exclusive of GST. The lease provided for other outgoings and for the bond; e. The plaintiff otherwise pleads the whole of the hotel lease agreement as if its terms are set out here in full. f. The above essential matters arose expressly and by implication. 5. Incidental to the hotel lease agreement the first plaintiff caused all the shares in the second defendant to be transferred to the plaintiff, the second defendant being identified as the operating entity of the Hotel for mortgagee purposes such that the plaintiff would have ownership and control of the second defendant during the term of any lease such that in turn the first plaintiff through its employees and agents could operate and control the banking records to meet the mortgage obligations. 6. In fact on 5 march the Hotel Lease Agreement was performed in that the first defendant handed over the premises and the business to the plaintiff whereby the plaintiff commenced to operate the business and manage the premises and otherwise the plaintiff by 10 April 2015 had made the following payments to the first defendant in performance of the hotel lease agreement, namely: a. $45,000 by way of bond despite such amount not being due yet on a reading of the lease though which the plaintiff accepted was now due; b. two payments of $50,416.67 being the rent for March and April 2015. 7. In further performance of the Hotel Lease Agreement the first defendant attempted to cause the employees and agents of the plaintiff to take control of the bank accounts of the second defendant but encountered obstruction by the mortgagee. 8. In fact on the 10 April 2015 to overcome mortgagee obstacles and not otherwise to in fact alter the true intent of the Hotel Lease Agreement the plaintiff and the first defendant executed a supplementary agreement which only bind aspect was the need to pay GST and otherwise was to have no legal effect and consequence as between the plaintiff and the defendants. …

Waterwood's submissions

1. Waterwood did not demur from the proposition that it bore the onus of satisfying the Court that Waterwood was entitled to the continuation of the ex parte orders. Its arguments may be summarised as: 1. No monetary default justifying the termination of the HLA had been established on the evidence. On the contrary, the evidence supported the conclusion that Waterwood was entitled to a credit even after adjustments had been made. 2. Even if there had been a monetary default, Waterwood was entitled to relief against forfeiture. KOP could not rely on any non-payment of rent (if there was any) while Waterwood was ready, willing and able to pay the rent and KOP's costs as lessor. 3. No other non-monetary default under the HLA had been proven and, in any event, no notice to remedy such default had been given under Clause 15(a) of the HLA. In the absence of such a notice the purported re-entry was invalid. 4. The lease of the Business, which included goodwill attached to the Land on which the Business is conducted and which is inseparable from it, gave Waterwood an equitable interest in the Land which could be protected by a constructive trust: The South Yarra Project Pty Ltd v Gentsis [1985] VR 29 ("Gentsis"). 5. KOP and MOOT were adequately protected by the undertaking as to damages and the undertaking to keep proper accounts of the Business. 6. KOP and MOOT also had comfort from the fact that Waterwood was seeking specific performance. It was therefore in Waterwood's interest to maintain the assets and goodwill. Mr Lye and his team were experienced in the management of the Business. 7. As the conduct of the Business was intimately connected to the Land, these proceedings were analogous to cases for specific performance of a contract for sale of land where the unique quality of the subject matter meant that damages were not an adequate remedy.

KOP and MOOT submissions

1. The defendants' submissions may be summarised as: 1. The statement of claim fails to disclose any question to be tried as against MOOT. No basis for MOOT being liable for anything is pleaded anywhere. In relation to KOP, the Statement of Claim fails to identify what provision of the HLA has been breached. 2. The Business is operated by MOOT. MOOT pays the wages of all the staff and maintains insurance. The bank account into which the Business' revenue is received is MOOT's bank account and it is MOOT which is the income earning entity. Waterwood cannot identify any document whereby MOOT agreed to sell the Business or its shareholding to Waterwood. Nor can Waterwood identify any transaction whereby MOOT relinquished its ownership or control of the Business. The ex parte orders currently operate to prevent MOOT from conducting what is plainly its Business. 3. Insofar as Waterwood seeks relief against forfeiture of the Land, any such relief is futile because Waterwood does not own or operate the Business on the Land. It is pointless to reinstate Waterwood to the Land if it has no rights to the Business. 4. Waterwood has failed to demonstrate that it has paid the rent or that it is ready, willing and able to pay any outstanding rent, expenses and the like to obtain the indulgence of being permitted to re-enter the Land. Waterwood cannot rely on the income of the Business to demonstrate that it is able to meet its financial obligations under the HLA because Waterwood has no entitlement to the Business. 5. Waterwood has failed to establish that its undertaking as to damages is not worthless. Waterwood has a paid up capital of $100. Searches and inquiries in evidence demonstrate that it has no independent cash reserves and that it has no real property. Insofar as Mr Lye has offered to give a personal undertaking as to damages, there is again no evidence that Mr Lye has the means to satisfy such an undertaking. 6. Maintaining the status quo only allows Waterwood to continue to operate a business that it does not own. This prejudices at least two categories of third parties. First, persons wishing to have a function at the Business are contracting with Waterwood, which does not own the Business and has no entitlement to hold itself out as the operator of the Business. Second, employees are left in the invidious position that they remain employed by MOOT but are subject to the directions of persons who do not represent MOOT and with whom they have no contractual relationship. Nor have they consented to enter into a relationship with Waterwood, which would normally be the case in a sale of business assets (as opposed to a sale of shares in the operating company) where employees' contracts are terminated on the sale and they are made offers of new employment by the incoming purchaser. 7. Waterwood has failed to demonstrate why damages would not be an adequate remedy. Waterwood alleges a breach of contract and includes a damages claim in its pleading. KOP owns the Land which it purchased in June 2014 for almost $9,000,000. There is adequate equity in the Land (see paragraph [14] above) so it could not be said that KOP would not be able to pay any damages. 8. An injunction has the effect of forcing the parties to continue in a relationship that has irretrievably broken down. 9. There was evidence that Mr Lye was now seeking to dismiss employees who were not employed by Waterwood but are employed by MOOT, thereby interfering with contractual relations and exposing MOOT to the possibility of claims for breach of contract.

Resolution

1. The Court accepts Mr Sirtes SC's submission that in granting interlocutory relief it is not for the Court to seek to make good the deficiencies in whatever bargain the parties have made. While it is clear from a legal point of view that the HLA as amended by the SA is a mess, that did not mean it was for the Court to try to clean up that mess, particularly through the medium of interlocutory relief.
2. The Court accepts that it may be possible, if the evidence is available, that through the application of any or all of the law relating to various forms of estoppel, statutory and common law misrepresentation, interpretation of contracts, implication of terms and rectification that Waterwood could plead a case that might give it title to both the Business and the Land. But it is not for the Court to find that case for Waterwood. The Court can and should only deal with the case which Waterwood has pleaded and the evidence which it has adduced. That means that Waterwood's case must rise and fall on the basis of the effect of the HLA pleaded in paragraph 4 of Waterwood's statement of claim (see paragraph [50] above). Even that pleading has been in part superseded by Waterwood's sensible concession that, contrary to the allegation in paragraph 8 of its statement of claim, the SA was intended by the parties to it to have legal effect according to its terms, whatever they might mean. Therefore, the HLA had to be read with the SA. However, the parties to the SA are again KOP and Waterwood without MOOT.
3. In the course of address Mr Sirtes SC did not abandon the defendants' submissions that rent was outstanding and that Waterwood had breached the HLA. However, he did not put those arguments at the forefront of his submissions. Rather, he focused the defendants' attack on the matters which have been identified as Waterwood's difficulties in paragraphs [44] to [48] above, in particular the fundamental problem of how Waterwood could demonstrate it had any rights against MOOT at all. The defendants were correct to take that approach because it is far from clear that Waterwood is in arrears of its rent or that it has committed some non-monetary breach of the HLA.
4. Before turning to the reasons why the Court has concluded that the ex parte orders should be discharged, I should first dispose of one of the defendants' preliminary submissions, namely that a "lease of a business" is not something known to the law. This question was considered by Palmer J in Harrington v Harrington Services Pty Ltd (in liq) [2002] NSWSC 859; (2002) 11 BPR 20,211. Sharing Palmer J's feeling that the "lease of a business" sounds a little strange to a black-letter property letter, I respectfully adopt his Honour's analysis: 7 Throughout the case both parties have used the expression "lease of the nursing home business". I do not think that there is any difference between the parties as to what is meant by that concept although, as a concept, it sounds a little strange to a black-letter property lawyer. In strict legal usage, the subject matter of a lease is confined to land and interests in land, in the earlier cases referred to as corporeal and incorporeal hereditaments: see e.g. The Sheffield Wagon Company Limited v Stratton (1878) 40 LT(NS) 86, at 87; Jones v Commissioner of Inland Revenue [1895] 1 QB 484, at 493. But there had been even earlier cases in which the Courts saw nothing remarkable in speaking of "leases" of chattels or "reversionary interests" in chattels: see e.g. Spencer's Case (1583) 5 Co. Rep. 16a, at 16b; Gordon v Harper [1796] EngR 2493; (1796) 7 TR 9 (101 ER 828) per Lord Kenyon at 11, and per Ashurst J ibid; Jenkins v Cooke 1 Ad&E 372, at 374 (110 ER 1248, at 1250). 8 The later cases recognise that in popular and commercial parlance what might be more properly called a bailment or a hiring of chattels is sometimes referred to as "a lease": see e.g. Halsbury's Laws of England Vol.27(1) para.17 fn.11. A "lease" of a business, however, would encompass more than a bailment of the chattels used in the conduct of that business. It would often include a lease of the premises in which the business is conducted, and it would always include a lease of the goodwill attached to the business since the goodwill of a business is inseverable from the business itself: Geraghty v Minter (1979) 142 CLR 177, at 193; Hepples v Federal Commissioner of Taxation [1992] HCA 3; (1992) 173 CLR 492, at 542; Federal Commissioner of Taxation v Murry [1998] HCA 42; (1998) 193 CLR 605, paras.23 and 30. I do not see why the term "lease" should not be applied to an agreement the subject matter of which is a business rather than a corporeal or incorporeal hereditament if all the essential hallmarks of a lease are to be found in that agreement. The essential hallmarks are well known: the lessee is granted exclusive possession of the subject property for a term certain or capable of being made certain; the lessee pays rent during the term and at its expiration is required to redeliver possession of the property to the lessor. 9 So, in the present case what Mr and Mrs Harrington claim as "a lease of the nursing home business" would have to be an agreement whereby the "lessors", i.e. Mr and Mrs Harrington, grant to the "lessee", i.e. Harrington Services, the exclusive possession of all that bundle of rights and interests called "the nursing home business" for a term certain or capable of being made certain by the giving of notice, the "lessee" during the term of "the lease" being entitled to retain the profits of the business while paying a "rent" to the "lessors", and the "lessors" having during that time a "reversionary interest" in the business. 10 The "bundle of rights and interests" which constituted the nursing home business, and of which Mr and Mrs Harrington would have to grant exclusive possession and enjoyment to Harrington Services, would have to include: possession of the Sydney Street land and the improvements thereon, use of the name "Trentham", use of all chattels, fixtures, fitting, plant and equipment owned by Mr and Mrs Harrington and used in the conduct of the nursing home business and, most importantly, the goodwill of the nursing home business. Was such an agreement made?
5. The definition of business in the HLA, including as it does goodwill (see paragraph [23] above) satisfies so much of Palmer J's analysis of what is required for the lease of a business. However, that is no answer to Waterwood's fundamental difficulty that KOP did not own the Business. It is to that issue to which the Court now turns as the first of six reasons for its conclusion that the ex parte orders should be discharged.
6. First, Waterwood has failed to demonstrate that there is a serious question to be tried as to its entitlement to the Business in circumstances where KOP did not own the assets or employ the employees which comprised the Business. Waterwood's statement of claim does not plead any basis for what might be described as an equity against MOOT which would form the basis of a final order compelling MOOT, as the owner of the Business, to give Waterwood possession of the Business as lessee.
7. Putting the matter slightly differently, Waterwood's statement of claim completely fails to address the issues identified in paragraphs [44] to [48] above as Waterwood's difficulties. For example, it is no answer for Waterwood to point to Recital A of the HLA (see paragraph [23] above) which records that KOP is the owner of the Business. While that recital may have consequences for the case as between KOP and Waterwood arising from an estoppel by deed, it cannot affect MOOT as a non-party to the HLA. Nor would such an estoppel prevent the true position being relied upon by Waterwood for rectification or possibly rescission for misrepresentation (see N. Seddon, Seddon on Deeds, The Federation Press, 2015, para [5.5]). Furthermore, Waterwood's reliance on Gentsis (see paragraph [51] above) does not assist it. In that case the lessor undoubtedly had an interest both in the land and the business which it leased. At least as presently pleaded, Waterwood's argument does not surmount the difficulty that MOOT is not a party to the HLA.
8. Second, damages are an adequate remedy. The Court does not accept Waterwood's submission that because it is, on its case, the lessee of both the Land and the Business, the Court's usual reluctance to accept that damages are an adequate remedy in cases about land applies to the case at bar.
9. Waterwood's case is primarily that it is the lessee of the Business with an incidental and necessary right to occupy the Land. Putting it another way, Waterwood's entitlement (if any) is to occupy the Land for the purpose of it conducting the Business. Waterwood's claim for specific performance is in essence a claim in ejectment to recover possession of the Business and the Land. Assuming it succeeds at final hearing, Waterwood's damages would generally be limited to loss arising from the period of KOP and MOOT's wrongful occupation of the Business and Land. Such claims for damages in relation to land, broadly described as mesne profits, are well understood by the law (see McGregor on Damages, Sweet & Maxwell Thomson Reuters, 2014, [1360] ff). On the other hand, if Waterwood is unable to establish a right to reoccupy the Business and Land, but is otherwise entitled to damages for breach of the HLA (perhaps referable to the profits it expected to make from the Business), this is again a process familiar to the law. Waterwood has been unable to demonstrate there is something unique about the Business for which it could not be adequately compensated by damages.
10. Third, the Court accepts the defendants' submission that even if the HLA gives Waterwood the right to occupy the Land, there is no utility in making an interlocutory order for it to do so when it has failed to demonstrate a serious question to be tried on its current case as to how it says it is entitled to operate the Business on the Land.
11. Fourth, the arrangement to which the parties have come in the SA for the operation of MOOT's bank account set out in paragraphs 4, 7 and 10 of the SA (see paragraph [30] above) are, at worst, unclear and, at best, convoluted. On any view they appear to contemplate a necessary degree of ongoing co‑operation between the parties both in dealing with each other and in dealing with ANZ as MOOT's bank and mortgagee. Equity is traditionally reluctant to enforce by way of specific performance obligations which require personal co‑operation between parties whose relationship has broken down. The best example of this is in relation to attempts to enforce contracts of employment. However, that is only an example of the application of a more fundamental principle derived from an understanding of human nature and common sense. The law will only come into disrepute if it forces people to continue to cooperate with each other when the relationship of personal trust has broken down. That appears to be the case in the present proceedings.
12. Having access to MOOT's bank account is a practical, critical requirement for Waterwood. So much is apparent both from the parties' attempt to agree something about that access in the SA and from the further interlocutory order for which Waterwood presses in the present application (see paragraph [8] above). But any trust between the parties has clearly broken down. The discretionary consideration referred to in the preceding paragraph is a further reason why the Court both declines to extend the existing orders and declines to make the further orders sought by Waterwood.
13. Fifth, the Court accepts the defendants' submission that, as a matter of discretion, the Court should not continue the existing orders because of the difficulty in which it places third parties, being the employees of the Business and those who wish to deal with the Business including, for example, people who might wish to book for a major event such as a wedding.
14. Waterwood submitted that MOOT had not proven it still employed the Business' employees. That submission is rejected. The evidence shows the employees are paid out of MOOT's bank account. There is no evidence that as at 1 March 2015 the employees were terminated as employees of MOOT and were re-hired by Waterwood. Prima facie they are Waterwood's employees. An eloquent example of Waterwood's position is provided by the employment of a new head chef not by MOOT or Waterwood but by Mirage F & B Pty Ltd t/as Newport Mirage Restaurant, a company registered on 1 May 2015 and controlled by a person with the same surname as Mr Lye.
15. Employees who were employed before 1 March 2015 will find themselves in the invidious position of being directed in their duties by persons who do not represent their employer. The relationship of employer and employee is a fundamental social contract and employees are entitled to know what their precise legal position is, from whom they are required to take direction and, importantly, against whom they may have recourse in the event of some difficulty in the relationship.
16. The same proposition about certainty of contract arises in relation to third parties who, in good faith, deal with Waterwood in connection with the Business. The Court will be slow to continue a situation where Waterwood enters into contracts with innocent third parties in connection with significant events such as weddings or other major functions in circumstances where there is a real doubt as to Waterwood's title to the Business. It is not a sufficient answer to say that those parties might have an action against Waterwood for breach of something such as an implied warranty of authority.
17. Sixth, and finally, in circumstances where it appears a plaintiff has a weak case, the issue of a plaintiff's capacity to meet any undertaking as to damages becomes a more significant issue in the interlocutory equation. The searches undertaken by the defendants have not disclosed any real property owned by Waterwood. A notice to produce for Waterwood's financial records has produced only accounts for the Business. The Court infers that Waterwood was established for the purposes of running the Business. The only evidence of any assets apart from whatever its rights under the HLA may be, is its paid up capital of $100.
18. At the hearing of the defendants' motion an undertaking as to damages was also proffered to the Court from Mr Lye personally. However, that was not accompanied by any evidence as to his personal circumstances. In considering the question of the adequacy of any undertaking, what the Court does know is that other than the $15,000 in deposits (see paragraph [18] above), all the other payments purportedly made under the HLA, as well as the payment of the disputed tax liabilities, were made from the operating account of the Business held by MOOT. In other words, all of those payments appear to have been made out of operating revenue of the Business rather than from the independent resources of MOOT or Mr Lye. Taking these matters together, the Court is not satisfied that MOOT's undertaking as to damages has any value or that any additional value is provided by the further undertaking offered by Mr Lye personally. While not the decisive consideration, this conclusion is an additional reason for the Court's decision not to extend the existing orders.

The statement of claim

1. Mr Burchett, for Waterwood, accepted during the course of argument that, whatever happened, the statement of claim would require amendment. KOP and MOOT submitted that the statement of claim ought to be struck out with leave to re-plead. In paragraph 7 of the outline of KOP and MOOT's submissions in support of the defendants' motion (the overall effect of which is summarised in paragraph [52] above), they made eight specific complaints about the form of the statement of claim. Those complaints are justified.
2. Furthermore, as the Court has already observed, in its current form the statement of claim completely fails to grapple with the problem of how Waterwood says MOOT has any enforceable legal, equitable or other obligations to Waterwood in respect of the Business when MOOT is not a party to either the HLA or the SA. Insofar as Waterwood wishes to assert any entitlement to the Business it will have to re-plead its case. The statement of claim will be struck out with leave to Waterwood to re-plead.

Orders

1. Subject to affording the parties an opportunity to be heard as to their precise form, the Court proposes to make orders to the following effect: 1. Orders 5 and 6 made on 12 June 2015 are discharged. 2. The statement of claim is struck out. 3. The plaintiff has leave to file and serve an amended statement of claim on or before 20 July 2015. 4. The plaintiff is to pay the defendants' costs of the defendants' notice of motion filed 15 June 2015. 5. The proceedings are listed before the Registrar for directions on 23 July 2015. 6. The exhibits are to be returned to the parties to be held by them in accordance with paragraph 28 of Practice Note SC Gen 18.

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: 30 June 2015