Federal Court of Australia

Williams v Albarran (Interlocutory Relief) [2026] FCA 680

ORDERS

THE COURT ORDERS THAT:

1.    The First Applicant be granted leave pursuant to s 237 of the Corporations Act 2001 (Cth) to bring these proceedings on behalf of the Third Applicant and the Fourth Applicant.

2.    Upon the Applicants giving the usual undertaking as to damages, an interlocutory injunction that, until further order, whether by themselves, their officers, servants, agents, or howsoever otherwise, the Respondents be compelled to:

(a)    deliver up to the Second Applicant all property, documents and information taken from in and around the cellar door building at the Montague Estate Property; and

(b)    deliver up to the Second Applicant the keys to the main wine shed and the cellar door building located at the Montague Estate Property.

3.    The claim for interlocutory relief in the Applicants’ Originating Application filed 25 March 2026 otherwise be dismissed.

4.    The costs of the application for interlocutory relief in the Originating Application be the respondents’ costs in the cause.

5.    The parties have leave to apply by email to the chambers of Needham J on two days’ notice.

6.    Order 1 of the Orders made by Lee J on 25 March 2026 is vacated.

THE COURT NOTES THAT:

A.    The Respondents have informed Westpac Bank to release the stop on the Second Applicant’s debit card ending x6768.

B.    The Orders made on 21 May 2026 are no longer in effect, upon the delivery of judgment on the Applicants’ Interlocutory Application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

NEEDHAM J:

1    Mr Williams, the first applicant, is the sole director of each of:

(a)    the second applicant, Montague Estate VY Pty Ltd (Montague No.2);

(b)    the third applicant, Montague VY No1 Pty Limited in its own capacity and as trustee for the Montague Trust (Montague No.1); and

(c)    the fourth applicant, U Minerals Pty Limited (U Minerals).

(together, the applicants).

2    The first and second respondents were the receivers of property owned by two of the applicants, appointed by the third respondent, Blackbird Mortgage Corporation Pty Ltd (Blackbird) pursuant to secured loans. The loans are each in default. The applicants plead that the respondents are liable to them by reason of a range of alleged breaches, arising (inter alia) out of claims of unfair contract terms, breach of duty as receivers, misleading and deceptive conduct, and unconscionable conduct.

Background

The parties

3    In addition to the directorships noted above, Mr Williams was also the former director of Montague Estate Pty Limited (in Liquidation) (Montague Estate (in liq)) which has been in liquidation since November 2024.

4    Montague No.2 and Montague No.1 are companies in the business of producing and selling wine in the Margaret River region of Western Australia. Montague No.2 is the primary business entity which owns and is responsible for selling the wine produced by the estate, while Montague No.1 is the owner of the three vineyard properties, being the Montague Properties referred to in the Originating Application.

5    U Minerals is a company which holds various assets in relation to mining tenements and royalties, most relevantly:

(a)    royalty entitlements under a Gross Production Royalty Deed (GPRD) of $20/oz for gold extracted across various tenements; and

(b)    a mining tenement E77/2784 located in the Mt Holland mining region of WA (the WA tenement), intended to form part of a project referred to as the Wesfarmers opportunity.

6    The first and second respondents, Richard Albarran and Brent Kijurina, are each a director and shareholder of Hall Chadwick (jointly referred to as the Receivers).

7    The third respondent, Blackbird, is a member of the group of companies known as the Blackbird Capital Group.

8    Blackbird’s business model was the subject of evidence, some of which was confidential. In very broad terms, the funds lent out by Blackbird are provided in part by investors who receive interest on their funds and are either paid out at the end of a loan or their funds are “recycled … into further lending opportunities”.

Is leave required for the first applicant to bring proceedings in the name of Montague No.1 and U Minerals?

9    Order 1 of the interlocutory relief sought is that the first applicant be granted leave pursuant to s 237 of the Corporations Act 2001 (Cth) to bring these proceedings on behalf of Montague No.1. In their submissions, the applicants sought to extend this leave to U Minerals. The respondents take no view on whether leave should be granted. The applicants pointed me to the decision of the Full Court in Ernst & Young (Reg) v Tynski Pty Ltd [2003] FCAFC 233; 47 ACSR 433. The Court (Branson, Marshall and Stone JJ) said (at [24]):

It is not, we think, open to dispute that directors of a company have the capacity, notwithstanding the “apparently all-embracing terms” of a debenture and the appointment of a receiver and manager to instruct solicitors to institute proceedings in the name of the company to challenge the debenture: Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782 per Street J at 790-1; Deangrove Pty Ltd (recs and mgrs apptd) v Commonwealth Bank of Australia (2001) 108 FCR 77; 37 ACSR 465 per Sackville J esp at [40].

10    On the basis of whether such leave should be granted only on the provision of security, the applicants submitted on the basis of what the Full Court said in Tynski at [26], security is only ordinarily provided where a director seeks to commence and maintain proceedings in the name of the company to which receivers are appointed. They point to a number of factors which take this case out of the ordinary rule:

(a)    the first applicant and Montague No.2 have granted indemnities to the respondents by way of the securities;

(b)    those indemnities would not extend to successful claims against the Receivers in their own capacities or Blackbird were it found that they were party to a system of unconscionable conduct; and

(c)    the high default interest rate would put the respondents in a better position if it were successful and able to enforce the securities.

11    In those circumstances, the applicants contend that either no leave is required, or to the extent that is required, the first applicant would satisfy ss 236 and 237 of the Corporations Act.

12    I am of the view that leave would be required. I have considered the matters set out in s 237(2) and am satisfied of the matters therein, in particular that the proceedings are in the best interests of those two companies and that they would not have been brought by the receivers. As the receivers and third respondent are already the recipients of indemnities from both of those companies, leave may be granted on that basis. I am content to grant leave to the first applicant to bring these proceedings on behalf of Montague No.1 and U Minerals.

The proceedings

13    This matter was listed for hearing in respect of the interlocutory relief sought in the applicants’ Originating Application filed on 25 March 2026. On that day, the matter came before Lee J as Duty Judge who made orders restraining the respondents from selling or dealing with any assets of the applicants, and from attending three properties referred to in the Originating Application, without provision of three business days’ written notice to the applicants’ solicitors. Lee J granted liberty to the parties to apply to the Duty Judge for variation of those orders, and for the matter to be docketed in the usual way.

14    The matter was docketed to me before any Duty Judge application for variation was made. At the first case management hearing on 28 April 2026, I made orders for the timetabling of pleadings. On that occasion the matter was also listed before me on 19 May 2026 in relation to the interlocutory relief sought in the Originating Application. The applicants have since filed a Statement of Claim and the respondents are due to file their defence by 5 June 2026.

15    The Receivers resigned their appointment on 18 May 2026, and notified that to the first applicant on 19 May 2026, just before or perhaps during the hearing of the interlocutory application which was listed for that day. By letter of 15 May the solicitors for Blackbird had given the three days’ notice contemplated by Lee J’s orders notifying that it intended “to take possession of the secured property the subject of the Security pursuant to its rights under the Facility Agreements … as mortgagee in possession”. After the hearing on 19 May, I requested that the parties agree on the terms of an interim injunction preserving the position as ordered by Lee J pending delivery of these reasons. The parties were unable to agree and so the matter was relisted on 21 May 2026. On that date, the parties agreed to orders that the respondents would not take any steps to sell or deal with the secured assets of the relevant applicants, and that the applicants would not deal adversely with any secured property, until I was able to give my reasons on the application for the injunction.

16    The applicants seek to restrain the respondents from seeking to move on the securities, and an order delivering up the second applicant’s property seized by the first and second respondents. They also seek an order under s 57 and/or s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) to appoint new receivers to replace the Receivers, who had been appointed by the third respondent.

17    The applicants relied on two affidavits of Mr Williams and an affidavit of Nicholas Driver, solicitor for the applicants. The respondents relied on three affidavits of Robert Moulden, the Chief Operating Officer of the third respondent. The respondents sought confidentiality orders over parts of Mr Moulden’s affidavit sworn 18 May 2026, which were granted. The respondents also relied on an affidavit of Michael James Calneggia, owner of Calneggia Family Vineyards and a director heading the advisory division at Boutique Property and Advisory, in relation to wine in storage.

18    None of the deponents was cross-examined, as is appropriate on this interlocutory application. Accordingly, none of the evidence summarised in these reasons has been tested in any way.

The loans

19    By July 2025, Montague No.1 was subject to a winding-up application following a statutory demand in relation to an alleged loan of approximately $1.9m owed to Montague Estate (in liq), and outstanding monies owed to ANZ Bank. Mr Williams decided to place Montague No.1 into voluntary administration, using Hall Chadwick, as he understood that it was able to assist with commercialising the assets held by U Minerals in order to pay these debts.

20    On 7 August 2025, Mr Williams received confirmation that Montague No.1 had been formally placed into voluntary administration with Mr Albarran as one of the administrators.

21    In Mr Williams’ first affidavit, he gave evidence that his key point of contact throughout the administration process was Paul Blahut, a director of Hall Chadwick’s Perth office. Prior to the appointment of Hall Chadwick as administrator, Mr Albarran had spoken to Mr Blahut about Mr Albarran having a close relationship with Blackbird, and it was proposed that Mr Albarran would “leverage” the relationship to assist with providing finance to payout the ANZ loan and the debt owed to liquidators of Montague Estate (in liq).

22    On around 5 September 2025, two loans were executed with Blackbird for a total value of approximately $8.5 million, which sum included four months of pre-paid interest. The borrowers were (separately) Montague No.1 and U Minerals. Each of them, and Mr Williams, gave security for the loans. Relevantly:

(a)    the security over U Minerals’ assets was limited to only the GPRD; and

(b)    Montague No.2 was not party to the loans, nor did it give any security for the loans.

23    The loans entered into default in late December 2025 and early January 2026. On 31 December 2025, Mr Williams received an email from Hall Chadwick stating that Mr Albarran had been engaged by Blackbird as an “Investigative Accountant”.

24    From 15 January 2026, Blackbird and Mr Albarran proposed terms of a deed of forbearance on the basis of Blackbird obtaining an interest in any royalties flowing from the Wesfarmers opportunity. In his first affidavit, Mr Williams stated that he felt “immense pressure … from Blackbird and Hall Chadwick”, to execute the forbearance deed. The Statement of Claim cites “pre-receivership pressure and threats” made by the receivers, and the claiming of unreasonable fees.

25    On 12 February 2026, Mr Williams received an email from Hall Chadwick containing a letter from Mr Albarran, stating that he and Mr Kijurina had been appointed as receivers of his personal property under his personal guarantee and security given in relation to the loan agreements. The email also contained a Notice of Appointment for Mr Albarran and Mr Kijurina. On 13 February 2026, Mr Williams received a notice that Mr Albarran and Mr Kijurina had been appointed as controllers of the Capulet Estate Property (one of the Montague Properties), and on 17 February 2026, a notice that Mr Albarran and Mr Kijurina had been appointed as receivers of the GPRD, and controllers of the MRVE Estate Property (another Montague Property).

Control of the properties and assets

26    On around 4 March 2026, representatives of Hall Chadwick entered one of the Montague Properties. An email from Hall Chadwick’s lawyers, exhibited to Mr Williams’ affidavit, stated that “Hall Chadwick staff … [were] not satisfied with Mr Williams continuing to operate the business assets without the supervision of the receivers” and required possession of the business premises and exclusive control of the winery operations.

27    As at the time of the commencement of these proceedings on 24 March 2026, the applicants stated that:

(a)    the respondents had given notice of the intention to sell the GPRD royalties for $4m;

(b)    the MRVE Estate Property and the Capulet Estate Property were listed for auction on 10 April 2026;

(c)    Mr Williams had lost access to his bank account (and Montague No.2 had temporarily lost access to its debit card, which has now been remedied); and

(d)    Montague No.2 was and is unable to conduct business or access its books, records and property and has otherwise lost possession of its wine inventory.

28    Since that time, U Minerals alleged that it has lost its opportunity to access a consortium bid in relation to the Wesfarmers opportunity, a loss which was said to be in the vicinity of $150 million. Mr Mason, the solicitor who appeared for the applicants, said that that loss is part of the damages claimed.

29    Mr Williams also gave evidence that a significant amount of wine, worth in his view several million dollars (although that was the subject of dispute), had been taken by the Receivers despite the assets of Montague No.2, the owner of that wine, not being part of the secured property.

Claim for Interlocutory Relief

30    Orders 3 and 4 of the claim for interlocutory relief seek that the Court appoint receivers, Mr Nipps and Mr Birch, on terms including authorising them to sell one of the Montague Properties (the Capulet Estate property) and the GPRD royalties owned by U Minerals. The respondents submitted that Orders 3 and 4 have been rendered otiose by the retirement of Mr Albarran and Mr Kijurina on 18 May 2026.

31    Order 2 of the interlocutory relief sought is extracted below:

Upon the Applicants giving the usual undertaking as to damages, an interlocutory injunction that, until further order, whether by themselves, their officers, servants, agents, or howsoever otherwise, the Respondents be:

(a)     restrained from:

(i)     enforcing the Facility and Security Agreements;

(ii)     selling or dealing with any assets of the Applicants, including but not limited to:

A.     the below Montague Properties via listed auction; and

B.     the royalties under the Gross Production Royalty Deed in favour of the Fourth Defendant;

(iii)     attending the properties commonly known as:

A.     325 Tom Cullity Drive, Wilyabrup Western Australia 6280 (the Montague Estate Property);

B.     Lot 26, 3599 Caves Road, Wilyabrup, Western Australia 6280 (the Capulet Estate Property);

C.     Lots 32, 33 and 34, 241 Clews Road, Cowaramup, Western Australia 6284 (the MVRE Property)

(the Montague Properties)

(b)     compelled to:

(i)     deliver up to the Second Applicant all property, documents and information taken from in and around the cellar door building at the Montague Estate Property;

(ii)     deliver up to the Second Applicant the Grifo Grape De-stemmer removed from the main wine shed at the Montague Estate Property;

(iii)     deliver up to the Second Applicant the keys to the main wine shed and the cellar door building located at the Montague Estate Property;

(iv)     inform Westpac Bank to release the stop on the Second Applicant’s debit card ending x6768.

Principles

32    The principles upon which an interlocutory injunction may be granted were not in dispute. The parties were agreed that there was a serious question to be tried, and the arguments centred on the balance of convenience, the adequacy of any undertaking as to damages, and the conditions on which an injunction, if any, should be granted.

33    The applicants characterised the basis of the injunction sought as being:

(a)    a real risk that the instrument by which the Receivers were appointed was void or otherwise that the appointment was not appropriate;

(b)    that the Receivers have engaged in conduct contrary to their duties such that their continued appointment during the course of the proceedings would be contrary to the interests of justice;

(c)    that the respondents have unlawfully interfered with and taken the property of Montague No.2; and

(d)    the totality of the conduct of the respondents is unconscionable within the meaning of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

34    The applicants submitted that there has been a total breakdown in any working relationship between the parties, and that there is a real, and not fanciful, risk that any funds from the sale of assets will flow to the investors behind Blackbird and will not be recoverable. They submitted that it would be in the interests of all parties that any proceeds from the sale of assets be held by a third party pending the conclusion of litigation, and that the proceeds of the sale of assets are maximised.

35    They submitted that it would be appropriate for an independent court-appointed receiver to resolve the issues as to the ownership of assets between the applicants and to otherwise recover and account for the assets presently held by the Receivers, and that having a court-appointed receiver hold the assets and report on the affairs of the companies and the issues arising between the parties would be the most consistent with ss 37M and 37N of the FCA Act in the circumstances that it is more likely to:

(a)    narrow the issues between the parties; and

(b)    avoid interlocutory skirmishes between the parties in respect of access to the books and assets for the purposes of proving their respective cases.

36    The respondents made three submissions in relation to the claim for interlocutory relief in Order 2:

(a)    the extent of the applicants’ debt by the time of judgment will greatly exceed the value of the security given by the applicants such that the balance of convenience favours withholding such relief;

(b)    the applicants have failed to prove the value of their undertaking as to damages such that the balance of convenience favours withholding such relief; and

(c)    any injunction must be conditioned on payment to the third respondent of the outstanding interest under both facilities.

37    I will deal with the questions which arise in turn. Each of them is interlinked, so I will set out the arguments of each party, and then determine the application in light of all of the circumstances.

What is the balance of convenience?

38    The applicants submitted that, while the question of whether damages would be an adequate remedy is at the “heart of the basket of discretionary considerations which must be addressed and weighed as part of the Court’s consideration of the balance of convenience and justice”, it is not of itself always determinative, citing Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 (Dowsett, Foster and Yates JJ) at [61]-[63]. Part of the balancing exercise involves a consideration of the strength and quantum of the applicant’s claims.

39    The tortious claim is brought on behalf of Montague No.2. In submissions, the respondents indicated that they would not object to a return of the Montague No.2 property to it (ie, “all property, documents and information taken from in and around the cellar door building at the Montague Estate Property” and the keys to the wine shed and cellar door at the Montague Estate Property). The property of Montague No.2 included the wine inventory, both bottled and in tanks or barrels, and the wine making equipment (as alleged in the Statement of Claim). There was, however a debate over which entity controlled the “Grifo Grape De-stemmer” sought to be delivered up to Montague No.2. The respondents referred to a financial statement of Montague No.2 for the eight months ended 28 February 2025, containing a depreciation schedule that did not contain the grape de-stemmer. On the other hand, the Court Book demonstrates that Montague No.2 was invoiced, on 21 April 2023, for “Grifo Grape De-stemmer Stainless Rubber Rollers”. This issue was not addressed in detail by the applicants. If the grape de-stemmer, or ownership of any other property of Montague No.2 remains in issue, the parties may relist the matter to determine the question of whether it should be included in the property to be returned to Montague No.2.

40    The applicants seek damages for the sequestration of property not subject to the receivership, and for any damage to the wine which may have occurred during transit and storage. The applicants contended that the indication that the respondents would not object to those parts of the relief being granted is a concession on the part of the respondents.

41    The unfair contract claim is made under ss 12BF and 12BG of the ASIC Act and relates to higher interest rates of 4% per month with a discounted rate of 2% per month where no default is subsisting, arising out of specified terms in the facility agreements with Blackbird. The unfair contract claim refers to other terms, including the Appointment of Receiver Terms as defined in paragraph 109(f) of the Statement of Claim which do not include a reasonable period for the remediation of default prior to the appointment of receivers. The applicants say that receivers were appointed some two days after default. The higher interest rates have, it is submitted, the “practical effect of a penalty”. Further, there are loss of opportunity claims and pre- and post-receivership “Pressure and Threats” alleged in the Statement of Claim, which it is claimed are improper exercises of the receivership powers.

42    Another claim by the applicants is that the respondents breached implied warranties owed to those parties who gave security as to the fitness of their financial services; linked to this is a claim of misleading and deceptive conduct arising out of Mr Albarran’s interests in the Blackbird Group and, it is alleged, as a shadow director, and that each of them received “a pecuniary benefit from loans made by the Blackbird Group to borrowers other than that of fees reasonably incurred in the course of his professional duties”. It is also claimed that the Receivers breached their professional duties.

43    The applicants submitted that I can be satisfied that there is a good arguable case for the purposes of assessing whether an injunction should be granted in light of Mr Albarran’s pecuniary interest in Blackbird’s loan book, and his involvement in bringing Blackbird as a lender to the secured applicants. The matters set out above, they contended, fall into the analysis of the balance of convenience. They submitted that a court-appointed receiver would allow an independent third party to assess which assets belong to which party, and ensure that the status quo is maintained.

44    The evidence disclosed that the applicants are in a vulnerable financial position. The real estate and the GPRD cover, roughly, the principal secured under the loan, and Montague No.2 has assets which are to be returned to it. The applicants put those assets at around $4 million although the plan would be to sell the wine. The applicants contended that their being locked out of the winemaking enterprise means that there will be no 2026 vintage. They submitted that much of the respondents’ concerns as to an imbalance in the applicants’ financial position and the likely amount of the loan principal and interest after 18 months or 2 years (the expected timeframe for a hearing) should be assuaged by the value of the wine, and the sale at a proper value of the GPRD. The applicants contended that the “only prejudice to the respondents is that the exorbitant accrual of interest may surpass the asset value, which should be afforded little weight”.

45    The applicants’ claim as to balance of convenience is centred on the appointment of the new receivers as providing a holding pattern which would enable:

(a)    property to be sold; and

(b)    Montague No.2 to continue trading.

46    On the applicants’ case, the strength of their claims would “either entirely or partially offset or exceed the debt and claims of Blackbird, and otherwise seek to set aside the loans and security in full”. As at 28 February 2026, the loan advance plus interest owing by Montague No.1 was $6,507,402.18 (including a $170,000 “exit fee”) and by U Minerals $2,549,813.88 (including a $50,000 “exit fee”). Standard interest was 4% per month, and discount interest was 2% per month. The last payment on each loan was, respectively, November and December 2025.

47    The applicant submitted that a further benefit to the appointment of new receivers was that the question of which assets belonged to which company could be determined, and including Montague No.2 in the receivership would ensure that its assets were properly managed in the meantime.

48    In response, the respondents submitted that the balance of convenience lay in allowing the security to be realised in accordance with the contractual arrangements between the parties. They submitted, firstly, that the likely significant delay in the substance of this matter reaching a hearing and subsequent judgment would mean that the debt would “greatly exceed the value of the security given by the applicants”. An aide-memoire was handed up at the hearing which noted that there was currently $1,027,935.66 in outstanding interest for Montague No.1 and $357,266.23 for U Minerals, and that the current surplus of assets over liabilities for the applicants was $1,205,765.50. That assessment of the value of the assets is disputed by the applicants, who say that the GPRD should be marketed in a way which maximises its value, and that the wine should be given a significantly higher value. The GPRD however is an asset which may not be straightforward to sell, and Mr Williams’ opinion that the $4 million offered for it was “opportunistic” does not rise very high.

49    The respondents pointed to the evidence of the applicants which, taken at its highest, shows an asset position of $11,500,000 plus the assets of Montague No.2 and of U Minerals beyond the GPRD. There is little evidence to the value of the currently unsecured assets, and what there is, is disputed. The present value of the debt is put at $9,674,234.50 (including principal, interest, and fees). That leaves an asset surplus of $1,375,765, which would, on the rate of interest payable under the facility agreements, be quickly subsumed. The respondents contended that “the total combined value of the debt in 18 months will be $15,755,731.84 and in two years will be $17,720,079.67”.

50    The proposed resumption of trading by Montague No.2 is, the respondents submitted, unlikely to be at a level that would enable the interest to be paid pending trial. The applicants say that trading would likely be at $500,000 gross revenue per year; not only is this insufficient to cover the interest, but it would also deplete the assets of Montague No.2 as it would realise this revenue by selling the wine.

51    In the absence of evidence of any likely increase in the value of the property, the respondents say there is no chance that their position would be protected and so the balance of convenience is weighted against the grant of an injunction.

52    The respondents also raised the question of the conditions upon which any injunction should be granted. In accordance with the principles in Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161, generally speaking a holder of a security will not be restrained from exercising it unless the amount of the undisputed mortgage debt is paid into court. They submitted that, having entered into security arrangements, the applicants should be held to their bargain and Blackbird should be able to realise its security, absent sufficiently strong evidence that the sales proceeds would be “dissipated” by repayment of its investors. They pointed to the cost of having the principal and interest unpaid, and the lack of any other security offered, as tipping the balance of convenience strongly against the grant of an injunction.

53    The applicants did not dispute that the principal of the loan needs to be repaid. However, they said that the rate of interest is the subject of the claim and contended that the RBA cash rate would be the appropriate interest rate were they to succeed. If successful, they contended that their various claims would offset, or wipe out, the indebtedness of the applicants.

54    The applicants relied on Varley v Varley [2006] NSWSC 1025 at [45] ff where Campbell J reviewed cases which dealt with impecunious givers of undertakings as to damages, in cases where the giver would be precluded from a trial if an injunction were not granted. See, for example, Ward v State of Western Australia (unreported, FCA, RD Nicholson J, 21 December 1995) at 17-18 and Custom Credit Corporation Ltd v Whitehall Holdings Pty Ltd (unreported, WASC, 7 April 1992) at 23-25.

55    The applicants submitted that a requirement that the principal and interest, or even only the interest, be paid into court as the price of an injunction would have the effect of limiting their access to justice. They submitted that the appointment of new receivers to the property with undertakings between the parties as to how the funds could be paid to the respondents, would preserve the position of all parties by ensuring that each sides’ interests would be protected. They pointed to the fact that Montague No.2 was not a party to the loans and that the inclusion of its assets, and the further assets of U Minerals in the new receivership would limit any prejudice to be suffered by the respondents.

The value of the security and the worth of an undertaking as to damages

56    The applicants have given an undertaking as to damages. However, the respondents questioned the worth of that undertaking given the precarious financial position of the applicants. On the basis of the submissions above as to the balance of convenience, the respondents say that if the applicants are not successful, then the interest will have grown so that the other assets (apart from the security for the loan) would be inadequate to satisfy either the debt, or (if circumstances arise so that the undertaking can be called upon) the undertaking as to damages.

57    The applicants contended that the higher interest rate of 4% per month (over the “discounted rate” of 2% per month for timely payment) should not be taken into account when assessing the adequacy of the undertaking. It should not, they submitted, be part of the counterfactual assessment of “what would be the damages available on the undertaking had the injunction not been granted” on the basis that any unfair contract with very high interest rates could not be subject of an injunction. The suggestion that a lender can rely on such a significant penalty interest component as an overriding basis against the making of an injunction was contrary, the applicants submitted, to the equitable principles on which injunctive relief is founded.

58    The respondents cited the well-known principles on an undertaking as to damages from European Bank Ltd v Evans [2010] HCA 6; 240 CLR 432 at [14], [16], [17] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) and at [18] citing Aickin J at first instance in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [1981] HCA 75; 146 CLR 249 at 266-7.

59    The purpose of the undertaking as to damages is to protect those who may be affected by the operation of an interlocutory order. Accordingly, the question of whether the applicants could meet any such undertaking if called upon to do so is a strong factor to be weighted in determining whether interlocutory relief should be granted with an undertaking as the price of that injunction.

60    The applicants’ submissions echo the words of Bowen LJ in Cowell v Taylor (1885) 13 Ch D 34 at 38: “The general rule is that poverty is no bar to a litigant. That, from time immemorial, has been the rule at common law and also, I believe, in equity”.

61    I do not understand the applicants to say, here, that they would be deprived of a trial were no injunction to be granted. They say, rather, that damages is not an adequate remedy.

Should a receiver be appointed?

62    The applicants asserted that the appointment of receivers to the property of the applicants would be “just and convenient” (see s 57 of the FCA Act) and would protect the applicants from what they say is the loss of the basis of their claim were the GPRD and secured properties to be sold and the proceeds divested by repayment of investors. They pointed to the inter-relationship of the Receivers and Blackbird, noting that in State Bank of NSW Ltd v Chia [2000] NSWSC 662 the Bank which appointed the receiver was so heavily involved in the performance of the receiver’s duties that it was “proper that the Bank he held to account in the same manner as the receiver and to the same standards” (at [886]). I note that the comments of Einstein J in Chia, as to the duties of a receiver appointed by a mortgagor, are not of general assistance to the applicants; at [869] his Honour said that the relationship of the receiver and the mortgagor is one which “escapes the imposition of general fiduciary obligations”. The main duty of a receiver is, of course, to realise the assets so as to discharge the security (Chia at [870]).

63    The respondents submitted that the appointment of receivers to the property to sell some of the property and maintain the proceeds of sale pending the outcome of these proceedings is akin to a freezing order where the basis for such an order does not exist.

Should an Injunction be Granted?

64    These proceedings involve serious allegations against the Receivers and against Blackbird. During the hearing I raised with the parties whether the matter could be heard expeditiously, on dates later this year which I have available; unfortunately, the parties were of the view that timetabling steps, including discovery and expert evidence, would be required which would take the matter into next year. Accordingly, any injunction until trial would involve a significant delay in the reduction of the debt owing to the third respondent, given the lack of any realistic proposal by the applicants to pay moneys into court, or any prospect of the wine business being profitable enough to do so.

65    It is undeniable that the preparation for trial, were it to take a year or more (which seems feasible) would result in the interest enlarging the debt to a level which is more than the current asset value of the applicants. The values of the wine and the GPRD seem to be somewhat speculative. I note that one of the assets which the applicants propose should be sold by any receivers appointed is the GPRD, which would have the benefit of realising that asset and ascertaining its value. Balanced against that is the value of the only other asset which the applicants propose should be sold by the new receivers – the Capulet Estate property which is valued at $1.4 million. Were that property to be sold at valuation, and the GPRD to achieve, say, twice the $4 million recently offered, that would still be insufficient to meet the current level of the secured debt.

66    I am satisfied that an injunction which would be in place for up to a year or more would unfairly promote the applicants’ interests in staving off sale of the more valuable properties at the expense of the third respondent, who would lose the use of the money it would have expected would have been now repaid to it, along with interest. The dispute as to the proper rate of interest is not one for which damages would be inadequate, were the applicant to succeed on this aspect. This factor weighs against an interlocutory injunction being granted, or at least against one which would last until the proceedings were able to be heard.

67    I have noted that the respondents do not take issue with the fact that there is a serious question to be tried. On an interlocutory application, of course, I cannot determine disputed questions of fact or complex questions of law; see Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; 118 CLR 618 at 622. At this early stage, before a defence has been filed, the most I can say is that the pleadings make out a case which is not unarguable. This factor weighs in favour of the applicants’ case for an interlocutory injunction.

68    This case therefore turns on the balance of convenience, which incorporates both the risk to the applicants being able to recover any damages, and the harm which would be suffered by the respondents were they to succeed in their defence of the claim after an injunction were granted.

69    Taking the applicants’ case at its highest, I do not accept that a broad injunction keeping the respondents out of their secured funds for a long period of time is appropriate. The risk that the interest payable under the securities will engulf the assets available is high. There is insufficient evidence that the business model of the third respondent is likely to result in “dissipation of assets” by way of return of capital to its investors. While the financial statements of Blackbird are not in evidence, there is some confidential evidence as to the way in which it functions and to the profits which would be made from loans, both those in contest in these proceedings and more generally. Without evidence pointing to likely dissipation, there is no basis for what was termed a “Mareva-type effect”. Additionally, the Statement of Claim alleges that Mr Albarran is a shadow director of Blackbird, and remedies are sought against him and Mr Kijurina as well as against the company. The first and second respondents would be personally liable for the breaches alleged, or possibly (although there is no evidence to this) they may have some recourse to insurance. There is no evidence that any of the respondents is impecunious.

70    I am however most influenced by the seeming hopelessness of the applicants’ financial position. There was evidence as to the value of the Wesfarmers opportunity, and the figure of $150 million was raised in support of the contention that the damages sought in the Statement of Claim would significantly outweigh the principal, interest and fees owing. The terms of the Wesfarmers opportunity was in evidence. It was expressed to be a “non-binding” offer and “intended as a basis for further discussion and negotiation only”, and required U Minerals and another company to “form an exploration and mining committee” in Stage 2. Mr Williams, the first applicant, says that “the loss of the Wesfarmers Opportunity has caused [U Minerals] significant loss in the vicinity of $150 million”. While the figure is significantly more than the $4 million which the receivers proposed as the sale price of the GPRD, there is a real difference between a non-binding opportunity and $4 million in the hand, particularly in the eyes of a receiver appointed to realise secured debts. I do not of course make any forecast as to the prospects of the loss of opportunity claim in relation to the Wesfarmers opportunity as it was not fully argued; I have only the documents in the Court Book and as the applicants said in submissions, discovery will be a significant additional part of their case. The combination however of the documented offer and the lack of specificity in the Wesfarmers opportunity result in the submission as to the upper limit of the prospective damages as being uncertain.

71    It is clear that the applicants cannot provide sufficient security by way of an undertaking as to damages, nor by way of payment into court of the principal (or even of the interest payments). Indeed, the proposal that Montague No.2 commence trading again is on the basis that it sells some of the assets which were being put forward as additional security – the wine. The balance of convenience is not in the applicants’ favour. I do not accept the applicants’ submission that “there is no or little prejudice to the respondents to have an injunction for six to 12 months”. Were the applicants to fail in their claims, the undertaking is very likely to be worthless.

72    One proposal for a lesser form of relief was for new receivers to be appointed, and the appointment be limited, say until the receivers had sold the two nominated assets and given their report to the Court. While the grant of a more limited form of relief than that sought by an applicant, where that more limited relief will do justice as between the parties, is preferable, this more limited receivership does not live up to its initial attractiveness. It merely would defer the time at which the applicants would have to face the fact that the assets it has at its disposal appear to be insufficient to meet the claims of the respondents were they to be unsuccessful; “from ancient grudge break to new mutiny”, perhaps. Without any provision in the orders for protection of the respondents’ secured position, they fail on the balance of convenience.

The application for interlocutory relief is dismissed

73    For the above reasons, the interlocutory application for an injunction in orders 2(a)(i)-(iii) of the claim for interlocutory relief is dismissed, and I decline to make orders 3 and 4 in relation to the appointment of new receivers. I will, however, grant leave for Mr Williams to bring these proceedings on behalf of the third applicant, as sought in order 1 of the claim for interlocutory relief.

74    The respondents said that they could not be heard against the orders for delivery up of assets in orders 2(b)(i) and (iii), and I will make those orders. The relief sought in order 2(b)(iv) has now occurred, and I will make a notation to that effect. As noted above, should there be further agitation in relation to the items which are the subject of orders 2(b)(i) and (iii), and the grape de-stemmer referred to in order (ii), the parties may relist the matter.

75    The applicants had some areas of success in relation to order 1 and order 2(b). However, those were orders which were not contested by the respondents. Otherwise, they were unsuccessful. Costs of the application are the respondents’ costs in the cause.

Associate:

Dated:    1 June 2026

SCHEDULE OF PARTIES