Chehade & Sons Constructions Pty Ltd v Lawrdo Super Pty Ltd - [2023] SADC 62

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
CHEHADE & SONS CONSTRUCTIONS PTY LTD & ANOR v LAWRDO SUPER PTY LTD & ANOR
[2023] SADC 62
Judgment of his Honour Judge Burnett
26 May 2023
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - RELEVANT CONSIDERATIONS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SEPARATE DECISION OR DETERMINATION OF QUESTIONS AND CONSOLIDATION OF PROCEEDINGS - SEPARATE DECISION OR DETERMINATION - GENERALLY
The applicants seek a separate trial on identified preliminary questions and an injunction preventing the respondents from dealing with the property that is the subject matter of the dispute until determination of those preliminary questions.
The applicants and the respondents have together developed a number of properties. This dispute concerns the last of the properties, a property at 6 O’Connell Street, Salisbury Downs (the Property).
The applicants claim that the development of the Property was governed by a written joint venture agreement which had been prepared by the parties for the development of another property. That joint venture agreement gave the second applicant, Property Partners Pty Ltd (Property Partners), first preference to buy the Property at an agreed valuation. Property Partners claimed, inter alia, that they have exercised that option and seek specific performance of that option. The preliminary questions concern their right to specific performance.
The respondents dispute that the written joint venture agreement governs the development of the Property and say that the parties entered into a Project Manager Services Agreement which deals with the development of the Property.
Held:
Dismissing the application and refusing to order that there be a separate trial of the preliminary questions.
There was no good reason to depart from the general rule that all issues be heard in the one trial: SA Water Corporation v United Water International Pty Ltd [2009] SASC 383 applied. A trial of the preliminary points would require extensive evidence as to the history of all developments undertaken by the parties and evidence of disputed oral conversations. The principals of both parties would be required to give evidence in both trials. An assessment of their credit of those witnesses will be required in both trials. An order for separate trials would likely cause delay and additional expense to the parties. There was no clear demarcation of issues. The determination of the preliminary questions would not, in all likelihood, resolve the remainder of the dispute: Idoport Pty Ltd v National Australia Bank [2000] NSWSC 125 applied.
The application for an injunction is dismissed.
Although the applicants had established a prima facie case, that prima facie case was not sufficiently strong to justify in the circumstances the preservation of the status quo. The two issues must be considered together: Adnyamathanha Traditional Lands Association v The Minister for Energy and Mining [2018] SASC 142 applied. The balance of convenience favoured the respondents. There had also been delay by the applicants in bringing the action for specific performance and seeking the injunction: Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd [1987] 76 ALR 633 applied.
Real Property Act 1886 (SA) s 191(k), s 233LD, referred to.
Warren v District Council of the Lower Eyre Peninsula [2020] SADC 87; SA Water Corporation v United Water International Pty Ltd [2009] SASC 383; O’Connor v Suman [2015] NSWSC 1812; Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369; Deans v Anangu Pitjantatjara Yankunytjatjara [2015] SASC 54; FAI General Insurance Co Ltd (in liq) v Sherry & Ors (2002) 225 LSJS 141; Rivers v Rivers (2002) 225 LSLS 74; Duke Group Ltd (in liq) v Alamain Investments Ltd (in liq) (No 2) [2006] SASC 33; City of Onkaparinga v Hassell Pty Ltd and Ors [2007] SASC 163; Tepko Pty Ltd v The Water Board (2001) 206 CLR 1; Perre v Apand Pty Ltd (1999) 198 CLR 180; Annabella Agius (by her tutor Gail Margaret Chalmers) v Southern Sydney Area Health Service [2003] NSWSC 623; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215; Liberty Financial Pty Ltd [2003] FCA 226; Wells v Council of the City of Orange [2016] NSWSC 589; Pioneer Park Pty Ltd (in liq) v ANZ Banking Group [2005] NSWSC 832; Admiral I Pty Ltd v Leighton Contractors Pty Ltd [2005] NSWSC 1105; McDonnell v Northern Sydney Central Coast Area Health Service [2009] NSWSC 1364; Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57; Acment Pty Ltd v Ai Tel Pty Ltd [2007] SASC 96; Adnyamathanha Traditional Lands Association v The Minister for Energy and Mining [2018] SASC 142; Marshall & Co Limited v Bertola SA [1973] 1WLR 349; City of Melbourne v Hamas Pty Ltd (1987) 62 LGRA 250; Legg v Inner London Education Authority [1972] 3 All ER 177; Texaco Ltd v Mulberry Filling Station Ltd [1972] 1 All Er 513; Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633, considered.

CHEHADE & SONS CONSTRUCTIONS PTY LTD & ANOR v LAWRDO SUPER PTY LTD & ANOR
[2023] SADC 62
Introduction

The Court heard a number of interlocutory applications that have been brought by the applicants and respondents.
The interlocutory applications that were heard were:
1.An application by the respondents that they be relieved of an undertaking that they had provided to the Court on 28 June 2022 and that they, along with a related party, provide an alternative undertaking in similar terms.
2.An application by the applicants that there be a trial on certain preliminary questions.
3.A further application by the applicants that, pending the hearing of the preliminary questions, the respondents be restrained from transferring, encumbering, selling or otherwise dealing with the land at 6 O’Connell Street, Salisbury Downs (the Property) or in the alternative the second applicant be granted permission to lodge a further caveat over the Property pursuant to s 191(k) of the Real Property Act1886 (SA).
Following the hearing, the circumstances of the respondents changed such that they no longer needed to be released from the undertaking. That change in circumstances also has consequences for the determination of the applicants’ interlocutory applications.
Claim of the applicants
To determine the interlocutory applications, it is necessary to examine in some detail the claim of the applicants. The applicants claim that they entered into a series of joint venture agreements with the respondents to develop a number of properties. In the period up to 2016, the applicants claim that they and the respondents developed seven properties and divided equally the net profit between the second applicant, Property Partners Pty Ltd (Property Partners) and the respondents. There were written joint venture agreements in respect of two of those properties: one at 54 Baldock Road, Ingle Farm (the Baldock Road property) dated 15 December 2011 and the other at Lauder Street Ingle Farm.
The applicants plead in paragraph 3 of the revised claim that in 2016 they entered into new arrangements whereby:
1.The applicants would find properties;
2.The respondents would fund the developments of those properties;
3.The respondents would receive a return on the monies that they had invested at the Reserve Bank rate plus 2%;
4.The first applicant Chehade and Sons Constructions Pty Ltd (Chehade & Sons) would undertake any building works on a costs plus basis;
5.The applicants and respondents would continue to share profits and losses equally.
Thereafter, the parties engaged in about six further developments. These proceedings primarily concern the last of these developments being the O’Connell Street property. The revised claim also seeks relief in the form of an accounting in relation to two other developments, one at 17 Radar Street, St Agnes (the Radar Street property) and 14 Upton Street, Elizabeth Vale (the Upton Street property).
The applicants claim that the joint venture agreement entered into between the Property Partners and the respondents in relation to the Baldock Road property (the written joint venture agreement) governs the relationship between the parties in relation to the development of the Property.
The respondents deny that the joint venture agreement applies to the Property. The respondents say that the relationship between the parties is governed by a Project Manager Services Agreement which was provided to the applicants by the respondents on 15 December 2016. In that Agreement, Property Partners was appointed by the first respondent, Lawrdo Super Pty Ltd (Lawrdo Super) as the project manager for the development. That Agreement did not give any right or option to the applicants to purchase any property being developed. In the accompanying email, the respondents advised the Project Manager Services Agreement would apply to the developments going forward. The applicants deny that the Project Manager Services Agreement applied to the O’Connell Street development.
The written joint venture agreement provides as follows:
·Clause 2 stated that the joint venture agreement shall continue in full force and effect until terminated in accordance with the terms of this agreement:
(a)    on completion of the sale of the property and subsequent finalisation of all accounts;
(b)    by mutual written consent of the parties; and
(c)    by default which is not remedied within 14 days of written notice.
·Clause 3 stated that the property would remain solely registered in the name of Party A (being the second respondent Lawrdo Investments Pty Ltd (Lawrdo Investments) and Lawrdo Super).
·Clause 4 referred to the fact that funding was provided by Lawrdo Investments and Lawrdo Super.
·Clause 5 stated that Party B (Property Partners) was entitled to lodge a caveat over the property to secure its entitlements hereunder should it desire.
·Clause 6 provided that Property Partners shall manage the joint venture and indicated what they should do.
·Clause 7 stated that the joint venturers shall share in the profits and losses incurred in the joint venture in equal proportions.
·Clause 9 stated that the joint venturers shall maintain at all times proper and accurate accounting records and that the joint venturers should have free and uninterrupted access to such records.
·Clause 10 sets out the various duties of the parties including using their best endeavours to promote the best interests of the joint venture.
·Clause 12(g) stated that the joint venturers shall not sell or transfer or deal with their interest in their property except as provided in the Agreement.
·Clause 13 which is critical to the applications provided as follows:
(a)     The joint venturer said ‘B’ [Property Partners] will have first preference to buying the Property an agreed valuation from Party A [Lawrdo Investments and Lawrdo Super] and B should a dispute arise between the joint venturers and which they are unable to resolve in an amicable manner.
(b)     Either joint venturer shall be entitled by notice in writing to the other joint venturer to require that the Property be sold should a dispute arise between the joint venturers and which they are unable to resolve in an amicable manner.
(c)     When the Property is to be sold in accordance with the terms and conditions of this agreement the joint venturers shall appoint as the selling agent within 30 days of receipt of Notice under sub-clause (a) hereof, a Notice of Determination under clause 14(a) hereof or agreement to sell have been reached by the Joint Venturers, a real estate agent nominated by A and the Property will be marketed and sold in accordance with the recommendations of such Selling Agent
(d)     the proceeds of sale shall be applied in the following order:
1)discharge of the mortgage.
2)payment of all proper costs incurred in the sale of the property including where applicable real estate agent’s commission and expenses, legal expenses and adjustments and outgoings.
3)payment of all other unpaid liabilities to third parties in respect of the joint venture and the property.
4)repayment to A (Lawrdo Investments) of any contributions made by A to the joint venture in accordance with Clause 4 (f) thereof which contributions have not been repaid.
5)the balance of the proceeds of sale to be apportioned equally between the joint venturers.
6)in the event that the proceeds of sale are insufficient to discharge the liabilities specified in paragraphs 1, 2, 3, 4, 5, 6 and 7 of sub-clause (c) hereof then in such event any shortfall shall be borne or paid equally by the joint venturers.
7)-8)…
·Clause 14 sets out the default provisions which also provides for the option of purchasing the interest of the default joint venturer.
·Clause 18 sets out the relationship between the parties and provides that the relationship shall be of joint venturers and not partners or agents.
Property Partners and/or Nominee entered into a contract to purchase the Property on 29 April 2017. Property Partners nominated the respondents as purchasers of the property and the respondents as purchasers settled on the property on 31 January 2018.
Lawrdo Super and Lawrdo Investments hold the property as tenants in common with a 90% interest owned by Lawrdo Super and a 10% interest owned by Lawrdo Investments.
Initially it was proposed that the Property would be divided into 12 lots. By email dated the 29 November 2017, Mr Chehade advised the respondents that the architect prepared a plan for the development that subdivided the property into 13 lots.
There is some dispute as to how the subdivision proceeded.
It is accepted for the purposes of this application that Property Partners subcontracted to Chehade & Sons certain works including arranging for architectural planning drawings to be prepared, survey work and a plan of the proposed community division for which they rendered an invoice to the respondents in the sum of $16,233.30. Chehade & Sons also claim that they incurred costs in the sum of $7,810 in relation to engineering works and rendered an invoice to Lawrdo Investments for that sum. Those invoices remain unpaid.
On 4 August 2020, the City of Salisbury provided development plan consent, land division consent and development approval to Property Partners for the subdivision of the property. Before the individual allotments could be sold, an application for the division of land had to be made to the Registrar-General pursuant to s 233LD of the Real Property Act 1886 (SA).
On 15 January 2020, the Police Credit Union stated they would provide funding to finance the development of the Property but indicated they would only be prepared to finance the development if Lawrdo Investments was the borrower as a superannuation fund is not able to borrow monies. The respondents came to the position that they were not willing to have Lawrdo Investments borrow money to develop the property and therefore decided that the best option was to subdivide the Property, install services infrastructure and sell the subdivided lots as vacant land to be developed by the purchasers of those allotments. The respondents have estimated that the costs to instal the services infrastructure to allow the subdivision to proceed is about $380,000.
At about this time, it appears that the respondents took over responsibility for managing the development, although the detail of each parties’ role in the period from about mid 2020 is unclear at this stage.
On 1 July 2021, the respondents entered into a written agreement with Adelaide Building Consulting (ABC) to assist in selling the thirteen planned allotments. The respondent entered into contracts for the sale of nine of the 13 allotments with a further four allotments having contracts signed by the purchasers. Some of those contracts have now come to an end but at present the respondents have entered into sale contracts as follows:
(1)New sale contracts that have been entered into between Lawrdo Investments and Lawrdo Super and third parties for the sale of allotments 1, 2 and 6 to those third parties (the previous sale contracts for those having fallen through).
(2)A sale contract for allotment 7 has been signed by the proposed purchaser but not by the respondents because of this application.
(3)Contracts entered into between Lawrdo Investments and Lawrdo Super and third parties for the sale of allotments 3, 4 and 8 - 13 remain on foot.
The purchase price under the new sale contracts range between $214,000 and $220,000 per allotment and exceed the price at which Tanner Hardwick valued the allotments. Tanner Hardwick valued the first 12 allotments at $160,000 and allotment 13 at $190,000.
The new sale contracts are conditional upon the vendor obtaining the relevant approval to commence the development.
ABC, upon finalisation of the sale of each allotment, will be entitled to payment in the sum of $289,250 (excluding gst).
The respondents claim to have incurred various holding costs and development costs prior to October 2022 (when the caveat was removed) in the sum of $92,724.49. Since October 2022 they have paid about $70,000 in costs and have incurred a liability for a further $45,000 in costs. Some of these costs represent holding costs. Further, subdivision costs in the sum of $97,861 will be payable once the subdivision plans are deposited with the Registrar-General. The respondents claim that some of those costs were spent on obtaining their own development approval for the development on the Property. That approval was granted on 16 August 2022. The respondents plan to complete site services and infrastructure work and then finalise the subdivision process.
On 21 October 2021, the applicants lodged a caveat in which they claimed an interest in the Property as a beneficiary under a constructive trust or alternatively as a chargee pursuant to an oral joint venture agreement in which the respondents agreed to charge the land in favour of the applicants as security for the respondents’ financial obligations to the applicants. Further, the applicants claimed an interest by making contributions to the acquisition and improvement of the Property pursuant to the oral joint venture agreement.
The caveat was warned on 1 March 2022 and the applicants instituted these proceedings and lodged an interlocutory application seeking the extension of time for the removal of the caveat.
The applicants instituted proceedings on 18 March 2022. In relation to the Property, the applicants plead that the respondents have ceased the joint venture and failed to recognise the applicants’ interest in the joint venture. In their initial Claim, the applicants’ pleaded:
(1)That in breach of the joint venture agreement the respondents were solely responsible for the finance of the development but had not obtained any finance to enable the development to proceed. The finance that was offered on 15 January 2021 was not accepted by the respondents.
(2)The respondents had breached their fiduciary duties by their unwillingness to continue to fund the development of the Property for the purposes of the joint venture and that they had indicated an intention to retain the land for their own purposes and not the joint venture purposes. In a revised claim filed in October 2022, the applicants claimed (apparently as part of its allegations of breach of fiduciary duty) that the respondents repudiated the joint venture, made decisions in relation to the Property without the agreement of the applicants including selling subdivided allotments as land only, failed to apply the applicants for work done in relation to subdividing the Property including taking the benefit of that work for themselves, charged interest at 10% on the money they expended rather than at the reserve bank rate plus 2% and engaged ABC where there was no value to the joint venture for that work and that the $318,175 to be paid to ABC should not be taken into account in any revised profit calculation.
(3)In their prayer for relief, the Property Partners sought: (1) a declaration that they have an equitable interest by way of constructive trust over the Property; (2) an order that the respondents provide full accounting on the development of the Property (and added in the Revised claim that additional costs incurred by the respondents in making a second application for subdivision of the Property be excluded); (3) an order that the respondents pay 50% of the actual profits and/or equitable damages based on anticipated profits from the development of the Property (4) payment to Chehade & Sons of the invoices of $7818 and $16,233.

The applicants further contended that Chehade & Sons Constructions would undertake any building works at a costs plus basis of 15%.
Following the hearing the Court made an order that upon the respondents undertaking to the Court to pay the sum of $150,000 into the Court Suitor’s Fund within 24 hours of settlement on the sale of allotment 6 of the Property, the caveat be removed.
In April 2023, the respondents sought to borrow $500,000 to complete the development of the Property. They again ran into difficulties in that Lawrdo Super was unable to borrow monies because of their status as a superannuation fund. Lawrdo Super therefore sought to transfer its interest in the property to a newly created entity Lawrdo Growth Investments Pty Ltd (Lawrdo Growth). This required the respondents to be released from the undertaking that they had given to the Court that there would be a payment into Court in the sum of $150,000 on the sale of allotment 6 as there would be a transfer of the Property prior to the sale of the allotment. The respondents said that they would continue to provide an undertaking in the same terms as the previous undertaking (ie the payment into Court in the sum of $150,000 on the sale of allotment 6) and also that Lawrdo Growth would provide that undertaking.
The applicants opposed the respondents being released from the undertaking. The applicants sought to exercise its option under clause 13 of the written joint venture agreement to buy the Property and specifically enforce that right. The respondents say that they sought to exercise that right in a letter dated 6 April 2023. That letter is somewhat ambiguous as it states:
Therefore in the circumstances the rights provided by clause 13 of the joint venture agreement are invoked and it is respectfully requested that your client attend to have the O’Connell Street property valued immediately.
Our client is prepared to purchase your client’s 50% interest in the property. Alternatively, your client may wish to purchase our client’s share” the respondents rejected that offer.
Although that offer might be considered to be ambiguous and not properly invoking clause 13 of the joint venture agreement, in its revised claim the applicants made clear that they sought to exercise their rights under the Option Agreement to purchase the Property.
The applicants then brought an amended interlocutory application in which they sought an order for a separate trial on certain preliminary questions and an injunction, pending determination of those issues, preventing the respondents from dealing with or disposing of the Property. Alternatively, the applicants sought permission to file a second caveat. If granted, either the injunction or the second caveat would prevent any dealing with the Property including proceeding with subdivision and the subsequent transfer of the allotments to the 13 prospective purchasers.
Following the hearing, the respondents have obtained alternate finance and therefore Lawrdo Super does not seek to transfer its interest in the Property to Lawrdo Growth.
Separate Trials-legal principles.
I set out in Warren v District Council of the Lower Eyre Peninsula[1] the principles relating to the determining an application for separate trial.
[1] [2020] SADC 87 at [21]-[31].
The principles governing the issues of separate trials are well settled. The starting point and general rule, as held by Anderson J in SA Water Corporation v United Water International Pty Ltd,[2] is that all issues should generally be dealt within a single trial.[3]
[2] [2009] SASC 383.
[3] Ibid at [46]; O’Connor v Suman [2015] NSWSC 1812 at [1].
The trial process should not be unduly fragmented. In Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC[4] White J (with whom Kelly J agreed) held:
In my opinion, the principles stated in the authorities concerning r 75.02 of the Supreme Court Rules are equally applicable to the exercise of the Court’s power under r 211 of the 2006 Rules. Those principles are well settled. I refer to the decisions in FAI General Insurance Co Ltd (in liq) v Sherry & Ors,[5] Rivers v Rivers,[6] Duke Group Ltd (in liq) v Alamain Investments Ltd (in liq) (No 2)[7] and in City of Onkaparinga v Hassell Pty Ltd and Ors.[8]

[4] [2008] SASC 369 at [92]-[93]; approved in Deans v Anangu Pitjantatjara Yankunytjatjara [2015] SASC 54 at [14]-[15].
[5] [2002] SASC 431; (2002) 225 LSJS 141.
[6] [2002] SASC 197; (2002) 225 LSLS 74.
[7] [2006] SASC 33.
[8] [2007] SASC 163.
The general rule is that all issues should be dealt with in a single trial. The trial process should not be unduly fragmented. In particular, it is inappropriate that one judge be asked to hear and determine disputed issues of fact, which involve an assessment of the credibility and reliability of the same witnesses, in more than one trial arising from the one action. Further, the experience of the courts has been that splitting issues arising from the one action for separate determination with a view to shortening proceedings and saving costs frequently resulting in prolongation of the proceedings and the incurring of additional costs.
The High Court has warned against the dangers of ordering separate trials and that potential savings of costs and avoiding of delay by ordering separate trials may prove illusory. In Tepko Pty Ltd v The Water Board, Kirby and Callinan JJ held:[9]
The attractions of trials of issues rather than of cases in their totality are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.
The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties, interests.
Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.
[9] [2001] HCA 19;(2001) 206 CLR 1 at [168]-[170].
In Perre v Apand Pty Ltd,[10] Callinan J held:
Care does need to be taken in deciding whether to conduct separate trials of different issues. It sometimes happens that they may turn out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which they are intended to avoid. In tort cases in which damage is the gist of the action, it will generally be undesirable to accede to requests for them, or to order them, unless all parties accept that compensable damage has been sustained by the plaintiffs or applicants as the case may be.
[10] [1999] HCA 36; (1999) 198 CLR 180 at [436].
Notwithstanding these comments, the power of the Court to order separate trials or separate determination of separate issues is a discretionary power.[11] The exercise of the discretionary power must be exercised judicially but is otherwise not fettered.[12]
[11] SA Water Corporation v United Water International Pty Ltd [2009] SASC 383 at [46]; Rivers v Rivers [2002] SASC 197; Duke Group Limited (in liq) v Alamain Investments Ltd (in Liq) [2006] SASC 33; Idoport Pty Ltd v National Australia Bank Limited [2000] NSWSC 1215 at [7].
[12] Idoport (above) at [7].
In exercising its discretion to order separate trials under UCR 151.1, the Court regard should be had to the objects of the Rules under UCR 5.1, namely to facilitate just, efficient, timely, cost-effective and proportionate resolution or determination of the issues in proceedings.[13] Rule 12.2(1) further provides the Court may, in making orders, have regard to the objects of the Rules and, pursuant to UCR 12.2 (2) may have regard to the matters that are set out in UCR 12.2(2).
[13] O’Connor v Suman [2015] NSWSC 1812 at [10].
In exercising its discretion, the Court must give effect to the overriding purpose of the rules, namely to facilitate the just, efficient, timely, cost-effective and proportionate resolution or determination of the issues in the proceedings.
As the Court begins with the proposition that it is ordinarily appropriate that all of the issues be determined at the one time, it is for the party seeking a departure from the usual rule, in this case the applicant, to show why it is appropriate that there be a departure from the rule and that it is desirable for separate trails to be ordered.[14]
[14] Annabella Agius (by her tutor Gail Margaret Chalmers) v Southern Sydney Area Health Service [2003] NSWSC 623 at [15] citing Idoport (above) at [7]; Liberty Financial Pty Ltd [2003] FCA 226 at [35].
In Idoport Pty Ltd v National Australia Bank Ltd,[15] Einstein J identified some of the instances where separate determination may be appropriate. These principles have been restated a number of times and approved in appellate decisions.[16] Einstein J held that separate determination may be appropriate:[17]
a.     where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversy or of substantially narrowing the field of the litigious controversy;
b.    where the resolution of that separate issue carries with it a strong prospect that the parties will thereafter be able to resolve their dispute themselves and thus avoid further litigation; and
c.     where there is a clear demarcation between that issue and all other issues in the case, including issues going to the credit of the witnesses.
(citations omitted)
[15] [2000] NSWSC 125 at [7].
[16] See Wells v Council of the City of Orange [2016] NSWSC 589 at [12]; Agius (above) at [15].
[17] Idoport (above) at [7](4).
Einstein J also provided examples where separate determination of an issue will not be appropriate including where:
a.     there are intertwined issues of facts or law between the separated question and the other questions such that a determination of the separate question will not have a substantial effect upon the width of the field of litigious controversy or the prospect of settlement on the balance of the litigation;
b.    where there is a commonality of witnesses and issues of credit as between the separate issue and the other issues in the case which will or may necessitate a ruling on the credit of one or more of the common witnesses, thus precluding the same judicial officer from again dealing with the matters going to the credit of the common witnesses; and
c.     there is a possibility that resolution of the separate issue will not finally determine the issue but will merely result in an appeal from that decision in relation to that separate issue, creating a multiplicity of proceedings, interruption to the court and undesirable fragmentation of the proceedings.
(citations omitted)
Einstein J went on to note (in accordance with the statements in Tepko (referred to above) that experience of courts suggests that separation of proceedings often does not result in the quicker and cheaper resolution of the proceedings but often has the reverse effect and causes delay and greater expense. Therefore, (again consistently with Tepko), before an issue is to be separately determined it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings.
Determination-separate trials
The applicants seek determination of the following preliminary questions:
(1)That a valuer be appointed to value the Property.
(2)A declaration that the Joint Venture Agreement contains a term as set out in clause 13 of the joint venture agreement dated 15 December 2011 (the option to purchase).
(3)A declaration that the applicants have exercised their right to acquire the Property.
(4)An order for specific performance that the respondents sell the Property to the applicants at the price set out in the valuation set out above or in default of such sale, the Land be sold at auction and the net proceeds sold into Court.
There are a number of immediate difficulties with the questions that have been identified. There is no apparent power for the Court to order a valuer to value the Property. Clause 13 of the written Joint Venture Agreement (on the assumption that it applies) requires the transfer of the Property at the valuation agreed by the parties. There has been no such agreement. It is difficult to see the utility of the resolution of this question.
The second question posed by the applicants is too narrow as it deals only with one aspect of the agreement between the applicants and the respondents in relation to the development of the Property. Properly reframed; the question requires the Court to identify the terms of the agreement between the parties as to the development of the Property. That requires, as appears to be common ground (and is evident from the affidavit material relied on by the parties) that the principals of both the applicants and the respondents give evidence about the history of their dealings, including the developments of other properties, oral conversations between the parties against the backdrop of previous developments, oral communication concerning the development of some of the other properties and the effect of communications concerning the Project Manager Services Agreement. Further, the Court will be required to assess what occurred in other developments. Clearly, the credibility of the witnesses for each side will be critical.
The third question that is identified again raises the difficulty that there has been no agreement between the applicants and the respondents as to the value of the Property. The issue will therefore arise as to the utility of determining that question. Clause 13(c) of the written Joint Venture Agreement provides for three possible avenues by which the Property might be sold: first, to the applicants where there is an agreed valuation between the applicants and the respondents in the event of a dispute which the parties are unable to resolve in an amicable manner; secondly, where either party has given notice requiring the Property to be sold in the event of a dispute which the parties are unable to resolve in an amicable manner and thirdly, where there has been a Notice of Determination under clause 14 (in the event of default). There is the real possibility that determination of the question will not assist in determining the dispute.
The fourth question that has been identified assumes that a valuation has been ordered by the Court and also assumes that the applicants have a right to require the respondents to sell the Property to them, even where the value has not been agreed. Leaving that aside, the respondents have indicated that they will raise a number of defences to a claim for specific performance including (1) delay by the applicants in exercising the claim for specific performance such that the court should not grant specific performance (2) estoppel (3) waiver and (4) election. These latter four defences will all require evidence to be given in relation to the dispute that arose between the parties in 2022 (when there was argument about the extension of the caveat).
The applicants seek an early determination of the questions so it will not lose its right to purchase the Property. Although, a trial on the preliminary questions would occupy less court time than a trial on all issues, and therefore may be able to be heard an earlier time by the Court, it would still require considerable evidence and likely take about three days to hear. It is not a trial on a discrete point or a trial involving an obvious demarcation of issues (such as liability and quantum). There would be evidence as to the oral conversations between the parties in determining what were the terms of the contract. There would be evidence about the history of the relationship between the parties and what occurred in past developments. That evidence would be relevant to determining whether there was a course of conduct such that the terms of the relationship between the parties in relation to the development of the Property might be ascertained. There would also be evidence relating to the defences that have been foreshadowed by the respondents such as estoppel, waiver, election and laches.
The applicants submitted that there was some urgency because the development of the Property could not proceed unless it was transferred to another entity. That is no longer the case after the respondents decided that they would not proceed with the proposed transfer but would source funds for the development without a transfer.
If there were separate trials, the principals of the applicants and respondents would have to give evidence in both trials. In both trials, an assessment of their credit would have to be made.
In the second trial, there would be evidence as to whether the respondents had breached their fiduciary duty and the joint venture including whether they were retaining the Property for their own use and whether they breached their duties by not obtaining finance. In the second trial, there would also be evidence relating to the engagement of ABC, whether they added value to the joint venture for their work and whether the amount paid to them forms part of the joint venture costs. The respondents would also have to give evidence about the additional costs they incurred in making a second application for subdivision and whether they were entitled to claim such costs as part of the joint venture.
The question of witnesses being critical to both trials has been held to be a significant factor in Pioneer Park Pty Ltd (in liq) v ANZ Banking Group[18] approved in Admiral I Pty Ltd v Leighton Contractors Pty Ltd[19] and referred to in McDonnell v Northern Sydney Central Coast Area Health Service.[20] In that latter case, the court held that:
[as] far and away the most significant factor the fact that the evidence of a plaintiff was likely to be critical both as to liability and as to damages/quantum in a number of ways. Additionally, expert evidence which both parties anticipated putting on in relation to liability was also material to any assessment of loss or damage.
[18] [2005] NSWSC 832.
[19] [2005] NSWSC 1105.
[20] [2009] NSWSC 1364 at [9].
There is also the danger that the same evidence would be given in both trials. In both trials, evidence relating to the progress of the development of the Property would be relevant. In the first trial, that evidence would be relevant as to whether an order for specific performance ought to be made in the discretion of the Court and whether there has been delay by the applicants in pursuing that remedy such that the defences referred to might apply. Specific performance is a discretionary remedy and it is generally accepted that the starting point is to enquire whether some other remedy is adequate to do justice.[21] In the second trial, the evidence as to the performance of the alleged joint venture would be relevant to the issue of whether the respondents had breached their fiduciary duties by retaining the Property for their own purposes.
[21] JD Heydon “Heydon on Contract” Lawbook Co , 2019 at [27.10].
There would be obvious further expense if a trial was held in relation to the preliminary issues. There would be two trials with the attendant extra costs. There would be a delay in hearing the second trial which would in all likelihood need to be heard by a different judge. Multiple appeals could also cause further delay and costs.
This is not a case where the determination of the preliminary questions is likely to resolve the remaining matters in dispute.

A trial on all issues would not be particularly complex. As the applicants acknowledged, the question of the entitlement to accounts in relation to the Upton Street and Radar Street properties is an issue of short compass and would be determined by a finding as to the terms of the agreement between the parties. I agree with the submission of the respondents that there would be relatively little further evidence if there is one trial.
Taking into account all of these matters, I decline to exercise my discretion to order separate trials.
Legal Principles-injunction
The Court in accordance with the decision of the High Court in Australian Broadcasting Commission v O’Neill[22] (ABC v O’Neill) must determine whether there is a prima facie case and whether the balance of convenience favours an order for extending the time over the removal of the caveat.
[22] [2006] HCA 46; (2006) 227 CLR 57.
The applicant must make out a prima facie case in the sense that if the evidence remains as it is there is a probability, at the end of trial, that they would be entitled to relief.[23] The reference to a prima facie case does not mean that the applicants must show that it is more probable than not that they will succeed at trial.[24] It is sufficient if it shows that they have a sufficient likelihood of success to justify in the circumstances the preservation of the status quo.[25]
[23] Ibid at [65].
[24] Ibid.
[25] Ibid.
The applicants must satisfy two further requirements, namely the balance of convenience; whether the inconvenience or damage that the applicant would suffer if the caveat is not extended outweighs the inconvenience or damage that the respondents would suffer if an injunction is granted[26] and that damages are not an adequate remedy. The onus lies on the applicants to satisfy the Court of those two matters.[27]
[26] Ibid.
[27] Acment Pty Ltd v Ai Tel Pty Ltd [2007] SASC 96 at [20].
The requirements of prima facie case and balance of convenience are interrelated and not considered independently of each other. That much is clear from the statement in ABC v O’Neill that the applicant must show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo. The Court in ABC v O’Neill[28] also quoted from the judgment of Kitto J in Beecham Group Ltd v Bristol Laboratories Pty Ltd[29] to the effect that how strong the probability needs to be, depends on the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders sought. Doyle J in Adnyamathanha Traditional Lands Association v The Minister for Energy and Mining[30] made a similar statement.
[28] ABC v O’Neill (above) at [25].
[29] [1968] HCA 1, (1968) 118 CLR 618 at 622 - 623.
[30] [2018] SASC 142 at 26.
Therefore, the stronger the prima facie case, the more likely that the Court will find that the balance of convenience favours the applicant and the reverse is also true, the weaker the prima facie case the less likely the balance of convenience will be found to favour the applicants. There is no presumption that if the applicants have established a prima facie case that then the balance of convenience will be found in their favour.
The Court does not conduct a preliminary trial is assessing whether an injunction ought to be granted,[31] although in some cases it may be possible to undertake evaluation of the strength of the applicants’ case for final relief in determining where the balance of convenience lies.[32]
[31] Ibid at [27].
[32] Ibid.
There is some debate in conflict in the authorities as to whether damages are an adequate remedy should be considered as part of the balance of convenience or a separate requirement. Young Croft and Smith in “On Equity” referring to the decision of Sach LJ Evans Marshall & Co Limited v Bertola SA[33] adopted in City of Melbourne v Hamas Pty Ltd[34] stated that the proper question is “is it just in all of the circumstances that the plaintiff should be confined to his remedy in damages?”
[33] [1973] 1WLR 349 at 379.
[34] (1987) 62 LGRA 250.
Delay by an applicant for an injunction is a relevant matter. The granting of an injunction is an exercise of the discretion by the Court. Meagher Gummow and Lehane in “Equity Doctrines and Remedies”[35] state:
As far as laches and delay are concerned, the cases are full or warnings. Megarry J in Legg v Inner London Education Authority[36] nearly declined interlocutory injunctions because the plaintiffs had been guilty of 12 weeks delay and Goff J in Texaco Ltd v Mulberry Filling Station Ltd [37]was troubled by a lesser period. Excessive delay was the plaintiff’s downfall in Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd[38]…
[35] LexisNexis Butterworths, 5^th ed, 2015.
[36] [1972] 3 All ER 177; [1972] 1 WLR 1245.
[37] [1972] 1 All Er 513; [1972] 1 WLR 814.
[38] (1987) 76 ALR 633.
Meagher Gummow and Lehane concluded that mere delay of itself can (not must) be fatal. In Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd,[39] the Court unanimously held:
The granting of injunctive relief, interim or final, is of course, discretionary. Delay be an applicant instituting or prosecuting a claim for an injunction may be a ground for refusing relief event at a final hearing. Where an interim injunction is sought on the basis that the applicant need only show a serious question of fact or law, delay in seeking that relief is an important discretionary consideration.
[39] (1987) 76 ALR 633 at 638.
Determination-injunction
Although the amended interlocutory application was premised on an urgent trial being ordered on the preliminary questions, I do not take the applicants to have abandoned their application for an injunction in the absence of a trial on the preliminary issues. I will consider the application on that basis.
Prima facie case
In determining whether the applicants had established that they had a prima facie case, they referred to my finding in the extension of caveat hearing that it was arguable for the purposes of the application that the terms of the written joint venture agreement governed the relationship between the parties.
That finding is maintained. If the evidence of the applicants is accepted at trial, then it is probable that the Court would find that the written joint venture agreement governed the relationship and the applicants would be entitled to at least some of the relief sought. It is not possible on an interlocutory application to determine the matter given the conflicting evidence.
However, that is not the question to be determined in the present case where the injunction is sought to protect the applicants’ claim for specific performance. The relevant question to be determined is whether there is a prima facie case that the applicants will be entitled to an order for specific performance for the transfer of the land to themselves.
There are a number of difficulties with the applicants’ case for specific performance. First, the right that the applicants seek to invoke the option provided by clause 13(a) of the written joint venture agreement namely that they have first preference to buy the Property at an agreed valuation from the parties should a dispute arise which the joint venturers are unable to resolve in an amicable manner. Clause 13(c) refers to the circumstances in which the Property may be sold including an agreement to sell having been reached by the joint venturers. However, no agreement has been reached because no price has been agreed. There is no mechanism in the written joint venture agreement to resolve that impasse.
Secondly, Chehade & Sons was not a party to the written Joint Venture Agreement. Therefore, its inclusion in the joint venture is dependent on an oral term that is not consistent with the terms of the written Joint Venture Agreement. If it is not a party to the joint venture, there are questions as to whether Chehade & Sons could claim loss of its opportunity to derive profit from constructing houses on the Property.
Thirdly, clause 6(b) of the written joint venture agreement requires the party managing the joint venture to first advertise the allotments for sale as land only.
Fourthly, there has been considerable delay (which I will address later) by the applicants in exercising any right that they may have under the written joint venture agreement for an option to purchase the Property. The matters relied upon by the applicants as constituting a dispute between the joint venturers which have not been able to be resolved have, existed for over 9 months. That delay gives rise to consideration whether the discretion to award specific performance will be exercised and whether the respondents have any defences, such as estoppel, waiver and laches because of that delay or conduct that has occurred during the interim period. Those are matters that cannot be determined on an interlocutory basis.
It is not possible to determine on the interlocutory application of this nature whether the written joint venture agreement governs the development of the Property or whether the Project Manager Services Agreement does so. Further, it is not possible to determine at this stage whether the Court would exercise its discretion to order specific performance.
I am prepared to find that the applicants have a prima facie case for the purpose of the application for the injunction but the matters that I have referred to above must be taken into account when assessing the strength of the prima facie case and whether it justifies an injunction when I take into account the balance of convenience.
Balance of convenience
Neither party has any interest in the Property other than that it be developed and be sold. Neither party has any attachment to the Property itself. It follows that in weighing the advantages and disadvantages in granting or refusing the injunction, it is the monetary consequences that are relevant.
The applicants contend that if they are not granted the injunction then they will lose the right to seek specific performance under the written joint venture agreement. If granted specific performance, on the applicants’ case, the Property would be sold to the applicants at an agreed valuation between the applicants and the respondents. The joint venture agreement does not specify what would happen in the event that there is no agreed valuation. The applicants would then be in a position to develop the Property as they saw fit including either selling the 13 allotments as vacant allotments or constructing houses and then selling each allotment as a constructed house. In that event Chehade & Sons would obtain the benefit of constructing any houses on the Property and the profits in doing so. In the event that an injunction is not granted, then the applicants would lose the benefit of potentially exercising their rights under the joint venture agreement and obtaining those benefits.
The potential losses that may be suffered by the applicants if an injunction is not granted and the right to seek specific performance is lost:
(1)The loss of the right to manage the completion of the development of the Property. If the Property is sold as vacant lots, the respondents have estimated that the costs of completion would be $380,000 while the applicants have estimated that those costs would be $260,000. The respondents have offered to pay Chehade & Sons a fixed sum of $260,000 to undertake the subdivision work but Chehade & Sons refused. That offer, if accepted, would have avoided any loss that the applicants would have suffered if the subdivision costs are in excess of that sum.
(2)The loss to Chehade & Sons of the profit on constructing any houses, rather than selling the allotments as vacant land. There is no evidence of the quantification of that loss or the ability of Chehade & Sons to undertake that work. There is no evidence of the holding and other costs that would be payable by Property Partners if it held onto the Property to allow that work to be undertaken. Further, under the Revised Claim, it is Property Partners who has exercised its rights under the Option Agreement to purchase the Property. It is Property Partners and not Chehade & Sons who claims specific performance of the option agreement. In these circumstances, losses to Chehade & Sons may be too remote to be claimable.
(3)The loss to the applicants if the respondents pay themselves interest at the rate of 10% on their investment. The applicants accept some interest is payable and in determining the amount paid into Court on extension of time for the removal of the caveat, allowance was made for one half of the interest claimed. It is therefore only if the respondents paid itself interest in full when distributing the proceeds of sale and then disbursed that sum such that it could not be recovered, would there be any loss to the applicants. Other forms of relief could be granted in relation to that claim.
(4)The loss to the applicants if the respondents, upon the distribution of the proceeds of sale, paid ABC the $318,175 (inclusive of gst) that has been invoiced by ABC. If the amount claimed by ABC is properly a joint venture expense, then it must be paid by Property Partners pursuant to clause 13(d)(3) of the written Joint Venture Agreement. In that instance, the applicants might still have a claim against the respondents for breach of the joint venture agreement or breach of fiduciary duty in relation to that liability.
(5)The loss to the applicants if the respondents, upon the distribution of the proceeds of sale, paid themselves the costs involved in making the second application for subdivision approval. Again, that amount should be paid if it is a proper expense of the Joint Venture. Again, the applicants might still have a claim against the respondents for breach of the joint venture agreement or breach of fiduciary duty in relation to that liability.
These losses, if sustained, are all monetary losses which could be compensated by an award of damages. There is no evidence the damages are not an adequate remedy and that the respondents are not able to pay these damages. For the reasons that I have stated, there is doubt whether some of the losses are claimable, some of the claimed losses might be protected by some other injunctive relief at a later stage and some of the claimed losses might be required to be paid under the terms of the joint venture agreement even if they give rise to a separate claim for a breach of fiduciary duty or a breach of the joint venture agreement against the respondents.
Further, the undertaking given by the respondents, during the application to extend the time to remove the caveat, to pay $150,000 into Court upon the sale of allotment 6, provides some protection to the applicants.
If an injunction is granted but ultimately specific performance is not awarded, the respondents may suffer the following losses or disadvantages:
(1)The respondents may lose the contracts that have been signed with the potential purchasers of the 13 allotments. The respondents have entered into contracts for the sale of the 11 allotments. On the evidence before the Court the proposed purchase prices are in excess of the valuation of the properties. The most recent purchase prices for an allotment are between $214,000 and $220,000 while the allotments are valued at $160,000 (for 12 allotments) and $190,000 (for one allotment). If the injunction is granted and the subdivision is not completed, then these contracts would have to be terminated as the respondents would no longer be the vendor and would have no ability to sell the allotments.
(2)The applicants have sought to exclude the following amounts as profits or expenses of the joint venture:
1.     The amount payable to ABC.
2.     The amount claimed by the respondents for interest.
3.     The amount paid by the respondents for making a second application for subdivision of the Property.
(3)Further holding costs.
(4)Potential delay in engaging a builder to complete the subdivision works.
(5)The right to complete the subdivision of the Property.
(6)Delay in the completion of the subdivision and the return of some of their investment and therefore the delay in receiving income from the sale of the alloments.
I consider that there has been delay by the applicants in seeking specific performance of their option to purchase the Property.
The option arises when there is a dispute between the parties under the joint venture agreement that is unable to be resolved by amicable agreement. By no later than June 2022, as is from affidavit material and other documentation filed by the applicants, the applicants and the respondents were in dispute about the following matters which have not been resolved:
(a)The unpaid amounts that are alleged to be due to Chehade & Sons Contractors.
(b)The amount of the commission payable to ABC and whether it was properly payable as an expense of the joint venture.
(c)The progress of the development and the delay by the respondents in undertaking the subdivision and the delay by the respondents in obtaining finance.
(d)Whether the respondents were entitled to interest rate of 10% on their investment.
There is nothing further that has prompted the application to be made at this time rather that or prior to June 2022. The proposed transfer to Lawrdo Growth was a new matter but that matter has been resolved by the respondents agreeing not to transfer the Property to that new entity. There is no reason or additional fact that would provide any reason for the applicants to exercise its right for specific performance of its right to purchase the property. There is no reason why that right could not have been exercised in June 2022. In my view there has been relevant delay by the applicants. The applicants have not proffered any good reason for the delay.
The applicants acknowledged this when they submitted that the dispute was twofold: first, the proposed transfer of the Property to Lawrdo Growth (which is not proceeding) and secondly, the existing dispute and that under the joint venture the applicants should have been managing the development and the properties should have been sold as house and land packages which would have enabled Chehade & Sons to obtain a profit. The applicants also acknowledged in their oral submissions that the injunction application was made because there was a threat to transfer the Property to Lawrdo Growth. The applicants further acknowledged that the injunction would not have been brought or needed if the threat was not made to transfer the Property to Lawrdo Growth.
The respondents have continued to expend money since June 2022 such that they have suffered prejudice by the delay in the applicants asserting any right to purchase the Property.
The respondents submitted that the applicants had not shown that they had sufficient assets to support the undertaking as to damages that they had proffered. Having given leave to the applicants to file a further affidavit, I am satisfied that the applicants do have sufficient assets to support their undertaking. The adequacy of the undertaking as to damages is therefore not a relevant matter.
Taking all of these matters into account, I consider that the applicants have not shown that they have a sufficient likelihood of success to justify in the circumstances the preservation of the status quo and the granting of the injunction, taking into account the balance of convenience. The applicants have not shown that damages would not be an adequate remedy. Further, the delay in the applicants seeking an order for specific performance and the consequent injunction preventing dealing with the Property until that application for specific performance has been heard is a relevant matter.
As the test for the lodging of a caveat is the same as that of an interlocutory application, it follows that the applicants claim to lodge a second caveat also fails for the same reasons.
Conclusion

I dismiss the application of the applicants for the hearing of preliminary issues and their application for an injunction or permission to lodge a second caveat.