Cooper v Moloney (No 6) - [2012] SASC 212

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Civil)
COOPER v MOLONEY (NO 6)
[2012] SASC 212
Judgment of The Honourable Justice Blue
15 November 2012
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - INJUNCTIONS TO PRESERVE STATUS QUO AND PROPERTY PENDING DETERMINATION OF RIGHTS
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - RELEVANT CONSIDERATIONS - BALANCE OF CONVENIENCE GENERALLY
PROFESSIONS AND TRADES - LAWYERS - DUTIES AND LIABILITIES - SOLICITOR AND CLIENT - ACTING AGAINST FORMER CLIENTS
PROCEDURE - COSTS - SECURITY FOR COSTS - OTHER REASONS FOR SECURITY
Hampden Park Pty Ltd (a Moloney company) sues Mr Cooper for trespass to land. Mr Cooper denies the claim on the basis and counterclaims for a declaration that he entered into a contract for a 10 year lease. Mr Cooper seeks an interlocutory injunction restraining Hampden Park evicting him before trial.
Mr Cooper sues Gortmore Proprietors (a partnership of the Moloneys) for work and labour allegedly performed pursuant to three contracts and the three Moloney land owners in restitution for $661,747 (the Debt Action). In October 2011, he lodged worker’s liens over the three titles to the land and in November 2011 he instituted the action claiming the monies said to be due by Gortmore Proprietors and the land owners. The land owners applied to the District Court to remove the liens from the titles on the ground that, in the action, Mr Cooper did not seek to enforce the liens within the meaning of s 15 of the Workers Liens Act 1893 (SA) within the requisite 14 days. Mr Cooper sought an interlocutory injunction restraining the Registrar-General from removing the liens before trial. A Master dismissed the application and Mr Cooper appeals against the dismissal. He also applies for a separate trial of the issue whether by commencing the action he sought to enforce the liens within the requisite 14 days.
The Moloneys seek an injunction restraining Camatta Lempens from acting as solicitors for Mr Cooper in the actions on the ground that they purportedly previously acted for Mr Moloney in relation to another matter.
The Moloneys seek security for costs in the Debt Action.
Held
Interlocutory injunction to restrain eviction
1. Mr Cooper has satisfied the agreed first limb of the criteria for the grant of an interlocutory injunction by making out a prima facie case (at [34] – [38]).
2. The grant of an interlocutory injunction would enable Mr Cooper to continue a use of the land which prima facie is contrary to section 44 of the Development Act 1993 (SA). The Court should not, by injunctive order, enable the continuation of an illegal activity (at [66], [77], [83]).
3. The balance of convenience favours not granting the injunction. The potential prejudice to the Moloneys outweighs the potential prejudice to Mr Cooper if the injunction is not granted (at [69] – [82]).
4.      Application for interlocutory injunction dismissed.
Separate trial of question whether action issued to enforce worker’s liens
5.      The enforcement action issue is complex. The enforcement action issue is interrelated with other worker’s liens issues in the Debt Action and should be determined in the same trial (at [100] – [104]).
6.      Disclosure has not been completed and it is conceivable that evidence will be adduced at the trial of the Debt Action which bears upon the enforcement action issue (at [103]).
7.      Application for separate trial dismissed.
Interlocutory injunction to restrain removal of worker’s liens
8.      Where refusal of an interlocutory injunction will destroy the subject matter of the action, the mere fact that the plaintiff’s undertaking as to damages is not backed by substance is not conclusive in weighing the balance of convenience. The Master therefore erred in his approach (at [108] – [110], [114]).
9. The Moloneys did not adduce any evidence of any specific prejudice they will suffer if the liens remain on the titles. The prejudice to Mr Cooper therefore predominates in assessing the balance of convenience. The balance of convenience favours the continuation of the interim injunction ([107], [111] – [114]).
10.     Appeal allowed and interim injunction restraining removal of the worker’s liens extended until further order.
Interlocutory Injunction to restrain Camatta Lempens from acting
11.     On Mr Moloney’s case, Camatta Lempens had not acted on Mr Moloney’s behalf. They therefore owe no duty to Mr Moloney to disclose confidential information they possess (at [126] – [127]).
12.     There are no grounds, in the nature of conflict of interest or otherwise in the interests of justice, which preclude Camatta Lempens acting for Mr Cooper (at [129] – [135]).
13.     Application for injunction dismissed.
Security for Costs
14.       Mr Cooper is not bringing the action in a representative capacity (at [139] – [142]).
15.    The Moloneys have not established reasonable grounds to suspect that the Debt Action may have been brought for an ulterior purpose (at [147] – [152]).
16.    The Moloneys have not established that it is necessary in the interests of justice to order security for costs (at [154] – [159]).
17.    Application for security for costs dismissed.
Development Act 1993 (SA) s 4, s 32, s 44, s 84, s 85; Law of Property Act 1936 (SA) s 26; Occupational Health, Safety and Welfare Act 1986 (SA) s 23, s 24; Retail and Commercial Leases Act 1995 (SA); Worker's Liens Act 1893 (SA) s 5, s 6, s 10, s 15; Supreme Court Rules 2006 (SA) s 194(1), 211, 285(4), referred to.
Kison v Papasian (1994) 61 SASR 567, discussed.
Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508; Black v Taylor [1993] 3 NZLR 403; Cayne v Global Natural Resources Plc [1984] 1 All ER 225; Coe v Commonwealth (1993) 68 ALJR 110; Collins v Emmacord Autos Pty Ltd (SASC, Full Court, Judgment No S6418, 3 November 1997, unreported); Cooper v Moloney (No 2) (No 2) (Unreported, SASC, Master Lunn 3.9.2012); Cooper v Moloney (No 3) [2012] SASC 153; Cooper v Moloney (No 4) (Unreported, Supreme Court of South Australia, Master Lunn, 8 October 2012); Cowandale Country Club Pty Ltd v Astill (1993) 115 ALR 112; Cummings v Claremont Petroleum NL (1996) 185 CLR 124; Custom Credit Corporation Ltd v Whittal Holdings Pty Ltd (unreported, 7 April 1992, Supreme Court of Western Australia); Fejo v Northern Territory [1998] HCA 58; (1998) 195 CLR 96; Flower and Hart v White Industries (QLD) Pty Ltd [1999] FCA 773; (1999) 87 FCR 134; Grimwade v Meagher [1995] 1 VR 446; Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561; Medical Board of SA v N,JRP [2006] SASC 19; (2006) 93 SASR 546; Murray v Macquarie Bank Ltd (1991) 105 ALR 612; Nasr v Vihervaara [2005] SASC 83; (2005) 91 SASR 222; Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; (2001) 4 VR 483; Thistlethwayte v Gender Estates Pty Ltd (1976) 8 ALR 700; Varley v Varley [2006] NSWSC 1025; Ward v The State of Western Australia (unreported, 21 December 1995, Federal Court of Australia,) per Nicholson J ; Williams v Spautz (1992) 174 CLR 509 , considered.

COOPER v MOLONEY (NO 6)
[2012] SASC 212
Civil: Interlocutory

BLUE J: In action number 413 of 2012 (“the Trespass Action”), Hampden Park Pty Ltd sues Mr Cooper for trespass to land, effectively seeking eviction and damages. Mr Cooper defends the action on the basis, and counterclaims for a declaration, that he is entitled to quiet enjoyment of the land pursuant to a 10 year oral lease.
In action number 1707 of 2011 (“the Debt Action”), Mr Cooper sues Gortmore Proprietors (a partnership of Brendan Moloney, Brian Moloney[1] and Helen Moloney) for a debt of $661,747[2] for work and labour undertaken pursuant to three oral contracts. He sues Brendan Moloney, Brian Moloney and Hampden Park Pty Ltd for restitution by reason of unjust enrichment in the same amount. Mr Cooper claims, and the defendants in that action deny, that he also sues to enforce three worker’s liens. A counterclaim is brought against Mr Cooper for damages for breach of four oral contracts.
[1] Brian Moloney died earlier this year. It is proposed that his executors be joined as parties in his stead.
[2] All dollar figures quoted herein are rounded and exclusive of GST.
I refer to one or more of Gortmore Proprietors, Hampden Park Pty Ltd and Brendan, Brian and Helen Moloney collectively as “the Moloneys”.
Mr Cooper is an undischarged bankrupt. He was made bankrupt on 26 August 2009.
Mr Cooper seeks an interlocutory injunction restraining Hampden Park Pty Ltd from evicting him.
Mr Cooper appeals from an order by a Master dismissing his application for an interlocutory injunction restraining the Registrar-General from entering memoranda on the titles that the worker’s liens have ceased.
The Moloneys seek an injunction restraining Camatta Lempens from acting as solicitors for Mr Cooper in the actions.
The Moloneys seek security for costs in the Debt Action.
These reasons for judgment address those four applications.
Background facts
The parties
At material times, Brendan Moloney, Brian Moloney and Hampden Park Pty Ltd (“Hampden Park”) owned adjoining lots of farmland situated three kilometres out of Maitland, South Australia. The total area of the three lots (collectively “the Moloney land”) was approximately 550 hectares. Brian Moloney was the sole director of Hampden Park.
Gortmore Proprietors was a partnership comprising Brian, Brendan and Helen Moloney. Gortmore Proprietors carried on the farming activities undertaken on the Moloney land, principally cereal and pulse cropping.
Mr Cooper is involved in the repair, maintenance and manufacture of farming machinery and equipment. Prior to August 2009, he was trustee of the T & A Holdings Trust. On 26 August 2009, he was made bankrupt. Mrs Cooper replaced Mr Cooper as trustee around that time.
As at September 2009, Mr Cooper was involved in a farming machinery and equipment workshop business in Moonta. This business was conducted by the trustee of the T & A Holdings Trust. There is a dispute whether Mr Cooper told Brendan Moloney (“Mr Moloney”) of this or whether Mr Moloney believed that Mr Cooper carried on the business in his own right under the name “T & A Holdings”.
The dealings
Mr Cooper and Mr Moloney had a number of communications and dealings between late 2009 and early 2011. There are fundamental disputes between them concerning the existence, nature and terms of the dealings and communications.
There is a lack of clarity on the material before me as to the identity of the party or parties on each side of such dealings as did occur. Most contracts alleged by one side are denied by the other side. There is a lack of clarity whether any given contract was entered into by Mr Cooper on his own behalf or on behalf of the trustee of the T & A Holdings Trust or on behalf of Rothmore ALT Engineering. There is a lack of clarity whether any given contract was entered into by Mr Moloney on his own behalf or on behalf of Gortmore Proprietors or Hampden Park. I refer in neutral terms to “Mr Cooper” to designate Mr Cooper and/or any other persons or entities on his side and to “the Moloneys” (as above) to designate Mr Moloney and/or any other persons or entities on his side.
In February 2010, Mr Cooper moved equipment and materials from the Moonta workshop to a shed or sheds on Hampden Park’s land.
Mr Cooper’s case is that on 28 December 2009 he entered into an oral contract with Mr Moloney as agent for Hampden Park under which it was agreed that Hampden Park would lease to Mr Cooper the shearing shed, the storage shed and part of the machinery shed together with access to the adjoining yard on its land (collectively “the sheds”) for 10 years at a rent of $100 per week per shed.
The Moloneys’ case is that there was no such discussion and no contract. Their case is that Mr Moloney told Mr Cooper that he could store items in the shearing shed on a temporary basis while he found premises to replace the Moonta workshop premises and that this discussion occurred in January 2010.
Mr Cooper’s case is that he entered into three separate oral contracts with Mr Moloney acting as agent for Gortmore Proprietors:
1.on 28 December 2009 to undertake certain work at $80 per hour and for an associate to undertake work at an agreed hourly rate;
2.on 1 February 2010 to undertake certain work at $80 per hour and for an associate to undertake work at agreed hourly rates;
3.in December 2010 to harvest the crop on the Moloney land for $450 per hour and for Mr Cooper and associates to undertake incidental work at agreed hourly rates.
Mr Cooper’s case is that the collective amount due for work done pursuant to the three separate oral contracts is $661,747. He has not identified the separate work done or amount due under each of the three contacts.
The Moloneys deny that Mr Moloney entered into the three contracts alleged by Mr Cooper. Their case is that Mr Moloney engaged Mr Cooper’s associates direct on a fee for services basis and the contractual relationship is with each associate and not Mr Cooper. It appears that their case is that they engaged Mr Cooper in a similar manner and paid him for any work he undertook pursuant to that engagement.
The Moloneys’ case is that Mr Moloney, as agent for Gortmore Proprietors, entered into four oral contracts with Mr Cooper:
1.in October 2009 for Mr Cooper to manufacture a chaser bin;
2.in October 2009 for the Moloneys to harvest grain on land owned by the Aboriginal Lands Trust at Point Pearce;
3.in December 2009 for Mr Cooper to purchase an R62 Gleaner harvester;
4.in December 2009 for Mr Cooper to transport grain from the Moloney land to the Ardrossan silos.
Mr Cooper admits the first two contracts but his case is that they were made by him as agent for the trustee of the T & A Holdings Trust. He denies the existence of the other two contracts alleged by the Moloneys.
The actions
In August 2011, Hampden Park instituted the Trespass Action in the District Court.
In November 2011, Mr Cooper instituted the Debt Action in this Court.
In January 2012, Mr Cooper filed a defence in the Trespass Action relying on the alleged 10 year oral lease. In February 2012, he amended the defence to include a counterclaim seeking a declaration that he is entitled to quiet enjoyment relying on the alleged 10 year oral lease.
In March 2012, the Trespass Action was transferred to this Court.
In May 2012, the Moloneys applied for summary judgment in both actions. On 3 September 2012, a Master dismissed the applications for summary judgment.[3]
[3] Cooper v Moloney (No 2) (Unreported, Supreme Court of South Australia, Master Lunn, 3 September 2012).
Interlocutory injunction precluding eviction
On 15 February 2012, Mr Cooper applied in the Trespass Action (FDN 12 in the District Court) for an interlocutory injunction restraining Hampden Park from evicting him or precluding access to the Sheds.
On 24 February 2012, a Judge of the District Court granted an interim injunction and listed the application for an interlocutory injunction for argument on 22 March. That listing was automatically vacated as a consequence of the order made on 9 March that the Trespass Action be transferred to this Court. The application was ultimately argued before me on 22 and 23 October and on 5 and 8 November.
Prima facie case
It is common ground that, in the circumstances, it is a precondition to the grant of an interlocutory injunction in favour of Mr Cooper that he make out a prima facie case within the meaning of the usual test for the grant of an interlocutory injunction.[4]
[4] Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 at [65]-[71] per Gummow and Hayne JJ (see also [19] per Gleeson CJ and Crennan J). See also Fejo v Northern Territory [1998] HCA 58; (1998) 195 CLR 96 at [26] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ referring to a “serious question to be tried”.
Mr Cooper swore an affidavit in which he deposed to a conversation with Mr Moloney on 28 December 2009 during which it was agreed that he would rent the sheds for $100 per week per shed. He did not depose directly to conversation about the period of the rental, but exhibited a diary note which he said he made at the time which referred to a period of 10 years.[5]
[5] No point is taken by the Moloneys that Mr Cooper’s evidence concerning the discussion about the period of the rental was indirect in this way.
By contrast, Mr Moloney earlier swore an affidavit denying any such conversation. His version was that in January 2010 he agreed to help out Mr Cooper by allowing him to use a shed for a few months until he was able to find alternative premises to his Moonta workshop and that there was no rental to be paid or contract entered into at any time.
The first issue going to the existence of the alleged contract for lease is the existence and content of the conversation between Mr Cooper and Mr Moloney on 28 December 2009. The Moloneys make extensive submissions, including by reference to other communications or transactions between the parties or between one of them and other persons, as to why Mr Cooper’s evidence of the conversation should be rejected as a matter of credibility. On an interlocutory injunction, it is neither possible nor appropriate to make credibility findings at least when none of the witnesses gave oral evidence or were cross-examined. Even if Mr Cooper’s account of the conversation were regarded as inherently unlikely (as the Moloneys contend), that would not entail that he does not establish a prima facie case for the purpose of an interlocutory injunction.
The second issue involves the identity of the parties to the alleged oral contract.
1.On Mr Cooper’s side of the contract, the Moloneys contend that, if Mr Cooper would otherwise be a party to the contract and entitled to enforce it, the effect of sections 58 and 116 of the Bankruptcy Act 1966 (Cth) is to vest the lease and the right to enforce the contract in Mr Cooper’s bankruptcy trustee and to divest it from Mr Cooper.
In Kison v Papasian,[6] Bollen J (King CJ and Mullighan J deciding on a different primary ground but agreeing with Bollen J as a secondary ground) held that:
… unless and until the official receiver intervenes, a bankrupt … has power to deal with after-acquired property and to bring proceedings in respect of it, notwithstanding it is vested in the official receiver. If in the course of proceedings by the bankrupt the official receiver does intervene, the bankrupt’s proceedings may be brought to nothing … [7]
Mr Cooper contends that he has standing to rely upon the lease and assert a right to quiet possession based on it notwithstanding that the lease may be vested in the bankruptcy trustee. The Moloneys contend that the decision in Kison is not applicable or has been superseded by the decision of the High Court in Cummings v Claremont Petroleum NL.[8]
Without deciding the respective contentions between Mr Cooper and the Moloneys, it is arguable that, by reason of the decision of the Full Court in Kison v Papasian, Mr Cooper is entitled to enforce the oral contract for lease notwithstanding his bankruptcy (at least in the absence of any intervention by his bankruptcy trustee).
2.There is a contest on the evidence whether Mr Cooper informed Mr Moloney that “his” farm machinery and equipment business was conducted by Mrs Cooper as trustee for the T & A Holdings Trust. Mr Cooper’s case is that the contracts with the Moloneys relating to the chaser bin and harvesting the crop on the Point Pearce land were entered into by him as agent for Mrs Cooper as trustee of that trust. If this is so, it might be that Mr Cooper also entered into the oral contract for the lease as agent for Mrs Cooper as trustee of the trust. However, the Moloneys do not contend that Mr Cooper has not established a prima facie case for the purpose of an interlocutory injunction on this ground.
3.On the Moloneys’ side of the contract, it appears to be an issue whether Hampden Park (which was controlled by Brian Moloney) authorised Mr Moloney to enter into a contract to grant a lease for 10 years. However, again, the Moloneys do not contend that Mr Cooper has not established a prima facie case for the purpose of an interlocutory injunction on this ground.
[6] [1994] SASC 4476; (1994) 61 SASR 567.
[7] Ibid at 572 quoting from and adopting the reasoning of Bowen CJ in Eq in Thistlethwayte v Gender Estates Pty Ltd (1976) 8 ALR 700 at 703-704.
[8] [1996] HCA 19; (1996) 185 CLR 124.

The third issue is whether an oral contract for the grant of a 10 year lease is unenforceable by reason of section 26 of the Law of Property Act 1936 (SA) because it is not in writing. Mr Cooper seeks to overcome this obstacle in two ways. First, he contends that he has an “equitable lease”, meaning that the contract will be the subject of specific performance by equity under the doctrine of part performance. His second contention is that the contract comprised a “retail shop lease” enforceable pursuant to the Retail and Commercial Leases Act 1995 (SA), notwithstanding that it was entirely oral. The Moloneys contest these responses, but do not contend that Mr Cooper has not established a prima facie case in relation to those issues for the purpose of an interlocutory injunction.
The fourth issue arises from the fact that Mr Cooper has not paid rent by way of money to Hampden Park pursuant to the alleged contract. By a series of invoices, issued successively in February/April,[9] July and October 2011 (each for the period January 2010 to January 2011 inclusive), Mr Cooper purported to set off amounts on account of rent for the sheds against amounts allegedly due to him for work done. Mr Cooper maintains that he is entitled to set off the amounts claimed in those invoices against ongoing rent from February 2011 onwards. The Moloneys contest these responses but accept that, to rely on the alleged non-payment of rent, they would first have to give notice to Mr Cooper (without prejudice to their denial of any lease) of intention to terminate the lease on that ground. They have not given such notice at this point.
[9] It is not clear whether Mr Cooper maintains his initial evidence that the first series of invoices was issued to the Moloneys in February or now accepts that it was in April.
In the circumstances, Mr Cooper has demonstrated a prima facie case within the meaning, and for the purpose, of the first question to be determined on an application for an interlocutory injunction.
Balance of convenience
It is common ground that, by February 2012, Mr Cooper was using the shearing shed and the yard outside the shearing shed for manufacturing farm equipment and the storage shed and part of the machinery shed for storage. It is also common ground that on 11 or 12 February 2012 the Moloneys moved whatever was being stored by Mr Cooper out of the storage shed (and perhaps machinery shed) into the open. Since 13 February and since the grant of the interim injunction on 24 February 2012, Mr Cooper has been using only the shearing shed and the yard outside it for manufacturing and storage. Mr Cooper seeks an interlocutory injunction confined to the shearing shed and yard outside it.
Potential prejudice to Mr Cooper
Mr Cooper contends that, if an interlocutory injunction is not granted, he will be evicted from the shearing shed and will suffer permanent loss, and hence prejudice, because he has not been able to locate alternative premises and would be obliged to close down his business.
Mr Cooper gave evidence that he has been actively looking for the last 12 months for alternative premises. He has been in regular contact with two real estate agents in Moonta over the last 6 months and they have agreed to notify him if anything suitable becomes available. He has also accessed internet sites (such as realestate.com.au) twice a week over the last 12 months.
Mr Cooper gave evidence that suitable alternative premises would be in the Yorke Peninsula area (between Kadina and Maitland) and have three phase 415 volt power, a shed or sheds with a combined area of 150 x 70 feet, sufficient yard area to manoeuvre machinery, sufficient access for ingress and egress of large machinery and water and toilet facilities.
Mr Cooper gave evidence that the only suitable alternative premises he has located to date were in Moonta in October or November 2011. The property was on the market for sale or lease. He had three conversations with the owners, but subsequently it was withdrawn from the market because the owners decided to commence their own business. Mr Cooper did not say whether he made an offer to lease the premises or whether the owners made an offer to him.
Mr Moloney gave evidence that Mr Cooper has transported a number of items of farm equipment to Mr Cooper’s uncle’s farm. Mr Cooper gave evidence in response saying that he has now asked his uncle whether he could operate his manufacturing business from a new shed on his uncle’s farm, and that his uncle has refused. He also gave evidence that there is no three phase power on his uncle’s farm.
Mr Cooper gave evidence that, as at 26 October, his business had nine large manufacturing contracts, with approximately 25 jobs to be completed prior to harvest. It is common ground that harvest takes place in the summer, beginning in November. Mr Cooper’s evidence is that he engages five sub-contractors in his business and that the business operates up to seven days a week and up to 15 hours per day.
Mr Cooper estimated that it would take six weeks to relocate his business and cost approximately $48,000.
Mr Cooper contends that, if he is obliged to close down his business, he will suffer substantial financial losses. He has not attempted to quantify the profit he is making from his business or its capital value. He exhibited his tax returns for the years ended June 2010 and June 2011. They show revenue over the two years totalling approximately $240,000, expenses totalling approximately $370,000 and a net loss totalling approximately $130,000. Mr Cooper has not adduced any evidence of the financial performance of his business from July 2011 onwards.
The Moloneys express cynicism that Mr Cooper has been and is unable to locate alternative premises from which to carry on his manufacturing and repair business. They contend, for example, that he could purchase a phase convertor which would convert single phase power into three phase power. However, Mr Cooper was not cross-examined on his affidavits. It is not possible to make credibility findings about his evidence. Whatever scepticism might be expressed by the Moloneys about Mr Cooper’s evidence, I proceed on the basis of accepting his evidence on the topic of the availability of alternative premises.
In relation to the time and cost of relocating the items which Mr Cooper is storing or using on the Moloney land, the Moloneys offer, if the interim injunction is discharged, to load, transport and unload all such items over a short period of time at their own cost.
Potential prejudice to the Moloneys
The Moloneys contend that, if an interlocutory injunction is granted, they will suffer financial prejudice as a result of being unable to store any of their chick pea, field pea, lentil or faba bean crops (collectively “pulses”) in the shearing shed. Mr Moloney gave evidence that he proposes to store the bulk of that crop this season (summer of 2012/2013) in the shearing shed. He gave evidence that, if they were to sell the pulse crops immediately at the time of harvest, the Moloneys would be exposed to the spot market price and deprived of the opportunity to obtain a higher price by waiting to sell them at an optimal time.
Mr Moloney identified three alternative methods of storage, each of which he said has significant disadvantages.
1.One alternative storage method would be to purchase silos. This would involve a capital cost of approximately $14,000 per 100 tonne capacity. Mr Moloney contends that the capital cost of silos makes this option uneconomic.
2.Another alternative would be to store the pulses at regional storage sites operated by Viterra at, for example, Ardrossan. This would cost approximately $1,700 per 100 tonnes for receival fees and $120 per 100 tonnes monthly storage fees. However, the storage fees would double from May 2013 onwards and quadruple from September 2013 onwards (assuming that new season grain demand does not require the storage space). Mr Moloney contends that this would constrain the Moloneys’ ability to sell the pulses at the optimal price.
3.A third alternative is to purchase single use grain storage bags. This would entail the purchase of the bags together with hiring loading and out loading equipment and cleaning and restoring the condition of the pulses. It would cost approximately $2,000 per 100 tonnes. It is subject to the risk of damage and deterioration due to pests and diseases. This was a problem suffered by the Moloneys in the 2009/2010 season when they utilised grain storage bags.
Mr Moloney estimates that the pulse crop this season will total 1,025 tonnes. His estimate of the storage capacity of the shearing shed is 1,300 tonnes. The Moloneys presently have a storage capacity (silos and grain bins) of 200 tonnes.
Mr Cooper expresses cynicism concerning Mr Moloney’s evidence and claims. Mr Cooper gave evidence of his own estimates of the Moloney 2012/2013 pulse crop at 350 tonnes, the Moloneys’ existing storage capacity at 400 tonnes and the capacity for storage in the shearing shed at 110 tonnes.
Neither Mr Moloney nor Mr Cooper were cross-examined on their affidavits. It is not possible to make credibility findings about Mr Moloney’s evidence. Whatever scepticism might be expressed by Mr Cooper about Mr Moloney’s evidence, I proceed on the basis of accepting his evidence on the sale and storage of pulses.
The Moloneys contend that, if an interlocutory injunction is granted, they would be exposed to the risk of irrecoverable losses if the shearing shed (and other items on the farm) were damaged or destroyed by fire or accidental damage caused by Mr Cooper’s occupation. It is submitted that the Moloneys’ own insurance would not cover such loss, although no evidence was given to that effect. Mr Cooper has offered, as a term of the grant of an interlocutory injunction, to take out, and pay the premiums for, a policy of insurance in his name and the Moloneys’ name against such fire or accidental damage.
The Moloneys contend that, if an interlocutory injunction is granted, they will be exposed to the risk of prosecution and penalties for a breach by Mr Cooper of the Occupational Health, Safety and Welfare Act 1986 (SA) and the Regulations made thereunder. That Act imposes duties primarily on employers. Some provisions (such as sections 23 and 24) impose duties on occupiers or manufacturers (such as Mr Cooper). The Moloneys do not identify any specific provisions which impose duties or liabilities upon owners of land as such.
The Moloneys contend that, if an interlocutory injunction is granted, they will be exposed to disturbance, tension and risk of danger from strangers coming onto the Moloney land for the purpose of doing business with Mr Cooper.
Non-complying land use
On 6 November 2012, an authorised officer of the District Council of Yorke Peninsula wrote a letter to Mr Cooper and to the Moloneys’ solicitors. The letter said that the Moloney land was zoned for farming use and that an area of it [the shearing shed and adjoining yard] was being used for a non-complying use, namely an engineering business manufacturing farm plant and machinery. The letter said that this constitutes development which is illegal and in breach of Part 4 of the Development Act 1993 (SA) (“the Development Act”). The letter said that the Council had instructed the officer to commence proceedings against Mr Cooper and Hampden Park pursuant to sections 84 or 85 of the Development Act. The letter said that the officer was prepared to extend a period of grace of one month in which to cease the illegal land use, beyond which he would serve a notice under section 84 or institute proceedings under section 85 in the Environment, Resources and Development Court. The letter referred to the option of lodging a development application with the Council to seek approval for the land use pursuant to the Development Act.
The evidence before me establishes that the Moloney land falls within the “General Farming Zone” of the District Council of Yorke Peninsula’s Development Plan. The General Farming Zone has six objectives which relate to agriculture, native vegetation and wind farms. The first principle of development control is that:
Development should be primarily for broadacre grazing and cropping on large land holdings.
Principle 6 provides:
Industrial Development should not take place unless it:
(a)     it [sic] associated with the processing or handling of primary produce and will be of benefit to the local community;
(b)     will not give rise to dangerous traffic conditions;
(c)     will not prejudice the use of land in the locality for primary production use;
(d)     will not have an unacceptable impact on any dwellings within the locality;
(e)     will not impair the amenity of the locality;
(f)    cannot be located within an appropriate industrial zone; and
(g)     can be designed and sited to minimise its impact on the landscape.
Principle 18 provides:
The following kinds of development are complying in the General Farming Zone:
Farming:
Farming buildings that:
(a)     are sited more than 100 metres from any public road or allotment boundary;
(b)     have a total floor area of 500 square metres or less;
(c)     have exterior cladding consisting of new materials; and
(d)     are used wholly or partly for the purpose of farming or horticulture.
Section 32 of the Development Act provides:
Subject to this Act, no development may be undertaken unless the development is an approved development.
Section 44(1) provides:
A person must not undertake development contrary to this Division.
Section 4(1) of the Act defines “to undertake development” to mean:
to commence or proceed with development or to cause, suffer or permit development to be commenced or to proceed.
Mr Cooper does not contend that the conduct of an engineering business to manufacture farm plant and machinery is a complying use in the General Farming Zone. He does not dispute that development approval is required for such a use. Prima facie, such use is illegal as asserted by the officer of the Council.
The effect of the interim injunction presently in force has been to prevent Hampden Park from evicting Mr Cooper or preventing him from carrying on his engineering business. Prima facie, this has enabled Mr Cooper to act in continuing breach of section 44 of the Development Act. It is inappropriate that an injunction granted by the Court permit the carrying on of an illegal activity. This in itself is a reason not to grant an interlocutory injunction as sought by Mr Cooper and to discharge the interim injunction at least in its present terms.
Mr Cooper contends that he is in the process of making an application to the Council for development approval, that this Court cannot determine at this stage whether development approval will be granted and that the interim injunction ought to be continued in the meantime. However, the possibility that development approval might subsequently be granted does not detract from the position that prima facie Mr Cooper is committing an offence in contravention of section 44 of the Development Act by continuing to carry on his engineering business pending the submission and determination of such an application.
Mr Cooper contends in the alternative that, regardless of the question of his actually operating his business, an interlocutory injunction ought to be granted restraining the Moloneys from preventing him from storing his equipment or having it located on the Moloney land. I address this submission below in the context of the overall weighing of potential prejudices.
Weighing of potential prejudices: carrying on business
I do not have any material on the basis of which I could assess the quantum of financial loss that would be suffered by Mr Cooper if his business is destroyed due to not being able to continue to carry it on on the Moloney land. This is because Mr Cooper has not adduced any evidence of the financial performance of his business since July 2011 or of the value of that business. On the other hand, while the quantum of that loss is capable of being assessed, it would on any view be a complex assessment involving matters of opinion and judgment. I therefore weigh as a factor in favour of the grant of an interlocutory injunction the fact that some loss would be caused by destruction of the business and the fact that the assessment of that loss would be a complex task, although the weight overall is tempered by the fact that Mr Cooper did not attempt to quantify that financial loss.
In relation to the cost of moving, the weight of this factor is largely tempered by the offer by the Moloneys to undertake the move. This is qualified to a degree by Mr Cooper’s concerns about loss of or damage to equipment and supplies if they are moved by the Moloneys. Overall, this factor has some, but limited, weight in favour of the grant of an interlocutory injunction.
The weight of both of these factors is tempered by the fact that, if Mr Cooper is ultimately successful at trial on the existence of the equitable lease, he would be entitled to damages against Hampden Park for wrongfully evicting him. Hampden Park owns a substantial proportion of the Moloney land and submissions were made to me on the assumption that Hampden Park is in a financial position to pay such damages.
In relation to potential prejudice suffered by the Moloneys, I accord weight to the potential loss of revenue or, alternatively, the extra costs which would be incurred by the Moloneys to store pulses if they cannot use the shearing shed for storage purposes. It is difficult to assess the likely quantum of such financial loss, because it depends on which option is taken by the Moloneys and each involves its own vagaries. While the use of storage bags is the cheapest option, it entails risks of pest and disease damage. The safest option and the one with the highest cost is the purchase of silos, which would involve a capital cost of approximately $110,000 but would result in the Moloneys having an asset available for future use. The likely quantum of the loss overall is a few tens of thousands of dollars.
I give some weight to the risk of the Moloneys suffering uninsured loss as a result of fire or accidental damage because there is always a risk that the indemnity under an insurance policy may not respond in specific circumstances. I do not give significant weight to the risk of liability of the Moloneys for any breach by Mr Cooper of the Occupational Health, Safety and Welfare Act 1986 (SA). I give some, but limited, weight to the disturbance, tension and risk of danger from strangers coming onto the Moloney land.
If Mr Cooper ceases to carry on his business within the month of grace offered by the Council’s officer, the prospect of Hampden Park or Mr Moloney being prosecuted for a breach of section 44 of the Development Act appears to be remote. However, if Mr Cooper continues to carry on the business beyond that period, the prospect of a prosecution of Hampden Park or Mr Moloney increases. There is no reasonable prospect that any development approval would be granted within that one month period or this calendar year. This is a factor which weighs against the grant of an interlocutory injunction.
In circumstances in which the grant or refusal of an interlocutory injunction will render the trial moot (either destroying the subject matter of the action for the plaintiff or destroying the defendant’s defence), this circumstance affects the assessment of the balance of convenience. The fact of destruction of the subject matter of the action or of the defendant’s defence needs to be weighed in the scales. Accordingly, the mere fact that a plaintiff’s undertaking as to damages is not backed by any substance does not necessarily dictate the refusal of an interlocutory injunction in those circumstances.[10]
[10] Cayne v Global Natural Resources Plc [1984] 1 All ER 225 at 233 per Eveleigh LJ (Kerr LJ and May LJ agreeing); Custom Credit Corporation Ltd v Whitehall Holdings Pty Ltd (Unreported, Supreme Court of Western Australia, Ipp J, 7 April 1992) per Ipp J at 23-25. Ward v State of Western Australia [1995] FCA 1781 at [42]-[43] per Nicholson J; Varley v Varley [2006] NSWSC 1025 at [62]-[65] per Campbell J.

I therefore take into account against an interlocutory injunction, but not decisive of the issue, the fact that it is common ground that Mr Cooper does not have any significant assets to back the undertaking as to damages which he offers. Accordingly, to the extent that the Moloneys would suffer any of the above losses if an interlocutory injunction were granted, I proceed on the assumption that they would not be recovered from Mr Cooper pursuant to his undertaking as to damages if the Moloneys are ultimately successful at trial.
The principal factor which weighs against the grant of an interlocutory injunction is the principle that the Court should not, by injunctive order, enable an illegal activity to continue. This principle applies in the sense that, but for the grant of the injunction, ex hypothesis, the Moloneys would prevent Mr Cooper from carrying on his business and hence the illegal activity would cease.
The prejudice identified by Mr Cooper in his evidence will be suffered if he is unable to continue to carry on his business on the Moloney land. It was this which he contends would cause the destruction of his business. In his evidence, he did not identify a comparable prejudice which he would suffer if he merely cannot store items on the Moloney land. That involves quite different considerations.
Weighing all of the factors for and against the grant of an injunction insofar as it is relevant to Mr Cooper carrying on his business on the Moloney land, the factors against the grant of an injunction predominate.
Weighing of potential prejudice: storage
The prejudice identified by Mr Cooper as a result of being unable to store items in the shearing shed (as opposed to being unable to carry on business on the Moloney land) comprises the cost of transporting the items from the Moloney land to their destination. Mr Cooper did not adduce evidence that there were no alternative premises at which he could store those items (as opposed to carrying on his engineering business).
The prejudice arising from the cost of transport is offset to a large extent (although not fully for the reasons given above) by the Moloneys’ offer to undertake the transportation.
In these circumstances, at least in respect of the items located in the shearing shed, the potential prejudice to be suffered by Mr Moloney is substantially outweighed by the potential prejudice which would be suffered by the Moloneys as a result of not being able to use the shearing shed for storage of pulses. In those circumstances, the balance of convenience favours not granting an interlocutory injunction.
Overall discretion
In the exercise of my overall discretion, a very important consideration is ensuring that an injunction by the Court does not enable the continuation of illegal activity contrary to section 44 of the Development Act. In the exercise of my overall discretion, I decline to grant an interlocutory injunction. I dismiss the application and will make orders discharging the interim injunction.
Interlocutory injunction restraining removal of workers lien
On 31 October 2011, Mr Cooper lodged with the Registrar-General a Notice of Lien over Mr Moloney’s land claiming $44,991, a Notice of Lien over Brian Moloney’s land claiming $51,767 and a Notice of Lien over Hampden Park’s land claiming $214,300.[11]
[11] As noted above, all dollar amounts are rounded to the nearest dollar and exclusive of GST. The liens claimed amounts inclusive of GST of $49,490.13, $56,944.05 and $235,730.55 respectively.
On 31 October 2011, Mr Cooper’s solicitors posted to Gortmore Proprietors (and its partners Brendan, Brian and Helen Moloney) three Notices of Demand demanding the amounts shown in each of the three Notices of Lien. They also posted a fourth Notice of Demand for $350,688 for labour and materials not provided in connection with the Moloney land. The total of the four Notices of Demand was $661,747. They also posted 13 invoices for the months of January 2010 to January 2011 for amounts totalling $661,747.
The Notices of Demand issued by Mr Cooper on 31 October 2011 were issued to Gortmore Proprietors as the contracting party liable to pay the amounts said to be payable. The Notices of Lien claimed that the relevant work was done with the assent of the owner of the land.
On 30 July 2012, Mr Moloney and Hampden Park applied to the Registrar-General pursuant to section 16 of the Worker’s Liens Act 1893 (SA) (“the Worker’s Liens Act”) to enter memoranda on their respective certificates of title that the respective liens over their land had ceased because no action had been brought by Mr Cooper to enforce the liens within 14 days from registration thereof.
On 13 August 2012, Mr Cooper filed an interlocutory application (FDN 24) in the Debt Action seeking an injunction restraining the Registrar-General from making a memorandum that each lien had ceased. On 13 August 2012, an interim injunction was granted by a Master pending the hearing and determination of the application for an interlocutory injunction.
On 8 October 2012, the Master dismissed the application for an interlocutory injunction, but continued the interim injunction pending the hearing of a foreshadowed appeal.[12]
[12] Cooper v Moloney (No 3) [2012] SASC 153; Cooper v Moloney (No 4) (Unreported, Supreme Court of South Australia, Master Lunn, 8 October 2012)
On 19 October, Mr Cooper appealed from the order dismissing the application for an interlocutory injunction (FDN 53). The appeal was heard by me on 23 October 2012.
Application for separate trial
The first ground of appeal contained in the Notice of Appeal is that the Master erred in not ordering the separate determination pursuant to rule 211 of the Supreme Court Civil Rules 2006 (SA) of the issue whether Mr Cooper had brought an action to enforce the liens within 14 days of registration and then in not determining that issue in favour of Mr Cooper.
Mr Cooper acknowledges that he did not apply to the Master pursuant to rule 211 to determine the issue by way of separate trial. In those circumstances, there is no basis for him to contend that the Master erred. I reject the first ground of appeal.
However, Mr Cooper makes an oral application to me for an order for a separate trial of the issue pursuant to rule 211 and argues that I should determine the issue in his favour on such a trial. The Moloneys do not oppose my hearing the application for an order for a separate trial, but oppose its making on the merits. I address that application before turning to the second ground of appeal.
Section 5 of the Worker’s Liens Act relevantly provides:
A … sub-contractor shall have a lien for the contract price, so far as accrued due, on the estate … of any owner … in each of the following cases:
a) Where the work is done, with the assent, expressed or implied, of the owner … to the land or to any fixture thereon:
b) Where the materials are, with the assent, expressed or implied, of the owner … used or intended to be used in or about work done … to the land or to any fixture thereon.
Section 6 relevantly provides:
Liens under … section 5 shall not … extend beyond that portion of the contract price payable by the owner … under the contract for the purposes of which the work or materials are done, furnished, or manufactured and unpaid at the time … or of its registration … nor extend at all to cases where there is no such contract binding the owner … to pay a contract price.
Section 10 relevantly provides:
(1)     A lien under this Act with regard to land shall be available only if registered before        the expiration of twenty eight days after the … contract price in respect of which such lien has arisen shall for the purposes of this section have become due.
(2)     Any … contract price shall for the purposes of this section be deemed to have      became due-
(a)     if unpaid for seven days after the same (being payable) shall have been              demanded by notice in writing, signed by the person claiming the same        and given to the person liable to pay the same, or posted in a registered             letter addressed to him at his usual or last known place of abode in South              Australia …
Section 15 relevantly provides:
Every lien under this Act upon the estate … of any owner … shall cease unless an action shall be brought against the owner … for enforcement of the lien within fourteen days from the registration thereof.
Taking the lien against the land owned by Mr Moloney as an example, in order to enforce the lien, it is necessary for Mr Cooper to establish the following matters:
1.he entered into a contract with Gortmore Proprietors to undertake work (“the sub-contract”);
2.the sub-contract was for work to the land or fixtures thereon;
3.he undertook work pursuant to the sub-contract;
4.the work undertaken was to the land or fixtures thereon;
5.an amount was payable pursuant to the sub-contract by Gortmore Proprietors to Mr Cooper for that work;
6.the amount was due within the meaning of section 10 of the Act by reason of having been demanded by notice in writing signed by Mr Cooper and sent by registered post to Gortmore Proprietors;
7.the work was done with the assent (express or implied) of Mr Moloney as owner of the land;
8.there was a contract between Mr Moloney and Gortmore Proprietors binding Mr Moloney as owner to pay a contract price to Gortmore Proprietors for work to be done to the land or fixtures thereon (“the head contract”);
9.the work done and materials furnished by Mr Cooper to Gortmore Proprietors under the sub-contract were done and furnished for the purpose of the head contract;
10.on 31 October 2012, when the lien was registered, there was a portion of the contract price payable by Mr Moloney to Gortmore Proprietors pursuant to the head contract for the purpose of which the work was done by Mr Cooper pursuant to his sub-contract with Gortmore Proprietors;
11.the Notice of Lien was registered within 28 days after the contract price became due by Gortmore Proprietors to Mr Cooper pursuant to the sub-contract; and
12.Mr Cooper brought an action against Mr Moloney as owner of the land for enforcement of the lien with 14 days of the registration of the lien.
The statement of claim in the Debt Action pleads the three separate contracts made in December 2009, February 2010 and December 2010 summarised at [19] above. It pleads the issue of the October 2011 series of invoices totalling $661,747. It pleads the lodging of the three Notices of Lien and posting of the four Notices of Demand on 31 October 2011.
The statement of claim pleads elements numbered 1, 5 and 11 listed above. In relation to elements 3 and 5, while Mr Cooper pleads that he provided labour and materials, issued invoices and has not been paid for them, he does not plead what labour and materials he provided, what labour and materials he provided pursuant to each of the three separate oral contracts or what labour and materials he provided which were related to Mr Moloney’s land (as opposed to Brian Moloney’s land or Hampden Park’s land). Consequentially, in relation to element 6, while Mr Cooper pleads that he demanded $44,991 in relation to Mr Moloney’s land, he does not plead that this was the contract price due for labour and materials provided in relation to Mr Moloney’s land or plead the separate amount due pursuant to each of the three separate contracts for labour and materials provided in connection with Mr Moloney’s land.
The statement of claim does not plead elements 2, 4, 8, 9 or 10. Mr Cooper does not plead what labour was undertaken or which materials were provided to Mr Moloney’s land or to fixtures on his land or how the provision of labour and materials constituted work to the land or fixtures thereon within the meaning of the Worker’s Liens Act. The 13 invoices rendered by Mr Cooper to Gortmore Proprietors make no distinction between land owned by Mr Moloney, Brian Moloney or Hampden Park. They include amounts for work done which on its face could not have been work done to land or fixtures on the land. For example, the first invoice is principally for repair work undertaken to an R62 and an R75 harvester. In general, the description of work done contained in the 13 invoices does not on its face describe the work in terms from which it is apparent that work was done to land or fixtures.
It is arguable that Mr Cooper’s pleading considered as a whole proceeds on the basis that the claim against the owners of the land is based in restitution rather than pursuant to section 5 of the Worker’s Liens Act and that the pleas relating to the Notices of Lien and Notices of Demand were made for the purpose of establishing that the sum of $661,747 became due and payable by 10 November 2011 when the action was instituted for the purpose of the restitutionary claim.
There are factors pointing both ways as to whether the institution of the Debt Action comprised an action to enforce the liens within the meaning of the Act. At this stage, disclosure in the two actions has not been completed. It is conceivable that evidence will be adduced at trial which bears upon the issue whether Mr Cooper brought an action against the owners of the land for enforcement of the liens within the meaning of section 15 of the Worker’s Liens Act by instituting the Debt Action.
In these circumstances, it is not appropriate to determine by way of separate trial the issue whether Mr Cooper did bring an action against the land owners for enforcement of the liens within 14 days from their registration. On the contrary, it is desirable that all issues relating to the existence and enforcement of the liens be determined at the trial of the Debt Action.
Accordingly, I decline to order under rule 211 the separate trial of the issue.
Interlocutory injunction: prima facie case
The Master decided that, for the purpose of an interlocutory injunction, Mr Cooper had established a prima facie case.[13] That conclusion is not challenged on appeal. While the Moloneys contest on the merits that Mr Cooper brought an action for the enforcement of the liens, they do not contend that Mr Cooper’s case is unarguable in this respect. The Moloneys did not file a Notice of Alternative Contention pursuant to rule 285(4) or otherwise contend that the Master’s refusal of the injunction should be supported because Mr Cooper had not established a prima facie case of entitlement to the liens (on issues other than instituting an action for enforcement within 14 days of registration).
[13] Cooper v Moloney & Ors (No 3) [2012] SASC 153 at [16] Master Lunn.
Interlocutory injunction: balance of convenience
The Master decided the issue of an interlocutory injunction on the balance of convenience.[14] He observed that the Moloneys had not adduced any evidence of any prejudice which they might suffer if the interlocutory injunction were to be granted and the liens were to remain on the titles until judgment.[15]
[14] Cooper v Moloney & Ors (no 4) (Unreported, Supreme Court of South Australia, Master Lunn, 8 October 2012).
[15] Ibid at [2].
On the other hand, the Master referred to the fact that Mr Cooper is an undischarged bankrupt and has no means to satisfy an undertaking as to damages.[16] The Master concluded as follows:
…if [the Moloneys] are successful … it is unlikely that they would recover any damages for loss which they might have suffered by a continuation of the liens on the titles. The giving of an adequate undertaking for damages is the price which justice requires should be paid by the plaintiff for a continuation of the injunction he seeks. It is for the plaintiff to offer an adequate undertaking and it is not for this Court to indicate what would be an adequate undertaking if it was offered. As no adequate and proper undertaking has been offered, the interlocutory injunction until trial will be refused.[17]
[16] Ibid at [3]-[4].
[17] Ibid at [4].
On appeal, Mr Cooper relies upon the principle and authorities referred to at [75] above to the effect that, where refusal of an interlocutory injunction would effectively destroy the subject matter of the action, the mere fact that the plaintiff is impecunious and hence unable to offer an undertaking as to damages backed by substance is not necessarily a reason to refuse the interlocutory injunction.
The refusal of an interlocutory injunction will lead to the entry by the Registrar-General of memoranda on the certificates of title that the liens have ceased. Mr Cooper is now out of time to lodge fresh liens. The refusal of an interlocutory injunction will therefore destroy the subject matter of the action if Mr Cooper were to succeed at trial on the issue whether he has an enforceable lien.
In assessing competing prejudices, Mr Cooper will inevitably suffer the prejudice of loss of his liens if the interlocutory injunction is not granted and he succeeds at trial on the lien issues. On the other hand, the Moloneys have not adduced any evidence of any specific prejudice which they will suffer if the liens remain on the titles.
As the Master observed, it is conceivable in theory that the Moloneys might suffer prejudice if at some future time they seek to deal with the land (for example granting a further mortgage to raise finance) and are prevented from or impeded in doing so by the existence of the liens.[18] However, there is no evidence that they presently intend to do so or that there is a reasonable possibility that this will occur in the near future.
[18] Ibid at [2].
The parties agree that an order ought to be made for an early trial and that they should be ready for trial by March 2013. If an interlocutory injunction is granted, it is likely to be in effect for approximately six months until the hearing and determination of the Debt Action. If an injunction is granted until further order, and circumstances arise in which the Moloneys seek to deal with the land in a manner which might be impeded by the liens, the question of balance of convenience and continuing grant of an injunction can be re-examined.
In the circumstances, the Master erred by refusing an injunction merely because Mr Cooper’s undertaking as to damages is not backed by any substance. It is appropriate that the interim injunction be extended until further order, with liberty to the parties to apply in the event of a change in circumstances. Accordingly, I allow the appeal and set aside the orders made by the Master. I will hear the parties as to the precise orders to be made.
Injunction restraining Camatta Lempens from acting
By interlocutory applications dated 9 May 2012 (FDN 11 in the Debt Action and FDN 2 in the Trespass Action), Mr Moloney seeks orders restraining Camatta Lempens from acting for Mr Cooper in the actions.
In March 2010, Mr Cooper proposed to Mr Moloney that they establish a business called “Rothmore Engineering” or “Rothmore ALT Engineering” involving the manufacture and repair of farm equipment and machinery. It was agreed that the business would be conducted in Mr Moloney’s name. There is a dispute, or at least uncertainty, on the evidence as to the beneficial ownership of the business, and in particular whether it was to be owned by Mr Cooper, Mr Moloney or a combination.
On 22 March 2010, Mr Moloney registered the business name “Rothmore ALT Engineering” and on 31 March 2010 he opened a bank account in the name of Rothmore ALT Engineering.
On 25 March 2011, Mr Cooper instructed Camatta Lempens that Mr Moloney was the legal owner of the business Rothmore Engineering, which he held on trust for Mr Cooper. Mr Cooper instructed Camatta Lempens that the Larwoods owed $126,998 for work undertaken by Rothmore Engineering to a Horwood Bagshaw cultivator. Mr Cooper instructed Camatta Lempens to send a demand to the Larwoods for payment of $126,998 and to offer to accept $96,998 if paid within 14 days.

On 30 March 2011, Camatta Lempens wrote a letter to Rothmore Engineering addressed to Mr Cooper’s post office box address at Moonta but marked to the attention of Mr Moloney. The letter said that Camatta Lempens had been instructed by “your agent Mr Richard Cooper” to take action to recover monies owed by the Larwoods for work undertaken by Rothmore Engineering, enclosed Terms of Engagement and requested that they be signed and returned. The letter said that Camatta Lempens had been provided with a statement by Mr Cooper on the matter. Mr Moloney did not receive that letter.
On 4 April 2011, Mr Cooper provided to Camatta Lempens an authority signed by Mr Moloney dated 4 October 2010. The authority was on a letterhead of Rothmore Engineering and was expressed in general terms to authorise Mr Cooper to “Sign on my Behalf of Rothmore Engineering”. On 4 April 2011, Camatta Lempens wrote a letter of demand to the Larwoods on behalf of Rothmore Engineering in accordance with the instructions provided by Mr Cooper on 25 March. The Larwoods wrote back denying liability and no further action was apparently taken.
Leaving aside the letter dated 30 March 2011 which Mr Moloney did not receive, Camatta Lempens did not have any communication with Mr Moloney in connection with Rothmore Engineering or the Larwood matter. Mr Cooper apparently did not have any communication with Mr Moloney concerning the Larwood matter.
Mr Moloney contends that Camatta Lempens is precluded from acting for Mr Cooper in the actions against the Moloneys on two grounds:
1.Camatta Lempens possess confidential information received from Mr Cooper in relation to the Rothmore Engineering/Larwood matter which they have a duty to disclose to Mr Moloney as the proprietor of Rothmore Engineering but they have a conflict of interest because they are instructed by Mr Cooper not to disclose it;
2.the protection of the integrity of the judicial process and the due administration of justice require that Camatta Lempens be prevented from acting for Mr Cooper.
Confidential information
It is common ground that this Court has equitable jurisdiction to restrain a solicitor from acting for one party in circumstances in which the solicitor owes a duty to a former client to disclose information but a duty to the current client not to disclose it.[19]
[19] Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508 at 515-516 per Mackenzie J; Murray v Macquarie Bank Ltd (1991) 33 FCR 46 at 47-51 per Spender J; Carindale Country Club Estate Pty Ltd v Astill [1993] FCA 218; (1993) 42 FCR 307 at 309-313 per Drummond J; Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248; (2001) 4 VR 501 at [26]-[57] per Brooking JA (Chernov JA agreeing); Nasr v Vihervaara [2005] SASC 83; (2005) 91 SASR 222 at [14]-[28] per Doyle CJ (Vanstone J and White J agreeing).
In the typical case in which a solicitor is restrained from acting for a current client against a former client, the solicitor has received confidential information from the former client which is relevant to the current action and would be of value to the current client against the former client. In the present case, Camatta Lempens did not receive any information at all from Mr Moloney.
If Camatta Lempens had received confidential information from Mr Cooper in the course of Mr Cooper, as agent for Mr Moloney, providing instructions to them to advance a claim against the Larwoods, Camatta Lempens would owe a duty to Mr Moloney as their client (Mr Cooper’s principal) to disclose that information to Mr Moloney. If the confidential information were relevant to the present actions between Mr Cooper and Mr Moloney and there were a real risk of Mr Moloney being prejudiced by non-disclosure of the information, an injunction might lie to restrain Camatta Lempens from acting for Mr Cooper against him in these actions.
In Mr Moloney’s affidavit sworn on 3 May 2012, he deposed that he never instructed or authorised Camatta Lempens to act on his behalf or on behalf of Rothmore Engineering in connection with a claim against the Larwoods (or at all). He deposed that he signed the authority to act in October 2010 solely for the purpose of authorising Mr Cooper to instruct a different solicitor to act for Rothmore Engineering against a different party unrelated to the Larwoods. Mr Moloney’s case is that Mr Cooper was not authorised to instruct Camatta Lempens on behalf of Mr Moloney or Rothmore Engineering in connection with the Larwoods or at all.
In those circumstances, on Mr Moloney’s own case, Mr Moloney was not the principal of Mr Cooper in providing instructions to Camatta Lempens. It follows that Camatta Lempens owe no duty to Mr Moloney to disclose those instructions or any confidential information provided to them by Mr Cooper in connection with the claim against the Larwoods. The position can be tested by asking the question: is Mr Moloney entitled to compel Mr Cooper as his agent in instructing Camatta Lempens, or Camatta Lempens as his solicitors, to divulge the confidential information provided by Mr Cooper to Camatta Lempens. Given that Mr Moloney’s case is that Mr Cooper was not in fact his agent and Camatta Lempens were not in fact his solicitors, the answer would be: no. It follows that the first ground on which the injunction is sought fails.
If Mr Moloney were entitled to compel disclosure of the confidential information, it may be that, as a matter of discretion, that would be the appropriate remedy rather than precluding Camatta Lempens from acting for Mr Cooper in the actions. However, it is not necessary to consider that question given the conclusion which I have reached.
Interests of justice
It is common ground that this Court has inherent jurisdiction as part of its supervision of practitioners to restrain solicitors from acting in circumstances in which it is necessary to protect the integrity of the judicial process and the due administration of justice, including the appearance of justice.[20] For this purpose, the test is an objective one assessed from the perspective of a fair minded, reasonably informed member of the public.[21]
[20] Black v Taylor [1993] 3 NZLR 403 at 417-418 per McKay J (Cooke P and Richardson J agreeing); Grimwade v Meagher [1995] 1 VR 446 at 450-452 per Mandie J; Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 at [76] per Brereton J.
[21] Kallinicos v Hunt (2005) 64 NSWLR 561 at [76] per Brereton J.
Mr Moloney refers to the fact that Camatta Lempens acted for the T & A Holdings Trust in a dispute with the owners of land at Point Pearce over payment for work done, which work was undertaken in part by the Moloneys and which is the subject of an aspect of their counterclaim against Mr Cooper in the Debt Action. Camatta Lempens also purportedly acted for Rothmore Engineering on instructions from Mr Cooper in relation to the claim against the Larwoods. Mr Moloney contends that it is possible that the relevant solicitor at Camatta Lempens, Mr Kenny, will be a witness at the trial of the actions in connection with those matters.
Mr Moloney contends that Camatta Lempens have a vested interest in the actions because they are owed hundreds of thousands of dollars in the insolvency administrations of Mr Cooper’s bankruptcy and the T & A Holdings Trust and are acting in the actions for Mr Cooper on a speculative basis.
Mr Moloney contends that a combination of these circumstances gives rise to an apprehension by fair minded, reasonably informed members of the public that the protection of the integrity of the judicial process and the due administration of justice preclude Camatta Lempens from acting for Mr Cooper in the actions.
At this stage, there is only a remote possibility that Mr Kenny will be called by either party to give evidence at trial. If he did so, this would not necessarily preclude Camatta Lempens (as opposed to Mr Kenny personally) acting for Mr Cooper. The mere possibility that Mr Kenny might be a witness is not a ground for precluding Camatta Lempens from acting for Mr Cooper.
In relation to Camatta Lempens’ interest in the action, the mere fact that they are creditors in Mr Cooper’s bankruptcy and of the T & A Holdings Trust and the mere fact that they are acting for Mr Cooper in the actions on a speculative basis does not in itself preclude their acting for him.
Considering all of the circumstances in combination, there is no basis on which to preclude Camatta Lempens from acting for Mr Cooper in the actions. I dismiss the applications by Mr Moloney for injunctive relief precluding Camatta Lempens from acting for Mr Cooper.
Security for costs
By interlocutory application dated 9 May 2012 in the Debt Action (FDN 11), the Moloneys seek an order that Mr Cooper provide security for costs of the action to the first day of trial.
Rule 194(1) of the Supreme Court Civil Rules 2006 (SA) relevantly provides:
The Court may order a plaintiff to provide security for costs if –
a)     the action is brought in a representative capacity and the plaintiff is insolvent or     would have insufficient resources to meet an order for costs if the action were to prove to be unsuccessful; or
…
c)     there are reasonable grounds to suspect that the action may have been brought      for an ulterior purpose; or
…
e)     the order is necessary in the interests of justice.
Action brought in representative capacity
In the statement of claim in the Debt Action, Mr Cooper pleads that it was a term of each of the three oral contracts that work to be performed by persons other than Mr Cooper would be charged at agreed hourly rates. The invoices rendered by Mr Cooper in October 2011 include amounts charged at hourly rates in respect of persons other than Mr Cooper totalling approximately $90,000.
The mere fact that a contractor includes work undertaken by a sub-contractor in a claim for monies due pursuant to a head contract does not result in the claim being made on behalf of the sub-contractor. It is clearly pleaded by Mr Cooper in the Statement of Claim that it was a term of the oral contracts that Mr Cooper would charge Gortmore Proprieties for work undertaken by his sub-contractors at agreed hourly rates.
In his second affidavit sworn on 16 October 2012, Mr Cooper said that:
As part of the monies owed to me by Moloney, I am seeking to recover money that I owe to subcontractors who did work for Moloney at my direction.
Mr Cooper went on to say that, if the sub-contractors were required to contribute to security for costs, he would not claim the money to be paid to them and they would have to commence their own proceedings in the Magistrates Court. This evidence does not change the nature of the claim brought by Mr Cooper against Gortmore Proprietors being for monies due to Mr Cooper and not for monies due to his sub-contractors.
Mr Cooper is not bringing the action in a representative capacity on behalf of the sub-contractors. This ground for an order for security for costs fails.
Action brought for ulterior purpose
This ground was introduced by the 2006 Rules. There do not appear to be any authorities expounding its meaning. The Moloneys contend that there are reasonable grounds to suspect that the Debt Action may have been brought for an ulterior purpose.
Rule 193(b) provides that the Court may dismiss proceedings if they are an abuse of the process of the Court. The Court also has inherent jurisdiction to stay or dismiss proceedings which are an abuse of the process of the Court.[22] One species of abuse of process is instituting proceedings for an ulterior purpose.[23]
[22] Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 at 519-520 per Mason CJ, Dawson, Toohey and McHugh JJ; Medical Board of SA v N, JRP [2006] SASC 19, (2006) 93 SASR 546 at [21] per Debelle J, [65] per Besanko J (Layton J agreeing).
[23] Williams v Spautz (1992) 174 CLR 509 at 520-522 per Mason CJ, Dawson, Toohey and McHugh JJ; Coe v Commonwealth [1993] HCA 42; (1993) 118 ALR 193 at 206-207 per Mason CJ.
It is common ground that the concept of an “ulterior purpose” within the meaning of rule 194(1)(c) is the same as the concept of an ulterior purpose which constitutes an abuse of process giving rise to a stay or dismissal of proceedings, but that the standard of satisfaction is lower because there only need to be reasonable grounds to suspect under rule 194(1)(c).
The Moloneys contend that Mr Cooper brought the Debt Action for the purpose of inducing the Moloneys to negotiate a settlement rather than seeking vindication by the Court of a meritorious claim.
Proceedings are brought for an improper purpose if they are brought not to vindicate a legal right but to obtain a benefit which cannot be obtained by the proceedings.[24]
[24] Coe v Commonwealth (1993) 118 ALR 193 at 206-207 per Mason CJ.
Proceedings are brought for an ulterior purpose if the plaintiff knows that they have no merit, intends not to proceed to trial and brings the proceedings purely for the purpose of placing pressure on the defendant to settle by way of compromise.[25]
[25] Flower & Hart (a firm) v White Industries (Qld) Pty Ltd [1999] FCA 773; (1999) 87 FCR 134 at [42]-[43], [48]-[49] and [63]-[64] per Lee, Hill and Sundberg JJ
On an application for security for costs pursuant to rule 194(1)(c), there is an important difference between these two species of improper purpose.
1. The first species involves a purpose of obtaining a benefit which cannot be obtained by and is foreign to the proceedings. It is not necessary to make an assessment of the merits of the proceedings if it is found as a fact that the plaintiff is pursuing them for this purpose.
2. The second species involves a plaintiff seeking to obtain the very benefit, or part of the benefit, which would be obtained if the proceedings were successful. In this case, it is unavoidable that an assessment be made of the merits of the proceedings for the purpose of determining whether there are reasonable grounds to suspect that the action may have been brought for that purpose. Such an examination of the merits will frequently be difficult at the interlocutory stage at which security for costs is sought and would involve the Court having to go a substantial way towards a conclusion that the proceedings themselves are without merit.
The Moloneys put the following contentions in combination.
1.Mr Cooper does not stand to lose by prosecuting the proceedings to trial because he is not required by his solicitors to fund them and he will not be in a financial position to meet an adverse costs order if they are unsuccessful.
2.Mr Cooper does not stand to gain by prosecuting the proceedings to trial because he will be obliged to pay a contribution to his bankruptcy trustee out of any proceeds of the Debt Action.
3.The Debt Action is part of a pattern by Mr Cooper and his associates of making demands without merit for the purpose of obtaining payments by way of compromise.
4. The amounts charged in the invoices tendered by Mr Moloney imply that he worked “superhuman” hours in a number of months. Mr Cooper had earlier rendered invoices during 2010 for much smaller amounts which had been paid by the Moloneys. The hours claimed for the harvesting are alleged by the Moloneys to be exorbitant. The total costs claimed are alleged by the Moloneys to be out of proportion with previous costs incurred by the Moloneys. In addition, Mr Cooper made changes from one series of invoices to the next without any convincing explanation.
5.Mr Cooper did not render any of the series of invoices until after the breakdown of the relationship with the Moloneys.
6.The invoices lack detail as to work undertaken.
7.Mr Cooper has not reported to his bankruptcy trustee as income the amounts invoiced to the Moloneys.
8.It should be inferred that Mr Cooper knows that he does not have a meritorious action.
There is a conflict on the affidavit evidence of Mr Moloney and Mr Cooper as to the dealings between them concerning the alleged oral contracts and the alleged work performed pursuant to them by Mr Cooper. Mr Cooper was not cross-examined and accordingly the contentions summarised at [150] above were not put to him for comment. At this stage of the actions, it is not possible to make a finding that there is no merit in Mr Cooper’s claim or to infer that he knows this. Except in a clear case, it would be exceedingly difficult to make the requisite finding at an interlocutory stage that there are reasonable grounds to suspect that proceedings may have been brought for the ulterior purpose of achieving a compromise knowing that there is no merit in them.
The Moloneys have not established that there are reasonable grounds to suspect that the Debt Action may have been brought for an ulterior purpose.
Necessary in the interests of justice
This ground was introduced by the 2006 Rules. The Supreme Court Civil Rules 1987 (SA) contained a residual ground being “special circumstances”. The mere fact that the plaintiff was impecunious did not amount to “special circumstances”.[26]
[26] Collins v Emacord Autos Pty Ltd [1997] SASC 6418 per Lander J (Doyle CJ and Bleby J agreeing).
The Moloneys contend that Mr Cooper is prosecuting the Debt Action for an ulterior purpose, and repeat the submissions they make under rule 194(1)(c) summarised above. Because I have concluded that the Moloneys have not established that there are reasonable grounds to suspect that the Debt Action has been brought for an ulterior purpose, this ground does not avail the Moloneys under the “interests of justice” head.
The Moloneys rely upon the fact that Mr Cooper is an undischarged bankrupt, impecunious and incapable of satisfying any order for costs. They rely upon Moir v Vodafone.[27]In that case, Mr Moir was the director, and he and his wife were the shareholders, of HTi Communications Pty Ltd (in liquidation). HTi was a reseller pursuant to a contract with Vodafone. HTi assigned its rights of action against Vodafone to Mr Moir in return for Mr Moir agreeing to pay 50 per cent of any net proceeds to HTi. Mr Moir then sued Vodafone pursuant to the assignment. Anderson J held that it was in “the interests of justice” within the meaning of rule 194(1)(e) that security be granted. The existence of the assignment coupled with Mrs Moir standing to benefit from the action without being exposed to costs were crucial factors in Anderson J reaching that conclusion.[28] In the present case, there is no issue of assignment. The mere fact that a plaintiff is impecunious cannot in itself render an order for security for costs necessary in the interests of justice.[29]
[27] [2009] SASC 234.
[28] [2009] SASC 234 at [6], [18] and [45].
[29] Collins v Emacord Autos Pty Ltd [1997] SASC 6418 per Lander J (Doyle CJ and Bleby J agreeing) in respect of the former “special circumstances” head.
The Moloneys do not contend that, during the course of the dealings with Mr Cooper which gave rise to the claimed debt the subject of the Debt Action, Mr Cooper misrepresented his status or failed to disclose that he was an undischarged bankrupt. In particular, Mr Cooper gave evidence that he informed Mr Moloney that he was an undischarged bankrupt in December 2009. While Mr Moloney gave evidence that he was aware in March 2010 that Mr Cooper was an undischarged bankrupt, he did not deny that he was aware of this in December 2009.
The Moloneys rely upon the fact that, on their case, they have provided very considerable services and paid substantial monies to Mr Cooper without receiving any consideration in return. These matters comprise the basis of the Moloneys’ counterclaim in, and part of their defence to, the Debt Action. These matters are in dispute and I am in no position to make findings on their merits at this interlocutory stage. They do not render an order for security for costs necessary in the interests of justice.

The Moloneys refer to the complexity of the actions and likely irrecoverable costs which will be incurred by the Moloneys in defending the Debt Action. This in itself does not make an order for security for costs necessary in the interests of justice.
Considering all of the grounds advanced by the Moloneys collectively, they do not establish that it is necessary in the interests of justice that security for costs be ordered.
The Moloneys have not established any ground under rule 194 for an order for security for costs. I dismiss the application for security for costs.
Conclusion
I dismiss the application for an interlocutory injunction restraining the Moloneys from evicting Mr Cooper and precluding access to the sheds (FDN 12 in the District Court). I dissolve the interim injunction granted on 24 February 2012.
I allow Mr Cooper’s appeal against the order by the Master dismissing his application for an interlocutory injunction restraining the Registrar-General from making memoranda that the workers liens have ceased (FDN 53). I will make an order restraining the Registrar-General from so acting until further order.
I dismiss Mr Moloney’s application for an injunction restraining Camatta Lempens from acting for Mr Cooper in the actions (FDN 11 in the Debt Action and FDN 2 in the Trespass Action).
I dismiss the Moloneys’ application for security for costs in the Debt Action (FDN 11).
I will hear the parties as to precise orders to be made.