Manos v Maras

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
MANOS & ORS v MARAS & ORS
[2007] SASC 192
Reasons for Decision of The Full Court
(The Honourable Justice Bleby, The Honourable Justice Vanstone and The Honourable Justice Layton)
25 May 2007
PROCEDURE - JUDGMENTS AND ORDERS - IN GENERAL - CLASSIFICATION - FINAL AND INTERLOCUTORY
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS
Appeal from interlocutory orders made by a single judge – orders enabling preliminary steps towards possible exercise of time-limited call option to purchase freehold of leased land – disputed entitlement to beneficial ownership of lease and as to whether call option should be exercised – consideration of nature of orders made – whether orders sought are in the nature of an injunction – whether orders directed towards ensuring the preservation of the disputed asset – consideration of alleged delay – consideration of whether non-disclosure warranted orders being set-aside – Appeal dismissed.

APPEAL AND NEW TRIAL - APPEAL -- GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - LEAVE TO APPEAL
Whether permission to appeal necessary – interlocutory orders – consideration of s 50(5) of Supreme Court Act 1935 (SA) – whether orders sought are in the nature of an injunction or amount to a final determination of a substantive right – Held: permission to appeal necessary, but would have been refused.
Supreme Court Act 1935 (SA) s 50; Supreme Court Civil Rules 2006 r 281, 285, referred to.
House v The King (1936) 55 CLR 499; Harris Scarfe Ltd (Receivers & Managers Appointed) (in liquidation) & Ors v Ernst & Young & Ors (No 2) 240 LSJS 17, applied.
Devlin v Collins (1984) 37 SASR 98; Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Australian Broadcasting Corporation v O'Neill (2006) 229 ALR 457; Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing (NSW) Ltd (1987) 76 ALR 633; Thomas A Edison Ltd v Bullock (1912) 15 CLR 679; Gallo v Dawson (1990) 64 ALJR 458; Meagher, Gummow & Lehane's Equity Doctrines and Remedies, 4th edition, considered.

MANOS & ORS v MARAS & ORS
[2007] SASC 192
Full Court: Bleby, Vanstone and Layton JJ
BLEBY J:
Background

On 20 April 2007 a Judge of this Court made orders by way of directions for the conduct of an action commenced by the first respondent, Mr Maras, and companies which he effectively controls. The defendants in the action are the first appellant, Mr Manos, three companies which he effectively controls and six other companies, the beneficial ownership of the shares in which is held equally by Mr Maras and Mr Manos. Those six companies are trustees of various trusts, the units in which are beneficially owned equally by Mr Maras and Mr Manos or by corporate entities which they respectively control. Included in the orders made by the Judge at first instance were orders authorising Mr Maras to take certain steps on behalf of the tenth defendant, Rundle East Company Pty Ltd (“Rundle East”), towards the possible exercise by Rundle East of a call option to purchase certain land of which Rundle East is the lessee. The detail of those orders is referred to below.
On 10 May 2007 Mr Manos and the companies he controls filed a Notice of Appeal against those orders. By direction of the Chief Justice the appeal was listed for hearing as a matter of urgency before the Full Court. The hearing of the appeal took place on 17 May. At the conclusion of the hearing and after a brief recess the Court ordered that the appeal be dismissed and that the appellants pay the respondents’ costs of the appeal. The Court indicated that it would publish reasons at a later date. These are my reasons.
Facts
This summary of the facts is based on allegations in the plaintiffs’ statement of claim which have been admitted by the defendants or on facts which are extracted from affidavits filed by the parties in support of or in opposition to the applications before the Judge at first instance. Where appropriate I have borrowed from the summary of the facts given by the Judge at first instance in his reasons for making the orders.
Since about 1980, Messrs Maras and Manos have been engaged in a business relationship by which they have effectively been partners in a number of projects for the acquisition, development and management of real estate in and around Adelaide. On 8 September 1980 they incorporated a company called Mancorp Investments Pty Ltd. They have been, and still are, the only directors of Mancorp. The shareholders of Mancorp are two companies, each of which is a trustee of a family trust respectively of Mr Maras and Mr Manos.
Other companies have been incorporated for the purpose of pursuing the investment in real estate by Messrs Maras and Manos. All those companies are effectively controlled by both these men who have pursued their interest in effect as partners in a business relationship intended to be for the equal benefit of their respective families. There was a third person involved in some of the projects for a short time, but his interests were purchased equally by Messrs Maras and Manos.
In 2004, Messrs Maras and Manos decided to bring their joint enterprise to an end. They agreed to terminate their business relationship and, according to Mr Maras, they agreed to divide the properties held by their respective companies. Negotiations floundered. In March 2006 they participated in a mediation which resulted in a handwritten agreement dated 12 March 2006 (“the March Agreement”). On the face of that agreement Messrs Maras and Manos agreed to apportion between them, free of debt, certain named properties in the investment portfolio, to sell two other properties in order to repay debts owed by the group, to refinance one with a view to its eventual sale and equal apportionment of the surplus on sale, and to make a certain cash adjustment to equalise the value of their respective interests.
Since the mediation, further difficulties have arisen in the winding up of the business relationship. This has led to Mr Maras and his companies instituting these proceedings. In short, the plaintiffs seek a declaration that the March Agreement constitutes a legally binding and enforceable agreement and seek various orders for specific performance against Mr Manos and his companies designed to implement that agreement. Alternatively, they seek rectification of the agreement to reflect what is alleged to have been the common intention of Maras and Manos in reaching the March Agreement. The plaintiffs also seek an order under s 233(1) of the Corporations Act 2001 (Cth) that Manos take certain action in relation to the affairs of Rundle East and the properties of which it is presently lessee, and that both Manos and Maras procure the transfer to their respective interests of the properties the subject of the March Agreement. Mr Manos alleges that the March Agreement is unenforceable. Alternatively he alleges that obligations under the agreement have been discharged, in that he has acted in good faith and used his best endeavours to attempt to agree, within a reasonable time, matters proposed in the agreement, but that no agreement has been reached. In other words, on his case, there is an unresolved dispute as to entitlements on termination of their business relationship.
Rundle East is one of the companies controlled by Messrs Maras and Manos. They have been the directors of Rundle East since 3 September 1993, shortly after the company’s incorporation, and at all material times they have been the only directors. The shareholders of Rundle East are family companies of each of Messrs Maras and Manos as trustee of the family trusts of the two men, each holding one half of the beneficial interest in Rundle East. Rundle East carries on business as the trustee of the Rundle East Trust, the fixed beneficial interests in which are held equally by the same family companies as hold the shares in the company, and for the same purposes.
By memorandum of lease dated 1 December 1993, (“the lease”) Rundle East leased 7 allotments of land in Rundle Street, Adelaide, from the Minister of Housing, Urban Development and Local Government Relations. The lease was for a term of approximately 99 years ending on 30 November 2092. The lease itself is an extremely complex document. Together with its annexures it occupies some 249 pages of closely typed material. It required the lessee to undertake certain development activity which it has done.
On 10 May 2004 Rundle East also purchased a property at 285 Rundle Street, Adelaide, known as the “Universal Wine Bar”. Together, the leasehold and freehold properties comprise the principal assets of the Rundle East Trust.
Mr Maras claims that it was a term of the March Agreement that he or his interests would take free of debt the assets held by Rundle East to the exclusion of the interests of Mr Manos and his interests. The evidence suggests that there may have been a substantial increase in the value of the Rundle East properties above that which was notionally accepted for the purposes of the March Agreement.
The relevant terms of the lease
At various points during the term of the lease the lessor may require the land or portion thereof to be offered for sale to the public. By clause 52 of the lease, the lessee is granted a call option whereby it may at any time during the term of the lease, subject to certain other conditions contained in the lease, purchase the premises or any portion thereof in the manner and on the terms and conditions specified in the lease.
In the events which happened, and in accordance with the relevant terms of the lease, the lessor exercised its sale option by serving a notice on the lessee on 28 October 2004. This meant that, during the period which followed and which ends on 30 June 2007, the lessee was required by clause 56.4 of the lease “in good faith, [to] conduct and manage the offering of the … land for sale” during that period. However, clause 56.5 provides that the lessee may, nevertheless, during that period exercise its call option and purchase the land.
Clause 56.6 provides that if the lessee does not sell or the lessor is not required to enter into a legally binding contract for the sale of the land or any portion of it, or if the lessee has not agreed to purchase the land or any portion of it pursuant to the call option, then the lessor may, in good faith, conduct and manage the offering of the land for sale during the period of 6 calendar months from 30 June 2007. By clause 56.7 the lessee may not exercise the call option during that period, although the lessee is not precluded from buying the land on the open market.
If the lessor does not effect a sale in that six month period, then under clause 56.8 the lessee may elect to terminate a further and subsequent right of the lessor to sell during an additional six month period. If that occurs, clause 56.9 requires that there is to be an adjustment in the ground rent.
If the lessor has the right to sell during the second six-month period, the lessee’s call option can be exercised during that period. If it is not exercised and the lessor does not sell the land, the lessor’s sale option lapses, in this case, until 1 July 2014.
In order to initiate the call option process, clause 52.3 requires that the lessee is to serve a written notice on the lessor stating that the lessee is considering exercising the call option in respect of the premises or a portion thereof, and requesting that the relevant purchase price be determined in accordance with clause 52.4. Under clause 52.4 the parties have 20 business days in which to negotiate an agreed purchase price. If they cannot agree they are each required to appoint a valuer to provide a written valuation of the market value of the premises, an expression which is defined in clause 1 of the lease. The purchase price to be paid by the lessee is 25% of the average of the market value determined by the two valuers. By clause 52.5, the lessee then has 40 business days from the ascertainment of the market value to serve on the lessor a written notice exercising the call option stating that the lessor agrees to purchase the lessor’s estate in fee simple in the premises. If the notice is not served within that time or, in the events which have now happened, by 30 June 2007, the lessee’s option to purchase lapses and, for reasons mentioned above, is not able to be exercised for the following period of 6 months, during which time the lessor may exercise its sale option.
Mr Maras argues that, by reference to relevant taxation and stamp duty considerations and to the lease definition of “market value”, there are certain obvious economic benefits to the lessee in exercising the call option during the current period. It is not necessary to determine whether that is so for the purpose of resolving this appeal.
The interlocutory application
The interlocutory application filed by the plaintiffs on 17 April 2007 sought mandatory orders that Mr Manos, in his capacity as a director of Rundle East, execute a directors’ circular resolution authorising the extension of a certain finance facility to Rundle East, enabling Rundle East to provide the lessor with written notice of the intention of Rundle East to exercise the call option and otherwise to do all things reasonably necessary to permit Rundle East to exercise the call option. However by the time of the hearing, the orders sought were that:
1.Mr Manos do all things and execute all documents as shall be necessary for Rundle East to give the written notice initiating the process necessary to exercise the call option under clause 52.3 of the lease;
2.Rundle East immediately appoint a valuer for the purposes of clause 52.4.2 of the lease;
3.Mr Maras be authorised for and on behalf of Rundle East to negotiate and agree an amount for the purposes of clause 52.4.1 of the lease.
This Court was informed that during the course of the hearing the plaintiffs acquiesced in a suggestion of the Judge at first instance that the appropriate order, if any was to be made, would be in the form actually made by the Judge which was as follows:
1.[Mr Maras] be at liberty and is hereby authorised to do all things and to execute all documents as shall be necessary for [Rundle East] to give the written notice pursuant to clause 52.3 of the lease dated 28 October 1993 between the Minister of Housing, Urban Development and Local Government Relations and [Rundle East] and registered no 7634950 (“the lease”).
2.Until further order, [Mr Maras] be at liberty and is hereby authorised for and on behalf of [Rundle East] to negotiate a price for the purchase of the properties the subject of the lease.
3.Neither [Mr Maras] nor [Rundle East] shall agree the purchase price of the properties the subject of the lease or enter into an agreement to purchase the said properties unless and until this Court authorises them to do so.
It will be noted that the desired relief had moved from requiring Mr Manos to take certain action to ensure the exercise of the call option to acquiescence by the respondents in an order authorising Mr Maras to take limited steps towards the possible exercise of the option.
Grounds of appeal
The appellants purport to appeal as of right to this Court against those orders on the following grounds:
1.The learned Judge erred in that he made orders authorising [Maras] to make decisions, and to act, irrevocably on behalf of [Rundle East], to the exclusion of [Manos], when [Maras’] claim to such authority rested upon an alleged implied term of an alleged agreement (the Mediation Agreement) the existence and enforceability of which is disputed in the action. The learned Judge did not have jurisdiction or power to make such an order in the absence of a final determination of the action, alternatively, should not have exercised any jurisdiction or power (if any) by making the orders.
2.The learned Judge erred in that he made final orders, that is orders finally determining the claimed right of the first plaintiff to act alone on behalf of Rundle East, to the exclusion of [Manos], in deciding to give a notice on behalf of Rundle East under clause 52.3 of the Lease …, thereby irreversibly activating the procedure for exercising the Call Option to purchase the reversion. The learned Judge ought not to have made any such orders without first finally determining the action.
3.The learned Judge erred in that he failed to identify what serious question arose to be tried (if any) and failed to consider, either sufficiently or at all, whether the preservation of the status quo pending the final determination of that issue required the making of any order in the nature of an interlocutory injunction. The learned Judge ought to have held that the preservation of the status quo did not require the making of the orders appealed from, or any orders.
4.The learned Judge failed to consider, either sufficiently or at all, whether there was any significant injustice in confining [Maras] to his legal remedies.
5.The learned Judge failed to consider, either sufficiently or at all, whether the relief sought should have been refused by reason of the delay in making the application.
6.The learned Judge failed to consider, either sufficiently or at all, whether the balance of irremediable damage favoured the making of the orders appealed from, or any orders. In particular, the learned Judge ought to have taken into account (but failed to so to do, either sufficiently or at all), that the orders contemplated that [Maras] would negotiate with the Lessor with a view to seeking further authorisation from this Court:
6.1 to bind Rundle East to a purchase price for the purpose of the Call Option; and
6.2 to exercise the Call Option before the 30 June 2007, the last day for so doing.
An amendment to the notice of appeal
On 14 May 2007 the appellants made an oral application to the Judge at first instance to discharge the orders the subject of the appeal on the ground that Mr Maras did not make full disclosure when obtaining the orders on 20 April. They complain that a letter dated 12 April 2007 sent by Mr Maras’ solicitors to the Chief Executive Officer of the Land Management Corporation was a material fact not brought to the attention of the Judge and which was only discovered by the appellants during the course of discovery of documents in the action after the orders had been made. I will return to the relevant parts of that letter when considering the further grounds of appeal.
As a result, the appellants sought leave to amend their notice of appeal to include an appeal against the refusal of the Judge to discharge paragraphs 2 and 3 of the orders made on 20 April 2007 and by adding the following grounds:
6A.The learned Judge erred in failing to discharge paragraphs 2 and 3 of the Orders made on 20 April 2007 by reason of the non disclosure of the letter sent from Shaw Lawyers to Wayne Gibbings dated 12 April 2007 (‘the Shaw Letter’).
6B.The learned Judge should have found that by reason of the failure to disclose the Shaw Letter the Court could have no confidence that Maras had been acting, or would continue to act, in the best interests of Rundle East whilst conducting the negotiations pursuant to order 2 of the Orders made on 20 April 2007.
Permission to amend the notice of appeal at the hearing was not opposed by counsel for the respondents and leave was given to amend the notice of appeal accordingly, the respondents maintaining their stated position that an appeal could only be brought pursuant to permission granted by the Court, and that without such permission the appeal must be dismissed as being incompetent.
The requirement for permission to appeal

Section 50 of the Supreme Court Act 1935 (SA) relevantly provides:
(1)Subject to this section—
(a)     an appeal lies to the Full Court against a judgment of the court constituted of a single judge; and
(b)     …
…
(4)An appeal lies only with the permission of the court—
(a)     …
(b)     if the rules provide that the appeal lies by permission of the court.
(5)    The rules cannot, however, require the court's permission for an appeal if the judgment under appeal—
(a)     …
(b)     …
(c)     grants or refuses relief in the nature of an injunction or the appointment of a receiver; or
(d)     …
(e)     makes a final determination of a substantive right.
…
(6)In this section—
judgment includes—
(a)     an order or direction; and
(b)     a decision not to make an order or direction.
Rule 281 of the Supreme Court Civil Rules 2006 provides:
Subject to any statutory provision to the contrary, an appeal to the Court lies by permission of the Court if–
(a)the judgment subject to the appeal is–
(i)    an interlocutory judgment of the Court given by a Judge; or
(ii)     a judgment given on appeal from an interlocutory judgment; or
(iii)    …
(b)the appeal is limited to a question about costs.
It follows that an appeal from an interlocutory order of a Judge requires permission unless the order grants or refuses relief in the nature of an injunction or makes a final determination of a substantive right. As the resolution of the appeal turns to some extent on the effect of the orders made by the Judge, it is convenient to defer until later in these reasons consideration of whether the appeal in this case requires permission.
Rule 285 of the Supreme Court Civil Rules provides that permission may be sought in one of two ways. The appellant may include in the notice of appeal a request for the necessary permission, or may, within 14 days after the date of the judgment appealed against, make a separate application for permission to appeal to the court of first instance. Neither course was followed in this case.
At the commencement of the hearing of the appeal, the appellants made an oral application for an extension of time within which to apply for permission to appeal and, to the extent necessary, for permission to appeal. The Court indicated that it would consider those applications along with the argument on the appeal.
The nature of the orders made
As previously noted, the original interlocutory application sought an order that Mr Manos perform or join in the performing of certain actions to ensure that the lessee’s call option was exercised. By acquiescing in the orders made the respondents were not seeking to have Mr Manos excluded from taking any action towards the exercise of the option. In the circumstances it was not surprising that it was Mr Maras who was authorised to give the notice and to negotiate with the lessor. If any action was to be taken, it had to be taken urgently. At the time of the hearing Mr Manos was in China. There was therefore no prejudice to Mr Manos in nominating Mr Maras to act.
Paragraphs 1 and 2 of the order of 20 April are facultative only. They are not in the form of an injunction. They do not require anyone to do anything or prevent anyone from doing anything. By implication, the first order prevents Mr Manos from countermanding any notice that Mr Maras may give, but any such countermanding, if given, would probably be ineffective anyway once a valid notice is given. The second order, by implication, prevents Mr Manos from negotiating a price on behalf of Rundle East. It does not prevent him from making known either to Mr Maras or to the lessor his view as to an appropriate price for Rundle East to pay on the exercise of the call option, nor does it prevent him from assisting Mr Maras in the negotiations.
The third order provides a significant guide as to the nature and purpose of the orders. It ensures that agreement cannot be reached as to price nor any notice of exercise of the call option given without the approval of the Court.
Grounds 1 to 4 and 6 of the appeal
It is convenient to consider grounds 1 to 4 and 6 of the appeal together.
The Judge at first instance, in his reasons, did not address or intend to address the strength or otherwise of the plaintiffs’ claim, nor did he make any order in reliance or purported reliance on the alleged right of Mr Maras to decide whether the call option should be exercised. Contrary to the allegations in ground 1, the Judge was careful to ensure that the orders he made did not rest on any alleged implied term of the March Agreement. Paragraph 3 of the orders was plainly inserted in order to avoid any possibility that the orders finally determined any issue between the parties. The Judge was concerned to prevent any agreement being reached with the lessor as to price or the exercise of the call option in a way that would determine the issues raised on the statement of claim.
It is important to understand the purpose and effect of the Judge’s order. One of the issues in the action between the parties is the beneficial entitlement to the assets held by Rundle East. Mr Maras claims that he or his family interests are the ultimate beneficial owners of the company and beneficiaries of the Rundle East trust. Mr Manos denies that and claims that the assets remain, in effect, jointly owned.
The Judge’s order is about preserving an asset the subject of dispute in the best interests of both protagonists pending resolution of the plaintiffs’ claim to the asset. The ultimate asset to be preserved includes a complex set of proprietary rights in respect of the Rundle East leasehold properties, including the right to purchase the freehold. That set of proprietary rights, in this case, is a set of changing and evolving rights, many of which are time-sensitive.
By paragraph 3 of the order, besides avoiding any determination of the parties’ rights under the March Agreement, the Judge has not even made a decision as to whether the exercise of the call option is likely to preserve the asset in a form which is in the interests of both parties pending resolution of the dispute. That is a decision yet to be made, not on the basis of whether Mr Maras has an entitlement to the asset, but on the probable financial consequences to the Rundle East Trust of taking one course or another, i.e. acquiring freehold or allowing it to be sold by the lessor. That decision cannot sensibly be made without knowing–
(a)what the cost and likely consequences to the beneficiaries of the Trust will be of exercising the call option and what value will thereby be acquired; and
(b)the likely financial consequences to the beneficiaries of the Trust of a default sale by the lessor during the period of six months following 30 June 2007.
There is no question of preserving the status quo pending trial in the sense of ensuring that nothing happens to alter the asset before trial. When the complex nature of the asset the subject of dispute in the proceedings is understood, it is apparent that it cannot be preserved in its present form. Where the directors of Rundle East are deadlocked and cannot make a decision whether a significant right should be exercised, this Court in the exercise of its inherent jurisdiction must make an order which best preserves the asset in dispute in a form which is in the best interests of both parties pending resolution of the dispute. It is not unlike the exercise of the Court’s inherent jurisdiction to grant orders in the nature of a Mareva injunction for the preservation of assets the object of litigation.[1]
[1] Devlin v Collins (1984) 37 SASR 98; Jackson v Sterling Industries Ltd (1987) 162 CLR 612.
No question has yet arisen in this case involving an interlocutory injunction which requires the assessment of–
(a)whether there is a prima facie case such that there is a sufficient likelihood of success having regard to the nature of the right asserted and the consequences of the relief (or lack thereof);[2]
(b)whether damages will be an adequate remedy; or
(c)whether the balance of convenience favours the granting of an injunction.
The only balance of convenience is the convenience to both parties of preserving or enhancing the value of the asset pending resolution of the dispute.
[2] See Australian Broadcasting Corporation v O’Neill (2006) 229 ALR 457 at 466, 478 - 480; [2006] HCA 46 at [19], Gleeson CJ and Crennan J, [65] - [72], Gummow and Hayne JJ.
The Court’s sole concern at this stage is the preservation of the asset in its most valuable form to the parties, whoever succeeds on the plaintiffs’ claim. The Judge’s orders were but one step in a process of making a decision as to how that asset can best be preserved. They were made in the exercise of the Court’s undoubted discretion. There is nothing to show that the exercise of the discretion miscarried in any way.
So far as ground six is concerned, while the orders do authorise Mr Maras to negotiate with the lessor, they do not permit him to reach agreement as to price or to take any further steps without the approval of the Court. There is no irremediable damage to the interests of Mr Manos by his doing so. If there should be, the appellants are protected by the respondents’ undertaking as to damages.
Mr Manos will no doubt be entitled to be heard as to whether an agreement on price should be reached, whether the valuation process should proceed and, in due course, whether the option should be exercised, not in furtherance of the alleged rights of Mr Maras, but in what the Court perceives to be in the best interests of the corporation and the beneficiaries of the Trust.
Mr Wells QC, counsel for the appellants, complains that this amounts to the Court descending into the arena of management and making “a business decision”. He submitted that directors who find themselves deadlocked should apply for appropriate remedies pursuant to the Corporations Act 2001 (Cth). In this case, as the dispute between the parties extends beyond one disputed asset, it is appropriately a matter which may be decided by this Court. Further, such a submission does not sit comfortably with the submission, also made by Mr Wells, that by its order the Court has finally determined the rights of the parties. It is undesirable that the Court should have to become involved in functions that would normally be undertaken by the directors of Rundle East. However, in a case such as the present, the inability of the directors, because of their bitter dispute, to make a decision in relation to the exercise of a time-sensitive right is itself tantamount to making a decision not to exercise the right. It is a decision which must be made in the best interest of the corporation, the parties and the beneficiaries of the Trust, whoever they may be. It is not a decision that should be made by default. In the absence of a receiver of Rundle East, and given the urgency of the situation, the Court must act in such a way as best to preserve the value of the rights vested in Rundle East.
Ground 5 – delay
The appellants’ submissions based on the alleged delay of the respondents are misconceived. The evidence before the Judge at first instance suggests that, since the granting of the lease, it had been a common intention of the parties to exercise the call option at the first appropriate opportunity. Nothing was done by either party to offer the land for sale following the receipt of the landlord’s notice of exercise of the sale option. A detailed proposal do to so by Mr Manos came only in March 2007, whereas, in negotiating the management administration agreement in July 2006, it appears that Mr Manos had sought to insert a provision concerning financing the Rundle East properties to be reviewed “when Rundle East trust acquires the freehold from the State Government of South Australia”.
Undue delay in seeking an interlocutory injunction may well result in the exercise of a court’s discretion not to grant the injunction.[3] However, enough has been said to show that this is not a conventional interlocutory injunction. It is an order directed towards the preservation of the property the subject of the action. It is not directed towards the preservation of the rights claimed by the plaintiffs under the March Agreement. So viewed, delay ceases to have any material significance.
[3] Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing (NSW) Ltd (1987) 76 ALR 633.
Grounds 6A and 6B – non-disclosure by the plaintiffs
Following the order made by the Judge on 20 April 2007 and in the course of inspecting documents discovered by the respondents, the appellants became aware of a letter dated 12 April 2007 from the solicitors for the respondent addressed to Mr Wayne Gibbings, Chief Executive, Land Management Corporation, the representation of the lessor. The letter contained the following paragraphs:
2.1We are instructed that our client, Maras Group (Aust) Pty Ltd, is prepared to enter into a contract to purchase the Minister’s freehold interest in the East End properties on exactly the same terms as Rundle East Company would purchase the East End properties if the Call Option were exercised under the Lease.
2.2The contract would, of course, be conditional upon Rundle East Company not exercising its Call Option by 30 June 2007. If Rundle East Company exercises its Call Option within that period, then the Minister’s freehold interest would be sold to Rundle East Company in accordance with the Lease.
The appellants then applied to the Judge to revoke the orders made on 20 April on the basis that there had been a material non-disclosure of the letter by the respondents. The Judge rejected the application on 14 May 2007. In his reasons the Judge correctly summarised the obligations of a party seeking an injunction on an ex-parte application, being principles which he considered applied with equal force to any application for an injunction. He said:
It is well settled that it is the duty of a party seeking an injunction on an ex parte application to bring to the notice of the court all facts material to the determination of that party’s right to the injunction: Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 681-683. The utmost good faith is required. The duty is to make full and fair disclosure of the entire facts of the case: see Thomas Edison at 682, Holden v Waterlow (1866) 15 WR 139, Dease v Plunkett (1843) 1 Drury 255 and Brown v Newall (1837) 2 My & Cr 558; 40 ER 752. That obligation has been repeatedly re-affirmed: see, for example, Lane v Channel 7 Adelaide Pty Ltd (2004) 232 LSJS 234 at [8] to [11]. Unless the applicant has made a full and candid disclosure of all facts relevant to the determination of the question whether the injunction should be ordered an ex parte injunction will, in almost all cases, be discharged: Thomas A Edison v Bullock at 682 and Holden v Waterlow.
The party seeking the injunction is not necessarily excused from making full disclosure because he has believed that particular matters known to him are not material, although that belief may be relevant to the exercise by the court of its discretion whether to discharge the order: see Dalglish v Jarvie (1850) 2 Mac & G 231; 42 ER 89; Behbehani v Salem (1989) 1 WLR 723; and Spry, Equitable Remedies (6^th Edition) at 496.[4]
[4] Maras & Ors v Manos & Ors [2007] SASC 175 at [11] – [12].
The Judge considered that there was an obligation on the part of the respondents to disclose the letter. However, had the letter been disclosed, he said that it would not have caused him to decline to make the orders made on 20 April, especially given that the offer is subject to Rundle East not exercising the option to purchase. On the other hand, the Judge recognised that the apparent possible conflict of interest and duty was of a kind that required the letter to be disclosed. The Judge noted, however, that any steps taken towards the exercise of the option would be under the scrutiny of the Court, that if Mr Maras was not astute in his negotiations, the next step would require the exchange of valuations. He also noted that he had since made an order that Mr Manos be informed of all steps in the negotiations as they occur and that he proposed to vary the orders to ensure that Mr Manos was more fully informed of all steps in the negotiations. He noted that there was nothing to prevent Mr Manos assisting Mr Maras with the negotiations. He noted again the undertaking by Mr Maras as to damages, and that if Mr Maras had the true intention of pursuing the acquisition by his own companies, he was engaging in a very expensive exercise to preserve an asset on behalf of Rundle East while not intending in fact to exercise the option to purchase on behalf of Rundle East.
The failure to disclose a material fact may well result in an order in the nature of an injunction being dissolved. However, that does not prevent a party from applying de novo for an injunction upon the merits as then disclosed.[5] In the circumstances, the Judge had a discretion to revoke the order, but having reconsidered the merits of the material before him and particularly in view of the fact that the order was directed to the preservation of an asset, the Judge exercised his discretion against revoking the order. It has not been shown that the Judge acted on any wrong principle or that any other factors are present which would justify interference by this Court with the exercise of the Judge’s discretion.[6]
[5] Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 683.
[6] House v The King (1936) 55 CLR 499 at 504 – 505.
Whether permission to appeal is necessary
The first question to be determined is whether any of the orders grants relief “in the nature of an injunction” for the purposes of s 50(5)(c) of the Supreme Court Act. The authors of “Meagher, Gummow and Lehane’s Equity Doctrines and Remedies” 4^th Edition[7] conveniently note a number of well-known descriptions of injunctive orders:
Injunctions may be described as court orders forbidding or commanding the person to whom they are addressed to do something. This the textwriters habitually say. Thus one leading authority puts it: “A writ of injunction may be described as a judicial process whereby a party was required to do a particular thing or to refrain from doing a particular thing according to the exigency of the writ”.[8] Another has it to the same effect: “An injunction is a judicial process whereby a party is ordered to refrain from doing or to do a particular act or thing”.[9] Again, an Australian writer has echoed the conventional wisdom: “An injunction is an order of an equitable nature restraining the person to whom it is directed from performing a specified act, or, in certain exceptional cases which will be considered hereafter, requiring him to perform a specified act”.[10]
The authors continue:
Legal usage alone, and not logic, decides which court orders can, and which cannot, accurately be described as injunctions. [Footnote omitted]
[7]    At [21-005].
[8]    WW Kerr, A Treatise on the Law and Practice of Injunctions, 6^th ed, Sweet & Maxwell, London, 1927 at 1.
[9]    Halsbury’s Laws of England, 4^th ed, vol 24 at 511.
[10] I C F Spry, The Principles of Equitable Remedies, 6^th ed, LBC Information Services, Pyrmont, 2001 at 322.
As already noted, the orders under appeal require no-one to do anything or to refrain from doing anything other than to return to the Court to obtain approval for any further step. They are not orders in the nature of an injunction.
I reject the submission of the appellants that any of the orders makes “a final determination of a substantive right” for the purposes of s 50(5)(e) of the Supreme Court Act. As has already been observed, the Court has been careful to avoid making any such orders or even to rely on any alleged right that the respondents claim based on the March Agreement. The nature and effect of the order is to be determined as a matter of substance. They are facultative. They do not attempt to decide the critical question whether the rights under the lease belong beneficially to Mr Maras or to Mr Manos or to both of them. They are directed towards the preservation of an asset. They do not amount to a final determination of a substantive right.

The orders of 20 April and the refusal to revoke them on 14 May are plainly interlocutory in nature. As they do not come within an exception contained in s 50(5) of the Supreme Court Act, r 281 of the Supreme Court Civil Rules provides that the appeal lies only by permission of the Court.
The extension of time and permission to appeal
Permission to appeal against an interlocutory order will only be granted if the Court is satisfied that the decision is wrong or attended with sufficient doubt to warrant its reconsideration on appeal or has the effect of working a substantial injustice to the appellant.[11] Enough has been said to indicate that the decisions of the Judge at first instance are neither wrong nor attended with any doubt and do not work any injustice on the appellants. It would be inappropriate to grant permission to appeal against any of the orders made by the Judge at first instance on 20 April 2007, or against his refusal to revoke two of them on 14 May 2007.
[11] See Harris Scarfe Ltd (Receivers & Managers Appointed) (in liquidation) & Ors v Ernst & Young & Ors (No2) (2005) 240 LSJS 17 at 18 - 19; [2005] SASC 168 at [4] – [11] and the cases cited therein.
Had application been made for permission to appeal in the manner prescribed by r 285 I would have refused permission to appeal.
The discretion to extend time is for the sole purpose of enabling the Court to do justice between the parties.[12] As permission to appeal would not be granted, there is no point in granting an extension of time.
[12] Gallo v Dawson (1990) 64 ALJR 458; 93 ALR 479.
Conclusion
Accordingly, although it was not formally ordered by the Court on 17 May, I would refuse an extension of time within which to apply for permission to appeal. As the appeal was one requiring permission which had not been granted, it followed that the appeal had to be dismissed as incompetent. However, even if permission had been granted, the appeal would still have to have been dismissed.
VANSTONE J: I agree with the reasons provided by Bleby J for the orders made on 17 May 2007.
LAYTON J: I agree that the appeal should be dismissed and I agree with the reasons provided by Bleby J.

[2007] SASC 192

17 May 2007 (Decision); 25 May 2007 (Reasons for Decision of The Full Court)