Paringawood Nom P/L & Ors v Baulderstone & Anor No. Scgrg-97-1382 Judgment No. S333

PARINGAWOOD NOMINEES PTY LTD & ORS v BAULDERSTONE & ANOR
[1999] SASC 333

Appeal from a Master

WILLIAMS J. This is an appeal by the appellants (the defendants at first instance) against the order of a Master dated 21 May 1999 where he refused their application to vary or dissolve an injunction which, in its current form, was put in place on 3 December 1997.
The Background to the Dispute

The action concerns the purchase, by interests associated with the respondents, Mr and Mrs Curtis, of an interest in a dairy farm near Mannum. The transaction is recorded in a series of documents each dated 3 November 1993. Settlement upon the agreement for sale and purchase has not occurred by reason of a dispute. Mr and Mrs Curtis are living on the property. One of the respondent companies, Paringawood Nominees Pty Ltd (“Paringawood”) has a licence to occupy the property.
Messrs Baulderstone were the vendors of the land but Mr Baulderstone Senior has since died, on 12 October 1994, and Mr Baulderstone Junior and Mr Fox have now obtained a grant of probate of his will. According to the respondents, the parties negotiated the deal against the background of a valuation which had been obtained of crown leasehold and water rights. The respondents now allege that the agreement for sale and purchase, when reduced to writing, did not reflect the parties’ intentions. The respondents seek rectification of the documentation to reflect what they claim to be the common understanding of the parties. There are a number of alleged mistakes in the documentation including one that the agreement for sale and purchase failed to expressly mention the purchaser’s agreed entitlement to water licence rights.
Upon the respondents’ case, the manner in which the arrangement was expressed is unusual. Counsel for the respondents drew to my attention to the constraints of s89(1) of the Land Agents, Brokers and Valuers Act 1973 which provides:
“89. (1)..... A contract for the sale of any land or business that provides for the payment of any part of the purchase price of the land or business (except a deposit) before the date of settlement is void.”
The respondents contend that being so constrained, the parties put in place an arrangement, evidenced by a document entitled “Loan Agreement”, whereby Paringawood agreed to advance $2625 per month to Mr Baulderstone Junior pending settlement. This was upon the footing that these accumulated borrowings, with interest, would then be set off against the purchase price for the land payable by Anthera Pty Ltd (“Anthera”), another company associated with the Curtis family. The agreement for sale and purchase itself contains a somewhat similar provision but in this case the set off is expressed to be in respect of amounts owing to Anthera, not Paringawood. One of the vendors thereby obtained the use of monies prior to settlement and also gained some increasing security for the purchase monies.
Alongside this arrangement was a written agreement, entitled “Licence Agreement”, whereby Paringawood agreed to pay Messrs Baulderstone $5375 per month by way of licence fee to occupy the land pending settlement. I note that the licence agreement contemplates settlement on or before 31 July 1995. The licence agreement also requires Paringawood to pay all council rates “...as and when the same fall due for payment”. The total of these monthly payments ($2625 plus $5375, in all $8000) is charged against Paringawood’s milk returns.
The loan agreement, giving rise to the monthly liability by Paringawood to advance $2625, is only of peripheral interest to the issue argued on appeal. However, it provides, alongside the other documents, an example of how some individual components of an overall arrangement have been separated out into different documents. Further, it shows how Mr Baulderstone Junior became entitled to additional security which will be brought to account at settlement.
The Statement of Claim dated 17 November 1997 alleges that the series of documents constituting the transaction were intended by the parties “...to take effect and be construed as inter-related components of one overall transaction...”.
The arrangements were preceded by an earlier dealing in 1990 when the Curtis’ interests, via Paringawood, agreed to acquire an interest of 20% of the relevant land and a 50% interest in livestock. A joint venture was then put in place whereby Paringawood, with a 50% interest in the business, was to manage the joint venture.
As registered proprietors of the Crown leasehold in unequal shares under the 1990 arrangements, pending settlement on the 1993 arrangements, the Curtis’ and Baulderstone interests remain liable for the council rates. However, in due course the contractual arrangements will effectively require the Curtis’ interests, by indemnity, to discharge the responsibility.
The respondents assert that the appellants are in breach of their contractual obligation to effect settlement and in this state of affairs the respondents have declined, apparently since June 1996, to continue payment of the licence fees. The council rates from 1 July 1993 to 30 June 1999 are also “outstanding”. The Mid Murray Council (“the Council”) is not currently pressing the matter. The Council acknowledges that, in the events which have occurred, some reassessment and reduction of the rates totalling about $20,483 will be necessary. According to the respondents’ counsel, the matter has been complicated by the fact that after the 1993 arrangement was put in place, Paringawood entered into a compromise with creditors so as to affect the appellants’ rights.
The action is nearly ready for trial. For some time there have been orders of the Court in place which injunct the appellants from pursuing their claims otherwise than within the framework of the action. The appellants are now seeking immediate payment of the licence fees and council rates as a condition of the continuance of the injunction.
The estate of Mr Baulderstone Senior at law has assigned to Mr Baulderstone Junior all licence fees due up to December 1997 (see par22 of the affidavit of Mr Baulderstone Junior sworn 16 January 1998). Upon that basis the appellants, as explained in par38 of that affidavit, now “...seek an order that:
“38.3.. Paringawood pays to me, within 7 days from the making of such order, the sum of $102,125.00, comprising the licence fees referred to in paragraph 22 of this affidavit;
38.4... Paringawood pays to the executors and me the licence fee of $5,375.00 on the 15th day of each calender(sic) month commencing with the month of January 1998 until further order of this Court;
38.5... Paringawood pays to the council, within 7 days from the making of such order:
38.5.1the rates; and
38.5.2..... all interest, fines and/or other penalties which have been imposed by the council, or are otherwise payable to the council, as a consequence of the late payment of the rates;
and that if Paringawood defaults in making any of the payments referred to in this paragraph:
38.6the injunction be dissolved; and
38.7paragraph 1 of the order made in this action on 22 October 1997 be vacated or set aside.”
I note in terms of the notice of appeal that the amount of $53750 is alleged to be owing for ten months from January to October 1998 (see par38.4 of the affidavit quoted above).
There have been a number of interlocutory hearings. As a result, the pre-trial process may have taken longer than the parties may have anticipated when the injunctions were put in place in 1997. As time passes, the appellants have a growing concern for the accumulating unpaid total of the licence fees and council rates. The appellants have counterclaimed for these amounts in the present action, but in terms of the order of 3 December 1997, are otherwise restrained from pursuing recovery action. They see themselves as being increasingly at risk by reason of their perceived doubts as to the respondents’ ability to meet their clear responsibilities. In these circumstances the appellants argue that the respondents should be required to meet these obligations if they are to enjoy the benefits of occupancy of the land and retain the protection of a caveat on the land.
The nature of the order of 3 December 1997

In refusing to vary his order of 3 December 1997 the Master proceeded upon the basis that the order was an interlocutory injunction. The appellants argue that in his recent consideration of the matter the Master should have treated their application as being one to vary an interim injunction. This question is fundamental to the identification of the principles which should be applied in considering the appellants’ application to vary the order.
On 17 October 1997 the Master put in place and expressed to operate, until 23 October 1997, an interim injunction extending time for removal of a caveat and generally restraining the appellants from enforcing the agreements. On 22 October 1997 the Master extended the order “until further order” but modified the original order to enable the appellants to deal in certain water rights. A note on the Court record explains the status of the order:
“22 October 1997 - “The ...[appellants] do not at this stage apply to have the application for an interlocutory injunction set down for hearing...For convenience the ...[appellants] do not oppose an interim injunction until further order but the ...[respondents] accept that they have the onus of justifying the grant of an interlocutory injunction should it become necessary in due course.”
On 3 December 1997 the Master varied this order so as to permit the appellants to file a counterclaim and to assign, amongst themselves, various rights which are affected by the proceedings. The order was made upon the respondents’ application but significantly the appellants did not consent. The Master was therefore required to exercise his discretion. The order operated without any further return date but par5 provided:
“5..... That the ...[appellants] be at liberty to apply upon short notice in writing to the ...[respondents] to dissolve or vary the injunction hereby granted.”
The order of 3 December 1997 also continued the time for removal of the respondents’ caveat under the Real Property Act 1886-1975 until further order. This order, upon its face, is consistent with the practice approved in Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198. The respondents’ caveat having been warned, it was appropriate that an interlocutory injunction be put in place if the caveat were to be allowed to remain until a trial of the issues.
On 29 October 1998 the Master had an application before him by the appellants for summary judgment for payment of the licence fees and council rates. The application dated 16 January 1998 sought, inter alia, the dissolution or variation of the earlier orders. The application was supported by the affidavit of Mr Baulderstone Junior dated 16 January 1998.
In the course of argument on 29 October 1998 the Master recognised that the appellants were not really pursuing an application for summary judgment under SCR25 but were seeking a variation of the existing order for injunction. The variation sought was that a condition be imposed upon the respondents. That condition appears from par38 of Mr Baulderstone Junior’s affidavit of 16 January 1998, namely, “...if Paringawood defaults in making any of the payments referred to in this paragraph...the injunction be dissolved ....”
There is no doubt that in disposing of the matter, the Master treated himself as dealing with an application to vary an interlocutory injunction and that is reflected in his reasons.
In my view, the Master was correct in treating the order in force as that of 3 December 1997 and in characterising it as containing an interlocutory injunction. That order gave the appellants a right to apply to vary and they pursued their right. Upon an examination of the form and content of the order, and bearing in mind the circumstances in which it was made, the order of 3 December 1997 bears all the indicia of being interlocutory. If the Master were making an interim order, one would have expected the matter to be adjourned to a fixed day, and if necessary, to a further fixed date (see Spry on The Principles of Equitable Remedies, 5th ed at 510).
In seeking a variation of this order, the appellants were required, in accordance with normal principles,
(i).... to show a significant change in circumstances to justify a reconsideration of the position, or alternatively,
(ii)... to point to relevant circumstances that for sufficient reasons they were previously unaware.
The respondent relied upon Chanel Ltd v Woolworths & Co [1981] 1 WLR 485 at 492-3 and Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated & Anor (1981) 148 CLR 170 at 177-8.
In my opinion, there is nothing in the affidavit of 16 January 1998 which raises new material that would warrant a variation in the interlocutory order of 3 December 1997. That was also the Master’s conclusion.
The appellants place some reliance upon the fact that the order of 3 December 1997 was made at a status conference. If the appellants had wished to oppose the making of the order on that occasion they could have asked that the matter be set down for argument. The parties were represented and had an opportunity to be heard before the Master made his order.
Against this background I consider that the Master was correct when he said:
“There is, however, one further aspect of the argument which needs to be mentioned. It relates to defining the nature of the application before me. It is clear that the ...[appellants] have remained at liberty to apply to dissolve or vary the injunction. It seems to have been accepted by both sides that the injunction granted on 3 December 1997 was an interlocutory injunction, if only because it was stated to have effect until further order. Usually, the Court will only permit an application for orders varying or dissolving interlocutory injunctive relief if there has been a mistake or error or if circumstances change after the grant of the order. There has been no additional affidavit material placed before the Court on this application which would require a re-examination of the original order. For that reason alone it would seem that the ...[appellants] application must fail.”
In reviewing the Master’s decision I reach the conclusion that the order in question contained an interlocutory injunction, irrespective of whether or not the parties, when arguing before the Master, “accepted” that to be the position.
The Master’s “notional” reconsideration of the balance of convenience and identification of a triable issue

The appellants’ application of 16 January 1998 for summary judgment in respect of licence fees and council rates was substantially abandoned in favour of an application confirmed orally, if not first made, on 29 October 1998 that there should be variations of the order of 3 December 1997.
Thereafter, the appellants were pursuing an application to vary the interlocutory injunction to require Paringawood, as a condition of the continuance of the injunction and associated orders, to pay $102,125 to Mr Baulderstone Junior, $53,750 to Messrs Baulderstone and Fox and a continuing amount of $5750 calendar monthly to Baulderstone and Fox as from 15 November 1998 until further order. The appellants were also seeking that Paringawood pay to the Council, council rates for the years ended June 1994 to June 1999. The amount involved has not been finally established but appears not to exceed about $20,000. The appellants argue that the licence fees and council rates are payable in any event by the Curtis’ interests. Further, they contend that it is unjust that their caveat should stand and that they should be left in occupation of the property without meeting these outgoings.
Although I consider that it was unnecessary in the circumstances for the Master to do so, he did review the operation of the injunction in light of the submissions advanced by the appellants. As such, the Master expressed himself as applying the principles discussed in Castlemaine Tooheys Ltd & Ors v The State of South Australia (1986) 161 CLR 148.
The appellants expressly disavowed reliance upon any “inter-relation” between the various agreements for the purposes of the appeal. However, it is that factor to which the Master paid heed. There is clearly a serious question to be tried as to whether the appellants have breached the agreement for sale and purchase. There are a series of requirements to be satisfied prior to settlement and the parties are in dispute as to who is in default. It is not appropriate at this stage to single out one issue, as the appellants have sought to do, namely as to the liability of the respondent Paringawood upon the licence agreement.
There is much to be said for the Master’s view that:
“...it has been sufficiently demonstrated by the ...[respondents] that there is a serious question to be tried as to whether or not the ...[appellants] have been in breach of the land contract. This is material to the question of whether or not Paringawood is in breach of the licence agreement because if the time for settlement in respect of the land contract has come and gone, Paringawood could not be said to be liable for further payments under the licence agreement because the period of the licence agreement was being wrongfully extended by the contractual breach of the ...[appellants].”
The Master noted the financial embarrassment which would result to the respondents if Paringawood were required to meet the various liabilities arising under the Licence Agreement pending a trial. Indeed, upon the Master’s assessment, there is every likelihood that the respondents would be unable to fund this action if those payments were required. The Master considered that the likely detriment to the respondents would far outweigh the countervailing detriment to the appellants by the retention of the status quo. The Master made it clear that, for reasons which I have already quoted, he did not think that the appellants were able to pursue the application. However, he considered it to be “...instructive notionally to revert to the original application” to examine the respective positions of the parties in light of the submissions which were now advanced by the appellants. In so doing, the Master looked at the matter afresh in light of all available material without being impeded by the status of the order of 3 December 1997.
The respondents point out that the approach taken by the Master is not dissimilar to that taken in National Bank Ltd v Zollo & Anor (1995) 64 SASR 63 at 67, where inability to litigate was recognised as a matter to be weighed when assessing the detriment which might be suffered in relation to the balance of convenience. However, it is important to recognise that each case must be judged on its own facts (see Zollo (supra) at 67-68 citing French J in Graham v Commonwealth Bank of Australia [1988] ATPR 49).
In my view, the Master acted in accordance with principle when assessing and identifying serious questions to be tried and in the exercise of his discretion in considering the balance of convenience. Upon this appeal the appellants are unable to demonstrate any error in the Master’s approach and if the appeal turned on that point it would fail.
The appellants argue that the balance of convenience clearly requires that the respondents ought to pay an undisputed liability for the licence fees and should also discharge the outgoings as “the price” of remaining in occupation. In my opinion, that is a very blinkered way of looking at only one limited aspect of a much larger arrangement. The Master chose to take a broader approach and, in my view, he was entitled to do so.
There was argument upon the present appeal as to whether the application dated 16 January 1998 was anything more than an application for summary judgment. The point assumed some importance on appeal because counsel for the respondents sought to rely upon an allegation that the appellants had delayed in seeking the variation until 29 October 1998. Counsel for the appellants contended that there was no delay as notice was contained in the application of 16 January 1998.

The Master has not mentioned the alleged delay in his reasons and, in my view, it was unnecessary for him to do so. The terms of the appellants’ application of 16 January 1998 and the supporting affidavit of Mr Baulderstone Junior sufficiently gave notice of the outcome which the appellants sought to achieve. Relevantly there was no delay.
Conclusion

In summary, the position is as follows:
1...... The order of 3 December 1997 was interlocutory.
2...... Looking at the matter afresh upon the whole of the material available, including the affidavit of Mr Baulderstone Junior dated 16 January 1998, the Master correctly identified and applied principle. No error can be seen in the Master’s reasons in the exercise of a discretion, which he did notionally having regard to point 3 below.
The Master identified serious questions to be tried and properly assessed the balance of convenience.
3.No additional material was placed before the Court since 3 December 1997 which would justify a re-examination of the order then put in place. Accordingly, the Master was correct in re-affirming the position as at 3 December 1997.

Upon an appeal from a Master the question is whether his or her decision ought to be affirmed or overturned in light of the material before him or her. Where the Master’s decision involved the exercise of discretion, some error must be established. No such error has been demonstrated. There were eleven grounds of appeal, some of which overlap in their ambit. I have considered and rejected each ground individually.
For these reasons there will be an order that the appeal be dismissed.

[1999] SASC 333

16 August 1999