PSI @ Mawson Lakes Pty Ltd v Land Management Corporation - [2006] SASC 185

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
PSI @ MAWSON LAKES PTY LTD v LAND MANAGEMENT CORPORATION
[2006] SASC 185
Judgment of The Full Court
(The Honourable Justice Bleby, The Honourable Justice Gray and The Honourable Justice Anderson)
26 June 2006
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT
Appeal against order of Master for immediate relief - Master determined the matter summarily pursuant to Supreme Court Rule 25.02 - appeal on grounds that matter raised triable issues in circumstances where there was no urgency and therefore no need for matter to be dealt with summarily - consideration of whether immediate relief was warranted - discussion of arguable defences to be raised - consideration of whether matter raised triable issues - not an appropriate case for summary judgment - appeal allowed.
Supreme Court Rules r 25.02, referred to.
Lawrence v Griffiths (1987) 47 SASR 455; Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (1988) 146 LSJS 150; Wicklow Enterprises Pty Ltd v Doysal Pty Ltd and Registrar-General (1985) 124 LSJS 225 ; Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 222 ALR 306; Nitschke Nominees v Hahndorf Golf Club (2004) 88 SASR 334, considered.

PSI @ MAWSON LAKES PTY LTD v LAND MANAGEMENT CORPORATION
[2006] SASC 185
Full Court Bleby, Gray and Anderson JJ
BLEBY J: I agree with the reasons now published by Gray J for allowing this appeal and for the orders made on 9 May 2006.
GRAY J:

On 2 March 2006, a Master of this Court granted the plaintiff and respondent, Land Management Corporation (Land Management), immediate relief by making declarations and orders in favour of Land Management against the defendant and appellant, PSI @ Mawson Lakes Pty Ltd (PSI). The declarations and orders related to Land Management’s rights to a re-transfer of the land from PSI. PSI appealed to the Full Court seeking to set aside the declarations and orders made by the Master and to obtain leave to defend.
On 9 May 2006, this Court made an order allowing this appeal and setting aside the judgment of the Master. I now provide my reasons for joining in that decision.
Background
In November 2003, PSI purchased land from Land Management for $525,000. The contract of sale included an encumbrance. PSI executed the encumbrance over the land in favour of Land Management.
The encumbrance was registered on the title. Clause 1 of the conditions of the encumbrance required that PSI should not erect any building on the block of land without the prior approval of Land Management. Clauses 6 and 7 of the encumbrance provided:
6      No Delay
The Owner –
6.1     must not permit any undue delay to occur in the commencement or completion of any works approved under clause 1;
6.2     must not permit the commencement of the construction of a building approved by the Encumbrancee in accordance with clause 1 on the land to be delayed beyond a time limit of 11 months after the date of this instrument (or such further time as the Encumbrancee in its absolute discretion may agree in writing with the Owner);
…
7      Option to buy back
If the construction of a building approved by the Encumbrancee is not commenced on the land before the expiry of the time limit stated in clause 6.2 (or such further time as the Encumbrancee may agree in writing with the Owner), then the following provisions will apply: -
7.1     The Encumbrancee may request the Owner to transfer the land to the Encumbrancee or its nominee. The request may be made at any time after the expiry of the time limit, unless by that time the construction of a dwelling has commenced.
7.2     The Encumbrancee may, in its sole discretion, determine a price for the transfer of land (being not less than the gross sale price of the land to the Owner less 10%).
7.3     The Owner must, within one calendar month after the date of a request under clause 7.1, transfer an estate in fee simple in the land in accordance with the request, subject only to this encumbrance.
7.4     The Owner must promptly execute all relevant documentation submitted to it by the Encumbrancee for the purpose of giving effect to the transfer.
7.5     Rates, taxes and all other outgoings relating to of the land will be adjusted to the date of settlement of the transfer. All costs associated with the transfer will be borne by the Encumbrancee or its nominee.
7.6     The price fixed by the Encumbrancee will be payable to the Owner on settlement.
On 1 February 2006, Land Management applied to this Court for immediate relief pursuant to Supreme Court Rule 25.02, seeking re-transfer of the land. Land Management submitted that PSI had failed to comply with its obligations pursuant to clause 7 of the encumbrance, in that it had failed to commence building on the land within the designated 12-month period.
At the time when Land Management’s application for immediate relief was lodged, PSI had commenced site works but had not laid the footings by the end of the specified period. It had spent several hundred thousand dollars on the development by this point in time, but was in dispute with its insolvent builder, Davlan Constructions, which company is now in liquidation.
Immediate Relief
Rule 25.02 permits a plaintiff to apply to have a claim for relief disposed of urgently in circumstances where the plaintiff can show sufficient grounds for urgency and that there is no serious question to be tried.[1] In Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd,[2] King CJ described the nature and effect of rule 25.02 in the following terms:[3]
It provides a procedure whereby in circumstances of urgency a judge can decide issues which are capable of speedy resolution without lengthy hearing and give judgment without trial, Wicklow Enterprises Pty Ltd v Doysal Pty Ltd and the Registrar-General 1985 124 LSJS 225; Lawrence v Griffiths 1987 140 LSJS 134. Another purpose of the procedure is to operate as an alternative to an Application for summary Judgment under Rule 25.01 where the Rule 25.01 endorsement has not been made but where the plaintiff considers that there is no serious issue to be tried, Bellas v Kipouros 1974 8 SASR 418 at 419. This latter purpose is emphasised by the language of the 1987 Rules which express the Rule 25.02 procedure as an alternative to the Rule 25.01 procedure.
[1] Lawrence v Griffiths (1987) 47 SASR 455.
[2] Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (1988) 146 LSJS 150.
[3] Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (1988) 146 LSJS 150 at 152.
In Wicklow Enterprises Pty Ltd v Doysal Pty Ltd and Registrar-General, of the predecessor to rule 25.02, order 10, King CJ observed:[4]
The Summons for Immediate Relief is a convenient vehicle for disposing expeditiously of cases in which there is not substantial dispute or in which the nature of the dispute is such that it can be resolved readily and speedily in Chambers. An attempt to determine by means of the Summons for Immediate Relief issues of fact and law requiring substantial hearing time produces mischiefs which are well illustrated by the course which the present case took.
The first such mischief is that the relief sought is likely to be delayed rather than expedited by the procedure followed. …
The second mischief is that the adoption of this procedure leads to the decision of complex issues of fact and law other than by means of a regular orderly trial. The attempt to resolve such issues by means of a succession of affidavits and intermittent examination and cross-examination of witnesses rather than by means of a regular and orderly trial can only be regarded as unsatisfactory and possessing a tendency to lead to an incorrect result.
The third mischief is that if the procedure adopted in this case were followed on a substantial scale, it would disrupt the orderly arrangement of the business of the Court and would be unjust to parties whose cases were listed for hearing in the ordinary way.
[4] Wicklow Enterprises Pty Ltd v Doysal Pty Ltd and Registrar-General (1985) 124 LSJS 225 at 226-227.
The application was heard by a learned Master who subsequently granted the application to have the matter dealt with summarily on the basis that sufficient grounds for urgency had been made out. The Master observed:
[Land Management] is in the process of developing 620 hectares of land at Mawson Lakes in a joint venture project with Delfin Lend Lease Limited (“Delfin”). In selling off blocks of this land to many purchasers the [respondent] has required each purchaser to enter into an encumbrance generally similar to that entered into by the [appellant] which requires the purchaser/encumbrancer to erect a building on the land within a limited time and in accordance with plans approved by the [respondent] and Delfin. Such encumbrances are part of a scheme to control the overall development of Mawson Lakes. [Land Management] and Delfin monitor compliance with the encumbrances and may be legally liable to other encumbrancers/purchasers if they do not control the development at Mawson Lakes in accordance with the common encumbrances.
[Land Management] can invoke R 25.02 to have the claim for relief disposed of urgently where [it] makes out sufficient grounds for urgency and it shows that there is no serious question to be tried … I am satisfied that there are sufficient grounds of urgency made out here. It is now over 12 months since the footings should have been completed.
As I will mention later, the evidence from [PSI] as to its ability to now complete the necessary building work, and as to when it could do so is vague and unsatisfactory. I do not accept the contention of [PSI’s] counsel that the quickest way for [Land Management] to have its development scheme fulfilled for [the land] is to now allow [PSI] to erect the building. I also do not accept that if this action was allowed to go to trial expedited directions and an order for early trial would be likely to have it completed quickly. Recent experience suggests that at the best it would take 6 to 12 months to complete such a trial, and longer if there were any appeals. Accordingly, I exercise my discretion to pursue the application for immediate relief.
The Master summarised the relevant facts upon which he based his decision in the following terms:
From December 2002 until October 2003 [PSI] had some preliminary drawings done for a building to be erected on [the land] in anticipation of purchasing it, although shortly before entering into the contract to purchase [PSI] terminated the instructions of an architect it had been using because it considered it to be too expensive. [PSI] appears to have done very little to further the drawings and the necessary approvals in the first few months of 2004. It had some discussions with Specialised Constructions, a builder experienced in the type of building contemplated, but in mid 2004 it discovered that company was having some financial problems and it then looked for another builder. On 15 June 2004 [PSI] appointed W T Partnership Quantity Surveyors as quantity surveyors for the project and commissioned it to undertake cost management services. In July 2004 it engaged George Milan (“Milan”), who had previously been a consultant to it for the project, to be its project consultant. In August 2004 it commenced negotiations with Davlan Group Pty Ltd (“Davlan”) with a view to it being employed as the builder for the project. However, up until November 2004 [PSI] had done very little to pursue the project and to ensure that it could comply with its obligations under clause 6.2 of the Encumbrance by 31 January 2005.
On 14 October 2004 Delfin wrote to [PSI] reminding it of its obligation to commence construction on or before 31 January 2005 and warning it that failure to do so may result in [Land Management] exercising its right to re-purchase [the land]. [PSI] replied to that letter on 10 November 2004 requesting an extension of time of three months from 31 January 2005 to commence construction. On 25 November 2004 Delfin refused that extension and reiterated construction must be commenced by 31 January or [Land Management] could exercise its right of re-purchase.
On 29 November 2004 there was a meeting between representatives of [PSI] and Davlan which recognised the requirement to commence the construction before 31 January 2005 and apparently put steps in place to accomplish this. On 1 December [PSI] wrote to Delfin stating it was “conscious of contract conditions. The construction company has been selected and are to commence activity on site mid-January 2005”. On that day Davlan wrote to [PSI] stating, inter alia, “Davlan Group will commence activity on site no later than 31 January 05”. This was not what was required for [PSI] to comply with clause 6.2 of the Encumbrance as completion of the footings was required by that date. There is no evidence that [PSI] took this up with Davlan or imposed any condition upon it that the footings had to be competed by 31 January 2005.
On about 19 January 2005 Davlan erected fences around [the land] and dug trenches for the footings, but did not pour the footings. There is no suggestion in the defendant’s affidavits that any of its representatives did anything to ensure Davlan had poured the footings by 31 January. The written Construction Management Contract between Davlan and [PSI] was not executed until 4 February 2005. Annexed to that document is a letter of 8 December 2004 from Davlan to [PSI] which states:
4 Mr Joe Wong (the director of [PSI]) to execute CM2 Agreement and return to Davlan Group by Friday 17 December, 2004 thus ensuring commencement obligations as stipulated by Delfin Land Lease can be achieved.
There is no suggestion that [PSI] complied with this request and there was no explanation why it did not do so.
It appears that the footings could not have been poured on [the land] by 31 January because no Council approval for this work had been obtained. [PSI] says it was Davlan’s obligation to obtain this approval and it did not do so.
On 11 February 2005 Davlan rendered an invoice to [PSI] for $354,640 for preliminary work which [PSI] disputed its liability to pay on the basis that all the work referred to in the invoice had not been performed by Davlan. It appears Davlan ceased work on [the land] after [PSI] disputed this invoice. On 12 April Davlan rendered a further invoice to [PSI] claiming $821,700 less $290,000 which it had already paid. Again [PSI] disputed its liability to pay this invoice.
On 6 April 2005 [Land Management’s] solicitors had written to [PSI] the letter which was referred to earlier that [Land Management] was exercising its right to re-purchase [the land]. On 12 April more work was done on behalf of [PSI] in digging the footings on [the land]. On 13 April [PSI] solicitors wrote to the defendant advising that it was too late for it to complete the footings and pointing out that if it did further work on [the land], it would be for the benefit of [Land Management]. There was no evidence of the value of any work done at this time. Council approval for the footings was given on 14 April 2005. No further work has been done to [the land].
The Master made the following declarations:
1.[PSI] is in breach of the provisions of the covenant contained in clause 6 of the [encumbrance] in respect of the [land] in that it permitted the commencement of the construction of the building approved by [Land Management] upon the said land to be delayed beyond the time limit contained in that clause.
2.On 6 April 2005 pursuant to clause 7 of the said Encumbrance [Land Management] exercised its right to require [PSI] to transfer the said land to it and determined the price for the transfer of the land to be the sum of $472,725.00.
The Master then ordered:
1.As between [Land Management] and [PSI] the agreement between them which is the subject of the declarations for the sale and purchase of the said land ought to be specifically performed and carried into execution at the purchase price of $472,725.00 subject to the adjustment for rates, taxes or other outgoings in respect of the land as at the date of transfer.
2.Further orders as to the carrying out of the order in paragraph 1 to be adjourned for further consideration particularly as to the position of the mortgagee and the lien holder.
3.[PSI] pay to [Land Management] its costs of the action to date and the implementation of this Order to be agreed or taxed.
4.The question of setoff of costs against the purchase price be reserved.
5.This matter be adjourned for mention only to 24 March 2006 at 9.15am.
6.There be liberty to apply.
The Appeal
The issue on this appeal was whether or not PSI was able to demonstrate a triable issue in respect of Land Management’s claim brought pursuant to Supreme Court Rule 25.02 for an order enforcing clause 7 of the encumbrance.
Initially PSI raised the possibility of a defence of unconscionability based upon section 51AC of the Trade Practices Act 1974 (Cth). However, this suggestion was subsequently abandoned at the hearing of the appeal.
PSI applied to this Court to have the decision of the Master set aside. Counsel for PSI submitted that the matter raised complex questions of fact and law that could not or ought not to have been determined summarily pursuant to rule 25.02 and that there are a number of triable issues. Counsel contended that those issues included:
-Whether clause 7 of the encumbrance, namely whether it is void as a penalty or as constituting an impermissible restraint on alienation;
-whether PSI’s failure to meet certain time lines was within or outside of PSI’s control given its dispute with Davlan;
-even if clause 7 is valid:
-whether PSI is entitled to relief against forfeiture;
-whether a court would decline to make an order for a mandatory injunction or specific performance and in lieu order damages.
Issues of Fact to be Resolved
At the hearing of the appeal, it became evident that there were a number of issues of fact as between the parties that needed to be resolved. The existence and nature of these issues indicated that this was not an appropriate matter for summary determination pursuant to the procedure set out in rule 25.02. The Master erred in granting Land Management’s application to deal with the matter summarily. An order that the matter be listed for urgent trial would have been much more effective in striking the appropriate balance between the need for expediency and the need to fairly resolve the issues between the parties.
Prejudice to the Respondent
At the hearing of the appeal, it became clear that the only matter of urgency that could be said to have prejudiced Land Management had the matter proceeded in the ordinary course and the application for immediate relief been refused was simply that Land Management would experience possible delay in having its development, of which PSI’s development project was an essential part, proceed in an orderly fashion. The affidavit evidence tendered by Land management did not address any specific issue or particular loss that Land Management would suffer if immediate relief were not granted. So much was conceded by counsel for Land Management. Counsel conceded that the following paragraphs from the affidavit of the Project Director of the Mawson Lakes Development put Land Management’s case for urgency at its highest:
While all allotments within the development are ultimately integral to achieving the broader commercial and planning aims of the Development, the Mawson Central precinct is of particular significance given its central and strategic position as Mawson Central is a centrepiece development of mixed us. The Mawson Central area includes the lakeside town centre, commercial and office space, retail tenancies, education facilities, together with residential and retirement living.
The prompt and balanced occupation of the tenancy mix of the Mawson Central precinct is seen by the joint venturers as a key development imperative within the broader development and in order to achieve the development aims of developing autonomous viable mixed residential and commercial communities.
Moreover, in the event, the summary determination of the issues has not led to an expedient resolution of the issues, nor was it likely to.

The builder first engaged by PSI has placed a lien on the title claiming more than $500,000. A lien has also been placed on the title by a sub-contractor. It is to be noted that the orders made by the learned Master adjourned the making of orders in the carrying out of the order of specific performance pending a consideration of the rights of the mortgagee and the lien holder. The resolution of these matters would, in the ordinary course, delay any re-transfer of the land.
No particular urgency was demonstrated by Land Management. There was no reason to conclude that reference of the matter to the commercial trial list of the court or the making of orders for an expedited trial would not lead to an appropriate and speedy resolution of the matter. Land Management did not show that it would suffer any significant loss or damage pending and early trial.
In any event, having determined that the matter would be dealt with summarily, the Master fell into further error in two important respects.
Onus of Proof
First, the Master erred in placing an onus on PSI to prove on the balance of probabilities that it was ready, willing and able to proceed with the development.
When determining an application pursuant to rule 25.02, the onus remains on the plaintiff to show that it is entitled on the balance of probabilities to the relief which it seeks. The Court, in considering whether that onus has been discharged, looks to the cogency of the defences raised by the defendant's affidavit.[5] The defendant need only satisfy the Court that there is a fair or reasonable probability of it having a bona fide credible defence. That is, a defendant need only show an arguable case on the affidavit evidence before the Court.
[5] Leasefin Corp Ltd v Clarke (SC(SA), Full Court, Jud No S3660, 16 October 1992, unreported).
Early in his reasons, the Master correctly identified that when there was a dispute, he should and would prefer the affidavit evidence of PSI:
I act upon the affidavit evidence from each party where it is undisputed. Where there are factual disputes I act on [PSI’s] version.
However, when considering whether PSI was ready and willing to proceed with the development, the Master rejected PSI’s affidavit to the effect that PSI was ready, willing and able to proceed in circumstances where there was no conflicting affidavit evidence:
I do not accept [PSI’s] contention that it has shown it is ready, willing and able to complete the development of [the land].
In so doing, the Master fell into error and effectively cast an onus on PSI and acted contrary to his earlier observation.
Valuation Error
The second error made by the Master was in the manner in which he analysed and assessed the valuation evidence presented to the Court. With respect to the valuation evidence, the Master observed:
[PSI] put forward an affidavit of a valuation expert, Mr Vartuli, who gave valuations of [the land] as at 21 June 2005 and 30 January 2006. In both his valuations he stated:
…
the adopted market value of $860,000 is based on the assumption that the encumbrance (to [Land Management]) does not exist. If we have regard to the encumbrance to the [respondent]) we consider that the market value (of [the land]) would be significantly less than the value adopted within this assessment.
As [Land Management] will re-sell [the land], if it succeeds in this action, to another purchaser subject to a similar encumbrance, the amount that will be realised by [Land Management] from any such re-sale is likely to be significantly less than $860,000. Part of [PSI’s] case was that [Land Management] would make a substantial profit on such a re-sale, but its evidence does not establish this as its valuer gives no indication of what he means by “significantly less”. It seems that some of the comparative sales on which he was relied in reaching his valuation are sales where land at Mawson Lakes was sold by [Land Management] subject to similar encumbrances. I do not understand why he could not have given his expert opinion on the market value of [the land] subject to the Encumbrance. I conclude that there is no acceptable evidence that [Land Management] would make a substantial profit on any re-sale on the land if this application succeeds. I accept that it would make some profit, but not necessarily a substantial one.
The Master appears to have misunderstood the evidence of the valuation expert, Mr Vartuli. In both reports, Mr Vartuli provided evidence of comparable sales by Land Management to third parties. Each of the sales was of land subject to an encumbrance. Those sales were said by Mr Vartuli to justify a per square metre land value of $450.00, leading to a valuation of PSI’s land at $860,000. As the encumbrance was in favour of Land Management and sales were to third parties, the inferred values from the sales demonstrate the value of the land to Land Management.
Mr Vartuli then considered the value of the land to PSI in circumstances where PSI was bound to sell to Land Management. No longer was there an open market; there was only one buyer who was able to fix the consideration. In those circumstances, the value of the land was much reduced.
This passage from the decision of the Master indicates that the Master failed to adequately take into account and weigh up the discrepancy between the substantial losses to be suffered by PSI under the forfeiture clause compared to the hypothetical loss suffered by Land Management as a result of a breach of the no delay clause.
Counsel for Land Management accepted that the Master had misunderstood the valuation evidence and that this misunderstanding had permeated his reasons in rejecting a number of the proposed defences.
The Master ought not to have rejected the evidence of Mr Vartuli as to the valuation of the land on the basis that the value disregards the encumbrance. The valuation necessarily had to disregard the encumbrance in that, in the events which have occurred, namely the purported exercise of rights under the encumbrance by Land Management, the land cannot be sold to anyone other than Land Management, and it must, because of clause 7, have a value of the original purchase price less 10%. It was therefore proper to assess the market value of the land by reference to current sales evidence. That sales evidence was based on properties sold subject to a similar encumbrance but in an open market. To that extent the encumbrance was not ignored.
In concluding that there was no acceptable evidence that Land Management would make a substantial profit on any re-sale of the land, the Master was in error. Properly understood, Mr Vartuli’s evidence established that Land Management would recover a very substantial profit if successful in its application for specific performance. In broad terms, Land Management would pay PSI approximately $475,000 for the land and would be able to re-sell the land for a consideration of $860,000.
In any event, once a building is erected, the restrictive covenant falls away. Accordingly, the value of the land at $860,000 disregarding the encumbrance is a measure of what the land is worth to PSI, if it proceeds to erect a building.
At the very least the Master ought to have held that there was a triable issue as to whether the land was worth substantially more to PSI than the purchase price applicable under clause 7 of the encumbrance.
Arguable defences
PSI identified a number of reasonably arguable defences to Land Management’s claim for relief.
Clause 7 void as a penalty
PSI submitted that the purpose of clause 7 of the encumbrance was to secure compliance with clause 6.2. Counsel contended that the forfeiture of PSI’s estate was the colloquial, “big stick” held in terrorem to induce performance of the obligation to commence construction within 12-months. Counsel argued that, as a result, the clause is a penalty because its effect is to operate in the nature of a punishment for non-observance of a contractual stipulation.
In Ringrow Pty Ltd v BP Australia Pty Ltd,[6] the High Court concluded that, in relation to non-monetary penalties, it is necessary to establish an extravagant and unconscionable difference or oppressive disproportion between the value of what is transferred and the price to be received. The Court observed:[7]
The principles of law relating to penalties require only that the money stipulated to be paid on breach or the property stipulated to be transferred on breach will produced for the payee or transferee advantages significantly greater than the advantages which would flow from a genuine pre-estimate of damage.
[6] Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 222 ALR 306.
[7] Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 222 ALR 306 at 313.
PSI has demonstrated that it has an arguable case that clause 7 is void as a penalty. This is a matter for trial and not for summary determination. In the ordinary course, it could be expected that evidence would be led as to the state of the property market at the time of the transaction, the contemplation of the parties at that time and the extent of the losses that could occur to either party in the event of the breach. These matters require assessment of the court before a determination could be reached as to whether clause 7 is penal.
Unlawful restraint on alienation
PSI submitted that the scope of the doctrine of a prohibition against restraint on alienation is unclear. Counsel for PSI contended that the uncertainty extends to the potential for the doctrine apply to partial restraints and to whether there is an exception to the doctrine when the restraint purports to protect a valid collateral object.
Counsel for PSI drew the Court’s attention to the decision of Nitschke Nominees v Hahndorf Golf Club[8] in support of the proposition that an option or a right of first refusal may be the subject of the doctrine. PSI contended that the operation of clause 6.2 prevents PSI from selling the property to anyone other than Land Management in a circumstance where the sale is, by necessity, at undervalue. Counsel submitted that, in these circumstances, an unlawful restraint on alienation arises.
[8] Nitschke Nominees v Hahndorf Golf Club (2004) 88 SASR 334.
This is a complex area of the law that should be determined following trial.
Relief against forfeiture
PSI submitted that a possessory or proprietary interest in land is an interest that may be protected under the relief against forfeiture doctrine. Counsel submitted that the purpose of clause 7 of the encumbrance was to secure the obligations under the no delay clause and to provide, in the event of a breach of those obligations, for the forfeiture of PSI’s estate.
PSI has made out an arguable case with respect to this proposed defence. There is a triable issue as to whether the exercise of the right of re-transfer should lead to relief against forfeiture because of the extent of the loss that may be suffered by PSI compared to the hypothetical loss flowing to Land Management.
The discretion to grant mandatory injunctive relief
There are a number of factors that could operate to lead a court to refuse relief of an injunctive nature. This is an issue that can only be determined following trial. In this case, the following factors may arise:
-the hardship and unfairness to PSI;
-a disproportion between the detriment that an injunction would cause PSI and the benefit that it would confer upon Land Management;
-whether damages would be an adequate remedy;
-whether PSI stands ready, willing and able to perform the substance of the contract;
-whether specific performance is possible;
-the extent of the supervision required to give effect to any order.
Conclusion
This was not an appropriate case for summary judgment. However, it was appropriate to grant immediate relief of a different nature. Appropriate orders designed to facilitate an early trial were called for. At the hearing of the appeal, both parties agreed that in the event that this appeal were allowed, it was appropriate that there be an order for an early trial and that the interlocutory processes be case-managed. The court is able to process the matter in such a manner.
For the foregoing reasons, I joined in the order allowing the appeal, setting aside the orders made by the Master and granting PSI leave to defend.
ANDERSON J I agreed earlier that the appeal should be allowed. I now agree with the reasons expressed by Gray J for allowing the appeal.