Sellers v Flinn
[2012] VSC 132
•13 April 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 01334 of 2012
| KENNETH STEWART SELLERS IN HIS CAPACITY AS JOINT AND SEVERAL RECEIVER OF LUKE ROBERT FLINN (ABN 25 593 238 700) (RECEIVERS APPOINTED) | First Plaintiff |
| and | |
| JUSTIN HOWLETT IN HIS CAPACITY AS JOINT AND SEVERAL RECEIVER OF LUKE ROBERT FLINN (ABN 25 593 238 700) (RECEIVERS APPOINTED) | Second Plaintiff |
| v | |
| LUKE ROBERT FLINN | First Defendant |
| and | |
| ROBERT FLINN | Second Defendant |
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JUDGE: | McMILLAN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 April 2012 | |
DATE OF JUDGMENT: | 13 April 2012 | |
CASE MAY BE CITED AS: | Sellers & Anor v Flinn & Anor | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 132 | |
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PRACTICE AND PROCEDURE - Injunctions - Interlocutory injunctions – Application to restrain the defendants from dealing with livestock – Application for declarations as to ownership of livestock pursuant to stock mortgage
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R.H.M. Attiwill | Piper Alderman |
| For the First Defendant | No appearance | No appearance |
| For the Second Defendant | In person |
HER HONOUR:
The Application
This proceeding concerns an application filed by the plaintiffs, as the joint and several receivers of the first defendant, seeking declarations, injunctive relief and other orders against the first and second defendants with respect to livestock and two properties.
The Factual Background
In or about October 2009, the ANZ Bank Ltd (“ANZ”) extended financial facilities to the first defendant, Luke Robert Flinn (“Luke”), comprising an Overdraft Facility, an ANZ Business Once Facility and an ANZ Business Loan (“the Facilities”). At that time, Luke was the registered proprietor of the land situated at and known as Soundrys Road, Elingamite (“the Soundrys Property”) and 153 Fosters Road, South Purrumbete (“the Fosters Property”). Luke was also the owner of 702 head of cattle. To secure the repayment of the Facilities, Luke provided ANZ with a first registered mortgage over the Soundrys Property dated 22 October 2008, a first registered mortgage over the Fosters Property dated 13 May 2009, and a stock mortgage dated 16 July 2009 (“the Stock Mortgage”).
Both the Soundrys Property mortgage and the Fosters Property mortgage incorporate a Memorandum of Common Provisions, which provided what constituted an event of default and ANZ’s rights upon an event of default, including the appointment of a receiver. The Stock Mortgage also incorporates these provisions. Further, the Stock Mortgage provided a prohibition on moving or removing the stock without ANZ’s prior written consent, an obligation to maintain the stock in good condition, an obligation to keep the stock branded, an obligation to allow ANZ to inspect or examine the stock, and an obligation not to give any other persons rights over the stock without obtaining ANZ’s prior written consent.
As at 10 August 2011, Luke was in default of the terms of the Facilities, having failed to make payments to ANZ as and when required pursuant to the terms of the Facilities. On 10 August 2011, ANZ served a Demand and Notice to Pay on Luke seeking payment of the sum of $3,847,582.20 then owing under the Facilities. The Demand and Notice to Pay stated that if the amount demanded was not paid within two days ANZ could exercise its rights pursuant to the terms of the Facilities. Luke failed to make any payment.
By letter dated 14 February 2012, the solicitors for the plaintiffs sent a letter of demand to Davies Moloney, who at the time were the solicitors for the defendants. The letter stated, inter alia, “ANZ intends to take appropriate action so as to enter into possession of the Secured Property forthwith… ANZ hereby demands that [Luke] deliver up possession of the Secured Property, that is of the Properties, the Stock and such other property secured by the Securities, to ANZ forthwith”.
On 20 February 2012, the plaintiffs were appointed joint and several receivers of the Soundrys Property, the Fosters Property and the Stock Mortgage pursuant to a receiver’s notice of appointment dated that day. At that time, Luke was in possession of the Soundrys Property and the Fosters Property, and the stock claimed to be the subject of the Stock Mortgage, which was, and still is, located on the Soundrys Property and at 295 Seftons Road, South Purrumbete (“the South Purrumbete Property”).
The Procedural Background
The proceeding was commenced by originating motion filed by the plaintiffs on 9 March 2012. The following declarations, injunctive relief and orders were sought against Luke and the second defendant, Robert Flinn (also known as Bernard Robert Flinn) (“Robert”):
(a) A declaration that the plaintiffs are in possession of the Soundrys Property and the Fosters Property.
(b) An injunction restraining the defendants from entering upon the Soundrys Property and the Fosters Property.
(c) A declaration that the livestock situated at the South Purrumbete Property is “stock” for the purposes of the Stock Mortgage dated 16 July 2009 given by Luke to the ANZ.
(d) An order that the plaintiffs and their authorised agents be permitted to enter onto the South Purrumbete Property for the purpose of removing the livestock situated thereon.
In support of that relief, the plaintiffs relied on an affidavit of the first plaintiff, Mr Kenneth Stewart Sellers sworn 9 March 2012, an affidavit of Mr Andrew MacNeil sworn 9 March 2012, and an affidavit of Mr Graeme Price sworn 9 March 2012.
The application was returnable before the Practice Court on 13 March 2012. The Honourable Justice Macaulay made orders, inter alia, for the filing of affidavits by the defendants and adjourned the further hearing to 21 March 2012.
In accordance with the orders of Justice Macaulay, Robert filed an affidavit sworn 19 March 2012 and Luke filed an affidavit sworn 19 March 2012. Robert filed an appearance in the proceeding, however Luke did not. In Luke’s affidavit, he deposed that he had read Robert’s affidavit sworn 19 March 2012 and confirmed the details contained therein. An affidavit of service of the originating motion and supporting material was filed by the plaintiffs on 21 March. Luke did not otherwise participate in the proceedings.
On 21 March 2012, the matter came on for further hearing before me. At that hearing, orders and declarations were made by consent, by which possession of the Soundrys Property and the Fosters Property was given to the plaintiffs and the defendants or their agents were restrained from entering upon those properties. A further order was made restraining the defendants from selling, transferring, further encumbering, disposing of or removing from the South Purrumbete Property, the stock, including the mortgaged stock, the removed stock and the disputed stock (as those terms are defined in the affidavits of Mr Sellers sworn 9 March 2012 and 21 March 2012). Further directions were made for the filing of affidavits by the plaintiffs and Robert and the matter was adjourned to 27 March 2012.
On 27 March 2012, the plaintiffs sought and were granted an adjournment in order to conduct further investigations of the cattle on the South Purrumbete Property. I made orders entitling the plaintiffs to enter and attend upon the South Purrumbete Property for the purpose of inspecting the stock located on that land, including any mortgaged stock, removed stock and/or Disputed Stock. Further directions were made for the filing of affidavits by the parties and the further hearing of the matter was adjourned to 3 April 2012.
On 30 March 2012, the plaintiffs filed further affidavits, being an affidavit of Mr Sellers sworn 30 March 2012, an affidavit of Mr Daniel Carey, and an affidavit of Mr Stephen Hammond.
On 3 April 2012, the solicitors for Robert sought and obtained leave to file and serve a notice of withdrawal of practitioner and to cease acting for Robert. The reason given for the withdrawal was that Robert had no further funds to continue the proceedings.
Thereafter, Robert appeared on his own behalf. Initially, he made an application to adjourn the further hearing of the proceeding for two weeks on the basis that he had not received certain material and that he wanted to instruct new solicitors. It was apparent in making that application that he had received and read the further affidavit material and knew what he wanted to say in relation to the matters contained therein. The application was refused, as the resolution of the ownership of the disputed stock was urgent due to the costs of attending to them compared to the achievable sale price. The matter then proceeded to hearing.
The Relief Sought
The remaining issue to be determined in this proceeding is the ownership of the cattle located at the Soundrys Property and the South Purrumbete Property (“the Disputed Stock”). The plaintiffs contend that the cattle located at the Soundrys Property and the South Purrumbete Property are stock the subject of the Stock Mortgage and Robert claims that he owns the Disputed Stock.
In making this application, the plaintiffs seek a declaration that the stock located on the Soundrys Property, the stock located on the South Purrumbete Property and any other stock branded with a “W” and/or with a tag marked “Flinn” on the above properties is stock for the purposes of the Stock Mortgage.
Further, the plaintiffs seeks orders:
(a) entitling them to possession of the stock in their capacity as joint and several receivers of the first defendant;
(b) entitling the plaintiffs, their servants and agents to enter and attend upon the South Purrumbete Property for the purpose of removing the stock on the land; and
(c) permanently restraining the defendants and their servants and agents from directly or indirectly selling, transferring, encumbering, disposing, removing or otherwise dealing with the Disputed Stock.
The Background to Ownership of the Disputed Stock
The stock claimed to be the subject of the Stock Mortgage was initially located at the Soundrys Property. However, on 18-19 February 2012, and unbeknownst to the plaintiffs, Robert and/or Luke moved or caused to be moved part of the stock from the Soundrys Property to a property owned by a Mr Wilson, being the South Purrumbete Property, which is located adjacent to the Fosters Property. The stock moved constituted 135 calves, 9 heifers and 37 cows - in total, 181 head of cattle (“the Removed Stock”).
On 21 February 2012, Mr Healy, a livestock representative and auctioneer under the employ of Brian O’Halloran & Co engaged by the plaintiffs contacted Mr Wilson. Mr Wilson informed him that on 18 February 2012, he met with Luke and Robert and verbally agreed to lease the South Purrumbete Property to them for the purpose of agisting cattle thereon and that, prior to the oral agreement being formalised in writing, Luke and Robert had almost immediately began moving the cattle onto the South Purrumbete Property.
After the plaintiffs were appointed receivers on 20 February 2012, Mr Sellers, together with two others assisting him, Mr Price and Mr MacNeil, met with Luke and Robert and was told by them that they would assist the receivers with selling the properties and the stock. No mention was made to Messrs Sellers, Price and MacNeil that any stock had been removed from the Soundrys Property. On the same day, Mr Price and Mr MacNeil met again with Luke and Robert and they again said they would assist the receivers with selling the properties and the stock. Again, no mention was made that any of the stock had been removed from the Soundrys Property and Robert made no claim to ownership of any of the stock.
On 21 February 2012, Mr MacNeil spoke with Luke and Luke denied moving any stock from the Soundrys Property.
On 22 February 2012, Mr Healey and Mr Merritt attended at the South Purrumbete Property to identify the Removed Stock. On that occasion, Luke fired a gun and Messrs Healey and Merritt were both verbally abused and intimidated by Luke and Robert such that they both genuinely feared for their lives and safety.
On 24 February 2012, a Mr Coutts of Victoria Police told Mr Sellers that Robert had said to him that he owned the stock on the South Purrumbete Property. This was the first time that the plaintiffs became aware that Robert claimed ownership of any stock. On that same day, Mr Sellers sent a letter to Robert in which he stated that he understood that Robert claimed ownership of the stock on the South Purrumbete Property and requested Robert provide any documentation evidencing his ownership of the Removed Stock by 11am on 27 February 2012. A copy of this letter was also sent to Davies Maloney.
On 27 February 2012, the plaintiffs arranged for the whole of the stock to be listed with Brian O’Halloran & Co for auction to be conducted on 16 March 2012.
On 27 February 2012, Davies Moloney forwarded a letter to the solicitors for the plaintiffs in which it was stated, inter alia, that the firm acted on behalf of Robert, that Robert was the owner of various cattle that were held on the South Purrumbete Property and that “Robert Flinn had brought these cattle across from his previous property at Soundrys Road or bred from same”. The letter further stated “we advise that our client is currently collecting evidence of the ownership of these cows and the deadline of 11:00am [on 27 February] simply cannot be complied with. It is ridiculous to set such tight timetables.” There was no mention in the letter that Robert owned any stock at the Soundrys Property.
On 27 February 2012, by way of reply, the solicitors for the plaintiffs wrote to Davies Moloney again requesting that Robert provide evidence of his ownership of the Disputed Stock, by 5:00pm on 28 February 2012.
On 29 February 2012, the solicitors for the plaintiffs again wrote to Davies Moloney, stating:
... as at the date of this letter, no such evidence has been forthcoming from your client, or otherwise, to support his contention that he owns the Disputed Cattle, and the Receivers accordingly presume that your client has no such evidence. In this regard, we note that the Receivers are in the process of taking steps to recover possession of the Disputed [Stock] on the basis that the same are subject to the Stock Mortgage. Accordingly we would suggest that, in the event that your client does have evidence supporting his claim to ownership of the Disputed [Stock], that the same be provided to us immediately.
Having received no response from the defendants or their solicitors, on 1 March 2012, the plaintiffs solicitor again wrote to Davies Moloney requesting Robert provide evidence forthwith of his ownership. The letter also stated: “during our telephone discussion of 29 February 2012 you suggested that a meeting be arranged with Robert Flinn and the Receivers’ stock agent so as to enable Robert Flinn opportunity to identify those stock to which he claims ownership and to explain to the stock agents the particular markings that such stock bears.” On 2 March 2012, the plaintiffs’ stock agent requested certain documentation from Robert that would prove either the purchase or breeding of the removed cattle, but which Robert did not provide.
On 5 March 2012, the solicitors for the plaintiffs sent another letter to Davies Moloney stating:
[i]t remains the case that despite numerous requests having been made by the Receivers or on their behalf for Robert Flinn to provide evidence to support his alleged claim to the Disputed Cattle, no such written evidence has been forthcoming. In such circumstances, we are now also instructed that if required we are to seek appropriate relief from a Court to aid the Receivers in the recovery of the Disputed Stock…
On 15 March 2012, Mr Carey, other representatives of the firm Brian O’Halloran & Co, and Victoria Police attended at the Soundrys Property to remove the Disputed Stock. At that time, Luke and Robert stated that they were only agreeable to 130 head of stock being removed from the Soundrys Property and only 30 head of stock being removed from the South Purrumbete Property. This was the first time that Robert had stated that he also owned stock on the Soundrys Property. By a letter dated 15 March 2012, Davies Moloney advised the solicitors for the plaintiffs that Robert claimed ownership of 245 head of cattle located on the Soundrys Property and on the South Purrumbete Property. As a result, the plaintiffs arranged for Mr Carey to only remove the stock that Robert did not lay claim to (“the Non-Disputed Stock”) from the Soundrys Property and the South Purrumbete Property.
On 16 March 2012, Brian O’Halloran & Co conducted an auction of the Non-Disputed Stock, at which time 142 head of cattle were sold. Four head of cattle were not sold at the auction due to mastitis and one head of cattle was sent to the slaughter house. On 20 March 2012, the cattle suffering from mastitis were sold at an auction.
On 15 March 2012, the plaintiffs obtained a Personal Properties Securities Register of Bernard Robert Flinn, which provided that Elders Ltd holds a currently registered livestock mortgage over, inter alia, all livestock owned by Robert (“the Elders Mortgage”).
On 15 March 2012, Davies Moloney sent a letter to the solicitors for the plaintiffs stating that “…[Robert] claims [ownership to] 105 cows, 140 mixed sex and aged cattle comprising rising 2 year olds, yearling and calves. These cattle are of Friesian, Friesian cross and jersey breeds.” The letter stated that the cattle are situated at both the Soundrys Property and the South Purrumbete Property. Attached to the letter were photographs of each of the cows, a copy of the Elders Mortgage dated 3 May 2001, a copy of an affidavit sworn by Robert on 11 May 2006 in the Supreme Court of Victoria proceeding number S CI 7782 of 2002 (“the Elders Proceeding”), and miscellaneous documents from Elders showing the purchase of the cattle. The letter further stated that Robert’s cattle are “freeze branded or have electronic ear tags NLIS tags” and that “none of his cattle have a “Flinn” eartag or a “W” earmarking on them.”
In Mr Sellers’ affidavit sworn 21 March 2012, he deposed that he became aware of the Elders Proceeding, which had been commenced against Robert and his wife, Mary Patricia Flinn, by Elders as a result of Robert’s defaults on the Elders Mortgage. The proceeding went to judgment twice, once before the Honourable Justice Williams in Elders Limited v Flinn & Anor[1] (“the 2007 Elders Judgment”) and once before the Honourable Justice Osborn in Elders Ltd v Flinn & Anor[2] (“the 2009 Elders Judgment”).
[1] [2007] VSC 252.
[2][2009] VSC 234.
In the 2007 Elders Judgment, her Honour noted “the plaintiff argues that the mortgage covers more than those 40 cattle and points to undertakings relating to the disposal and transfer of more cattle given to the Court in May 2005. Nevertheless, I note that the plaintiff has made no application for any injunctive relief against Mr Flinn's son, notwithstanding Mr Flinn's assertions.”[3]
[3]Elders Limited v Flinn & Anor [2007] VSC 252, [7].
In the 2009 Elders Judgment, his Honour stated that “Mr Flinn… gave evidence that his son continues to hold some 25 or 26 of the cattle, which were the subject of the [Elders Mortgage] on which the plaintiff sues. The balance he says have all been sold through the plaintiff’s agency or are dead.”[4]
[4]Elders Ltd v Flinn & Anor [2009] VSC 234, [16].
On 20 March 2012, the solicitors for the plaintiffs sent a letter to Corrs Chambers Westgarth, the solicitors for Elders Ltd, asking whether Elders Ltd maintained any claim to the Disputed Stock pursuant to the Elders Mortgage, should Robert be determined to be the owner of the Disputed Stock.
On 27 March 2012, by way of reply, Corrs Chambers Westgarth advised the plaintiffs’ solicitors that Elders Ltd “[did] not intend to appear at the return of the proceeding; [did] not intend to file any evidence in the proceeding; and it maintains that any cattle owned by [Robert] in favour of [Elders].”
The Evidence in respect of the Ownership of the Disputed Stock
The Stock Mortgage signed by Luke on 16 July 2009 contained the following definition of “stock”:
(a) all of the 702 Friesian cows;
(b) all other animals whether Friesian cows or not which may at any time in the future be acquired by Luke and which may at any time be in or upon the property or upon other land owned or leased or licensed to Luke;
(c) any animals added to or substituted or exchanged for the stock referred to in paragraphs (a) and (b) whether Friesian cows or not;
(d) animals which may be used by Luke in the conduct or management of his operations, business, trade or occupation whether or not that stock is in or upon the property or in transit to or from the property; and
(e) all the present and future increase and progeny of the stock.
On 27 May 2009, as part of obtaining the Stock Mortgage from ANZ, Luke signed a statutory declaration stating that he was the owner of the stock listed in the attached schedules to the statutory declaration and that the stock would be depasturised by him on the Soundrys Property and the Fosters Property. The declaration was witnessed by Mr Gary Lord, an ANZ bank manager, who also declared that on 27 May 2009 he inspected some 700 cattle, comprising the dairy herd, which cattle were properly tagged with [National Livestock Identification System (“NLIS”)] NLIS Tags/Bolus and had “freeze brand” as the secondary identification.
The plaintiffs gave evidence by way of an affidavit by Mr Carey, a stock agent and principal of Brain O’Halloran & Co for approximately 35 years, sworn 30 March 2012 (“the Carey Affidavit”), and an affidavit of Mr Stephen Hammond, a self-employed primary producer who has been a dairy farmer and primary producer for 23 years, sworn 30 March 2012 (“the Hammond Affidavit”).
Both Mr Carey and Mr Hammond were engaged by the plaintiffs for the purpose of inspecting and documenting the markings on the Disputed Stock. Mr Carey was also engaged to provide an opinion as to the reproduction cycle of cattle, particularly dairy cattle, and Mr Hammond was engaged to milk and feed the cattle at the Soundrys Property.
Mr Carey and Mr Hammond stated that there were 136 head of cattle located at the Soundrys Property and 113 head of cattle located at the South Purrumbete Property. Oral evidence was also given by Mr Carey that it was possible that there were more cattle on the South Purrumbete Property, as the terrain of the property made it difficult to locate and muster the cattle.
Both Mr Carey and Mr Hammond also addressed the issue of the identification and the number of stock on the Soundrys Property and the South Purrumbete Property. Exhibit “SH-1” to the Hammond Affidavit identifies the stock on the land located at the Soundrys Property and Exhibit “DC-1” to the Carey Affidavit is a table of the results of the inspection of the Disputed Stock which identifies the Disputed Stock on the land located at the South Purrumbete Property. Both exhibits also identify any other stock branded with a “W” and/or with a tag marked “Flinn” located on the two properties. Mr Hammond also deposed in his affidavit that the NLIS tags inserted in the right ear of the Disputed Stock appeared to be almost new, as there was no sign of weather or general wear and tear.
Further, Mr Carey referred to the breeding patterns of dairy cattle and deposed that, based on his experience as a farmer and stock agent, he was of the opinion that the likely head count for 26 mature female cows as at June 2009, all of which had calved at June 2009 and were expected to birth soon thereafter, would be 117 by March 2012, which number assumed that all cows birthed and there were no deaths over that period.
In support of his claim for ownership of the Disputed Stock, Robert deposed in his affidavit sworn 26 March 2012 that the Disputed Stock could be identified as his cattle on the following basis:
(a) the presence of an earmark;
(b)the presence of a yellow plastic tag through the ear, marked in black texta with the word ‘Flinn’; and
(c)the fact that, save for three cows, none of his cattle had brands, and by this he meant freeze brands or fire brands.
In this regard, Robert claimed that the cattle the subject of the Stock Mortgage were identified by a freeze brand or fire brand on the stock. As proof of his claim for ownership, Robert provided the Court with copies of photographs taken by him illustrating the above identification markings.
In his oral evidence, Robert repeated that the stock on the Soundrys Property and the South Purrumbete Property were owned by him, giving the same reasons as stated in his affidavit sworn 26 March 2012. He asserted that the stock on both properties were the progeny of his original stock of 26 head in 2009. He did not produce any contemporaneous records supporting his claim for ownership or the birth of the progeny of his original stock. Robert also stated that he had inserted the NLIS tags into the ears of the Disputed Stock on 7 March 2012 after he and/or Luke moved the stock to the South Purrumbete Property. He said that this was necessary, as the tags identified the property where the stock were currently located.
Robert stated that he was on good terms with his son, Luke, and that he spoke with him daily. The reasons given by Robert for not calling Luke as a witness in the proceeding was that Luke was working and that Robert thought he would get the hearing on 3 April adjourned for two weeks. The affidavit sworn by Luke on 19 March 2012 simply confirmed the contents of Robert’s affidavit sworn 19 March 2012 and did not provide any evidentiary basis as to Robert’s ownership of the Disputed Stock.
In my view, the evidence relied upon by Robert was not credible and failed to establish that he was the owner of the Disputed Stock. Robert had ample opportunity to provide evidence as to his claim for ownership of the Disputed Stock and failed to do so. Further, Robert could provide no contemporaneous documentary evidence as to his ownership of the Disputed Stock.
By reason of the evidence contained in the affidavits of Mr Carey and Mr Hammond, I am satisfied that the livestock described in the relevant exhibits in those affidavits is “stock” for the purpose of the Stock Mortgage.
For those reasons, I will grant the declaration sought by the plaintiffs that the stock located on the Soundrys Property, the stock located on the South Purrumbete Property, and any other stock branded with a “W” and/or with a tag marked “Flinn” on the above properties is stock for the purposes of the Stock Mortgage. I will also make the orders entitling the plaintiffs to possession of the stock in their capacity as joint and several receivers of the first defendant and entitling the plaintiffs, their servants and agents to enter and attend upon the South Purrumbete Property for the purpose of removing the stock from the land.
Prohibitive Injunction
The remaining issue to be determined is whether to grant the plaintiffs the prohibitive injunction sought to permanently restrain the defendants, their servants and agents from directly or indirectly selling, transferring, encumbering, disposing, removing or otherwise dealing with the stock.
The “organising principles” to be applied when determining whether an interlocutory injunction should granted as set out in Williams Civil Procedure are: [5]
(a) there is a serious question to be tried, or the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief;
(b) he or she will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and
(c) the balance of convenience or justice favours the granting of an injunction.[6]
[5]Williams Civil Procedure, Chapter 1 38.01.250.
[6]Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154 (Mason CJ); ABC v Lenah Game Meat (2001) 208 CLR 199 (Gleeson CJ); Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57.
The test as to whether an interlocutory injunction should be granted was laid down in Beecham Group Ltd v Bristol Laboratories Pty Ltd:[7]
[t]he first [question] is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
[7](1968) 118 CLR 618, 622-623 (per coram) which was confirmed by the High Court in Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57.
In my opinion, the plaintiffs have made out a prima facie case and, if the evidence were to remain as is, for the reasons outlined above, the plaintiffs would be entitled to the relief sought.
With respect to the second of the organising principles, the plaintiffs submitted that damages would not be a sufficient remedy, as the safety of the agents attending on the properties has been placed at a real risk, the welfare of the cattle has been placed in jeopardy and the value of the mortgaged stock, if not properly maintained, will diminish. Further, there are serious doubts as to whether an award for damages could be met by Luke or Robert. Luke owes a substantial amount under the Facilities, and he is presently the subject of a bankruptcy petition. Robert stated in oral evidence that he had no assets apart from the Disputed Stock. For the reasons submitted by the plaintiffs, I am of the view that an award for damages would be an inadequate remedy in the present circumstances.
Further, I am of the view that the balance of convenience favours the grant of relief sought by the plaintiffs. The injury the plaintiffs would suffer if an injunction were not granted would far outweigh the injury the defendants will suffer by the granting of the injunction. The plaintiffs need to be placed in a position to realise the value of the stock as soon as possible. In addition, evidence has been given that the welfare of the stock is a serious concern to the plaintiffs and the safety of the plaintiffs’ agents attending at the various properties has been placed at real risk.
In my opinion, it would be just in all the circumstances, and for the reasons outlined above, to grant the plaintiffs a prohibitive injunction. However, I am of the view that as this application is an interlocutory application, the injunction restraining the defendants and their servants and agents from directly or indirectly selling, transferring, encumbering, disposing, removing or otherwise dealing with the stock should be made until further order and not on a permanent basis.
Conclusion and Orders
Accordingly, I am of the view that in all the circumstances it is appropriate to grant the injunctive relief, the orders and declarations sought by the plaintiffs on the basis of these reasons outlined above. I will hear the parties as to the form of final orders and on the question of costs.
CERTIFICATE
I certify that this and the 15 preceding pages are a true copy of the reasons for Judgment of McMillan J of the Supreme Court of Victoria delivered on 13 April 2012.
DATED this thirteenth day of April 2012.
Associate
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