Trotter v RNC Nominees Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PRACTICE COURT

S ECI 2025 02167

GARY ALEXANDER TROTTER
(and others according to the schedule attached)

Plaintiffs

RNC NOMINEES PTY LTD (ACN 602 126 287) AS TRUSTEE

OF THE AGRIMAC FUND AND AS TRUSTEE OF THE ROADNIGHT CAPITAL PRIVATE DEBT FUND
(and others according to the schedule attached)

Defendants

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JUDGE:	Gray J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 April 2025
DATE OF JUDGMENT:	28 April 2025
CASE MAY BE CITED AS:	Trotter v RNC Nominees Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 224

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PRACTICE AND PROCEDURE — Urgent application for interlocutory injunctions — Application by registered proprietors of land to restrain imminent settlement of contracts of sale of land — In related proceeding caveator seeks to maintain caveats on basis of claim of breach of mortgagee’s duty in exercising power of sale — Outcome of related proceeding dependent on outcome of application for injunction — After receiving defendants’ affidavit material plaintiffs apply for adjournment to supplement their affidavit material — Court hears application for interim injunction.

INJUNCTIONS — Application by registered proprietors of land to restrain imminent settlement of contracts of sale of land — Two claims pleaded in general indorsement on writ — First claim alleges unconscionable conduct in relation to entry into loan facility agreement and steps taken by defendants under that agreement — Asserted claim subject to release contained in subsequent deed of forbearance — On current evidence prima facie case not established for first claim — Second claim alleges exercise by defendants of mortgagee’s power of sale in breach of duty of good faith and s 77 of Transfer of Land Act 1958 — On current evidence, prima facie case for second claim not established — Further or alternatively, any such case insufficient to justify interim injunction preventing imminent settlements — Balance of convenience does not support the grant of the injunction — Not established that damages would be an inadequate remedy — Not established that usual undertaking as to damages would be meaningful in light of plaintiffs’ inadequate finances, uncertain prospects of obtaining refinancing and the absence of any alternative additional security — Not established that plaintiffs face a greater risk of harm from settlements proceeding than defendants do from sales being restrained — Transfer of Land Act 1958 s 77.

PRACTICE AND PROCEDURE — Discovery — Application for particular discovery — Claim alleging exercise by defendants of mortgagee’s power of sale in breach of duty of good faith and s 77 of Transfer of Land Act 1958 — Defendants disclosed partially redacted contracts of sale omitting identify of purchasers and purchase prices — Plaintiffs apply for discovery of unredacted contracts of sale — Relevance to claim — Defendants’ allegations of interference with sale process by plaintiffs — Defendants’ claims about commercial sensitivity and confidentiality — Whether necessary and appropriate to decide in course of urgent Practice Court hearing — Civil Procedure Act 2010.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr AJ Purton	Madgwicks
For the Defendants	Mr HA Austin KC and Mr N Kotzman	Mills Oakley

TABLE OF CONTENTS

Overview.............................................................................................................................................. 1

Context................................................................................................................................................. 1

The Trotters and their dealings with RNC Nominees............................................................. 2
RNC Nominees commences the Caveat Proceeding............................................................... 5
The plaintiffs commence this proceeding.................................................................................. 6
A case management issue straddling the two proceedings.................................................... 7

The plaintiffs’ claims........................................................................................................................ 8

The plaintiffs’ summons and the hearing on 24 April 2025...................................................... 9

Consideration of application for interim injunctions.............................................................. 10

The applicable principles........................................................................................................... 10
Unconscionable conduct claim.................................................................................................. 14
Breach of duty claim................................................................................................................... 20
Second-ranking mortgage................................................................................................ 22
Choice of agent................................................................................................................... 23
Timing of sale..................................................................................................................... 24
Description of the properties........................................................................................... 25
Public auction vs private treaty....................................................................................... 25
Undervalue......................................................................................................................... 26
Further or alternative reasoning on balance of convenience...................................... 27

No decision on discovery application.......................................................................................... 33

Conclusions and orders.................................................................................................................. 34

HIS HONOUR:

Should I restrain the defendants, on an interim basis, from completing its sale as mortgagee in possession of three rural properties pursuant to contracts of sale it has made with non‑party purchasers? Should I order that the defendants produce unredacted versions of the contracts of sale?

Overview

I have decided that the plaintiffs have failed to show a prima facie case that either of the two claims they make will succeed on a final basis. The first claim is subject to releases granted by the plaintiffs and on current evidence has no prospects of success. An aspect of the second claim may perhaps be arguable but its prospects do not rise to a prima facie case justifying an interim injunction. Further and in any event, the balance of convenience is clearly against a grant of an interim injunction.

I have not decided the plaintiffs’ application for discovery of unredacted versions of the contracts. In light of my reasoning and conclusions on the injunction application, it is not necessary or appropriate to do so as part of the urgent Practice Court matter before me. The plaintiffs may renew that application in the future if they wish, and it should then be dealt with under ordinary case management processes.

Context

In explaining the factual context of this proceeding, I set out a number of essentially uncontroversial background facts mentioned in the evidence, submissions and indorsement of claim in the proceeding, and I also refer to certain steps taken by the parties and the Court in another proceeding – related proceeding S ECI 2025 01663 (Caveat Proceeding).

In referring to steps taken in the Caveat Proceeding, I am not making any findings in this proceeding based on evidence adduced in that proceeding. I have not relied on evidence adduced in the Caveat Proceeding in deciding any of the issues in this proceeding.

The Trotters and their dealings with RNC Nominees

The Trotter family operates a farming business through the third defendant (Beverly Farming). The first plaintiff (Gary Trotter) established the business with his wife, Lorna Trotter. Their son, and the second plaintiff (Andrew Trotter), operates the business with his father. Gary and Andrew Trotter are directors of Beverly Farming.

In around January 2023, Beverly Farming entered into contracts of sale to purchase a property on four titles in Marnoo, Victoria (Marnoo property).[1]
[1]Crown Allotments 54, 55, 55A & 59, Parish of Marnoo, described in Certificates of Title Volume 04388 Folio 558, Volume 07371 Folio 152, Volume 07880 Folio 073 and Volume 04306 Folio 103, registered to Andrew Trotter as registered proprietor from 7 June 2023 and each subject to RNC Nominees’ registered mortgage AW909464B.

Beverly Farming approached Roadnight Capital Pty Ltd (Roadnight Capital) as a potential lender to fund the acquisition of the Marnoo property.

Following a serious of communications between Beverly Farming and Roadnight Capital, to which I refer in more detail below, the latter agreed to provide finance. On 24 May 2023, a nominee of Roadnight Capital, the first defendant (RNC Nominees) and Beverly Farming entered into a loan facility agreement (Facility Agreement) pursuant to which RNC Nominees agreed to advance up to $6.8 million to Beverly Farming, including an amount for purchasing the Marnoo property of $4.1 million called the ‘Marnoo Acquisition Limit’ and a $1.5 million ‘Crop Lending Limit’ to be provided in three tranches of $500,000 each on or before 31 May, 30 June and 30 September 2023.

The parties to the Facility Agreement were RNC Nominees (as lender), Beverly Farming (as borrower), and the third plaintiff (Beverly Foods), Gary Trotter, his wife Lorna Trotter, and Andrew and Sarah Trotter (each as guarantors).

The moneys advanced were secured by registered mortgages over the Marnoo property and nine other properties at locations in the Wimmera near Rupanyup and Rich Avon West,[2] variously owned by members of the Trotter family, as well as a general security agreement (collectively, the Securities).
[2]Seven properties registered to Gary Trotter and subject to NAB’s first registered mortgage AV105161M or AV105115U and RNC Nominees’ second registered mortgage AW909413U: (1) ‘Hemphills’ (Crown Allotment 163 Parish of Lallat, Burrum Lawler Road, Rupanyup, described in Certificate of Title Volume 03711 Folio 049); (2) ‘South‑East’ / ‘South House, East & Bottom’ (Part 150 Trotter Road, Rich Avon West, described in Certificate of Title Volume 07425 Folio 968); (3) ‘Woods’ (Part 150 Trotter Road, Rich Avon West, described in Certificate of Title Volume 10934 Folio 962); (4) ‘Rich Avon’ (Crown Allotment 19 section D Parish of Rich Avon West, described in Certificate of Title Volume 09947 Folio 100); (5) ‘Top Paddock’ (Lots 1 and 2 on TP110513T, Trotter Road, Rich Avon West, described in Certificate of Title Volume 10191 Folio 537); (6) ‘Grandfathers (1)’ (Crown Allotment 3 and 4, section B Parish of Rich Avon West, Minyip‑Rich Avon Road, Rich Avon West, described in Certificate of Title Volume 06553 Folio 542); and (7) ‘Grandfathers (2)’ (Crown Allotment 3A and 4A, section B Parish of Rich Avon West, Minyip‑Rich Avon Road, Rich Avon West, described in Certificate of Title Volume 06779 Folio 681). One property registered to Andrew Trotter and subject to RNC Nominees’ registered mortgage AW879408Y: ‘Boxleigh / School Lane’ (145 School Lane, Rich Avon West, Crown Allotments 2 and 2A, section B Parish of Rich Avon West, described in Certificate of Title Volume 07678 Folio 054). One property registered to Andrew Trotter and Lorna Trotter and subject to Commstream Capital Ltd’s first registered mortgage AQ077410M and RNC Nominees’ second registered mortgage AX106732V: ‘Farm House’ / ‘Trotter Road’ (150 Trotter Road, Rich Avon West, Lot 1 PL110484, described in Certificate of Title Volume 09135 Folio 005).

Seven of those properties were already subject to registered mortgages held by the National Australia Bank Ltd (NAB), securing a debt of approximately $4.75 million, as quantified on 18 March 2025. Another was already subject to a registered mortgage held by another financier which has not been referred to in the affidavits.

On 5 June 2023, Andrew Trotter and Beverly Farming’s solicitor had a conversation in which the solicitor said the Marnoo Acquisition Limit under the Facility Agreement did not adequately cover stamp duty, interest and costs, and so was approximately $400,000 short.

On 7 June 2023, the $4.1 million of the Marnoo Acquisition Limit was advanced under the Facility Agreement. Beverly Farming used approximately $400,000 of the second tranche of the Crop Lending Limit to pay for the costs of acquisition of the Marnoo Property. Settlement of the Marnoo Property occurred, and Andrew Trotter became registered proprietor of the Marnoo Property.

By reason of the drawdown to enable settlement of the Marnoo Property, Beverly Farming was ‘unable to cover the interest payments on the Loan’. On 22 June 2023, a representative of Beverly Farming sought additional funds of up to $700,000 from RNC Nominees, which did not occur.

On 9 October 2023, and again on 2 February 2024, RNC Nominees issued default notices on Beverly Farming and the Facility Agreement guarantors.

On 4 April 2024, following a farm debt mediation pursuant to the Farm Debt Mediation Act 2011, the parties to the Facility Agreement entered into a Deed of Forbearance, pursuant to which RNC Nominees agreed not to exercise its rights under the Facility Agreement or enforce the Securities unless Beverly Farming defaulted under the Deed of Forbearance or further defaulted under the Facility Agreement.

The Deed of Forbearance set out certain acknowledgments as to the debts owed under the Facility Agreement and certain releases in favour of RNC Nominees by the Trotter family members and entities, to which I refer in more detail later in these reasons.

Steps were then taken that are impugned by the plaintiffs in this proceeding as follows. On 1 May 2024, RNC Nominees issued a third notice of default to Beverly Farming and the Facility Agreement guarantors. On 6 May 2024, RNC Nominees took possession of all the properties mortgaged in its favour, and appointed Ross Andrew Blakeley (the second defendant) and Benjamin John James Waters (Agents) to act as its agents whilst it remained in possession of the properties. RNC Nominees also appointed them as receivers and managers of Beverly Farming.

Following a sale process that is impugned by the plaintiffs and that I will refer to in more detail below, on 21 February 2025, RNC Nominees entered into contracts of sale in respect of three of the mortgaged properties, Hemphills, South‑East and Woods. The contracts for sale provided for settlement on 7 April 2025.

On 18 March 2025, Lorna Trotter lodged caveats over the folios of the Register for Hemphills, South‑East and Woods, based on a claim of implied, resulting or constructive trust.

RNC Nominees commences the Caveat Proceeding

On 31 March 2025, RNC Nominees commenced the Caveat Proceeding, applying to this Court to remove Lorna Trotter’s caveats pursuant to s 90(3) of the Transfer of Land Act 1958 (TLA).

The Caveat Proceeding was listed before me as an urgent application in the Practice Court. I initially heard the application on 3 April 2025. After receiving evidence and hearing submissions, I indicated that I would not be able to deliver a decision before the scheduled settlement date of 7 April 2025. I referred to special condition 18 of each of the contracts of sale and expressed the view that the plaintiff as vendor could extend settlement of the contracts to a date after the Court delivers judgment. On 3 April 2025, I ordered that ‘Judgment is reserved and will be delivered on a date not before 14 April 2025’ and ‘Liberty is reserved to the plaintiff and first defendant to apply at short notice to the Judge sitting in Practice Court’.

On 16 April 2025, I published reasons for judgment to the parties ([2025] VSC 207 – Caveat Proceeding Reasons), concluding that:

(a) Having regard to the potential prejudice to Lorna Trotter of removing the caveats forthwith and lack of imminent prejudice to RNC Nominees in maintaining them for a time because of the entitlement to extend the settlement date, Lorna Trotter should be provided with a reasonable time to commence an appropriate proceeding.

(b) The parties would be heard on the precise terms of the orders to be made and how long Lorna Trotter should have to commence an appropriate proceeding seeking recognition of her asserted equitable interest in the properties and alleging breach by RNC Nominees of s 77 of the TLA.

(c) My preliminary view was that I should ‘adjourn the application for removal of Mrs Trotter’s caveats for two months and make the matter returnable to the Practice Court provided Mrs Trotter gives undertakings to decide whether to commence a proceeding relating to her claims of a joint endeavour constructive trust and the sale by the receivers and managers of the three properties, and (if she so decides) to commence any such proceeding before the return date in the Practice Court’, and that I should reserve liberty to apply.

Early on 17 April 2025, RNC Nominees’ solicitors sent an email to the Court and to Lorna Trotter’s solicitor seeking an urgent listing of the matter that day ‘so that the Court can determine and make a final form of order as soon as practicable’ and informing the Court that:

(a) on 7 April 2025, pursuant to special condition 18 of the contracts of sale, RNC Nominees extended the settlement date to 30 April 2025; and

(b) RNC Nominees did not consider it likely that it would be possible to extend the settlement date any further.

I listed the Caveat Proceeding for further hearing on 22 April 2025. Before the hearing, further material and submissions were provided by the parties. They included new facts and arguments. The position stated in RNC Nominees’ submissions was that, at the hearing on 22 April 2025, it would seek to persuade the Court to consider removal of the Caveats afresh or, if the Court declined to do so, to immediately make formal orders reflecting the Caveat Proceeding Reasons.

At the hearing on 22 April 2025, I indicated to the parties my view that the interests of justice required a fresh consideration of RNC Nominees’ application unfettered by the Caveat Proceeding Reasons, and my view that Lorna Trotter should be granted a short further period of time to respond to the further material, outline and authorities now relied upon by the plaintiff. On that basis, I adjourned the Caveat Proceeding to 24 April 2025 for further hearing.

The plaintiffs commence this proceeding

Shortly before the further hearing of the Caveat Proceeding on 24 April 2025, the plaintiffs commenced this proceeding and sought that it be listed before me at the same time as the Caveat Proceeding for hearing of an urgent summons. RNC Nominees did not oppose this.

The Court listed this proceeding for mention at the same time as the further hearing of the Caveat Proceeding on 24 April 2025.

A case management issue straddling the two proceedings

The two matters were called together on the morning of 24 April 2025, initially on the basis that this proceeding was merely for mention. I asked the parties to address the question of how best to proceed with the two matters. Counsel for each party made submissions on that question.

Counsel for Lorna Trotter explained that her position ‘really rises and falls with the strength of the application for an injunction’ and so the plaintiffs’ injunction should be heard and determined first. Having regard to the objective of conducting the proceedings efficiently, I was therefore persuaded (over the objection of RNC Nominees) that the plaintiffs’ injunction application should be addressed before the further hearing of the Caveat Proceeding.

However, the plaintiffs were unready to proceed to a final hearing of their summons, because (as their counsel explained) their affidavit material omitted to address the Deed of Forbearance and the circumstances in which it was made. They sought an opportunity to remedy that omission, seeking an adjournment to Wednesday 30 April 2025. RNC Nominees opposed any adjournment. Given that the extended date for settlement of the sales was 30 April 2025 and the question of whether RNC Nominees might be unable to insist on another extension under special condition 18 of the sales contracts was uncertain, I considered it unsatisfactory to simply leave the caveats in place and defer the further hearing of the Caveat Proceeding to that date.

After discussion, counsel for the plaintiffs expressed willingness to proceed with the injunction application as an application for an interim injunction, on the understanding that the plaintiffs will (most likely in the week commencing 28 April 2025) seek a final hearing and determination of their application for an interlocutory injunction. By that time, they will have prepared further evidence addressing the Deed of Forbearance.

I decided to hear the plaintiffs’ application for an injunction on an interim basis forthwith, on the parties’ current evidence, with the intention of then addressing the Caveat Proceeding. I expressed my understanding of Lorna Trotter’s position as being that if the application for an interim injunction failed, the caveats would be removed.

No party sought an order that evidence filed in the Caveat Proceeding be treated as evidence in this proceeding and no such order was made.

The plaintiffs’ claims

The plaintiffs’ writ commencing this proceeding is generally indorsed with claims that:

(a) it was unconscionable, alternatively unconscionable conduct in contravention of s 12CB or s 12CA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), for RNC Nominees to rely on Beverly Farming’s breach of provisions of the Facility Agreement defined as the ‘ICR Undertaking’ in the indorsement of claim (the unconscionable conduct claim); and

(b) in entering into the contracts of sale, RNC Nominees failed to act in good faith and to have regard to the interests of the Gary Trotter (as mortgagor) and the other plaintiffs, contrary to s 77(1) of the TLA and the duty that it otherwise owed to Gary Trotter (breach of duty claim).

By reason of the alleged unconscionable conduct, the plaintiffs allege that they have suffered loss and damage in three ways: RNC Nominees refused to make a final tranche of money available on the basis of its reliance on breach of the ICR Undertaking, and this is alleged to have caused Beverly Farming to be unable to pay interest due on (or about) 30 September 2023; RNC Nominees relied on breach of the ‘ICR Undertaking’ and the failure to pay interest to enforce the Securities; and the charging of default interest.

By reason of the alleged breach of duty, the plaintiffs allege that if RNC Nominees is not restrained from completing the contracts of sale, the plaintiffs will suffer harm for which damages will not be an adequate remedy.

Permanent injunctions are sought against the defendants restraining them from completing the contracts of sale, from taking any steps to sell any of the properties, and from enforcing the Securities, as well as damages.

The plaintiffs’ summons and the hearing on 24 April 2025

By their summons dated 23 April 2025, the plaintiffs seek to restrain the defendants until further order from:

(a) in the case of Hemphills, South‑East and Woods, completing the contracts of sale (summons [1]); and

(b) in the case of all the farming properties, taking any steps to sell them (summons [3]);

(c) enforcing any of the Securities granted by the plaintiffs in favour of RNC Nominees (summons [5]); and

(d) relying on a notice of termination dated 15 April 2025 (apparently issued in respect of an agreement between the third defendant and an entity associated with Andrew Trotter[3]) (summons [6]).

[3]Described in the notice as an Independent Contractor Agreement dated in or around May 2024 between Narragall Holdings Pty Ltd (ACN 161 142 114) as the trustee for the A&S Family Trust and Beverly Farming.

The plaintiffs also seek orders requiring the defendants to:

(a) produce unredacted copies of the contracts of sale for Hemphills, South‑East and Woods (summons [2]); and

(b) deliver up certain farming equipment and machinery (summons [4]).

On the afternoon of 24 April 2025, I heard the plaintiffs’ application for interim injunctions in the form of summons [1] and [3] and for production of documents in summons [2].

The plaintiffs sought an interim injunction restraining settlement of the contracts of sale for the three properties until the time the plaintiffs have supplemented their evidence by addressing the Deed of Forbearance and are ready to have their summons heard and determined in full, which they expect to be in the near future and probably the week commencing 28 April 2025.

Most of the plaintiffs’ arguments at the hearing focussed on the imminent sale of Hemphills, South‑East and Woods. Much was said in support of summons [1]. Nothing of substance additionally and specifically relating to summons [3] was advanced.

To the extent that the plaintiffs were seeking the injunction in summons [3] on an interim basis, I am satisfied that any arguments that could have been advanced substantially overlapped with the arguments in support of summons [1] – the application for an interim injunction restraining settlement of the sale of the three properties.

The plaintiffs also advanced submissions, briefly, in support of summons [2] – the application for production of unredacted versions of the contracts of sale of those properties. It was submitted that production was sought by way of discovery, that the contracts of sale were clearly relevant to the breach of duty claim, and it had not been established that RNC Nominees had any proper basis for preventing them being disclosed in the proceeding.

Consideration of application for interim injunctions
The applicable principles

The Court has a broad discretionary power to grant injunctions where just and convenient to do so pursuant to the Supreme Court Act 1986,[4] and as an incident of the Court’s inherent jurisdiction to preserve the subject matter of litigation and ensure the effective exercise of its properly invoked jurisdiction.[5]
[4]Supreme Court Act 1986 s 37; see also, Supreme Court (General Civil Procedure) Rules 2015 r 38.01.
[5]See, eg, Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1.

The principles generally applicable to the Court’s consideration of applications for interlocutory injunctions are settled. The general ‘organising principles’ are as follows. The applicant or plaintiff must show that there is a prima facie case for the relevant relief and that the balance of convenience favours the granting of an injunction. ‘Prima facie’ does not mean more probable than not: it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial (or, for an interim injunction, pending expiry of the interim injunction). How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the order sought.[6]
[6]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 68 [19] (Gleeson CJ and Crennan J), 81–84 [65]–[72] (Gummow and Hayne JJ), following Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 620, 622–623 (Kitto, Taylor, Menzies and Owen JJ).

The requirement to establish a prima facie case in this sense is made out where ‘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’.[7]
[7]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 622–623 (Kitto, Taylor, Menzies and Owen JJ).

Most such applications ‘are heard on affidavit material untested in any way. The Court is not in a position to resolve disputed questions of fact and often, time constraints make it difficult for the Court to resolve conflicts and difficult questions of law’.[8]
[8]Waikato (Pty) Ltd v Kaplan [2002] VSC 310 [48] (Gillard J).

The requirement to establish that the balance of convenience favours an injunction requires the inquiry as to ‘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’.[9] In this regard, the Court of Appeal has explained that a Court determining an application for interlocutory injunction ‘should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial’.[10]
[9]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 622–623 (Kitto, Taylor, Menzies and Owen JJ).
[10]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73 [35] (Maxwell P and Charles JA). See also Archbishop Abba Petros v Beru [2007] VSCA 226, [17] (Maxwell ACJ, Chernov and Kellam JJA); Perfection Fresh Australia Pty Ltd v Melbourne Market Authority (2013) 41 VR 657, 674 [75] (Hansen JA).

Whether there is a prima facie case, and the balance of convenience, are not to be considered in isolation.[11] A weaker prima facie case will generally require the plaintiff to show a stronger balance of convenience supporting the injunction.
[11]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, [84] (Maxwell P and Charles JA), referring to ‘serious issue to be tried’ rather than a ‘prima facie case’, prior to publication of the High Court’s decision in Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57.

Whether as part of the inquiry as to balance of convenience or as a separate principle, the Court will ask whether the plaintiff has shown that the plaintiff will suffer irreparable injury for which damages will not be adequate compensation unless the injunction is granted.[12] There is a presumption that an interest in land is generally of a special nature,[13] such that a remedy in damages may be inadequate by comparison with an in specie interest.
[12]Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57, 68 [19] (Gleeson CJ and Crennan J), referring to Jakudo Pty Ltd v South Australian Telecasters Ltd (1997) 69 SASR 440, 442–443 (Doyle CJ).
[13]See, eg, Dougan v Ley (1946) 71 CLR 142, 150 (Dixon J).

The Court will generally not grant an interlocutory injunction in the absence of the plaintiff giving the usual undertaking as to damages. If the evidence indicates that the usual undertaking is not worthwhile or meaningful, this may weigh against granting the injunction.[14]
[14]See South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120, 147 [175]–[176] (Hely J); Permanent Promotions Pty Ltd v Independent Distillers (Aust) Pty Ltd (2004) 62 IPR 538; [2004] FCA 794 (Heerey J).

The undertaking will be moulded so as to fit the circumstances of the case at hand. These circumstances may include the likelihood of the plaintiff’s insolvency, which might mean it is unable to discharge any liability to the party enjoined pending a final hearing that might accrue under the undertaking. In a proper case the Court may require the undertaking to be supported by security.[15]
[15]See First Netcom Pty Ltd v Telstra Corp Ltd (2000) 101 FCR 77, 85–6 [23]–[25] (Beaumont, Burchett and Emmett JJ).

Where an applicant for interlocutory relief has delayed in approaching the Court, this is a discretionary factor which may weigh against granting the relief.[16]
[16]See, eg, DP World Sydney Ltd v Guy [2016] NSWSC 1072, [69]–[76] (White J); Imac Security Services Pty Ltd v Tyco Australia Pty Ltd [2002] VSC 592, [44] (Redlich J); CME Properties (Australia) Pty Ltd v Prime Capital Securities Pty Ltd [2016] WASC 231, [34] (Le Miere J); South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120, [177] (Hely J).

The above principles apply also where, as here, an interlocutory injunction is sought on an interim basis, in the sense of a period less than the full duration of the proceeding.

Unusually, this was an application made on notice for an interim injunction of very short duration. It was sought to preserve the plaintiffs’ interests only until they have supplemented their evidence by addressing the Deed of Forbearance and are ready for hearing of their application on a full interlocutory basis, which may be as early as the week commencing 28 April 2025.

Interim injunctions are commonly sought on an ex parte basis. The additional considerations that arise in applications for interim injunctions made ex parte do not arise here.

Where relief is sought on an interim basis, all other things being equal, the balance of convenience will be more likely to favour the grant of relief, insofar as the duration of the proposed restraint is shorter.

As already noted, there are two claims pleaded in the general indorsement on the writ — unconscionable conduct and breach of duty in exercising a mortgagee’s power of sale. In principle, both claims should be considered on a cumulative basis in making an ultimate decision whether to exercise the Court’s discretion to grant the injunction sought. However, at least as an initial step, I will consider each separately. I will then be able to decide whether any consideration is required of the cumulative impact of both together.

Unconscionable conduct claim

Counsel for the plaintiffs explained the unconscionable conduct claim to me in some detail, referring to evidence that he said supported the claim. The key matters I discern from the plaintiffs’ evidence, submissions and indorsement that they rely upon are as follows:

(a) Like many farming businesses, the income of Beverly Farming is seasonal in that harvest is once per year and it earns the majority of income immediately after harvest. For Beverly Farming, the majority of its income is generated in January and February each year.

(b) In support of Beverly Farming’s approaches to Roadnight Capital seeking finance, on 2 May 2023, Andrew Trotter sent an email to representatives of Roadnight Capital which attached a cash flow forecast for Beverly Farming. The cash flow forecast was provided to enable Roadnight Capital to assess whether to provide finance. It was presented on a month by month basis. It forecast that for the period from January 2023 to February 2024, Beverly Farming forecast total income of $23,860,303. However, almost all of that income (around $23,600,000 or 99% of all income) was forecast to be generated in January 2024.

(c) As already noted, RNC Nominees entered into the Facility Agreement with Beverly Farming later that month, on 24 May 2023.

(d) Clause 10.5(b) of the Facility Agreement provided:

The Borrower must (unless the Lender otherwise consents) ensure that the ICR is at all times greater than 2.00x.

(e) The ‘ICR’ in the Facility Agreement is the interest cover ratio, which is calculated by dividing the ‘Annualised EBIT’ (Beverly Farming’s EBIT for the previous three months multiplied by four) by the ‘Annualised Interest Amount’ (being, in respect of a particular month, the interest amount payable that month multiplied by 12).

(f) Clause 4.2(a)(iii) of the Facility Agreement provided that RNC Nominees would make the Marnoo Acquisition Limit available provided that the Borrower was not in breach, or would not be in breach by virtue of the proposed Advance, of each financial covenant in clause 10.5.

(g) Beverly Farming had made no income in the previous three months and accordingly was going to be in breach of the Facility Agreement as soon as the Marnoo Acquisition Limit was made available.

(h) On 7 June 2023, the Marnoo Acquisition Limit of $4.1 million was drawn down and settlement of the purchase of the Marnoo Property occurred.

(i) As at mid‑September 2023, Beverly Farming ‘was up to date with all interest payments due under the Facility Agreement’.[17]
[17]Affidavit of Andrew Trotter 22 April 2025, [21].

(j) On 15 September 2023, RNC Nominees sent a letter to Beverly Farming stating that (based on management accounts recently provided) Beverly Farming was in default of cl 10.5(b) of the Facility Agreement, and reserving RNC Nominees’ rights.

(k) On around 20 or 25 September 2025, Beverly Farming requested that RNC Nominees make the third tranche of the Crop Lending Limit available and apply some $80,000 of it to the interest that would otherwise have been due under the Facility Agreement on 29 September 2023.

(l) RNC Nominees refused to do so and, on 9 October 2023, served a default notice, relying on the failure to pay interest when due on 29 September 2023 and the breach of the ICR Clause and calling in the whole of the loan.

(m) On 1 May 2024, RNC Nominees served a notice of default under s 76 of the TLA. RNC Nominees relied on a series of defaults, including the breach of cl 10.5(b) as at 30 September 2023.

Counsel submitted that there is a serious issue to be tried, or (more precisely) a prima facie case in the sense explained in the authorities binding upon me, that the above circumstances meet the test for unconscionable conduct for the purposes of s 12AB and 12AC of the ASIC Act identified in ASIC v Kobelt[18] and in equity,[19] and there is a sufficient likelihood that after trial the Court will grant relief against enforcement of the Securities to justify the maintenance of the status quo by imposing an interim injunction.
[18]Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18, especially [234] (Nettle and Gordon JJ).
[19]Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49, [37]–[38] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ); Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25.

The particulars in the indorsement of claim allege that unconscionability is made out because RNC Nominees ‘was aware – before it advanced any funds under the Facility Agreement’ – that:

·Beverly Farming made most of its income around harvest time, which was early summer each year;
·at the time funds were first advanced under the Facility Agreement, Beverly Farming forecast that it would make no income or alternatively, no significant income until January 2024;
·Beverly Farming intended to use the Crop Lending Limit to be made available under the Facility Agreement for working capital, including payment of interest; and
·Beverly Farming would breach the ICR Undertaking immediately on funds being advanced under the Facility Agreement.

Counsel for the plaintiffs added a further point. He submitted that RNC Nominees ‘need not have advanced the money at all’ – that RNC Nominees as Lender was not required to advance $4.1m of the facility to support the acquisition of the Marnoo Property, if it would have caused a breach of cl 10.5(b). He submitted that it was unconscionable for RNC Nominees to later rely on that breach once Beverly Farming was in default, because ‘if it was really a problem, then [RNC Nominees] should never have advanced those funds in the first place’.

In response, Senior Counsel for RNC Nominees submitted that the Forbearance Deed presents an insuperable barrier to the success of the unconscionable conduct claim, at least if the evidence at trial remains ‘as it is’.[20]
[20]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 620, 622–623 (Kitto, Taylor, Menzies and Owen JJ).

I agree with the submission on behalf of RNC Nominees.

A solicitor for RNC Nominees deposed to attending a farm debt mediation on 26 March 2024, following which, on or about 4 April 2024, the plaintiffs and others entered into the Deed of Forbearance with RNC Nominees.

The plaintiffs’ affidavit material does not address the circumstances of their entry into the Deed of Forbearance at all. If the evidence remains as it is, that document must be given full effect on its terms.

The releases in the Forbearance Deed clearly cover the unconscionable conduct claim, including the argument that RNC Nominees ‘need not have advanced the money at all’.

The Deed of Forbearance contains the following recitals:

C. The Borrower drew down the following amounts under the terms of the Facility:
(i) $500,000 on 24 May 2023;
(ii) $1,280,322.19 on 30 May 2023; and
(iii) $4,519,677.81 on 5 June 2023.
D. On or around 30 May 2024 the Borrower requested an extension of $50,000 to the Facility limit, which request was refused by the Lender.
E. The Borrower failed to pay interest for June 2023 (July Interest) in accordance with the requirements of the Facility Agreement.
F. On 11 July 2023, the Lender notified the Borrower that the July Interest had not been paid in accordance with the Borrower's obligations under the Facility Agreement and that if the required payment was not made by the end of that day that interest would commence accruing at the Higher Rate.
G. On 14 July 2023, the Lender notified the Borrower that the July Interest remained unpaid and that, in accordance with the terms of the Facility Agreement, interest would commence being applied to the amounts outstanding under the Facility Agreement at the Higher Rate.
H. On 12 September 2023, the Borrower provided a financial year 2023 financial report to the Lender (FY23 Reports), which recorded that no lentils were sold during that financial year.
I. On 15 September 2023, the Lender:
a. notified the Borrower that the FY23 Reports evidenced a breach of the ICR covenant under clause 10.5(b) of the Facility Agreement; and
b. issued a reservation of rights letter to the Borrower stating that on time payment of interest for September 2023, the provision of tangible evidence of progression towards executing a shareholder agreement for the reported $5 million equity raise and completion of the September 2023 covenant reporting, including passing of the relevant covenants, were each required by 15 October 2023.
J. On 21 September 2023, the Lender rejected the Borrower’s request for the drawdown of the final $500,000 pursuant to the Facility Agreement on the basis that the Facility was in default and the conditions within the reservation of rights letter had not been satisfied. The Borrower alleges that the Lender improperly refused this draw down request (Draw Down Dispute).
K. On 9 October 2023, the Lender's solicitors issued a demand and notice of default to the Borrower and each of the Guarantors.
L. On 13 October 2023, the Borrower's agent notified the Lender that the Borrower would not be able to repay the Lender in accordance with the notice of default.

The Deed of Forbearance contained a definition of ‘Existing Defaults’ including but not limited to failures to pay interest and fees due on 29 September 2023, 31 October 2023, 30 November 2023, 29 December 2023, 31 January 2024, failure to comply with cl 10.5(b) as at 30 September 2023, and failures to provide information required in relation to covenant testing under cl 10.5 and monthly management accounts under cl 10.3 for the last quarter of 2023. The Deed of Forbearance contained acknowledgements by the obligors, who include all the plaintiffs, including that:

the Secured Money owing to the Lender under the Facility Agreement and the Securities is $7,197,591.97 (excluding legal costs) with interest, fees, legal costs and other charges continuing to accrue in accordance with the terms of the Facilities and the Securities…[21]

[21]Clause 2.3(a).

RNC Nominees agreed in cl 4.1 to forbear from exercising its rights and remedies under the Transaction Documents or applicable law in respect of or arising out of the Existing Defaults for the Forbearance Period, which was defined as the period ending on the earlier of a breach of the Deed of Forbearance or a future default under the Facility Agreement or Securities. The Obligors were required under cl 5.1 to repay the Secured Money by the Repayment Date (defined as 19 April 2024).

The Deed of Forbearance was conditional upon, and contained, two Solicitor’s certificates showing that before Gary Trotter and Andrew Trotter signed the Deed of Forbearance they received legal advice about the legal nature and effect of the acknowledgments and obligations set out in the Documents (the Facility Agreement, Securities and Deed of Forbearance), and that executing the Deed involved considerable risk, including the risk of losing property and other assets. The certificates recorded that each understood the legal nature and effect of the Deed and that he was signing the Deed freely, voluntarily and without pressure from any other person.

The Deed of Forbearance contained the following releases (cl 8.1):

Upon execution and exchange of this Deed, the Borrower and the Guarantors absolutely and irrevocably release and forever discharge the Lender and its officers, employees, advisors and legal advisors from and against all or any Claims which they now have or but for the execution of this Deed may have had against the Lender (including the Lender’s officers, employees, advisors and legal advisors) in relation to the Facility Agreement, the Securities, the Draw Down Dispute and/or any of the other matters the subject of this Deed.

On the current evidence it seems apparent from the recitals that the plaintiffs knew of the fundamentals of the matters about which they now complain[22] in advancing the unconscionable conduct claim. It also seems apparent from the clear words of the Deed of Forbearance and solicitor’s certificates that the plaintiffs can have been in no doubt that they were granting irrevocable releases in favour of RNC Nominees in respect of any claims which they had, as at 4 April 2024, in relation to the Facility Agreement, the Securities, the “Draw Down Dispute”, and any other matters the subject of the Deed of Forbearance. These words amply cover the claim of unconscionable conduct the plaintiffs now seek to advance. That claim therefore falls well short of being a prima facie case; in fact, it has no prospect of success at all if the evidence remains ‘as it is’ at trial.
[22]Doggett v Commonwealth Bank of Australia (2015) 47 VR 302, 319–320 [64] (Whelan JA, McLeish JA and Garde AJA agreeing), citing with approval Westpac Banking Corporation v Billgate Pty Ltd [2013] NSWSC 1304, [626]–[628] (Stevenson J).

This was, no doubt, the reason why the plaintiffs sought an adjournment to supplement their evidence before making their final arguments in support of their summons. Howsoever that may be, an interim injunction restraining enforcement of the Securities cannot be granted on the basis of the unconscionable conduct claim.

Because no prima facie case has been shown, I give the unconscionable conduct claim no weight for the purposes of the interim injunction application. I do not take the claim into account in any cumulative consideration of the balance of convenience that might otherwise have been appropriate.

Breach of duty claim

As noted above, the plaintiffs also allege that, in entering into the three contracts of sale, the defendants have exercised RNC Nominees’ power of sale as mortgagee in breach of the duty of good faith and s 77 of the TLA.

The submissions on behalf of the plaintiffs did not develop the prima facie case for breach of duty in detail. They submitted that there is a ‘serious question to be tried about the sale process’, which I will take to be a submission that the current evidence establishes a ‘prima facie case’ in accordance with the applicable principles already identified. The plaintiffs submitted in this regard that they ‘are hampered in developing a submission about the sales process because they do not know the sale price’, but that ‘[l]egitimate concerns have been raised, however, about the manner in which the sale was conducted.’ More detail about the claim appears in the general indorsement of claim and in Andrew Trotter’s affidavit of 23 April 2025.

Under general law, a mortgagee exercising its power of sale has a duty to exercise the power in good faith and for the purpose for which it was conferred, meaning a mortgagee cannot recklessly or wilfully sacrifice the interest of the mortgagor.[23] Section 77 of the TLA widens the general law duty by providing that the mortgagee must exercise its power of sale ‘in good faith and having regard to the interests of the mortgagor’.[24]
[23]Pendlebury v Colonial Mutual Life Assurance Society Ltd (1912) 13 CLR 676, 680 (Griffith CJ).
[24]See also, MBF Investments Pty Ltd v Nolan (2011) 37 VR 116, 144–5 [100] (Neave, Redlich and Weinberg JJA).

The mortgagee’s duties only go so far. A mortgagee has the right to exercise the power for their own benefit.[25] A mortgagee is obliged to obtain the best price consistent with its entitlement to realise its security.[26] Even in cases where a specific duty of care to achieve market value applies (which is not claimed here), a controller or mortgagee is not obliged to take steps to improve the value of the property, nor to ‘secure the market value by the method of sale or by the timing of the date of the sale’.[27] In such cases, the Court focusses on the process of sale of the property, not on whether the resulting sale was above or below its market value.[28] A mortgagee may sell at a time of their choosing and does not have to wait until a time when a better price may be obtained.[29]
[25]Because ‘a mortgagee is not a trustee of the power of sale for the mortgagor’, — as to which, see, eg, Commercial and General Acceptance Ltd v Nixon (1981) 152 CLR 491, 494 (Gibbs CJ).
[26]Vasiliou v Westpac Banking Corporation Ltd (2007) 19 VR 229, 242 [63] (Maxwell P, Neave and Kellam JJA).
[27]Investec Bank (Australia) Ltd v Glodale Pty Ltd (2009) 24 VR 617, 625 [44], 627 [48] (Neave and Redlich JJA and Forrest AJA) (‘Investec’).
[28]Ibid 626–7 [46]–[47].
[29]Ibid 627 [48].

The plaintiffs claim in the general indorsement on their writ that RNC Nominees and its Agents breached their duties relating to the exercise of power of sale of the properties for the following reasons:

RNC Nominees is the second ranking mortgagee of Hemphills, Woods and the South House, East & Bottom [ie, South‑East] properties. After sale costs, any proceeds of sale will not reduce the net indebtedness of Beverly Farms to RNC Nominees or alternatively, will not materially reduce the net indebtedness of Beverly Farms to RNC Nominees.
If RNC had the right to enforce its securities, then it should have sold those properties of which it was the first ranking mortgagee in priority to those over which it had a second ranking security.
Further, in selling Hemphills, Woods and the South House, East and Bottom properties, RNC Nominees:
·did not engage a local real estate agent to market and conduct the sales;
·did not adequately describe Hemphills, Woods and the South House, East and Bottom properties when advertising them for sale; and
·did not adequately take into account recent comparable sales.

Andrew Trotter’s affidavit asserts:

(a) that the estate agents engaged as selling agents were not local to the location of the properties;

(b) that the properties were marketed for sale between August and September (as opposed to February and March);

(c) that the marketing material did not draw sufficient attention to, or give proper details of, the ‘Carbon Initiative’;

(d) that Hemphills, South‑East and Woods were sold, and the remaining seven properties are to be sold, by way of private treaty (not public auction); and

(e) that the contracts of sale in respect of Hemphills, South‑East and Woods were entered into at an undervalue.

I have decided that none of these matters, together or in any combination, establish a prima facie case of breach of the applicable duties, and certainly no such case sufficient to justify maintenance of the status quo and restraint of settlement of the sales of the three properties on 30 April 2025. There are some arguable points amongst them, but they do not rise to the level of a prima facie case.

Second-ranking mortgage

The plaintiffs did not explain how the choice of RNC Nominees to sell three of the properties subject to a first ranking registered mortgage to NAB could be said to be in breach of the duty owed to Gary Trotter or the other plaintiffs. As already noted, seven of the ten properties subject to the Securities are subject to first registered mortgages in favour of NAB, and another is subject to a first registered mortgage to another company. Amongst the properties subject to the Securities, that leaves only the Marnoo Property and one other property over which RNC Nominees holds a first registered mortgage. The plaintiffs have not demonstrated that RNC Nominees ‘should have sold those properties of which it was the first ranking mortgagee in priority to those over which it had a second ranking security’. And even if the plaintiffs had established that it might have been better for RNC Nominees to do so, this would not have established a prima facie case of a breach of RNC Nominees’ duties owed to Gary Trotter or the other plaintiffs.

Choice of agent

In Investec, for the purposes of statutory duties to take reasonable care to attain market value that applied in that case (which in any event are not claimed to arise here), it was alleged that a mortgagee in possession failed to discharge its duty to take reasonable care in selling a block of apartments located in Port Douglas because it appointed a Melbourne‑based estate agent in conjunction with a Cairns‑based estate agent, neither of whom had experience in selling property in Port Douglas. The trial judge found that by not engaging a Port Douglas agent, the bank had not taken reasonable care to ensure the market value was obtained, and the Court of Appeal found no error in this conclusion. However, there is no general rule that a local agent must be chosen. The choice of agent depends on all the facts.

Here, even if Investec was regarded as binding on this case, the evidence does not establish any disregard of relevant factors by RNC Nominees, or any lack of care in consideration of choice of agent. Several sales agent candidates were considered, some of which operated nationally. Andrew Trotter’s views were considered. He opposed using two of the local candidates. The Agents established that Andrew Trotter’s preferred local candidate was apparently a creditor of Beverly Farming and Andrew Trotter, and they were concerned it did not have sufficient experience and ability to deal with corporate and larger farming operations. The Agents considered that a national sales agent was more likely to have a breadth of contacts of potential purchasers, and less likely to have a history of acting for property owners in the area, thereby avoiding the risk they might be less likely to press for the highest possible sale price if negotiating with local buyers. A selling agent with contacts in the local area was considered unnecessary on the basis that any interested local buyer would be expected to come forward regardless of who the selling agent was. The chosen sales agent (Colliers) demonstrated particular expertise and experience that made it a good fit for the brief on various bases identified by Mr Blakeley. In short, the choice of Colliers was based on rational and relevant factors in an effort to maximise the prospects of achieving sales and the sale prices. No basis has been demonstrated for a prima facie case of breach of duty.

Timing of sale

Andrew Trotter deposes that he conveyed to the Agents that ‘the time to sell the Sale Properties is between February/March (after harvest)’, and that despite this, the properties were marketed between August and September.

It is the right of a secured creditor to select the time at which it exercises its power of sale. RNC Nominees observe that the statutory duties imposed on controllers (by s 420A of the Corporations Act 2001 (Cth)) have been found to impose no requirement that a property be sold at any particular time, or that a sale be postponed until a more favourable price may be obtained. They point to authority that, so long as the controller is acting in good faith, it is ‘entitled to consult its own convenience’ in determining the time at which it elects to exercise its power of sale. They submit that these principles apply to the duty imposed on a mortgagee under TLA s 77. The plaintiffs made no contrary submission. I can see no reason for doubting the analogy drawn by RNC Nominees. It follows that the argument as to timing does not amount to a prima facie case.

Further and in any event, the evidence relied upon by RNC Nominees explains why the expression of interest campaign occurred when it did and that RNC Nominees considered that it would have been impractical to delay the commencement of marketing to February or March 2025, including by reason of the substantial additional indebtedness that was accumulating.

Description of the properties

The gravamen of this aspect of the claim appears to be that the marketing material for the sales did not draw sufficient attention to, or give proper details of, the ‘Carbon Initiative’ and Andrew Trotter’s success in achieving the best crop yields in the district.

The evidence adduced by RNC Nominees shows that Andrew Trotter did not substantiate his carbon‑related assertions, despite repeated requests, made verbally and by email, for further information and certifications. It was reasonable to require substantiation before including details of the carbon capture characteristics or properties in the published marking materials.

On the available evidence, no prima facie case of breach of duty is made out.

Public auction vs private treaty

Andrew Trotter deposes that the contracts of sale in respect of Hemphills, South‑East and Woods were entered into by the Agents by way of private treaty ‘rather than holding auctions to test market’ and he also observes (correctly) that the advertisement for the remaining properties are also ‘not being sold by way of auction’.

Sale by auction is not per se required for a mortgagee to discharge the duties it owes to a mortgagor under general law or statute.[30] The test is whether the power of sale has been exercised in good faith, and having regard to the interests of the mortgagor. As noted above, the mortgagee is not obliged to actually attain the market value. Sale by public auction, or by private treaty, or by public tender are each available means to endeavour to reasonably attempt to obtain market value. Mr Blakeley’s affidavit explains the process of reasoning for choosing an expression of interest process and a public tender process as the methods of sale in respect of Hemphills, South‑East and Woods, and other remaining farming properties, respectively. There is nothing in that process of reasoning that betokens any bad faith or recklessness toward the Trotters, and the reasoning bears all the hallmarks of an attempt to achieve sales and to do so at market prices. Mr Blakeley’s account of the progress of the expression of interest campaign and what followed raises no suggestion that anything untoward occurred. No prima facie case of breach of duty is shown.
[30]See, eg, Vasiliou v Westpac Banking Corporation Ltd (2007) 19 VR 229 (Maxwell P, Neave and Kellam JJA).

Undervalue

The plaintiffs claim that RNC Nominees did not adequately take into account comparable sales and entered into the contracts of sale at an undervalue.

Their current evidence cannot positively establish this. As already noted, and as their counsel pointed out, they are ‘hampered in developing a submission about the sales process because they do not know the sale price’.

Andrew Trotter’s affidavit referred to the sale of Lot 5, Banyena Silo Road, Banyena on 14 February 2025 being a comparable sale at a district record price of over $8000 per acre.

Andrew Trotter deposed to an ‘understanding’ that the sales contracts are at prices of approximately $4500 to $5000 per acre. No objection was taken to this evidence, and I will rely on it for present purposes.

On 21 February 2025, Andrew Trotter sent an email to the Agents that drew attention to the sale of Lot 5, Banyena Silo Road, Banyena — saying, amongst other things, ‘Given this market increase in value I don’t see any need to rush the acceptance on any offer …’.

On 21 February 2025 RNC Nominees entered into the sales contracts with purchasers whose identities have not been disclosed to the Trotters.

On 25 February 2025, Andrew Trotter sent another email to the Agents, saying, amongst other things, that they had not been willing to disclose the sale prices to him. I understand that this remains the case.

Andrew Trotter later obtained reports setting out valuations of the three properties at $2.14 million for South‑East, $2.205 million for Hemphills and $2.18 million for Woods, which reports are exhibited to his affidavit. Mr Trotter deposes that the sale at Lot 5, Banyena Silo Road, Banyena is ‘Sale 2’ referred to in each of the valuation reports. The reports indicated that that sale occurred in a more well regarded location and with a higher rainfall.

With the possible exception of RNC Nominees’ non‑disclosure of the sales prices, there is nothing in the material relied upon by the plaintiffs capable of raising any suggestion that the sales might have been at such an undervalue that a potential breach of duty could be said to have occurred.

The evidence of Mr Blakeley establishes that due care was taken by the Agents to achieve sales and to do so at the best price they could. The only matter of any potential significance is the non‑disclosure of the sale prices. I will assume for the purposes of this application that the properties are sold at a material undervalue compared with the valuations in the reports obtained by Andrew Trotter, consistent with the understanding he deposed to. A sale at a very significant undervalue could be relevant to the assessment of whether a breach has occurred. However, a sale below market value estimates in itself is not evidence capable of establishing a breach of the duties.

On the current evidence about the possible sale at undervalue, no prima facie case of breach of duty is made out.

Further or alternatively, if the non‑disclosure were to give rise to an arguable claim of breach of duty under s 77 of the TLA, it would be very weak and would be insufficient in itself to justify an interim injunction restraining the imminent settlement.

As I will now explain, in case it is relevant, I have turned my mind to the assessment of the balance of convenience on a hypothetical assumption of a weak prima facie case of breach of duty by RNC Nominees in exercising the power of sale of the three properties.

Further or alternative reasoning on balance of convenience

For the reasons explained below, I have reached the view that the evidence on the balance of convenience does not support the granting of an injunction — even a very brief interim one — on the basis of a weak case for breach of duty.

The plaintiffs submitted that the balance of convenience favours the grant of the injunction for four reasons:

(a) The farmland is a generational farming property. The Trotter family has invested in improving the soil over many years. Those efforts have resulted in the farm leading the district in yield return.

(b) If the status quo is preserved, then there is a good prospect that the debt owed to RNC Nominees will be repaid through the refinance that is presently being negotiated.

(c) In contrast, RNC Nominees will not be paid in full from the sale of the Woods property, the South‑East property and the Hemphills property. RNC Nominees holds second ranking security over the property. If the sales are allowed to go ahead, around $4,747,901 will be paid to NAB (after selling costs) before any amount is applied to the secured debt owed to RNC Nominees.

(d) The special conditions in the contracts of sale for the Woods property, the South‑East property and the Hemphills property mean that the sale of those properties can be delayed (or terminated) without penalty. While the purchaser would no doubt like to complete the sales, the inconvenience they suffer is minor in comparison to the damage suffered by the plaintiffs if the sales are not restrained.

These matters are not sufficient to lead me to conclude that the balance of convenience favours restraining the settlement of sale of the three properties on 30 April 2025.

I have decided that I cannot place weight on three of these four matters.

First, the evidence falls well short of establishing that if the status quo is preserved, there is a good prospect that the debt owed to RNC Nominees and NAB will be repaid through the refinance that is presently being negotiated. The non‑binding, indicative terms of finance that Andrew Trotter has tendered as exhibits to his affidavit potentially cover about $10 million. This falls short of the total he accepts is owing to NAB (approximately $4.75 million as at 18 March 2025) and RNC Nominees (‘in the vicinity of $7‑8 million’). In place of Andrew Trotter’s estimate of Beverly Farming’s indebtedness to RNC Nominees, I would place more weight on Ross Blakeley’s estimate, which is approximately $8.8 million. The difference may be explained by default interest. On the basis of the unconscionable conduct claim, the plaintiffs are contending that default interest should not be applied. But I am giving that claim no weight, as explained earlier in these reasons. Beverly Farming’s total indebtedness is, on this basis, about $13.5 million. In other words, the indicative refinancing offer falls about $3.5 million short.

There are two potential offerings forming part of the refinancing proposal, the most significant one from Ecosse Capital Partners for a total of $5.75 million and the other from Paramount for $4.386 million. The indicative terms of Ecosse Capital Partners refer to a loan secured by first mortgages on several of the properties of $4.5 million for 12 months at 12.5% interest, conditional upon Beverly Farming achieving discharge through sales or refinancing of all its debt, and a further loan of $1.25 million secured by second mortgages on all the properties and similar terms. Paramount’s indicative terms are for 12 months, at slightly less interest.

There have been many months since RNC Nominees appointed agents to exercise its mortgagee’s power of sale in respect of the properties. As Ross Blakeley deposed, since that time Andrew Trotter has been telling the Agents of his intention to arrange refinancing, but this has not occurred. Given that there has been no success in these endeavours over many months, it seems implausible that there would be success in in the future.

Second, it is not certain that RNC Nominees has an entitlement to serve further notices of extension under special condition 18.1 of each of the three sales contracts. That clause provides:

In the event that the Vendor:
(a) is restrained, delayed or prevented (or is likely to be restrained, delayed or prevented) from completing this Contract by injunction, caveat, threatened or actual litigation, or otherwise; or
(b) is unable to provide all title documents necessary for the Purchaser to become the registered proprietor of the Property;
(each, a Disruption Event), the Vendor may at its option:
(c) terminate this Contract by notice in writing to the Purchaser at any time prior to settlement whereupon this Contract will end and any Deposit paid by the Purchaser will be refunded to the Purchaser; or
(d) extend the Due Date for up to 6 months (“Extended Date”) to enable the Vendor to remove any injunction, caveat or other restraint or take any other steps necessary for the Vendor to transfer title to the Purchaser under the terms of this Contract.

That condition is open to the interpretation that the power to extend settlement under it is open to be used only once, resulting in an ‘Extended Date’, and that if settlement cannot occur on that date, the only option remaining to the vendor is to terminate in accordance with special condition 18.2. Special condition 18.2 provides:

If the Vendor elects to extend the Due Date under Special Condition 18.1 and the Vendor is unable to give title to the Purchaser under the terms of this Contract by the Extended Date for any reason the Vendor may by notice in writing (at its election) terminate this Contract and any Deposit paid by the Purchaser will be refunded to the Purchaser.

Third, the fact that RNC Nominees will not be paid in full from the sale of the Woods property, the South‑East property and the Hemphills property and the bulk of the proceeds of sale will go to NAB as first registered mortgagee is not of any real significance in weighing the balance of convenience.

The remaining point, that the Trotters have farmed the land in question as part of a farming enterprise of some longevity, is potentially relevant. It could be relevant to the question of whether damages for any alleged breach of duty by RNC Nominees in the sales process would be an adequate remedy.

After careful reflection on this issue, I have decided that the plaintiffs have not established that damages would be an inadequate remedy for any breach of duty they might ultimately establish against RNC Nominees in the process leading to the sale of Hemphills, South‑East and Woods.

In short, that is because the indebtedness of Beverly Farming to the holders of the Securities is so great (approximately $13.5 million, with interest said by Mr Blakeley accruing on the debt to RNC Nominees at about $150,000 per month), and the evidence of currently available indicative refinancing so inadequate, that it seems virtually inevitable that at least some of the properties subject to the Securities will have to be sold.

In these circumstances, if the three properties Hemphills, South‑East and Woods are being sold at the undervalue in breach of duty as the plaintiffs claim, that breach will result in an order for damages after trial, but the claim of breach of duty has not been shown to be material enough to justify prevention of their sale altogether.

In fact, Andrew Trotter’s affidavit conceded that some properties will have to be sold if the refinancing is confined to what is offered indicatively by Paramount and Ecosse Capital Partners. He deposed in this regard at [65] that:

Funding from a third lender is also being pursued as at the date of this affidavit. If a third lender cannot be sourced, I acknowledge that Beverly Farms will need to sell the following 2 properties to fully repay Roadnight:
(a) Marnoo Property;
(b) Rich Avon Property.

In light of this evidence, it seems reasonable to characterise the plaintiffs’ argument that damages are an inadequate remedy as an attempt to resist the sale of the three particular properties RNC Nominees has selected and contracted for sale to date (Hemphills, South‑East and Woods), at the same time as conceding that the above properties (Marnoo and Rich Avon) would have to be sold.

It is not up to the plaintiffs to determine the mortgagee’s selection of properties in this manner. In my view, the plaintiffs’ preferences as to which of the properties should be sold should have no bearing on the balance of convenience.

There are several additional factors that weigh against the grant of an injunction in the assessment of the balance of convenience.

First, although the plaintiffs give the usual undertaking as to damages in support of their application for injunctions, it has not been established that their undertaking as to damages would be meaningful in light of their inadequate finances, their uncertain prospects of obtaining refinancing, and the absence of any alternative additional security being proffered.

Second, Mr Blakeley deposed cogently to the risks that RNC Nominees face, including the flow‑on impact on the campaign to sell the remaining properties, if the settlements do not occur on 30 April 2025. To these concerns could be added, as already mentioned, the uncertainty that (in my view) would attend any further attempt to extend the settlement date under cl 18.1 of the sales contracts.

For these reasons, it has not been established that plaintiffs face a greater risk of harm from settlements proceeding than defendants do from the sales being restrained.

RNC Nominees could lose the benefit of the contracts if settlement does not proceed on 30 April 2025. At some point, as time goes on and interest and enforcement costs continue to accrue, there is a risk that RNC Nominees will be exposed to sustaining loss that may not be recoverable from the Securities. It is unclear precisely how far in the future that time may be. However, it can be inferred that if the sales do not proceed, the risk of RNC Nominees facing a loss will be increased, and the period during which it is being held out of its money will be lengthened. These are forms of prejudice to RNC Nominees.

Finally, there was lengthy delay by the plaintiffs in commencing this proceeding, most of which is not explained. At the very latest they have been on notice since late February of the matters they now complain of. Although they might not have seen the need for urgency in the period from 16 to 22 April 2025, they should otherwise have been acting with expedition. If I had thought that the balance of convenience was finely balanced, that delay would have weighed against exercising my discretion to grant injunctive relief.

However, in the end, I have reached a clear decision that the balance of convenience is not finely balanced. In my view, for the reasons I have set out above, the balance of convenience is clearly against the grant of the relief sought by the plaintiffs.

I note that Ross Blakeley’s affidavit expresses concerns that Andrew Trotter has in the past, and may again, interfere with marketing of the properties the subject of the Securities. It has not been necessary for me to form any views about these concerns.

No decision on discovery application

Andrew Trotter’s affidavit included copies of redacted versions of the three contracts of sale for Hemphills, Woods and South‑East, which omit the identities of the purchasers and sale prices.

The plaintiffs seek production of unredacted copies of the sale contracts. RNC Nominees resists the application on the basis that disclosure of the sale prices could adversely impact the marketing campaign for the other properties, and that disclosure of both the pricing and purchaser identity information could provide scope for Andrew Trotter to interfere with the sale process for the three properties and the additional properties.

The plaintiffs did not develop their submission in support of the application in detail. The unredacted contracts of sale would presumably be of principal relevance to the plaintiffs’ breach of duty claim. Presumably they expect that evidence of the sale prices would or could be probative of whether (and to what extent) the sales of the three properties are at an undervalue by comparison with the valuations recently obtained by Andrew Trotter and exhibited to his affidavit.

It is unusual for an application for discovery to be heard and determined in the Practice Court. The demands on Practice Court resources are usually limited to brief, urgent applications. I reached my conclusions on the plaintiffs’ interim injunction application after accepting evidence of Andrew Trotter’s understanding that the three properties were being sold at what he regards as a significant undervalue, by comparison with the valuations he has obtained. I found that this did not establish a prima facie case of breach of mortgagee’s duties in the exercise of RNC Nominees’ power of sale. In light of the admission into evidence of Mr Trotter’s understanding, and the conclusion I reached, there are cogent arguments that it is unnecessary to decide the discovery application, or at least that it is inappropriate for it to be decided in the course of urgent Practice Court proceedings.

In light of my decision to decline the interim injunctions sought by the plaintiffs and reasons for doing so, and in light of the objective of conducting the proceeding efficiently in accordance with the Civil Procedure Act 2010 and the usual limits placed on applications made in Practice Court, I have not determined the plaintiffs’ application for discovery of unredacted versions of the sales contracts.

The plaintiffs will be at liberty to pursue that application on a future occasion if they wish to do so.

Conclusions and orders

I will dismiss the plaintiffs’ applications for orders 1 and 3 in their summons dated 23 April 2025 to be made on an interim basis.

I will hear the parties on the question of costs.
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SCHEDULE OF PARTIES

GARY ALEXANDER TROTTER	First plaintiff
ANDREW MICHAEL TROTTER	Second plaintiff
BEVERLY FOODS PTY LTD (ACN 668 092 448)	Third plaintiff
-and-
RNC NOMINEES PTY LTD (ACN 602 126 287) AS TRUSTEE OF THE AGRIMAC FUND AND AS TRUSTEE OF THE ROADNIGHT CAPITAL PRIVATE DEBT FUND	First defendant
ROSS ANDREW BLAKELEY AND PAUL STUART HARLOND IN THEIR CAPACITY AS RECEIVERS AND MANAGERS OF BEVERLY FARMING PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 162 054 917)	Second defendant
BEVERLY FARMING PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 162 054 917)	Third defendant

[2025] VSC 224

28 April 2025