Federal Court of Australia Bist v Cyan Stone Clydesdale Estate 1 Pty Ltd [2024] FCA 1108 File number: NSD 1174 of 2024 Judgment of: KENNETT J Date of judgment: 23 September 2024 PRACTICE AND PROCEDURE – application for interlocutory injunction – whether real question to be tried – whether balance of convenience favours grant of an injunction REAL PROPERTY – indefeasibility of title – whether notice of prior interest sufficient to defeat title by registration under Real Property Act 1900 (NSW) – whether claim under "knowing receipt" limb of Barnes v Addy (1874) LR 9 Ch App 244 sufficient to impugn indefeasible title Catchwords: CONSUMER LAW – Australian Consumer Law (ACL) – whether promise to transfer lot of land not yet in existence is a "service" within the meaning of the ACL – whether action for unconscionable conduct under s 21 of the ACL lies against stranger to supply of goods or services TORTS – conspiracy by unlawful means – where no intention to cause harm shown – where means relied on unlawful only by reason of statutory prohibition and statute supplies remedies – whether applicants can maintain action in tort TORTS – inducing breach of contract – where evidence does not disclose intention to interfere with contractual relations shown – whether injunction at common law an available remedy Constitution s 109 Federal Court of Australia Act 1976 (Cth) Pt IVA Legislation: Competition and Consumer Act 2010 (Cth) ss 87, 131, 131C, Sch 2 (Australian Consumer Law) ss 1, 2, 21, 36, 62, 232, 236, 237, 239, 243 Corporations Act 2001 (Cth) s 500 Trade Practices Act 1974 (Cth) (repealed) ss 51AC, Real Property Act 1900 (NSW) ss 42, 43 Barnes v Addy (1874) LR 9 Ch App 244 Council for the City of the Gold Coast v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135 eSafety Commissioner v X Corp [2024] FCA 499; 303 FCR 354 Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd [2003] NSWSC 851; 59 NSWLR 312 Cases cited: Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 Ooranya Pty Ltd v ISPT Pty Ltd [2018] WASC 256 Smethurst v Commissioner of Police [2020] HCA 14; 272 CLR 177 The Good Living Company Pty Ltd ATF the Warren Duncan Trust No 3 v Kingsmede Pty Ltd [2019] FCA 2170 C Sappideen, P Vines, J Eldridge, P Giliker, P Handford and B McDonald, Fleming's The Law of Torts (11th ed, Lawbook Co, 2024) D Rolph, J Varuhas, P Crossley and M Douglas, Balkin & Davis Law of Torts (6th ed, LexisNexis, 2021) W Gummow, "The In Personam Exception to Torrens Indefeasibility" (2017) 91 Australian Law Journal 549 Division: General Division Registry: New South Wales National Practice Area: Other Federal Jurisdiction Number of paragraphs: 50 Date of hearing: 4 September 2024 Counsel for the applicants: P Braham SC with Q Rares and S Steinhoff Solicitor for the applicants: William Roberts Lawyers Counsel for the first to sixth respondents: The first to sixth respondents did not appear Solicitor for the first to sixth respondents: The first to sixth respondents did not appear Counsel for the seventh to ninth respondents: C Withers SC with B Yin Solicitor for the seventh to ninth respondents: Thomson Geer ORDERS NSD 1174 of 2024 SHASHANK BIST BETWEEN: First Applicant NATALIA BIST Second Applicant CYAN STONE CLYDESDALE ESTATE 1 PTY LTD (ACN 610 208 967) First Respondent AND: CYAN STONE CLYDESDALE ESTATE 2 PTY LTD (ACN 610 209 106) Second Respondent CYAN STONE CLYDESDALE ESTATE 3 PTY LTD (ACN 610 210 494) (and others named in the Schedule) Third Respondent order made by: KENNETT J DATE OF ORDER: 23 september 2024 THE COURT ORDERS THAT: 1. The interlocutory application be dismissed. 2. The applicants pay the costs of the seventh to ninth respondents as agreed or assessed. 3. These reasons be published only to the parties for 72 hours for the purpose of the parties identifying any commercial-in-confidence information that should not be published. 4. This proceeding be referred to the National Operations Registrar for allocation to a docket judge. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KENNETT J: Background 1. On 22 December 2020 the applicants entered into a contract to buy a lot in a new housing development at Marsden Park, NSW (the Clydesdale Development). The vendors were the first to sixth respondents (the vendors). 2. The contract was in the standard form of a contract for the sale and purchase of land in New South Wales but 44 pages of special conditions, plus attachments, were annexed to the standard form. What the applicants were agreeing to purchase was not a parcel of land that existed and could be conveyed to them, but a parcel that was to be created by an as yet unregistered plan of subdivision. Important terms of the contract included the following. 3. Completion was subject to and conditional on the satisfaction of the "Conditions Precedent" (relevantly, registration of the plan of subdivision) (cl 39.2(a)). The vendor was required to use all reasonable endeavours to satisfy that condition (cl 39.2(b)). 4. If the Conditions Precedent were not satisfied on or before the "Sunset Date" (31 December 2024), either party was entitled to rescind the contract (cl 39.2(c)). 5. The purchaser was prohibited from lodging a caveat over any part of what the contract called the "Development Site" until the issue of a certificate of title for the specific lot being purchased ("the Property") (cll 51.1, 51.2). 6. The purchasers acknowledged that the vendors were listed "on title" as bare trustees for the first respondent who was the ultimate beneficial owner of "the land". The purchasers acknowledged that the trustees could transfer the Development Site or the Property to a "Third Party Vendor" (or to the first respondent as beneficiary of the trust) (cl 54.1). The vendor was required to give the purchaser written notice if that occurred (cl 54.2(a)). 7. If notice of a transfer was given, the purchaser: 1. agreed to the transfer of the Property or the Development Site (cl 54.2(b)(i)); 2. agreed to a novation of their rights and obligations to the Third Party Vendor (cl 54.2(b)(ii)) and was required to execute a deed of novation if required to do so by the vendors (cl 54.2(c)); and 3. was bound to accept on completion a transfer of the Property from the Third Party Vendor (cl 54.2(b)(iii)). 8. The purchase price of the Property was $615,000. The applicants paid (in two tranches) a deposit of $61,500. 9. The plan of subdivision has not yet been registered. 10. Some time in or around July or August 2024, the applicants became aware of a rumour that somebody was trying to sell the Property that they had contracted to buy. In August 2024, they made some inquiries and obtained from a real estate agent a price list and a plan showing the Clydesdale Development, in the same form as had been marketed to them but with the lots renumbered. A lot which corresponded exactly to the Property was shown on the plan and was seemingly being offered for sale for $1,080,720. 11. Further inquiries revealed that, on or about 4 June 2024, the vendors had transferred the whole of the land on which the Clydesdale Development was to be built (the Clydesdale land) to the seventh respondent (Astro Fort) for a purchase price of $85.5 million. 12. The applicants commenced this proceeding by an originating application and concise statement filed on 27 August 2024. The proceeding is constituted as a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) on behalf of the applicants and other persons who contracted with the vendors to purchase lots in the Clydesdale Development (group members). 13. The applicants applied on 27 August 2024 to Thawley J, as duty judge, for urgent interlocutory relief to prevent any marketing of, sales of, transfers of or dealings with lots in the Clydesdale Development which group members had contracted to purchase from the vendors. However, the seventh to ninth respondents (the Astro Fort parties) gave an undertaking which allowed that application to be stood over. 14. The application for interlocutory relief came before me, as duty judge, on 4 September 2024. The vendors had been served substantially in accordance with orders made by Thawley J but did not appear. After the hearing, my Chambers was advised that they had gone into voluntary liquidation. 15. By their interlocutory application, the applicants sought injunctions that would prevent the respondents from marketing, selling, transferring or dealing with any lots in the Clydesdale Development that have been "sold" to (ie, that are the subject of contracts entered into with) any of the group members. 16. The applicants modified this position in order to accommodate some of the points raised by the Astro Fort parties. Draft orders annexed to the applicants' written submissions proposed a regime in which: 17. the Astro Fort parties would be enjoined from selling, transferring or dealing with any lots that, to their knowledge, are the subject of contracts with group members; but 18. the order would not prevent selling, transferring or dealing with a lot if it had first been offered for sale to the relevant group member on the same terms as that member's contract with the vendors, and with 1. an assignment of the group member's interest in the deposit already paid (which is held in a solicitor's trust account) in lieu of a cash deposit; and 2. the group member having given the usual undertaking as to damages. 19. An interlocutory injunction was also sought against the vendors, preventing them from disposing of the proceeds of sale of the Clydesdale land. The substantive proceeding 1. The final relief sought (leaving aside costs and ancillary orders) is listed in the concise statement as comprising: 2. specific performance of the contracts for sale and purchase (the sale contracts); 3. declaration of a resulting, constructive or implied trust over the land the subject of those contracts; 4. an order that the NSW Registrar-General register the land to give effect to those contracts; 5. alternatively, equitable damages or equitable compensation; and 6. compensation or damages (including aggravated and exemplary damages) under the Australian Consumer Law (the ACL); and 7. damages in tort. 8. The causes of action relied upon are: 9. entitlement in equity to specific performance of the sale contracts or, alternatively, declarations of trust over the respective lots; 10. unconscionable conduct in contravention of 21 of the ACL, and/or failure to provide services after receiving payment (s 36(4) and 62 of the ACL), giving rise to a claim for damages under s 236 or compensation under s 237; 11. tortious inducement of breach of contract; and 12. conspiracy to injure the group members through the use of unlawful means. proposed interlocutory orders against Astro Fort parties Real issue to be tried 1. The injunction sought against the Astro Fort parties is a traditional interlocutory injunction, to preserve the status quo pending a final hearing. Senior counsel for the applicants therefore accepted that the interlocutory injunction would not be granted unless the applicant established a prima facie case for final injunctive relief, or some other final orders that would vindicate their (asserted) interests in the properties that they and other group members had contracted to purchase. Examples of such orders that might be in contemplation include the declaration of trusts in favour of the group members; an order that the Clydesdale land be transferred back to the vendors (on the footing that they would be bound by their contracts with the group members); or orders that the land be subdivided and lots transferred (on payment of the agreed purchase price) to group members. The claims for specific performance (which would presumably go against the vendors) and for damages or compensation can be put to one side for present purposes. Relief in equity 1. The claim for declarations of trust is probably best understood as asserting constructive trusts; no basis for an implied or resulting trust has been articulated. It obviously faces very significant difficulties. Prominent among these is that, under s 42 of the Real Property Act 1900 (NSW) (the RPA), Astro Fort's title to the relevant land is indefeasible "except in case of fraud" or where one of the express exceptions in s 42 is made out. It is accepted for present purposes that Astro Fort knew or should have known, when it acquired the Clydesdale land, that the vendors had contracted to sell parts of that land (once subdivided) to the group members; however, that falls short of fraud in the relevant sense, even if the group members had interests in the land (see s 43(1) of the RPA). Meanwhile, equitable interests of the kind generated by the first ("knowing receipt") limb of Barnes v Addy (1874) LR 9 Ch App 244 (which seems to be the basis for the asserted trusts) cannot detract from the indefeasible title conferred by s 42: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [192]-[195] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ); Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd [2003] NSWSC 851; 59 NSWLR 312 at [103] (Austin J). The evidence adduced so far does not come close to showing any conduct by Astro Fort that would give rise to one of the "personal equities" that have been recognised in the cases as capable of creating exceptions to indefeasibility. Given the nature of the contractual arrangement described above (which can be assumed to be similar in the case of each of the group members), there is also likely to be some difficulty in identifying any fiduciary duty in whose breach Astro Fort was involved or any trust property received by it; no such duty is pleaded. Senior counsel for the applicants recognised these difficulties and ultimately did not rely on the claim for declarations of trust as a basis for a real issue to be tried. 2. Rather, the applicants contend that there is a prima facie case for: 3. an injunction under s 232 of the ACL (noting s 232(6)(b)), or an order against Astro Fort under s 237 or 239 (combined with s 243(h)), requiring it to execute some form of dealing with the Clydesdale land or parts of it; or 4. an injunction requiring transfer of relevant lots to group members as a form of relief in tort. Claims under the ACL 1. The concise statement alleges unconscionable conduct by all of the respondents. It was put by the applicants in written submissions that Astro Fort contravened (or was involved in a contravention of) s 21(1) of the ACL, which provides as follows. A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person; or … engage in conduct that is, in all the circumstances, unconscionable. 1. "Services" is defined in the ACL to include rights in relation to, and interests in, real property that are or are to be provided, granted or conferred in trade or commerce. It is thus arguable that the contract entered into between the vendors and the applicants was a contract for the "supply" of "services" which (having formed part of a business undertaking) occurred "in trade or commerce" within the meaning of s 21. It is also arguable that the transfer of an interest in property which was to occur pursuant to that contract (assuming it was not rescinded and the plan of subdivision was registered) was a supply of "services" in trade or commerce. The transfer of the Clydesdale land from the vendors to Astro Fort defeated or frustrated the applicants' contractual right to receive that "supply" and had the result that, absent some further dealing, the transfer to them of an interest in property would not occur. Arguably, therefore, any "unconscionable" conduct by Astro Fort in the course of that transaction would be caught by s 21(1) and expose it to the broad range of remedies provided for in ss 232 and 236-239 of the ACL (which include injunctions for the transfer of property under s 232(6)(b) and, under s 243(h), ordering a party to execute an instrument in relation to a transfer of property). Assuming that the contracts signed by other group members were in the same form, the same argument could be made. 2. This argument, however, is inconsistent with the construction of s 51AC of the (then) Trade Practices Act 1974 (Cth) (TPA), the direct predecessor of s 21 of the ACL, adopted by the Full Court in Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 at [114]-[116] (Heerey J, Black CJ and Tamberlin J agreeing) (Monroe Topple). The Court held, in the light of several aspects of s 51AC (including the list of factors relevant to determining unconscionability, which now appears in s 21 of the ACL), that the provision was concerned with unconscionable conduct as between (relevantly here) a "supplier" and a "business consumer"; it was not concerned (as Heerey J put it at [116]) with "the impact of conduct on third parties". This aspect of the reasoning in Monroe Topple has been treated as applicable to s 21 of the ACL: eg The Good Living Company Pty Ltd ATF the Warren Duncan Trust No 3 v Kingsmede Pty Ltd [2019] FCA 2170 at [161]-[162] (Markovic J). Thus, the conduct of Astro Fort in purchasing the Clydesdale land was not itself a contravention of s 21 with respect to the applicants (or the other group members) because there was never any supply of goods or services in contemplation between them. 3. Relief may also be granted under the ACL against a person who is "knowingly concerned in, or a party to" (s 232(1)(e)), or "involved in" (s 237), conduct by someone else that constitutes a contravention of s 21. Being "involved" in a contravention means aiding, abetting, counselling or procuring the relevant contravention; inducing the contravention; or being knowingly concerned in or a party to the contravention (s 2). If the vendors' conduct in selling the Clydesdale land is characterised as "unconscionable" in the relevant sense (which I accept is at least possible, although the express acknowledgement in cl 54 of the contract may point against such a characterisation), it was arguably a contravention of s 21 on the basis that it was conduct "in connection with" supplies of services that they had promised to make to the group members. On that basis it is also possible that Astro Fort could be exposed to an injunction or other order under the ACL, which (subject to a point considered below) could include an order that it transfer lots in the Development, on appropriate conditions, to the applicants and other group members. 4. The applicants have not so far been able to adduce evidence of the dealings between the vendors and Astro Fort or a connection between them that points to Astro Fort's acquisition of the Clydesdale land being other than an arm's length transaction. However, at the time it acquired the Clydesdale land from the vendors, Astro Fort knew (at least) that the vendors had entered into contracts to sell some of the lots in the development. It therefore knew that there were persons to whom the vendors had contractual obligations and that those persons' rights would be adversely affected by the transaction. On this basis there is some prospect of the applicants being able to prove that Astro Fort knew enough about what was going on to be "involved", in a relevant sense, in unconscionable conduct by the vendors. 5. In framing the appropriate relief in this scenario, the Court would clearly be alive to the fact that the group members have so far only paid deposits for their lots and stamp duty (and it is not controversial that these amounts can readily be refunded to them). However, the Court would also be alive to the fact that, absent some further relief, the group members will be denied the benefit of the increase in the value of the land that has occurred since late 2020 (and may be out of pocket in other ways as well), and to the general rule that damages are not regarded as an adequate remedy for a claimant who has lost land or the right to acquire land. 6. The Astro Fort parties also relied on the indefeasibility of Astro Fort's title as a complete answer to any claim under the ACL for orders requiring it to deal with the land (or parts of it) in specific ways. The applicants sought to meet this argument by referring to a suggestion by Professor Gummow that the similar remedial provisions in s 87 of the Competition and Consumer Act 2010 (Cth) (the CCA) might, "by 'covering the field', limit the scope for the in personam doctrine, for example, where the registered proprietor is a trading or financial corporation which acquired its registered title by misleading or deceptive or unconscionable conduct" (W Gummow, "The In Personam Exception to Torrens Indefeasibility" (2017) 91 Australian Law Journal 549 at 559). 7. Professor Gummow's article does not develop this thought. Nor (so far as I have been able to ascertain) has it been taken up in any case where claims under the ACL were met by submissions relying on statutory indefeasibility. The passage quoted above seems on its face to be suggesting that a federal law might exclude the availability of equitable remedies based on the in personam exceptions by covering the same ground. However, it also seems possible in principle (and Professor Gummow may have been suggesting) that, by operation of s 109 of the Constitution, the remedial provisions of the CCA may prevail over s 42 of the RPA (and its analogues in other States) so as to create new, statutory, exceptions to indefeasibility. 8. The answer to this suggestion, at least so far as the ACL is concerned, probably lies in the fact that the text of the ACL (which appears as Schedule 2 to the CCA) is designed to operate both directly as a law of the Commonwealth in the circumstances referred to in s 131 of the CCA (principally, to the conduct of corporations) and as a law of each State or Territory where it is applied by an "application law" (see Part XIAA of the CCA and s 1 of the ACL). It should be taken to have been intended to operate in the same way in both applications, and therefore not to embody any overarching intention to "cover the field" or otherwise displace State legislative regimes. This point is reinforced by s 131C of the CCA, which appears in Part XI (dealing with the application of the ACL as a law of the Commonwealth) and provides (relevantly) as follows. 131C Saving of other laws and remedies (1) This Part is not intended to exclude or limit the concurrent operation of any law, whether written or unwritten, of a State or a Territory. … (4) Except as expressly provided by this Part or the Australian Consumer Law, nothing in this Part or the Australian Consumer Law is taken to limit, restrict or otherwise affect any right or remedy a person would have had if this Part and the Australian Consumer Law had not been enacted. 1. In the face of these provisions, it will be very difficult for the applicants to succeed on a claim for relief under the ACL that includes orders requiring Astro Fort to execute (or not execute) any particular dealings with land that forms part of the Clydesdale land. Although that claim is not conceptually founded on unregistered interests in the land (which is the express concern of s 42 of the RPA), it has that character in substance: it relies on the contractual promises by the vendors in relation to parts of the land and seeks to vindicate those rights by the making of an order directly impinging on Astro Fort's title, based on conduct connected with the acquisition and registration of Astro Fort's interest. It would be based in large part on Astro Fort having had notice of the group members' interests (which s 43 of the RPA expressly excludes from the concept of fraud). This claim would in my view have real prospects of avoiding collision with s 42 only in so far as it worked analogously to one of the "personal equities" which s 42 does not exclude. That, as noted above, would require actual wrongdoing by Astro Fort (rather than mere notice of other interests); and the evidence so far falls well short of establishing such wrongdoing. Claims in tort 1. The applicants submit that an injunction requiring Astro Fort to restore the Clydesdale land to the vendors, or transfer lots in the development to group members on conditions, is an appropriate form of final relief in the event that they succeed on their claims against Astro Fort in tort (for inducing the vendors' breach of contract or conspiracy to injure). They rely on Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142 (Esso Petroleum), where the proprietor of a garage that was subject to a solus tie agreement had been acquired by another company which then procured the transfer of the land to a related entity in order to defeat the agreement. Bridge J, in the Queen's Bench Division, issued a mandatory injunction requiring the land to be transferred back to the original proprietor. His Lordship considered that damages were inadequate as a remedy and that the tortfeasor should be required to undo the consequences of its unlawful actions. Esso Petroleum was referred to in Smethurst v Commissioner of Police [2020] HCA 14; 272 CLR 177 at [256] (Edelman J) as an example of the grant of a mandatory injunction to ameliorate the consequences of a wrong (although his Honour was in the minority in that case on the question whether an injunction should be granted). The applicants also referred to Ooranya Pty Ltd v ISPT Pty Ltd [2018] WASC 256. However, the citation of Esso Petroleum in that case appears in a lengthy extract from one of the parties' submissions (at [42]) rather than in reasoning of the Court. 2. It can be accepted that there are circumstances where an injunction will lie to restrain tortious conduct; and that, therefore, there is no reason in principle why a restorative mandatory injunction cannot be granted requiring the effect of tortious conduct to be reversed (assuming that damages are not an adequate remedy). However, as the Astro Fort parties point out, the authorities relied on by the applicants do not grapple with the effects of statutory indefeasibility of title. The Astro Fort parties submit that a claim for a mandatory injunction requiring transfer of the Clydesdale land, or parts of it, meets the same fate as a result of s 42 of the RPA whether it is based in equity, on the ACL or on causes of action in tort. 3. The relationship between the Court's power to grant injunctive relief as part of the remedy for a claim in tort on the one hand, and statutory indefeasibility of title in Torrens systems on the other, does not seem to have been explored in the case law. Here, rather than a pre-existing but unregistered interest which is said to qualify or detract from the registered proprietor's title, what is asserted is a common law cause of action (based on a civil wrong) that ordinarily sounds in damages. As noted earlier, accepting that a prohibitory injunction might be available to restrain that wrong if sought in time, it may follow that it is possible to grant a restorative mandatory injunction after the event to reverse or mitigate the effects of that wrong. Arguably, this is not a case of asserting competing rights in the land and vindicating them by the issue of an injunction, but rather a case of remedying tortious conduct that has damaged the applicants' contractual rights or economic interests more generally. It is thus possible to see a way in which the applicants' claims in tort might be able to avoid collision with s 42 of the RPA. 4. However, the reason why this is so (ie, that the claims rely on active wrongdoing by Astro Fort and not merely the assertion of prior rights) is also the reason why the claims in tort against the Astro Fort parties, on the present state of the evidence, are weak. Inducing breach of contract 1. An actual breach of a contract is central to this cause of action. In the present case, the applicants have some work to do to establish that there was a breach. As noted above, the terms of the contract between the applicants and the vendors recognised the right of the vendors to transfer the Clydesdale land to another party. There was no promise not to effect such a transfer. There was a requirement for notice to be given (and it seems that no notice was given); however, at least at first blush, this was notice after the event rather than something that conditioned the vendor's right to sell the land. There was also provision for novation, but this (again, at least at first blush) appears to have been at the option of the vendors. Some form of implied term seems to be required in order for the sale of the Clydesdale land, and the consequent frustration of the applicants' (and other group members') expectation, to amount to a breach of the contract. The applicants have not attempted to explain the nature of any such implied term or how it arises. Prima facie, the applicants' right to acquire the lot for which they had paid a deposit was conditional on both the plan of subdivision being registered and the Clydesdale land not having been sold to somebody else prior to completion: if either of these conditions were not met, they could expect only the return of their deposit. 2. The requisite intention on the part of the alleged tortfeasor is also an essential element of the tort. It is sufficient for these purposes to refer to C Sappideen, P Vines, J Eldridge, P Giliker, P Handford and B McDonald, Fleming's The Law of Torts (11th ed, Lawbook Co, 2024) at [28.80] and [28.100], where the following is said. The gist of the tort is the defendant's knowing inducement or procurement of breach, leading to damage to the plaintiff as the innocent contractual party. … All that need be shown is that the defendant acted with the necessary knowledge and intention of procuring a breach of contract. It is not enough that the breach was a natural consequence of the defendant's conduct; the defendant must have intended it. On the other hand, the defendant need not have actually known the precise terms of the contract, or that his object could be accomplished only through its breach. If, turning a blind eye, the defendant persisted with a course of conduct regardless of whether it would involve a breach, the defendant will be treated as if the defendant had knowingly procured it. Indifference is equated with intent. It is otherwise if the defendant acted under a bona fie belief that there was no infringement of contractual rights, for example, after going to the trouble of seeking legal advice, mistaken though it may turn out to be. (Footnotes omitted.) 1. Here, the parties have proceeded on the basis that the Astro Fort parties knew or ought to have known that the land had already been marketed for sale and there were contracts in existence for some of the lots in the development. It is natural to assume that, before agreeing to pay $85.5 million for a large block of land (which was clearly in the course of being developed), Astro Fort made itself aware of the dealings that had occurred. It would be somewhat surprising if Astro Fort had not obtained copies of some of the contracts and taken advice on their effect and significance. However, in the light of the clauses of the applicants' contract mentioned above, it by no means follows that Astro Fort either appreciated that it was about to cause breaches of contract by the vendors or was indifferent to that possibility. There is no evidence as to the state of mind of relevant officers of Astro Fort, and no evidence from which any particular state of mind concerning the contracts between the vendors and the group members can be inferred. Conspiracy 1. The conspiracy claim is articulated by the applicants' concise statement as follows (at [32]). Two or more of the respondents entered into a combination, arrangement, agreement or understanding, a purpose or intention of which was to injure each of the Group Members through the use of unlawful means (being each of the causes of action set out above), and this conspiracy was carried out by way of the concerted action. … 1. As so articulated, the claim appears to be one of an "unlawful act", rather than an unlawful intention (ie, a predominant purpose of harming the applicants) pursued by otherwise lawful means (see eg D Rolph, J Varuhas, P Crossley and M Douglas, Balkin & Davis Law of Torts (6th ed, LexisNexis, 2021) at [21.43] (Balkin & Davis)). The claim has not been explored to any great extent in submissions. However, the following points may be made. 2. The "unlawful means" alleged consists of the other causes of action that have been discussed above. In so far as one of those causes of action arises under the ACL, difficulty arises from Council for the City of the Gold Coast v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135 at 152 (Drummond J), where it was held that conduct proscribed only by the (then) TPA (and not by the general law) was not capable of being sued on as a conspiracy by unlawful means because the Act itself provided specific remedies. 3. In so far as one of those causes of action involves the tort of inducing breach of contract, the problems attending that claim have been discussed above (and if there is a cause of action for inducing breach of contract, it is not clear what conspiracy adds to it). As to the claim for declarations of trust, it is not clear what the relevant "unlawful" conduct is: no breach of a fiduciary duty is alleged, for example. 4. An "unlawful act" conspiracy is committed (Balkin & Davis at [21.55]): … when the defendants, by their agreement, intend to cause financial harm to the plaintiff. To bring about that harm need not be their predominant motive …, but it is not sufficient merely to show that the conspirators' conduct necessarily involved injury to the plaintiff, or that the plaintiff was reasonably contemplated as likely to suffer harm. (Footnotes omitted.) 1. The applicants are currently unable to point to any evidence of the respondents' intention, or evidence from which a distinct intention to cause harm to them (rather than an awareness that the transfer of the Clydesdale land would be adverse to their interests) can be inferred. Conclusion 1. The applicants are not without any prospect of obtaining final relief including some form of order requiring Astro Fort to deal with the land comprising the Clydesdale land in a particular way. However, their claims, where not met by powerful legal arguments, suffer from a lack of any sufficient evidentiary foundation. In these circumstances I do not think there can be said to be a real issue to be tried. Balance of convenience 1. In eSafety Commissioner v X Corp [2024] FCA 499; 303 FCR 354 at [19] I noted that the issues of whether there is a real issue to be tried and where the balance of convenience lies are not always independent of each other, because the strength or weakness of an applicant's case may sometimes be relevant in assessing the balance of convenience. If the view were taken that there is a real issue to be tried because some of the relevant claims for relief are not hopeless, it would be relevant to note – for balance of convenience purposes – that those claims appear on the current state of the evidence to have very modest prospects. 2. The Astro Fort parties rely on two main factors in relation to the balance of convenience. 3. First, although the applicants have offered the usual undertaking as to damages, the impact of the proposed interlocutory orders goes well beyond the specific lot which they contracted with the vendors to purchase. Undertakings are not offered by other group members. The applicants are a married couple of fairly modest means. Their undertaking is obviously insufficient to assure the respondents that all or even a significant proportion of the damage that might be done to their economic interests by the proposed interlocutory relief would be made good. 4. Much but not all of the force has been taken out of this point by the applicants' reformulation of their proposed orders. Pursuant to the revised orders, the Astro Fort parties would be free to sell any lots in the Clydesdale Development in respect of which they have not been made aware of existing contracts. They would also be free to deal with any lot in respect of which there is an existing contract, if the relevant group member did not accept the offer of sale, or otherwise to enter into a contract with the relevant group member. The offer of sale would be at the purchase price previously agreed with the vendors (which is probably significantly less than what the lot would now fetch); but the group member would have to give an undertaking, in effect, to make up the difference in the event that the applicants' claims for final injunctive relief fail. If the group member declined to give that undertaking, Astro Fort would no longer be bound by any interlocutory order in respect of the lot. 5. Astro Fort's main point about the sufficiency of undertakings is now, therefore, that it would be bound to accept undertakings from people about whose financial position it (and the Court) knows nothing. That is not an inconsequential point. However, as to any lot that Astro Fort was prevented from offering for sale on the open market, it would have an undertaking from the purchaser to whom it was constrained to sell that lot. The undertaking would need to be called on only to meet the loss occasioned by going through with a sale at the previously agreed price rather than the current market price. 6. Secondly, Astro Fort adduced evidence of the agreement with a consortium of lenders by which it financed the purchase of the Clydesdale land and the further development work that is needed (the loan agreement). Aspects of the loan agreement are the subject of non-publication orders because of their commercial confidentiality. The short points that arise from it are as follows: 7. Given the size of the facility and the interest rate (which are confidential), Astro Fort is subject to a significant interest burden. Generally, interest is capitalised monthly and payable on the redemption date (which is a fixed date). However, there is provision for early redemption, which Astro Fort obviously has compelling reasons to seek to achieve. There is also provision for additional interest, the terms of which add to the adverse consequences (for Astro Fort) of delay in completing sales. 8. The agreement contains various "milestones" which if not met give rise to "review events", the potential consequences of which include cancellation of any remaining advances and the lenders demanding immediate payment of all outstanding amounts. These milestones include, relevantly, sale of a minimum number of lots by a fixed date for consideration equal to or greater than a "threshold amount", and sale of a minimum number of lots per month (also for consideration equal to or greater than the threshold amount) thereafter. The threshold amount is a specified dollar amount per square metre for each lot. 9. Again, some but not all of the force is taken out of these points by the applicants' reformulation of their proposed orders. 10. As to the accrual of interest, the revised orders would allow contracts for the sale of all lots in the development to be made while the orders remain in force. Some delay may arise in the case of individual lots from the requirement to give group members a right of first refusal, but there is no reason to think that this would be significant. On the other hand, if some delay were to result (leading to Astro Fort having to pay additional interest) Astro Fort would, as I read the proposed orders, only be able to call on the undertaking offered by the applicants themselves. 11. The risk of a review event (which could lead the financiers to demand immediate repayment) arising from the making of the revised orders is less than under the original proposed orders but still significant. It is not apparent that the revised orders would jeopardise Astro Fort's ability to sell the required numbers of lots. However, it is common ground that the price per square metre at which the applicants contracted to buy their lot from the vendors is significantly below the threshold amount; and it can readily be inferred that the same is true for the other group members. A significant number of group members taking up the offer to buy their lots from Astro Fort at the original price would mean that a significant proportion of Astro Fort's sales would be for consideration below the threshold amount, and make it unlikely to meet relevant milestones. 12. It can be assumed that Astro Fort would not be able to meet a demand for immediate repayment. The loan is secured by a mortgage of the Clydesdale land. As senior counsel for Astro Fort explained, the existence of these proceedings (in which Astro Fort's title to the land is under attack) would give the financiers a strong incentive to exercise their powers under the loan agreement and their mortgagee's power of sale in order to protect their own position. The claims now being advanced against Astro Fort would not be maintainable against a new registered proprietor unconnected to any potential wrongdoing engaged in by any of the respondents. Nor, at least prima facie, would a new registered proprietor be bound by any contracts that might have been entered into between Astro Fort and group members as envisaged by the proposed orders. The group members would be even further away from being able to establish a right to have transferred to them the interests in land which they sought to acquire. 13. It is therefore reasonably likely that the making of the proposed orders (including the revised version) would have catastrophic consequences for Astro Fort (which could not be adequately compensated for by the applicants' undertaking) and would be counterproductive from the group members' point of view. This means that, even if I had come to a more favourable view of the applicants' prospects of obtaining final injunctive relief, the balance of convenience would weigh against the grant of the proposed interlocutory orders. proposed interlocutory order against the vendors 1. After being notified that the vendors were being wound up, my Chambers inquired of the applicants whether they pressed their application for injunctive relief against the vendors (see s 500(2) of the Corporations Act 2001 (Cth)). The applicants no longer press for that relief. disposition 1. The interlocutory application should be dismissed with costs. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. Associate: Dated: 23 September 2024 SCHEDULE OF PARTIES NSD 1174 of 2024 Respondents Fourth Respondent CYAN STONE CLYDESDALE PTY LTD (ACN 610 008 172) Fifth Respondent CYAN STONE CLYDESDALE DEVELOPMENT PTY LTD (ACN 610 008 467) Sixth Respondent CYAN STONE CLYDESDALE HOLDINGS PTY LTD (ACN 610 008 510) Seventh Respondent ASTRO FORT CLYDESDALE PTY LTD (ACN 675 838 507) Eighth Respondent ASTRO FORT HOLDINGS PTY LTD (ACN 675 830 270) Ninth Respondent MARVIA JONCAS HOLDINGS PTY LTD (ACN 671 948 502)