Legal Practice Act 2003, s 225, s 231(3), (4)

Legal Practitioners Act 1893, s 62

Transfer of Land Act 1893

Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [1981] HCA 75; (1981) 146 CLR 249

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Bullock v Federated Furnishing Trades Society of Australasia (No 1) [1985] FCA 19; (1985) 5 FCR 464

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148

Cayne v Global Natural Resources Plc [1984] 1 All ER 225

Evans Marshall & Co Ltd v Bertola SA [1973] 1 All ER 992; [1973] 1 WLR 349

Holborow v Macdonald Rudder (A Firm) [2001] WASCA 91

Pindan Pty Ltd v Sunny's Redevelopment & Ors [2001] WASC 104

Re Nelson and the Legal Practitioner's Act (1970) 106 ACTR 1; 105 FLR 137

Re Peggoty, unreported; SCt of Qld (Derrington J); Library No 256 of 1981; 5 April 1991

State of Queensland v Australian Telecommunications Commission [1985] HCA 25; (1985) 59 ALR 243

State Transport Authority v Apex Quarries Ltd [1988] VicRp 26; [1988] VR 187

Westminster Brymbo Coal & Coke Co v Clapton (1867) 36 LJ Ch 476

Woodward v Page, unreported; Eq Div SCt of NSW (McLelland J); Library No 3329 of 1989; 20 July 1989

Kirschbaum v "Our Voices" Publishing Company & Ors [1972] 1 OR 737

Macedonian Society of Western Australia (Inc) (Receiver and Manager appointed) v St George Bank Ltd [2003] WASC 17

Re Gyhon; Allen v Taylor (1885) 29 Ch 834

1 COMMISSIONER MCKERRACHER QC: This is the plaintiff's application for urgent injunctive relief.

2 By a statement of claim dated 7 April 2005 the plaintiff claims against the first defendant declaratory and injunctive relief, damages and various other remedies.

3 The second defendant has played no part in these proceedings.

4 The relief sought in the application was directed to two principle issues, namely, removal of a caveat over certain land in Northbridge in Perth ("the Northbridge land") as well as a restraint from lodging further such caveats and, secondly, an order that the first defendant, a solicitor, do, effectively forthwith account for all monies that he has had, received and paid on the plaintiff's behalf. The accounting sought related to professional services as well as to commercial activities. Various ancillary orders have been sought to facilitate those two main orders. An undertaking as to damages in the conventional form was proffered.

5 Sizer was not joined in the proceedings and there was no direct evidence from it.

6 The caveat aspects were not pursued under the regime provided for in Pt V of the Transfer of Land Act 1893 ("the TLA").

7 The statement of claim pleads the plaintiff's engagement of the first defendant in his professional capacity in 2002 in relation to negotiations and advice concerning the Northbridge land. Obligations in relation to the retainer were pleaded as was a Deed of Charge executed by the plaintiff on 28 May 2002 to secure payment of professional fees due to the first defendant. The plaintiff contends that in breach of his fiduciary duties the first defendant failed to advise the plaintiff before it executed that charge ("the Thorpe charge") as to the effect of it and that the plaintiff should obtain independent legal advice in relation to it.

8 There are also pleadings relating to work carried out in accordance with the Northbridge land. One feature of that work was said to be negotiations conducted with Sizer Developments Pty Ltd ("Sizer"). The first defendant it is said, advised the plaintiff to enter into certain agreements including a deed with Sizer and others dated 29 November 2002 ("the Sizer deed"). The Sizer deed was for the joint development of the Northbridge land. The effect of the Sizer deed was that Sizer would construct a block of apartments known as "Caledonia" on the Northbridge land, sell the resulting strata units, would underwrite finance costs and all other agreed expenses, make certain payments in advance to or at Aaronisle's direction and after deduction of the agreed expenses would pay Aaronisle one half of the net proceeds from the sale of the strata units.

9 The Sizer deed provided that Sizer would hold the Northbridge land on trust for the plaintiff subject to terms. Clause 5.2 of the Sizer deed acknowledged that "Aaronisle and Gray covenant that there are no other parties who are entitled to assert any interest or claim in respect of the land". "Gray" is Mr Clark Gray, the sole director of the plaintiff. The plaintiff asserts that in reliance on the first defendant's advice the plaintiff executed the Sizer deed.

10 The plaintiff argues that if the Thorpe charge was of any force or effect, which it denies, then the first defendant was in breach of his fiduciary duties by failing to advise the plaintiff that it was not in a position to execute the Sizer deed by virtue of the Thorpe charge. It is pleaded that the first defendant is also now estopped from relying on the Thorpe charge by virtue of the content of cl 5.2 of the Sizer deed and the circumstances into which it was entered.

11 On 11 March 2005 the first defendant lodged a caveat (the "first caveat") with the second defendant claiming an interest in the Northbridge land under the Thorpe charge. By reason of the Northbridge land being "subject to dealing", pending the second defendant's determination as to whether the caveat should be accepted for registration, Sizer was unable to complete the sale of certain Caledonia strata units until the first defendant withdrew the first caveat from the dealing on or about 22 March 2005. The plaintiff claims to have suffered loss and damage as a result. It also now wants a replacement caveat removed and a restraint on the lodging of any further caveats under the Thorpe charge against the Northbridge land. (The first defendant made it clear at the hearing that he had lodged a further caveat ("the second caveat") after he had withdrawn the first caveat.) The second caveat I was informed was also lodged in respect of the rights pursuant to the Thorpe charge.

12 As a separate complaint, the plaintiff also pleads in considerable detail, a breach of the first defendant's duty to account to the plaintiff in relation to a project known as the Maylands project. The Maylands project involved the plaintiff and the first defendant and one Gerardus Vile agreeing to buy a property comprising 16 residential strata units in Maylands and developing them for sale. The history of the payment of the deposit, the agreements between the parties, the development and sale of units is pleaded in detail. Also pleaded, are loans advanced by the first defendant to Gray between December 2002 and July 2003 and an agreement under which the plaintiff authorised the first defendant to deduct the value of the loans he had advanced to Gray from the proceeds of the sale of the plaintiff's allocated units in the Maylands project. Extensive breaches on the part of the first defendant are pleaded both in relation to breach of contract and a failure to account. The plaintiff contends that it has suffered loss and damage to amount of approximately $250,000 as a result of those breaches.

13 The third general area relates to professional fees. The plaintiff points to payments made to the first defendant in the sum of $127,969 between January 2002 and January 2005 for professional services, in respect of which it is said the first defendant had rendered no bills and accordingly asserts his representations to the plaintiff that it was obliged to pay him those sums was misleading and deceptive and in breach of s 10 of the Fair Trading Act 1987. In further breach of the retainer and the fiduciary duties, it is pleaded that the first defendant failed to render any bills for his professional services to the plaintiff until 25 February 2005 on which date he delivered lump sum bills to the plaintiff for $241,847.04. It is pleaded that the first defendant has failed to provide itemisation in the manner contemplated by s 231(3) of the Legal Practice Act 2003.

14 By affidavit sworn on 7 April 2005, Mr Clark Gray confirmed many of the matters pleaded in the statement of claim together with various other background facts. In particular, he swore to the fact that the first defendant demanded that Mr Gray in his capacity as the plaintiff's director execute the Thorpe charge which he did.

15 He expanded on the damage suffered at the time of lodging the first caveat and the damage that the plaintiff would suffer if further caveats were lodged or not withdrawn.

2. settlement of 3 "chalk line" apartments valued at approximately $900,000 was imminent;

3. between now and July 2005 contracts for a further 10 apartments valued at approximately $4,000,000 were due for completion;

4. Sizer was making every effort to sell the remaining 13 apartments in the complex which, if sold, would result in sales to the further value of about $5.2 million;

5. under the terms of the sales contract Sizer was obliged to give clear title to the purchasers at settlement;

6. no sales contract could be completed where the relevant certificate of title was subject to a caveat or subject to a dealing;

7. Sizer was unable to complete the sale of certain Caledonia strata units while the Northbridge land was "subject to dealing" because the first defendant had lodged the caveat notwithstanding that he withdrew it before it was registered;

8. Sizer's expenses, including interest and other holding costs, would increase if sales and settlement were delayed for any reason;

9. if Sizer were unable to complete the contracts it will be exposed to claims from the purchasers ranging from penalty interest to damages for repudiation which could result in substantial losses; and

10. Sizer estimated that the plaintiff's share of the Northbridge profits at this stage was likely to be about $400,000 but that amount would be adversely affected if its expenses increase or sales cannot be completed for any reason.

17 The plaintiff also pointed to those matters in the context of its assertion as to the urgency of the relief which it sought.

18 The belief held by Mr Gray as to those matters arose from information he had received from the General Manager of Sizer, a Mr Bennett. As I have said, there was no direct evidence from Sizer, the registered proprietor of the Northbridge land and it was not joined as a party.

19 In the context of the Maylands project, Mr Gray outlined in detail the contractual arrangements between the various parties in a form similar to the statement of claim and in the same way gave evidence of the alleged failure on the part of the first defendant to account for the funds received pursuant to the Maylands project.

20 He also swore that he had been informed by his accountant that the plaintiff's share of the Maylands' profit was likely to be in the order of $250,000, but without access to information he was unable to establish what monies were owed by the first defendant to the plaintiff or vice versa. He was also unable to complete the plaintiff's accounts of financial statements for 2003 and 2004, income tax returns, business activity statements or to determine the quantum of its GST liability and the GST contribution to be paid by the first defendant.

21 The first defendant denied he had agreed that the plaintiff could pay its legal fees from profits from the development of the Northbridge land. He swore to the fact that he initially rendered accounts to the plaintiff from time to time and they were paid. He produced copies of accounts that were rendered and on which payment was made. There were five Supreme Court and one District Court actions in which the plaintiff was involved or in which it was interested, in connection with the Northbridge land. This accounted for the high level of fees which had been generated.

22 In the context of the Thorpe charge, although the plaintiff had paid for legal accounts in 2000/2001 and 2002, early in 2002 Mr Gray told him that the plaintiff would not be able to immediately pay for ongoing legal fees.

23 The first defendant said that in or about April 2002 he had drawn another charge in respect of his claim to fees from work done on a development for the plaintiff in Scarborough. He says he showed that charge to Mr Gray and told him that he, the first defendant, had a professional obligation to inform Mr Gray and the plaintiff that they had the right to obtain independent legal advice before granting any charge.

24 The first defendant says that Mr Gray told him that neither he nor the plaintiff required independent legal advice and then executed the charge. The first defendant then lodged the caveat against the titles to the Scarborough land to protect his charge and these caveats were eventually withdrawn to enable settlement to proceed on two of the Scarborough units on payment to him of $10,000 from each unit in part satisfaction of one of his accounts.

25 The first defendant says that by May 2002 he knew therefore that Mr Gray was familiar with the procedure for charging real estate and that nevertheless after drafting the Thorpe charge he "reminded" Mr Gray that he had to inform him that he and the plaintiff could seek independent advice before granting the charge. He says that Mr Gray again told him that neither he nor the plaintiff required independent advice and he executed the charge. The plaintiff's execution of the charge according to the first defendant was quite willing and was not pursuant to any demand by the first defendant.

26 It is common ground that the Thorpe charge was executed on 28 May 2002 by the plaintiff. The document is stamped and recites that the plaintiff had instructed the first defendant to act on its behalf in respect of legal matters, that the first defendant had provided services to the company from time to time, the company wished to continue to instruct the first defendant; the first defendant had agreed to continue to act, conditional on the company charging its interest in the Newcastle land with payment of the first defendant's legal costs. It provides:

"In consideration of Thorpe continuing to act for the Company, the Company hereby charges its interest in the [Northbridge] land with payment of past and future legal costs and authorises the lodging of the Caveat to protect Thorpe's interest in the [Northbridge] land."

27 The first defendant accepted that he provided advice to the plaintiff from time to time in relation to negotiations with Sizer but denies that he advised the plaintiff in any relevant sense to enter into the Sizer deed.

28 He also contended that Sizer knew that he, the first defendant, had been granted a charge by the plaintiff because the first defendant had lodged a caveat to protect his interests in the Northbridge land in the middle of 2002 and that caveat was the subject of discussion at meetings attended by Mr Bennett of Sizer and Sizer's solicitors.

29 In relation to the Maylands project, the first defendant disputed much of Mr Gray's account. He also said that in October 2003 he provided Mr Gray with a schedule of all monies expended on the refurbishment and monies loaned to the plaintiff and annexed a copy of that schedule. He said that at no stage did the plaintiff or Mr Gray take any issue with the content of the schedule. He also denied refusing to provide statements to the plaintiff's accountant as asserted on information and belief by Mr Gray.

30 The first defendant annexed the actual document executed by the parties on 14 February 2003 in relation to the Maylands project ("the Maylands deed"). The first defendant acknowledged that he received monies at settlement as a joint venturer and said that he disbursed them pursuant to the terms of the Maylands deed, but in respect of the plaintiff's lots prior to each settlement he said he actually discussed with Mr Gray the disbursement of monies to be received.

31 After the issue of the proceedings, the first defendant provided Mr Gray with a further copy of a lengthy schedule of expenditure on the Maylands project as well as a schedule of further monies advanced to Mr Gray and/or the plaintiff. He annexed all those documents. The schedule of expenditure which the first defendant says was first provided in 2003, and a copy of which was recently provided to Mr Gray again, runs to some 183 items of expenditure by cheque, cash or credit card which items have been variously allocated either to Mr Gray or to the Maylands project. There were some errors in it which were referred to in a memorandum from the first defendant to Mr Gray dated 13 April 2005 which alluded to those errors and corrected the total paid out by the first defendant to Mr Gray and Aaronisle under the 2003 schedule as being $283,873.31. The first schedule also recorded a total expenditure at Maylands in the sum of $366,202.31.

32 The 13 April memorandum also attached another list showing additional expenditure for Mr Gray or the plaintiff on various occasions in 2003 between May and December of that year totalling a further $208,006.89.

33 The first defendant swore to the fact that he did not intend to prevent settlement of any of the Northbridge units. He had offered on a number of occasions to agree a means of protecting his claim to an interest in the proceeds of Northbridge, however, the plaintiff had declined to negotiate. He swore to the fact that he was prepared to enter into an arrangement to enable settlements to proceed as long as his claim and its priority was not affected.

34 When this summons first returned before me the first defendant gave the same undertaking. It was rejected by counsel for the plaintiff, Mr Birman. The undertaking was repeated by senior counsel for the first defendant, Mr Gilmour QC, when the matter was argued before me on 22 April. Again, counsel for the plaintiff declined to accept that offer which he regarded as being unsatisfactory. He submitted that the manner in which the plaintiff's minute for relief had been framed provided mutually adequate protection.

35 The manner in which the plaintiff's minute was framed involved a further undertaking beyond the plaintiff's undertaking as to damages. The plaintiff undertook that it would direct Sizer to hold on trust all monies payable by Sizer to the plaintiff in respect of the Northbridge development. Senior counsel for the first defendant opposed an order in such terms, on the basis that there was an admitted relationship of trust between the plaintiff and Sizer. It was said that Sizer holding the funds would, in the circumstances, be in effect similar to the plaintiff holding the funds. The first defendant would be dependent upon Sizer and/or the plaintiff agreeing to the first defendant's legal costs being due and payable. Given that the first defendant had a prima facie legitimate charge in respect of his fees and an entitlement to lodge the caveat, there was no basis, it was submitted, for his legal and equitable entitlement to be put at risk in the way contended for by the plaintiff.

36 It is clear that there were many issues of fact very much in dispute. In a second affidavit of Mr Gray sworn in reply to the affidavit of the first defendant, Mr Gray deposed to the fact that neither he nor the plaintiff had ever received the original bills or copies of the bills annexed to the first defendant's affidavit and relating to the period 200, 2001 and 2002. He also denied ever having paid the first defendant in any way in relation to those bills and never authorising the first defendant to deduct monies held on trust for such payment.

37 Mr Birman for the plaintiff urged me to conclude that the affidavits and offers from the first defendant were unreliable and disingenuous. Particularly in the context of an accounting, he took me to alleged inconsistencies of past conduct compared with recent or proposed actions.

38 In an application of this nature it was neither appropriate nor possible for me to reach any conclusions on the basis of affidavit evidence as to bona fides in the manner pressed upon me.

39 Because the plaintiff chose to proceed, in the interests of urgency, by way of injunctive relief, rather than by the regime under Pt V of the TLA, it is the cases dealing with injunctions that establish the relevant tests. It is clear from those that an applicant for interlocutory injunctive relief must first satisfy the court that the claim is not frivolous or vexatious and in other words that there is a serious question to be tried: Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153. This test is applicable to the application to restrain the lodgment or registration of further caveats pursuant to the Thorpe charge.

40 If common law damages will be an adequate remedy and the defendant will be able to pay them, an interlocutory injunction should not normally be granted: Castlemaine Tooheys at 153 and American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 at 408. That inquiry may also be framed as whether it is just in all the circumstances that the plaintiff should be confined to that remedy: Evans Marshall & Co Ltd v Bertola SA [1973] 1 All ER 992 at 1005; [1973] 1 WLR 349 at 379; State Transport Authority v Apex Quarries Ltd [1988] VicRp 26; [1988] VR 187 at 193.

41 If the applicant has established that there is a serious question to be tried and that damages is not an appropriate remedy, it is necessary then to address the balance of convenience. This analysis has also been described as the balance of the risk of doing an injustice: Cayne v Global Natural Resources Plc [1984] 1 All ER 225 at 237.

42 The serious question to be tried condition and the balance of convenience are not independent of each other. In Castlemaine Tooheys at 154 Mason A-CJ (as he then was) pointed out that the degree of likelihood of success is a factor related to the balance of convenience. The two questions are not independent of each other and an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even, but a claim of less strength which nevertheless raises a serious question to be tried may attract interlocutory relief where there is a marked balance of convenience in favour of it: Bullock v Federated Furnishing Trades Society of Australasia (No 1) [1985] FCA 19; (1985) 5 FCR 464 at 472.

43 To the extent that an order was sought compelling the first defendant to withdraw the second (and any caveat), the plaintiff was in effect seeking a mandatory injunction.

44 In the case of a mandatory injunction the plaintiff is generally required to demonstrate a high probability of success in its claim: State of Queensland v Australian Telecommunications Commission [1985] HCA 25; (1985) 59 ALR 243 at 245. Additionally, the plaintiff must show that irreparable damage will be suffered unless it is granted: Westminster Brymbo Coal & Coke Co v Clapton (1867) 36 LJ Ch 476 at 478. It follows that the necessary test to remove the caveat would be higher than the test for restraining the lodgement of a further caveat. This, even though in either case the argument as to an alleged breach of fiduciary duty is the same. But in both instances there will be balance of convenience considerations to which I will come shortly.

45 It was asserted that the Thorpe charge did not on its face create a caveatable interest because the terms "Thorpe's legal costs" and "payment of past and future legal costs" were undefined and ambiguous and should therefore be interpreted against the first defendant. I am not persuaded as to the strength of this submission. Taking the deed on its face, it was clearly a deed between the plaintiff and the first defendant in relation to presently owing and future legal fees. Given the deed was to protect in part future fees, clearly those fees were not known at the stage of its execution and could not be itemised. I do not consider that it is arguable that the deed suffers from uncertainty.

46 Additionally, it was asserted for the plaintiff that the first defendant is estopped from relying on the Thorpe charge because of his failure to advise the plaintiff that it should not execute the Sizer deed because of the content of cl 5.2 by which the plaintiff and Mr Gray covenanted that no other parties were entitled to assert any interest or claim in respect of the land. The difficulty with this submission is that the Sizer deed was prepared by another firm of solicitors. While there is no denial on the part of the first defendant that he did not so advise the plaintiff or Mr Gray, the first defendant has denied that he gave any relevant advice in relation to the content of the Sizer deed. He is not a signatory to the deed. Mr Gray does not depose to the fact that the first defendant was given the opportunity to examine the deed in detail and to consider all aspects of it. The first defendant's denial was not taken any further in the affidavit in reply by Mr Gray. It is possible that cl 5.2 was simply overlooked. I do not consider that there is a high probability of success of the estoppel argument in relation to the Sizer deed. Further, while I would accept that the point is arguable, it is in my view a weak argument for the reasons stated.

47 As far as the probability of success is concerned in relation to the alleged breach of fiduciary duty regarding the Thorpe charge, there is no doubt that a legal practitioner in this State is entitled to secure payment of fees and disbursements both present and future.

48 This is now reflected in the Legal Practice Act 2003, s 225. In the statute that was applicable at the time of execution of the Thorpe charge (the Legal Practitioners Act 1893) the provision was s 62. These provisions have been necessary to overcome the common law prohibition on such a charge being applicable to future services as distinct from costs already due. The legislative provisions in this State differ slightly from corresponding provisions in other States.

49 In many circumstances it may be necessary that a lawyer advises, indeed insists that his or her client do obtain independent legal advice before security is given but in my view there is no universally applicable rule. It will depend upon the nature of the security, the circumstances in which it is procured, the knowledge and experience of the client and no doubt other factors. (See for example Re Nelson and the Legal Practitioner's Act (1970) 106 ACTR 1; 105 FLR 137.) Whilst it may be prudent to so insist, I am not persuaded that in the circumstances of this case as they are presently known and assuming the presently conflicting evidence on this point is found in favour of the plaintiff at trial, that the plaintiff has demonstrated a high probability of success in its claim of a breach of duty. Given that the Thorpe charge reflects a statutory entitlement and given the general practice for solicitors to receive money into a trust account to secure payment of fees and given that solicitors also have a legal right to a lien in respect of their fees, on the face of the evidence, as it is at the moment, I do not consider that the plaintiff has a high probability of success on this aspect of the claim.

50 I do accept however that if all the facts asserted by the plaintiff are assumed for present purposes to be correct, it has an arguable case (Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153), but again, not one that could be considered to be a strong arguable case.

51 In relation to the application for an order that the first defendant should account immediately, it is common ground that the first defendant is a party required to account both in relation to the Maylands project and for his professional fees. On an appropriate case the court may exercise its discretion to order an account on a summary basis (Rules of the Supreme Court, O 45 r 2): Holborow v Macdonald Rudder (A Firm) [2001] WASCA 91.

52 The plaintiff contended that there would be no prejudice to the first defendant in giving the sort of accounting it seeks and that he should have prepared it months ago. It is said the plaintiff will be prejudiced and will continue to be prejudiced by its inability to attend to its affairs and, if necessary, to prosecute actions against the first defendant for damages for so long as he is permitted to avoid his obligations.

53 As to summarily ordering an accounting in relation to the Maylands project, it is clear from what the Full Court said in Holborow (supra) at [7] that the summary remedy under O 45 is appropriate only in certain situations:

"If it appears in the return of the summons that there is a dispute as to whether the plaintiff is entitled to a decree for the taking of accounts, it is inappropriate to make a summary order: Cullen v Steen [1932] St R Qd 192 at 197; Hutchings v Snowden (1897) 18 ALT 268."

And as the Full Court held in that case as soon as it appeared that there was an arguable case that the accounting party had already accounted, the court cannot fail to be satisfied that there is in terms of O 45 r 1(3) "some preliminary question to be tried".

54 It is clear in this case that there is a real dispute. The first defendant contends that he has accounted. On the first defendant's case it has provided to the plaintiff settlement statements for the sale of those units in respect of which the plaintiff had an interest and it has rendered extensive statements concerning expenditure in connection with the Maylands project. That at least is sufficient in my view to conclude that there is a preliminary issue to be decided as to whether or not the first defendant has in fact accounted. It is clear at that point on Holborow (supra) the court cannot fail to be satisfied that there is a preliminary question to be tried. For those reasons I do not consider this is an appropriate situation for the ordering of accounts to be taken on a summary basis.

55 The plaintiff also seeks an account in relation to the first defendant's legal fees. The plaintiff points to the inadequate nature of the lump sum bills and suggests that the undertakings or assurances given by the first defendant that he will itemise them are disingenuous. It is asserted that the lump sum bills are of no force and effect pursuant to the provisions of s 231(4) of the Legal Practice Act 2003 because the first defendant has failed, within the time allowed for by the Act under s 233, to provide detailed bills in lieu of the lump sum bills. However, events have overtaken this part of the application as the plaintiff has now exercised its right to have the lump sum bills taxed in this Court. The bills have been lodged with the Court and I am told the taxation is proceeding. That being so, particularly insofar as the obligation to account for legal fees is concerned, there seems no point in requiring an account of that nature when the plaintiff is quite properly exercising its right to have the exercise carried out by an officer of this Court. I have also been asked by the plaintiff to make an order that the taxation be expedited, but that is a matter that is in the hands of the taxing officers. It is inappropriate that I should interfere in that way.

56 In this application it appears that the factors going to the plaintiff's balance of convenience arguments were also relevant to the question of whether the plaintiff should, in all the circumstances, be confined in its remedy to a claim in damages. I will consider those factors and would not conclude before doing so that the plaintiff should be confined to a claim in damages.

57 I have referred above to the factors on which the plaintiff relies to demonstrate the urgency of the relief sought by this application.

58 In relation to the disruption of sales, the only evidence is on information and belief in these terms: "no sales contracts can be completed where the relevant certificate of title is subject to a caveat or is subject to dealing". The expression "no sales contracts can be completed" (on information and belief) is rather equivocal. If it means that settlement cannot occur then that is obvious and is the purpose of lodging a caveat. But there is no acceptable evidence that an offeror would not sign a binding offer to purchase a unit. Indeed the opposite has been the experience.

59 The evidence is that to date the first defendant has co-operated to permit a settlement to take place for part of the Northbridge land. I do not find the evidence that settlements could not proceed at all as being compelling.

60 Moreover, on repeated occasions the first defendant has offered to enter into some suitable arrangement which can protect his interests while at the same time permitting settlements to occur. Such offers appear to me to have been rejected completely.

61 The alternative proposal put by the plaintiff in the draft minute is not in my view one which the first defendant should be required to accept and is not one which I am prepared to order. The first defendant is entitled to protect his entitlement to legal fees. Precisely what that entitlement is, is now the subject of taxation in this Court and it will doubtless be in the interests of the plaintiff to pursue that taxation of costs as quickly as possible.

62 Alternatively, it is in the plaintiff's interests to negotiate an agreement with the first defendant under which the caveat or caveats will be lifted to permit sales to occur. This is a mechanism which has been judicially recognised on occasions, particularly where the relief sought is pursuant to statutory provisions: Pindan Pty Ltd v Sunny's Redevelopment & Ors [2001] WASC 104 at [22]; Re Peggoty, unreported; SCt of Qld (Derrington J); Library No 256 of 1981; 5 April 1991; and Woodward v Page, unreported; Eq Div SCt of NSW (McLelland J); Library No 3329 of 1989; 20 July 1989.

63 Senior counsel for the first defendant has made it clear that the first defendant remains willing to enter into an arrangement which will enable units to be sold providing his position is protected.

64 I am firmly of the view that the balance of convenience does not favour injunctive relief and I will not grant it.

65 Finally, it was submitted for the first defendant that the plaintiff's undertaking as to damages was not adequate. Reliance was placed on the uncontradicted evidence appearing in the first defendant's affidavit of 20 April, in the following terms:

"I understand from what Gray has told me that Aaronisle may be a trustee of a discretionary trust for Gray's sole benefit. From my knowledge of Aaronisle I believe the company to be insolvent. If anything - from the time Gray said Aaronisle had no money referred to at paragraph 7 of Gray's affidavit - Aaronisle's assets have reduced and its liabilities increased. Gray has told me that Aaronisle owes money to the Australia Taxation Office for assessments already issued and there is GST and income tax payable in respect of Maylands."

66 To give meaning to that paragraph I refer to par 7 of the affidavit of Mr Gray, which reads:

"I did not question or dispute these estimates at the time because Aaronisle was not able to pay Thorpe any monies until it received the profits from the Northbridge land."

67 The plaintiff has objected to part of par 19 of the first defendant's affidavit and I have little doubt that, in part, the objection has merit. Certainly I would not allow the statement of belief that the plaintiff is insolvent. The statements as to amounts due in respect of income tax or capital gains tax are also too vague to be of real assistance. The plaintiff, through counsel, has offered to provide an undertaking on behalf of the plaintiff to be given by Mr Gray himself. Senior counsel for the first defendant has indicated that he would require to be satisfied (on oath) as to the value of such an undertaking.

68 The giving of an undertaking as to damages is a very important, if not essential, means of preventing injustice before the rights of parties have been finally determined: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [1981] HCA 75; (1981) 146 CLR 249 at 311. Were I inclined to grant the relief the plaintiff seeks or any relief, I would have afforded the plaintiff the opportunity to satisfy me that an undertaking from Mr Gray would be adequate in the circumstances. That course is unnecessary as I am not prepared to grant the relief sought by the plaintiff and accordingly will dismiss the application.