WESTGEM INVESTMENTS PTY LTD (RECEIVERS AND MANAGERS) (ADMINISTRATOR APPOINTED) -v- SARACEN PROJECT MANAGEMENT PTY LTD [No 2] [2012] WASC 358 (26 September 2012)

4 Mr Saraceni caused an administrator (the Administrator) to be appointed to Westgem immediately following the apparent appointment of the Receivers (affidavit of Mr Saraceni sworn on 14 February 2011, par 19 and attachment 'LS 13'). The defendants contended that any charge created by the Deed was void as against the Administrator by reason of s 266 Corporations Act 2001 (Cth).

5 On 10 January 2011, an amount of $1,330,000 was transferred from a bank account operated by Westgem (Westgem's general account) to the first defendant (Saracen). Subsequently, Saracen remitted $20,000 to Westgem, leaving a balance of $1,310,000 (the Disputed Amount). The source of the funds transferred to Saracen was a refund of GST tax input credits paid by the Australian Taxation Office (ATO) to Westgem.

6 The plaintiffs commenced these proceedings seeking a declaration that Saracen held the Disputed Amount on a constructive trust for BankWest and for consequential relief. They subsequently applied for interlocutory injunctions restraining the defendants from dealing with the Disputed Amount and requiring them to do all things reasonably necessary to cause Saracen to transfer the Disputed Amount to a nominated bank account standing in the name of Westgem and held with Bankwest (referred to in these reasons as the 'GST Account'). The application was adjourned on an undertaking by Saracen to transfer the Disputed Amount to the trust account of its solicitors to be held until further order of the court. However, a number of the issues that had been raised in argument on the application for interlocutory relief concerned the effect of the Deed and the validity of the appointment of the Receivers.

7 Mr Saraceni and Saracen commenced proceedings (COR 22 of 2011) against the Receivers and BOSI Security seeking declarations that the Deed was ineffective to charge any property of Westgem; that the appointment of the Receivers was not a valid and effective appointment to the property of Westgem and that any charge created by the Deed was void as against the Administrator. Those proceedings were commenced shortly after these proceedings had been initiated.

8 I held in Saraceni v Mentha [2012] WASC 336 that the Deed charged all of the assets and undertaking of Westgem, alternatively that the Deed should be rectified so that it had that effect. I further held that the Receivers had been validly appointed and that the charge created by the Deed (the Charge) was not void as against the Administrator under s 266 of the Corporations Act. Those findings have disposed of a number of matters raised in these proceedings.

9 The remaining issues to be determined on the plaintiffs' application for interlocutory relief concerned whether:

(a) the plaintiffs had established a prima facie case that the Receivers were entitled to recover the Disputed Amount on any one of the several grounds summarised below;

(b) refunds of GST input tax credits (the source of the funds transferred by Westgem to Saracen) were caught by the Charge; and

(c) the balance of convenience favoured the grant of an injunction requiring Saracen to pay the Disputed Amount into the GST Account.

10 The grounds relied on by the plaintiffs to allege that Saracen was obliged to disgorge the Disputed Amount were, in summary, that:

(a) Mr Saraceni breached his duty as the director of Westgem in causing the Disputed Amount to be transferred from Westgem's general account to Saracen. He acted in a position of conflict; alternatively, he caused a transfer to be made that he knew was not authorised. Saracen received the Disputed Amount with knowledge of Mr Saraceni's breach of duty (plaintiffs' outline of submissions, pars 32 -36).

(b) The transfer of Disputed Amount from Westgem's general account to Saracen was unauthorised. Westgem's authority to deal with those funds was limited by the RFA. Saracen received the funds with knowledge that the transfer was unauthorised (pars 38 - 40).

(c) The Disputed Amount could be traced into the hands of Saracen as money had and received to the use of the plaintiffs (par 41).

(d) The effect of the RFA was to create a trust over refunds of GST input tax credits received by Westgem. The transfer of funds derived from that source was, to the knowledge of Saracen, in breach of trust (pars 42 - 45).

11 I have concluded that the plaintiffs have established a prima facie case that the Disputed Amount was held by Saracen on trust for BankWest and that the balance of convenience favours making the interlocutory orders sought by the plaintiffs.

12 The following matters were not in issue for the purpose of determining the application:

(a) Westgem held its legal title to the land comprising Raine Square on trust for Pakwest Pty Ltd. Pakwest, in turn, held its interest in the land as trustee for Newport Securities as trustee for the Pakwest Trust and Oakcure as trustee for the Parry Trust (affidavit of Luke Saraceni sworn 18 February 2011 (Mr Saraceni's third affidavit), par 5).

(b) On a date not disclosed by the evidence, Pakwest executed a document entitled, 'Declaration of Joint Venture Development Raine Square Perth (excluding Wentworth Hotel)' (the Declaration) (attachment 'LS 2' to Mr Saraceni's third affidavit) which recorded the formation of an unincorporated joint venture between Pakwest and Oakcure for the purpose of undertaking a project for the development of the Raine Square land into 'a multistorey mixed use development of shopping centre and office tower and the subsequent leasing, sale and settlement of the shopping centre and office tower upon the completion of the development' (see the definition of 'Project' appearing in cl 1.1 of the Declaration).

(c) I inferred that Westgem was the vehicle by which the project was to be undertaken. Clause 5.1 of the Declaration provided that Newport was appointed project manager.

(d) By letter dated 30 August 2005, Newport confirmed that Saracen had been appointed to undertake the project management of the project on behalf of Newport and Westgem (attachment 'LS 3' to Mr Saraceni's third affidavit). The letter was signed by Mr Saraceni and attached a schedule of services to be provided by Saracen.

(e) The Facility Agreement and the Deed were made on 23 April 2008 (attachments 'LS 4' and 'LS 7' to the affidavit of Luke Saraceni sworn 14 February 2011 (Mr Saraceni's first affidavit)). Westgem, the Financiers and BOSI Security entered into the Security Trust Deed on the same day (attachment 'LS 6' to Mr Saraceni's first affidavit). BOSI Security was appointed as the security trustee for the purpose of the Facility Agreement and the Deed pursuant to that deed.

(f) Also on 23 April 2008, BOSI Security (as Security Trustee), BankWest (as Facility Agent appointed for the purpose of the Facility Agreement and other contemporaneous agreements) and Westgem entered into a deed entitled, 'Set-off Agreement - Overdraft (GST Float) Account' (the Set-off Agreement) (attachment 'CKP 1' to the affidavit of Christopher Kingsley Pearce sworn 18 April 2011). The provisions and the purpose of the deed are explained later in the reasons.

(g) On 22 September 2010, the Financiers and Westgem entered into the RFA (attachment 'LS 5' to Mr Saraceni's first affidavit).

(h) On 4 January 2011, Saracen issued an invoice for $1,310,000 for project management fees payable in respect of the project (attachment 'MFXM 10' to the affidavit of Mark Francis Xavier Mentha sworn 10 February 2011).

(i) On 7 January 2011, Westgem received a cheque drawn in the sum of $1,330,288 by the Australian Tax Office (ATO). The cheque was a refund of GST input tax credits (par 19(a) of Mr Mentha's affidavit and attachment 'MFXM 8'). It was paid into Westgem's general account - a bank account held by Westgem with Westpac Banking Corporation Ltd. I will refer to the amount paid by the ATO to Westgem as the 'GST Refund'.

(j) On 9 January 2011, the sum of $1,330,000 was transferred from Westgem's general account to a bank account operated by Saracen (par 19(b) of Mr Mentha's affidavit and attachment 'MFXM 9').

(k) Saracen subsequently remitted $20,000 to Westgem and retained the Disputed Amount. The Disputed Amount corresponded with the amount of the invoice rendered by Saracen on 4 January 2011 for project management fees and the transfer of Disputed Amount was said to have been made in payment of that invoice. It was not in issue in the application that Saracen was entitled to charge project management fees (and Saracen has lodged a proof of debt with the Administrator in relation to project management fees that it claims are payable - attachment 'LS 3' to Mr Saraceni's first affidavit).

(l) On 11 January 2011, the Receivers entered into a deed with BOSI Security appointing them as receivers and managers of what was defined in the deed as the 'Property' (attachment 'MFXM 1' to Mr Mentha's affidavit). On the same day, Mr Saraceni caused the Administrator to be appointed to Westgem.

13 The Financiers agreed to make 'the Facilities' available to Westgem by cl 2.1 of the RFA. The term 'Facilities' was defined by cl 1.1(55) to mean a MultiOption Facility; a Letter of Credit Facility and an 'Overdraft (GST Float) Facility' (GST Facility).

14 The GST Facility was defined by the RFA to mean 'the overdraft facility provided by the Financiers to [Westgem] utilising the Overdraft (GST Float) Facility Limit under the terms of this document' (cl 1.1(93)). The Facility Limit for the GST Facility was $5 million (cl 1.1(94)).

15 The RFA also defined the term 'Overdraft (GST Float) Account' (being the account that was earlier referred to as the GST Account) as 'the account to be established by [Westgem] with the Facility Agent [BankWest] for the purposes of the Overdraft (GST Float) Facility' (cl 1.1(92)).

16 The RFA provided for drawdown notices to be given by Westgem when it wished to make a Drawing under any of the Facilities (cl 4). The term 'Drawing' was defined to include 'the making of an Advance under the Multi-Option Facility by means of a drawdown under the provisions of this document' and 'each utilisation of the Overdraft (GST Float) Facility' (cl 1.1(48)). An Advance was defined to mean 'each advance of money made available by the Financiers to the Borrower under the Multi-Option Facility in accordance with this document' (cl 1.1(9)). Westgem was not entitled to request a Drawing if a facility limit would be exceeded as a result of permitting the requested drawing (cl 2.2 and see also, cl 5).

17 Clause 3 of the RFA was headed 'Purpose'. The clause specified the purpose for which each Facility could be used by Westgem. The clause provided that:

Unless otherwise agreed in writing by the Financiers, the Borrower may only use the Facilities for the following purposes:

...

(3) in respect of the Overdraft (GST Float) Facility, to meet the on-going GST obligations for the Project.

18 Clause 4 of the RFA concerned Drawdown notices. Clause 4.5 provided that:

Subject to this document [Westgem] can utilise the Overdraft (GST Float) Facility by way of overdraft on the Overdraft (GST Float) Account to fund the on-going GST obligations for the Project, or in any other manner specified or agreed by the Facility Agent, but in any case will not have any access to the Overdraft (GST Float) Account other than with the prior consent of the Facility Agent.

19 Clause 7 provided for payment of interest on the Facilities. The clause drew a distinction between the payment of interest on Advances and on the GST Facility. Westgem was obliged to pay interest on Advances on the last day of an 'interest period' for an Advance (cl 7.2). It could specify the interest period for an Advance (30, 60 or 90 days) under cl 7.3. However, Westgem was required by cl 7.5 of the RFA to pay accrued interest on the GST Facility monthly in arrears. Interest payable in respect of the Multi-Option Facility and the GST Facility could be capitalised but that was subject to a capitalisation limit (cl 7.2). Each debiting of the GST Account constituted a new utilisation of the GST Facility (cl 7.5(4)).

20 Clause 9 of the RFA concerned repayment of the Facilities granted by the agreement. The GST Facility was repayable on demand: cl 9.1(2). Different arrangements applied for repayment of the other Facilities. In particular, the 'Principal Outstanding' under the Multi-Option Facility was to be repaid according to a repayment schedule annexed to the RFA (schedule 4).

21 Clause 13.2 provided that it was a condition precedent to the obligation of the Financiers to make available any Drawing that:

(a) the Facility Agent was satisfied that the Drawing would be used for a purpose set out in cl 3 (cl 13.2(4));

(b) the Facility Agent was provided with a certified copy of a report from the project certifier confirming all matters relating to the 'Project' requested or required by the Financiers including (cl 13.2(6)):

(i) if the amount of the Drawing was to be used to fund 'Works' costs that were the subject of the 'Building Contract' or any other costs under any other 'Project' works contract, verification of the amount of the drawing and the original third party invoice to be funded by that drawing; and

22 Clause 15.2 of the RFA contained what were described as 'project undertakings' given by Westgem. The undertakings were prefaced by the words '[Westgem] must'; there then followed various undertakings including that Westgem must, 'deposit all GST input tax credits received by it to the Overdraft (GST Float) Account within 5 Business Days of receipt by it of those amounts' (cl 15.2(15)). The equivalent clause in the Facility Agreement to cl 15.2(15) was cl 15.2(12).

23 Clause 17 specified events of default. The events included a failure by Westgem to comply with any obligation under the RFA (cl 17.2(2)) and a breach by Westgem of any undertaking that it had given (cl 17.18).

24 Westgem was defined by the Set-off Agreement as the 'Depositor'. The term 'Deposit' was defined to mean 'in respect of the Overdraft (GST Float) Account, at any time, the Depositor's right, title and interest in connection with the Overdraft (GST Float) Account including the balance standing to the credit of the Overdraft (GST Float) Account'. Accordingly, the agreement concerned the account that Westgem was required to maintain with BankWest as Facility Agent.

25 Clause 2.2 of the Setoff Agreement provided that the agreement set out the terms on which BOSI Security would repay the balance at any time now or in the future standing to the credit of the GST Account. Clause 2.3 contained undertakings given by Westgem as the Depositor. Those undertakings included that 'the Depositor must also carry out on time all its obligations under every Transaction Document, including the obligation to pay all of the Secured Money and the obligation to maintain, and deposit all required amounts into, the Overdraft (GST Float) Account in accordance with cl 15.2(12) of the Facility Agreement' (cl 2.3(2)). Further, cl 2.3(4) provided that:

The Depositor declares that it holds and will continue to hold each Deposit:

(a) as owner, free of any interest of a third party; and

(b) in the same capacity as the Depositor has entered or will enter into each Transaction Document.

26 Clause 2.3(3) also stated that the Depositor's obligations under the deed continued even if the Depositor closed the GST Account.

27 Clause 3 provided for the terms on which Westgem as the Depositor could withdraw a Deposit or part of a Deposit. Clause 3(1) contemplated that a withdrawal would be permitted after BOSI Security had received evidence that the Finance Parties had received all of the Secured Money under the Facility Agreement. However, cl 3(2) conferred an unfettered discretion on BOSI Security to allow a withdrawal to occur at an earlier time.

28 Clause 4 provided that interest would be paid on each Deposit and cl 5 provided for a right of setoff in the Facility Agent, delegated to BOSI Security. In particular, cl 5(2) allowed the Facility Agent to set of any amount the 'Finance Parties' (a term defined by the Facility Agreement) owed the Depositor in connection with a Deposit against the Secured Money (a term that was also defined in the Facility Agreement).

29 Clause 6.2 of the set-off agreement provided that, 'the Depositor must get the Security Trustee's written consent before it can assign, charge, declare any trust over or otherwise deal with any of its rights in connection with a Deposit. Any attempt to do any of these things without the Security Trustee's prior written consent is void'. Clause 6.3 stipulated that the deed did not limit in any way rights that BOSI Security or any other Finance Party had under any document.

30 The grounds on which the plaintiffs alleged that they were entitled to recover the Disputed Amount from Saracen were summarised earlier. The plaintiffs referred to each ground in their written submissions in support of their application for interlocutory relief. However, senior counsel for the plaintiffs placed primary emphasis in oral submissions on the allegations that the RFA created a trust over the proceeds of the GST Refund and that the transfer of the proceeds from Westgem to Saracen was, to Saracen's knowledge, unauthorised and in breach of trust.

31 The defendants challenged each aspect of the plaintiffs' claim for interlocutory relief. They contended that (par 1 of the defendants' written outline of submissions):

(a) The plaintiffs had failed to establish a prima facie case or a serious question to be tried.

(b) The balance of convenience lay in their favour.

(c) The plaintiffs had not provided a proper undertaking as to damages.

(d) The plaintiffs should be denied relief as they did not come to the court with clean hands. That was an allegation that was also made and determined in COR 22 of 2011. It was found that the Financiers, BOSI Security and their solicitors had not engaged in conduct that could be characterised as improper in equity.

32 The defendants denied the existence of the trust alleged by the plaintiffs, contending that the provisions of the RFA on which the plaintiffs relied merely imposed contractual obligations on Westgem. A breach of those obligations did not entitle the plaintiffs to trace the GST Refund into the hands of Saracen so as to obtain an order requiring the amount received to be paid into the GST Account. They further contended that there was a course of dealing for a period of at least 12 months prior to the receipt of the GST Refund that was inconsistent with the trust asserted by the plaintiffs.

33 The defendants also contended that the receivers were not validly appointed and in any event, the GST Refund and the funds transferred from Westgem to Saracen were not caught by the Charge. The validity of the appointment of the Receivers went to their capacity to sue for the relief claimed or to cause Westgem to institute proceedings for recovery of the Disputed Amount.

34 The Administrator appeared on the hearing of the application. He contended that the Deed was ineffective to create a charge, alternatively that any charge that was created was void as against him. He also argued that the RFA did not create a trust over the GST Refund and that the question of who was entitled to the Disputed Amount should be left for him to determine 'in the interests of all creditors' (outline of submissions on behalf of the Administrator, par 4).

The test to be applied in determining the application

35 The test to be applied in determining whether to grant an interlocutory injunction is that confirmed by the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; 227 CLR 57.

36 In a joint judgment, Gummow and Hayne JJ stated at [65] that the relevant principles in Australia were those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 (Gleeson CJ and Crennan J expressly agreed with Gummow and Hayne JJ on this point; see at [19]). The plaintiff is required to establish a prima facie case in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be held to be entitled to relief. However, a prima facie case does not require the plaintiff to show that it is more probable than not that it will succeed at trial; it is enough that the plaintiff demonstrates a sufficient likelihood of success to justify the preservation of the status quo pending the trial. Further, 'how strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks' (at [65], their Honours citing from the judgment of Kitto, Taylor, Menzies and Owen JJ in Beecham).

37 The right asserted by the plaintiffs in these proceedings is to require Saracen to account for funds that it received and which were allegedly transferred from Westgem in breach of a fiduciary obligation (an obligation either owed by Westgem to BankWest or by Mr Saraceni to Westgem). The injunction sought is mandatory in its effect.

38 The same principles apply whether an injunction is mandatory or prohibitive: RP Meagher, JD Heydon & MJ Leeming, Meagher Gummow & Lehane's Equity Doctrines and Remedies (4th ed Butterworths Lexis Nexis 2002) at [21460]. However, there are authorities to the effect that the court must be more confident that the plaintiff will ultimately succeed in obtaining final relief at trial where a mandatory injunction is sought: see for example, Shepherd Homes Ltd v Sandham [1971] Ch 340, 351 (Megarry J), cited by Kennedy J in Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471, 483. That reflects the fact that often the grant of a mandatory injunction will, in a practical sense, dispose of the subject matter of the proceedings by effectively determining the final outcome. As such, an injunction requiring the respondent to take some step will often alter rather than preserve the status quo.

39 The question of what constituted the status quo prior to the transfer of the proceeds of the GST Refund from Westgem to Saracen was bound up with the substantive issues to be determined. The plaintiffs contended that an order requiring Saracen to pay the money into the GST Account would restore the status quo. However, that would only be so if, as they alleged, the GST Refund constituted trust property. Implicit in the defendants' case was the proposition that the status quo would be restored by returning the money to Westgem's general account.

40 The undercurrent to this issue at the time that the application was argued was the uncertainty surrounding the effect of the Deed, the validity of the appointment of the Receivers and the extent of any charge created by the Deed. That uncertainty generated a possible three-way contest between the Receivers (the money belonged to Westgem but was subject to a trust in favour of BankWest as Facility Agent), the Administrator (the funds belonged to Westgem but were not subject to any claim by the Receivers or by BOSI Security as the Deed was ineffective or any charge that was created was void as against him) and Saracen (the funds belonged to it as Westgem had legal and beneficial ownership of the proceeds of the GST Refund at the time that the proceeds were transferred; at most, the transfer by Westgem was in breach of a contractual not fiduciary obligation). It was said by the defendants that the fact that the Receivers and the Administrator disagreed over who was entitled to the Disputed Amount demonstrated that the Receivers' claims to the money were weak (defendants' amended outline of submissions, par 41). That submission failed, in my view, to reflect the commercial reality of the various parties' positions, at least at the time that the application for interlocutory relief was argued.

41 Mr Langdon was an accountant working on the receivership of Westgem under the supervision of the Receivers. He gave evidence concerning the GST Account to the effect that (affidavit of Scott David Harry Langdon sworn 22 February 2011):

(a) Westgem received many GST inclusive invoices for goods and services provided in the course of the Project;

(b) a business activities statement (BAS) was lodged by or on behalf of Westgem monthly with the ATO claiming a refund of the various GST amounts paid in the relevant month;

(c) the ATO would refund GST paid by Westgem (a GST input tax credit refund);

(d) it appeared that pending receipt of refunds of GST input tax credits, Westgem was unable to fund from its own resources the GST component of invoices rendered to it during the Project as those invoices fell due for payment;

(e) accordingly, Bankwest provided Westgem with an account (the GST Account) on the basis that refunds of GST input tax credits would be paid into that account when refunds were received by Westgem;

(f) the GST Facility funded payments from the GST Account pending receipt of money from refunds of GST input tax credits;

(g) payment of refunds into the GST Account would reduce the debit balance in the account to zero;

(h) the GST exclusive portion of an invoice rendered to Westgem was paid from the MultiOption Facility and the GST portion would be drawn from the GST Account, with the two amounts aggregated in a single payment to the relevant supplier on its invoice.

42 It was apparent from Mr Langdon's evidence (which was not disputed by the defendants) that the purpose of the GST Facility was to provide funds as and when required by Westgem to pay the GST portion of invoices rendered during a period of approximately one month. Drawdowns under the facility resulted in accumulated debit balances in the GST Account. The GST payments generated tax input credits which were claimed in monthly BAS statements submitted by Westgem. Refunds of those credits were paid into the GST Account with the intention that the account would be reduced to a nil balance subject only to timing differences. The operation of those arrangements was subject to the facility limit for the GST Facility.

43 Mr Langdon's evidence must also be considered in the context of the provisions of the Set-off Agreement which was not referred to by him or by the Receivers when the application was initially heard. Obviously, I paid no regard to any part of Mr Langdon's evidence that implied a view about the interpretation of those aspects of the Facility Agreement/RFA that were contentious.

(a) He was the controlling mind of Westgem until the appointment of the Administrator. It was his intention and, therefore, the intention of Westgem that funds deposited into Westgem's general account should belong to Westgem.

(b) Between February and October 2010, development work on the Raine Square site stalled. During that period, funds were paid from Westgem's general account into the GST Account as and when those funds were required for payment of GST out of the GST Account.

(c) Between March and September 2010, Westgem did not receive any refunds of GST input tax credits as a result of an arrangement made between Westgem and the ATO that GST was not required to be remitted by Westgem 'up front' but instead GST refunds would be offset against amounts of GST that were payable. That arrangement was made as a consequence of a dispute between Westgem and the head contractor for the construction work on the Raine Square site. GST required to be paid on other project costs during this period were met by Westgem transferring sufficient funds from Westgem's general account to the GST Account to enable payments to be made to the ATO while maintaining the balance in the account below the facility limit.

(d) Westgem had made payments into the GST Account in the same amounts as refunds received from the ATO but the timing of those payments coincided with when Westgem was obliged to pay GST to the ATO (by which I inferred Mr Saraceni to be saying that amounts equivalent to the GST refunds that were received were not paid into the GST Account within five business days as the RFA required).

Was there a trust over the GST Refund? The parties' contentions

45 The plaintiffs contended that cl 15.2(15) of the RFA, when read in the context of the entire agreement, disclosed an intention that Westgem would hold on trust refunds of GST input tax credits paid by the ATO. They characterised the trust as a Quistclose trust (Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567). The beneficiary of the trust was Bankwest, as Facility Agent.

46 The defendants characterised the relief sought by the plaintiffs as relying on a right to use the GST Refund for a particular purpose 'namely, payment to [Westgem's] secured creditor for the purposes of allowing a reduction in the amount owing to it in an overdraft account so that the [Receivers] might ... more conveniently pay another of [Westgem's] creditors by redrawing on that overdraft account' (defendants' amended outline of submissions, par 7). The defendants further submitted that there was no evidence establishing an intention on the part of Westgem, the ATO or any of the parties to the financing arrangements for the project that refunds of GST input tax credits would be held on trust for any particular purpose.

47 A Quistclose trust typically involves a loan of money to be used by the borrower solely for the purpose of making a payment to a particular person or class of persons (although the reasoning in Quistclose Investments has since been applied to transfers of money other than by way of loan). The borrower does not receive and hold the money absolutely prior to payment to the third party and is it obliged in equity to return the money to the lender if the purpose of the loan cannot be fulfilled for any reason. Consequently, a debt will only be created between the lender and the borrower once the trust has been discharged.

48 In Twinsectra Ltd v Yardley [2002] UKHL 12; 2 AC 164, Lord Millett referred to the judgment of Gummow J in Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia [1991] FCA 344; (1991) 30 FCR 491 and observed (at [80] - [81]) that:

Gummow J saw nothing special in the Quistclose trust, regarding it as essentially a security device to protect the lender against other creditors of the borrower pending the application of the money for the stated purpose.

On this analysis, the Quistclose trust is a simple commercial arrangement akin ... to a retention of title clause (though with a different object) which enables the borrower to have recourse to the lender's money for a particular purpose without entrenching the lender's property rights more than necessary to enable the purpose to be achieved. The money remains the property of the lender unless and until it is applied in accordance with his directions, and in so far as it is not so applied it must be returned to him. I am disposed, perhaps pre-disposed, to think that this is the only analysis which is consistent both with orthodox trust law and with commercial reality.

49 The issue that ordinarily arises is whether a loan of money creates only a debt (in which case the borrower acquires absolute ownership of the money transferred) or whether an equitable obligation is 'engrafted onto' the contractual obligation (in which case, the borrower does not acquire beneficial or sole beneficial ownership of the money). Gummow J emphasised in Australian Elizabethan Theatre Trust that the issue was to be determined according to the intention of the parties and that 'the relevant intention is to be inferred from the language employed by the parties in question and to that end the court may look also to the nature of the transaction and the relevant circumstances attending the relationship between them' (503) (and see Compass Resources Ltd v Sherman [2010] WASC 41; 42 WAR 1 [58] - [59] (Beech J)).

50 In Twinsectra, Lord Millett characterised a Quistclose type trust as a resulting trust [100]. However, in George v Webb [2011] NSWSC 1608 Ward J concluded, after an extensive review of Australian authority, that 'the weight of authority in this jurisdiction is that the Quistclose trust is an express trust' [282] (and see the comments of JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (7th ed 2006) at [216] suggesting that there may be no real difference between an express trust and an implied resulting trust). Young, Croft and Smith briefly discuss the issue in On Equity (2009) at [6.1020], concluding that:

The exact nature of the Quistclose trust is really only of academic interest, but the debate is one that intrigues some academic lawyers. The better view is that there is nothing special in theory about a Quistclose trust; it is merely an illustration of a person paying over money to which an obligation attached, and the purpose failing.

51 The facts in this case are, of course, different to the circumstances in which a Quistclose trust usually arises. Here, the funds were paid to Westgem by the ATO as a refund; they were not advanced by the Financiers to Westgem. The defendants sought to highlight that difference and confine the plaintiffs' claim by contending at various points in their submissions that there was no evidence that the ATO (as the entity paying across the money) and Westgem intended a trust over the GST Refund. However, those submissions misconceived the nature of the trust asserted by the plaintiffs. The question raised on the plaintiffs' claim was whether the Financiers and Westgem intended to create a trust over refunds of GST input tax credits received by Westgem. A trust was said to have been intended not because of the terms on which the money was paid to Westgem by the ATO but because of what Westgem had agreed with the Financiers about the application of any refund that was received from the ATO.

52 As I understood the argument, the plaintiffs' purpose in referring to the decision in Quistclose Investments was two-fold: first, to support the proposition that contractual and equitable obligations are not, as Gummow J described them in Australian Elizabethan Theatre Trust, 'distinct and disparate norms' but that 'in a given case the transaction under analysis might bear a dual character' - trust and debt (Australian Elizabethan Theatre Trust at 502); and second, to draw an analogy in support of the contention that Westgem held refunds of GST input tax credits on trust for the particular purpose of paying the amount of the refund into the GST Account. As to the analogy, the comments of Gummow J in Australian Elizabethan Theatre Trust at 503 are relevant:

There is no need for particular caution in drawing the inference that a trust was intended: see Bahr v Nicolay (No 2) ... However, it is also important to appreciate both the flexibility of the institution of the express trust and the range of equitable institutions which fall short of but have some of the characteristics of a trust.

...

To speak of a Quistclose trust as if it were a new legal institution, rather than an example of the particular operation of principle upon the facts as found, is to set the listener or reader off on a false path.

53 The essential question raised by the plaintiffs' claim was whether the Financiers and Westgem intended that Westgem would take money received from the ATO as refunds of GST tax input credits absolutely or whether received and held the money subject to a fiduciary obligation created by the RFA: see Australian Elizabethan Theatre Trust (501); Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45; (1978) 141 CLR 335, 353 (Gibbs ACJ) and Compass Resources [59] - [60] (in which Beech J stated that the relevant test as: 'is it intended that the monies not become part of the general assets of the company and be used only for the particular purpose?').

54 Saracen raised no issue about its liability to account if it was found that the funds had been transferred in breach of a fiduciary duty (although it maintained that it was liable to account to the Administrator and not to the Receivers). Knowledge was not put in issue, no doubt because Mr Saraceni was the sole director of Westgem. Further, Saracen was the recipient of the Disputed Amount and the money had been paid into the trust account of its solicitors. Issues of the kind considered in George v Webb about whether a Barnes v Addy (1874) LR 9 Ch App 244 claim could be maintained for breach of trust were not raised.

55 HAJ Ford and WA Lee in Principles of the Law of Trusts (loose leaf) discuss the distinction between trust and debt at [1.3310] and following. They describe various factual situations involving the transfer of money in which it may be necessary to distinguish between trust and debt, the circumstances analogous to those considered in Quistclose Investments being merely one example. Their approach reflects the diversity of situations in which a person may receive money subject to a duty recognised in equity that conditions the receipt and use of the money. There are many instances where a recipient of money owes a fiduciary obligation in relation to the receipt and use of the money and which are not ordinarily analysed according to concepts and language of trust - at least, as to the source and nature of the obligation (for example, an agent with authority to draw on its principal's money, a director or company employee with authority to draw on and use the company's money and stakeholders). Accordingly, the question of whether a person receives and holds money for the benefit of another is not to be answered by asking only whether the recipient was acting as a trustee in the strict sense.

(a) There must, of course, be identifiable trust property for there to be a trust. Consequently, a stipulation that a transferee is to keep money that has been transferred to it separate from its own funds may indicate a trust. However, a term of the transfer that the money is to be deposited into a separate bank account will not necessarily point to a trust: Principles of the Law of Trusts at [1.3450].

(b) Prima facie, trust moneys should be paid into a separate account. However, if it is agreed between the trustee and beneficiary that they may be paid into a general account, the trustee will be required to retain sufficient moneys in that account to cover its trust obligations: Stephens Travel Service International Pty Ltd v Qantas Airways Ltd (1988) 13 NSWLR 331, 349 (Hope JA, with whom Kirby P and Priestley J agreed). In Stephens Travel Service v Qantas, Hope JA stated that he could see no reason why effect should not be given to such an agreement or why it should result in the destruction of the trust (349).

(c) Ascertaining the intention of the parties may require a close examination of their statements, acts, circumstances and in particular, any special relationship between them in connection with the money has been paid across to the transferree. Nevertheless, in cases where no clear intention to create a trust is shown, an intention that moneys be kept separate from the general funds of the transferee may be decisive: Principles of the Law of Trusts at [1.3450].

(d) Many loan agreements contemplate that the money lent will be used for a particular purpose. The specification of such a purpose will not, of itself, produce a trust over the loan moneys until they are applied for that purpose: Finn, Fiduciary Obligations (1977) at [234]; Twinsectra [73] (Lord Millett); Compass Resources [67].

(e) The question is whether it was intended that the money transferred be retained as an identifiable fund that was not to be used in whatever way the transferee chose: Henry v Hammond [1913] 2 KB 515, 521 (emphasis added) and see Principles of the Law of Trusts at [1.3410].

(f) Parties may expressly stipulate that money receipts that would ordinarily be regarded as trust moneys can be mixed in the trustee's general trading account and be dealt with as its own. Further, courts have been prepared to imply a consent to such dealings if it is the known business practice of the recipient and is not objected to by the alleged beneficiary in their course of dealings: Finn, Fiduciary Obligations at [220].

(g) An agreement that obliges the transferee to pay interest to the transferor on money transferred will ordinarily indicate that the transferee is intended to be at liberty to use the money as it chooses; that is, that the transfer was pursuant to a debtor - creditor relationship.

(h) Monies lent under a Quistclose trust may be held on trust for the lender or on trust for a third party which benefits from the purpose specified for the use of the money advanced: Compass Resources [73] and see Jacobs' Law of Trusts in Australia [216].

The parties' submission on the effect of the Set-off Agreement

57 The defendants contended that the terms of the Setoff Agreement were inconsistent with the existence of any trust attaching to refunds of GST input tax credits received by Westgem. The effect of cl 2.3(4) was that Westgem declared that it held its right, title and interest in connection with the GST Account free of any interest of a third party and further, cl 6.2 prohibited any express trust being created over its rights, title and interest in connection with the account. It was submitted that, 'the fact that the parties expressly prohibit the creation of an express trust is telling against the implication of a trust between the same parties' (defendants' supplementary submissions, par 12).

58 The plaintiffs contended that cl 2.3(4) had to be read in context (plaintiffs' submissions on the GST Set-off Agreement, par 8):

(a) Clause 2.3(2) reiterated the obligation imposed on Westgem by the RFA to deposit all 'required amounts' into the GST Account (and the clause expressly referred to cl 15.2(12) of the Facility Agreement).

(b) Clause 2.3(3) provided that the obligations imposed on Westgem by the Setoff Agreement continued even if it closed the GST Account. It was said that this provision reinforced 'the position that Westgem has no discretion as to how such funds are to be used'.

(c) Neither BOSI Security nor BankWest as the Facility Agent were third parties for the purpose of cl 2.3(4) so that the clause was not intended to extend to or affect any beneficial right that they possessed. Rather, the clause was intended to protect BOSI Security and BankWest by requiring an undertaking to the effect that Westgem would not interfere with their existing beneficial rights by purporting to grant interests in the Deposit to third parties. That was reinforced by the obligation in cl 2.3(6).

59 The plaintiffs also submitted that the limitations imposed by the Setoff Agreement on withdrawals of Deposits by Westgem as Depositor was consistent with the existence of a trust over refunds of GST input tax credits (par 9); 'it is a commercial nonsense to suggest (as the defendants do) that the Security Trustee must [by cl 6.2] give consent to grant a trust when the interest already exists and the interest is to be granted to itself' (par 10) and the issue was 'put beyond doubt' by cl 6.3 - the language of the clause covered the trust created by the Facility Agreement and the RFA (par 12).

60 I consider that the plaintiffs have established a prima facie case according to the test confirmed in Australian Broadcasting Corporation v O'Neill that Westgem received and held refunds of GST input tax credits on trust for BankWest as Facility Agent.

61 In my view, the Set-off Agreement was significant in establishing the parties' intentions with regard to refunds of GST payments. The purpose of the agreement was disclosed by the following matters:

(a) The agreement was concerned with 'Deposits'. The choice of that term as a descriptor appears to have been deliberate given that cl 15.2(12) of the Facility Agreement imposed an obligation on Westgem to 'deposit' all GST input tax credits in the GST Account.

(b) The agreement was primarily concerned with credit balances in the GST Account. Clause 2.2 expressly provided that the agreement set out the terms on which BOSI Security would repay the balance at any time standing to the credit of the GST Account. It was the credit balances standing in the account from time to time that were apt to be described as constituting the Depositor's right, title and interest in connection with the account.

(c) Westgem was not obliged to meet its obligation to pay GST on goods and services rendered to it out of the GST Account. It could, of course, pay GST from its own funds independently of the overdraft facility provided by the Financiers. However, the obligation imposed by cl 15.2(12) was to deposit all GST input tax credits in the GST Account regardless of whether the credits were generated by GST payments made out of the GST Account utilising the GST Facility or by Westgem using its own resources.

(d) Accordingly, the Setoff Agreement recognised that credit balances could be accumulated in the GST Account and that the funds represented by those balances belonged to Westgem. The purpose and effect of the agreement was to stipulate the terms on which those balances were to be held and paid.

62 Several aspects of the Set-off Agreement indicated that the funds held in the GST Account did not constitute and were not held by BankWest as deposits of a kind ordinarily made by a customer in a deposit or current account with a bank:

(a) The obligation to 'repay' the balance standing to the credit of the GST Account rested with BOSI Security as Security Trustee and not with BankWest with whom the account was maintained (cl 2.2). 'Repayment' was effected by BOSI Security permitting a withdrawal of a Deposit or part of a Deposit on being satisfied of the matters referred to cl 3(1).

(b) The nature of a Deposit as defined by the agreement.

(e) The limitations imposed on Westgem by cl 6.2 in relation to dealing with its rights in connection with a Deposit.

63 The parties accepted that the Setoff Agreement created interests in and rights over a Deposit that were proprietary in character rather than merely contractual. I accept that this was apparently the parties' intention. The term Deposit was defined by reference to Westgem's right, title and interest 'in connection with the [GST Account] including the balance standing to the credit of the [account]'. The familiar phrase 'right, title and interest' connotes a property interest - most obviously, in a credit balance in the GST Account. Clause 3 contemplated that withdrawal of a Deposit would, in the ordinary course, occur only after the funds advanced under the Facilities made available by the Facility Agreement and all other monies owing to the Financiers and related parties had been repaid and BOSI Security was satisfied that no claim could be made to claw back the repayments. Consequently, one effect of the Set-off Agreement was to recognise that Westgem had a proprietary interest in any money held in the GST Account following completion of the financing arrangements. The obligation to repay that money was not purely contractual as would ordinarily be the position with funds placed on deposit with a bank. Further, the definition of Deposit and cl 2.3(4) recognised that the property rights and interests of Westgem in connection with the GST Account and credit balances did not crystallise only on the events to which cl 3(1) referred occurring; rights, title and interests were created and subsisted before those events.

64 The fact that the parties recognised that property rights were created in connection with the GST Account arguably reflected a view that they took about the source of the funds deposited into the account. Those funds were not just money that BankWest was contractually bound to repay as the deposit holder when the financing had been completed. Rather, each Deposit (see the reference to 'each Deposit' in cl 2.3(4)) was treated as an item of property, arguably because the refunds of GST tax input credits were regarded as such by the parties. Each Deposit and each refund of GST was a separate and identifiable item of property that was not treated as simply forming a money balance in the GST Account or in Westgem's general account (that is, as an accretion to a money balance in each account).

65 I accept the plaintiffs' submission that the reference in cl 2.3(4) to a 'third party' was to a person who was not a party to the Setoff Agreement. It would be odd in a professionally drawn instrument for a reference to 'third parties' to have been intended to include a party to the deed. Consequently, cl 2.3(4) did not evidence that Westgem held its right, title and interest in connection with the GST Account and in any credit balance in the account absolutely as the defendants contended.

66 It was clear that the parties intended that Deposits would be applied in reduction of debit balances in the GST Account. Clause 6.2 was intended to protect the interests of the Financiers, through BankWest as Facility Agent and BOSI Security as Security Trustee, in the GST Account and each Deposit. The clause goes beyond the kind of contractual restrictions that might be imposed where BankWest was the holder of money that was to be applied for a particular purpose but the money belonged absolutely to Westgem. In my view, the clause apparently recognised that the Financiers, through BankWest and BOSI Security, had an interest in the property constituted by a Deposit that was, itself, proprietary in character. Otherwise, the Financiers would have had no interest in preventing Westgem from creating rights over a Deposit; it would be sufficient for their interests for BankWest to be contractually entitled to apply Deposits in reduction of debit balances in the GST Account.

67 The intention of the parties to the Facility Agreement and the RFA to create a trust over refunds of GST tax input credits may be inferred from the following aspects of those agreements, when read with the Set-off Agreement:

(a) The purpose of the GST Facility. The facility was for a specified and limited purpose to meet the 'ongoing GST obligations of the Project'.

(b) The creation of a separate GST Account. Westgem could utilise the GST Facility by way of an overdraft on the GST Account. Access to the account was with the consent of the Facility Agent.

(c) The funds received were from an identifiable source and for a specified amount. Clause 15.2(12) (cl 15.2(15) RFA) recognised that the funds bore an identifiable character. The funds were indentified in that way in the clause - as 'GST input tax credits'.

(d) The refunds of GST tax input credits were paid into Westgem's general account. No doubt that was for administrative and accounting convenience and because the refunds were for GST payments made by Westgem as reported in its BAS statements. However, the funds were to be deposited into a separate account - the GST Account - within five business days. It would be commercially odd for the parties to have intended, as the Administrator contended, that Westgem would have the use of the funds for five days as part of its working capital and for whatever purpose it chose and then be obliged to account for the funds to BankWest. Rather, it appears that the five days was intended to allow for refund cheques to be cleared through Westgem's general account.

(e) The obligation imposed by cl 15.2(12) was to deposit into the GST Account 'all GST input tax credits' rather than an amount equivalent to the refund of GST. That is consistent with the parties intending that refunds would be treated as not merely accretions to the money balance in Westgem's general account but as separate items of property in which the parties had an interest.

68 The last of those points is, in my view, particularly telling. It was to be expected that the provisions of the Facility Agreement/RFA and the Set-off Agreement would have been materially different if all that the parties had intended was to impose a contractual obligation on Westgem to pay amounts periodically into a designated account to reduce overdraft balances in that account. The obligation would have been expressed in those terms and would have been limited to whatever payments were required to reduce the debit balance to specified amounts at particular times. However, the effect of the Facility Agreement/RFA was to require Westgem to deposit 'GST input tax credits' into the GST Account and to deposit all amounts bearing that description regardless of the balance at any time in the account. Those deposits were then held subject to the Setoff Agreement.

69 In my view, a prima facie case has been established that the combined effect of the Facility Agreement/RFA and the Set-off Agreement was to identify a particular fund of money, to specify that the fund was only to be used for a designated purpose and to require that the fund be kept separate so as to ensure that it would be used only for that purpose (both by Westgem being required to deposit the 'GST input tax credits' into the GST Account and by BankWest and BOSI Security holding the deposits subject to the Facility Agreement/RFA and the Set-off Agreement). Those matters suggest that the parties intended that refunds of GST input tax credits would be kept separate from Westgem's 'general' funds notwithstanding that the funds were deposited into Westgem's general account and that the refunds would not be available to be used by Westgem as it chose. They are indicia of a trust over the refunds. The evident purpose of the agreements was aptly described by Gummow J in Australian Elizabethan Theatre Trust - to create a trust that operated as a form of security analogous to a retention of title clause. It was significant that it was BOSI Security that was obliged to repay credit balances in the GST Account and who controlled withdrawals from the account.

70 I do not consider that Mr Saraceni's evidence established that the parties intended through a course of dealing that Westgem should own absolutely refunds of GST input tax credits. The evidence indicated only that the requirement that deposits be made into the GST Account within five business days had not been strictly enforced. Further, it appeared that special arrangements for paying GST had been adopted during the period to which Mr Saraceni referred. Obviously, the fact that funds were transferred from Westgem's general account to the GST Account did not count against the claim made by the plaintiffs.

71 Westgem's interest in the GST Refund was, in my view, an asset of Westgem. It was an interest in money that was to be deposited in the GST Account and which was to be used to either reduce Westgem's debit balance in the account or was to be held as a credit balance subject to the Set-off Agreement.

72 The effect of the findings that have been made is that the plaintiffs have established a prima facie case that the GST Refund ought to have been but was not deposited in the GST Account in breach of trust. As previously indicated, the defendants did not contest the question of Saracen's knowledge if the primary elements of trust and breach were established. Accordingly, a prima facie case has been established that Saracen had no right to, and has no right to retain, the Disputed Amount.

73 In my view, the balance of convenience will generally favour the restoration of trust property to the trustee where a prima facie case has been established that it was transferred in breach of the trust. The defendants contended that an interlocutory order requiring the Disputed Amount to be paid into the GST Account would finally dispose of the action (defendants' amended submissions, par 48). However, an interlocutory order requiring payment into the GST Account will not finally dispose of the question of the plaintiffs' entitlement to the money; the substantive issues in the plaintiffs' action will remain to be determined at trial. The subject matter of the injunction is money. The defendants' position in the proceedings would be preserved by an effective undertaking as to damages.

74 The defendants raised matters that were said to establish that the plaintiffs did not come to court with clean hands beyond those that were considered in Saraceni v Mentha (defendants' outline of submissions, par 54). Those matters were that the first plaintiff was indebted to Saracen and repayment of the Disputed Amount 'would contribute to the failure by the first plaintiff to pay the first defendant its entitlements' and that the first plaintiff, through the Receivers, was using the property of Saracen in completing the Raine Square project. These matters could not constitute unclean hands in equity.

75 I consider that the balance of convenience favours an order that the Disputed Amount be paid into GST Account. That will mean that the funds will be applied according to the RFA and the Set-off Agreement. As I have indicated, the defendants' position will be protected by an undertaking as to damages. However, it seems to me that the undertaking will need to extend to the Administrator to protect his position and that of Westgem, in its capacity as a party that claims that it owned the money represented by the GST Refund absolutely.

76 I accept in circumstances of this matter that an undertaking given by the Receivers is of real substance. I will leave the parties to confer on the precise form of the undertaking.

CITATION : WESTGEM INVESTMENTS PTY LTD (RECEIVERS AND MANAGERS) (ADMINISTRATOR APPOINTED) -v- SARACEN PROJECT MANAGEMENT PTY LTD [No 2] [2012] WASC 358 (S)

BETWEEN : WESTGEM INVESTMENTS PTY LTD (RECEIVERS AND MANAGERS) (ADMINISTRATOR APPOINTED)

MARK FRANCIS XAVIER MENTHA AND CLIFFORD STUART ROCKE AS RECEIVERS AND MANAGERS OF WESTGEM INVESTMENTS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATOR APPOINTED)

Practice and procedure - Costs - Whether the costs of a mandatory injunction should be in the cause or whether they should be paid forthwith by the respondent to the application - No new principles

1 I made an order in this action requiring the first defendant to pay an amount (referred to as the 'Disputed Amount') into a specified bank account (the GST Account) standing in the name of the first plaintiff and held with Bank of Western Australia Ltd. The order was made on an application for interlocutory relief.

2 The plaintiffs have applied for an order that the first defendant pay the costs of the application on the following grounds:

(a) The order that was made was mandatory in effect. Although the same principles apply whether an injunction is mandatory or prohibitive, ordinarily the court must be more confident that the plaintiff will ultimately succeed at trial where a mandatory injunction is granted. That reflects the practical reality that a mandatory injunction will often dispose of the subject matter of the proceedings and effectively determine the parties' dispute.

(b) It was entirely unclear as to whether and when the balance of the action would be litigated in light of the other (numerous) proceedings on foot between the parties.

3 The first defendant opposes the application on the ground that the costs of an application for an interlocutory injunction are usually costs in the cause. Although it accepted that each case must depend on its own facts, the first defendant submitted that there was no reason to depart from the usual order in this case.

4 Plainly, the costs of an interlocutory injunction are at the discretion of the court. However, it is common practice for the costs of an interlocutory injunction to be costs in the cause or the plaintiff's costs in the cause. That is because the court does not ordinarily assess the merits of the parties' respective cases beyond satisfying itself that the applicant has established a prima facie case for relief. The court is concerned with the balance of convenience in the circumstances that prevail at the time of the application once it has satisfied itself about that requirement. Frequently, the application is made at about the time that the proceedings were commenced.

5 The court may depart from the usual practice where it is apparent that either party has acted unreasonably in bringing or defending the application for interlocutory relief. In such a case, it may be appropriate to order the unreasonable party to bear some or all of the costs of the application. The court will also facilitate the conclusion of proceedings by making a costs order where it is clear that neither party wishes to proceed with the litigation once the interlocutory application has been heard and determined.

6 In my view, neither of the grounds advanced by the plaintiffs justify departing from the usual practice that the costs of an application for an interlocutory injunction be in the cause. There are three reasons for that conclusion:

(a) The grant of interlocutory relief was not intended to finally determine the litigation. An argument that the grant of an interlocutory injunction requiring the Disputed Amount to be paid into the GST Account would finally dispose of the question of the plaintiffs' entitlement to the money was rejected at the time that the injunction was granted: Westgem Investments Pty Ltd (Receivers and Managers) (Administrator appointed) v Saracen Project Management Pty Ltd [No 2] [2012] WASC 358 [73].

(b) Consistent with that finding, the action remains on foot and directions have recently been made for the future conduct of the matter.

(c) The defendants did not act unreasonably in resisting the application for the interlocutory injunction (and it was not suggested that they did so).