Advanced Communications Technologies Inc v Advanced Communications Technologies (Australia) Pty Ltd and Ors

Advanced Communications Technologies Inc (the plaintiff) commenced proceedings against Advanced Communications Technologies (Australia) Pty Ltd (the first defendant) and two other defendants, seeking an interlocutory injunction to prevent the defendants from appointing another distributor for the plaintiff's products in North and South America. The plaintiff further sought damages for breach of an exclusive distribution agreement, alleging that the first defendant had breached the agreement by appointing another distributor and had also terminated the agreement for the plaintiff's failure to act in good faith. The defendants denied the allegations and counterclaimed for damages for the plaintiff's alleged breaches of the distribution agreement. The matter was heard in the Federal Court of Australia.

The court had to decide whether an interlocutory injunction should be granted to prevent the defendants from appointing another distributor in North and South America, and whether the plaintiff had established a serious issue to be tried regarding the alleged breaches of the distribution agreement. The court also had to consider whether the plaintiff had demonstrated a balance of convenience in favour of granting the injunction and whether security for undertaking as to damages should be required. Additionally, the court needed to determine if the plaintiff, being a foreign company, had sufficient assets in Australia to satisfy any potential judgment.

The court found that the plaintiff had made out a serious issue to be tried in relation to the alleged breaches of the distribution agreement. The court also considered that the balance of convenience favoured granting the interlocutory injunction, as the plaintiff's business and reputation would be significantly harmed if the defendants were to appoint another distributor in North and South America. The court held that the plaintiff had demonstrated that it had sufficient assets in Australia to satisfy any potential judgment. Consequently, the court granted the interlocutory injunction, restrained the defendants from appointing another distributor in North and South America, and ordered the defendants to provide security for undertaking as to damages.