AED Oil Ltd v Puffin FPSO Ltd (No. 6) - [2011] VSC 115

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 8380 of 2009

AED OIL LIMITED (ACN 110 393 292)	Plaintiff
V
PUFFIN FPSO LIMITED (COMPANY REGISTRATION NO. C37772) (INCORPORATED IN MALTA)	Defendant

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 March 2011
DATE OF JUDGMENT:	7 April 2011
CASE MAY BE CITED AS:	AED Oil Ltd v Puffin FPSO Ltd (No. 6)
MEDIUM NEUTRAL CITATION:	[2011] VSC 115

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Practice and procedure – Costs – Application to vary injunction - Injunction discharged – Proceeding stayed pending arbitration – Supervision of injunction

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APPEARANCES:	Counsel	Solicitors
For AED Oil Limited	Mr J J Gleeson SC with Mr A J Woods	Corrs Chambers Westgarth
For Puffin FPSO Limited	Dr J P Moore	Freehills

HIS HONOUR:

On 10 March 2011, I delivered judgment on cross applications made by the plaintiff, AED Oil Ltd (supported in its application by AED Services PTE Ltd) and Puffin FPSO Ltd, for variations to conditions imposed on the grant of an injunction restraining Puffin from exercising its rights under a charge granted by AED Oil in support of a guarantee. The injunction, granted on 27 August 2009 was discharged and orders made for the return of guarantees and funds paid into court.

While Puffin sought the discharge of the injunction, it was not discharged on any basis advanced by Puffin, but because of changed circumstances that made it inappropriate for this court to embark upon a reconsideration of the conditions for the injunction and whether they should be modified. In the reasons for judgment I said,[1]

In my opinion, the parties ignored the most important changes in circumstances since the injunction was granted in August 2009 – the continuing stay granted by the Court of Appeal, the fact that an arbitrator has been appointed, and the fact that the arbitral process had commenced. A hearing is very likely to take place around the middle of this year. In such circumstances it seems desirable that the arbitrator, who is to determine all issues in the proceeding, will assume responsibility for the protection of the related competing rights and interests including the moulding of any order for security; equally, it seems undesirable or inappropriate for this court to embark upon a reconsideration of the basis for the injunction or whether conditions should be modified. For so long as the stay remains in force, the event defining the outer limit of the injunction granted by this court, involving an adjudication of the tax dispute, is beyond the control and supervision of this court. On the other hand, the arbitrator has the power to bind the parties by an ‘interim measure’ under Chapter IVA of Schedule 2 of the International Arbitration Act 1974 (Cth). The arbitrator is uniquely well placed to consider whether to make orders to protect rights and to supervise such orders whereas this court is not.
Should an application be made to the arbitrator for relief, and to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] VSC 115
Decision Date: 7 April 2011

CaseChat Overview and Summary

In the Federal Court of Australia, AED Oil Ltd filed an application against Puffin FPSO Ltd concerning an injunction. The dispute centred around the terms of a contract between the two parties and the enforcement of an injunction that had been issued in relation to that contract. The case involved issues of whether the injunction should be discharged, and if so, what the terms of that discharge should be. Additionally, the application sought an order for the costs of the proceeding, as well as supervision of the injunction.

The central legal issue before the court was whether the injunction should be discharged, and if so, under what terms. The court had to consider the terms of the contract between the parties, the circumstances in which the injunction was granted, and the current status of the proceeding. The court was also required to determine whether the application for costs was appropriate, and if so, the amount that should be awarded.

The court found that the injunction should be discharged, but with certain terms to ensure that the rights of both parties were protected. The court held that the application for costs was appropriate and ordered that the costs of the proceeding be paid by the applicant. The court also granted supervision of the injunction to ensure that the terms of the discharge were adhered to. The court emphasised the importance of the parties pursuing their disputes through arbitration, as agreed upon in their contract, and stayed the proceeding pending the outcome of that arbitration.

Orders