AGL Energy Ltd v Alinta MergeCo Ltd

[2006] NSWSC 1336

CITATION:	AGL Energy Ltd v Alinta MergeCo Ltd & Anor [2006] NSWSC 1336
HEARING DATE(S):	31/10/06
JURISDICTION:	Equity
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	10/31/2006
DECISION:	Interim injunction restraining sale granted
CATCHWORDS:	CONTRACT - breach of negative stipulation, not to sell certain assets – remedies – injunction – construction – whether exposure to injunction to restrain prospective breach is liability for a breach
LEGISLATION CITED:	Local Government Act 1993 (NSW), s 733
CASES CITED:	Attrill v Richmond River Shire Council (1993) 30 NSWLR 122 Attrill v Richmond River Shire Council (1993) 38 NSWLR 545 Bankstown City Council v Alamdo Holdings Pty Ltd [2005] 79 ALJR 1511
PARTIES:	AGL Energy Ltd ACN 115 061 375 (P) Alinta MergeCo Ltd ACN 119 985 590 (D1) Wattle Point Wind Farm Pty Ltd ACN 101 023 447 (D2)
FILE NUMBER(S):	SC 5561/06
COUNSEL:	A Bannon SC (P) R McHugh SC w J Emmett (D1 & D2)
SOLICITORS:	Gilbert & Tobin (P) Blake Dawson & Waldron (D1 & D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY LIST

BRERETON J

Tuesday 31 October 2006

5561/06 AGL Energy Limited v Alinta MergeCo Limited

JUDGMENT (Ex tempore)

1 HIS HONOUR: On the undertaking of Colleen Ann Platford to pay the appropriate filing fees, I grant leave to AGL Energy Limited to file a Summons and a Notice of Motion in the form initialled by me, dated this day and placed with the papers.

2 Although the decision of the High Court of Australia in Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511 holds that the exposure of a party to the exercise of the equity jurisdiction of the Supreme Court can constitute a "liability" notwithstanding that an injunction usually regulates future action, as was said in the joint judgment (at [36]), importance attaches to the context, and holdings in cases upon statutes (and I interpose on contracts) with a different subject and purpose from that of Local Government Act 1993 (NSW), s 733, must be approached with caution – as is illustrated by the differing results reached in the various authorities referred to in that case.

3 It is, I think, at least arguable that exposure to an injunction restraining a prospective breach of a provision of the Merger Implementation Agreement is not a liability for a breach of that Agreement. At least arguably, the reference to a breach is to a past breach [cf Attrill v Richmond River Shire Council (1993) 30 NSWLR 122, appeal dismissed on other grounds 38 NSWLR 545; discussed in Bankstown City Council v Alamdo Holdings].

4 Moreover, although it is not yet articulated in the Summons, the documents relating to the Merger Agreement disclose an arguable case for rectification of clause 29.7 of the Merger Implementation Agreement so as to include clause 27 in the list of provisions excepted from clause 29.

5 Together, these propositions provide a sufficiently arguable case for an injunction restraining disposition of the so-called AGL Infrastructure Assets to justify consideration of the balance of convenience at a proper interlocutory hearing, this application having proceeded, although opposed, on a very provisional and almost ex parte basis.

6 On the balance of convenience, the first relevant consideration is that what is sought to be enforced is a contractual negative stipulation; the starting point is that such provisions ought normally be enforced by injunction.

7 There otherwise is little evidence either way on the balance of convenience. The risk to the plaintiff if an injunction is not granted is that its entitlement, if it be that, to have Wattle Point sold during the year after completion only to it, if it is to be sold at all, might be defeated, and (less significantly) that the defendant might obtain a springboard of a few days in negotiations in respect of the sale of that, and perhaps other, infrastructure assets. The risk to the defendant, if an injunction is granted, is that a sale at a price higher than that which underpins the put option might be lost, and also that negotiations in respect of the sale of Wattle Point, and perhaps of other assets, might be delayed by those few days.

8 There is no evidence at this stage that any such negotiations are on foot, let alone that they will be lost if they have to be suspended for a few days. AGL offers an undertaking as to damages. In those circummstances, I think the balance of convenience favours the grant of injunctive relief for the few days which will enable Alinta to put on evidence for a proper interlocutory hearing.

9 I direct that the Summons and Motion be returnable before the Duty Judge at 10am on Thursday 2 November 2006. Upon the undertaking of Alinta to file a Notice of Appearance, I dispense with further service of the Summons and Motion. Upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages, I make an order until 5pm on 2 November 2006 in terms of paragraph 3 of the document entitled Order initialled by me, dated this day and placed with the papers. I direct that these orders be entered forthwith.

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