Anythings Possible Transport Pty Ltd v Redox Pty Ltd
[2016] FCA 1601
•19 August 2016
FEDERAL COURT OF AUSTRALIA
Anythings Possible Transport Pty Ltd v Redox Pty Ltd [2016] FCA 1601
File number: QUD 529 of 2016 Judge: DOWSETT J Date of judgment: 19 August 2016 Catchwords: PRACTICE AND PROCEDURE – application for injunctive relief – where the balance of convenience lies in favour of declining the relief sought – application refused Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, ss 18, 232, 243 Cases cited: Samsung Electronics Co. v Apple Inc (2011) 217 FCR 238 Date of hearing: 19 August 2016 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 22 Counsel for the Applicant: Mr S Fisher Solicitor for the Applicant: Mark Treherne and Associates Counsel for the Respondent: Mr J Ward Solicitor for the Respondent: Mitry Lawyers ORDERS
QUD 529 of 2016 BETWEEN: ANYTHINGS POSSIBLE TRANSPORT PTY LTD ACN 143 839 703 AS TRUSTEE FOR THE STEVEN WINDLE FAMILY TRUST
Applicant
AND: REDOX PTY LTD ACN 000 762 345
Respondent
JUDGE:
DOWSETT J
DATE OF ORDER:
19 AUGUST 2016
THE COURT ORDERS THAT:
1.the orders dated 15 July 2016 be amended to include the usual undertaking as to damages by the applicant through its counsel;
2.the applicant's application for interlocutory relief be refused;
3.the applicant pay the respondent’s costs of today;
4.the respondent file and serve its defence on or before 30 August 2016;
5.the parties file and serve any expert evidence on which they rely on or before 30 September 2016;
6.the parties have liberty to apply by 3 days’ written notice;
7.the trial take place in Brisbane on 24, 25, and 26 October 2016; and
8.the costs of the proceedings otherwise be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
DOWSETT J:
I order that the order made on 15 July 2016 be amended to record the usual undertaking as to damages offered by counsel for the applicant on that day.
Since some time in 2011, the applicant has been providing transport services to the respondent. Those services involve the delivery of goods from a warehouse near Brisbane to the coalfields or to places nearer to Brisbane. The applicant asserts that it has provided such services pursuant to contractual relations entered into between the parties at some time since 2011. It seems that, at least from the early part of this year, the respondent has been expressing dissatisfaction at the level of service provided by the applicant. The applicant generally denies the complaints. The ultimate result of the respondent's apparent dissatisfaction was that on 20 May this year, Mr Ballard, a branch manager employed by the respondent, wrote to Mr Windle, a director of the applicant. It is clear from the letter that there were matters of dispute between the parties but, for present purposes, it is relevant, only to the extent that under the heading “3 Strike Rating”, he said:
We are implementing a new strike system with our carriers which will ensure that a high level of customer service is performed by our carriers as expected by our customers. All complaints made by any Redox Richlands staff (must be in writing as well), customers or general public will see an internal quality problem (QP) raised, investigation launched and if Redox does not deem sufficient evidence has been presented to the contrary, a strike will be added to the contractors file.
Should three strikes be received within any six month period, action will be taken to remove or reduce the business at the full discretion of Redox Pty Ltd. We are no longer open to receiving excuses and expect the time of our carriers to be better utilised to implement CA (corrective actions) to ensure the best possible service is provided to their customer, Redox Pty Ltd.
Should the requested timeframe to any written investigation not be acknowledged and replied in full with sufficient evidence, a strike will be added to the carrier's file.
At the end of the letter the following paragraphs appear:
Please acknowledge this email and its content in its entirety by close of business Friday, 27 May 2016.
If you do not accept these new terms of the conditions of business with Redox, please let us know and we will transfer this business permanently elsewhere.
This letter followed a letter dated 29 April 2016, in which Mr Ballard expressed dissatisfaction with a number of aspects of the relationship between the applicant and the respondent. The problem seems to have been not really concerned with the way in which the applicant was performing. Rather, there seems to have been an issue between the parties concerning the extent to which the applicant was seeking to perform long range transportation work rather than shorter range work, the former being more lucrative than the latter.
In any event, following the letter of 20 May 2016, Mr Windle wrote to Mr Ballard as follows:
Shane,
APT acknowledge your email.
I would like to clarify our delivery dates to LDE, Currently we deliver Monday, Wednesday & Friday as discussed with Dennis. Your email states delivery on Tuesday, Thursday & Monday?
We can also provide a truck & dog for the Tuesday & Thursday, plus an additional day (say 3 trips a week) which will give them 7 bags, more than a B-double. Jacob being the driver.
Could you also clarify if you require APT to finish the local work on Monday 30th May?
On 6 July, Mr Ballard wrote to Mr Windle as follows:
Given the recent APT truck incident, a revision of our internal Chain of Responsibility procedures and taking into consideration the issues over the last 12 months.
A decision has been made by Redox Corporate to terminate all dealings with your company as at close of business Friday 15th July, 2016.
This means no deliveries will leave our site which will occur beyond this date. We ask that all pending POD’s be returned in a timely manner so we can finalise all outstanding invoices within our agreed terms.
Redox Pty Ltd appreciates the relationship and the support APT showed us in the early stages of Richlands, and we wish you all the best in the future.
This is a commercial decision without prejudice made in the best interests of Redox and our respective customers.
The decision is final, and no discussion will be entered into. Redox has the right to terminate earlier should issues arise between now and the 15th July, 2016.
The incident in question appears to have been a single vehicle accident in which a vehicle, returning from a delivery pursuant to the delivery arrangements between the applicant and the respondent, had overturned. The applicant submits that as a result of the correspondence between the parties and subsequent conduct, the so-called 3 strikes rule became a term of the contract pursuant to which it was providing services to the respondent. For present purposes, it seems to me that there is a reasonable basis for reaching that conclusion, and I am willing to proceed upon the basis that there is a prima facie case to that effect.
The applicant then submits that although the contract is one which is terminable on reasonable notice, the notice which was given was not reasonable. It points in particular to the 3 strikes policy or rule as indicating that at least a period of six months would be a reasonable period of notice in the circumstances. It seems to me that all other things being equal, and on the state of the evidence as it is at the moment, the notice given by the respondent was less than a reasonable period of notice.
As to what would have been a reasonable period, I am inclined to think that the 3 strikes policy may have given some indication, but I do not reach any concluded view on that point. I am not satisfied that there is a prima facie case that such a period would be the relevant period.
The applicant has commenced proceedings against the respondent, alleging breach of contract, such breach being that anticipated by the letter of 6 July 2016. The applicant claims not to have accepted the repudiation and to have affirmed the contract. It also claims damages for misleading or deceptive conduct, apparently under the Australian Consumer Law, relying on much the same factual matrix. There is also a claim for abuse of market power. I do not consider that any prima facie case has been made out on that cause of action.
I proceed upon the basis that there is a prima facie case with respect to the misleading or deceptive conduct claim. By its statement of claim, the applicant seeks:
·a declaration under s 243 of the Australian Consumer Law that the respondent has engaged in conduct in contravention of s 18;
·an order under s 232 of the Australian Consumer Law restraining the respondent by its servants and agents from engaging in contravening conduct; and
·further, or alternatively, an order restraining the respondent by itself, servants and agents, from terminating the contract dated on or about 26 May 2016 or the “second contract” between the applicant and the respondent.
I take the reference to a “second contract” to be a reference to the amended contract. The applicant seeks other relief including damages.
The applicant has subsequently sought an interlocutory injunction, restraining the respondent from determining the contract. On 15 July 2016, orders to that effect were made by consent, with effect until 16 August 2016, or other earlier order. There were also ancillary orders relating to the continued allocation of work by the respondent to the applicant, and regulating the way in which it was to be done. As I say, the orders were made by consent. The solicitors for both parties have filed affidavits concerning the relationship between the parties during the period since the commencement of the interim order. It seems that there are differences of opinion on a more or less ongoing basis.
In general, the Court will not grant injunctive relief, at least on a permanent basis, which will require parties who have demonstrated inability to work together to continue doing so. Such an order would require ongoing supervision by the Court. The attitude of the courts to the grant of such injunctive relief on an interlocutory basis is not quite so severe. The grant of any such relief is governed by the principles espoused by the High Court in various cases. The effect is summarized in the decision of the Full Court of this Court in Samsung Electronics Co. v Apple Inc (2011) 217 FCR 238. In general, the requirement is that the applicant establish a prima facie case, and that the balance of convenience as between the parties favours the grant of interlocutory relief.
The strength of the prima facie case may well be a relevant consideration in connection with the balance of convenience. In the present case, as I have said, at least as it concerns the case in contract, I proceed upon the basis that there is, on the evidence as it presently stands, a prima facie case, although I would not say that it was necessarily a strong one, having regard to the apparent history of dealings between the parties, as evidenced in the correspondence. The primary inconvenience, if I can use that word, from the applicant's point of view, is said to be that it has so committed itself to the provision of services to the respondent pursuant to the alleged contractual arrangements, that to lose the work would, relatively quickly, create serious financial difficulty. There is a suggestion, for example, that the applicant might be able to survive for a period of three months whilst it looked for other work, but that in any longer period of time, it would suffer seriously. I have no doubt that losing a large client has the potential to cause serious damage to a small business. On the other hand, the notice of determination was given on 6 July 2016, some five or six weeks ago. I should not overlook the fact that it was the applicant's decision to commit itself so heavily to one customer. One can only assume that it thought that it was in its own best interests that it do so.
The evidence does not suggest that the respondent promised exclusivity to the applicant, although the applicant asserts broadly to that effect. The correspondence suggests that the parties were not carrying on their business in that way. In any event, it is basic commercial sense that one should not put all of one's eggs in one basket. Nonetheless, I proceed upon the basis that the applicant is likely to suffer significant financial difficulty as a result of the termination of work coming from the respondent. There is a significant history of dissatisfaction between the parties, evidenced by the correspondence. I have not referred to all of it, but I have certainly formed that view. It would be unwise to assume that there would be no risk of damage to the respondent's business if it were compelled by the Court to continue using the services of the applicant. That problem could be remedied by an undertaking as to damages. Although the respondent asserts that any undertaking by the applicant would lack value, it has accepted that a joint undertaking given by both Mr Windle and the applicant would be sufficient for its purposes.
The other matter of some concern is the capacity to give this matter an early trial. Given, in particular, the fact that the applicant is, obviously, a small businessman, I appreciate that a speedy trial would be one, and probably the most effective solution to the problems that face me. However, I am, myself, going on leave in a month, and the parties will not be ready to proceed in anything less than a month.
I have made inquiries of the National Operations Registry as to the availability of another Judge. They seem to have been unable to find anybody. In those circumstances it seems unlikely that there will be any trial before late October at the earliest. The matter is further complicated by the fact that it is most unlikely that at trial, the applicant would obtain ongoing injunctive relief, restraining the termination of the contract.
Indeed, although it seeks a permanent injunction, counsel has made it clear that it does not expect to obtain any such relief. Rather, the relief that would be sought would be limited to a period of reasonable notice. When one understands the case to be cast in that way, it seems that what the applicant is really seeking to do is simply to delay the eventual termination of the contract, so as to continue to obtain the benefit of it in the short term.
Such motivation is not a disqualifying feature, but it does highlight the fact that in the end it is damages, and not injunctive relief which will be the proper remedy. In those circumstances, and taking into account the apparent difficulties which have attended compliance with the orders previously made in this matter, I conclude that the balance of convenience lies in favour of declining the injunctive relief sought. I therefore, refuse the application.
I order:
1.that the applicant pay the respondent's costs of today;
2.the applicant file and serve its reply to the defence on or before 30 August 2016;
3.the parties file and serve any expert evidence to be relied on at the hearing by 30 September 2016 and, otherwise comply with the relevant practice direction;
4.the parties be at liberty to apply on three days' notice by either to the other;
5.the trial take place at Brisbane on 24, 25 and 26 October 2016; and
6.the costs of the proceedings otherwise be reserved, including those relating to the appearance on 16 August 2016.
The application for an interlocutory injunction is refused.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate:
Dated: 21 July 2017
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