Associated International Group of Nurseries Inc v Nutrafruit - [2024] QSC 234

SUPREME COURT OF QUEENSLAND

CITATION: Associated International Group of Nurseries Inc v Nutrafruit
Pty Ltd [2024] QSC 234
PARTIES: Associated International Group of Nurseries Inc
(Applicant)
v
Nutrafruit Pty Ltd
(Respondent)
FILE NO/S: BS11190/24
DIVISION: Trial Division
PROCEEDING: Civil Application
ORIGINATING Supreme Court at Brisbane
COURT:
DELIVERED ON: Order made: 2 October 2024
Reasons published: 3 October 2024
DELIVERED AT: Brisbane
HEARING DATE: 25 September 2024
JUDGE: Ryan J
ORDER: The application is dismissed with costs.
If the applicant wishes to make submissions about refining the terms of the respondent’s undertaking, then it may contact my associate to arrange a suitable time for that issue to be dealt with.
CATCHWORDS: EQUITY – EQUITABLE REMEDIES – INJUNCTIONS –
INTERLOCUTORY INJUNCTIONS – GENERALLY –
where the respondent entered into a contract appointing the
applicant to be its exclusive agent for the global marketing
and commercialisation of the Queen Garnet plum – where the
respondent formed the view that the applicant had breached
the contract – where the respondent purported to terminate
the contract – where the respondent then took steps itself to
market the plum globally – where the applicant applied for
declarations that the contract termination was invalid and that
the contract remained in force – where the applicant sought
an interlocutory injunction to restrain the respondent from
interfering with the applicant’s rights as the respondent’s
exclusive agent until its application for declarations was
determined – where the balance of convenience lay – whether
the applicant’s delay disentitled it to relief
Aveo Retirement Homes Limited v Springfield City Group Pty
Ltd [2024] QCA 120, considered
Capgemini US v Case [2004] NSWSC 674, considered
Groupline Constructions Pty Ltd v CDI Lawyers Pyt Ltd
[2024] QSC 209, considered
Imac Security Services Pty Ltd v Tyco Australia Pty Ltd
[2002] VSC 592, considered
Scyne Advisory Business Services Pty Ltd v Heaney [2024]
NSWSC 275
Tasman Fighters Pty Ltd v Teremoana [2024] QSC 226,
considered
Zuellig v Pulver [2000] NSWSC 7, considered
COUNSEL: M T Hickey with T E Randall for the applicant
C Templeton for the respondent
SOLICITORS: Robinson Nielsen
Resolve Litigation Lawyers (Russells as town agent)

By written contract, the respondent appointed the applicant to be its sole and exclusive
agent for the global marketing and commercialisation of the Queen Garnet plum. The
respondent became dissatisfied with the applicant’s performance under the contract,
and formed the view that the applicant was in breach. It terminated the contract for
cause and took steps to market the plum itself. The applicant applied for declarations
that the termination was invalid and that the contract remained in force. Pending the
hearing of the application for declarations, the applicant sought orders restraining the
respondent from interfering with its rights as the respondent’s sole and exclusive
agent. I heard the application for the interlocutory injunction. I dismissed it on
2 October 2024, with costs, and informed the parties that I would publish my reasons
as soon as possible thereafter. These are my reasons. As they reveal, I reached my
decision to dismiss the application on the basis of the respondent’s undertaking to the
court in the terms it proposed at the hearing (among other matters). If the applicant
wishes to make submissions to me about refining the terms of that undertaking, then
it may contact my associate to arrange a suitable time for that issue to be dealt with.
Background
Scientists working for the Queensland State Government developed a new variety of
plum, known as the Queen Garnet plum (QG), which was said to have certain health benefits. The State of Queensland owns the intellectual property in the QG. The
State of Queensland wished to commercialise the QG globally.
On 2 March 2010, the State of Queensland entered into a Master Commercialisation
Agreement (MCA) with Nutrafruit (NF), in pursuance of which it granted a licence
to NF to “commercialise” the intellectual property it held in the QG. The intellectual
property it licenced to NF included rights under an Australian “PBR” (which
protected the intellectual property rights of plant breeders) and under a United States
Plant Patent.
Item 6 of Schedule 1 to the MCA set out the purpose of the licence and the field of
commercialisation as follows:
[The relevant government department] wishes to appoint Nutrafruit as the exclusive commercial development partner to manage the commercial development, propagation, promotion and marketing of the “Queen Garnet” plum fresh fruit and fruit products.
The opportunity exists to propagate, grow, promote and market fresh fruit and/or fruit products from trees of “Queen Garnet” plum and similar varieties bred by [the relevant government department], that have elevated levels of antioxidants and anthocyanin which may have human health benefits when consumed.
The meaning of “commercialise” in the MCA included –
(a) …
(b) in relation to material of a plant variety, to produce or reproduce, condition for propagation, offer for sale, sell, import, export, or to stock for the purpose of doing any of those things; …
(c) …
Under clause 3.1 of the MCA, NF was permitted to grant a sub-licence to any person
(on certain conditions). Under clause 4 of the MCA, NF was required to pay the
Government a licence fee (4.1) and a royalty fee (4.2).1

The contract between Nutrafruit and AIGN for QG; and the agreement between
AIGN and Vitaplum

AIGN is an American company. It asserts that it specialises in the global management
of plant breeder intellectual property; fruit tree commercialisation; and nursery
The MCA was varied and extended on 16 July 2012.
operations. Among other things, it asserts that it develops co-ordinated marketing
plans at a global level for tree sales and commercial fruit production. It has a network
of members from various countries around the world, including the Australian
Nurserymen’s Fruit Improvement Company Ltd (ANFIC) in Australia. Its
promotional material asserts an expertise in intellectual property protection, including
the following:
How We Support Our Members
…
Intellectual Property Protection
Protecting your product from replication is imperative to ensure the highest returns to the stakeholders. We are experts in Intellectual Property Protection and have the tools to help you navigate the complex process of keeping your investment secure.
NF “faced problems” regarding an application for plant breeder’s rights (PBR) for
QG in various countries, including China, Chile, and Argentina.
Material before me included emails from 2018 between the relevant Queensland
Government department (the Department of Agriculture and Fisheries), an entity
called Davies Collison Cave Intellectual Property (DCC), Nutrafruit, and others about
PBR protection in China and Chile for the QG and importing budwood into those
countries. I note that most of the discussion about PBR and importation was between
the Government department and DCC. I also note the complaint by the Government
department about Nutrafruit “causing some unnecessary delays” in an email dated 10
May 2018.
In about 2019, NF contacted AIGN to (NF said) assist it with its PBR applications,
and in the commercialisation of QG. NF said it provided AIGN with all relevant
documents and information about the PBR issues it was having during its pre-
contractual negotiations with AIGN.
On 12 November 2019, AIGN provided to NF an “Exclusive Worldwide Plant
Variety Commercialisation Proposal”, which stated that an early indication of the
commercial potential of QG could see more than 30,000 tonnes (700 ha) produced
globally as fresh fruit. Under the proposal, AIGN said that it would –

(a) distribute QG globally to the majority of AIGN territories [that is, nominated
countries or regions from around the world];

(b) continue QG’s evaluation and commercial assessment in the AIGN territories;
(c) manage all marketing of trees, fruits and by-products of QG in all AIGN
territories; and

(d) “use its best endeavours to include [Nutrafruit’s existing] test growers and
organisations in the AIGN global commercialisation plans”.

Also, under the proposal, AIGN said that it would “continue to manage existing IP
applications and grants”.
On 31 January 2020, AIGN entered into an agreement – a Multi-Territory License
Agreement – with Vitaplum Technology Pty Ltd, for the GW1 plum variety which
was owned by Vitaplum (in the same way as the QG was “owned” by the State of
Queensland). NF considered the GW1 plum a QG competitor. AIGN considered the
GW1 plum and the QG to be complementary varieties and saw benefit in marketing
them (and a third variety of plum) together.
On 10 June 2020, NF entered into a sub-licence agreement with AIGN, entitled
“Multi Territory Marketing Services Agreement for Queen Garnet Plum”. I will refer
to this agreement as the “contract” to reflect the language of the application.
The background to the contract included the following recital:
AIGN desires to provide services to Nutrafruit to assist Nutrafruit with the marketing of Plums as defined below and selection of Sub- licensees2 as defined below and as provided herein.
A “sub-licensee” was defined as “any party with whom AIGN enters into a Sub-
license on behalf of Nutrafruit”. “Marketing” was defined as “the propagation,
growth, harvest and sale of [Queen Garnet Plum] Plants [including scion, nursery
trees and budwood] and the harvest, packing, distribution and sale of Plums in
specified Territories”. The “Territories” included “China … South Korea, Japan,
New Zealand, South Africa, the United States, Mexico, Canada, Turkey, Europe,
“Licence” was spelt with a “c” in some documents and an “s” in others, reflecting the fact that AIGN is an American company dealing with an Australian company.
including the UK, Chile, Argentina and any other territories that the parties may agree
upon from time to time”.
By clause 2 of the contract, NF appointed AIGN as “its sole and exclusive agent to
pursue Marketing of the Variety [the Queen Garnet plum] in the Territories including
the development of an exclusive brand with Trademarks for the Variety in the terms
of this Agreement and AIGN accepts appointment on those terms”. If NF wished to
pursue the marketing of QG in other territories of the world, then, by clause 2(b),
AIGN had a right of first refusal to market in that other territory. By clause 2(c),
AIGN was authorised by NF to solicit, negotiate, and sign or otherwise conclude Sub-
licenses on behalf of NF with the prior written approval of NF “whose consent must
not be unreasonably withheld, conditioned or delayed”, for the purpose of marketing
the QG.
By way of consideration, AIGN was to receive a commission equal to 50 per cent of
the royalties received by NF under any sub-licence. The royalty rate was to be
determined on a territory-by-territory basis.
Clause 9.2 set out the mechanism for termination of the contract, including for cause
as per clause 9.2(a)(i):

(a) A party may terminate this Agreement for cause if -

(i) the other party fails to pay royalties or materially abide by the terms and conditions of this Agreement and fails to cure the breach within twenty-one (21) days of receiving a written notice from the other party.

The contract was signed by Luke Couch, a director of NF, and Lynnell Brandt, a
director of AIGN.
The relative expertise of Nutrafruit’s and AIGN’s witnesses
The evidence before me on this application included affidavits from Dr Gavin Porter
for AIGN and from Mr Indrajit Ghosh for NF.
Where there was a contest between Dr Porter and Mr Ghosh about matters involving
fruit trees, such as the expected timeline from quarantine to commercial production,
the applicant invited me to prefer Dr Porter’s evidence over Mr Ghosh’s evidence because of Dr Porter’s experience, which it contended was more relevant than
Mr Ghosh’s experience.
Dr Porter is the current chief executive officer (CEO) of AIGN. Dr Porter has
17 years’ experience as an academic in the field of intellectual property management
and the commercialisation of new fruit varieties; a “Ph D” in Botany; and 22 years of
private industry experience in fruit crop production. Dr Porter is also the CEO of
ANFIC. In his affidavit of 23 September 2024, he outlined his experience in detail.
Mr Ghosh has been a trader of agricultural products; a majority shareholder in a
company which traded in seeds, including fruit seeds; and a shareholder and director
of companies, including those in the fruit industry. He advised a Government about
the export of rice between 2005 and 2009. Mr Ghosh claimed significant expertise
acquired over years of industry experience. He was appointed a director of Nutrafruit
in 2019 and in that position gained experience in several aspects of the marketing and
commercialisation of QG in Australia and Spain.
On the strength of the affidavit evidence, I could not choose who was the “better”
expert. But as it turned out, their relative expertise was not a matter of significance
in this application. I was prepared to accept that the process of commercialisation
took time, and that there was no guarantee of success.
The lead up to the present application and the issues for me
According to Dr Porter, a successful QG global marketing campaign in the EU, the
USA, South Africa and China could be expected to generate a revenue for AIGN of
approximately USD $714,000,000.00 by the year 2040. While this was not spelt out
in the evidence before me, I infer that NF could expect the same, given the parties’
agreement upon a 50:50 revenue split.
Obviously, it was to the benefit of both AIGN and NF for AIGN to work as hard as
it could to commercialise the QG, and for NF to co-operate with AIGN, to the extent
to which it was reasonable, to further commercialisation proposals. However, within
a relatively short period of time, each party was complaining about the other and
accusing the other of breaching the contract.
Ultimately, NF gave notice to AIGN of its intention to terminate the contract (the
breach notice) on 11 March 2024 (if AIGN did not do certain things within 21 days)
and notice of termination on 5 April 2024.
AIGN refused to accept the termination as valid.
On 23 August 2024 AIGN filed an application for declarations that the contract was
in force and that NF’s purported termination was of no effect. In the same application,
it sought an interlocutory injunction to restrain NF from (among other things) –
interfering with or seeking to interfere with the continuance of the applicant’s right to act as the respondent’s sole and exclusive agent for the Marketing and sub-licensing of the Queen Garnet variety of plum, except by engaging in this proceeding.
As is well known, the matters for a court to consider on an application for an
interlocutory injunction are: (a) whether the applicant has a prima facie case (that is,
a case with a sufficient likelihood of success as to justify, in the circumstances, the
preservation of the status quo pending the trial); and (b) where the balance of
convenience lies, which may include consideration of any delay by the applicant in
bringing its application. I was also required to consider whether damages would be
an adequate remedy for any harm that might be done to AIGN by my not granting the
injunction if AIGN were proved to be right at trial about the invalidity of the
termination.
At the hearing of the application for the interlocutory injunction, AIGN explained that
I was not required to consider (a) as a reason for granting the injunction. And, to the
extent to which AIGN’s likelihood of success was relevant to my assessment of the
balance of convenience, the parties agreed that it was a neutral factor. They
acknowledged that I could not possibly evaluate AIGN’s prospect of success in the
substantive application on the material before me.
AIGN offered the usual undertaking as to damages offered in these applications.
Mr Ghosh challenged the value of that undertaking in detailed affidavit material.
However, I was informed at the hearing that I need not worry about that issue, because
any order for an injunction that I might make could be or would be conditioned on
the provision of an undertaking by AIGN by way of the payment of money into court,
and that money, in an agreed amount, was already in AIGN’s solicitor’s trust account.
To evaluate where the balance of convenience lay and to gain an understanding of the
harm that might be suffered by AIGN were there to be no order for an injunction, and
whether damages would be an adequate remedy for it, I considered the progress made
under the contract.
Progress under the contract and the deterioration of the relationship between the parties
Dr Porter’s affidavit of 23 August 2024 set out the actions taken by AIGN under the
contract. They included: shipping budwood to certain territories, taking steps to
maintain intellectual property rights in EU and the USA, investigating the status of
plant breeder rights, registrations and trademarks in certain of the territories,
contacting 20 test growers “to establish test trees “in as many AIGN territories that
were able to receive plant material through Plant Quarantine as was possible”; taking
steps to resurrect the plant breeder rights applications (made by NF) through plant
material distribution in China and New Zealand; causing trees to be planted in some
of the territories; and paying quarantine fees (of about USD $120,000 per year). The
actions took place mostly between 2020 and 2023, with the payment for quarantine
being the only action listed for 2024.3
AIGN also “sought methods to commercialise the Queen Garnet globally in a
coordinated manner, as plant material was distributed globally and established prior
to evaluation of the Queen Garnet variety for climatic and commercial adaptability”.
To explain: the State of Queensland had secured intellectual property rights for the
QG in some of the AIGN territories before AIGN was in the picture and before any
sub-licence had been entered into in those territories. For territories in which plant
breeders’ rights could not be established, NF expected AIGN to establish alternative
intellectual property rights (such as brand development using trademark names) so
that there would be commercial value for growers to invest in the QG.
On 9 April 2021, Dr Porter provided NF with a report on the status of the QG’s
marketing and commercialisation. It is fair to say that the report did not contain much
good news. It noted that AIGN had been “partially successful” in contacting the
For what it was worth, Mr Ghosh stated that, in his experience, nurseries did not charge for quarantining, propagating, or evaluating plant material. He gave as examples: the nurseries used by NF in France prior to the signing of the contract; the Stargrow nursery in South Africa; and the Escande Nursery in France.
various QG testers, previously licenced by NF, to access QG fruit for initial
evaluation. It set out the “major challenges” faced by AIGN in globally
commercialising the QG which included there being several territories where plant
breeders’ rights were unlikely to be granted (for example, New Zealand, China, and
Chile). AIGN said –
Commercialisation will be difficult enough in these territories with PBR but without it, it will be close to impossible and that’s assuming QG isn’t already illegally imported into these territories.

Another challenge was that, although the NF testers had access to QG plant material
since 2020 to propagate trees and evaluate the variety, there were –
very small numbers of test trees planted in most territories, little fruit variety evaluation has been done and while there appears to have been some uncontrolled semi-commercial plantings in Europe with fruit sold as red fleshed plum and not Queen Garnet, there’s been little commercial evaluation in the past 10 years.
Further, most of the licenced testers were “antagonistic” towards AIGN and initial
access to them had been difficult. AIGN’s members would try again in 2021 to
confirm the tree numbers planted by past testers. AIGN was continuing to develop a
global commercialisation and marketing plan, but COVID 19 had affected its work
practices and it was not finalised.
Having said all of that, AIGN still considered 1.75 million trees (on 700 hectares) to
be a realistic amount to plant in the USA, the EU, and South Africa initially. There
were already test growers in some of the territories and AIGN said it would use its
best endeavours to include those test growers in its global commercialisation plans.
In a more detailed analysis of the state of things, AIGN raised issues about other
matters, including but not only –

(a) its inability to access plant material which had been established in test blocks
in New Zealand;

(b) the challenge of commercialisation in China because there was no ability to
enforce plant breeders’ rights there (a PBR application having not been
successful);

(c) the plan to plant 5000 trees in Morocco which was abandoned;
(d) that none of the testers on the list of EU testers provided by StarFruits (one of
AIGN’s EU members) was under an AIGN testing agreement because no new
test trees had been planted in the past year;

(e) that in 2020, there were some fruits in the South of France but none in Italy
because of Spring frost damage;

(f) that 2021 would be difficult in Europe because of frost which had already had
an impact on France, Spain, and Italy; and

(g) that in New Zealand, McGrath Nurseries refused to share any QG plant
material with AIGN’s New Zealand member without being paid NZ $220,000
for plant quarantine and the propagation of the initial test trees which AIGN
considered an unjustifiable price.

There were more positive signs, including but not only that –

(a) Cameron Nursery (sub-licensed by AIGN in the USA for the purposes of
propagating and trialling QG) supplied AIGN with propagation material in
August 2020 so that AIGN could build mother trees for its block;

(b) AIGN would be collecting more material “this coming fall” for further
propagation of trial trees – 250 were proposed, to be available in 2023;

(c) Stargrow (which had been licenced by NF as a test grower) had approximately
600 trees planted in a semi-commercial planting; and

(d) TopFruit (AIGN’s South African member) had been in contact with Stargrow
and accessed plant material to propagate an additional 5,000 trees for semi-
commercial planting in July 2022.

On 22 October 2022, Dr Porter provided to Mr Couch an update about the status of
testing the QG in the northern and southern hemispheres and the impact of
COVID 19. The update included reports of very attractive fruit and easy to manage
trees from one crop in France; with similar feedback from Spain. The update included
reasonably positive news and plans from Europe; less positive and more cautious
news and plans from the USA; and optimistic, yet cautious, news and plans from
South Africa.
On 6 January 2022, Dr Porter provided to Mr Couch an AIGN proposal for a sub-
licence in the USA. It was sent under cover of an email which said, “Please find
attached an AIGN proposal from our USA AIGN member for consideration by
Nutrafruit for the Farmgate fruit sales market sector for QG. This is just a precursor
to a future commercial proposal for the USA orchard sector but these market sectors
work in harmony in the USA”.
The USA proposal was authored by Mr Kevin Brandt.4 The proposal was by way of
a one-page, relatively informal, letter. The proposal was in the following terms:
While we work to build the commercial segment for the Queen Garnet cv., we have been approached by a closely affiliated nursey that has an interest in providing Queen Garnet cv trees to growers who provide fruit to the farmgate segment of the industry …
The proposal referred to the impact of COVID 19 on the purchasing habits of
consumers – including causing consumers to order online and not to enter crowded
stores thereby hindering the introduction of new fruit to them. It said that plums were
number 19 of the top 20 fruits sold within the USA and that customer satisfaction
with them to date had been quite low. It said that Farmers’ Markets in the USA made
Honeycrisp “what it is today” (a very successful apple). It said, “Tens of thousands
of Honeycrisp trees are grown specifically for the farmgate market and we envision
Queen Garnet as having the same potential once promotional activities and consumer
recognition takes hold” (my emphasis). It sought permission to licence the QG, to be
grown and sold specifically for the farmgate market. It proposed a $2 per tree royalty
rate with a continuing fruit production royalty (the detail of which I will not set out
here). However, the farm gate proposal did not include much detail at all. For
example, it did not include detail about the size of the planting contemplated; or
planting rates; or timeframes; or why Farmgate growers might be interested in the
QG.5
The evidence did not disclose whether Kevin Brandt was related to Lynnell Brandt, the director of AIGN who signed the contract.
In later correspondence (dated 16 May 2024), on behalf of NF, NF’s lawyers asserted that the proposal did not constitute a commercial proposal because it omitted details about the total area under production; the expected target area/target markets; areas of production; financial costs and returns; the total number of trees to be planted; and fruit yield annually over a period of time.
On 25 January 2022, AIGN provided to NF a proposal to commercialise QG plants
in South Africa. The form, content and detail of this proposal may be contrasted with
Mr Brandt’s one-page, casual, Farmgate letter proposal.
The South African proposal included a royalty of $1.30 per tree (capped at 2,500
trees) and a certain production royalty. It proposed that TopFruit would manage the
overall coordination of the commercialisation. The final page of the proposal
explained that the document was an initial draft and ought to be seen as a discussion
document. It contained several cautions, including in relation to congestion in the
stone fruit market; and the reasons why growth was slowing down. It concluded with
the following dot points:
 TopFruit sees a promising opportunity for Queen Garnet, within the South African industry, provided that the business case is profitable for all involved, with the emphasis on the grower who makes the biggest investment when establishing an orchard.

 Queen Garnet is already seen as a promising premium variety
and TopFruit believes that the uptake will be good.

Neither Mr Brandt’s proposal nor AIGN’s South African proposal were endorsed by
NF. Mr Ghosh did not consider Mr Brandt’s letter to amount to a commercial
proposal and the South African proposal as it stood (that is, as an initial draft for
discussion) was, from the State Government and NF’s point of view, uncommercial.
On 15 March 2022, Dr Porter provided to NF a report on the state of the global
nursery market by way of a presentation entitled “AIGN Management Team
Presentation”. The presentation was not optimistic about the state of the global
market although, obviously, I am not suggesting that AIGN was responsible for
downturns in markets, or frosts, or increasing competition, or lost excitement, or lost
appetite for new varieties, or the impact of COVID 19 et cetera. Individual AIGN
members’ reports (which were part of this presentation) were also, on the whole,
pessimistic about the state of the fruit industry generally: however they were not plum
specific and tended to focus on apples and pears.
On 14 June 2022, Dr Porter provided to Mr Couch a report on the status of the QG’s
commercialisation and the issues it was facing. Dr Porter explained that, at its recent AGM, AIGN’s members had discussed at length the QG variety and its potential
global commercial development. He said –
The AIGN President and AIGN Executive are becoming concerned about some of the roadblocks now being encountered with QDAF6/Nutrafruit, which will hinder the successful global commercialisation by AIGN for QG in the current global economic climate and the impact on each AIGN territory’s plum industry. As AIGN is unable to put a global IP system in place to assist with global commercialisation, to make these global plans work and be commercially viable, AIGN has to explore other means of both variety and brand protection. This takes time and considerable funds to be achieved globally, without a global IP system in place.
Dr Porter went on to elaborate upon the problems caused by a lack of global IP rights.
He raised the South African TopFruit proposal, and explained that, because of the
royalty rates required by QDAF (which he said exceeded royalty rates for similar
programs in South Africa by 200 – 300 per cent), the program was unsustainable and
unviable and there was little chance of attracting growers to it. Dr Porter requested a
meeting with Mr Couch and QDAF to further discuss the global outlook, the South
African proposal, and QDAF’s royalty expectations.
On 28 June 2022, Mr Couch replied to Dr Porter. He said the IP challenges described
by Dr Porter were “legacy issues for Queen Garnet that all parties have been aware
of for a period of time far preceding [the contract]”. He continued, “To flag these
concerns as a challenge to commercialisation 2 years after the execution of the
agreement doesn’t fill us with confidence that AIGN is actually committed to the
success of the variety internationally”. Mr Couch also discussed in detail the
TopFruit proposal for South Africa.
On the legacy issues point, Dr Porter said that AIGN was aware that QDAF and NF
were having issues with PBR applications in China, Chile, and New Zealand, and
intended to provide assistance in that regard.
Dr Porter said that AIGN asked NF for a power of attorney to assist it in relation to
PBR issues. His affidavit said “AIGN did not receive this”. His affidavit went on to
explain that NF told AIGN that another entity had power of attorney and attached an
email chain from June 2020 (not long after the contract had been executed). In an
The acronym for the Queensland Department of Agriculture and Fisheries.
email to NF in that chain, Dr Porter expressed AIGN’s excitement about the
arrangement and indicated that NF’s input was required in relation to several matters,
including the granting of power of attorney to AIGN. Dr Porter said –
Some of the AIGN members eg Chile and China, have expressed a willingness to assist in any PBR applications, as they have members in-country, as well as established IP protection pathways with all of the various Plant Breeders Rights offices and personnel. To assist in these PBR applications, would Nutrafruit please provide a Power of Attorney (POA) or similar to allow us to inquire and assist in gaining PBR in any outstanding jurisdictions.
In reply to that request, Mr Couch said:
DAF [the Government department] looks after PBR for the variety so I’m unsure if they would look to sign over POA. They use Davies Collison Cave in Melbourne and we haven’t had much in the way of progress over the last few years. If your members want a link to talk through the history today, I’d be happy to bring all parties together.
In March/April 2023, NF was contacted by Evan Lin on behalf of Joy Wing Mau
(JWM). JWM is a leading wholesaler of fresh fruit in China and a 25 per cent
shareholder in Shennong Variety Management LTD (SVM), AIGN’s member in
China. The relevant email chain exhibited to Mr Ghosh’s affidavit commenced on
20 March 2023 with Mr Lin’s email to [email protected] and concluded with
Mr Lin’s email to Mr Couch dated 29 May 2023.
On 27 March 2023, Mr Couch replied to the first email in the chain, thanking Mr Lin
for his enquiry; sending him information; and stating that NF was interested in
starting discussions with JWM about the potential to commercialise QG in China. He
suggested a meeting. On the same day, Mr Lin replied with a proposed meeting
agenda which mentioned JWM’s desire to become NF’s partner if QG were suitable
for planting in China. The next few emails consisted of an exchange of information
and a discussion of possible dates for a Zoom meeting – settling on 6 April 2023.
On 10 April 2023, Mr Lin raised some issues with Mr Couch, including the
following:
Since JWM and SVM … are related, please tell us what your commitment to SVM is?
Mr Lin also asked about NF’s propagating rights or licences in China.
On 19 April 2023, Mr Couch told Mr Lin that, “[a]s discussed,7 Nutrafruit has an
agreement with AIGN giving them rights to commercialise in overseas territories,
(including China) in conjunction with Nutrafruit. We have no relationship with SVM
but understand they are a member of AIGN. SVM is also the sponsor of QG into
quarantine in China”. Mr Couch told Mr Lin about the NF board’s response to an
opportunity in China:
The opportunity in China was discussed by our Board at yesterday’s meeting.
As we discussed, for Nutrafruit to move forward with JWM (particularly on an exclusive basis) we will need a proposal on the size of the opportunity in China and a proposed planting program …
Mr Couch told Mr Lin he was going on annual leave “tomorrow” and would be back
on 15 May 2023. He asked Mr Lin to provide his projections for QG (before 15 May)
so that he might discuss them with Mr Lin upon his return to work.
On 20 April 2023, Mr Lin emailed Mr Couch the detail requested. He also explained
that his boss, Mr Liu, was “quite concerned” because of the relationship between
JWM and SVM and asked Mr Couch to ensure that JWM’s cooperation with NF
would not cause conflicts. After an exchange of inconsequential emails, Mr Couch
replied to Mr Lin on 24 May 2023 (see below).
On 26 April 2023, AIGN provided a report for the 2022 season. It explained, with
reasons, that AIGN had no prospect of commercialisation in the EU or the USA in
the next two years. It noted that –

(a) the Farmgate proposal was declined because it was not commercially viable for
NF;

(b) the TopFruit proposal was not going forward because there was no agreement
with NF about its terms;

(c) the attempt to re-introduce the QG into New Zealand was unsuccessful because
the trees in quarantine died;

(d) the cost of attempting to import QG into New Zealand again might not be worth
it, given the limited size of their plum market;

I assume during the Zoom meeting on the 6th.

(e) the time to commercialisation in Chile was about 7 years;
(f) plant material was still in quarantine in South Korea;
(g) the plant material in China was still viable; and
(h) QG was in a Chinese market.

The report also noted that NF had declined to add India to the AIGN territories for
QG evaluation and potential commercialisation.
On 23 May 2023, Mr Couch emailed Mr Lin and invited a discussion about the
timeline for trials of the QG in China and its subsequent commercialisation and other
details. He concluded his email with an assurance that NF would “not look to cause
tension between JWM and SVM” and that NF was “currently exploring options that
we believe could be beneficial to all parties”.
On 29 May 2023, Mr Lin provided details about quarantine, explaining that JWM
had its own quarantine facilities which meant that the plant material did not have to
be quarantined in customs quarantine and that it could be tested and trialled at the
same time, saving two to three years. The trial period would be of three to four years.
He also said –

- About the schedule and projection for commercial planting
Frankly speaking, we are interested in QG and we have already made a timeframe and projection for commercial planting.
However, as you know, our boss is one of the directors of AIGN and he just went to Australia for the annual board meeting of AIGN. They clearly told him that AIGN has signed agreements with Nutrafruit and they are titled (sic) for managing QG internationally, including the business in China.
In this case, I am not allowed to send you the timeframe and projection until we figure out who we should talk to about the partnership. I hope you can understand and sort out with AIGN.

On 12 June 2023, AIGN wrote to Mr Couch “Re: Notification To Nutrafruit Re
Breach of Multi-Territory Marketing Services Agreement Due to Nutrafuit’s Recent
Commercial Discussion in China”. The letter complained about Nutrafruit’s CEO
having discussions about commercialisation in China, in “clear breach of the
agreement Nutrafruit has with AIGN, as its sole and exclusive agent to pursue the Marketing of Queen Garnet in many territories, including China (and Hong Kong)”.
It continued:
This action shows further disregard by Nutrafruit for AIGN, our sole and exclusive licence and our international capability, as we had previously presented two AIGN commercial proposals for other territories to Nutrafruit, which were denied.
It referred to the “rescue project” terms put to Nutrafruit by AIGN in July 2022 and
said the rescue project was only possible if Nutrafruit approved AIGN’s commercial
proposals and did not undermine AIGN’s international capability.
It warned about IP issues:
The lack of PBR for Queen Garnet in many territories, has already likely led to illegal propagation and marketing of Queen Garnet with NO opportunity for Nutrafruit and the variety owner to manage this or enforce any IP rights.
The longer AIGN is denied the ability to proceed commercially with the international proposals made to Nutrafruit, the higher the risk of unauthorised and illegal activity which no-one will be able to stop. Queen Garnet will effectively become a “public” fruit variety … if some authorised commercial activity isn’t started in the territories, which already have access to Queen Garnet plant material.
It also warned about the state of the industry and suggested that AIGN’s proposals
were the best opportunities currently available.
It requested three actions by NF, namely, (a) to advise it of the commercial terms it
was willing to accept for China, so that AIGN could prepared a proposal for NF for
immediate acceptance; (b) to share AIGN’s previously submitted proposals with the
Queensland Government for review and potential acceptance; and (c) to provide its
written feedback and that of the Queensland Government on the reasons for
acceptance or rejection of the AIGN’s commercial proposals.
On 19 June 2023, Resolve Litigation Lawyers, for NF, wrote to Stokes Lawrence,
the lawyers for AIGN. It listed NF’s concerns about AIGN, which included (but not
only) concerns that AIGN had not entered into any sub-licensing agreements with
growers other than with test growers, including those with whom NF had a previous
relationship; and concerns that PBR and trademark applications had not been pursued
in the territories. It noted that there had not been a proposal put to NF for the
propagation of QG. It was also concerned that AIGN had a conflict of interest as agent for both GW1 and QG. It asserted that the difficulties AIGN referred to in
correspondence about its inability to put in place a global IP system and the inability
to use “Queen Garnet” as a trademark were the same issues faced by NF and conveyed
to AIGN during pre-contractual negotiations. Further, those issues related only to
China and some South American countries.

The letter referred to the complaints made by AIGN about NF “speaking with a
certain party in China” and asserted that NF was not in breach of the contract by doing
so. In response to AIGN’s complaint that NF was unreasonably rejecting its
proposals, it asserted that the proposals were uncommercial and therefore reasonably
rejected. The letter informed AIGN that NF had formed the preliminary view that
AIGN had committed a material breach of the contract and requested that AIGN
“show cause in writing, within 14 days” as to why AIGN had not committed a
material breach; failing which, NF would consider its entitlement to terminate. In the
meantime, NF “reserved its rights”.
On 6 July 2023, Stokes wrote to Resolve, responding to the 19 June 2023 letter.
Stokes’ letter conveyed that:

(a) AIGN fundamentally disagreed with the allegations made.
(b) It was Nutrafruit who was in breach of the contract.
(c) The demand for a response in 14 days was inconsistent with paragraph 9(2)(i)
of the contract, which provided for a 21 day cure right.

(d) There was no basis for termination and AIGN wished to invoke the dispute
resolution process contained in paragraph 10 of the contract.

(e) AIGN had no responsibility for PBR – its role related to marketing.
(f) The deadline for global PBR applications was 13 July 2016 – four years before
AIGN’s involvement. AIGN did what it could to help in relation to PBR issues
but it did not accept responsibility for curing them.

(g) There was nothing improper about AIGN’s representing Vitaplum and QG.
(h) Nutrafruit’s denials of AIGN’s two commercial proposals were on a nominal
basis.
(i) Rejecting proposals on the basis that the royalty stream was not large enough
was arbitrary, capricious and unreasonable.

(j) Nutrafruit inexplicably went cold on the prospect of licencing in India.

After other complaints, the letter concluded with a demand (made previously) that the
parties resolve their issues by way of the dispute resolution process provided for in
the contract.
On 6 November 2023, Dr Porter provided to Mr Couch a report on the status of the
plum’s testing and marketing in the northern hemisphere and an interim update on
southern hemisphere testing. There were some positives in this report. The QGs from
some French trees were of good calibre and good eating. In the USA, the harvested
fruit from test trees provided “a very pleasant eating experience”, although testers
needed to be educated about when to pick the QG. Semi-commercial plantings had
been established in South Africa, with the first fruit to be harvested in March/April
of 2024. And the AIGN member in Chile continued to monitor the QG in quarantine,
awaiting its release.
Also on 6 November 2023, Dr Porter provided a proposal to Mr Couch to
commercialise Queen Garnet plums in China, through JWM. The covering letter
from Dr Porter included the following –
In addition to the AIGN Commercial Proposal, Joy Wing Mau would like to propose the following tree and fruit production royalty proposals for consideration by Nutrafruit for the Chinese territory.

 US$0.50 - $1.00 per tree Tree Royalty
 3-5% Fruit Production Royalty
 (These royalty rates would be split 50%:50% between
Nutrafruit and the AIGN Licenced Member)

I understand similar commercialisation timelines may have already been shared with you directly by Joy Wing Mau, so you will be familiar with the time required prior to full commercialisation in China.

The proposal contained a timeline, with Stage 1 (trials and evaluations) in 2024 –
2026, through to Stage 4 (full commercialisation) in 2032 – 2035 – that is, as I read
the timeline, 8 – 9 years.
Termination for cause
On 11 March 2024, Mr Ghosh sent to Mr Lynnell Brandt a notice under section
9.2(a)(i) of the contract (a breach notice).
Under the heading “Background”, the notice referred to AIGN’s proposal of
16 October 2019 for the commercialisation of QG worldwide, and its estimates that
more than 30,000 tonnes could be produced globally as fresh fruit. It also noted that,
before 2020, various plant growers in the territories showed an interest in QG,
including Stargrow in South Africa. It identified some of AIGN’s obligations under
the contract and asserted that the contract contained implied terms – including that
AIGN, as NF’s agent, was to exercise reasonable skill, care, and diligence in carrying
out its responsibilities and use all reasonable endeavours to pursue Marketing, as
defined in the contract. It noted that, since June 2020, AIGN had provided only two,
non-commercial proposals to NF (from the USA and South Africa). It had facilitated,
or attempted to facilitate test growing in several territories, but none resulted in a
proposal for propagation of QG. It asserted that AIGN “failed to plant even a single
tree” contrary to its 16 October 2019 proposal. It complained about the South African
proposal as follows –
[AIGN has] progressed commercialisation of QG in South Africa by facilitating the execution of a semi-commercial agreement on 12 August 2022 which led to the approval of QG as a varietal listing in South Africa on 24 August 2022, but failed to provide for a commercial return and did not result in a proposal being given to NF for the propagation of QGs.
The notice referred to NF’s concerns about AIGN’s non-compliance with its
obligations, as set out in the letter dated 19 June 2023, and asserted that AIGN failed
to address its concerns.
It noted that JWM/Mr Lin contacted NF directly in June 2023 to discuss collaboration
for the commercialisation of QG in China; and informed NF that AIGN had not
approached JWM about commercialisation of QG in China. It noted that the proposal
for China sent by AIGN to NF on 6 November 2023 contained terms which were
inconsistent with the royalty structure in the MCA. It observed that the proposal was
not attributable to any steps taken by AIGN but rather to the communication between
JWM and Nutrafruit. The notice asserted that each of AIGN’s proposals were
uncommercial or inconsistent with the royalty structures in the MCA. The notice asserted that AIGN had not progressed plant breeder’s rights or trademark
registrations in any of the territories. It also alleged, as a breach, AIGN’s working as
agent, for an alleged competitor of QG – GW1/Vitaplum, which was sold in the same
time period as QG.
In paragraph 21, AIGN was given 21 days to cure its alleged breaches by: (a)
procuring one written proposal from a credible grower (other than those which had
approached NF directly) which was consistent with the royalty structure in the Master
Commercialisation Agreement; (b) ceasing to market Vitaplum; and (c) providing a
plan outlining specific marketing strategies. In paragraph 22, the notice stated that if
the alleged breaches were not cured within 21 days, NF reserved its right to terminate
the contract and to treat AIGN’s conduct as repudiation of the contract.
The covering letter from Mr Ghosh provided an example of royalty terms which
would be consistent with the MCA and possibly satisfactory to NF. Additionally, it
referred to previous attempts to clarify the origin of the GW1 plum and asked for a
statutory declaration confirming: (a) “the accuracy and truthfulness of the origin of
GW1…”; (b) that QG and GW1 were not related varieties; and (c) that AIGN made
no representations about the origin of GW1.
There was no relevant response from AIGN in that 21-day period.
Material tendered referred to a letter sent on AIGN’s behalf to NF dated 4 April 2024.
That letter is not before me, but it is described in other material as not containing a
substantive response to the notice and confirming that AIGN had taken no steps to
cure the alleged breaches.
On 5 April 2024, Mr Couch sent a notice of termination of the contract for cause to
Mr Lynnell Brandt.
AIGN’s response to the notice of termination
Dr Porter asserted that, since 5 April 2024, AIGN acted as if the contract remained
on foot. He described AIGN’s actions in general terms in paragraph 43 of his affidavit
as follows:
AIGN has since [5 April 2024]:

(a) provided Nutrafruit with an annual marketing plan;
(b) continued to Market the Queen Garnet with AIGN members;
(c) continued the testing of Queen Garnet in certain regions;

(d)

distributed plant material to as many AIGN territories as possible while meeting territory importation requirements through plant quarantine facilities; and
(e) paid quarantine facility fees as and when they fall due.

As was observed at the hearing, the description of AIGN’s activities since 5 April
2024 was in very general terms without details such as: the dates upon which the
marketing referred to in (b) took place, or the name of the members to whom the QG
was marketed; or the dates of the testing referred to in (c); or the regions in which the
QG was tested; or the dates upon which the plant material was distributed referred to
in (d), or the date upon which quarantine facility fees were paid referred to in (e).
As to (a): On 9 April 2024, Mr Brandt wrote to Mr Couch. His letter bore the heading
“Re AIGN Annual Marketing Plan for Queen Garnet”. Among other things, it
defended AIGN’s progress to date. It said that –

(a) AIGN’s members with existing test QG trees had provided reports to AIGN
about their QG as part of the research and development of QG in the member’s
territories;

(b) additional test trees had been planted in recent years – and attached an
Appendix, which showed tree planting in Chile (2022), France (2021, 2022,
2023), Italy (2022, 2023), Spain (2022, 2023) and the USA (2014 and 2022);

(c) it had been unable to commercialise QG because its proposals had been
arbitrarily rejected by Nutrafruit;

(d) “AIGN continues to evaluate the Queen Garnet variety in trial sites pending the
grant of future commercial licenses”; and

(e) it had visited most of the previously licensed test growers and asked them to
sign new AIGN test agreements to protect the IP of the QG and to provide them
with commercialisation opportunities under a global marketing plan. All
previous and current test growers had “resigned” (I assume he meant “re-
signed”) under AIGN test agreements.

It went on –
4 The Forecasts of Queen Garnet fresh plum fruit are outlined below with a commercial license grant date of 2024 for the AIGN territories of the EU, South Africa, USA and China. These sales estimates are approx. 3,600 ha producing 110.000 tonnes of fruit within 15 years …
5 The Marketing steps and strategies to be developed once commercial licences have been granted include:

a The development of a new trademark for the Queen
Garnet plum variety.
b Through current market research … in various markets … to drive the branding and marketing strategies in each of the major markets.
c The development of unique packaging for each market
…
d Advertising and promotion …

It qualified its plan with the following –
If the commercial cooperation from Nutrafruit is received by AIGN in a prompt, fair and reasonable manner and commercial licenses were granted for the various AIGN member territories proposed, then there is an indication of the Annual marketing Plan and commercial timelines possible, provided no impediment to global plant material distribution occurs.
The report envisaged that trees would be planted by the end of 2024 and provided a
document which set out the number of trees to be planted in the EU, South Africa,
the USA, and China.
In his affidavit, Mr Ghosh challenged the forecast – explaining why planting by the
end of 2024 would not be possible and expressing his opinion that the number of trees
to be planted per hectare were inflated and unrealistic.
Nutrafruit’s actions since the notice of termination
Nutrafruit’s actions, since the notice of termination, included, but not only, the
following –

(a) From about 10 April 2024, Mr Ghosh has been in negotiations about the
potential commercialisation of QG in South Africa. On 12 April 2024, he
became aware of a semi-commercial QG plantation in South Africa from which
AIGN’s member, TopFruit, had received a one-time royalty, and continues to
receive five per cent of the value of the sales.

(b) From mid-April 2024, Mr Ghosh has been in discussions with Joy Wing Mau
about the export of QG and value-added products from Australia to China.

(c) Mr Ghosh has been in discussions with growers in Spain. QG plants are
already being commercialised in that country. And in August/September
2024, Mr Ghosh discussed planting 100 acres of QG with two growers.

(d) Mr Ghosh intends to attend the “Fruit Attractions” conference in Madrid
between 8 – 10 October 2024, during which he has arranged to speak to: a
marketing agent from the UK, who will introduce him to growers in Italy;
Stargrow representatives who will introduce him to growers in France; and a
representative of a Spanish grower who will introduce him to growers in Chile.

(e) Mr Ghosh is in discussions with the largest importer in the UK who is the sole
importer for Sainsbury’s.

Lawyers’ correspondence post the notice of termination

On 10 April 2024, Polczynski Robinson (PR), AIGN’s new lawyers, wrote to
Resolve. PR’s letter referred to prior communication between Resolve and AIGN’s
former American lawyers (Stokes), and between AIGN to NF, from 12 June 2023
until 12 February 2024. It noted that the issues between AIGN and NF had been
ongoing for some time. The letter stated that AIGN wished to work productively with
NF – but maintained its position (as reflected in the correspondence mentioned above)
that –

(a) NF had unreasonably rejected AIGN’s commercial proposals;
(b) NF had attempted to circumvent AIGN in the Chinese, Indian, European and
United Kingdom territories; and

(c) NF had attempted to compel the purported termination of the contract in bad
faith.

The letter went on to refute many of the claims made by NF against AIGN. It argued
why its proposals had been commercial. It stated that QDAF’s royalty expectations
meant the commercialisation of QG was not sustainable. The letter also dealt with
the origin of the GW1 plum.
Under paragraph 4, it set out inter alia the actions taken by AIGN. I note that some
of the actions were expressed in terms that suggested current activity – such as (my
emphasis):

(a) “Stargrow are working with AIGN … AIGN continue to evaluate the QG
variety in [South Africa and the EU].”

(b) “AIGN is taking steps to resurrect each of the PBR applications in China and
New Zealand …”

AIGN denied that it was in breach of contract. AIGN considered NF in breach,
including by failing to abide by the dispute resolution clauses of the contract. Thus,
it argued, the notice was invalid. It also defended its complementary marketing of
GW1 and QG: GW1 was not QG’s competitor.
The letter concluded with the following –

7.1.1 Nutrafruit’s purported Notice is ineffective and amounts to
a repudiation of the [contract] which is not accepted.
7.1.2 AIGN requires Nutrafruit to withdraw all of the allegations
in the Notice; and
7.1.3 AIGN considers that the [contract] remains on foot, and it will continue with all reasonable endeavours to pursue Marketing … of QG in the Territories.

The letter also stated that AIGN reserved its rights, including its right to damages, for
NF’s conduct and purported termination of the contract.
On 16 May 2024, Resolve replied to PR’s letter. It referred to an email dated 4 April
2024, from PR, which Resolve asserted “did not contain a substantive response to the
Notice or the 11 March Letter, and, indeed, confirmed that no steps had been taken
to cure the Breaches”. Resolve set out the justification for the notice of termination
and responded to the arguments made on AIGN’s behalf in PR’s letter including by
challenging the commerciality of the proposals put by AIGN, given the requirements
of the MCA; and denying that NF discussed any commercial terms with
Joy Wing Mau. It challenged AIGN’s assertion that it [AIGN] was currently working
with Stargrow, on the basis of NF’s “recent” discussions with Stargrow; it asserted
that its master plan, provided on 26 April 2023, did not include what it was required
to include under the contract; and maintained that GW1 and QG were competitors. It concluded with assertions that the contract had been validly terminated on 5 April
2024. It required AIGN to immediately cease acting as NF’s agent. And NF
“reserved all of its rights including, but not limited to, its rights under the [contract],
negligence and the Australian Consumer Law as well as in relation to AIGN’s
fiduciary obligations”.
As the parties put it – it was then “pistols at dawn”, in that each implicitly threatened
legal action unless the other did as demanded.
On 30 May 2024, PR wrote to Resolve and demanded that NF cease and desist
solicitation of business contrary to the terms of the contract; and cease its repudiatory
conduct with respect to the contract. It made it plain that AIGN did not accept NF’s
purported repudiatory conduct and that it considered that the contract remained on
foot. It complained about the conduct of Mr Ghosh in, essentially, soliciting business
in South Africa on 10 – 12 April 2024; and in China on 15 May 2024. It asserted that
this was not the first time conduct of that kind had occurred and referred to a letter
from Stokes to Resolve dated 12 February 2024. It gave NF seven days to respond
to the letter and comply with AIGN’s “Required Steps” as set out in the letter. It
concluded with the following –

4.2 AIGN is concerned that QDAF is not aware of the full extent of the work undertaken by AIGN including but not limited to the various opportunities that Nutrafruit has refused to pursue. AIGN will set out those details in further communication.
4.3 This letter may be relied upon on the question of costs,
including on an indemnity basis, should the need arise.

On 7 June 2024, Resolve replied to PR’s letter, asserting that –

(a) The contract was validly terminated;
(b) NF was therefore entitled to solicit QG business as it thought fit;
(c) AIGN was obliged to cease acting as NF’s sole agent;

It contained the following warning:
Our client will not hesitate to take whatever steps as it may be advised to protect its interests in the event that your client interferes or hinders, or attempts to interfere or hinder, with our client’s rights to communicate, solicit business, discuss commercial opportunities or grant exclusive sub-licences to any third parties. In particular, and without being exhaustive, your client must not make any representations to growers, nurseries or any other third parties to the effect that:

a. the AIGN Agreement remains on foot;

b.

AIGN continues to hold the right to act as the sole and exclusive agent for the commercialisation of QG in the Territories; or

c.

Nutrafruit may not enter into any testing or licensing negotiations or agreements with nurseries or growers in the Territories.

If growers, nurseries or others were to rely on some or all of the Representations and … [that could cause] Nutrafruit to suffer substantial loss and damage. Nutrafruit reserves its right to hold [AIGN] liable, and to pursue all appropriate remedies against [AIGN] in that regard.

It also indicated that Nutrafruit would vigorously defend any proceedings brought by
AIGN and reserved its rights, including to claim/cross-claim against AIGN for loss
and damage.

No legal action was taken (by either party) until the application for declarations and
an interlocutory injunction was filed by AIGN on 23 August 2024.
Arguments about balance of convenience
Each party’s case included an argument to the effect that it ought to be allowed to
pursue the marketing and commercialisation of the QG, prior to the determination of
the substantive application, because it would achieve better results that the other
party.

[112] AIGN submitted that the question for me was not who was best placed to
commercialise the QG – but rather whether the inconvenience or injury which the
applicant was likely to suffer if an injunction were refused outweighed the
inconvenience or injury the respondent was likely to suffer if the injunction were
granted. That is the correct way to understand the “balance of convenience” issue.
However, AIGN’s submissions were to the effect that Mr Ghosh/NF did not have the
necessary experience to commercialise QG or protect its IP, which was why AIGN
was engaged by NF in the first place. AIGN submitted, in effect, that the applicant
was likely to suffer more harm if an injunction were refused than that which NF would suffer if it were granted because NF was not as well placed as AIGN to commercialise
the QG or protect its IP.

The issue about relative injury or harm was complicated by the fact that the contract
between AIGN and NF required any revenue from the commercialisation of QG to
be equally shared. Speaking generally – if AIGN was right, and the contract had been
invalidly terminated, then no matter who earned commercialisation revenue prior to
the resolution of the substantive proceeding, the other would benefit as the contract
envisaged (and would continue to benefit into the future). And AIGN accepted that,
if its application for an injunction were granted and it ultimately emerged that the
contract was validly terminated, then it would not be required to turn over 100 per
cent of any revenue it made in the intervening period to NF (as it had originally
submitted). It would have a claim on some of that revenue, on a quantum meruit type
basis.
AIGN referred me to correspondence in which it said NF estimated its potential
damages as “$100,000”. AIGN submitted that that did not amount to significant
prejudice. (NF pointed out that its estimate was “a least $100,000”.) AIGN
submitted that the potential harm to NF if the injunction were granted would be
limited. Its only identifiable direct financial loss was the payments of commissions
to AIGN, which would be recoverable if the contract were found to have been validly
terminated. AIGN submitted that NF could only benefit from AIGN’s being allowed
to continue to act as its agent.
On the evidence before me, while the period between now and the trial provided an
opportunity for the negotiation of sub-licences, it was unlikely that significant
revenue would be generated in that period. Indeed, Mr Ghosh made predictions about
when royalties and commissions might be expected to flow in his affidavit of 11
September 2024. None were predicted in the next year. The real risk in the period
between now and trial was the risk of lost opportunity to make progress towards a
sublicense agreement and a risk that IP in the QG might be lost.
AIGN submitted that it risked suffering significant commercial harm if the injunction
were not ordered because it would be unable to negotiate potentially lucrative sub-
licences, including because NF would withhold its consent.
NF argued that the terms of the injunction did not assist AIGN in that regard. NF
submitted that that the injunction ought not to be ordered because its terms would not
in fact allow AIGN to pursue a financial benefit under the contract. This was because
NF was not obliged to do anything under the terms of the injunction sought. For
example, it was not obliged to give its (not unreasonably withheld) consent for AIGN
to enter into sub-licensing agreements, although it acknowledged that if AIGN
secured a financially promising sub-licencing agreement, then it would be contrary
to NF’s interests to withhold its consent to it.
It is correct that AIGN did not seek an injunction which expressly compelled NF to
act in accordance with the contract. AIGN applied for an injunction to restrain NF
from: carrying on a business inconsistent with AIGN’s role as NF’s sole agent in the
Territories; marketing QG in a territory outside the Territories without giving AIGN
a right of first refusal to market in that territory; soliciting customers away from
AIGN; persuading customers to stop dealing with AIGN; and interfering with the
continuance of AIGN’s right to act as NF’s sole agent for the marketing and sub-
licensing of QG.
In my view, restraining NF from interfering with, or seeking to interfere with, AIGN’s
right to act as NF’s sole and exclusive agent in the marketing and sub-licensing of the
QG (as per paragraph 1(e) of the application), interpreted reasonably, would extend
to restraining NF from not unreasonably withholding its consent to a sub-licence
proposed by AIGN. Thus, in my view, my ordering an injunction in the terms sought
would allow AIGN to pursue a financial benefit under the contract (if it managed to
find a suitable potential sub-licensee and compose a commercial proposal).
AIGN argued, in effect, that NF brought it on board because NF did not have the
skills to market and commercialise the plum. Therefore, without the injunction, and
on the assumption that the contract was invalidly terminated, there would be lost
opportunities for commercialisation, and it would suffer losses which were
unquantifiable because of the difficulties in calculating the financial cost of lost
opportunities, bearing in mind the numerous variables at play. Thus, damages would
be an inadequate remedy.
NF argued, in effect, that if the injunction were granted, there would be a stalemate.
AIGN would do nothing or nothing productive (based on its past performance), and NF could do nothing, in furtherance of the commercialisation of the QG. It submitted,
in effect, that AIGN had performed unsatisfactorily under the contract and had
provided insufficient detail about what it was presently doing (or would continue to
do if the injunction were granted). This was to be contrasted with the quality of the
evidence of the steps NF was undertaking to commercialise the QG. Further,
Mr Ghosh’s affidavit outlined in significant detail what he said would be the financial
consequences to NF if the injunction were granted – particularly in relation to
commercialisation in China, South Africa, the UK and the EU. NF argued that it was
at risk of unquantifiable losses of opportunity if the injunction were granted.
AIGN said it was concerned about the State of Queensland and NF’s ability to protect
intellectual property rights – and submitted, in effect, that AIGN was best placed to
do so and there was a risk that those rights would be lost if there were no injunction
ordered. He asserted that NF had already failed to secure IP rights in New Zealand
and China, where commercial sales of the QG had already started. A failure to
adequately secure the IP rights associated with the QG meant the rights were lost and
unrecoverable. A grower in a region in which the rights had been lost would see no
value in paying for a sub-license for a fruit which did not require one. QG was already
being copied in Australia. AIGN also made an argument that – since the purported
termination of the contract – NF had not commenced proceedings to protect PBRs
which might be infringed by AIGN, proving that NF “could not be trusted” to protect
PBRs.
Mr Ghosh said that it was not correct to say that commercial sales of QG had already
started in New Zealand and China: NF had not exported plant material to those
countries and had only exported QG to China through other entities. Mr Ghosh was
not aware that QG was being copied, or that there had been unauthorised planting of
it. He would have expected that information to be conveyed to NF by AIGN, pursuant
to paragraph 7(d) of the contract, which required one party to immediately notify the
other of any infringement or misappropriation. 8
Paragraph 7(d): “Nutrafruit and AIGN must both take all reasonable proactive steps to prevent or restrict any third party activities involving plant variety infringement, trademark infringement or trade secret misappropriation related to the Variety. Nutrafruit and AIGN must both use reasonable diligence to determine whether or not any infringement or misappropriation has occurred. If either party learns of any infringement from its own investigations or from other sources that party must immediately notify the other party of such infringement.
NF made the point that, under the contract, AIGN was obliged to protect the QG’s IP
and to prosecute and maintain PBR and yet it had done very little in the four years
since the contract was executed – little more than investigate the status of PBR and
trademarks. In other words, NF argued that there was no evidence that AIGN would
be any better than NF in protecting the QG’s IP.
Dr Porter said that AIGN entered into the contract with NF “in conjunction with two
other contracts for the sub-licensing of two other varieties of plum plants”. One had
a high antioxidant quality, like the QG. The other was early maturing. But both had
different harvest windows. Thus, the three were complementary. This allowed
growers to have a larger market window during a fruit’s harvesting season.
According to Dr Porter, AIGN had been pitching to potential licensees their ability to
invest in three plums at once – thus spanning the course of the harvest market using
a trademark branding marketing approach. If the injunction were not granted, AIGN
could not market all three varieties together it would therefore be deprived of
“deriving maximum opportunity from each of the plum varieties and diminish the
potential market for the Queen Garnet”. Dr Porter continued:
[50] … This significantly detracts from the value of the potential sub-licensees signing an agreement with AIGN for all three plant varieties.
[51] If Nutrafruit is not restrained from marketing the Queen Garnet, the harm AIGN will suffer with these potential sub- licensees is not just a monetary amount but also the loss of time required to grow test trees to a stage of producing test fruit for potential sub-licensees. This can be a period between two to three years.
None of the reports provided by AIGN mentioned AIGN’s plans for marketing QG
with two other plum varieties, or suggested that AIGN was “pitching” a three-plums-
at-once investment opportunity.
As evidence of NF’s knowledge of the complementary marketing plan, AIGN pointed
to an email from Tony Mahoney from “Ripe Planet” to Dr Porter and Mr Couch,
copying in Mr Lynnell Brandt, “Bonney” Ghosh, who I understand is Indrajit Ghosh,
and Sid Ghosh, both also of Ripe Planet, dated 12 June 2020, which said –
Thank you Gavin and Lynnell.
Really exciting development [the contract between AIGN and NF]
I look forward to the path forward.
Queen Garnet then coupled with GW1 Vitaplum that AIGN will also be managing globally is going to be an extremely powerful plum offer going forward.

[128] In oral submissions, AIGN said that the email came from NF, which implied a
relationship between NF and Ripe Planet. That relationship was not apparent from
the evidence before me, but I was prepared to proceed on the basis Mr Mahoney was
associated with NF in some way.

Mr Ghosh said that he was aware that AIGN had entered into a contract with Vitaplum
but was not made aware, during contract negotiations, that AIGN intended to market
QG along with two other varieties. He said that, at the time of those negotiations,
GW1 and QG were in different stages of development, and he had no reason to expect
complementary marketing.
While an “extremely powerful plum” offering involving QG and one other plum may
have been contemplated by AIGN in June 2020, and communicated then to Mr
Ghosh, there was no further mention of it by AIGN to NF. But this application was
not the time to say anything more about whether NF knew of AIGN’s intentions.
NF submitted that any injury which might arise from AIGN’s not marketing three
plums together was likely to be less harmful than AIGN marking a competitor plum
– but conceded that it was extremely difficult to make that argument quantitatively.
Each party claimed a risk of damage to its reputation and goodwill if it were, in the
case of NF, not permitted to continue its current discussions in the territories about
the marketing and commercialisation of QG; or, in the case of AIGN, if it were ousted
from discussions in its territories and NF were permitted to take over.
AIGN submitted that, if the injunction were not granted, its reputation would be
damaged because NF would inform potential sub-licensees that AIGN was no longer
associated with QG. Also, potential licensees who have a relationship with AIGN
and wished to maintain that relationship would be placed in the difficult position of
missing out on sub-licensing the QG because NF had been marketing to their
competitors.

[134] NF observed that there no evidence – only speculation – that NF had informed
potential sub-licensees that AIGN was no longer associated with QG. More
relevantly, NF submitted that there was an equal reputational risk to it if the injunction
were granted.

In oral submissions, NF emphasised that “prejudice” in the context of balance of
convenience arguments in this case “cut both ways”, as did the arguments about
damage to reputation. Additionally, it made the following points:

(a) In the four-odd years since the contract was signed, AIGN had not achieved a
concluded sub-license agreement, from which royalties might be derived.

(b) The injunction sought would restrict NF from marketing QG plants for
commercialisation but did not compel AIGN to perform its obligations under
the contract which could result in there being no marketing of QG.

(c) After the contract was terminated, NF had undertaken substantive steps to
commercialise QG in the territories which would be interrupted if the
injunction were made.

(d) AIGN would not lose any claim it might have upon NF for royalties earned
pending the resolution of the substantive matter (if the contract were found to
remain on foot) and NF would preserve AIGN’s potential share of royalties in
an Australian bank account.

To elaborate upon (d): Nutrafruit aged to provide the following undertaking to the
court, which would operate until the conclusion of the substantive proceeding. It
would –

(a) keep accounts of all payments received by it in relation to the Marketing of the
Queen Garnet in the Territories; and

(b) keep 50% of all monies received by it in relation to the Marketing of Queen
Garnet in the Territories in a separate Australian bank account.

NF submitted that this proposal weighed heavily in favour of NF on the balance of
convenience issue.
Each party argued that there had been delay on the part of the other. AIGN submitted
that because there was delay on both sides, it was not an issue of significance. NF
argued, in effect, that practical realities explained its delay but AIGN’s delay was not
explained; and it weighted heavily against the granting of the injunction. I have dealt
separately with the delay issue below.
Consideration of balance of convenience arguments
On the evidence, I found it impossible to weigh the potential loss to AIGN of the
opportunity to market three plums together, pending the resolution of the substantial
application, against the cost to NF of AIGN marketing what NF considered to be a
competitor fruit. On the evidence, it was not possible for me to meaningfully compare
the risk to the IP of the QG if the injunction were granted against the risk if it were
not. To the extent to which the evidence allowed me to assess it, I found the risk to
AIGN’s reputation if the injunction were not to be granted to be equal to the risk to
NF’s reputation if it were.
NF provided detailed evidence about the steps it had been taking to market the QG
since it gave notice of termination of the contract. AIGN’s evidence about its steps
post notice of termination was in general terms, as I have observed. On the evidence,
I had a better understanding of what NF stood to lose if I were I to grant the injunction
than I did of what AIGN stood to lose if I were not to grant the injunction.
On the evidence, I found that the risk of loss to AIGN if the injunction were not
granted probably did not outweigh the risk of loss to NF if it were. On the evidence,
I found that NF probably had more to lose if the injunction were granted. In other
words, the balance of convenience in this regard did not favour the injunction. I added
to that finding the offer made by NF to keep accounts and preserve any income it
might earn until the resolution of the substantive matter if the injunction were not
granted. Giving particular weight to that offer (whilst recognising the undertaking as
to damages offered by AIGN), I considered the balance of convenience, as canvassed
under this heading, to favour the dismissal of the application.
Delay
An applicant’s delay is another factor relevant – either as part and parcel of balance
of convenience considerations, or as a stand-alone discretionary consideration.
On NF’s calculations, AIGN did not file its application until –

(a) 5 ½ months after the breach notice;
(b) 4 ½ months after the notice of termination; and
(c) almost three months after its 30 May 2024 demand of NF to cease and desist.

AIGN submitted that there were delay arguments going both ways, in that NF had not
brought proceedings to enforce the termination of the contract. It submitted that its
delay was not fatal and suggested that the delay issue was not going to be
determinative. However, to the contrary, as will emerge, AIGN’s delay carried
weight in my decision to dismiss the application.
NF complained that AIGN had not sought relief promptly as it should have done. It
relied upon Zuellig v Pulver (Zeullig) 9 to illustrate that a court may, in its discretion,
refuse to grant an interlocutory injunction if there has been a delay which has not been
adequately explained.
NF relied upon Capgemini US v Case10 for the proposition that delay served as a
litmus test of the seriousness of the infringement alleged. In that case, Campbell J
referred to Zeullig and the need for an application for interlocutory relief to be brought
promptly, and continued at [40]:
… The court is always entitled to use, as a litmus test of the seriousness of the infringement of the plaintiff’s rights which is occurring, how fast the plaintiff reacts to the infringement of its rights. It is not only as an example of the equitable doctrine of laches that delay is relevant on an application for an interlocutory injunction; it is also as an admission by conduct about how serious the infringement of the plaintiff’s rights is. Thus, it is a matter which goes to the balance of convenience and not merely to the question of whether there is a serious question to be tried, which might be met by a defence of laches at the trial.
Before considering Zuellig, I note, on the “litmus test” point, that delay as evidence
of lack of prejudice or hardship can do no more than give rise to an inference that
may be displaced by more direct evidence – cf Imac Security Services Pty Ltd v Tyco
Australia Pty Ltd.11

[2000] NSWSC 7 at [36] – [37].
[2004] NSWSC 674.
[2002] VSC 592.
In Zuellig, the court considered a delay of a matter of weeks to be too long. On 14
January 2000, Zuellig applied for an injunction restraining two of its former
employees from misusing confidential information. The employees had tendered
their resignations on 15 December 1999 and Zuellig was aware that they were going
to start working for its competitor on 14 January 2000.

[149] Through its lawyers, on 23 December 1999, Zuellig asked the defendants for
undertakings in terms of a certain deed and said it would commence proceedings
against them on 29 December 1999 if the undertakings were not given. On
24 December 1999, the defendants’ lawyers offered more limited undertakings than
those sought by Zuellig which, inter alia, made it plain that, after 13 January 2000,
the defendants considered themselves entitled to act as they pleased.

Proceedings for an interlocutory injunction were not commenced until 14 January
2000. Rolfe J concluded that, because the undertakings of 24 December 1999 were
limited, Zuellig was obliged to commence proceedings much sooner than it did. His
Honour said that, if he had not refused the application for other reasons, then he would
have refused it in the exercise of his discretion because of the delay, which he
described as “gross”. His Honour said:
[36] … The grant of interlocutory relief is dependent upon a party seeking that relief moving with expedition. Each case must, of course, be judged according to the facts. However in the present case, there was no acceptable reason, so far as the evidence has disclosed, why the plaintiff did not move several weeks before it did. As Young J observed in Network Ted Limited v
Fullwood (4 December 1995 – unreported):-
“Finally, the Court expects in cases of interlocutory injunction that people will act promptly. As I sit here in this duty list, if a person has let a week go by it is only in a very strong case that I can be persuaded to grant an injunction or grant short service because if a person is to seek an injunction it should be sought promptly.
Subsequently, his Honour said, after considering certain submissions in relation to this matter:-
“However, there is a separate principle that on an interlocutory injunction the Court in its discretion will refuse the injunction if there has been delay which is not adequately explained. I do not consider that the delay has been adequately explained in this case. Accordingly, in my view, the defendants are ahead on this second matter.”
[37] Whilst I would not necessarily fix any specific period as the period within which a party must act, each case depending on its own facts, it seems to me that on the facts of this case as the plaintiff was aware no later than 15 December 1999 that the defendants would commence employment with [its competitor] on 14 January 2000, and as the undertaking in the letter of 24 December 1999 expressly provided that this may happen, that the plaintiff was bound to move earlier than 14 January 2000.
NF submitted that, as at 30 May, AIGN knew or at least suspected that NF was
“seeking to drum up sub-licence agreements itself”. It demanded that NF cease those
activities within 7 days. But after those 7 days – when NF did not cease – AIGN did
nothing until 23 August 2024: “the best part of three months”. NF submitted that it
was also significant that AIGN did not respond to the breach notice within 21 days.
NF submitted that if AIGN took its position seriously, it might have been expected to
not only refute the allegations made against it within 21 days, but also to make an
application for injunctive relief at the same time. Further, NF emphasised that AIGN
had provided no explanation for its delay.
AIGN “readily acknowledged” the delay on its part in commencing proceedings.
However, it submitted that “it lay ill in the mouth of Nutrafruit” to rely upon AIGN’s
delay when it had engaged in a war of words only, and not commenced proceedings
itself. It argued that in the face of AIGN’s assertion that the contract was not validly
terminated, NF ought to have protected its interests by commencing proceedings and
it did not do so “at its peril”.
To make this point, AIGN referred me to a recent decision of Muir J in Groupline
Construction Pty Ltd v CDI Lawyers Pty Ltd,12 in which her Honour referred to the
decision of Morrison JA in Aveo Retirement Homes Ltd v Springfield City Group Pty
Ltd.(Aveo)13 and concluded that any delay on the part of Groupline for an injunction
was not such as to warrant the court refusing to grant the relief.
In the case before Muir J, “Groupline” and “Chevron” were companies engaged in
litigation over a construction contract. Groupline applied for an injunction restraining
[2024] QSC 209.
[2024] QCA 201
“CDI” (a law firm) from acting for Chevron in the litigation because one of CDI’s
partners, Mr Pyman, had obtained confidential information about Groupline when he
was a partner at another law firm. Mr Pyman acted for Groupline for many years,
from 2006 until 2019.
One of the arguments made by CDI in resisting the application was that Groupline
failed to act promptly in seeking the restraint.
After an appeal in 2020, Groupline stopped retaining Mr Pyman. In October 2020,
Groupline asked Mr Pyman, who was then at CDI, whether he was acting in a matter
(not the Chevron matter) against Groupline and whether he had a conflict of interest.
Mr Pyman replied by stating “I am not acting”.
Groupline first became aware that CDI was acting for Chevron on 30 March 2023 in
the first dispute between the companies under the construction contract. That dispute
was resolved in less than three weeks through settlement discussions. Her Honour
accepted that Groupline said nothing about CDI’s involvement with Chevron at that
point in time because it thought it had a good and workable relationship with Chevron
and did not expect further disputes.
But by October 2023, as her Honour put it, “the rumblings of another dispute started
to bubble”. In early February 2024, Groupline was made aware that CDI was acting
for Chevron in the dispute. On 28 February 2024, Groupline (through its lawyers)
asked CDI to stop acting for Chevron in the dispute and threatened to bring restraint
proceedings if they did not do so.
Groupline lodged its first adjudication application on 6 March 2024. On 14 March
2024, CDI informed Groupline’s lawyers that it was acting for Chevron. On
28 March 2024, Groupline commenced Supreme Court proceedings against Chevron
and the construction contract’s superintendent claiming more that $3 million in
damages for breach of the construction contract.

[160] On 30 April 2024, Groupline filed an originating application seeking permanent
injunctions, restraining CDI or Mr Pyman, from acting for Chevron against it.

Her Honour held that Groupline’s “delay” did not require the court to refrain from
restraining CDI and Mr Pyman from acting for Chevron in the dispute for five
reasons.
The third of those reasons was that Mr Pyman and CDI knew that Groupline objected
to them acting against Groupline’s interests in October 2020 – but Mr Pyman did not
respond by stating that he could act against Groupline whenever he wished to or that
Groupline had no reason to object. As I understand her Honour’s point, she found
that there was no reason for Groupline to be concerned about Mr Pyman acting against
it in October 2020, which meant the delay was measurable in terms of weeks, not
years.
The fourth of those reasons included the reference to Aveo. At [85], her Honour said:
Fourth, as Morrison JA recently observed in Aveo …, once a party is aware that the other side objects to the state of affairs (there being the continuation of an expert determination), that party proceeds at its own peril – the objecting party is not to be penalised for any delay henceforth.
Her Honour made orders, restraining CDI and Mr Pyman from acting for Chevron.
In the present matter, distinguishing it from Groupline, each parties objected to the
state of affairs asserted by the other, and in that sense, it might be said that both
proceeded “at their peril”.
Turning to Aveo, upon which AIGN relied: Briefly, the facts were that Aveo – which
develops seniors’ living communities – and the owners and developers of the suburb
Springfield entered into a deed to govern Aveo’s development of a seniors’ living
community in Springfield.
Springfield and Aveo fell into dispute about whether Aveo was complying with the
terms of the deed. Under the deed, Aveo was to submit Business Plans to Springfield.
The dispute between the parties concerned Business Plans for 2021 and 2022. Those
disputes were referred to an expert – as anticipated by the deed. However, the parties
disagreed about whether, on the proper interpretation of the deed, the matters were
matters the parties agreed were to be determined by an expert because, Springfield
argued, the purported Business Plans were not Business Plans under the deed.
On 6 June 2023, Springfield commenced proceedings in the Supreme Court seeking:
(a) declarations that the Business Plans for 2021 and 2022 were not Business Plans
for the purposes of the deed; (b) a declaration that the appointment of the expert was
invalid and of no effect; and (c) a final injunction, restraining Aveo from taking any
steps in the expert determinations. Springfield also sought an interlocutory
injunction, restraining Aveo from participating further in the expert determination
process until the substantive proceedings were determined.
The primary judge granted the injunction. Aveo appealed. Its appeal was dismissed.
In attempting to resist the injunction at first instance, Aveo relied upon Springfield’s
delay in bringing its application. The primary judge determined not to penalise
Springfield for delaying “until it became clear to them that the something of
commercial significance was at stake”. His Honour did not wish to encourage
commercial parties to seek relief for matters of little commercial consequence. His
Honour did not find that delay, or its consequences for Aveo, disentitled Springfield
to interlocutory relief. On appeal, Aveo challenged the evidential basis for the
primary judge’s finding.
The Court of Appeal (Morrison JA, with whom Boddice JA and Williams J agreed)
held that the evidence inferentially supported the primary judge’s statement that
Springfield took action when it was clear that something of commercial significance
was at stake.
Aveo also submitted, on appeal, that the primary judge should have characterised the
delay as Springfield’s failure to commence proceeding earlier, knowing that Aveo
was spending time and money on the expert process (weighing against the granting
of interlocutory relief). Morrison JA did not accept this submission. His Honour said
that the characterisation of the delay; who was at fault; and whether it was a
disqualifying delay, were matters for the primary judge. The primary judge’s finding,
that the delay was not fatal, was open to him. That another judge may have
characterised the delay differently was not the test. The primary judge’s finding about
the reason for the delay provided a basis for its characterisation as explicable, rather
than fatal. Also, the delay was relevant if it caused material prejudice. Aveo relied
upon the costs it had expended on the expert process. But Morrison JA said than any
impact on Aveo from its proceeding with the expert process lay with its own decisions, not with the decisions of Springfield. Aveo always knew that Springfield
contended that the Business Plans did not qualify as such under the deed.
The primary judge recognised that Aveo might have avoided incurring costs on the
expert process had Springfield sough an injunction sooner. But Aveo was aware that
Springfield contended that the 2021 and 22 Business Plan were not Business Plans
under the deed. Avel did not seek a declaration or other relief to clarify the rights of
the parties in this respect. And to that extend, Aveo incurred costs with knowledge
that their costs might be wasted. Aveo submitted on appeal that the primary judge
erred in finding that it was incumbent upon it to seek declaratory relief.
Morrison JA observed that the primary judge examined the significance of Aveo’s
costs as part of the overall assessment of balance of convenience and in that context
observed that Aveo had not sought declaratory relief. Morrison JA considered that
to be a fact which the primary judge could taken into account and that his Honour’s
finding that, to that extent, Aveo incurred costs with knowledge that they might be
wasted, was unexceptional.
It must be remembered that the challenge in Aveo was to the factual findings of the
primary judge. In my respectful view, Aveo makes it plain that the characterisation
of delay, and who was at fault, and whether a delay was satisfactorily explained; and
who acted aware of a risk, et cetera were matters for assessment by a primary judge
about which minds might differ.
AIGN also referred me to Tasman Fighters Pty Ltd v Teremoana,14 a recent decision
of Martin SJA in furtherance of its arguments about delay not working against it
because the timelines in the cases were similar.
Teremoana is a boxer. He entered into a Promotion Agreement with Tasman Fighters
(TF) on 1 January 2021, to conclude on 1 January 2025 by which he appointed TF
his exclusive promoter.

[177] Termoana complained that TF breached the Promotion Agreement by not using
reasonable endeavours to provide him with the number of fights required by the
contract. He rescinded, or purported to rescind, the contract on 27 May 2024. The

[2024] QSC 226.
last fight under his contract with TF had been in 2022. TF purported to affirm the
contract one month later.
Teremoana entered into a contract with another promoter, Matchroom Boxing.

[179] In about September 2024, TF Fighters applied for an interlocutory injunction
restraining Teremoana from participating in any boxing match without its prior
consent or entering into any agreement for the promotion of any boxing matches in
relation to him. Martin SJA made an order in terms of the interlocutory relief sought.

His Honour was satisfied that TF had demonstrated a prima facie case.
On the balance of convenience question, his Honour said:
[19] The balance of convenience is in the applicant’s favour. Tasman Fighters has undertaken to perform its agreement in accordance with its terms during the pendency of any trial in this matter. This is not a case in which damages are either easily assessed or an adequate remedy … Secondly, there is some force to the argument by the applicant that to remove a person who has some ability and recognition from their “stable” of boxers under management would damage their reputation in the eyes of those who engage in the promotion of boxing matches.
[20] The usual undertaking as to damages has been given … [and] is valuable and is sufficient …

…
[23] The applicant should not have to suffer because the respondent decided to take the risk of entering into another arrangement. In Bulldogs Rugby League Club Ltd v Williams Austin J15 said:
“[65] There is authority for the proposition that the Court will place little or no weight on hardship suffered by defendants where they are the authors of their own misfortune: John Fairfax v Birt at [49] per Brereton J. In the present case the first defendant’s possible hardship would be that he would have to forego his playing opportunities in France and bring to an end whatever work arrangements he had entered into with the second defendant.

AIGN relied upon the Tasman Fighters case to submit that any prejudice that might
inure to NF if the injunction were granted (because any steps it had taken to
commercialise the QG in China and South Africa would have been wasted) was
[2008] NSWSC 882
something NF had brought upon itself by acting as it did without bringing an
application to the court to, for example, declare the contract validly terminated.
It was not clear whether the undertaking given by TF was an undertaking to the court,
or something less formal. AIGN submitted that it was akin to the statements made
by Dr Porter about what AGIN would do if the injunction were granted. NF very
properly acknowledged that, practically speaking, AIGN would be motivated to do
something in pursuance of the contract to affirm it – even if it did not offer a formal
undertaking to do so.
With reference to those authorities, AIGN submitted that it was plain to NF that AIGN
rejected the validity of the purported termination when it provided an annual
marketing plan on 9 April 2024 (two business days after the notice of termination).
It was put beyond doubt on 10 April 2024. AIGN submitted that NF’s conduct after
this time was with knowledge that proceedings were likely to be brought. AIGN
submitted that it was relevant that NF did not commence proceedings seeking a
declaration that it had validly terminated the contract, when it could have done so.
Indeed, NF insinuated that it would commencing proceedings, and in not doing so,
acted “at its own peril”.
AIGN submitted that its delay was relatively short, in the context of the matter. In its
written submissions, it argued the matter this way:
[67] Nutrafruit issued the Purported Notice on 11 March 2024 and the Purported Termination on 5 April 2024. AIGN responded to reject the validity of those two notices on 10 April 2024. Nutrafruit respond[ed] on 16 May 2024, 30 days after.
[68] Based on the length of time it took to receive a response, AIGN would have been justified in not have [sic] expected a response from Nutrafruit (sic) until 1 July 2024. The proceeding was filed on 23 August 2024. Accordingly, there was only 39 business days’ delay. The affidavit of Dr Porter shows [by inference] that during this time AIGN changed solicitors from the Melbourne based firm Polcynski Robinson to its current solicitors.
AIGN’s argument was (I think) that it was entitled to wait until 1 July 2024 to see if
NF ceased and desisted as AIGN demanded it to before making a decision about
bringing an application. The 39 business days refers to the period between 1 July
2024 and 23 August 2024. This was an unappealing argument, and it was not supported by evidence. AIGN’s better argument to explain its delay might have been
that it changed lawyers sometime after 30 May 2024 but there was simply no direct
evidence about the reason for the delay.
NF responded to AIGN’s arguments by inviting me to look at “the practicalities”: It
could not be the case that everyone who terminated a contract was obliged to come
to court seeking a declaration that the contract was valid. NF acknowledged that what
AIGN did post the purported termination was a relevant consideration. However, in
addition to the provision of a marketing plan on 9 April 2024, the only other evidence
of what AIGN did was to be found in Dr Porter’s affidavit and was in very general
(NF said “bland”) terms, as I observed above. NF made the point that AIGN did not
mention any discussion of substance with a potential sub-licensee. NF invited me to
contrast the “flaky” evidence of AIGN’s activities post purported termination with
the “quite specific evidence” of Mr Ghosh about what he had been doing and intended
to do.
I found the case of Scyne Advisory Business Services Pty Ltd v Heaney,16 (which the
parties provided to me) quite helpful on the issue of delay as a discretionary
consideration. The applicant sought an injunction against its former employee to
enforce restraints in her employment contract with the applicant which restricted her
freedom to accept employment in a competing business. The application was refused
by Parker J. His Honour was satisfied that the applicant had reasonable prospects of
success in its substantive application. In terms of the balance of convenience, his
Honour observed that the defendant knew or ought to have known that she was at risk
of an application being brought to enforce employment restraints upon her and the
onus was upon her to demonstrate hardship as a defence to it. His Honour found the
evidence of hardship she produced to be unimpressive and gave it little, if any, weight.
At that point, his Honour would have been inclined to grant the relief. But his Honour
found the delay a lengthy one, which had not been adequately explained, and on that
basis, refused the relief. The defendant resigned on 29 November 2023. The
application for an injunction was brought on 4 March 2024.

On the issue of delay, his Honour referred to Capgemini and said (at [67]) that delay
in applying for interlocutory relief may be an answer to such an application. His
[2024] NSWSC 275.
Honour did not need to resolve the doctrinal question whether delay went to the
balance of convenience or was a separate defence to the application because the
applicant’s counsel accepted that it was an important discretionary consideration
which might itself be a sufficient reason for declining an application for an
interlocutory injunction ([68]).
The plaintiff/applicant acknowledged its delay, but submitted that it was not fatal for
three reasons –

(a) Ms Heaney was on “gardening leave” until 29 February 2024 – thus, the delay
was short;

(b) There were extensive exchanges between the parties, during which the
plaintiff/applicant attempted to persuade the defendant to return to it or to give
relevant undertakings – which, while not excusing the delay, was a mitigating
factor; and

(c) Laches required some sort of detriment and the defendant had not shown that
she had taken action she would not otherwise have taken – thus the delay was
immaterial.

As to (a) – there was no evidence that the plaintiff/applicant delayed because the
defendant was on gardening leave. Nor was there any reason why the
applicant/plaintiff had to wait until the defendant was in breach if there was sufficient
evidence of a threatened breach. That threat was clear from the outset.

[192] As to (b) – there was no evidence that the plaintiff/applicant delayed bringing
proceedings because of its belief that litigation could be avoided by negotiations.
Indeed, the correspondence between the parties could not be accurately described as
negotiations. The defendant’s position was uncompromising. She did not ever hold
out the possibility of changing her mind. Nothing justified the plaintiff/applicant
from holding off.

As to (c) – the defendant’s mind was made up from the outset. There was nothing to
suggest that the plaintiff/applicant’s delay made any difference to her decision-
making processes or to her financial decisions. But that did not exhaust the detriment
resulting from the delay. His Honour observed that had the application been brought
promptly, it could have been resolved while the defendant was on gardening leave. His Honour considered it most unreasonable to restrain the defendant now from
continuing with her well-signalled intention to join another employer because the
plaintiff/applicant had belatedly discovered the urgency of the case.
Overall, his Honour considered the delay tipped the scales against the injunction. It
was lengthy, it had adverse effects upon the defendant, and it was not adequately
explained.
It is worth considering the chronology of events in the present matter:

(a) AIGN’s report of 9 April 2021 was not an overly optimistic one. It set out all
of the challenges to commercialisation which it faced.

(b) AIGN knew, in about January 2022, that NF rejected its sub-licensee proposals
for the USA farmgate market and in South Africa.

(c) AIGN’s March 2022 report to NF was not optimistic.
(d) AIGN’s June 2022 report to NF complained about the State Government and
NF’s roadblocks to commercialisation.

(e) In reply, on 28 June 2022, Mr Couch expressed a lack of confidence in AIGN.
(f) In March/April 2023, JWM approached NF directly about commercialisation
of the QG.

(g) AIGN’s April 2023 report to NF was not optimistic.
(h) April/May 2023, AIGN was likely aware of the communication between NF
and JWM, via SVM.
(i) On 12 June 2023, AIGN accused NF of breaching the contract and asked NF
to do three things.

(j) On 19 June 2023, NF accused AIGN of breaching the contract and asked AIGN
to show cause, within 14 days, as to why it was not in breach – failing which
NF would consider its entitlement to terminate.

(k) On 6 June 2023, AIGN asserted that it was not in breach.
(l) On 6 November 2023, AIGN provided NF with a more positive report, and
JWM’s proposal to commercialise QG in China.

(m) On 11 March 2024, NF sent AIGN a breach notice – which required a response
within 21 days.

(n) On my count, 21 days expired on 1 April 2024.
(o) On 4 April 2024, AIGN sent a letter to NF which confirmed that AIGN had
taken no steps to cure the alleged breaches.

(p) On 5 April 2024, NF terminated the contract.
(q) On 9 April 2024, AIGN produced a marketing plan to NF – conveying that it
did not accept that the contract had been terminated.

(r) On 10 April 2024, AIGN expressly told NF that it considered the termination
invalid.

(s) On 16 May 2024 NF told AIGN that the contract had been validly terminated
and to cease acting as NF’s agent.

(t) On 30 May 2024, AIGN demanded that NF cease acting in AIGN’s territories.
(u) On 7 June 2024, NF told AIGN that the contract had been validly terminated
and to cease acting as NF’s agent.
(v) On 23 August 2024, the application for an injunction was filed.

The correspondence demonstrated that – up until 7 June 2024 – neither party was
going to back down. But there was no evidence before me that AIGN delayed in
bringing the application in the hope that the parties could resolve the matter via
correspondence. And even if that was a reasonable inference to draw, relevant
correspondence ceased on 7 June 2024, with the demand from NF. In the face of that
correspondence, AIGN waited about two and a half months from that date to file its
application. There was no explanation for that delay in circumstances were AIGN
was aware by 30 May 2024 that Mr Ghosh had been to South Africa in April 2024
and to China on 15 April 2024. AIGN’s unexplained delay weighed against my
granting the application.
Conclusion

[197] As the parties acknowledged, it was simply not possible for me to evaluate the
applicant’s prospects of success in the substantive application at this stage.

Although it was not easy to evaluate, on the strength of the evidence, NF was active
in pursuing the marketing of the QG as soon as it gave notice of termination, and on
that basis, seemed to have more to lose if the injunction were granted that AIGN had
to lose if it were not. And I found its offer, to hold AIGN’s potential share of any
income, in an Australian bank account, to be something which weighed in favour of
refusing the application.
Of most weight in favour of refusing the application was AIGN’s unexplained delay
in bringing it. NF’s notice of termination was unequivocal. The fact that AIGN
rejected it did not cause NF to pause in its pursuit of marketing opportunities, to
AIGN’s knowledge. NF’s demand on 7 June 2024 was just as unequivocal, yet AIGN
delayed for two and a half months, without explanation, to bring this application.
For these reasons, I dismissed the application, with costs, as per the general rule that
costs follow the event.

CITATION:	Associated International Group of Nurseries Inc v Nutrafruit Pty Ltd [2024] QSC 234
PARTIES:	Associated International Group of Nurseries Inc
(Applicant)
v Nutrafruit Pty Ltd
(Respondent)
FILE NO/S:	BS11190/24
DIVISION:	Trial Division
PROCEEDING:	Civil Application
ORIGINATING	Supreme Court at Brisbane
COURT:
DELIVERED ON:	Order made: 2 October 2024
Reasons published: 3 October 2024
DELIVERED AT:	Brisbane
HEARING DATE:	25 September 2024
JUDGE:	Ryan J
ORDER:	The application is dismissed with costs.
If the applicant wishes to make submissions about refining the terms of the respondent’s undertaking, then it may contact my associate to arrange a suitable time for that issue to be dealt with.
CATCHWORDS:	EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – GENERALLY – where the respondent entered into a contract appointing the applicant to be its exclusive agent for the global marketing and commercialisation of the Queen Garnet plum – where the respondent formed the view that the applicant had breached the contract – where the respondent purported to terminate the contract – where the respondent then took steps itself to market the plum globally – where the applicant applied for declarations that the contract termination was invalid and that the contract remained in force – where the applicant sought an interlocutory injunction to restrain the respondent from interfering with the applicant’s rights as the respondent’s exclusive agent until its application for declarations was determined – where the balance of convenience lay – whether the applicant’s delay disentitled it to relief
Aveo Retirement Homes Limited v Springfield City Group Pty Ltd [2024] QCA 120, considered Capgemini US v Case [2004] NSWSC 674, considered Groupline Constructions Pty Ltd v CDI Lawyers Pyt Ltd
[2024] QSC 209, considered
Imac Security Services Pty Ltd v Tyco Australia Pty Ltd
[2002] VSC 592, considered
Scyne Advisory Business Services Pty Ltd v Heaney [2024]
NSWSC 275
Tasman Fighters Pty Ltd v Teremoana [2024] QSC 226,
considered
Zuellig v Pulver [2000] NSWSC 7, considered
COUNSEL:	M T Hickey with T E Randall for the applicant C Templeton for the respondent
SOLICITORS:	Robinson Nielsen Resolve Litigation Lawyers (Russells as town agent)

(b)	continue QG’s evaluation and commercial assessment in the AIGN territories;
(c)	manage all marketing of trees, fruits and by-products of QG in all AIGN

(c)	the plan to plant 5000 trees in Morocco which was abandoned;
(d)	that none of the testers on the list of EU testers provided by StarFruits (one of

(e)	AIGN had no responsibility for PBR – its role related to marketing.
(f)	The deadline for global PBR applications was 13 July 2016 – four years before

(g)	There was nothing improper about AIGN’s representing Vitaplum and QG.
(h)	Nutrafruit’s denials of AIGN’s two commercial proposals were on a nominal

	US$0.50 - $1.00 per tree Tree Royalty
	3-5% Fruit Production Royalty

(a)	provided Nutrafruit with an annual marketing plan;
(b)	continued to Market the Queen Garnet with AIGN members;
(c)	continued the testing of Queen Garnet in certain regions;
(d)	distributed plant material to as many AIGN territories as possible while meeting territory importation requirements through plant quarantine facilities; and
(e)	paid quarantine facility fees as and when they fall due.

a	The development of a new trademark for the Queen Garnet plum variety.
b	Through current market research … in various markets … to drive the branding and marketing strategies in each of the major markets.
c	The development of unique packaging for each market …
d	Advertising and promotion …

7.1.1	Nutrafruit’s purported Notice is ineffective and amounts to a repudiation of the [contract] which is not accepted.
7.1.2	AIGN requires Nutrafruit to withdraw all of the allegations in the Notice; and
7.1.3	AIGN considers that the [contract] remains on foot, and it will continue with all reasonable endeavours to pursue Marketing … of QG in the Territories.

4.2	AIGN is concerned that QDAF is not aware of the full extent of the work undertaken by AIGN including but not limited to the various opportunities that Nutrafruit has refused to pursue. AIGN will set out those details in further communication.
4.3	This letter may be relied upon on the question of costs, including on an indemnity basis, should the need arise.

a.	the AIGN Agreement remains on foot;
b.	AIGN continues to hold the right to act as the sole and exclusive agent for the commercialisation of QG in the Territories; or
c.	Nutrafruit may not enter into any testing or licensing negotiations or agreements with nurseries or growers in the Territories.

…
[23]	The applicant should not have to suffer because the respondent decided to take the risk of entering into another arrangement. In Bulldogs Rugby League Club Ltd v Williams Austin J15 said:

(c)	AIGN’s March 2022 report to NF was not optimistic.
(d)	AIGN’s June 2022 report to NF complained about the State Government and

(e)	In reply, on 28 June 2022, Mr Couch expressed a lack of confidence in AIGN.
(f)	In March/April 2023, JWM approached NF directly about commercialisation

(g)	AIGN’s April 2023 report to NF was not optimistic.
(h)	April/May 2023, AIGN was likely aware of the communication between NF

(k)	On 6 June 2023, AIGN asserted that it was not in breach.
(l)	On 6 November 2023, AIGN provided NF with a more positive report, and

(n)	On my count, 21 days expired on 1 April 2024.
(o)	On 4 April 2024, AIGN sent a letter to NF which confirmed that AIGN had

(p)	On 5 April 2024, NF terminated the contract.
(q)	On 9 April 2024, AIGN produced a marketing plan to NF – conveying that it

(t)	On 30 May 2024, AIGN demanded that NF cease acting in AIGN’s territories.
(u)	On 7 June 2024, NF told AIGN that the contract had been validly terminated