Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd (No 2) - [2017] ACTSC 139

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd (No 2)
Citation:	[2017] ACTSC 139
Hearing Dates:	5, 6 June 2017
DecisionDate:	6 June 2017
Reasons Date:	19 June 2017
Before:	Mossop J
Decision:	1. Order 1 of Murrell CJ of 19 May 2017 continues until further order. 2. Costs of the hearing including the reserved costs are costs in the cause. 3. The matter is to be listed for hearing on 5 September 2017 with an estimate of 4 days.
Catchwords:	EQUITY – INTERLOCUTORY INJUNCTION – Application for interlocutory injunction to be continued – termination of franchise contract by franchisor – whether plaintiff conducting business in a manner justifying preservation of the status quo – whether irreparable harm for which damages not an appropriate remedy a separate condition precedent to grant of interlocutory injunction – balance of convenience favours injunctive relief – injunction continued
Cases Cited:	Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd [2017] ACTSC 116 Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57 Bankstown City Council v Alamdo Holdings Pty Ltd [2005] HCA 46; 223 CLR 660 Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd [2010] NSWCA 283 Murphy v Lush (1986) 60 ALJR 523 Stratford Sun Ltd v OM Holdings Ltd [2011] FCA 414 Varley v Varley [2006] NSWSC 1025 Waterways Authority of NSW v Coal and Allied (Operations) Pty Ltd [2007] NSWCA 276
Texts Cited:	G E Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 6^th ed, 2015) W Gummow, “The Injunction in Aid of Legal Rights – An Australian Perspective” (1993) 56 Law and Contemporary Problems 83 R Meagher, D Heydon and M Leeming, Meagher Gummow & Lehane’s Equity Doctrines & Remedies (Butterworths LexisNexis, 4^th ed, 2002) I C F Spry, The Principles of Equitable Remedies (Lawbook Co, 9^th ed, 2014) P Young, C Croft and M Smith, On Equity (Thomson Reuters, 2009)
Parties:	Atarashii Stone Pty Ltd (Plaintiff) Granite Transformations Pty Ltd (Defendant)
Representation:	Counsel Mr P Walker SC (Plaintiff) Mr D Mahendra (Defendant)
Solicitors Trinity Law (Plaintiff) Gilberts Legal (Defendant)
File Number:	SC 138 of 2017

MOSSOP J:

Introduction

On 6 June 2017 I made an order continuing an injunction preventing the defendant from relying upon a purported termination of a franchise agreement. These are my reasons for making that order.

The proceedings involve the plaintiff, a franchisee, and the defendant, a franchisor. The franchise relates to the provision of a composite stone product which is used to create bench tops within houses. On 1 May 2017 the defendant purported to terminate the franchise agreement. Subsequently, on 3 May 2017, the plaintiff commenced proceedings seeking orders including a declaration that the termination was void and of no effect and restraining the defendant from relying upon or implementing the termination…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2017] ACTSC 139
Decision Date: 6 June 2017

CaseChat Overview and Summary

The case of Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd (No 2) involved an application for the continuation of an interlocutory injunction. The dispute arose between the plaintiff, Atarashii Stone, and the defendant, Granite Transformations, following the termination of a franchise agreement. Atarashii sought to maintain the status quo pending the determination of the broader legal issues between the parties, including potential breaches of contract and fiduciary duty.

The central legal issues before the court were whether the plaintiff's ongoing business operations justified the preservation of the status quo and whether there was irreparable harm for which damages would not be an appropriate remedy. The court needed to assess whether these conditions, alongside the balance of convenience, supported the continuation of the interlocutory injunction.

The court found that the balance of convenience favoured the continuation of the interlocutory injunction. The plaintiff's business operations and the preservation of its existing practices and assets were deemed significant enough to warrant the maintenance of the status quo. Additionally, the court determined that the harm which would result from the termination of the injunction was not adequately compensable by damages alone, thus fulfilling the criteria for injunctive relief. Consequently, the injunction was extended pending further determination of the case.

The final orders included the continuation of the interlocutory injunction until further order, the allocation of the costs of the hearing to the parties, and the scheduling of the matter for a future hearing on 5 September 2017. The hearing was estimated to last four days.

Orders

Orders of the court

1. Order 1 of Murrell CJ of 19 May 2017 continues until further order.

2. Costs of the hearing including the reserved costs are costs in the cause.

3. The matter is to be listed for hearing on 5 September 2017 with an estimate of 4 days.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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