Austen and Butta Ltd v Shell Australia Ltd

Austen and Butta Ltd (the applicant) sought leave to appeal against a decision of the Supreme Court of New South Wales, which had dismissed its application for an interlocutory injunction. The respondent, Shell Australia Ltd, had entered into a contract with the applicant for the supply of fuel. The applicant alleged that Shell had breached this contract by failing to supply fuel at the agreed price and by threatening to terminate the contract. The applicant sought to restrain Shell from terminating the contract and from supplying fuel to other parties at a lower price.

The primary legal issues before the Court of Appeal were whether the applicant had established a sufficient likelihood of success on the merits to warrant the grant of an interlocutory injunction, and whether the balance of convenience favoured granting such an injunction. Specifically, the court had to consider whether the applicant had demonstrated a serious question to be tried regarding Shell's alleged breach of contract and whether the applicant would suffer irreparable harm if the injunction were not granted, which could not be adequately compensated by an award of damages.

The Court of Appeal, in dismissing the application for leave to appeal, found that the applicant had failed to establish a sufficient likelihood of success on the merits. The court noted that the applicant's claim was based on an interpretation of the contract that was not strongly supported by the wording of the relevant clauses. Furthermore, the court determined that the balance of convenience did not favour the grant of an interlocutory injunction. The court reasoned that the potential harm to Shell from being compelled to continue supplying fuel at a price below market rates, and the disruption to its business operations, outweighed the potential harm to the applicant, which could be adequately compensated by damages if its claim ultimately succeeded.