Boreline Pty Ltd v Romteck Australia Pty Ltd

[2021] WADC 135

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   BORELINE PTY LTD -v- ROMTECK AUSTRALIA PTY LTD [2021] WADC 135

CORAM:   RUSSELL DCJ

HEARD:   10 & 22 DECEMBER 2021

DELIVERED          :   23 DECEMBER 2021

PUBLISHED           :   19 JANUARY 2022

FILE NO/S:   CIV 4462 of 2021

BETWEEN:   BORELINE PTY LTD

Plaintiff

AND

ROMTECK AUSTRALIA PTY LTD

Defendant

RGT HOLDINGS PTY LTD

Intervenor

Catchwords:

Civil procedure - Interlocutory injunction - Urgent interlocutory application for mandatory injunction - Claim in detinue - Delivery up of personal property - Whether intervenor has registered security interest which takes priority over any interest of plaintiff - PPS lease

Legislation:

District Court of Western Australia Act 1969 (WA), s 6, s 8, s 50, s 50(1), s 50(1)(a), s 53, s 55, s 57
Personal Property Securities Act 2009 (Cth), s 10, s 12(1), s 12(2)(h), s 12(2)(j), s 12(3(c), s 13, s 13(1), s 13(2)(b), s 267
Rules of the Supreme Court 1971 (WA), O 52 r 2

Supreme Court Act 1935 (WA), s 25

Result:

Plaintiff's application allowed in part

Representation:

Counsel:

Plaintiff	:	Mr D W Thompson
Defendant	:	Mr J P Cook
Intervenor	:	Mr T J Langdon

Solicitors:

Plaintiff	:	Results Legal
Defendant	:	Mendelawitz Morton
Intervenor	:	HWL Ebsworth

Case(s) referred to in decision(s):

Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581

Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 53; (2001) 207 CLR 520

Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57

Black Diamond Group Pty Ltd v Manor of Maluka Pty Ltd (in liq) [2015] 1 Qd R 180

Bredenkamp v Gas Sensing Technology Corporation, in the matter of Welldog Pty Ltd (in liq) (Receivers and Managers Appointed) [2017] FCA 1065

Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148

Centreplex Pty Ltd v Noahs Rosehill Waters Pty Ltd [2019] WASC 252

Chianti Pty Ltd v Leume Pty Ltd [2007] WASCA 270; (2007) 25 WAR 488

Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation Ltd) (1991) 5 WAR 208

Doulton Potteries Ltd v Bronotte [1971] 1 NSWLR 591

Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640

Emeco International Pty Ltd v O'Shea [2012] WASC 282

Gollan v Nugent (1988) 166 CLR 18

Googe v Spoljaric [2017] WADC 99

JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112

Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105

Morara Pty Ltd v Kingslane Property Investments Pty Ltd [2019] WASC 136

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104

Pargiter v Alexander (1995) Aust Torts Reports 81-349

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30

Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd [No 7] [2012] WASC 502

Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76; (2017) 55 WAR 36

Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

RUSSELL DCJ:

Introduction

1. The plaintiff, Boreline Pty Ltd, supplies survey and orientation probes and camera equipment for use in down hole drilling to the mining industry.  Its two main products are known as the Borecam and Corecam.

2. From about late December 2014 or early January 2015 until about October 2021, the defendant, Romteck Australia Pty Ltd, provided services to the plaintiff in relation to the manufacture, service, repair and calibration of Borecams and Corecams.

3. On 17 November 2021, the plaintiff issued these proceedings against the defendant in relation to certain equipment, schematic diagrams, software and design notes in the defendant's possession used by the defendant to provide those services to the plaintiff, which the plaintiff claims ownership of.

4. The plaintiff claims, by way of final relief in the proceedings:

   1.an order for delivery up of the equipment and other items set out in Schedule A to the statement of claim (collectively the Equipment), which it claims are its personal property and which, despite demand having been made of the defendant, the defendant has refused to return to the plaintiff; and

   2.damages.

5. Though the proceedings are at an early stage and no defence has yet been filed, the defendant's position is, in essence, that the defendant is the owner of the Equipment and the plaintiff is not entitled to the relief claimed.

6. By chamber summons filed on 3 December 2021, the plaintiff applies for the following interlocutory relief:

   1.an interlocutory injunction restraining the defendant from dealing with the Equipment; and

   2.an order for delivery up of the Equipment,

   (plaintiff's application).

7. I heard the plaintiff's application on 10 December 2021.  I reserved my decision and, on 16 December 2021, I gave abbreviated oral reasons, I indicated that I would provide detailed written reasons at a later date and adjourned the matter to 20 December 2021 to make orders in relation to the plaintiff's application.

8. I informed the parties on 16 December 2021 that I had found that there is a serious question to be tried, that the balance of convenience is against the granting of the interlocutory relief in the terms sought.  However, I considered that the relief sought by the plaintiff should be granted in part, and that I would make orders preserving all of the Equipment pending trial, for only the items of equipment identified in par 5 of the statement of claim to be delivered up to the plaintiff at that stage, and for the trial of this matter to be expedited.

9. Orders were made on 20 December 2021 listing the action for trial commencing on 8 March 2022 and for case management, including for the filing and service of the defence and in relation to discovery and mediation.

10. On 20 December 2021, before orders had been made in respect of the plaintiff's application, RGT Holdings Pty Ltd (RGT) made an application seeking leave to intervene and to be heard on the plaintiff's application (RGT's application).

11. RGT claims that it has an interest in the Equipment as holder of a general security interest in all of the assets of the defendant under the Personal Property Securities Act 2009 (Cth) (PPSA).

12. For the ex tempore reasons I gave on 22 December 2021, I granted leave to RGT to intervene and to be heard on the plaintiff's application for interlocutory relief, and heard submissions from counsel for RGT and responsive submissions from counsel for the plaintiff and defendant.

13. On 23 December 2021, I delivered my revised decision on the plaintiff's application and said I would provide detailed written reasons separately.  I also made orders restraining the defendant from dealing with the Equipment other than in the ordinary course of business until further order or determination of the proceedings.  I reserved the costs of the plaintiff's application and RGT's application until after delivery of my written reasons for decision in respect of the plaintiff's application.

14. These are the written reasons for my decision in relation to the plaintiff's application.

The issues

1. The overarching issues I am required to determine on the plaintiff's application, as I will outline in further detail in these reasons are:

   1.Whether there is a serious question to be tried.

   2.Whether the inconvenience or injury which the plaintiff would be likely to suffer if the interlocutory injunction were refused, outweighs, or is outweighed by, the inconvenience or injury the defendant or RGT would suffer if the injunction is granted.  That is, does the balance of convenience favour the granting of the injunctive relief sought?

   3.What are the appropriate orders on the plaintiff's application?

The plaintiff's application

1. By chamber summons filed on 3 December 2021, the plaintiff applied for an interlocutory injunction restraining the defendant from dealing with the Equipment and an order for delivery up of the Equipment.

2. The plaintiff seeks orders in the terms of its minute of proposed orders dated 9 December 2021, as follows:

   Upon the plaintiff undertaking to the court that it will pay to any party restrained or affected by the restraints imposed by this interlocutory injunction, or of any interim continuation thereof, such compensation as the court may in its discretion consider in the circumstances to be just, such compensation to be assessed by the court, or in accordance with such directions as the court may make and to be paid in such manner as the court may direct, AND UPON the plaintiff undertaking to the court that, once in possession of the Equipment, it will keep the Equipment in good repair and refrain from dealing with it other than in the normal course of its business until judgment in this action or until further order.  IT IS ORDERED THAT:

   1.Until after judgment in this action, or further order, the defendant whether by itself, its officers, servants, agents or otherwise, be restrained and an injunction is hereby granted restraining it from dealing with the Equipment, as defined in paragraph 7 of the writ of summons filed on 17 November 2021.

   2.Within 7 days of the date of this order, the defendant deliver up the Equipment to the plaintiff.

   3.The defendant pay the plaintiff's costs of this application, such costs to be taxed if not agreed on the basis that the relevant scale limits are lifted by 50%.

Principles applicable to the grant of an interlocutory injunction

The District Court's power to grant equitable relief

1. The District Court only has the civil jurisdiction conferred on it by s 8 of the District Court of Western Australia Act 1969 (WA) (DCA). The District Court's civil jurisdiction is primarily set out in DCA s 50.

2. The District Court has jurisdiction in relation to all personal actions where the amount, value or damages sought to be recovered is not more than the jurisdictional limit, which is presently $750,000.[1]  The plaintiff's claim, being a claim in tort for detinue or trespass to goods, is a personal action.  There is nothing before the court to indicate that the value of the claim or damages sought exceeds the jurisdictional limit.

   [1] DCA s 6 and s 50(1)(a).

3. The District Court has no jurisdiction in relation to claims for equitable relief over and above the types of actions expressly set out in DCA s 50.[2]  The court does not have jurisdiction to grant an interlocutory injunction if that is the sole relief sought in the action.  The court does have jurisdiction to grant an interlocutory injunction or other equitable relief if it is ancillary or auxiliary or incidental to a claim otherwise within the jurisdiction of the court.[3]  Ancillary relief is relief subservient to principal relief in the sense that it serves and assists the principal relief and makes it more effective.[4]

   [2] Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation Ltd) (1991) 5 WAR 208, 217.

   [3] See Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers' Compensation Ltd), (217) ‑ (219); Chianti Pty Ltd v Leume Pty Ltd [2007] WASCA 270; (2007) 25 WAR 488, 505.

   [4] Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) (219).

4. Where an action falls under s 50(1) of the DCA, this court has the same jurisdiction to hear and determine and may exercise all the powers and authority that the Supreme Court has and may exercise from time to time, including to grant equitable relief.[5]

Interlocutory injunctive relief

[5] DCA s 53, s 55 and s 57, read with Supreme Court Act 1935 (WA), s 25.

1. The principles governing the grant of interlocutory injunctive relief were summarised by Beech J (as his Honour then was) in Twinside Pty Ltd v Venetian Nominees Pty Ltd.[6]  His Honour drew on the High Court decision in Australian Broadcasting Corporation v O'Neill.[7]

   [6] Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 [7].

   [7] Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 [65] - [71].

2. In identifying the relevant principles, consideration should also be given to the Court of Appeal's reasons for decision in Mineralogy Pty Ltd v Sino Iron Pty Ltd and Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2].[8]

   [8] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 [87] and Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76; (2017) 55 WAR 36 [130] - [131].

3. Vaughan J (as his Honour then was) summarised the well‑established principles relating to interlocutory injunctions by reference to the authorities I have referred to in Morara Pty Ltd v Kingslane Property Investments Pty Ltd,[9] as follows:

   …

   (1)The two main inquiries that arise are whether the plaintiff has made out a prima facie case and whether the balance of convenience favours the grant of the injunction.

   (2)The first inquiry as to a 'prime facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial.

   (3)How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks.

   (4)The second inquiry is whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury which the defendant would suffer if an injunction was granted.

   (5)Whether an applicant for an interlocutory injunction has made out a sufficient prima facie case and whether the balance of convenience favours the grant of such relief are related, not independent, questions.  For example, as the apparent strength of the plaintiff's case diminishes, the balance of convenience moves against the making of an order.

   [9] Morara Pty Ltd v Kingslane Property Investments Pty Ltd [2019] WASC 136 [41].

4. The relevant principles have also been summarised in terms that there are three things to be shown: (1) that there is a serious question to be tried; (2) that the plaintiff will suffer irreparable injury for which damages will not be adequate compensation; and (3) that the balance of convenience favours the grant of the injunction.[10]

   [10] See Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148, 153; Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 53; (2001) 207 CLR 520 [13].

5. In Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2], the Court of Appeal proceeded on the basis that the question of adequacy of damages is an aspect of the balance of convenience and not a separate requirement.  It also considered the rights of third parties, stating (relevantly) as follows:

   The parties to this appeal did not take issue with the observations made in Mineralogy Pty Ltd v Sino Iron Pty Ltd as to the general principles to be applied in the exercise of the power to grant an interlocutory injunction.  Those observations proceed, at least implicitly, on the basis that the question of adequacy of damages is an aspect of the balance of convenience, not a separate requirement.  We will also proceed on that basis.  Three further points should, however, be observed.  First, in an interlocutory injunction application in equity's exclusive jurisdiction, the question of whether damages or other remedies at law are adequate does not arise: Heavener v Loomes.  Secondly, in equity's auxiliary jurisdiction, the question of whether the plaintiff will suffer irreparable injury for which damages will not be adequate compensation involves no more than a consideration of whether the injury cannot properly be compensated in damages, or by an order for accounts or some other interim remedy.  The question of whether the injury cannot properly be compensated in damages involves a consideration of whether it is just in all the circumstances that the plaintiff be confined to their remedy in damages.  See R v MacFarlane; Ex parte O'Flanagan and O'Kelly; McCarty v The Council of the Municipality of North Sydney; Action Cycles Pty Ltd v Ross; Meagher, Gummow & Lehane.  Thirdly, as the Full Court of the Federal Court observed in Samsung Electronics Company Ltd, in assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances; whether those interests tend to favour the grant or refusal of an injunction in any given case depends upon the circumstances of the case; and hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive.

   (footnotes omitted)

6. Third party interests and the effect on a third party of granting interlocutory relief as matters relevant to consideration of the balance of convenience, were also considered by Edelman J in Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd [No 7].[11]

   [11] Perdaman Chemicals & Fertilisers Pty Ltd v Griffin Coal Mining Co Pty Ltd [No 7] [2012] WASC 502, [205] - [207] (Edelman J), referring in turn to the decision of the High Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1 [65], 41 ‑ 42, [62] ‑ [63], [131].

7. The defendant refers to the principles set out by Edelman J in Emeco International Pty Ltd v O'Shea[12] and submits, in effect, that if an order were to be made for delivery up of the Equipment, it would be tantamount to granting summary judgment.  It submits that the court should therefore evaluate the strength of the plaintiff's case and there would need to be unequivocable evidence of the plaintiff's title or possessory rights to the Equipment before such relief is granted.

   [12] Emeco International Pty Ltd v O'Shea [2012] WASC 282 [24].

8. The relevant passage from Emeco International Pty Ltd v O'Shea is as follows:

   24…

   (1)Normally the court does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case.  But, there are some kinds of case in which for the purpose of seeing where lies the balance of convenience it is desirable for the court to evaluate the strength of the plaintiff's case for final relief.  One class of case to which this applies is where the decision to grant or refuse an interlocutory injunction will in a practical sense determine the substance of the matter in issue.

   (2)Where a plaintiff's entitlement to ultimate relief is uncertain, the court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled.

   (3)Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the court to decide that question on the interlocutory application.

   (4)Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question.

1. In Centreplex Pty Ltd v Noahs Rosehill Waters Pty Ltd,[13] Le Miere J observed that:

   27Although the court will often examine the strength of a case for an interlocutory injunction, the court will not normally undertake a preliminary trial and will rarely attempt to resolve disputes of fact.  The extent to which the court will consider the merits of disputes as to legal issues will depend on the circumstances of the case.  There is no inflexible rule.

   28There has been conflict in the authorities about whether these principles should apply equally to mandatory interlocutory injunctions.  The better approach is that the same principles should apply.  The better approach is, as Kiefel J has explained, that the classification of an injunction as mandatory should not automatically attract a requirement that the court should have further confidence in the correctness of the order.  The focus should be on the effect of the proposed order.  A prohibitory injunction is capable, in some cases, of having a more serious effect on the parties than a mandatory one.  There can also be a fine line between an order which requires something to be done and an order which prohibits something from being done; sometimes the former can be re‑characterised as the latter.  Merely characterising an interlocutory order as mandatory should not invite a different approach.

   (footnotes omitted)

   [13] Centreplex Pty Ltd v Noahs Rosehill Waters Pty Ltd [2019] WASC 252 [27] - [28].

2. As I will outline, the evidence before me is insufficient for me to evaluate the strength of the plaintiff's case in any meaningful way, at this stage.  There are also a number of disputed facts and questions of law.

The plaintiff's claim

1. The plaintiff claims that it entered into a written agreement on about 24 October 2012 with Romteck Pty Ltd (Romteck) for the development and supply of an improved system incorporating the functions of the plaintiff's down hole orientation equipment, camera probe equipment and calibration software, which is defined in the agreement as the Product.[14]  I refer to that agreement as the Agreement.

   [14] Statement of claim, par 3.

2. The relevant terms of the Agreement are pleaded as follows:[15]

   [15] Statement of claim, par 4.  Paragraph 4(f) is repetitive of par 4(e) and not reproduced.

   …

   (b)Pursuant to clause 1, Romteck agreed to develop the Product exclusively for the plaintiff.

   (c)Pursuant to clause 3, in consideration for Romteck agreeing to develop the Product to [sic] the [plaintiff] pursuant to the Agreement, the plaintiff agreed to make payments to Romteck in accordance with cl 4.

   (d)Pursuant to clause 5, the defendant assigned to the plaintiff its entire right, title and interest in the Product, Design Specification, Ancillary Documentation, notes, source codes, software drawings, designs, procedures, discoveries and inventions created pursuant to the Agreement, including, but not limited to, patents, copyrights, trade secrets and any other Intellectual Property right, whether in Australia or abroad.

   (e)Pursuant to clause 6(2) and clause 9, Romteck warranted that it possessed the requisite skills and experience to develop the Product.

   …

   (g)Pursuant to clause 10(a)(2), if the plaintiff formed the reasonable belief that Romteck was incapable of developing the Product at all or within the timelines agreed between the parties, the plaintiff may terminate the Agreement.

3. The plaintiff alleges that, in about 2012, the plaintiff handed to Romteck the following items listed in Schedule A to the statement of claim, all of which the plaintiff had manufactured, and which were, at that time, and remain the property of the plaintiff:

   1.item B(1), described in Schedule A as dual gearbox unit complete with stepper motors;

   2.the mechanical parts of item B(3), described in Schedule A as stepper motor control unit;

   3.item B(7), described in Schedule A as adaptor for mounting the Corecam units;

   4.item B(10), described in Schedule A as specific manufactured tools for the clamping and holding of the Corecam units, removal of end plugs and drill guide for end plugs;

   5.the electrical switching control box of item C(2), described in Schedule A as Helmholtz coils control unit; and

   6.item C(11), described in Schedule A as specific manufactured tools for the clamping and holding of the Borecam units with spanners for the dismantling of the Borecam B tube.[16]

   [16] Statement of claim, par 5.

4. The plaintiff alleges that the balance of the items set out in Schedule A to the statement of claim became the property of the plaintiff upon their acquisition or creation by Romteck for and on behalf of the plaintiff in the course of performing its obligations under the Agreement.[17]

   [17] Statement of claim, pars 6 and 7.

5. I have adopted the plaintiff's reference to all of the items in Schedule A to the statement of claim collectively as 'the Equipment'.

6. Romteck was wound up and a liquidator appointed to it by order of the Federal Court on 4 November 2014.

7. The plaintiff alleges that, on about 15 December 2014, the defendant sent a letter to the plaintiff signed by its general manager, Mr Stephen Merralls, containing the following words:[18]

   Should you have any contracts in the name of Romteck Pty Ltd that you require re-signing in the name of Romteck Australia Pty Ltd then please forward to the undersigned for action.

   [18] Statement of claim, par 10.

8. The plaintiff claims that the defendant's letter dated 15 December 2014 constituted an offer made by the defendant to trade with the plaintiff on the terms on which Romteck had previously traded with the plaintiff.[19]

   [19] Statement of claim, par 11.

9. The plaintiff also relies on a telephone conversation between the plaintiff's managing director, Mr Nick Kleyn, and the defendant's then general manager, Mr Merralls, on a date between 15 and 23 December 2014, in which it is alleged that words to the following effect were spoken:[20]

   Mr Kleyn:Based on the Letter, I presume the Technology Development Agreement entered into between Boreline and Romteck Pty Ltd on 24 October 2012 is now being taken over by Romteck Australia Pty Ltd?

   Mr Merralls:    Yes that is correct.

   Mr Kleyn:Does the agreement need to be amended or re-signed between Boreline and Romteck Australia?  I want to ensure it is clear Boreline still owns all equipment and IP under the agreement.

   Mr Merralls:    No, the agreement does not need to be re-signed as there is no dispute as to Boreline's ownership of the equipment and intellectual property the subject of the agreement.  We are happy to continue as is.

   Mr Kleyn:Great thank you.  We will continue the agreement with Romteck Australia.

   [20] Statement of claim, par 12.

10. The plaintiff claims that in reliance on the offer made in the defendant's letter dated 15 December 2014, further or alternatively the conversation between Mr Kleyn and Mr Merralls referred to above, the plaintiff continued to trade with the defendant.[21]

    [21] Statement of claim, par 13.

11. The plaintiff also relies on a further agreement between it and the defendant, which it claims was entered into between 15 and 23 December 2014, the material terms of which it alleges were to the following effect:[22]

    1.The defendant would develop core orientation and camera probe products for the plaintiff, provide support for the software used to control those products, engineering support and upgrades and improvements to those products and software from time to time, as required.

    2.The plaintiff would pay the defendant for those services (at the rates as set out in par 14(b) of the statement of claim, as varied from time to time).

    3.The Equipment was and would remain the plaintiff's property.

    4.The provisions of cl 10 of the agreement (relating to termination) would form part of the further agreement. 

    [22] Statement of claim, par 14.

12. The plaintiff says that the further agreement was partly oral and partly in writing.  To the extent that it was oral, the plaintiff says it was formed in conversations between Mr Kleyn and Mr Merralls and, to the extent that it was written, it was recorded in a document prepared by the defendant titled 'Appendix to Technology Development Agreement signed and dated 24 October 2012', signed by Mr Kleyn on behalf of the plaintiff and Mr Merralls on behalf of the defendant on 23 December 2014 (Appendix).[23]

    [23] Statement of claim, particulars to par 14.

13. I do not reproduce the Appendix in full.  It includes the following:

    Appendix to Technology Development Agreement signed and dated 24^th October 2012.

    Manufacture of Boreline Pty Ltd Products by Romteck Pty Ltd.

    After a protracted development period, it is agreed between Romteck Pty Ltd (ACN 94 009 202 117) (Managing Director, Roland A. Brazier) and Boreline PtyLtd (ACN 160 290 442) (Managing Director Nick Kleyn) that a manufacturing phase for the required Boreline products is to begin.

    As laid down in Section 5 of the Agreement, Boreline now owns all the Intellectual Property including the embedded firmware, PCB designs and PCB production tools for the Corecam device (also known as the Oritool) and the Borecam device (also known as the Camera).  Boreline will also own the Intellectual Property of the calibration software and hardware for both devices.  In addition, on the suspension of the hand‑held component in Stage One of Section 3 of the Agreement, Boreline will also own the Intellectual property for the interim Apple iPod Application Software for the control and date retrieval from both the Corecam and Borecam units, until such time that the hand-held component is completed at which time the Intellectual property rights will revert to Boreline.

    Romteck will continue to manufacture the Corecam, Borecam and support the Apple iPod unit for the agreed price until Romteck or Boreline terminate this agreement.  The agreed price will include engineering support as required, and upgrades and improvements from time to time as required.

    …

    As requested by Boreline and as a result of the Product development phase being completed and accepted by Boreline and all accounts paid, the below listed items now become the Property of Boreline:

    …

    The Appendix then lists the items of the Equipment that are set out in Schedule A to the statement of claim.

14. The Appendix is dated 23 December 2014 and is stated to be signed on behalf of the plaintiff and Romteck Pty Ltd (ACN 94 009 202 117), as opposed to (as the defendant points out) the defendant, Romteck Australia Pty Ltd (ACN 602 827 109).

15. The plaintiff alleges that from 23 December 2014 the defendant provided the services pleaded in par 14 of the statement of claim to the plaintiff and continued in possession of the Equipment.[24]

    [24] Statement of claim, par 17.

16. The plaintiff claims it is the owner of the Equipment, alternatively that the defendant is estopped from denying the plaintiff is the owner of the Equipment, and the plaintiff is entitled to the return of its property on demand.[25]

    [25] Statement of claim, pars 16, 18 and 19.

17. On 23 October 2021, the plaintiff gave written notice to the defendant terminating the agreement between it and the defendant, asserting its right of possession to the Equipment and demanding its return.[26]  On 2 November 2021, the defendant responded to the demand refusing to return the Equipment.[27]

    [26] Statement of claim, par 20.

    [27] Statement of claim, par 21.

18. On 4 November 2021, the plaintiff made a further demand for the defendant to return the Equipment.[28]  The defendant responded on 5 November 2021 refusing to return the Equipment and asserting ownership of it.[29]

    [28] Statement of claim, par 22.

    [29] Statement of claim, par 23.

19. The plaintiff claims in detinue for the return of the Equipment and seeks final relief in terms of an order for delivery up and damages for the loss it claims to have suffered by reason of the defendant's conduct.

The evidence relied upon by the plaintiff

1. The plaintiff relies on the following affidavits in support of its application for interlocutory relief:

   1.affidavit of Mr Nicky Alfred Kleyn, director of the plaintiff, affirmed on 2 December 2021 (Kleyn Affidavit); and

   2.affidavit of Mr Stephen Ronald Merralls affirmed on 2 December 2021 (Merralls Affidavit).

Kleyn Affidavit

1. Mr Kleyn deposes in the Kleyn Affidavit, amongst the other matters stated, to the following:

   1.The plaintiff was incorporated on 10 September 2012 and has, since that date, traded as a supplier of down hole orientation equipment for the mining industry.

   2.The plaintiff has two main products that it supplies to customers.  They are the Borecam, which is a survey probe or camera and the Corecam which is a geological core orientation probe.  Mr Kleyn explains what each of the Borecam and Corecam are used for in his affidavit.  It is not necessary for me to repeat his explanation in these reasons.  In very general terms, they are used by geologists in the course of minerals exploration to, in the case of the Borecam, survey a drill hole and, in the case of the Corecam, orient the core of a hole once the core is extracted.

   3.The background to the plaintiff entering into the Agreement with Romteck[30] and payments made by the plaintiff to Romteck under the Agreement.[31]

   [30] Kleyn Affidavit, par 14, 'NAK-1', pages 18 - 31.

   [31] Kleyn Affidavit, par 22.

   4.Receipt by the plaintiff of the letter from the defendant dated 15 December 2014.[32]

   [32] Kleyn Affidavit, par 23, 'NAK-4', page 51.

   5.Conversations between Mr Kleyn and Mr Merralls between 15 and 23 December 2014, including that referred to in the statement of claim as set out in [40] of these reasons.[33]

   [33] Kleyn Affidavit, par 24.

   6.Mr Kleyn signed the Appendix on or around 23 December 2014 a copy of which is attached to the affidavit.[34]

   [34] Kleyn Affidavit, par 28, 'NAK-5', pages 52 - 53.

   7.Mr Kleyn received an email from Mr Merralls dated 24 December 2014.[35]

   [35] Kleyn Affidavit, par 30, 'NAK-6', pages 54, 56.

   Amongst other things, that email refers to a 'discussion the other day regarding future collaboration between Boreline and Romteck Australia' and the defendant providing services in relation to Corecams and Borecams.  Mr Merrall states in that email under the heading 'Intellectual Property':

   Romteck Australia Pty Ltd has acquired the Intellectual Property and Title to all assets of Romteck Pty Ltd.  It is our opinion that the Intellectual Property relating to the design of the Corecam and Borecam instruments, plus the software that is installed on an iPod, is the property of Boreline.  Any requirement for Boreline to pay any outstanding accounts is strictly between yourself and the Romteck Pty Ltd administrator.  Romteck Australia will require approval from Boreline to use your Intellectual Property in order to manufacture Corecams and Borecams.  Unless agreed otherwise, the items will be built, tested and calibrated strictly in accordance with Boreline's IP.

   8.Mr Kleyn also refers in the Kleyn Affidavit to his subjective understanding of the effect of the agreement between the plaintiff and defendant.[36]

   [36] Kleyn Affidavit, par 31.

   A party's subjective views as to the terms or effect of any agreement do not inform and is not relevant to construction of the alleged agreement and its terms.  A commercial contract is to be construed objectively based on the understanding of a reasonable businessperson by reference to the contract as a whole, to its text, context and commercial purpose or objects.[37]

   [37] See Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] - [53]. See also summary in JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112 [67] and discussion and authorities referred to in JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [68] - [72].

   9.The defendant provided services to the plaintiff from late December 2014, which the plaintiff paid for, and the defendant continued in possession of the Equipment.  Copies of invoices, purchase orders, quotes and payment advices for 2015 and 2020 ‑ 2021 and copies of emails between the plaintiff and defendant in July 2015, August 2016 and June 2019 are attached to the Kleyn Affidavit.[38]

   [38] Kleyn Affidavit, pars 32 - 36, 'NAK-7' - 'NAK-11', pages 57 - 143.

   10.In about August 2021, problems arose in relation to the quality of the defendant's servicing and calibration of Borecam units.  In an email exchanged between the plaintiff's administrative and accounts assistant and Mr Randall Joseph of the defendant on 22 September 2021, Mr Joseph referred to performing the calibration on Romteck calibration equipment.  Mr Kleyn states, in effect, that this was the first time the defendant had suggested that the Equipment, or any part of it, was the defendant's property.[39]

   [39] Kleyn Affidavit, pars 38 - 40, 'NAK-12', pages 144 - 146.

   11.By October 2021, Mr Kleyn was concerned about leaving the Equipment in the defendant's possession and had also formed the view that the defendant was not in a position to do any further development work on the Borecam and Corecam products.  He says this was because key personnel of the defendant who had worked on those products, Mr Merralls and Mr Jim Gale, had left the defendant.[40]

   [40] Kleyn Affidavit, par 41.

   12.Mr Kleyn refers to and attaches to his affidavit copies of:

   (a)the letter of demand sent to the defendant by the plaintiff's solicitors dated 23 October 2021;[41]

   [41] Kleyn Affidavit, par 43, 'NAK-13', pages 147 - 151.

   (b)the defendant's response dated 2 November 2021;[42]

   [42] Kleyn Affidavit, par 44, 'NAK-14', pages 152 - 153.

   (c)the further letter of demand from the plaintiff's solicitors to the defendant dated 4 November 2021;[43]

   [43] Kleyn Affidavit, par 45, 'NAK-15', pages 154 - 155.

   That letter refers to a statutory declaration of Mr Stephen Merralls being attached, which the letter says evidences that the defendant made assurances, through its representatives, that the Agreement would be continued by the defendant.  That statutory declaration is not attached to Mr Kleyn's affidavit and does not form part of the evidence before the court in relation to the plaintiff's application; and

   (d)the defendant's response dated 5 November 2021.[44]

   [44] Kleyn Affidavit, par 46, 'NAK-16', page 156.

   13.Mr Kleyn says that the Borecam and Corecam were manufactured and developed using specialised parts under the Agreement and the further agreement between the plaintiff and the defendant.  He says that the Equipment was designed specifically for the Borecam and Corecam and is useless to the defendant.  He says, in effect, that:

   (a)without the Equipment, the plaintiff cannot repair or replace parts of the Borecam and Corecam, as the Equipment includes the calibration equipment that is required to calibrate the Borecam and Corecam;

   (b)since late 2019, the plaintiff has been working on a new version of the Borecam and Corecam units with the assistance of Mr Merralls, who he believes parted company with the defendant in 2019;

   (c)that project, which also involves the construction of new and different calibration equipment, effectively stopped when the COVID-19 pandemic hit, but the plaintiff has restarted it now;

   (d)he anticipates that the new equipment will not be ready until at least March or April 2022, by which time, he says the plaintiff would have lost many clients; and

   (e)the plaintiff will not be able to calibrate its existing stocks of the Borecam and Corecam without the information that forms part of the Equipment in the defendant's possession.[45]

   15.In relation to the loss the plaintiff claims it will suffer if the Equipment is not returned to it, Mr Kleyn states, in effect, that:

   (a)under informal warranties with its customers to whom it supplies the Borecam and Corecam, the plaintiff does about five repairs per month on average;

   (b)without the Equipment, the plaintiff cannot repair and re‑calibrate the Borecams and Corecams and will have to replace them;

   (c)the plaintiff has had to supply three new Borecams to replace customers' broken Borecam units which would normally be sold for US$25,000 each; and

   (d)the plaintiff only has four Borecams left and will, therefore, only be able to service clients for up to four broken Borecams and then will be unable to assist customers with broken Borecam units.  It is likely customers will go to other suppliers who deal in similar equipment and the plaintiff will lose their business.[46]

   [45] Kleyn Affidavit, pars 48 - 53.

   [46] Kleyn Affidavit, pars 54 - 56.

1. The evidence provided in this regard is vague and of limited assistance in determining the potential damage to the plaintiff arising from the plaintiff's continued possession of the Equipment.  Of the limited evidence before the court, Mr Kleyn states, as follows:[47]

   [47] Kleyn Affidavit, pars 57 - 60.

   1.One of the plaintiff's bigger clients, Indodrill, has approximately 30 Borecams and Corecams on hire from the plaintiff which equates to about US$45,000 per month.

   It is not clear if this is the amount paid by that client to the plaintiff or the loss the plaintiff says it will suffer and, if so, how that is calculated.

   2.Four big clients in Indonesia would probably spend about US$120,000 per month on hire equipment.

   This is vague and provides no clear evidence as to the loss said to arise in relation to the four unidentified clients.

   3.The plaintiff has quite a few smaller clients which it has taken five years to get on board.

   This is also vague and provides no evidence as to what, if any, loss arises in relation to these clients.

   4.If customers cannot get their equipment from the plaintiff, they will go to one of the plaintiff's competitors which would quickly destroy the plaintiff's business.

   This is also vague and there is no further evidence before the court in relation to this.

Merralls Affidavit

1. Mr Merralls deposes, amongst the other matters stated, to the following:

   1.Between 2008 and 31 October 2014, he was employed as projects coordinator, quality manager, industrial designer and production coordinator for Romteck.[48]

   [48] Merralls Affidavit, par 2.

   2.Between 10 December 2014 and 18 February 2019, he was employed as director, general manager, quality manager and production manager of the defendant.[49]

   3.He refers to the Agreement entered into between the plaintiff and Romteck on or about 24 October 2012 for the development and supply of the Borecam.  He says that he was the main point of contact for Mr Nick Kleyn of the plaintiff regarding the Agreement and thereafter between the plaintiff and the defendant.[50]

   4.He explains the purpose or function of the items of Equipment and how and when they were acquired, developed or manufactured.[51]

   Mr Merralls does not state precisely when each item was acquired, developed or manufactured.  He merely states that the items in the schedule were acquired, developed or manufactured 'in, about or after October 2012'.

   Mr Merralls deposes to which items of Equipment were developed by Romteck and states that some were revised by Romteck over time.  He does not say when.  There are a number of conclusionary statements by him to the effect that certain items of the Equipment were acquired by the plaintiff pursuant to the Agreement.  I can give little, if any, weight to such statements, which are largely inadmissible.  Ultimately, whether all or any of the items of Equipment were acquired by and are owned by the plaintiff are issues for determination by the court.

   5.Mr Merralls states, in effect, that after Romteck was placed into receivership in late 2014, the defendant was formed to continue operation of the Romteck business and he was appointed as the production general manager.  He says that soon after he was appointed general manager and he was also appointed a director of the defendant (though he does not say when).[52]

   6.On or around 15 December 2014, on behalf of the defendant, he sent a letter to customers 'explaining the situation', a copy of which is attached to his affidavit.[53]

   This is the same as the letter dated 15 December 2014 referred to in and attached to the Kleyn Affidavit.[54]

   7.He states that he discussed the changeover from Romteck to the defendant with Nick Kleyn of the plaintiff in December 2014.  He remembers giving Mr Kleyn an assurance that the plaintiff would remain the owner of all intellectual property in the plaintiff's products that Romteck had been working on and remained owner of the equipment the plaintiff had provided to Romteck for the project and the equipment Romteck had acquired for the plaintiff as part of the project.[55]

   8.On or around 23 December 2014, he prepared and signed a document titled 'Appendix to Technology Development Agreement signed and dated 24 Oct 2012', a copy of which is attached to the affidavit.[56]  He says that the reference to Romteck Pty Ltd in that document, as opposed to Romteck Australia Pty Ltd, was an error on his part.[57]

   [49] Merralls Affidavit, par 3.

   [50] Merralls Affidavit, pars 5 - 6.

   [51] Merralls Affidavit, pars 7 - 10.

   [52] Merralls Affidavit, pars 11 - 12.

   [53] Merralls Affidavit, pars 13, 'SRM-1', page 16.

   [54] Kleyn Affidavit, as 'NAK-4', page 51.

   [55] Merralls Affidavit, par 14.

   [56] Merralls Affidavit, par 15, 'SRM-2', pages 17 - 18.  This is the same as the Appendix referred to in and attached to the Kleyn Affidavit as 'NAK-5'.

   [57] Merralls Affidavit, par 16.

The plaintiff's submissions

1. The plaintiff submits, in summary, that:

   1.It has a strong prima facie case in detinue and there are serious issues to be tried.  The plaintiff has made demand of the defendant for the Equipment, which demand has been refused.  The primary matter in issue is whether the plaintiff has a right to possession of the Equipment as it contends.

   2.The plaintiff also sues in equity for specific restitution, in respect of which it submits the mere fact that the Equipment, or some of it, can be given a monetary value does not disentitle the plaintiff from relief.[58]

   [58] The plaintiff refers to Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581.

   4.Property used in a business that cannot readily be replaced for a period may, for that reason, have the required special value.[59]  The Equipment has special value to the plaintiff and damages will not be an adequate remedy because:

   [59] The plaintiff refers to Doulton Potteries Ltd v Bronotte [1971] 1 NSWLR 591.

   (a)the Equipment was made especially for the plaintiff;

   (b)it can only be used with regard to the plaintiff's products;

   (c)it will take until at least March or April 2022 to replace; and

   (d)is required by the plaintiff to continue to trade.

   5.The balance of convenience favours the plaintiff because:

   (a)The plaintiff will suffer a loss of revenue if it is unable to recover the Equipment, will lose market share and suffer a diminution of its goodwill.  As such the plaintiff submits it should not be confined to a remedy in damages.

   (b)Conversely, it appears unlikely the defendant would suffer significant prejudice from the restraints being maintained until trial.  This is said to be on the basis that the Equipment is specific to the plaintiff's products and cannot be used for anything else and there is no evidence of particular detriment that would flow to the defendant if the interlocutory relief sought is granted.

   6.The order for delivery up is sought by the plaintiff on two bases. First, under the court's power under O 52 r 2 of the Rules of the Supreme Court 1971 (WA) to make an order for the detention, custody, preservation or inspection of any property which is the subject matter of a cause or matter, or as to which any question may arise. Second, the court's power in its equitable jurisdiction to make a mandatory interlocutory injunction for delivery up of the Equipment.

The evidence relied upon by the defendant

1. The defendant relies on the affidavit of Randall Stratton Joseph, director of the defendant, sworn on 9 December 2021 (Joseph Affidavit) in opposition to the plaintiff's application.  The Joseph Affidavit also contains a significant amount of inadmissible material, including comment and legal conclusion to which I can give little, if any, weight.

2. I do not repeat everything in the Joseph Affidavit.  Mr Joseph deposes, amongst the other matters stated, to the following:

   1.He, Mr Randall Joseph, was appointed as a director of the defendant on 31 January 2019.  His father, Sean Eric Joseph, was a director of the defendant from 12 November 2014 - 26 January 2019.[60]

   [60] Joseph Affidavit, pars 4 - 5.  See also 'RSJ 1', pages 11 - 19.

   2.On about 18 August 2014, the Deputy Commissioner of Taxation made an application to wind up Romteck.[61]

   [61] Joseph Affidavit, par 12.  See also 'RSJ 2', pages 20 - 35.

   3.On 4 November 2014, Neil Raymond Cribb of RSM Australia Partners was appointed as liquidator of Romteck.[62]

   [62] Joseph Affidavit, par 14.  See also 'RSJ 2', pages 20 - 35.

   4.On about 6 November 2014, receivers and managers were appointed to Romteck.[63]

   [63] Joseph Affidavit, par 15.  See also 'RSJ 2', pages 20 - 35.

   5.The receivers advertised the sale of Romteck's assets in the Australian Financial Review on 12 November 2014.  At that time, Mr Joseph's father, Mr Sean Joseph, was the managing director of Romteck Grid Pty Ltd and RGT.  Romteck Grid Pty Ltd and RGT relied heavily upon Romteck for the supply of alarm signalling equipment fire modems.[64]

   [64] Joseph Affidavit, pars 17 and 19.

   6.Romteck also produced other products including heat stress monitors, fuel management systems, communication systems and the mining probes produced for the plaintiff.  Those other Romteck products were of interest to Romteck Grid Pty Ltd and RGT as they generated revenue which would help to support the team of software programmers and design engineers needed in order to produce the alarm signalling equipment.[65]

   [65] Joseph Affidavit, pars 21 - 22.

   7.The defendant was incorporated on 12 November 2014 to acquire the business of Romteck.[66]  Attached to the Joseph Affidavit are partially executed copies of:

   [66] Joseph Affidavit, par 20.

   (a)binding heads of agreement between Romteck, the receivers of Romteck and the defendant, which is undated but said to be dated 1 December 2014;[67] and

   [67] Joseph Affidavit, par 33, 'RSJ 4', pages 40 - 57.

   (b)business sale agreement between Romteck, the receivers of Romteck and the defendant dated 22 December 2014.[68]

   [68] Joseph Affidavit, par 37, 'RSJ 5', pages 58 - 87.

   Mr Joseph states his subjective belief that those documents reflect the agreement between the parties to them.  As noted earlier in these reasons, a person's subjective views as to the terms or effect of an agreement do not inform and are not relevant to construction of the agreement and its terms.  In any event, there is no evidence that Mr Randall Joseph was involved in the defendant entering into the agreements he refers to.

   8.On 16 December 2015, RGT registered a security interest over all of the present and after acquired property of the defendant in respect of a loan to the defendant for over $3 million to pay the purchase price of $1.8 million pursuant to the business sale agreement and for working capital.  A copy of the registration and security instrument are attached to the Joseph Affidavit.[69]

   [69] Joseph Affifavit, pars 76 - 78, 'RSJ 7', pages 94 - 125.

   9.At the time of the business sale agreement, the receivers of Romteck were pursuing Boreline Pty Ltd in relation to an unpaid account of $153,146 owing to Romteck, which he says he knows from reading the liquidator's report as to the affairs of Romteck dated 12 January 2015.[70]  That report is not in evidence.

   [70] Joseph Affidavit, par 60.

   10.Mr Merralls was a senior employee of Romteck and became a director of the defendant on 19 February 2015 until about 24 January 2019.[71]

   11.Mr Joseph says he is informed by his father, Sean Joseph, and believes that during the period of negotiation between the defendant and the receivers of Romteck, his father spoke with Mr Merralls almost daily and sometimes multiple times on any day.[72]

   12.Mr Joseph has searched the business records of the defendant and has been unable to locate a copy of the Appendix annexed to the Kleyn Affidavit.[73]

   13.On 5 November 2014, Mr Merralls sent an email to Sean Joseph and another employee of Romteck, Phil Harman, sketching out a plan for restructuring the business of Romteck.  In relation to down hole monitoring, the products developed by Romteck for the plaintiff, Mr Merralls said the following and Phil Harman added the comments starting [PH]:[74]

   Down Hole Monitoring.  The two products that have been developed have good potential but unfortunately the customer is impossible to work with.  Over $75,000 have [sic] been spent in the last 6 months with contractual arguments.  I recommend to take the opportunity to termite [sic] the involvement in this product and customer.  [PH] If we were to hand over the IP for Corecam this would provide an immediate $59K …

   14.After settlement of the business sale agreement, almost all of the work the defendant did for the plaintiff related to the manufacture and calibration of equipment and was conducted solely by reference to quotations, purchase orders and invoices.[75]

   16.Mr Joseph states that all of the items of Equipment comprise assets acquired by the defendant pursuant to the business sale agreement, or have been developed by the defendant to allow it to continue to develop and manufacture products and services for sale.[76]

   There is no factual basis stated for these conclusions, which are, ultimately, matters for determination by the court.

   [71] Joseph Affidavit, par 123 - 124.  See also 'RSJ 2', pages 20 - 35.

   [72] Joseph Affidavit, par 23.

   [73] Joseph Affidavit, par 27.

   [74] Joseph Affidavit, pars 29 - 31.  See also 'RSJ 3', pages 36 - 39.

   [75] Joseph Affidavit, par 75.

   [76] Joseph Affidavit, pars 80 and 82.

The defendant's submissions

1. The defendant opposes the plaintiff's application and says, in effect, that to grant the interlocutory relief sought would be tantamount to giving the final relief sought by the plaintiff in the action and there would 'be no going back after trial should the ultimate issue go against the plaintiff'.

2. The defendant refers to the principles set out in Emeco International Pty Ltd v O'Shea[77] and submits, in effect, that the court should evaluate the strength of the plaintiff's case and there would need to be unequivocable evidence of the plaintiff's title or possessory rights to the Equipment to grant the relief sought by the plaintiff.

   [77] Emeco International Pty Ltd v O'Shea [24]. See [29] of these reasons.

1. I do not restate all of the defendant's submissions.  In summary, the defendant's position is as follows:

   1.The defendant was incorporated on 12 November 2014 for the specific purpose of acquiring the business of Romteck.  The two Romteck entities, the defendant and Romteck are entirely separate from one another.

   2.The Agreement was an agreement between Romteck and the plaintiff.  The defendant is not a party to the Agreement and is not bound by it.

   3.As to the further agreement alleged to have been entered into between the plaintiff and the defendant (through Mr Merralls), Mr Merralls had no authority to enter into any such agreement or execute any document on behalf of the defendant and Romteck was under external control at that time.

   4.The defendant purchased all of the assets of Romteck from the receivers of Romteck under the business sale agreement.  There was nothing to indicate that any property of the plaintiff in Romteck's possession did not form part of the assets acquired by the defendant under the business sale agreement.  There was no registration on the personal property security register to restrict the receivers' right to sell and the defendant's right to acquire any such assets in the possession of Romteck free from any security interest.

   5.Any interest of the plaintiff in the Equipment was captured by the definition of an assignment under s 12(2)(j) or of a consignment under s 12(2)(h) of the PPSA giving rise to a security interest for the purpose of the PPSA, which the plaintiff was required to register.

   6.The contractual relationship between the plaintiff and defendant after settlement of the business sale agreement was conducted solely by purchase orders and invoices and was limited to work relating to the manufacture and calibration of equipment.  The defendant says that any agreements between the plaintiff and Romteck were excluded under the business sale agreement.  It refers to the definition of 'Excluded Assets' in cl 1.1 (in particular to cl 1.1(e)) of the business sale agreement, which provides:

   1.1Excluded Assets means:

   …

   (e)the customer contracts exclusively arising from, in relation to or in connection with the mineral exploration instruments designed and manufactured for Boreline Pty Ltd ABN 50 160 290 442.

   7.The defendant also refers to cl 5.3(e) of the business sale agreement, which provides:

   5.3Vendor's obligation at Completion

   At completion, the Vendor must deliver or otherwise provide to the Purchaser:

   …

   (e)possession of the Premises together with all security devices and keys relating to the Premises, and with all Excluded Assets having been removed from the Premises prior to Completion.

   8.On the defendant's case, even if any of the Equipment was owned by the plaintiff before Romteck's receivership, which it denies, that property is now owned by the defendant.  All of the items in Schedule A to the statement of claim either comprise assets acquired by the defendant under the business sale agreement or have been developed by the defendant to allow it to continue to develop and manufacture products and services for sale.

   9.The defendant also submits it is open to the court to infer that things such as software and source code are things that are in a constant state of development and what constituted the Equipment in 2014 does not reflect what the Equipment is now.

   10.Further, the Equipment is subject to a registered security interest held by RGT over all present and after acquired property of the defendant, which was created on 16 December 2015 as security for its loan to the defendant.

   11.If the injunction sought by the plaintiff is granted and the defendant is ordered to deliver up the Equipment to the plaintiff, the court would be putting property into the hands of a commercial competitor of the defendant in a summary way.  The question of ownership is a matter that ought to be determined at trial and granting the interlocutory relief sought would be tantamount to granting summary judgment when there are serious issues to be tried.

RGT's position, evidence and submissions

RGT's application to intervene

1. As stated earlier in these reasons, RGT sought leave to intervene and be heard on the plaintiff's application on the basis that it holds a general security interest in all of the assets of the defendant, which it contends includes the Equipment the subject of the plaintiff's application and in respect of which the plaintiff seeks an order for delivery up.  For the ex tempore reasons given on 22 December 2021, I gave leave to RGT to intervene and be heard on the plaintiff's application.

The evidence relied upon by RGT

1. RGT relies on the affidavit of Sean Eric Joseph sworn on 19 December 2021 and on the Joseph Affidavit.

2. Mr Sean Joseph deposes in his affidavit to the following, amongst the other matters stated:

   1.RGT loaned $3.2 million to the defendant in around December 2014.  The terms of that loan are specified in a loan agreement between the defendant and RGT dated 8 December 2015.  The loan agreement is secured by a General Security Charge between the defendant and RGT dated 8 December 2015 under which the defendant charged all of its future and present rights, property and undertaking in favour of RGT as security for the amounts owing to RGT under the loan agreement.[78]

   2.He is informed by Randall Joseph and believes that the Equipment is essential to the operation of the defendant's plant and equipment and, if the Equipment were removed the rest of that plant and equipment would be rendered inoperable and its value would be greatly diminished.  He says that if RGT had cause to try to sell the charged property without the Equipment, it would be very difficult to do so as it would be inoperable, and any potential purchaser would have to be made aware that to become operational, it would require the commission of specialist engineers (who may not be available) and further delays.[79]

   Neither Sean Joseph, nor Randall Joseph elaborate on this.

   3.If the Equipment is removed from the defendant's control, it will constitute an event of default under the General Security Charge.  He says RGT has not yet decided whether or not to enforce the General Security Charge and take possession of the rest of the defendant's property, if that occurs, and reserves the right to do so.[80]

RGT's submissions

[78] Affidavit of Sean Eric Joseph sworn 19 December 2021, pars 5 - 9; Joseph Affidavit, RSJ-7, pages 94 ‑ 125.

[79] Affidavit of Sean Eric Joseph sworn 19 December 2021, pars 23 - 24.

[80] Affidavit of Sean Eric Joseph sworn 19 December 2021, par 25.

1. I do not repeat all of the submissions made on behalf of RGT.  In summary, RGT made submissions to the following effect:

   1.In around December 2014, RGT loaned the defendant $3.2 million for the defendant to purchase certain assets of Romteck from the receivers and managers of Romteck.  The terms of that loan are specified in the loan agreement between RGT and the defendant dated 8 December 2015.[81]

   [81] Joseph Affidavit, RSJ-7.

   2.The defendant granted a security interest over all of the defendant's assets in favour of RGT under a General Security Charge executed on 8 December 2015, which was registered as a security interest by RGT on 16 December 2015.

   3.RGT says that it appears from the pleadings that the plaintiff asserts that, from around October 2012, it held title to the Equipment and Romteck had indefinite possession of the Equipment as a bailee, in consideration for which Romteck supplied manufacturing services to the plaintiff.

   4.RGT contends that in those circumstances, the interest in the Equipment asserted by the plaintiff is a PPS lease (as defined in s 13 of the PPSA), and a security interest under s 12(3)(c) of the PPSA which has not been registered as required under the PPSA. As such, any interest the plaintiff had in the Equipment vested in Romteck under s 267 of the PPSA immediately before the winding up order was made. RGT submits that, consequently, if the Equipment was the plaintiff's property, it ceased to be so on 3 November 2014.

   5.RGT submits that, any right the plaintiff has or had to the Equipment is subject to RGT's General Security Charge, and RGT's registered security interest which takes priority over any unregistered security interest of the plaintiff.

   6.In relation to the balance of convenience, RGT submits that an order requiring the defendant to deliver up the Equipment to the plaintiff will seriously affect RGT's rights under the General Security Charge, which is a significant factor weighing against the grant of the injunctive relief sought by the plaintiff.

   7.RGT says that an order for the delivery up of the Equipment to the plaintiff would significantly impact its claimed security interest in the Equipment and would substantially affect the value of its security.  RGT asserts that if an order is made that the Equipment or any part of it is delivered up to the plaintiff, its rights and the defendant's obligations under the General Security Charge will be adversely affected.  Counsel for RGT identified those rights and obligations.  It is not necessary for me to set them out in these reasons.

   8.Further, RGT says:

   (a)that if an order were to be made for delivery up of the Equipment to the plaintiff, that would constitute an event of default under certain clauses of the General Security Charge (also identified by RGT's counsel), and RGT will be entitled to immediately enforce its General Security Charge against the Equipment and any other assets of the defendant;

   (b)that if RGT relies on the default under the General Security Charge, that will have a catastrophic effect on the defendant's business; and

   (c)that not only will RGT be entitled to immediately enforce, which will prevent the defendant from continuing to trade, it may also create cascading defaults under other contracts.

   There is no further evidence before the court as to the 'catastrophic effect' referred to or in relation to any cascading defaults.

   9.RGT also submits that the plaintiff has created the situation it finds itself in by terminating its contract with the defendant on 23 October 2021, without having an alternative service provider, and in circumstances where the defendant had possession of the Equipment.

Is there a serious question to be tried?

1. The defendant accepts there are serious issues to be tried and relies on this as a basis for its contention that it would be unjust for the court to grant the interlocutory relief sought, which it says would be tantamount to granting summary judgment.

Plaintiff's claim in detinue

1. The elements of and relief for a claim in detinue and the relevant principles and authorities were collected by Gething DCJ in Googe v Spoljaric,[82] which I respectfully refer to and adopt.

   [82] Googe v Spoljaric [2017] WADC 99 [296], [300], [303] ‑ [307].

2. In summary, to succeed in a claim in detinue, a plaintiff must establish that it has an immediate right to possession of personal property, it has made a demand of the defendant for the return of that property and the defendant has wrongfully refused to return the property to the plaintiff.  The plaintiff must have a right to immediate possession of the property at the time of making the demand for its return and for as long as the wrongful detention of it continues.[83]

   [83] Pargiter v Alexander (1995) Aust Torts Reports 81-349, 62, 503 (Zeeman J); Black Diamond Group Pty Lgtd v Manor of Maluka Pty Ltd (in liq) [2015] 1 Qd R 180 [28], [41] ‑ [42] (Jackson J); Gollan v Nugent (1988) 166 CLR 18, 25 (Brennan J).

3. For present purposes, to establish that it has a cause of action in detinue in relation to the Equipment:

   1.the plaintiff must have made a demand for the Equipment, possession of which the plaintiff was entitled to at the time of making the demand;

   2.the defendant must have refused the plaintiff's demand to return the Equipment; and

   3.the defendant's refusal to return the Equipment and continued detention of it must have been wrongful.

4. I am satisfied that demands have been made by the plaintiff to the defendant for the return of the Equipment and the defendant has refused to return the Equipment, as evidenced by:

   1.the letter sent to the defendant by the plaintiff's solicitors dated 23 October 2021 demanding the return of the Equipment to the plaintiff by 5.00pm on 2 November 2021;[84]

   2.the defendant's response to that letter dated 2 November 2021;[85]

   3.the further letter sent to the defendant by the plaintiff's solicitors dated 4 November 2021, demanding the return of the Equipment to the plaintiff by 5.00 pm on 5 November 2021;[86] and

   4.the defendant's response to that letter dated 2 November 2021.[87]

   [84] Kleyn Affidavit, par 43, 'NAK-13', pages 147 - 151.

   [85] Kleyn Affidavit, par 44, 'NAK-14', pages 152 - 153.

   [86] Kleyn Affidavit, par 45, 'NAK-15', pages 154 - 155.

   [87] Kleyn Affidavit, par 46, 'NAK-16', page 156.

5. For the reasons I will outline, on the evidence presently before me, I consider that the plaintiff has a reasonably strong prima facie case that it owned items of the Equipment as existed immediately before Romteck was wound up and the appointment of administrators to Romteck.  However, there are a number of disputed facts and questions of law in relation to the ownership of the Equipment and whether the plaintiff was entitled to immediate possession of it at the time the demands were made that I am unable to resolve on the evidence before me, at this stage.

6. Though this significantly reduces the extent to which the strength of the plaintiff's case as a whole can be assessed at this stage of the proceeding, I am satisfied that there are serious questions to be tried, including (in broad terms) though not limited to the following, some of which overlap:

   1.whether the plaintiff had a right to immediate possession of the Equipment or any part of it at the time the demands for its return were made of the defendant;

   2.whether the defendant's refusal to return the Equipment to the plaintiff and its continued detention of the Equipment was wrongful;

   3.whether the Equipment or any part of it forms part of the assets of the defendant subject to the security interest claimed by RGT under the General Security Charge between the defendant and RGT dated 8 December 2015;

   4.whether any such security interest takes priority over any interest of the plaintiff in the Equipment or any part of it;

   5.whether the Equipment or any part of it ought to be delivered up to the plaintiff by the defendant;

   6.whether the plaintiff is entitled to damages arising from the defendant's failure to deliver up the Equipment or any part of it; and

   7.if so, the quantum of such damage.

7. Determination of the above issues will include determining ownership of the items of the Equipment under the terms of the Agreement between the plaintiff and Romteck and the alleged further agreement between the plaintiff and the defendant.  It will also include determining whether there was a bailment of the Equipment or any part of it by the plaintiff to Romteck (or to the defendant) which amounted to a PPS lease as contended by RGT and, if so, the effect of any security interest in the Equipment as claimed by RGT.

8. I do not make any findings in relation to the issues I have identified, at this stage.  Those and any other matters that are or remain in issue between the parties after close of pleadings are to be determined at trial with the benefit of all of the evidence to be adduced.

9. The views I express about the merits or otherwise of the plaintiff's claim and the evidence in support are necessarily provisional based on the evidence presently before the court and subject to evaluation of the evidence ultimately adduced and the cases presented at trial.

The Agreement

1. On the evidence presently before me in relation to the Agreement (entered into between the plaintiff and Romteck in October 2012) and the payments made to Romteck by the plaintiff, the plaintiff appears to have a reasonably strong prima facie case that it owned the Equipment as it existed immediately before Romteck was wound up and the appointment of administrators to Romteck. 

2. Though not an operative part of the Agreement, the Background provides context to the agreement between the plaintiff and Romteck.  It is in the following terms:

   A.The [plaintiff] has identified a need to improve certain products that it currently supplies to the mining industry and in particular its down hole orientation and camera equipment.

   B.The [plaintiff] has requested [Romteck] to develop and supply an improved system incorporating the functions of both the orientation equipment and camera probe equipment ('the Product').

   C.[Romteck] has agreed to develop the Product exclusively for this purpose and for the [plaintiff] to retain all intellectual property rights in respect of the Product and its component parts.

3. By cl 3 of the Agreement:

   1.Romteck was responsible for the supply of all electronic components, printed circuit boards, batteries and sundry items up to and including Stage Five prototypes as part of the scope of supply.

   2.The plaintiff was responsible for the manufacture and supply of support hardware, brass/plastic enclosures, as requested by Romteck during the course of the development.

   3.The plaintiff was also responsible for the supply of the initial calibration rig.

   4.Romteck agreed to develop the Product in stages and within the timeframes stated in that clause, which included development of software (amongst the other things stated).

4. The plaintiff agreed to pay Romteck as set out in cl 4 of the Agreement.

5. Clause 5 of the Agreement is of particular significance.  It states:

   [Romteck] hereby assigns to the [plaintiff] its entire right, title and interest in the Product, Design Specification, Ancillary Documentation, notes, source codes, software drawings, designs, procedures, discoveries and inventions created pursuant to the Agreement, including, but not limited to, patents, copyrights, trade secrets and any other Intellectual Property right, whether in Australia or abroad. …

6. 'Product' is defined in cl 15(a) of the Agreement as the downhole equipment hardware, the downhole software, the handheld controller and includes all of the equipment and services set out in Romteck's quotation delivered to the plaintiff dated 3 July 2012 (excluding 'production items').

   The quotation referred to in the definition is not in evidence before the court.

7. 'Intellectual Property' is defined as any and all intellectual and industrial property rights throughout the world and includes, without limitation (relevantly) designs and printed circuit board layouts whether or not now existing and whether or not registered or registrable.

8. Clause 12 of the Agreement provides:

   (a)This Agreement and the obligations to be performed under this Agreement are personal to the parties.

   (b)Neither party may assign or purport to assign any of the rights or liabilities or transfer its obligations under this Agreement without the prior written consent of the other party (which consent may be withheld in its discretion).

9. Clause 5 of the Agreement is not expressed as being conditional upon payment by the plaintiff of the amounts stated in cl 4.  However, it makes commercial sense that the rights and title would pass after completion of the stages of development of the Product and payment having been made for that stage.

10. The evidence of Mr Kleyn supports a finding that payments were made for the amount payable for each stage on the dates shown in attachment NAK‑2 to the Kleyn Affidavit.  The last of those payments was $23,800 on 20 October 2013, for 'Manufacture, assemble - Stage 5'.  There is no evidence adduced by the defendant to contradict that.

11. In those circumstances and, having regard to the text of the Agreement as a whole, the surrounding commercial context and the (objectively assessed) purpose and objects of the Agreement, I consider that the plaintiff has a reasonably strong prima facie case that Romteck assigned to it such items of the Equipment as existed before the winding up of and the appointment of administrators to Romteck.

12. However, it is unclear on the evidence before me whether, in the circumstances, the plaintiff retained ownership of such items of the Equipment following the winding up of and the appointment of administrators to Romteck.  There are also issues to be determined as to whether the plaintiff was entitled to possession of all of the items that make up the Equipment at the time the demands were made, including items such as source codes, software, schematic diagrams and design notes in the defendant's possession and whether such are in the same form as assigned to the plaintiff by Romteck.

The alleged agreement between the plaintiff and defendant

1. There is a further issue as to whether there was any agreement concluded between the plaintiff and the defendant as contended by the plaintiff and the basis upon which the plaintiff and defendant engaged following the defendant's acquisition of Romteck's business and assets.

2. The plaintiff contends that the defendant effectively stepped into the shoes of Romteck and held the Equipment for the plaintiff for the purpose of developing core orientation and camera probe products for it, providing support for the software used to control those products, engineering support and upgrades and improvements to those products and software from time to time.  It is the plaintiff's case that this was on substantially the same terms as it had traded with Romteck and included an acknowledgment by the defendant that the plaintiff owned the Equipment.

3. One of the issues in dispute between the parties is whether Mr Merralls had authority to enter into agreements on behalf of the defendant at the relevant times.  If so, whether the Appendix, which is alleged to form part of the acknowledgment or agreement of the plaintiff's ownership of the Equipment, is binding on the defendant given it is stated to be between the plaintiff and Romteck, not the defendant.

4. I am satisfied on the evidence of Mr Kleyn that the items set out in par 5 of the statement of claim (and at [34] of these reasons) were manufactured by and supplied by the plaintiff to Romteck in about 2012.  As such, I do not accept that those items form part of the items the defendant contends it has subsequently developed in its own right.

5. However, it is not clear on the evidence before me when the other items of the Equipment were acquired or created by Romteck or, in the case of items such as source code, software, schematic diagrams and design notes, whether those items have been further developed by the defendant.  Mr Merralls merely states in his affidavit that they were created 'in, about or after 2012'.

Security interest under the PPSA

1. The defendant initially made submissions to the effect that, at the time Romteck was wound up, there was a security interest under s 12(2)(h) or s 12(2)(j) of the PPSA which required registration by the plaintiff. Following intervention by RGT, the defendant joined in with and supported RGT's submissions to the effect that, if the plaintiff did have title to the Equipment before Romteck was wound up and administrators appointed, the Equipment was bailed to Romteck indefinitely and amounted to a PPS lease under s 13 of the PPSA, which the plaintiff failed to register.

2. Section 12 of the PPSA provides (relevantly):

   12Meaning of security interest

   (1)A security interest means an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property).

   …

   (2)For example, a security interest includes an interest in personal property provided by any of the following transactions, if the transaction, in substance, secures payment or performance of an obligation:

   …

   (h)a consignment (whether or not a commercial consignment);

   …

   (j)an assignment;

   …

   (3)A security interest also includes the following interests, whether or not the transaction concerned, in substance, secures payment or performance of an obligation:

   …

   (c)the interest of a lessor or bailor of goods under a PPS lease.

   …

3. I am not persuaded by the defendant's argument that there was a security interest under s 12(2)(h) or s 12(2)(j) of the PPSA which required registration by the plaintiff. Whilst the Agreement includes an assignment of certain rights, title and interest to property, the evidence does not support any consignment or that the assignment under cl 5 of the Agreement was a transaction which secured payment or performance of any obligation so as to bring it within the ambit of the PPSA.

4. The relevant principles relating to security interests under the PPSA and, in particular, when a PPS lease will arise were set out by Barker J in Bredenkamp v Gas Sensing Technology Corporation, in the matter of Welldog Pty Ltd (in liq) (Receivers and Managers Appointed).[88]  I set out and respectfully adopt the following passages from that decision which are also applicable to this case. [89]

   [88] Bredenkamp v Gas Sensing Technology Corporation, in the matter ofWelldog Pty Ltd (in liq) (Receivers and Managers Appointed) [2017] FCA 1065 [7] - [19] (Bredenkamp).

   [89] Note: PPSA, s 13(1) (Meaning of PPS lease) set out in Bredenkamp is as of 20 March 2017, not as of 3 November 2014, when Romteck was wound up.  However, cl 13(1)(a) - cl 13(1)(d), set out in Bredenkamp reproduced below are in the same terms in the PPSA as of 3 November 2014.

   OPERATION OF THE PPSA

   7It may generally be said that, under the PPSA, the rights of the parties to a transaction that falls within the meaning of 'security interest' in s 12 are explicitly not dependent on either the form of the transaction or upon common law notions of title. Rather, the PPSA provides a completely new regime for determination of priorities to collateral following an insolvency event.

   8The general position under the PPSA is that an unperfected security interest is subordinated to the interest of:

   (1)a person who has perfected a security interest or is entitled to priority under the PPSA; and

   (2)the grantor of a security interest to which an external controller has been appointed following a relevant insolvency event, such as an administrator or liquidator.

   …

   12By virtue of the deeming provisions under s 267(2) of the PPSA, upon the appointment of a controller to a grantor under s 267(1), the grantor may have rights superior to those enjoyed by the grantor prior to that appointment (see also s 588FL of the Corporations Act).  Relevantly, an unperfected PPS lease may result in those goods being completely vested in the grantor, even though, prior to the appointment the grantor only had a possessory right in those goods.  …

   13Under the PPSA, a security interest arises in either of two ways:

   First, under s 12(1), a security interest in personal property may arise where it is provided for by a transaction that, in substance, secures payment or performance of an obligation.

   Secondly, an interest in personal property may be deemed to be a security interest for the purposes of the PPSA. Relevantly for this application, by s 12(3)(c) and s 13(1), a PPS lease is deemed to be a security interest, whether or not the transaction concerned, in substance, secures payment or performance of an obligation.

   …

   15There is no argument here that the equipment is 'personal property' for PPSA purposes, as it plainly is.

   16The real question is whether the relevant equipment is the subject of a deemed PPS lease, which was defined by s 13 as of 20 March 2017 in the following terms:

   13 Meaning of PPS lease

   (1)A PPS lease means a lease or bailment of goods:

   (a)for a term of more than one year; or

   (b)for an indefinite term (even if the lease or bailment is determinable by any party within a year of entering into the lease or bailment); or

   (c)for a term of up to one year that is automatically renewable, or that is renewable at the option of one of the parties, for one or more terms if the total of all the terms might exceed one year; or

   (d)for a term of up to one year in a case in which the lessee or bailee, with the consent of the lessor or bailor, retains uninterrupted (or substantially uninterrupted) possession of the leased or bailed property for a period of more than one year after the day the lessee or bailee first acquired possession of the property (but not until the lessee's or bailee's possession extends for more than one year).

   (2)However, a PPS lease does not include:

   …

   (b)a bailment by a bailor who is not regularly engaged in the business of bailing goods; or

   …

   Bailments for value only

   (3)This section only applies to a bailment for which the bailee provides value.

   …

   18Ordinarily, the most significant consequence of failing to perfect a security interest that arises under the PPSA [by registration on the PPSR under s 20 and s 21 of the PPSA] is that upon a grantor entering into insolvency, the unperfected security interest that a grantee holds is vested in the grantor under s 267 of the PPSA and s 588FL of the Corporations Act.

   …

1. As to whether there was a bailment giving rise to a PPS lease, the plaintiff accepted that there was a bailment of the Equipment but not of the kind contemplated by s 13 of the PPSA. The plaintiff submits that:

   1.no PPS lease arises because it was not regularly engaged in the business of bailing goods and, as such, the exception under s13(2)(b) of the PPSA applies; and

   2.the time for assessing whether or not it was regularly engaged in the business of bailing goods is the time the bailment was entered into, not the time of the demands for return of the Equipment.

2. Whilst it is accepted, as appears to be the case, that the Equipment or part of it was the subject of a bailment by the plaintiff to Romteck (and later the defendant), there is insufficient evidence before me at this stage to determine whether the plaintiff was in the regular business of bailing goods at the relevant time.  Though, it seems unlikely, as the plaintiff submits, that the plaintiff was regularly engaged in the business of bailing Borcams and Corecams at the time of any bailment of the Equipment to Romteck if the Borecam and Corecam were still under development at that time.

3. However, given the uncertainty, at this stage, as to other matters concerning the plaintiff's right to possession of the Equipment at the time the demands were made, it is not necessary for me to resolve this issue at this stage.  This is one of the number of issues to be resolved at trial, as identified.

Does the balance of convenience favour the grant of the injunction sought?

1. As I have observed, there are a number of disputed facts and questions of law which can only be resolved at trial.  Also, the evidence of any inconvenience or injury the plaintiff would be likely to suffer if an interlocutory injunction were refused is vague and uncertain.

2. Though it seems that the plaintiff's argument that the Equipment is highly specialised and cannot be easily replaced has merit, I am unable to assess on the evidence as it stands, at this stage, the extent of the loss of clients and market share the plaintiff contends it will suffer if the Equipment is not delivered up to it.  Nor is there sufficient evidence from which I can make any assessment as to whether damages will not be an adequate remedy.

3. The plaintiff merely submits that it will very likely lose clients and market share, losses it says it may never make good.  The evidence relied on is vague and lacking in detail, including as to the likely quantum of damages.

4. As to the defendant's contention that the plaintiff is a commercial competitor, there is no direct evidence to support this and insufficient evidence from which I could draw that inference.  The evidence is to the effect that the plaintiff engaged with Romteck initially to manufacture, develop and supply the Product, which it did.  Then, from early 2015 the defendant manufactured, supplied and calibrated Borecams and Corecams on behalf of the plaintiff.  There is no evidence that the defendant was separately manufacturing, supplying or calibrating such equipment for customers other than the plaintiff or that the plaintiff and defendant are commercial competitors.

5. As to the security interest alleged by RGT, I am unable to determine on the evidence before me at this stage whether RGT has a security interest in the Equipment or any part of it.  However, if it does have such interest, its rights and the defendant's obligations under the General Security Charge would likely be adversely affected by ordering delivery up of the Equipment to the plaintiff, at this stage.

6. In any event, given the uncertainties as to ownership of all of the items of Equipment, and whether RGT has a security interest as it contends, I am not satisfied that the balance of convenience favours making orders restraining the defendant from any dealing with the Equipment or that it should be delivered up to the plaintiff, at this stage, pending the expedited trial of this matter.

What are the appropriate orders on the plaintiff's application?

Conclusion and orders

1. In the circumstances, for the reasons stated, I find that there are serious questions to be tried and that the balance of convenience is against the granting of the interlocutory relief sought requiring the defendant to deliver up the Equipment to the plaintiff, at this stage.

2. However, the relief sought should be granted in part by making orders preserving all of the Equipment (as itemised in Schedule A to the statement of claim) pending the expedited trial.

3. Orders were made on 23 December 2021 to that effect restraining the defendant from dealing with the Equipment other than in the ordinary course of business.  Counsel for the defendant confirmed that this included the defendant preserving the Equipment until further order or determination of the proceedings.

4. I will hear from the plaintiff, the defendant and RGT in relation to the costs of the plaintiff's application and of RGT's application to intervene and be heard on the plaintiff's application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

AD

Associate to Judge Russell

19 JANUARY 2022