Bottoni v Young

Case

[2024] WASC 186


JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   BOTTONI -v- YOUNG [2024] WASC 186

CORAM:   LUNDBERG J

HEARD:   15 MAY 2024

DELIVERED          :   17 MAY 2024

FILE NO/S:   CIV 1341 of 2024

BETWEEN:   CHRISTOPH ANDREA BOTTONI

First Plaintiff

INVISIBLE ORTHODONTIC STUDIO PTY LTD AS TRUSTEE FOR THE BOTTONI FAMILY TRUST

Second Plaintiff

AND

NATASHA LOUISE YOUNG

First Defendant

NY CONSULTING PTY LTD &/OR NATASHA LOUISE YOUNG ATFT NATASHA YOUNG FAMILY TRUST

Second Defendant


Catchwords:

Equity - Interlocutory injunction - Partners operating a dental practice in three locations - Dispute between parties as to nature and terms of the partnership - Whether a partnership of individuals or a partnership of trusts - One partner issued a notice of dissolution of partnership and a notice of withdrawal from partnership - Whether partnership has been dissolved - Whether defendants should be restrained from interfering with the plaintiffs' present efforts to establish fresh practice in one location - Whether serious question to be tried - Principles of estoppel relied upon in support of the interlocutory injunctive relief - Whether estoppel claim has merit - Whether defendants' conduct unconscionable - Balance of convenience - Scope of proposed injunction - Turns on own facts

Legislation:

Health Practitioners Regulation National Law (WA) Act 2010, s 53, s 57, s113, s 121
Partnership Act 1895 (WA), s 43
Rules of the Supreme Court 1971 (WA), O 51 r 1, O 52 r 2

Result:

Application for interlocutory injunction dismissed.

Category:    B

Representation:

Counsel:

First Plaintiff : J N Thompson
Second Plaintiff : J N Thompson
First Defendant : C M Slater
Second Defendant : C M Slater

Solicitors:

First Plaintiff : Thompson Commercial Law
Second Plaintiff : Thompson Commercial Law
First Defendant : HHG Legal Group
Second Defendant : HHG Legal Group

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

Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119

Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1981] 3 All ER 577

Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281

Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [2001] HCA 63; (2001) 208 CLR 199

Commercial & General Corporation Pty Ltd v Manassen Holdings Pty Ltd [2021] SASCFC 40

CPB Contractors Pty Ltd v Rizzani De Eccher Australia Pty Ltd [2017] NSWSC 1798

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

Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670

GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1

Government Employees Superannuation Board v Martin (1997) 19 WAR 224

Grundt v Great Boulder Proprietary Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 614

Maher F, 'Doing The Same Work? Estoppel by Convention and Failure of Basis' (2023) 50(2) University of Western Australia Law Review 64

Mears Ltd v Shoreline Housing Partnership Ltd (2015) 160 ConLR 157

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

National Westminster Finance New Zealand Ltd v National Bank of New Zealand Ltd [1996] 1 NZLR 548

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

Thompson v Palmer [1933] HCA 61; (1933) 49 CLR 507

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

Table of Contents

A.       Introduction

Overview

Dr Bottoni

Ms Young

B.        Interlocutory relief sought

C.       Materials relied upon by the parties

D.       Background

Partnership terms

Operations of the partnership

Disagreement between the partners

First Notice

Second Notice

Recent developments

E.        Principles to be applied

F.        Disposition of the interlocutory application

Serious question to be tried

Balance of convenience

Further issue – scope of the order

G.       Conclusion and orders

H.       A final observation

LUNDBERG J:

A.     Introduction

Overview

  1. The parties to this proceeding are the partners of an orthodontic practice which has traded under the name 'Clear Orthodontic Studio', referred to as COS by the parties.  The partnership has provided dental services from premises situated in Cottesloe, in Manjimup, and in Denmark. 

  2. The nature of the partnership, its precise terms, and whether it has been dissolved, are matters about which the parties cannot agree, but it is palpably clear that, after a relatively short period in business, less than 3 years, they can no longer work in partnership with each other.  

  3. Substantive relief has accordingly been sought from this Court by the plaintiffs for orders for the appointment of a receiver to the partnership and orders that the partnership be wound up on and from 15 March 2024.[1]  The parties disagree as to the necessity for, as well as the terms upon which the winding up of the partnership should be conducted.  Additional orders are sought for injunctive relief [2] and for the transfer of income and property.[3]  As yet, no statement of claim has been filed in the proceedings.

    [1] Originating Summons filed 26 March 2024, [1]. The orders were sought pursuant to O 51 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC).

    [2] Originating Summons, [2].

    [3] Originating Summons, [3].

  4. Leaving to one side for now the trust structures employed by the parties, the individuals involved in the practice are Dr Bottoni and Ms Young.  The present proceedings have been initiated by Dr Bottoni and his trustee company, Invisible Orthodontic Studio Pty Ltd as trustee for the Bottoni Family Trust.[4]  The named defendants to the proceeding are Ms Young and her trustee company, NY Consulting Pty Ltd as trustee for the Natasha Young Family Trust.[5]

Dr Bottoni

[4] Dr Bottoni is the sole director of the second plaintiff.

[5] Ms Young is the sole director of the second defendant.

  1. Dr Bottoni is an orthodontist who administers clinical dental care to the patients of the practice.  Dr Bottoni is a registered health practitioner under the Health Practitioner Regulation National Law (WA) Act 2010 (the National Law).[6]  Dr Bottoni holds individual Medicare provider numbers for the health services which are provided at each of the practices.  

    [6] The Australian Health Practitioner Regulation Agency (or AHPRA) is the regulating board in respect of this legislation.  

  2. I am told that Dr Bottoni holds a specialist registration under s 270 of the National Law as an orthodontist, and he is permitted to carry out restricted dental acts as defined in s 121(2) of the National Law.

Ms Young

  1. Ms Young is a qualified dental hygienist, who provides services as an auxiliary to support the three practices, and also provides bookkeeping and administrative services to the partnership. Ms Young has various qualifications including an Associate Diploma of Dental Clinic Assisting, an Associate Diploma in Dental Therapy, a Certificate IV in Accounting, a Certificate IV in Bookkeeping, and is registered with the Dental Board of AHPRA.

  2. Historically, it was Ms Young who established the orthodontic business, together with her former business partner, who was a dentist (not being Dr Bottoni).  That was in 2018.  It too operated under the 'Clear Orthodontic Studio' banner.  Ms Young and her former business partner obtained a lease for the Cottesloe premises in 2019.  Subsequently, commencing in around July 2021, Dr Bottoni acquired the interest of Ms Young's former business partner and took an assignment of the lease.  Dr Bottoni and Ms Young then commenced in partnership together from around September 2021.

B.     Interlocutory relief sought

  1. The substantive relief sought by the plaintiffs will be heard and determined by the Court in due course.  For present purposes, I note the plaintiffs seek urgent interlocutory relief to restrain the conduct of the defendants.  To this end, the matter was initially brought on before Master Russell on 7 May 2024, and orders were made for the plaintiff's injunction application to be listed for an urgent hearing on 15 May 2024. 

  2. The scope of the interlocutory dispute between the parties narrowed in the lead up to the hearing.  The plaintiffs clarified, through a minute of proposed orders filed on 14 May 2024, that the only restraint presently sought is confined to the Manjimup practice, as follows:

    Pursuant to O 52 r 1 RSC, that the first defendant in her own right and/or as director or trustee of the second defendant, and the second defendant, be restrained from doing any acts or things which hinder, prevent or frustrate the usual operation by the plaintiffs of an orthodontic practice at the premises of GS Family Dental at 20 Bath Street, Manjimup, including, but not limited to, the entry into a new services and facilities agreement with GS Family Dental on such terms as the plaintiffs see fit.

  3. I heard the application on 15 May 2024 and reserved my decision through until 17 May 2024 to allow myself an opportunity to further review the affidavit material and the parties' contentions.

C.     Materials relied upon by the parties

  1. The plaintiffs filed several affidavits and undertakings as to damages, together with an outline of submissions,[7] in support of the interlocutory relief sought.  The plaintiffs relied upon the affidavits of Dr Bottoni sworn on 18 March 2024 (First Bottoni Affidavit), 10 April 2024 (Second Bottoni Affidavit), and 6 May 2024 (Fourth Bottoni Affidavit).  The plaintiffs did not expressly rely upon the affidavit of Dr Bottoni sworn on 1 May 2024 (Third Bottoni Affidavit).  

    [7] Plaintiffs' outline of submissions filed on 10 May 2024.

  2. The plaintiffs also relied upon the affidavit of Dr Bottoni's solicitor, Mr Thompson, sworn on 3 May 2024 (First Thomson Affidavit), which attaches the written consent of the proposed receiver, and the affidavit of Mr Thompson sworn on 6 May 2024 (Second Thompson Affidavit), which among other things, attaches the undertaking as to damages signed by both plaintiffs

  3. The defendants have filed affidavits in opposition and an outline of submissions.[8]  The defendants relied upon the affidavit of Ms Young sworn on 10 May 2024 (Young Affidavit). 

    [8] Defendants' outline of submissions filed on 13 May 2024.

  4. The defendants also sought to rely on the late filed affidavit of Ms Emma Cohen, a solicitor for the defendants, which was sworn on 13 May 2024 (Cohen Affidavit).  The Cohen Affidavit attached documentation demonstrating Ms Young's qualifications, which were inadvertently omitted from the earlier affidavit.  The plaintiffs did not oppose the defendants having leave to rely upon the Cohen Affidavit.  In the circumstances, given the contents of the affidavit, and in the absence of discernible prejudice to the plaintiffs from the late filing, I granted the defendants leave to rely upon that affidavit.

  5. Additionally, I note the defendants relied on a copy of the GS Dental Practice agreement which was attached to the Third Bottoni Affidavit, without objection from the plaintiffs.

  6. Counsel for the defendants noted that various passages in the plaintiffs' affidavit material were susceptible to objection as being submissions rather than evidence, or as purporting to summarise the effect of documents.[9]  Sensibly, rather than press those objections in detail, counsel indicated that he was content to proceed on the basis that those passages should be seen as having little or no weight in the determination of the application. 

    [9] A range of objections are detailed in the letter from the defendants' solicitors to the plaintiffs' solicitors dated 2 May 2024: Young Affidavit, Attachment NLY-27.

D.     Background

  1. The following background is drawn from the affidavit material referred to above.  The factual matters set out in these reasons should obviously not be taken to represent final findings by this Court.  The application presently before the Court is interlocutory in nature only, conducted in chambers, and without the deponents to the affidavits being subjected to cross-examination or otherwise tested.

Partnership terms

  1. There is in existence a document described as a Partnership Agreement, signed and initialled by Dr Bottoni and Ms Young on 30 September 2021.[10]  I will refer to this instrument, in a neutral manner, as the Written Agreement.  The plaintiffs say this is not a legally constituted partnership, either as a matter of tax law or at common law in relation to any undertaking or asset.  According to the plaintiffs, that partnership had no assets and never traded.  Rather, the plaintiffs contend that the true partnership is a partnership of trusts between the second plaintiff and second defendant, rather than a partnership of individuals.

    [10] First Bottoni Affidavit, Attachment CAB-10.

  2. In contrast, the defendants contend the Written Agreement constitutes the terms of the partnership agreement between the parties.

Operations of the partnership

  1. As already noted, Dr Bottoni has carried on health service practices as an orthodontist at the three orthodontic practices operated by the partnership.  He has serviced those practices on a monthly circuit. 

  2. The plaintiffs have highlighted the contention that the partnership cannot carry on an orthodontic business, as only individuals are eligible for general registration (pursuant to s 53 of the National Law) or specialist registration (pursuant to s 57 of the National Law) in a health profession. Further, the plaintiffs say that Ms Young does not and cannot provide health services on her account.

  3. The plaintiffs assert that Dr Bottoni is the sole provider of health services through his Medicare registrations.  The plaintiffs observe that all of Dr Bottoni's income from his health services practice is diverted through the partnership of trusts, which they say is contrary to the Practical Compliance Guidance issued by the Australian Taxation Office, known as ATO PCG 2021/4.[11]  The ATO guidance sets out the arrangements acceptable to the ATO for the operation of a service trust in a professional practice.

    [11] First Bottoni Affidavit, Attachment CAB-3.

  4. The partnership holds various assets, including plant and equipment, and the lease at the Cottesloe premises.  Dr Bottoni has sworn that the partnership operates as a service trust to support the three practices.

  5. Over time, the partnership business expanded to Manjimup and Denmark. 

  6. In relation to Manjimup, in February 2023, the second plaintiff and second defendant signed a services and facilities agreement with a Manjimup practice known as GS Family Dental.  I understand that in return for the use of the facilities the partnership would account to that practice for professional fees for orthodontic treatment which a patient committed to and all items incurred relating to that treatment, and then pay a fee calculated as $50 per hour during the use of the facilities together with 5% of net patient billings.

Disagreement between the partners

  1. It appears that in around September 2023 a strong difference of opinion emerged between Dr Bottoni and Ms Young in relation to the running of the business.  I need not document the full extent of their disagreement in these reasons.  It will need to be explored at any final trial of this proceeding.

  2. The disagreement has led to a significant exchange of correspondence between lawyers for the parties, setting out the parties' respective factual and legal positions.

  3. This ultimately led to two formal notices in relation to the partnership being issued by Dr Bottoni in September 2023.  More recently, it has led to these proceedings being commenced.  I will set out the terms of the two notices below.

First Notice

  1. The first notice is headed 'Notice of dissolution of partnership of trusts' (First Notice).[12]  It was issued on 13 September 2023.  The parties identified in the notice are the trustees of the family trusts, that is the second plaintiff and the first plaintiff (referred to as BFT and NYFT in the notice).  As is apparent from the terms of the First Notice, it was issued on the assumption that the partnership was a partnership of trusts, and not subject to the Written Agreement. 

    [12] First Bottoni Affidavit, Attachment CAB-5.

  2. The First Notice states that:

    Background:

    A.BFT and NYFT entered into a partnership on or about 30 September 2021.

    B.The partnership of trusts (Partnership of Trusts) constituted by the arrangement described in Recital A:

    (1)carries on business through ABN [redacted] under the business name 'Clear Orthodontic Studio'; and

    (2)is not subject to any written agreement between BFT and NYFT.

    C.BFT wishes to dissolve the Partnership of Trusts pursuant to Section 43(c) of the Partnership Act 1895.

    Notice:

    Pursuant to Section 43(c) of the Partnership Act 1895, BFT hereby gives notice of the dissolution of the Partnership of Trusts 6 months after the date this notice is given to NYFT in accordance with Section 135(1A)(a) of the Property Law Act 1969.

  3. The First Notice invokes the terms of s 43(c) of the Partnership Act, which is found in pt IV of the legislation, headed 'Dissolution of partnership and its consequences'. The full terms of s 43 are as follows:

    43 .         Dissolution by expiration of notice

    Subject to any agreement between the partners, a partnership is dissolved —

    (a)     if entered into for a fixed term, by the expiration of that term;

    (b)   if entered into for a single adventure or undertaking, by the termination of that adventure or undertaking;

    (c)   if entered into for an undefined time, by any partner giving notice in writing to the other or others of his intention to dissolve the partnership.

    In the last mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice.

  4. By its terms, if valid, the First Notice sought to bring about the dissolution of the partnership after the expiration of a 6 month period, being 15 March 2024.

Second Notice

  1. The second notice is headed 'Notice of withdrawal of partnership' (Second Notice).  It was also issued on 13 September 2023.  The parties identified in the notice are Dr Bottoni and Ms Young, referred to as CAB and NLY in the notice.  

  2. So, in contrast to the First Notice, the Second Notice is predicated on the partnership being between the individuals rather than the trusts, and being subject to the Written Agreement.  That is, although not stated within the Second Notice itself, it appears to have been issued in the alternative to the First Notice.  Plainly, the two notices cannot stand together as they are predicated on different underlying assumptions as to the nature of the partnership, although both notices seek to bring about a similar result.  The affidavit material filed by the plaintiffs does not provide any detailed explanation as to the intended interaction between the two notices.

  3. The Second Notice states:

    Background:

    A.CAB and NLY entered into a partnership agreement (Partnership Agreement) on 30 September 2021.

    B.The partnership (Partnership) constituted under the Partnership Agreement:

    (1)has no assets;

    (2)has never carried on business;

    (3)is not (despite the terms of the Partnership Agreement), the registered owner of the business name 'Clear Orthodontic Studio';

    (4)does not have an ABN or TFN; and

    (5)has never filed a tax return.

    C.CAB wishes to withdraw from the Partnership pursuant to clause 31 of the Partnership Agreement.

    Notice:

    Pursuant to clause 31 of the Partnership Agreement, CAB hereby gives notice of his withdrawal from the Partnership 6 months after the date this notice is given to NLY in accordance with clause 31 of the Partnership Agreement.

  4. Clause 31 of the Written Agreement gives a partner the right to voluntarily withdraw from the partnership at any time, upon 6 months' prior notice being given (or such other period as agreed).  The clause requires the retiring partner to 'consider the potential adverse consequences' to the business when implementing his withdrawal from the business and to 'use his best endeavours in the timing of his exit to minimise damage to the practice.'

  1. Clause 32 of the Written Agreement provides that:

    32.Except as otherwise provided elsewhere in this Agreement, the voluntary withdrawal of a Partner will have no effect upon the continuance of the Partnership business.

  2. The defendants draw attention to cl 44 of the Written Agreement and say that the Second Notice does not conform to the requirements thereof, because it was not unanimous.  That clause is headed 'Dissolution' and states:

    44.Dissolution

    Except as otherwise provided in this Agreement, the Partnership may be dissolved only with the unanimous consent of all Partners.

Recent developments

  1. In more recent months, the second defendant registered new business names for orthodontic practices in Perth, Denmark and Manjimup.  This occurred in February and March 2024.

  2. On 17 April 2024, lawyers for GS Family Dental, the dental practice in Manjimup, sought from the second plaintiff and the second defendant confirmation that the partnership business 'Clear Orthodontic Studio would be continuing the provision of Dental Services under the Agreement'. 

  3. The following represents a brief chronology of events thereafter concerning the Manjimup practice:

    (a)On 24 April 2024, lawyers for the defendants wrote to the lawyers for the plaintiffs requesting that Dr Bottoni agree to facilitate the partnership's performance of the services and facility agreement until this dispute had been finally determined, and enclosed their proposed correspondence to the lawyers for the Manjimup Dental Practice in the event that the defendants did not agree.  It appears the plaintiffs did not respond to this correspondence.

    (b)On 26 April 2024, lawyers for the defendants wrote to the lawyers for GS Family Dental requesting an extension of time to respond while the plaintiffs and defendants sought to resolve their differences. That letter acknowledged the disputes and expressed uncertainty whether Dr Bottoni would comply with the agreement.  The letter asserted the defendants' position that the professional fees for orthodontic treatment ought to be collected by the partnership and accounted to GS Family Dental. 

    (c)An extension was given through until 30 April 2024.

    (d)On 1 May 2024, lawyers for GS Family Dental informed the partners that the services and facilities agreement was terminated.  The reason stated was that the partnership had not provided written confirmation that the partnership was willing and able to perform the agreement.  

  4. The plaintiffs assert that the termination occurred because of the letter from the defendants' solicitors dated 24 April 2024.

  5. In contrast, the defendants say the termination occurred because the partnership was unable to meet the request of GS Family Dental for 'written confirmation that Clear Orthodontic Studio will be continuing the provision of Dental Services under the Agreement' or that 'Clear Orthodontic Studio are willing and able to continue the provision of Dental Services'.

E.     Principles to be applied

  1. For an interlocutory injunction the two main enquiries are: firstly, whether the plaintiff has made out a prima facie case and secondly, whether the balance of convenience favours the grant of the injunction: Mineralogy Pty Ltd v Sino Iron Pty Ltd.[13] 

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

  2. The following statement of Newnes JA in the Court of Appeal provides a convenient and authoritative explanation of the correct approach to be adopted:[14]

    [87] The principles to be applied on an application for an interlocutory injunction are well-known and were not in dispute.  The two main enquiries 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.  The first inquiry as to a 'prima 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.  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.  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: Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618; Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57. 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: Warner-Lambert Co LCC v Apotex Pty Ltd [2014] FCAFC 59 [70].

    [14] Mineralogy Pty Ltd v Sino Iron Pty Ltd [87].

  3. Some decades ago, in Films Rover International Ltd v Cannon Film Sales Ltd,[15] Hoffmann J observed that a 'principal dilemma' about the granting of interlocutory injunctions, whether they be prohibitory or mandatory, is that there a risk the court may make the 'wrong' decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. 

    [15] Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670.

  4. Hoffman J's response to the above dilemma was to favour the adoption of the principle that the court 'should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong'.[16] 

    [16] Films Rover International Ltd v Cannon Film Sales Ltd (680).

  5. These considerations were touched upon by Beech J (as his Honour then was) in Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110,[17] as appears from the following passage:

    [11] As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order: Glenwood Management Group Pty Ltd v Mayo [1991] VicRp 45; [1991] 2 VR 49, 54 - 55; Todd v Novotny [2001] WASC 171. The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial: Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670; Madaffari v Labenai Nominees Pty Ltd [2002] WASC 67 [14].

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

  6. Finally, it is worthy of note that the court does not undertake a preliminary trial of the issues when considering an application such as this, and does not seek to resolve contested questions of fact on the affidavit evidence.[18]

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

F.     Disposition of the interlocutory application

  1. I turn now to examine whether the interlocutory relief ought be granted, starting first with a consideration as to whether there is a serious question to be tried.

Serious question to be tried

  1. The disposition of the plaintiffs' application requires that the terms of the interlocutory restraint which is sought be kept firmly in focus.  The order sought, as clarified in the minute filed on 14 May 2024, is to restrain the defendants from 'doing any acts or things which hinder, prevent or frustrate the usual operation by the Plaintiff of an orthodontic practice' at the premises of GS Family Dental in Manjimup. 

  2. This is said to include, but is not to be limited to, 'the entry into a new services and facilities agreement with GS Family Dental' on such terms as the plaintiffs see fit.

  3. The order as sought invites immediate scrutiny of the legal or equitable right or claim which the plaintiffs assert underpins the relief which they seek.  In this regard, it is well to remember the observations of the High Court in Australian Broadcasting Corporation v Lenah Game Meats Pty Limited as to the importance of identifying the rights which are to be determined at the final trial of the matter.[19]  

    [19] Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [2001] HCA 63; (2001) 208 CLR 199.

  4. In that case, hidden video cameras had been installed in abattoirs by trespassers, which captured footage of possums being stunned and killed in less than humane ways.  The footage was to be aired as part of a broadcast on ABC.  The operators of the abattoirs applied to the Supreme Court of Tasmania for an interlocutory injunction to restrain the ABC from distributing, publishing, copying or broadcasting the video.

  5. At first instance, the injunction was dismissed, but that decision was reversed by the Full Court on appeal.  On appeal to the High Court, the appeal was allowed, resulting in a dismissal of the injunction application.  Gleeson CJ, Gaudron, Gummow and Hayne JJ all emphasised the necessity on such an application to identify the legal or equitable rights which are to be determined at the trial and in respect of which final relief is sought.[20]  On analysis, the majority of the court concluded that no legal or equitable rights had been asserted by the abattoir owners which might be enforced by final judgment. 

    [20] It is not necessary on the present application to explore the separate reasoning of Kirby and Callinan JJ.

  6. Gleeson CJ addressed the issue in the following way:[21]

    [15]A dispute arose in the course of argument as to "whether interlocutory injunctive relief to prevent publication can be granted without any underlying cause of action to be tried".  In the context of the present case, this is puzzling.  There could be no justification, in principle, for granting an interlocutory injunction here other than to preserve the subject matter of the dispute, and to maintain the status quo pending the determination of the rights of the parties.  If the respondent cannot show a sufficient colour of right of the kind sought to be vindicated by final relief, the foundation of the claim for interlocutory relief disappears.

    [16]In a context such as the present, a proposition that the respondent has a "free-standing" right to interlocutory relief is a contradiction in terms.  This is demonstrated, not only by the purpose for which interlocutory relief is granted, but by the form of the relief.  The Full Court granted the injunction sought "until further order".  A more usual form of interlocutory injunction would be "until the hearing of the action or further order", but the effect is the same.  If there were a "free-standing" right to injunctive relief, why would the injunction be limited in time?  If there is no serious question to be tried because, upon examination, it appears that the facts alleged by the respondent cannot, as a matter of law, sustain such a right, then there is no subject matter to be preserved.  There is then no justice in maintaining the status quo, because that depends upon restraining the appellant from doing something which, by hypothesis, the respondent has no right to prevent.

    [17]Unconscionability is a concept that may be of importance in considering the nature and existence of the claimed right which a plaintiff seeks to vindicate.  It is a matter that requires examination in the present case.  But, in these circumstances, it cannot be used to conjure up a right to interlocutory relief where there is no right to final relief.  If the respondent cannot demonstrate that there is at least a serious question as to whether the appellant is free to keep the video and to use it as it thinks fit, how could conscience require or justify temporary restraint upon the use of the video by the appellant?  If there is no serious question to be tried in the action, how can it be unconscientious to keep and use the video in the meantime?  Unconscionability has a role to play in the present case; but that role is in the evaluation of the claim to final relief. Such an evaluation became necessary at the interlocutory stage because it was contended that the plaintiff had no equity.

    [21] Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [15] – [17].

  7. Gleeson CJ noted that there may be cases where it is necessary to examine the legal merits of the claim for final relief as an essential step in assessing whether there is a serious question to be tried:[22]

    [18]The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff's claim for final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule.  It may depend upon the nature of the dispute. For example, if there is little room for argument about the legal basis of a plaintiff's case, and the dispute is about the facts, a court may be persuaded easily, at an interlocutory stage, that there is sufficient evidence to show, prima facie, an entitlement to final relief.  The court may then move on to discretionary considerations, including the balance of convenience.

    [22] Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [18].

  8. The plaintiffs firmly base the claim for interlocutory injunctive relief on the estoppel claim which is developed in their outline of submissions.[23]  As the proceedings were commenced by originating summons, no statement of claim has been filed at this stage, and so the plaintiffs' claim is presently articulated only within their submissions.  The plaintiffs explain, albeit in very general terms, the estoppel claim in the following way in those submissions.

    [23] Plaintiffs' outline of submission, [6.3].

  9. The plaintiffs submit that the doctrine of estoppel operates to preclude a party to legal proceedings (in this case, the defendants) from asserting against another party (the plaintiffs) a factual or legal state of affairs which is inconsistent with another assumed state of affairs.  This state of affairs is said to be the dissolution of the partnership by notice.

  10. No species of estoppel is identified in the plaintiffs' submissions.

  11. The plaintiffs further submit that, by operating to preclude the assertion of a factual or legal state of affairs inconsistent with the assumption, the court ought to hold the parties to the assumed state of affairs for the purpose of determining the respective rights, interests and obligations of the parties.  The plaintiffs say that the object of estoppel is the prevention of conduct by one party that would be unconscionable, if left to result in the suffering of detriment by another party.

  12. Applying these principles to the facts of the case, the plaintiffs maintain that an estoppel claim is made good on the affidavit evidence, at least to a level that it is a serious question to be tried to sustain the interlocutory relief which is sought.  The plaintiffs contend that, first, they have adopted an assumption on the basis of an act, being the giving of the notice of dissolution of the partnership on the basis there was no written partnership agreement.  This is a reference to the First Notice issued by the plaintiffs on 13 September 2023. 

  13. Curiously, the assumption is said to have been adopted on the basis of an act on the part of the plaintiffs themselves, not on the part of the defendants.  I will return to this aspect of the claim below.

  14. Second, the plaintiffs contend that, on the basis of the assumption to which I have just referred, they have so acted or abstained from so acting that a detriment will be suffered if the person against whom the estoppel is asserted (the defendants), is allowed to set up rights inconsistent therewith.  The plaintiffs explain that they gave 6 months' notice of the dissolution of the partnership through the First Notice, yet it was not until some 4 months into the notice period that the defendants made the assertion that the Written Agreement was applicable to the partnership.  I understand this contention was first made by letter from the defendants' previous solicitors dated 22 January 2024.[24]

    [24] First Bottoni Affidavit, Attachment CAB-8.  This letter is marked without prejudice save as to costs but no objection was taken to the plaintiffs' reliance on the correspondence.

  15. The plaintiffs say this was done by the defendants to ensure that a new notice would need to be issued by the plaintiffs, and a new notice period would need to run, or in order to maintain that the partnership cannot be dissolved without the unanimous consent of all parties.

  16. Third, the plaintiffs contend that the defendants have played such a part in the adoption of or persistence in the assumption, that freedom to act otherwise than in the manner consistent with it would be unfair or unjust.  The plaintiffs say that the defendants had 6 months' notice of dissolution and the plaintiffs have conducted themselves on the basis that the partnership was dissolved on 15 March 2024.  Further, the plaintiffs point to the breakdown in the relationship between them and say the conduct of the defendants has been such that no other conclusion can be drawn than that the partnership was dissolved on 15 March 2024.

  17. The plaintiffs emphasise that the partnership cannot function as a going concern and the only means by which it can be wound up is through the appointment of a receiver.

  18. Although the plaintiffs did not expressly refer to the foregoing contentions as giving rise to an estoppel by convention, the language of the submissions certainly evokes that species of estoppel.  Other than a reference to legal commentary concerning unconscionable conduct, no legal authority was cited by the plaintiffs in support of their arguments.

  19. In response, the defendants submit the estoppel claim is misconceived for several reasons, including for the reason that the estoppel, even if demonstrated, does not relate to the question of restraining interference with the setup of a new services and facilities agreement with the Manjimup Dental Practice.  The defendants further submit that the plaintiffs have failed to identify a representation or act by the defendants to ground the estoppel, and instead point to their own act – the giving of the dissolution notice to the partnership – followed by the assumption made by the plaintiffs on the basis of that act.  There is force in this submission, with respect.

  20. During the course of the hearing on 15 May 2024, I raised with counsel for the plaintiffs on several occasions a concern as to the legal or equitable right or cause of action upon which the relief was sought.  Counsel for the plaintiffs reiterated his clients' reliance on the estoppel contention, as set out in the submissions.  In my view, the asserted estoppel, as a foundation for the relief now sought, suffers from deficiencies and difficulties which are so substantial that it cannot presently be said there is a sufficient likelihood of success to justify the preservation of the status quo pending the trial.  That is, I consider the plaintiffs have not demonstrated a prima facie case, as that concept is explained in Australian Broadcasting Corporation v O'Neill[25] and Mineralogy Pty Ltd v Sino Iron Pty Ltd, to which I have earlier referred.  Fundamentally, I am concerned that the plaintiffs seek injunctive relief against the defendants which is unsupported by any legal or equitable right or any cause of action.  The difficulties with the plaintiffs' position can be explained as follows.

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

  21. First, there is real uncertainty as to the manner in which the estoppel claim has been articulated by the plaintiffs.  In one sense, the claim appears to be formulated as an equitable promissory estoppel, but it demonstrably lacks any articulated representation or form of conduct on the part of the defendants which would ground such a claim.  The primary, and indeed sole, act identified to ground the estoppel claim is an act on the part of the plaintiffs, not the defendants.[26] 

    [26] Being the plaintiffs' act in issuing the First Notice.

  1. Second, and allied to the first point, no conduct has been identified by the plaintiffs which supports the conclusion to the standard required that, assuming there had been on the part of the defendants some creation or encouragement of an assumption on the part of the plaintiffs that a particular state of affairs existed, allowing the departure from that state of affairs by the defendants would be unconscionable.  At its highest, the plaintiffs complain that the defendants waited 4 months before asserting a particular argument and stating their legal position.  If the plaintiffs underlying legal contentions as to the nature and terms of the partnership between the parties are correct, the defendants' decision to articulate a contrary position is hardly something which strikes at equity's conscience.

  2. Third, assuming without deciding that promissory estoppel can operate as a positive source of legal rights (a proposition in respect of which there is supportive authority),[27] an acceptance of the plaintiffs' asserted position would nonetheless require the Court to push that principle beyond its breaking point. 

    [27] I refer, by way of example, to Commercial & General Corporation Pty Ltd v Manassen Holdings Pty Ltd [2021] SASCFC 40 [166] – [185] (Livesey J, Stanley J agreeing); Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281 and CPB Contractors Pty Ltd v Rizzani De Eccher Australia Pty Ltd [2017] NSWSC 1798.

  3. Let me explain this a little further. 

  4. The plaintiffs argument, at its core, is that the parties conducted themselves on the basis the partnership was not subject to any written agreement.  The estoppel argument pressed by the plaintiffs is not that there was a postulated contract in existence, but rather that there was no such contract.  It may be the plaintiffs say there was, instead, a postulated legal relationship in existence which the estoppel is intended to preclude the defendants from denying, but the terms of that postulated relationship are not spelt out in the submissions. 

  5. As presently expressed, the plaintiffs claim appears to rely on the asserted estoppel to create rights in an abstract sense.

  6. Fourth, having regard to some of the language employed by the plaintiffs in their submissions, I have given some consideration as to whether the claim is based on common law conventional estoppel, in the sense explained by Dixon J in Thompson v Palmer[28] and in Grundt v Great Boulder Proprietary Gold Mines Ltd.[29]  To be clear, the plaintiffs did not expressly submit that a conventional estoppel arose and submissions were not made directly on this point. 

    [28] Thompson v Palmer [1933] HCA 61; (1933) 49 CLR 507, 547 (Dixon J).

    [29] Grundt v Great Boulder Proprietary Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 614, 674 – 675 (Dixon J).

  7. In Thompson v Palmer, Dixon J said:[30]

    The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment.  Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party.  He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct, as in Yorkshire Insurance Co. v. Craine (1922) 2 A.C. 541, at pp. 546-547; cp. Cave v. Mills [1862] EngR 494; (1862) 7 H. & N. 913, at pp. 927-928; [1862] EngR 494; 158 E.R. 740, at pp. 746-747; Smith v. Baker (1873) L.R. 8 C.P. 350, at p. 357; Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. (1921) 2 K.B. 608, at p. 612; and Ambu Nair v. Kelu Nair (1933) 60 I.A. 266, at p. 271; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption.  But, in each case, he is not bound to adhere to the assumption unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted.

    [30] Thompson v Palmer (547).

  8. In Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd,[31] the Court of Appeal reviewed several Australian authorities which have addressed the scope of the estoppel, and its application.  Buss J (as his Honour then was), with whom Steytler P agreed, expressed his agreement with the statements of principle endorsed by Finn J in  GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd[32] as to the elements of the doctrine of estoppel by convention, with one qualification.[33]  Those elements were as stated by the New Zealand Court of Appeal in National Westminster Finance New Zealand Ltd v National Bank of New Zealand Ltd,[34] as follows:

    The authorities show that for an estoppel by convention to arise the following points must be established by the party claiming the benefit of the estoppel (the proponent):

    (1) The parties have proceeded on the basis of an underlying assumption of fact, law, or both, of sufficient certainty to be enforceable (the assumption).

    (2) Each party has, to the knowledge of the other, expressly or by implication accepted the assumption as being true for the purposes of the transaction.

    (3) Such acceptance was intended to affect their legal relations in the sense that it was intended to govern the legal position between them.

    (4) The proponent was entitled to act and has, as the other party knew or intended, acted in reliance upon the assumption being regarded as true and binding.

    (5) The proponent would suffer detriment if the other party were allowed to resile or depart from the assumption.

    (6) In all the circumstances it would be unconscionable to allow the other party to resile or depart from the assumption.

    [31] Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119.

    [32] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1.

    [33] The qualification identified was that, to the extent the proponent relied upon an assumption of law or an assumption of mixed fact and law, the assumption of law must relate to private legal rights.  This may include a common assumption as to the effect of contracts or agreements.

    [34] National Westminster Finance New Zealand Ltd v National Bank of New Zealand Ltd [1996] 1 NZLR 548, 550.

  9. To the extent to which the plaintiffs claim rests upon a conventional estoppel, there is not apparent on the evidence adduced for the present application a basis to say that the parties proceeded on a particular (and shared) assumption of fact, law or both.  These are necessary, although not sufficient, requirements for the estoppel.  The remaining elements identified above require proof, but it is enough to say for present purposes that the plaintiffs claim hits a hurdle at the first two elements identified above. 

  10. The picture which emerges from the affidavit material is that the plaintiffs issued two notices in September 2023, one predicated on the existence of a partnership of trusts and the other predicated on the existence of the Written Agreement.  Some months later, the defendants expressed a position that they regarded the Written Agreement as having effect.  Whether that is legally correct or not, the position is that the plaintiffs do not point to material which grounds a shared assumption of the parties prior to this time. 

  11. Indeed, it must be remembered that the plaintiffs also issued the Second Notice in September 2023.  That notice, at least on its face, asserts the existence of a partnership constituted under the Written Agreement.  This notice, again, at least on its face, is inconsistent with the state of affairs described by the plaintiffs as forming the basis of its estoppel claim.

  12. Fifth, if the plaintiffs rely upon a common law conventional estoppel, as distinct from a promissory estoppel, it is accepted that such an estoppel cannot itself ground a cause of action or create substantive rights in the parties.  This issue was not argued before me.  It is however sufficient for present purposes to refer to the legal principles collected by Dr Felicity Maher in her recent article on estoppel by convention, as follows:[35]

    Conventional estoppel is a shield, not a sword.  It is a procedural, rather than substantive rule.  It is a rule of evidence, by which the defendant is precluded from denying the parties' assumption.  The defendant may not plead the contrary, or lead evidence to do so.  Estoppel by convention is not, therefore, a direct source of rights and obligations.  It does not create substantive rights in the parties.  And it is not a cause of action.  Nor can it found a cause of action, or form the basis for a positive claim, itself.  Rather, conventional estoppel has an indirect effect upon the parties' rights and obligations.  It may change them indirectly, by changing the material facts.  The estoppel establishes the facts – the state of affairs – by reference to which legal relations between the parties are ascertained.  So, it is concerned with the terms on which the parties' rights and obligations are ascertained.  It makes available to the plaintiff a cause of action which would be available if the parties' assumption were true, and the relief which would be available if that cause of action were made out.  (footnotes omitted)

    [35] Maher F, 'Doing The Same Work? Estoppel by Convention and Failure of Basis' (2023) 50(2) University of Western Australia Law Review 64, 79 - 80.

  13. Amongst other authorities, Dr Maher cites Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd,[36] Government Employees Superannuation Board v Martin,[37] and Mears Ltd v Shoreline Housing Partnership Ltd,[38] in support of these propositions, as well as several academic articles.

    [36] Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1981] 3 All ER 577, 591.

    [37] Government Employees Superannuation Board v Martin (1997) 19 WAR 224, 244

    [38] Mears Ltd v Shoreline Housing Partnership Ltd (2015) 160 ConLR 157, [49].

  14. Sixth, even if the estoppel and the assumed state of affairs contention is made out, I fail to see the logical connection between these matters and the plaintiffs' claims in respect of the Manjimup practice.  That is, there is a lack of connection between the estoppel, which would require that Ms Young recognise the non-operability of the Written Agreement (and presumably therefore the consequential position that the partnership has been dissolved by operation of the First Notice) and the ability of the plaintiffs to be permitted to engage in fresh legal relations with those who own the Manjimup dental practice. 

  15. The two are separate and distinct matters, it seems to me. 

  16. Whether or not the plaintiffs can enter into a fresh arrangement with the Manjimup dental practice is a matter for those parties, subject to any legal claims which Ms Young may have in due course in relation to any profits made by Dr Bottoni in respect of that endeavour.  I record that have not seen in the materials any threat on the part of Ms Young to seek injunctive relief in respect of the proposed Manjimup practice agreement.  The claims appear to be confined to monetary claims.

  17. Seventh, and finally, the evidence does not sufficiently disclose actual or threatened conduct on the part of Ms Young which involves the infringement of Dr Bottoni's rights, assuming those rights are made out.  The letter from her solicitors is not sufficient to demonstrate such an infringement, in my view.  It represented the expression of a legal position.

  18. For these reasons, I find that there is no serious question to be tried, in the sense there is no legal or equitable right or cause of action which is required to be determined at a final trial which is supportive of the particular injunctive relief sought.  That is not to say there are not other arguable claims apparent from the originating summons which will require final curial determination.  However, these reasons are focused on the question whether the injunctive relief sought is properly grounded in some right or claim.  The plaintiffs maintain the estoppel claim provides the necessary foundation.  I respectfully disagree.  

  19. That being the case, it is strictly unnecessary to consider the balance of convenience question, but in the event I am wrong as to the serious question to be tried issue, I will now turn to examine the second issue.

Balance of convenience

  1. I recognise the concerns which the plaintiffs have expressed in relation to the need to ensure continuing care for the dental patients of the practice in Manjimup, and additionally the concern as to possible disciplinary action against Dr Bottoni as a result of his inability to maintain that care. 

  2. The former concern is valid one, although there is a lack of cogent evidence on the application to enable the Court to form any view as to the immediacy of any danger to the patients of the practice.  I do not know whether there are any specific patients in need of Dr Bottoni's care in the immediate future, nor whether they may be other avenues for those patients to receive appropriate care.  The concern as expressed by Dr Bottoni is thus relevant, but is not one I give significant weight to on this application in light of the state of the evidence.

  3. The disciplinary action concern is also legitimate.  I would not seek to minimize the risk of a professional person being exposed to such action, but there must be some basis in the evidentiary materials to point to the level of the risk.  At present, the prospect of such action appears remote, given the circumstances, and the evidentiary material puts the matter as no higher than a potential risk without providing material to enable the Court to properly quantify that risk.

  4. No doubt Dr Bottoni wishes to operate the practice in Manjimup and service his patients.  To do so, it would appear he needs to enter into a fresh agreement with the Manjimup practice.  The former agreement was terminated.  The relief being sought by Dr Bottoni is designed to prevent Ms Young taking steps to prevent Dr Bottoni and the Manjimup practice entering into the fresh agreement, although it is not clear to me how Ms Young would achieve this through her own actions.  The submission made by counsel for the plaintiffs was that the Manjimup practice had been 'scared away' by Ms Young's expression of her legal position and that it did not wish to become embroiled in the litigation on foot between the current parties. 

  5. All of that may well represent the reality of the situation, but again, it is unclear how the relief which is sought is intended to logically assist Dr Bottoni's position to secure the new agreement.  To reiterate – Dr Bottoni and the Manjimup practice may see fit to enter a fresh agreement.  That is a matter for them.  As between Dr Bottoni and Ms Young (and their trusts), there remain extant claims for final determination within these proceedings, including a duty to account to each other.

  6. I am also mindful of the following matters.

  7. First, the defendants offered to facilitate a resumption of orthodontic services at the Manjimup practice on the basis that the work of the plaintiffs was accounted to the partnership. I understand that proposal was rejected by the plaintiffs.[39]

    [39] Defendants' outline of submissions, [88].

  8. Second, Ms Young has deposed that her last working day at the Manjimup practice was 8 March 2024 and she has not attended the premises since then.  Further, and importantly, Ms Young has deposed that she:[40]

    …does not intend to contact GS Family Dental or Culshaw Miller Lawyers [the lawyers for the Manjimup practice] to discuss Dr Bottoni or the Manjimup Services Agreement other than as arranged through my lawyers with notice to Dr Bottoni through Dr Bottoni's lawyer.

    [40] Young Affidavit, [44].

  9. I would also add that Ms Young has made similar sworn statements in relation to the Cottesloe and Denmark practices.[41]

    [41] Young Affidavit, [42] and [46].

  10. Fundamentally, it seems to me the plaintiffs' desire is to secure an injunction which can be promoted or provided to GS Family Dental as an incentive for that business to enter into further arrangements with Dr Bottoni.  I have a real concern that facilitating this outcome, through the grant of interlocutory relief, where the parties are in dispute as to the manner in which the partnership should be dissolved and where they have ongoing obligations to account to each other, is intended to improve Dr Bottoni's position (to facilitate his entry into a new business), rather than merely preserve the status quo.  Injunctive orders should not be granted by this Court as an aid to improve a party's legal, commercial or negotiating position (as opposed to the preservation of the status quo), where there are contested factual and legal issues which require final resolution. 

  11. The balance of convenience does not favour the grant of the injunctive relief sought by the plaintiffs.  In any event, as already noted, I consider there is no serious question to be tried.

Further issue – scope of the order

  1. The defendants submitted that a further difficulty which tells against the grant of the interlocutory relief sought is the broad and vague scope of the order which the plaintiffs seek.  I accept that the terms of an interlocutory injunction must be expressed in such terms that the injunction is reasonably capable of being obeyed.  The party restrained must known what he or she cannot do in the period leading up to trial, while the order remains in effect.  Such relief should be granted in terms which permits proper supervision by the court.  Injunctive relief should also not be granted which is wider than necessary. 

  2. The order proposed by the plaintiffs is, in my view, vague and would create considerable difficulties in terms of enforcement.  The plaintiffs seek to restrain acts or things which 'hinder, prevent or frustrate', which is a composite term of some uncertainty.  Further, the object of the orders is the 'usual operation by the plaintiffs' of the orthodontic practice in Manjimup.  Precisely what that 'usual operation' might be is unclear.  The evidence adduced appeared to rise no higher than that Dr Bottoni had been practising for a period at the Manjimup premises following mid-March 2024, without any formal arrangement in place, but pursuant to an arrangement which was subject to ongoing negotiations. 

  3. To add to the lack of clarity, the order sought would preclude the defendants from engaging in acts which hindered, prevented or frustrated the ability of the plaintiffs to enter into a new agreement with the Manjimup practice.  In the course of the hearing, I queried whether this would extend to conduct on the part of the defendants by which they reiterated to the Manjimup practice their previously expressed legal position.  Counsel for the plaintiffs acknowledged that this would be caught by the proposed injunction.  This strongly suggests the relief is too wide.

  4. Accordingly, I consider the breadth and generality of the proposed order is a further reason to decline the relief sought.

G.     Conclusion and orders

  1. For the foregoing reasons, I am of the view that the plaintiffs' application for interlocutory injunctive relief should be dismissed. 

  2. In summary, I am of that opinion because:

    (a)I am not satisfied the interlocutory relief sought by the plaintiffs is supported by the legal right or claim which the plaintiffs have identified, even at a serious question to be tried stage;

    (b)further, and in any event, I am not satisfied the balance of convenience favours the grant of any restraint upon the defendants; and

    (c)further still, I consider the proposed terms of the injunctive relief are too broad and vague such that the restraints cannot properly be supervised by the Court nor can the defendants know whether they have breached the terms or not.

  1. I will hear the parties on the issue of costs.

H.     A final observation

  1. Finally, I should record my view that this dispute would benefit from early mediation before a Registrar of this Court, before the positions of the respective parties become further entrenched and the costs of the litigation become a material issue in the resolution of the matter. 

  2. Counsel for both parties made it abundantly clear to the Court at the hearing of the injunction application that Dr Bottoni and Ms Young regard the interests of their patients, and their clinical care, as paramount matters.  It would be unfortunate if the clarity of that view were to become clouded through protracted litigation.

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

LM

Associate to the Honourable Justice Lundberg

17 MAY 2024


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