Brown v Sigma Chemicals (1986) Pty Ltd as Trustee of the Sigma Chemicals Trust
[2001] WASCA 145
•8 MAY 2001
BROWN & ORS -v- SIGMA CHEMICALS (1986) PTY LTD as Trustee of the SIGMA CHEMICALS TRUST & ORS [2001] WASCA 145
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 145 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:155/2000 | 26 FEBRUARY 2001 | |
| Coram: | PARKER J McKECHNIE J | 8/05/01 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | DAVID BROWN GLENYS DAWN BROWN DAVID BROWN INVESTMENTS PTY LTD STEPHEN GLEN BROWN JEFFREY DAVID BROWN MICHAEL CHARLES BROWN CHEMISALES PTY LTD SIGMA CHEMICALS (1986) PTY LTD as Trustee of the SIGMA CHEMICALS TRUST JEAN-PIERRE GEORGES HERICHER CICELY MADELEINE HERICHER PAUL CONRAD WOJTYSIAK ROBERT STALLARD |
Catchwords: | Interlocutory injunction No new principles |
Legislation: | Nil |
Case References: | Bentley v Nelson [1962] WAR 89 Sigma Chemicals (1986) Pty Ltd as Trustee of the Sigma Chemicals Trust v Brown & Ors [2001] WASC 39 Adam P Brown Male Fashions Pty Ltd v Phillip Morris Ltd (1981) 148 CLR 170 BP Chemicals ANZ Pty Ltd v Manildra Starches Pty Ltd, unreported; FCA (Finklestein J); 1189/97; 5 November 1997 Brink's-Mat Ltd v Elcombe [1988) 1 WLR 1350; 3 All ER 188 Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; SCt of WA; Library No 960641; 8 October 1996 Clifton v Robinson (1853) 16 Beav 355; 51 ER 816 Grant Matich & Co Pty Ltd v Toya Menka Kaisha Ltd (1978) 3 ACLR 375 In re Will of Gilbert (dec'd) (1946) 46 SR (NSW) 318 Lock International PLC v Beswick [1989] 3 All ER 373 Thomas A Edison Limited v Bullock (1913) 15 CLR 679 Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40 Wilson v Metaxas [1989] WAR 285 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BROWN & ORS -v- SIGMA CHEMICALS (1986) PTY LTD as Trustee of the SIGMA CHEMICALS TRUST & ORS [2001] WASCA 145 CORAM : PARKER J
- McKECHNIE J
- First Appellant (First Defendant)
GLENYS DAWN BROWN
Second Appellant (Second Defendant)
DAVID BROWN INVESTMENTS PTY LTD
Third Appellant (Third Defendant)
STEPHEN GLEN BROWN
Sixth Appellant (Sixth Defendant)
JEFFREY DAVID BROWN
Seventh Appellant (Seventh Defendant)
MICHAEL CHARLES BROWN
Eighth Appellant (Eighth Defendant)
CHEMISALES PTY LTD
Ninth Appellant (Ninth Defendant)
AND
(Page 2)
- SIGMA CHEMICALS (1986) PTY LTD as Trustee of the SIGMA CHEMICALS TRUST
First Respondent (Plaintiff)
JEAN-PIERRE GEORGES HERICHER
Second Respondent (Fourth Defendant)
CICELY MADELEINE HERICHER
Third Respondent (Fifth Defendant)
PAUL CONRAD WOJTYSIAK
Fourth Respondent (Tenth Defendant)
ROBERT STALLARD
Fifth Respondent (Eleventh Defendant)
Catchwords:
Interlocutory injunction - No new principles
Legislation:
Nil
Result:
Appeal dismissed
(Page 3)
Representation:
Counsel:
First Appellant (First Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Second Appellant (Second Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Third Appellant (Third Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Sixth Appellant (Sixth Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Seventh Appellant (Seventh Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Eighth Appellant (Eighth Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
Ninth Appellant (Ninth Defendant) : Mr G T Bigmore QC &
Mr S K Shepherd
First Respondent (Plaintiff) : Mr S J Archer &
Mr S J Penrose
Second Respondent (Fourth Defendant) : No appearance
Third Respondent (Fifth Defendant) : No appearance
Fourth Respondent (Tenth Defendant) : No appearance
Fifth Respondent (Eleventh Defendant) : No appearance
Solicitors:
First Appellant (First Defendant) : Mallesons Stephen Jaques
Second Appellant (Second Defendant) : Mallesons Stephen Jaques
Third Appellant (Third Defendant) : Mallesons Stephen Jaques
Sixth Appellant (Sixth Defendant) : Mallesons Stephen Jaques
Seventh Appellant (Seventh Defendant) : Mallesons Stephen Jaques
Eighth Appellant (Eighth Defendant) : Mallesons Stephen Jaques
Ninth Appellant (Ninth Defendant) : Mallesons Stephen Jaques
First Respondent (Plaintiff) : Tottle Christensen
Second Respondent (Fourth Defendant) : No appearance
Third Respondent (Fifth Defendant) : No appearance
Fourth Respondent (Tenth Defendant) : No appearance
Fifth Respondent (Eleventh Defendant) : No appearance
(Page 4)
Case(s) referred to in judgment(s):
Bentley v Nelson [1962] WAR 89
Sigma Chemicals (1986) Pty Ltd as Trustee of the Sigma Chemicals Trust v Brown & Ors [2001] WASC 39
Case(s) also cited:
Adam P Brown Male Fashions Pty Ltd v Phillip Morris Ltd (1981) 148 CLR 170
BP Chemicals ANZ Pty Ltd v Manildra Starches Pty Ltd, unreported; FCA (Finklestein J); 1189/97; 5 November 1997
Brink's-Mat Ltd v Elcombe [1988) 1 WLR 1350; 3 All ER 188
Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; SCt of WA; Library No 960641; 8 October 1996
Clifton v Robinson (1853) 16 Beav 355; 51 ER 816
Grant Matich & Co Pty Ltd v Toya Menka Kaisha Ltd (1978) 3 ACLR 375
In re Will of Gilbert (dec'd) (1946) 46 SR (NSW) 318
Lock International PLC v Beswick [1989] 3 All ER 373
Thomas A Edison Limited v Bullock (1913) 15 CLR 679
Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40
Wilson v Metaxas [1989] WAR 285
(Page 5)
- JUDGMENT OF THE COURT:
Introduction
1 This is an application for leave to appeal against a decision of Templeman J on 22 August 2000 in which his Honour declined to discharge an injunction which had been earlier obtained by the respondents to this appeal.
Background to application
2 Since that time, the action has progressed. In January 2001, Steytler J heard an application to join a further defendant for interlocutory relief by way of injunction and other orders. The application was contested. On 15 February 2001, Steytler J delivered judgment on the application. We were advised by Mr Bigmore QC for the appellants that an appeal against that decision is not proposed.
3 In the course of his reasons for decision, Steytler J comprehensively set out the background to the litigation and the history of the litigation.
4 It is therefore unnecessary for us to set out those matters here. We shall refer only to as much of the history and background as is necessary to understand these reasons. We adopt with gratitude the history of the parties and of the litigation set out by Steytler J in Sigma Chemicals (1986) Pty Ltd as Trustee of the Sigma Chemicals Trust v Brown & Ors [2001] WASC 39 par 2 to par 35 inclusive. As that narrative discloses, on 23 June 2000, Anderson J made various ex parte orders in favour of the plaintiffs which are set out in par 25 of the judgment of Steytler J.
5 On 21 July 2000, following a hearing, Templeman J formed the view that:
"(1) there is a serious question to be tried as to whether the post-1991 formulae are materially different from the pre-1992 formulae;
(2) there is a serious question to be tried as to whether the first and second defendants were in breach of fiduciary duties owed to the plaintiff in establishing the ninth defendant and causing the plaintiff to purchase mixes from it; or as to whether they have misused confidential information;
(Page 6)
- (3) it would be preferable not to require the defendants to disclose the formulae to the plaintiff at this early stage of the proceedings, and thereby, effectively, grant the plaintiff final relief in at least that respect, when the defendants claim that they are the owners of at least the post-1991 formulae;
(4) it would be impractical to remove the receiver and manager so as to revert to the pre-23 June position, because the plaintiff could not now be expected to deal with the ninth defendant."
6 Templeman J then continued:
"In all these circumstances I concluded that the best practical interlocutory solution would be for the ninth defendant to continue to produce the mixes, under the control of the receiver and manager, and on terms to be negotiated by him. This could be achieved only with the co-operation of the defendants. The advantage to them of that solution (which, as I made plain, I would not compel them to adopt) is that they would not be required, at this stage, to disclose the formulae.
That course commended itself to the defendants, with the result that counsel for all parties were able to formulate appropriate minutes of orders.
Because of the need to provide a permanent solution as soon as possible, I also ordered that the action be entered into the expedited list."
7 The relevant order read as follows:
"1. The first to eighth defendants and each of them, by himself, herself or itself and his her or its servants and agents in the ninth defendant other than by the receiver appointed on 23 June 2000 be restrained and an injunction is hereby granted restraining them until the hearing of these proceedings or further Order in the meantime from doing the following acts or any of them:-
(a) destroying, altering, defacing, copying, secreting, disposing of, dealing with or parting with possession of any of the Specified Items as
(Page 7)
- defined in Schedule A hereto in existence at the date of this Order;
- (b) using or imparting or disclosing to any person (save for the Receiver and Manager of the ninth defendant) firm or company the Confidential Process as defined in Schedule B to this Order;
(c) subject to the undertaking in paragraph 3 hereof, manufacturing, selling, dealing with or disposing of any of the Confidential Products as defined in Schedule C to this Order save that the defendants (or any of them) be and hereby are authorised to provide co-operation and assistance to the Receiver and Manager of the ninth defendant to enable him to recommence the manufacturing operations of the ninth defendant for the production of the Confidential Products (as defined in Schedule D of the Orders made on 23 June 2000), inter alia, for sale to the plaintiff.
- 2. The ninth defendant by itself, its servants and agents (other than the Receiver and Manager) be restrained and an injunction is hereby granted restraining it until the hearing of these proceedings or further order from selling, dealing with, disposing of, charging or encumbering any of its assets or property without the written consent of the plaintiff's solicitors or the leave of the Court.
3. The Court notes the undertaking of the first defendant that when reasonably requested so to do by the Receiver and Manager he will attend at the premises at Unit 8, 443 Scarborough Beach Road, Osborne Park and manufacture such quantities of the Confidential Products from raw materials provided by the Receiver and Manager, as the Receiver and Manager may reasonably ask him to manufacture PROVIDED THAT the first defendant shall be entitled to receive from the Receiver and Manager reasonable remuneration for such work.
4. Geoffrey Frank Totterdell, the Receiver and Manager of the ninth defendant be and is hereby directed to exercise all powers conferred on him by virtue of his appointment
(Page 8)
- as receiver pursuant to the orders of this Honourable Court on 23 June 2000 and pursuant to sections 420(1) and 420(2) of the Corporations Law."
8 On 10 August the first to ninth defendants filed a chamber summons to vary or discharge the orders made on 21 July. They sought orders that:
"1. Order 1(c) of the Orders of the Honourable Justice Templeman made 21 July 2000 be discharged.
2. The Receiver and Manager of the ninth defendant be authorised to sell any or all of the products listed in schedule C to the Orders of the Honourable Justice Templeman made 21 July 2000 to the first defendant or parties associated with the first defendant.
3. Such further or other orders be made as this Honourable Court deems fit.
4. The cost of this application to be the defendants' costs in any event.
Alternatively:
5. The appointment of Geoffrey Frank Totterdell as receiver and manager of the assets and undertaking of the ninth defendant pursuant to Order 6(4) of the Orders of the Honourable Justice Anderson made in chambers 23 June 2000 be revoked.
6. Orders 1, 2 and 4 of the Orders of the Honourable Justice Templeman made 21 July 2000 be discharged.
7. The first defendant be released from the undertaking given on 21 July 2000.
8. Such further or other orders be made as this Honourable Court deems fit.
9. The costs of this application and of the hearings on 5 July 2000 and 21 July 2000 be the defendants in any event."
9 After a hearing on 22 August 2000, Templeman J dismissed the application. It is from this dismissal that the appellants seek leave to appeal.
(Page 9)
10 The grounds of appeal are lengthy. However, as developed by Mr Bigmore QC for the appellants, the principal issues for consideration are whether Templeman J erred in failing to hold that there had been a significant change of circumstances, sufficient to justify the discharge of the injunction and whether in obtaining the injunctions ex parte before Anderson J, and subsequently before Templeman J, the plaintiff failed to disclose matters relevant to the subject matter of the applications. The principal matter relied upon in respect of non-disclosure is also relevant to the ground relating to changed circumstances. In short, it is contended that the plaintiff has and always has had the ability to manufacture flux and that an injunction is no longer necessary.
11 Complaint is also made that Templeman J misdirected himself in a matter of law.
The change of circumstances
12 Templeman J said:
"There is a dispute about the way in which the plaintiff came to be in that position: although it is common ground that it is in that position at least to a limited extent."
13 He then dealt with questions of impropriety in relation to the plaintiff searching the premises of Chemisales with the consent of the receiver. Templeman J was of the view that the conduct did not amount to impropriety on the part of the receiver and did not consider it was a matter he could resolve in relation to the plaintiff.
14 Templeman J dealt with this argument before concluding that "there is nevertheless at the moment a strong prima facie against the defendants of serious impropriety." He then went on:
"The important point, I think, the fundamental point, is that if there is a change of circumstances such as to warrant a variation of interlocutory orders, that it must be a change of circumstances relating to the grant of the orders in the first place."
15 If read by itself, this passage may well not reflect the law.
16 However, in context, we do not consider that his Honour's comments should be understood so as to reveal error. Templeman J's comments
(Page 10)
- appear to have been directed to the circumstances of the particular litigation as is made clear by the next paragraph which reads:
"What I did on 21 July was vary the orders of Anderson J to the extent necessary to avoid a stalemate and to enable the plaintiff to continue its business and to enable the ninth defendant to continue in existence to the benefit of all concerned. Although it is true that the plaintiff can now manufacture mixes to a certain extent, that does not in my view constitute a significant change in the circumstances because it does not alter the fact that there is still a strong prima facie case of misuse of confidential information and breach of fiduciary duty."
"In all the circumstances that seems to me to be a reasonable approach on behalf of the plaintiff and I am not persuaded that in the circumstances I should vary the order."
18 On the material available to Templeman J in August 2000, we consider that the decision he reached concerning the change of circumstances was open. In any event, the decision is not attended with sufficient doubt to satisfy the intervention of this Court.
19 Whether, in the light of further evidence the defendants assert is relevant, the circumstances now disclose a significant change is not a matter about which we can comment. We do note, however, that it is open for the defendants to bring a fresh application to vary or discharge the injunctions should they so desire.
Duty of non-disclosure
20 It may be accepted that a party applying for an injunction owes a duty of the utmost faith to make disclosure of all material matters. Non-disclosure of a material matter can, and will generally, lead to a subsequent discharge of the injunction. What is more, the non-disclosure may vitiate an order continuing an injunction until trial, although made inter partes: Bentley v Nelson [1962] WAR 89.
21 There is an issue as to the extent to which the question of non-disclosure was a live question before Templeman J. The chamber
(Page 11)
- summons filed by the defendants in breach of the Rules of the Supreme Court, O 59 r 3(3) did not specify any grounds for the application.
22 The written submissions subsequently filed by the defendants did not appear to raise the issue of non-disclosure. In opening the case for the defendants at the hearing of the summons, senior counsel then appearing for the defendants referred to a paragraph in the written outline of submissions and the summary of grounds upon which an injunction might be varied. He then said:
"We don't there set out, but of course over and above that is the situation where the order was obtained as a result of or following a material non-disclosure by the plaintiff on the occasion on which the injunction or the orders were made."
23 Shortly after that passage, counsel said:
"Your Honour, in our submission the plaintiff in seeking and indeed obtaining from your Honour effectively an extension, although in fact different orders were eventually made, failed to disclose to the court what were material and significant circumstances then existing. They broadly relate to these matters, although I will come back to them in greater detail. They relate to the fact that at the time the plaintiff had obtained the formulae for making the fluxes from the raw materials."
24 Counsel concluded their submission and Mr Archer, on behalf of the plaintiff, commenced his submissions. Just before lunch the Judge posed the following question:
"TEMPLEMAN J: Mr Archer, it might help if I say this: at the moment I'm not disposed to go into the question of who knew what on 21 July and what people's motives were and so forth. Those are matters which I think don't need to be determined today even if I was in a position to do so, which I don't think I am. The sole question, it seems to me, is given that it is now accepted that the plaintiff has its own capacity to make the fluxes, albeit perhaps a limited capacity, does that change things to the extent necessary to warrant some variation or relaxation of the orders? That is really the question."
25 In his reply, senior counsel for the defendants referred, in closing, to the question of disclosure as a heavy burden which fell on the plaintiff on 21 July 2000 when it did not disclose its ability to manufacture the flux.
(Page 12)
26 It seems to us that at the hearing on 22 August 2000 before Templeman J, the issue of non-disclosure, in the defendants' submissions, played a supporting role at best. Before us, the issue had moved to centre stage.
27 On the issue Templeman J said:
"It is also said, on behalf of the defendants, that on 21 July there was material non-disclosure in the sense that the plaintiff did not disclose to the court that it was in a position to manufacture the confidential products.
As to that, again, it is not necessary for me to come to any conclusion. My provisional view is that the allegation is not well founded. It seems to me that, at its highest, on the evidence as it now stands, the plaintiff may have been hopeful that it would shortly be in a position to manufacture the confidential products but had not at that point achieved that position."
28 We think his Honour's summary of the position, which he described as provisional, is a fair summary having regard to the material that was before him. Templeman J did not find it necessary to come to a final conclusion as to the ability of the plaintiff to manufacture the flux and it was his desire to maintain a sensible regime until trial. He wished to avoid a stalemate and to enable the plaintiff (respondent) to continue its business and to enable the 9th defendant (9th appellant) to continue in existence.
29 It is to be remembered that when this summons was before Templeman J the whole matter was in the expedited list.
30 Whether the evidence now available suggests a greater ability in the plaintiff to manufacture the flux, and whether this in turn leads to a conclusion that at 21 July 2000 the plaintiff was, or ought to have been aware, that it had the ability to manufacture the flux, are not matters raised by the appeal. The appellants sought leave to adduce further evidence but were refused.
Conclusion
31 The appellants have failed to demonstrate that the decision of Templeman J is wrong or attended with sufficient doubt, as to justify the grant of leave. We therefore refuse leave to appeal.
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