Buller v Murray Grey Beef Cattle Society Limited
[2014] FCA 1127
•3 October 2014
FEDERAL COURT OF AUSTRALIA
Buller v Murray Grey Beef Cattle Society Limited [2014] FCA 1127
Citation: Buller v Murray Grey Beef Cattle Society Limited [2014] FCA 1127 Parties: GARY RAYMOND BULLER and MARGARET HUNTER v MURRAY GREY BEEF CATTLE SOCIETY LIMITED (ACN 083 111 406) File number: ACD 96 of 2014 Judge: FOSTER J Date of judgment: 3 October 2014 Catchwords: CORPORATIONS – whether the Court should restrain an incorporated association of cattle breeders on an interlocutory basis at the suit of two of its members from providing pedigree information and other raw data contained in the corporation’s database to another member being information which was originally provided to the corporation by that other member Legislation: Corporations Act 2001 (Cth), ss 140, 180, 182, 232, 233, Pt 2F.1A Cases cited: Patrick Stevedores Operations No 2 Proprietary Limited v Maritime Union of Australia (1998) 195 CLR 1
Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238Date of hearing:
1 October 2014
Place:
Sydney (via video link to Canberra)
Division:
GENERAL DIVISION
Category:
Catchwords
Number of paragraphs:
59
Counsel for the Applicants:
Mr P Walker SC
Solicitor for the Applicants:
Aulich Civil Law Pty Ltd
Counsel for the Respondent:
Ms AE Munro
Solicitor for the Respondent:
APJ Law
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 96 of 2014
BETWEEN: GARY RAYMOND BULLER
First ApplicantMARGARET HUNTER
Second ApplicantAND: MURRAY GREY BEEF CATTLE SOCIETY LIMITED (ACN 083 111 406)
Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
3 OCTOBER 2014
WHERE MADE:
SYDNEY (VIA VIDEO LINK TO CANBERRA)
THE COURT NOTES THAT:
1.The applicants by their solicitor continue the undertaking as to damages first given to the Court on 26 September 2014.
THE COURT ORDERS THAT:
2.The injunctions ordered by Foster J on Wednesday, 1 October 2014 be discharged.
3.Leave be granted to the applicants to amend their Originating Application and Statement of Claim in such manner as they may be advised, such amended documents to be filed and served by 24 October 2014.
4.The respondent file and serve its Defence by 5 November 2014.
5.Both parties have liberty to apply on three (3) days’ notice or on such shorter notice as a Judge might allow.
6.The costs of and incidental to the proceeding up to and including this day (3 October 2014) be costs in the proceeding.
7.The proceeding (including the respondent’s Interlocutory Application filed on 1 October 2014) be listed for directions at 9.15 am on 7 November 2014 before the A.C.T. List Judge.
THE COURT ALSO NOTES THAT:
8.The respondent by its Counsel hereby undertakes to the Court that, until further order, it will not supply information to anyone, other than in the ordinary course of its business, and other than the information set out in paragraphs (a) to (d) of paragraph 17 of the affidavit of Gail Menegon sworn on 1 October 2014 to Mr Richard Metcalfe, namely:
(a)Two generation of pedigrees for the eight youngest age groups of Mr Metcalfe’s cattle, including all the cattle originally in that age group whether they are still active or not.
(b)The results of all genetic testing of all those animals.
(c)The actual blood percentage of Angus and Murray Grey in all those animals.
(d)All raw data supplied to the Agricultural Business Research Institute Ltd (ACN 058 555 623) that is relevant to those animals.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
ACD 96 of 2014
BETWEEN: GARY RAYMOND BULLER
First ApplicantMARGARET HUNTER
Second ApplicantAND: MURRAY GREY BEEF CATTLE SOCIETY LIMITED (ACN 083 111 406)
Respondent
JUDGE:
FOSTER J
DATE:
3 OCTOBER 2014
PLACE:
SYDNEY (VIA VIDEO LINK TO CANBERRA)
REASONS FOR JUDGMENT
The applicants are members of the respondent, Murray Grey Beef Cattle Society Limited (MGBCS). They are also owners and breeders of Murray Grey cattle and are enrolled in, and use, a computer-based cattle and beef recording system called the Murray Grey Group Breedplan (Breedplan).
MGBCS maintains a herd book and is the owner of the Breedplan.
Late last Friday afternoon, the applicants made an ex parte application for urgent interlocutory injunctive relief against both MGBCS and another corporate entity called Australian Business Research Institute Limited (ABRI). That application was dealt with by me on an urgent basis although it was not supported by any affidavit evidence. The only evidence in support of the application was certain oral evidence given by the second applicant (Margaret Hunter).
Upon the basis of the evidence and submissions heard by me last Friday, I granted interlocutory injunctive relief up to and including 1 October 2014.
On 1 October 2014, there was a contested hearing as to whether any injunctive relief should be continued beyond that day.
In order to enable the Court and MGBCS to understand the nature of the case which the applicants wished to put, on 26 September 2014, I ordered the applicants to file and serve a Statement of Claim as well as all affidavit evidence upon which they intended to rely in support of their application to have the injunctions which I granted on that day continued until further order. A Statement of Claim was filed on 1 October 2014, as was an affidavit sworn by the first applicant (Gary Buller).
By 1 October 2014, the applicants had refined the terms of the injunction which they were seeking. The injunction which they now seek is in the following terms:
An order that, until further order, the respondent by its officers, servants or agents be restrained from transferring data from the “Murray Grey Group Breedplan” database other than information that is not confidential and which is provided to people enrolled in the said plan in the course of the ordinary and usual operations of the plan until whichever of the following first occurs:
c)a resolution has been passed by members of the respondent approving the transfer; or
d)six months has elapsed from the date of making this order.
MGBCS resists the grant of any further injunctive relief to the applicants. At the conclusion of argument last Wednesday, MGBCS informed the Court that it was prepared to give an undertaking to the Court in the following terms:
Until further order, Murray Grey Beef Cattle Society Ltd will not supply information to anyone, other than in the ordinary course of its business, and other than the information set out in paragraphs (a) to (d) of paragraph 17 of the affidavit of Gail Menegon sworn on 1 October 2014 to Mr Richard Metcalfe, namely:
(a)Two generation of pedigrees of the eight youngest age groups of Mr Metcalfe’s cattle, including all the cattle originally in that age group whether they are still active or not.
(b)The results of all genetic testing of all those animals.
(c)The actual blood percentage of Angus and Murray Grey in all those animals.
(d)All raw data supplied to the Agricultural Business Research Institute Ltd (ACN 058 555 623) that is relevant to those animals.
The matter in dispute between the parties concerns the proposal by MGBCS to make available to Mr Richard Metcalfe certain information which is held by MGBCS in a database maintained by ABRI on behalf of MGBCS. Mr Metcalfe is a member of MGBCS and also its immediate past President. He is also a member of a separate society which is involved with the breeding of Angus cattle, The Angus Society of Australia Limited (Angus Society). In circumstances which I will explain in a little more detail below, in August 2014, Mr Metcalfe requested that he be provided with the information in question so that he may then pass it on to the Angus Society with a view to having that society record raw data concerning his cattle and then, based upon that data, calculate what has been described in the evidence as estimated breeding values (EBVs) which will thereafter be kept on a database maintained by the Angus Society.
The applicants contend that MGBCS ought not to provide to Mr Metcalfe the information which he has requested because, were it to do so, it would be in breach of certain rights which the applicants contend they presently enjoy.
Before discussing the issues in more detail it is necessary to set out some relevant facts.
THE RELEVANT FACTS
The Breedplan
The Breedplan is a breed plan utilised by MGBCS. However, it was conceived and operated by ABRI. According to literature published by ABRI, the program which it uses is the national beef recording system for Australia and for several other countries. The Breedplan uses an advanced modern genetic evaluation system (based on best linear unbiased prediction) and technology incorporating multi-trait analysis procedures to produce EBVs for recorded cattle across a range of important production traits. The Breedplan technology can be used at a number of levels, such as within herd analyses for individual breeders, across herd analyses for members of a breed association (or breeding group) or for international genetic evaluation where breed associations from a number of countries pool their data for analysis.
The rationale for this is simple according to ABRI: The larger the population of cattle being evaluated, the higher the chance of finding elite genetic material which can then be rapidly disseminated using modern artificial breeding techniques.
For the purposes of the present application, it is not necessary to traverse the ideas behind or the attributes of the Breedplan to any greater extent than I have done at [12] and [13] above.
When this proceeding was commenced last Friday, as I understood the case being sought to be mounted by the applicants, the matter of immediate concern from their perspective was the circumstance that MGBCS intended to provide to Mr Metcalfe and, ultimately, to the Angus Society, EBVs in respect of Mr Metcalfe’s cattle. This proposal, as it was then explained to me, would involve the provision of proprietary information held by MGBCS or by ABRI on behalf of MGBCS being information which is the product of calculations of some complexity performed by the software in the Breedplan and which goes far beyond the mere reproduction of raw data.
The evidence before me at the moment does not provide any detail as to the nature of the business arrangements between MGBCS and ABRI. However, for present purposes, I propose to assume that, as I have already said, the EBVs which reside in MGBCS’s database or in ABRI’s database held on behalf of MGBCS is proprietary information belonging to MGBCS.
The Current Dispute
When the matter was brought before me last Friday, I was given the impression, based upon the evidence then led, that the dispute had arisen quite recently – indeed, as recently as the Monday before (22 September 2014). Having been told this, I was critical of the applicants for not bringing their application before the Court earlier or, at least, for not bringing their interlocutory application on the usual basis, that is to say, supported by affidavit evidence. However, I was also told that a meeting of the directors of MGBCS was scheduled for Monday 29 September 2014, at which time it was proposed that those directors would resolve to provide to Mr Metcalfe the information which he had requested and that the matter was, for that reason, extremely urgent. These circumstances led me to deal with the matter on an urgent basis notwithstanding the applicants’ delay.
The current dispute began much earlier than last week.
On 11 August 2014, Mr Metcalfe wrote to the board of MGBCS in the following terms:
I am writing to the Society to request authorisation by the Board to release pedigree & Breedplan data of my herd, Melaleuca Murray Greys, to Angus Australia.
After 41 years as a member, it is with great sadness that I make this request.
I am seeking to transfer the 8 youngest MCA [this is a reference to Mr Metcalfe’s own herd] age groups with two generations of pedigree. I ask that the following be made available for these animals:-
ŸAll associated Breedplan data.
ŸAll relevant recessive gene information.
ŸThe percentage purebread status, including breakdown by breed.
If these requests are granted, I guarantee to dual record these animals for the next two years. I would prefer to dual record after this period, however this will be dependent on my satisfaction with the direction the Society is working towards.
My reasoning for taking this action is that views and policies expressed by members during my tenure as a director and the recent election were highly alarming, and represent a considerable threat to my business. In particular:
ŸMaking EBV’s a user pays arrangement
ŸMaking DNA and genetic testing voluntary
ŸDirection away from recognised industry best practice
The fact that these views were significantly supported by the membership during the election was very concerning.
With the next generation coming into our business, it is my responsibility to ensure the commercial viability of my stud is protected. This involves being aligned with an organisation that we believe best reflects the direction and goals of our business.
Thank you for considering this request. I will be happy to answer any questions.
It appears from the affidavit sworn by the first applicant that he became aware of Mr Metcalfe’s request, contained in the letter dated 11 August 2014, some time towards the end of August or perhaps right at the end of August.
On 28 August 2014, the directors of MGBCS met. On that occasion, according to the evidence of Ms Menegon, who is the current President and Chairperson of MGBCS, the following resolution was passed:
Moved Perkins/Davidson – the MG society as requested by Herd MCA release two generation pedigree, recessive gene information and performance data to Richard Metcalfe and Metcalfe be responsible for all costs involved.
It appears from the terms of that resolution that the directors of MGBCS took the view on 28 August 2014 that Mr Metcalfe’s request for “all associated breed plan data” was aptly covered by the descriptor “performance data” set out in the resolution apparently passed on that day.
Thereafter, there was some difference of opinion among those who had attended the Board meeting held on 28 August 2014 as to whether a resolution in the terms which I have extracted at [21] above had actually been passed. It seems that the directors now take the view that no resolution in those terms was actually passed. It also seems clear from the evidence that no data of the kind described in the resolution has yet been supplied by MGBCS to Mr Metcalfe.
On 1 September 2014, the first applicant wrote to the directors of MGBCS in the following terms:
I have recently been advised that the Board received a letter from Richard Metcalfe asking that the cattle pedigree and performance data which has been accumulated by the Society in relation to his herd be transferred to the Angus Society. I have also been informed that the Board agreed to this course.
This is an alarming situation, given that the Society is freely giving our biggest competitors our intellectual property for their benefit and use. I request that you immediately desist from that course. To make it abundantly clear, do not send the data until this matter is resolved. [emphasis in original]
As a Board you may or may not be aware that this issue (of who owns the intellectual property) was agitated some time ago and resolved in the affirmative, that is, the data belongs to the Society and by inference its membership.
As a Board you cannot divest membership interests that will significantly impact on the Society and its members, particularly when it will affect their business interests.
Please be aware that if the Board disseminates this data to the Angus Society prior to the issue being resolved, this letter will be used in any proceedings that arise as a result of this dissemination.
Please advise me by close of business today if you are not willing to accede to my request. Please note that injunctive relief will be sought as a matter of urgency should the Board decide to go ahead regardless of this request. Costs will also be sought against the Society should injunctive relief be required to help with dissemination.
I have taken the liberty to send this letter to the Society’s Solicitor and ABRI’s General Manager.
MGBCS did not reply to that letter until 22 September 2014. I also pause to note that the first applicant’s letter of 1 September 2014 was not brought to the Court’s attention last Friday when ex parte relief was granted.
MGBCS replied to the first applicant’s letter by letter dated 22 September 2014. MGBCS’s reply was in the following terms:
Thank you for your letter, dated 1st September 2014, regarding the intellectual property of Murray Grey Beef Cattle Society.
The Murray Grey Society maintains the Herd Book and its data forms a primary role in provenance and marketing of the Murray Grey breed. It is the Board’s view that the Herd Book is intellectual property controlled and maintained by the Society on behalf of the members for those purposes.
Release of information from the Herd Book to a competing breed in the Angus Society could well amount to a breach by the Board of its fiduciary duty to the members to protect the intellectual property comprised in the Herd Book for the members.
That said, the Board nonetheless has the custody of the intellectual property comprised in the Herd Book and is authorised by the Constitution of the Society to make decisions from time to time about the use and dissemination of the information. The Board, in making those decisions, would have regard to the commercial consequences to the members of the Society should the information be distributed. Balanced against this overarching obligation is a member’s entitlement to access to the information provided by that member in respect of his cattle for inclusion in the Herd Book.
We see no reason why a member cannot have information from the Herd Book specific to their livestock should they wish it.
The first applicant responded to that letter on 23 September 2014 by means of a without prejudice communication which has been tendered in evidence without objection, notwithstanding the fact that it was labelled “without prejudice”. The first applicant’s response took issue with a number of the points made by MGBCS in its letter dated 22 September 2014.
After the first applicant sent his letter of 23 September 2014, nothing appears to have been done until last Friday when the applicants approached the Court in the manner which I have already recounted.
On 29 September 2014, a meeting of the directors of MGBCS took place, as foreshadowed. At that meeting, it was resolved to seek clarification from Mr Metcalfe as to the information he actually required. By email sent the same day, Mr Metcalfe confirmed that he required information from the herd book maintained by MGBCS. He described the information which he wanted in the terms of the undertaking which I have extracted at [8] above. In his email, Mr Metcalfe also made clear that he did not require the Breedplan figures associated with his or any other animals and that he was content to be made a party to the current proceeding.
It appears that the first applicant and Ms Menegon had a conversation earlier on 29 September 2014 in which some difficulties caused by the injunctions granted last Friday were discussed.
In her affidavit, Ms Menegon said that, as far as her understanding of matters is concerned, at its meeting on 28 August 2014, the Board of directors of MGBCS had not authorised the release of information which would disclose the application of the Breedplan program or which would otherwise be used primarily to predict the genetic performance of Herd MCA (Mr Metcalfe’s herd). She went on to say that the intention of the Board is, and always has been, to confine the data to be supplied to Mr Metcalfe to that data which he himself has supplied from time to time to MGBCS in respect of his own herd (Herd MCA) and the genetic testing in respect of such animals undertaken by the University of Queensland (for recessive genes), which testing had been carried out at Mr Metcalfe’s cost.
Ms Menegon also made clear in her evidence that it is not the intention of MGBCS to release to Mr Metcalfe EBVs derived from the application of the Breedplan program to his cattle which, according to her, is and remains, in the view of the Board of directors of MGBCS, the intellectual property of MGBCS. This view is consistent with cl 1.3 of Appendix 4 to the Constitution of MGBCS which provides that EBVs and other statistics calculated or derived from information supplied to MGBCS by its members is the property of MGBCS. Ms Menegon went on to say that all that will be given to Mr Metcalfe is his own information. Ms Menegon also raised some difficulties caused by the terms of the injunctions granted last Friday.
On 1 October 2014, in light of those matters, I discharged the injunctions granted last Friday and imposed on a strictly temporary basis further injunctions pending delivery of this judgment.
THE APPLICANTS’ CASE
As I have mentioned already, when they commenced the present proceeding, the applicants believed that the EBVs calculated by and recorded in the Breedplan which relate to Mr Metcalfe’s cattle (or, in the language of the Board, “performance data” which relate to those cattle) were going to be supplied by MGBCS to Mr Metcalfe. When the applicants drafted their Statement of Claim, that belief was reflected in par 6 of the Statement of Claim. In par 9 of the Statement of Claim, the applicants pleaded:
The composite information in the MGGB [referring to the Breedplan] received as a result of the information from the Murray Grey Herd across Australia provided as outlined in paragraph 6(a) and the formulae for undertaking the calculations from that information for provision of information to members as outlined in paragraph 6(c) and (d) are confidential and not made available to owners or the public.
In their Statement of Claim, the applicants alleged that the provision of the information described by them in par 9 of the Statement of Claim would be a detriment to MGBCS, would be contrary to the interests of members of MGBCS as a whole, and would be in breach of cl 37(3) of the Constitution of MGBCS.
Unfortunately, the applicants did not relate these allegations to any particular identified cause of action or to any particular statutory provision.
Before leaving the Statement of Claim, I note that cl 37(3) of the Constitution of MGBCS is in the following terms:
Any proposal by the Board to sell or dispose of the Society’s main undertaking shall be subject to ratification by the Society in general meeting.
Senior Counsel who appeared for the applicants on Wednesday of this week submitted that the applicants had a cause of action in contract (with the aid of s 140 of the Corporations Act 2001 (Cth) (the Corporations Act)), whereby they were entitled to enforce cl 37(3) of the Constitution of MGBCS against MGBCS itself. That is to say, the proposition was that the proposal to provide to Mr Metcalfe the limited information which the Board of directors of MGBCS now intends to provide to him would constitute a transfer of the main undertaking of MGBCS and, in the absence of the approval of its members in general meeting, would be susceptible to being restrained at the suit of individual members.
The second cause of action relied upon by the applicants is based upon s 180 and s 182 of the Corporations Act. Those provisions impose duties upon the directors of MGBCS. Counsel did not explain exactly how the applicants put their case based upon those provisions. If the applicants wish to agitate the corporation’s rights against its directors under those provisions, that case would need to be brought in the name of the corporation and under the provisions of Pt 2F.1A of the Corporations Act. Before bringing such an action, the applicants would need the leave of the Court to sue in the name of MGBCS. They would also require other assistance from the Court. No such leave or assistance has yet been sought from the Court. In any event, the directors of MGBCS are not parties to this proceeding.
The third basis upon which Counsel relied was s 232 and s 233 of the Corporations Act which give to the Court power to make a range of orders in circumstances where a corporation’s affairs have been conducted in an oppressive manner towards one or more of its members. In particular, Counsel submitted that his clients had engaged the Court’s jurisdiction under s 233(1)(i) of the Corporations Act and that the Court could, and would, in due course grant injunctive relief restraining MGBCS from providing to Mr Metcalfe the information which he now seeks.
DECISION
The principles upon which interlocutory injunctions will be granted in this Court are well settled. As the majority of the High Court said in Patrick Stevedores Operations No 2 Proprietary Limited v Maritime Union of Australia (1998) 195 CLR 1 at 32 [35]:
… The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked. The Federal Court had jurisdiction to make interlocutory orders to prevent frustration of its processes in the present proceeding.
In Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 at 256–262 [52]–[74], the Full Court articulated and summarised the principles as explained by the High Court in a number of cases. For present purposes, I need only refer to 256 [52]–[53], 257–258 [57] and 260–261 [62]–[68]:
52In Lenah Game Meats, a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. As Gleeson CJ said at [15]:
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.
See also [8]–[21] (per Gleeson CJ); [59]–[61] (per Gaudron J); and [86]–[92]; [98]–[100]; and [105] (per Gummow and Hayne JJ). At [10], Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies (5th ed, 1997) pp 446-456.
53At [13], Gleeson CJ expressly approved the following passage from the judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153:
In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
…
57In O’Neill at [65], Gummow and Hayne JJ said that the relevant principles were those explained in Beecham. Gleeson CJ and Crennan J agreed with that proposition. When referring to the well-known passage in Beecham at 622-623 (which we have extracted at [55] above), Gummow and Hayne JJ then said, at [65], that, when considering an application for an interlocutory injunction, the Court must address itself to two main inquiries (viz has the plaintiff established a prima facie case in the sense explained in Beecham and does the balance of convenience and justice favour the grant of an injunction or the refusal of that relief). Their Honours then observed:
By using the phrase “prima facie case”, their Honours did 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. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [(1968) 118 CLR 618 at 620]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [(1968) 118 CLR 618 at 622]:
How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.
…
62The assessment of harm to the plaintiff, if there is no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is at the heart of the basket of discretionary considerations which must be addressed and weighed as part of the Court’s consideration of the balance of convenience and justice. The question of whether damages will be an adequate remedy for the alleged infringement of the plaintiff’s rights will always need to be considered when the Court has an application for interlocutory injunctive relief before it. It may or may not be determinative in any given case. That question involves an assessment by the Court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies (8th ed, 2010) at pp 383-389, 397-399 and 457-462).
63The interaction between the Court’s assessment of the likely harm to the plaintiff, if no injunction is granted, and its assessment of the adequacy of damages as a remedy, will always be an important factor in the Court’s determination of where the balance of convenience and justice lies. To elevate these matters into a separate and antecedent inquiry as part of a requirement in every case that the plaintiff establish “irreparable injury” is, in our judgment, to adopt too rigid an approach. These matters are best left to be considered as part of the Court’s assessment of the balance of convenience and justice even though they will inevitably fall to be considered in most cases and will almost always be important considerations to be taken into account.
64Gleeson CJ also observed in Lenah Game Meats (at [18]), that, where there is little or no room for argument about the legal basis of the applicant’s claimed private right, the court will be more easily persuaded at an interlocutory stage that a prima facie case has been established. The court will then move on to consider discretionary considerations, including the balance of convenience and justice. But, as his Honour also observed at [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.
65The resolution of the question of where the balance of convenience and justice lies requires the Court to exercise a discretion.
66In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the plaintiff if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the plaintiff for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted.
67As Sundberg J observed in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15], when considering whether to grant an interlocutory injunction, the issue of whether the plaintiff has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties’ substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416] per Burchett J; Aktiebolaget Hassle v Biochemie Australia Pty Ltd (2003) 57 IPR 1 at [31] per Sackville J; Hexal Australia Pty Ltd v Roche Therapeutics Inc (2005) 66 IPR 325 at [18] per Stone J; and Castlemaine Tooheys at 154 per Mason ACJ.
68It may also be necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally.
I intend to apply those principles in the present case.
The applicants seek final relief in precisely the same terms as the interlocutory injunction which they presently seek. They do not claim damages or any other substantive relief.
As I have mentioned, the applicants base their claims for final relief upon various provisions in the Corporations Act and upon the contract said to arise between each individual member and MGBCS set out in the Constitution of MGBCS.
Whether or not the current applicants can, in fact, enforce cl 37(3) of the Constitution of MGBCS against MGBCS, I do not think that the conduct which MGBCS now has in mind could conceivably constitute the disposition of its main undertaking in breach of cl 37(3). All that MGBCS has in mind at the moment is to hand back to Mr Metcalfe certain information which concerns his own cattle and which he himself supplied to MGBCS over time. Having regard to the Society’s objects and functions and the nature of its herd book and the Breedplan, the provision of this limited amount of information could hardly be described as the transfer of MGBCS’s main undertaking. I do not think that the applicants have made out a serious question to be tried in respect of that cause of action.
As far as s 180 and s 182 of the Corporations Act are concerned, the actions against the directors of MGBCS which were foreshadowed by Senior Counsel for the applicants last Wednesday would need to be brought in the name of MGBCS itself and to be brought against its directors personally. The present proceeding is not constructed in that way and, for that reason, I do not think that there is any serious question to be tried based upon those sections.
During argument last Wednesday, there was some discussion between Senior Counsel for the applicants and me concerning whether his clients were relying upon a cause of action in copyright or for disclosure of confidential information. Senior Counsel seemed to suggest that his clients were intending to rely on such causes of action. However, both of those causes of action reside in MGBCS itself and would, therefore, need to be brought either by MGBCS or by members in its name. Any action to be brought in the name of MGBCS would need to satisfy the requirements of Pt 2F.1A of the Corporations Act. For the same reasons as I think there is no serious question to be tried in respect of the causes of action based upon s 180 and s 182, I am of the view that no serious question to be tried is raised by the present applicants in respect of alleged breaches of copyright or duties of confidentiality.
That leaves the cause of action based upon oppressive conduct of the affairs of MGBCS.
It is conceivable that, if the evidence remains as it is, the Court might consider that the conduct of MGBCS and its Board of directors in respect of Mr Metcalfe’s requests, taken as a whole, might constitute oppressive conduct vis-à-vis the applicants and thus be actionable under the Corporations Act. I say “conceivable”, although my present view is that, if there is a serious question to be tried in respect of that cause of action, it is not one in respect of which the applicants’ prospects are strong.
However, I do not need to consider this particular cause of action any further. I say this because MGBCS has proffered an undertaking to the Court which, in the circumstances in which it is being proffered, makes perfectly clear that MGBCS and its Board of directors have no present intention of providing to Mr Metcalfe EBVs calculated in or from the Breedplan or, as described by the Board of directors itself, “performance data”, or other information which is the product of the application of ingenuity by ABRI or others for or on behalf of MGBCS so as to produce outcomes and information which extend beyond raw data concerning pedigree and other primary factual information.
In circumstances where such an undertaking has been proffered, most of the dangers to which the first applicant has referred in his affidavit (the destruction of the essence of MGBCS’s herd book, the destruction of the essence of MGBCS’s business, and so on) evaporate because the confidential nature of MGBCS’s proprietary information will be preserved. What, in fact, is now proposed is a very limited repatriation to Mr Metcalfe of factual information or raw data which had originally come from him in the circumstances outlined in the evidence.
While it is true that Mr Metcalfe proposes to give that information to the Angus Society, which will then operate upon it to produce EBVs and other secondary information, I do not think that that circumstance warrants the Court’s interference by way of injunction in the face of the undertaking which has been proffered.
In addition, Ms Menegon said that MGBCS had intended to publish its members’ catalogue on 29 September 2014 but had been prevented from doing so by the injunctions which I granted last Friday. Ms Menegon went on to say that the injunctions, as originally granted, had effectively prevented MGBCS from providing any of its member services and had also prevented it from updating its website. The members of MGBCS obtain up-to-date breeding information about their herds from the website of MGBCS.
The form of the injunction now sought addresses some of these concerns. However, in my view, the scope of the activities prevented by the proposed injunction is still too wide and some of the expressions used are too vague. For example, the proposed injunction appears to cover all data in the Breedplan except information that “… is not confidential”. In addition, there is ambiguity in the description of the events which, when they occur, are intended to discharge the injunction according to its terms.
For the reasons explained at [51]–[55] above, even if there is a serious question to be tried in respect of the applicants’ alleged causes of action under s 232 and s 233 of the Corporations Act, I think that the balance of convenience and justice favours the refusal of the injunction as now claimed.
As far as costs are concerned, I think the costs should be costs in the proceeding. I say that because, although the applicants have failed to obtain injunctive relief beyond today, they have secured some protection by reason of the undertaking which has been given to the Court by MGBCS. Also, they did have legitimate and justifiable concerns when they commenced the proceeding that the Board of MGBCS proposed to provide to Mr Metcalfe information which went way beyond the raw data and factual information which is now in prospect. It is quite clear from the letter which Mr Metcalfe wrote to MGBCS on 11 August 2014 and from the resolution apparently passed by the Board of directors on 28 August 2014 that the Board did have in mind providing information belonging to MGBCS which is proprietary and confidential and which, prima facie, ought not to be provided to Mr Metcalfe. It was only after the proceeding was commenced that the extent of the information to be provided was narrowed or, as perhaps disingenuously put, clarified.
I think, in those circumstances, that a fair outcome in respect of costs is that the costs of the proceeding to date should abide the outcome of the proceeding and be costs in the proceeding generally.
There will be orders accordingly.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 22 October 2014
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