C and S Systems Pty Limited v Custom Security Services Pty Limited

[2006] FCA 1392

FEDERAL COURT OF AUSTRALIA

C & S Systems Pty Limited v Custom Security Services Pty Limited

[2006] FCA 1392

PRACTICE AND PROCEDURE – Application for leave to appeal from interlocutory orders – applicable principles – no error of principle  

Trade Practices Act 1974 – s 80

Foster v ACCC (2006) 149 FCR 135 cited
Australian Rugby Union Limited v Hospitality Group Pty Limited (2000) 173 ALR 702 cited

C & S SYSTEMS PTY LIMITED v CUSTOM SECURITY SERVICES PTY LIMITED
ACD22 OF 2006

JACOBSON J
18 OCTOBER 2006
CANBERRA

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY	ACD22 OF 2006

ON APPEAL FROM A JUDGE OF THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	C & S SYSTEMS PTY LIMITED Applicant
AND:	CUSTOM SECURITY SERVICES PTY LIMITED Respondent

JUDGE:	JACOBSON J
DATE OF ORDER:	18 OCTOBER 2006
WHERE MADE:	CANBERRA

THE COURT ORDERS THAT:

1.Application for leave to appeal be refused.

2.Applicant pay the Respondent’s costs of the application for leave to appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY	ACD22 OF 2006

ON APPEAL FROM A JUDGE OF THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	C & S SYSTEMS PTY LIMITED Applicant
AND:	CUSTOM SECURITY SERVICES PTY LIMITED Respondent

JUDGE:	JACOBSON J
DATE:	18 OCTOBER 2006
PLACE:	CANBERRA

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

1. This is an application for leave to appeal from the interlocutory judgment of Federal Magistrate Mowbray; Custom Security Services Pty Limited v C & S Systems Pty Limited [2006] FMCA 1411. His Honour granted interlocutory injunctive relief restraining the applicant for leave to appeal, C & S Systems Pty Ltd, trading as IPS (IPS), from representing that it is authorised to respond to callouts made to customers of the respondent to this application, Custom Security Services (CSS). The terms of the injunction were set out in order 1 made by the Federal Magistrate.

2. His Honour granted additional injunctive relief in orders 2 and 3.  Order 2 restrains IPS from opening the security control panels, or otherwise interfering with the security systems of clients or customers of CSS.  Order 3, which is in the nature of mandatory relief, orders IPS to return keys of clients or customers of CSS currently in its possession to those clients or customers by 5 pm on 19 September 2006.  I do not propose to repeat the reasons for judgment given by the learned Federal Magistrate.

3. Counsel for IPS does not dispute, for the purpose of this application, the finding made by his Honour that there is a serious question to be tried or the finding on balance of convenience. However, Mr Arthur contends that orders 2 and 3 were made in breach of the principles which govern the grant of injunctive relief under s 80 of the Trade Practices Act 1974 (Cth) as recently considered and explained by a Full Court in Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135.

4. In particular, Mr Arthur submits that it was not appropriate to make orders 2 and 3 because there was no sufficient nexus demonstrated between the contravention of s 52 of the Trade Practices Act and the conduct which is the subject of orders 2 and 3. Mr Arthur concedes that the grant of interlocutory injunctive relief was an exercise of his Honour's discretion and that it is necessary for him to point to an error of principle in the making of orders of 2 and 3. He submits that whilst it would have been open to his Honour to find a nexus, his Honour failed to do so. Alternatively he submits that there was no evidence from which his Honour could draw that conclusion.

5. It seems to me that the learned Federal Magistrate must be taken in [24] and [25] of his reasons to have found that there was a threat to continue to make the implied representation which his Honour found to have been made in [11] and which gave rise to the exercise of the learned Federal Magistrate's discretion to grant injunctive relief.  I'm satisfied that there was evidence, in particular in the affidavit of Ms Klitogiannis, to support that finding.

6. Whilst it would certainly have been open to the learned Federal Magistrate to decline to make orders 2 and 3; see for example Australian Rugby Union Ltd v Hospitality Group Pty Ltd (2000) 173 ALR 702 at [152] to [153], I can see no error of principle by the learned Federal Magistrate in deciding upon the evidence before him that orders 2 and 3 were appropriate within the principles referred to by the Full Court in Foster.  Accordingly, the order I will make is that leave to appeal be refused.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson J.

Associate:

Dated:        18 October 2006

Counsel for the Applicant:	R J Arthur
Solicitor for the Applicant:	Bradley Allen Lawyers
Counsel for the Respondent:	B J Salmon QC with C Besemeres
Solicitor for the Respondent:	J S O'Connor Harris & Co
Date of Hearing:	18 October 2006
Date of Judgment:	18 October 2006