Clough Engineering Ltd v Oil and Natural Gas Corporation Ltd [No 4]
[2007] FCA 2110
•21 DECEMBER 2007
FEDERAL COURT OF AUSTRALIA
Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [No 4]
[2007] FCA 2110
INJUNCTION – orders discharging ex parte and inter partes interlocutory injunctions – injunctions to restrain calling upon and payment under performance guarantees – application for stay of execution of orders and extension of injunctions pending determination of foreshadowed application for leave to appeal from the orders - stay and extensions granted.
Trade Practices Act 1976 (Cth), s 51AA
Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Limited [1998] 84 FCR 367 cited
Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [No 3] [2007] FCA 2082 referred to
Erinford Properties Ltd v Cheshire County Council [1974] Ch 261 followed
Johnson Tiles Pty Ltd v EssoAustralia Ltd [2000] FCA 1572 cited
Smith v New South Wales Bar Association (1991) 66 ALJR 219 cited
Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission [2007] FCAFC 147 citedCLOUGH ENGINEERING LIMITED v OIL AND NATURAL GAS CORPORATION LIMITED, COMMONWEALTH BANK OF AUSTRALIA, HSBC BANK AUSTRALIA LIMITED AND BNP PARIBAS
WAD 117 OF 2007GILMOUR J
21 DECEMBER 2007
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 117 OF 2007
BETWEEN:
CLOUGH ENGINEERING LIMITED
(ACN 009 093 869)
ApplicantAND:
OIL AND NATURAL GAS CORPORATION LIMITED
First RespondentCOMMONWEALTH BANK OF AUSTRALIA
(ACN 123 123 124)
Second RespondentHSBC BANK AUSTRALIA LIMITED (ACN 006 434 162)
Third RespondentBNP PARIBAS (ABN 23 000 000 117)
Fourth Respondent
JUDGE:
GILMOUR J
DATE OF ORDER:
21 DECEMBER 2007
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1. This Notice of Motion be returnable instanter.
2.The execution of orders made on 21 December 2007 be stayed pending the determination of an application for leave to appeal from the judgment of the Honourable Justice Gilmour delivered on 21 December 2007 by the applicant.
3.Upon the applicant’s undertaking as to damages, the injunction granted by paragraphs 4 and 5 of the Order of 19 June 2007 be extended pending the determination of an appeal referred to in paragraph 2 above.
4.In the event the applicant does not file an application for leave to appeal or a notice of appeal with respect to the judgment referred to in paragraph 2 above by 4.00 pm on 16 January 2008, the stay granted in paragraph 2 above and the injunction extended in paragraph 3 above be dissolved.
5.Costs be reserved on the motion.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WAD 117 OF 2007
BETWEEN:
CLOUGH ENGINEERING LIMITED
(ACN 009 093 869)
ApplicantAND:
OIL AND NATURAL GAS CORPORATION LIMITED
First RespondentCOMMONWEALTH BANK OF AUSTRALIA
(ACN 123 123 124)
Second RespondentHSBC BANK AUSTRALIA LIMITED (ACN 006 434 162)
Third RespondentBNP PARIBAS (ABN 23 000 000 117)
Fourth Respondent
JUDGE:
GILMOUR J
DATE:
21 DECEMBER 2007
PLACE:
PERTH
REASONS FOR JUDGMENT
I made orders earlier today including orders for the discharge of injunctions previously made against each of the respondents. In order to avoid repetition and to give relevant context, these reasons ought to be read together with the reasons for making those orders: Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [No 3] [2007] FCA 2082.
Immediately following the pronouncement of those orders the applicant, Clough Engineering Ltd, by an amended motion invited the Court to stay their execution and further, to extend the injunctions previously made, pending the determination of an application for leave to appeal from my judgment in respect of those orders.
In an ex tempore judgment I granted the stay of execution and extended the injunctions.
The reasons which follow in substance reflect the reasons I gave orally on 21 December 2007.
Although interlocutory, the orders, particularly those for the discharge of the injunctions, will operate, in a practical way, to finally determine the matters and issues in the proceedings.
An application for leave to appeal against the orders could be heard as early as 8 February 2008.
I take into account that on such an application, points of substance will be raised and not merely procedural matters. In such circumstances the threshold for obtaining leave is somewhat lower than otherwise might be the case: Johnson Tiles Pty Ltd v EssoAustralia Ltd [2000] FCA 1572 at [45]; Visy Industries Holdings Pty Ltd v AustralianCompetition and Consumer Commission [2007] FCAFC 147 at [39].
There will be undoubted prejudice to the applicant which, to an extent, at least arguably, may be irreparable, if the stay is not granted and the injunctions are not extended to enable the leave application to be made. Certainly, any appeal would be rendered nugatory, because $US21.5 million would otherwise be paid immediately to the first respondent, Oil & Natural Gas Corporation Limited under the performance guarantees by the respondent Banks. Counsel for the second to fourth respondent Banks has so informed me, at least in relation to the second and fourth respondents. I have no reason to think that the position of the third respondent would be any different; certainly that was its position on a previous occasion in argument before me.
Against this must be balanced the risk of prejudice to the respondents. The first respondent, ONGC, will, if a stay is granted, be kept out of a substantial sum, namely the $US21.5 million, under the performance guarantees. However, that loss can be measured and compensated for by an appropriate award of interest in due course. None of the respondents has pointed to any specific prejudice beyond that.
Such a limited stay and injunction is open to be made, although the court has ordered the dissolution of the injunctions already made: Erinford Properties Ltd v Cheshire County Council [1974] 1 Ch 261 at 267-268. It is necessary for the applicant to establish that there are reasonably arguable grounds of appeal: Smith v New South Wales Bar Association (1991) 66 ALJR 219 at 220.
It cannot be said, emphatically, in my opinion, that the correctness of my construction of clause 3.3 of the Construction Contract, and in particular clause 3.3.3, is unassailable. The applicant’s construction is not so untenable that an application for leave to appeal must necessarily fail. I conclude that in the context of an application for a stay, therefore, that Clough’s construction of that clause is reasonably arguable.
Likewise, it cannot be said that the applicant’s case, based in s 51AA of the Trade Practices Act 1976 (Cth) is, again, in the present limited context, not reasonably arguable. The same is the position in relation to my findings on the balance of convenience.
In my opinion, it is appropriate to grant a stay and to extend the injunctions: Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Limited [1998] 84 FCR 367.
In light of those reasons, the orders that I will make, therefore, are, as to the first four orders, in terms of paragraphs 1 to 4 of the notice of motion as amended. As to 5, I will order that costs be reserved.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate:
Dated: 25 February 2008
Counsel for the Applicant: Mr G H Murphy SC with Mr B Dharmanada Solicitors for the Applicant: Minter Ellison Counsel for the 1st Respondent: Dr A S Bell SC with Mr C Lockhart Solicitors for the 1st Respondent: Maxim Litigation Counsel for the 2nd - 4th Respondents: Mr K A Reid Solicitors for the 2nd - 4th Respondents: Allens Arthur Robinson Date of Hearing: 21 December 2007 Date of Judgment: 21 December 2007
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