Green, C. v SA Public Service Association Health Benefits Fund Incorporated

[1994] FCA 37

37         9 Y

JUDGMENT No. .,,.,.,.,,,,,,,,,./ ., ..,,,,,,,,

IN THE FEDERAL COURT OF AUSTRALIA )

1

SOUTH AUSTRALIAN DISTRICT REGISTRY )

)

GENERAL DIVISION	) No. SG124 of 1993
BETWEEN: CHARLES GREEN

Applicant

AND :

S.A. PUBLIC SERVICE
ASSOCIATION HEALTH

BENEFITS FUND INCORPORATED

EX TEMPORE REASONS FOR DECISION

Corm: von Doussa J.
Date : 27 January 1994

The applicant seeks an order by way of interlocutory injunction running until trial, restralnlng the respondent organisation from seeking to implement the purported

termination of an arrangement between them incorporated in

"heads of agreement" signed in 1991.

Notice purporting to termlnate the heads of agreement, pursuant to clause 8(1) thereof, was given on 4 August 1993. The notice by its terms purports to terminate the arrangement on 6 months notice. Unless restrained, the respondent seeks to implement that termination from 4 February 1994.

and secondly, whether the balance of convenience favours granting the injunctive relief to maintain the status quo

On an application for an interlocutory injunction pending
trial, it is usual to look at two questions: first, whether
there is a serious question to be tried between the parties,

untll the merits of the points in dispute are determined at trial. In this case, a third consideration has been raised by counsel for the respondent, namely whether for discretionary reasons it would be inappropriate in any event to award injunctive relief.

Dealing with the question of a serious issue to be tried, it is not necessary for the applicant to establish on evidence a strong prima facie case or even a prima facie case. It is necessary merely that the applicant establish, on the information before the Court, that there is a serious question to be tried. The applicant contends that the serious question in this case is whether there was agreement between the parties that their arrangement would operate for an initial fixed term of 5 years before the 6 month notice provision then came into force.

In my view, the papers do indicate that there is a

serious question to be tried on that issue. It is a rather

complicated factual question and it is inappropriate that I go

into it in detail now. In brief, having regard in particular

to paragraph 24 of Mr Hill's affidavit, it seems that there was a discussion between the parties at a critical time shortly before the heads of agreement were signed about the S year arrangement which had earlier been contemplated. m Hill says that the applicant said to him "that if, from the legal point of view, the five year arrangement was 'okay', then it might be all right to include that." It is, of course,

possible that more than one interpretation is open, but I read that particular sentence to indicate by the words "include that", that the parties were referring back to the advice of Mr Yates, which was to draft clause 8 in the heads of agreement in the terms in which it now appears. It is an open interpretation that Mr Green understood that conversation to indicate that Mr Hill was saying to him that, in effect, the 5 year arrangement which had previously been discussed was to operate. Whether that is so or not is a matter that will have to be determined at trial when all the evidence has been heard, but it seems to me that there is a serious issue to be tried.

Alternative claims are put forward in the statement of claim. It is said that if there were not to be a 5 year term, there were representations to the effect that there would be, which are now actionable, either under s.52 of the Trade P r a c t i c e s A c t 1974, or otherwise. I am just persuaded that there is a serious point to be tried on those grounds. It is further said that the circumstances in which the agreement

came to be made are such that it would now be unconscionable	to allow the agreement to be terminated inside of 5 years. To
some extent that turns on what was said between the parties leading up to the execution of the heads of agreement. That is a matter which can only be resolved at trial. To some extent the question of unconscionable conduct may involve the position of Mr Yates in the negotiations, a matter that has been flagged but has not been investigated by the papers. On

the unconscionable conduct ground, it seems to me there is
also a serious question to be trled.

In ordinary circumstances, the views just expressed would mean that the Court would turn to consider where the balance of convenience lay, but I think it is appropriate that I deal first with the submissions of the respondent's counsel that in any event it would be inappropriate to award an injunction because, first, the applicant has unreasonably delayed in bringing the issue before the Court, secondly, damages would be an adequate remedy in any event, and thirdly, on discretionary grounds, the applicant ought not be awarded equitable relief because he has brought his case to the Court on affidavit evidence which reflects a serious failure to make full disclosure of relevant facts.

In my view, the delays, such as they were, are nowhere near sufficient to deprive an applicant of discretionary relief of a kind now sought. The delays suggested were:

First, a period from 4 August 1993 to 31 August 1993 before the first letter was written by the applicant's solicitors to the respondent. Having regard to the complicated nature of the dispute and the length of that letter and the time that it would take to give instructions, I do not think that delay is unreasonable.

Secondly, the respondent's solicitor responded on 7

September 1993 and it was not until 8 October 1993 that there was a further response to that. Again, some time would have been necessary to investigate allegations that were made by the respondent and to prepare what is in fact a detailed response. I do not thlnk there is any unreasonable delay there. It is to be noted that the respondent did not reply to the letter of 8 October until 29 October 1993 and in the meantime, on 28 October 1993, the applicant's solicitors had again followed up the position. It is possible, although there is no evidence of this, that there were telephone conversations going on in the meantime, but I put that to one side. Merely on the correspondence I am not satisfied that there was adequate delay there.

Thirdly, it is said that there is a serious delay because from 28 October 1993 when rectification proceedings were threatened and the respondent had made it clear that it would not change its position, the applicant did not issue proceedings until 21 December 1993 which, for practical purposes, was the start of the Christmas break. In my view,,	again, that delay is not unreasonable, certainly not such that
it would deprive someone of injunctive relief if that relief
were otherwise appropriate. It is not a long period but, more importantly, the evidence does not advance any assertion by the respondent that it was relying on that delay in the sense that it was assuming that the applicant had waived any complaint that he had earlier made. In the month of December 1993 another optometrist was appointed by the respondent. I think commonsense indicates that inquiries leading up to that
appointment must have been under way for quite some time beforehand, indeed, a month or two would seem likely. Therefore, it cannot be inferred on the evidence that the respondent was relying on a delay of some 2 months when no proceedings were issued to found an assumption that no proceedings would be issued.
I consider that the position of the applicant had been made perfectly clear in letters of 31 August and again on 8 October 1993. That position was that the rectification would be sought unless it was conceded that there was a 5 year initial term. I do not think that the events that occurred thereafter could operate to deprive the applicant of the right to take that course.
It is argued that damages would be an adequate remedy. If damages are considered by a court to be an adequate remedy in a case such as this, damages will be awarded in lieu of an
injunction, but whether this is an appropriate case or not it is impossible at this stage to tell. It is asserted by m
Hill in his affidavit that the relationship between the parties is intolerable. By implication, therefore the Court is asked to conclude that specific performance of the whole or any part of the heads of agreement would be an inappropriate remedy. One can understand that the continuing relationship between the parties at present might be very uncomfortable and in that sense, because they no longer see eye to eye, it is

intolerable, but the papers do not indicate that the relationship is intolerable in a practical working sense. The clinic apparently is still operating, there is no suggestion that patients are suffering and, as Mr Sulan QC points out, this is not an employer/employee relationship. The justification for the reasons for the personal dissatisfaction of one side with the other are yet to be investigated. The applicant says that many of the causes of complaint now made by the respondent are misconceived and it may be at trial that that turns out to be the case, in which event there would be no rational basis for concluding that the relationship between the parties is intolerable. That, it seems to me, is another issue which will have to be determined at trial, and is not one so clear at this stage that it should deprive the applicant of any remedy that he might otherwise be entitled to.

The third disqualifying factor was said to be serious

omissions from the affidavit evidence. Those omissions are

af f idavit . In my view, although those paragraphs upon	said to occur in paragraphs 14 and 16 of the applicant's
consideration have turned out to be inadequate, there is no ground in the papers for believing that the omissions were deliberately vague and designed to mislead the Court. In my view, those omissions are not such that they should disqualify the applicant.

So I come back to the question of balance of convenience.

The respondent points out that another optometrist has now been engaged and is being paid at a rate of remuneration of approximately $100,000 per year, and is set to commence working for the respondent from 4 February when the notice of termination would expire. No doubt other arrangements have also been made which will have to be changed in the event that an injunction is granted. Furthermore, the respondent says that damages would be an adequate remedy, in due course, in any event.

On the other hand, the applicant advances a number of reasons why he would suffer considerable hardship if an injunction were not now ordered. He would have difficulty meeting certain financial commitments, he would have difficulty exercising his professional skills, and particulars of that are set out in his affidavit. It is also said that his reputation would be likely to suffer and I think there is some force in that. If an injunction were not granted, it seems to me that the practical effect would be that even if he

whatever arrangements may have been put in place in the	were subsequently to succeed on the merits, he could not go back into the business. It would be impossible to dismantle
meantime with a new optometrist actually in the practice. Moreover it would mean the destruction of any value that might exist in the right to assign the benefit of the heads of agreement.

The reasons advanced by the applicant are strong reasons,

for the grant of an injunction. As to the reasons against doing so, first it seems to me the respondent has gone into this with its eyes open. It was told in clear terms in the letters of 31 August 1993 and 8 October 1993 that the applicant did not accept the notice of termination and would take proceedings. In the face of that, and without further clarification, the respondent chose to appoint an optometrist at $100,000 a year. That is a decision that was made with full knowledge of the applicant's claim to be entitled to a five year minimum term. The fact that another optometrist has been appointed provides no reason why the applicant should now be denied remedies that would otherwise have been open to him.

In a sense the argument that damages would be an adequate remedy in any event is right because almost any loss can be quantified in money terms in the absence of some more appropriate remedy, but it seems to me a very harsh step to

i	take to put a practising professional person out of his
!	practice simply on that ground, unless there are other good reasons for doing so, and I cannot find any other good
might not confine the remedies granted to rectification and reasons. More importantly if the applicant succeeds the Court damages, having regard, in particular, to the right of assignment contained in the heads of agreement.
i	I am concerned that the respondent is an incorporated association. It is a non-profit organisation, and it has a lot of members. The damages, if the applicant succeeds and

damages were to be the sole remedy, could be very high. I think it is better to avoid the risk of there later being a high award by granting an injunction at this stage. In my view, the balance of convenience is in favour of the injunction. An injunction pending trial should be granted.

In reaching this decision I have had in mind that it

should be possible to have a trial starting on Monday, 2 May

1994 after dealing with the necessary interlocutory steps in

the meantime.

There will be an order that until further order the respondent be restrained from determining the heads of agreement.

On the directions hearing there will be the following additional orders.

1.    Liberty to the applicant to amend statement of claim by

Friday, 4 February, 1994.

2 .    The respondent to file defence by 14 February 1994.

3.    The applicant to file reply if so advised within 7 days of receiving defence.

4.   Parties to advise each other withln 7 days of defence of the classes of documents and topics on which they require discovery.

5.    Parties to give discovery within 14 days of the nominated topics.

6.    Trial for Monday, 2 May 1994, 5 days set aside.

7.    I adjourn directions hearing to 9 .OO a.m. on Wednesday, 30 March 1994.

8. Liberty to apply.

9.    Costs in the cause.

10. Vacate directions hearing set for 9 February 1994.

I certify that this and the

10 preceding pages are a	i
!
true copy of the Reasons	! .,
for Decision of Mr Justice	I
von Doussa
Associate:
Dated: 27	!

Counsel for the applicant	: M r J Sulan QC
Solicitor for the applicant	: Thomsons
Counsel for the respondent	: Mr D Howard
Solicitor for the respondent	: J A Carr & CO
Date of hearing	: 27 January 1993