Hickinbotham Developments Pty Ltd v Woods - [2005] SASC 215

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Application)
HICKINBOTHAM DEVELOPMENTS PTY LTD v WOODS & ORS
Reasons for Decision of The Honourable Justice Layton
14 June 2005
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - SERIOUS QUESTION TO BE TRIED - GENERALLY
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - BALANCE OF CONVENIENCE
Application for urgent interlocutory relief that the second and third defendants as vendors be restrained from selling, disposing, transferring or otherwise dealing with their interest in land – further order sought that the vendors and the fifth defendant Kentia Developments Pty Ltd be restrained from completing any contract for sale of the land – the fifth defendant opposed the orders sought – consideration of whether there was a tender process - whether it involved a process contract - whether it gave rise to an obligation by the vendors to act fairly – consideration of whether there is a serious question to be tried and where the balance of convenience lies – consideration of whether damages would be an appropriate remedy – whether plaintiff will lose right to challenge contract for sale of land and its loss of chance in the tender process – damages for loss of opportunity considered – application for interlocutory injunction refused.
Trade Practices Act 1974 (Cth); Fair Trading Act 1987 (SA); Supreme Court Act 1935 (SA) s 29, referred to.
Aboriginal Development Commission v Ralkon Agricultural Co Pty Ltd (1987) 15 FCR 159; Australian Broadcasting Corporation v Lenah Game Meats Ltd (2001) 208 CLR 199; Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1038; Blackpool and Flyde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25; Castlemaine Toohey's Ltd v South Australia (1990) 169 CLR 436; Cubic Transportation Systems Inc v State of NSW & Ors [2002] NSWSC 656; Eagle Import Co v Burley (1978) 80 LSJS 419; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151; Pratt Contractors Ltd v Palmerston North City Council [1995] 1 NZLR 469; Service Station Association Ltd v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84; Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317; State Transport Authority v APEX Quarries Ltd [1988] VR 187; Tidy Tea Ltd & Lyons Tetley Ltd v Unilever Tetley Ltd (1995) 32 IPR 405; Queensland Industrial Steel Pty Ltd v Jensen [1987] 2 Qd R 572; Willow Grange Pty Ltd and Anor v Yarra City Council [1998] ANZ ConvR 415, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"interlocutory injunction"

HICKINBOTHAM DEVELOPMENTS PTY LTD v WOODS & ORS
[2005] SASC 215

LAYTON J: Hickinbotham Developments Pty Ltd (“the plaintiff”) by an inter partes summons, has sought urgent interlocutory relief by court order that Barry Woods and Robert O’Callaghan the first and second defendants (“the vendors”) be restrained from selling, disposing, transferring or otherwise dealing with their interest in land, described in and comprising Register…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] SASC 215
Decision Date: 14 June 2005

CaseChat Overview and Summary

In the case of Hickinbotham Developments Pty Ltd v Woods, the plaintiff sought urgent interlocutory relief to prevent the second and third defendants from selling or transferring their interest in a parcel of undeveloped land, as well as to restrain the vendors and the fifth defendant, Kentia Developments Pty Ltd, from completing any contract for sale of the land. The plaintiff argued that the vendors had breached their duty to act fairly in a tender process for the land. Kentia Developments opposed the orders sought by the plaintiff. The legal issues before the court included whether there was a serious question to be tried, the balance of convenience, and whether damages would be an appropriate remedy.

The court considered whether there was a tender process that involved a process contract, which would give rise to an obligation by the vendors to act fairly. The court also evaluated whether there was a serious question to be tried and where the balance of convenience lay. The court further examined whether damages would be an appropriate remedy and whether the plaintiff would lose its right to challenge the contract for sale of the land and its loss of chance in the tender process. In the end, the court found that the difficulties with the plaintiff's claim for injunctive relief were considerable, particularly in the circumstances of this case and particularly when there was an innocent buyer. The application for an interlocutory injunction was refused.

The court concluded that if the plaintiff had other causes of action and relief to seek against the vendors as a consequence of the actions of the vendors agent, they would likely sound in damages for loss of opportunity or for any costs incurred in relation to the tender process. Although the proof and quantum of those damages may be difficult to assess, the court noted that this difficulty inhered in the nature of the claim for damages for loss of opportunity.

Orders

Orders of the court

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Background

Background to the litigation

The plaintiff gave the usual undertaking as to damages in respect of each of the defendants.Facts on the material before the Court Almost all of the facts are undisputed. It is mainly the inferences which can be drawn from those facts and the legal principles to be applied, which are the subject of differing arguments between the plaintiff and Kentia. The plaintiff is a company involved in various businesses, one of which is acquiring and developing land for residential purposes. As part of its business activity it became interested in the Land which is registered in the names of the vendors. This is an undeveloped parcel of land presently used for growing grapes and is zoned as suitable for residential purposes. Mr Michael Hickinbotham on behalf of the plaintiff, requested Mr Ken Gaetjens of Gaetjens Real Estate to make inquiries of the Land on behalf of the plaintiff. Mr Gaetjens deposed that he spoke to Mr Peter Fairweather, who is an employee or agent of the vendors agent. Mr Gaetjens deposes as follows in paragraph 4 of his affidavit:On or about 10 or 11 February 2005, I had a telephone conversation with Mr Fairweather. Mr Fairweather confirmed that the Land was for sale on a “best offer basis” and that tenders for the purchase of the Land were due to close at 5 pm on Friday 11 February 2005. This information was in turn conveyed to Mr Hickinbotham who on 11 February 2005 instructed Mr Gaetjens to submit an offer which he did by a letter of offer sent by e-mail. The letter nominated a “one and highest offer” of $1.7 million with a settlement period of 14 days (from the performance of the special condition involving a soil report), with a deposit of $30,000 to be paid within seven days from acceptance of the offer. The soil report condition specified that the offer was conditional upon the purchaser obtaining within 4 months, a report as to the suitability of the soil for residential development. A copy of the letter is exhibit KAG 2 to the affidavit of Mr Gaetjens. A copy of this e-mail in which this was sent, was not annexed to the affidavit of Mr Gaetjens as his computer malfunctioned and he lost all e-mail communications up to and including 11 February 2005. However, Mr Gaetjens telephoned the office of the fourth defendant and spoke to a person by the name of "Lyn”, who confirmed that she had received the offer sent by e-mail. On 14 February 2005, being the Monday after the date for tenders had closed, Mr Hickinbotham sent an e-mail to Mr Gaetjens requesting that he add an addendum to the tender to the effect that the plaintiff anticipated it would take some time (possibly five or more years) until it had obtained the relevant approvals and was ready to develop the land. On that basis the plaintiff was prepared to grant the vendors a license to operate and take fruit from the existing vineyard on the land at no charge during the period. A copy of this e-mail is annexed to the affidavit of Mr Hickinbotham as exhibit MRH 1. Mr Gaetjens e-mailed Mr Fairweather three times on 14 February 2005. The first e-mail advised Mr Fairweather that the plaintiff wished to “add an addendum to the Tender faxed[1] to you on Friday last” and indicated that the plaintiff would “grant a licence [to the vendors] to operate and take fruit from the vineyard at no charge until [the plaintiff was] ready to develop the land” which was indicated as being “possibly 5 or more years.”[1] I note that the word used was “faxed” as distinct from emailed, but nothing turns on this at this hearing.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I consider that the arguments proffered by the plaintiff and my consideration of them, show there are considerable difficulties with its claim for injunctive relief in any final court order, particularly in the circumstances of this case and particularly when there is an innocent buyer. This is not to say that there are not other causes of action and relief which could be sought by the plaintiff against the vendors as a consequence of the actions of the vendors agent. However, these are matters which would if anything, sound in damages for loss of opportunity or for any costs incurred in relation to the tender process. It is true that the proof and quantum of those damages may be difficult to assess, but as Sackville J noted in the Australian Agricultural Co Ltd[27] “… that difficulty inheres in the nature of the claim for damages for loss of opportunity”. [27] Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1038.Conclusion Having considered the three criteria relevant to the granting of an interlocutory injunction, I am not satisfied overall that an interlocutory injunction should be granted. The application for an interlocutory injunction is refused.

Ratio Decidendi

Legal Principle Established

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