Hughes v Milera - [2021] SADC 66

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
HUGHES v MILERA
[2021] SADC 66
Reasons for Rulings of his Honour Judge Heffernan
3 June 2021
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - MANDATORY INJUNCTIONS - MATTERS AFFECTING GRANT GENERALLY
The applicant had an agreement with the respondent for the use of a commercial vessel called The Capricorn. On the applicant’s case he had an oral contract for exclusive use of the vessel for 3-4 years from August 2020. Both the applicant and the respondent spent money on the maintenance and refitting of the boat over a period of several months. Between August 2020 and March 2021 the applicant used the vessel for the purpose of conducting dolphin tours in the Port River Dolphin Sanctuary, fishing charters and as a support vessel for an international hydrographic survey company, Fugro, which has contracts with the Royal Australian Navy to conduct surveys along the coastline. Those contracts are anticipated to continue for many years. The applicant’s case was that the Fugro support vessel work was lucrative and had potential for ongoing contracts. The applicant contends that the respondent was fully aware of his contract with Fugro and the potential it held for ongoing income. Pursuant to the oral agreement, the applicant made payments to the respondent in late 2020 and early 2021 for monies owed arising from the use of the vessel. In early 2021 the respondent's son became involved in discussions with respect to the agreement and made allegations that invoices for use of the vessel had not been paid. The vessel was at that time placed with a marine mechanic for servicing. The respondent and his son retained the keys to the vessel indicating that it would not be returned to the applicant until outstanding invoices were paid. The applicant denied that any invoices were outstanding but agreed to make advance payments for the respondent’s share of monies due from Fugro work which had been performed in March 2021. The vessel has not been returned. The applicant sought a mandatory injunction requiring the respondent to return The Capricorn to him to enable him to continue performing work for Fugro.
Held:
1. Dogtooth Marine Pty Ltd be joined as an applicant to these proceedings.
2. Douglas Milera Jnr is joined as the second respondent to these proceedings.
3. Darren Hughes is disjoined as an applicant to these proceedings save as to the question of costs on this application.
4. The applicant’s application for a mandatory injunction as against the first respondent is dismissed.
5. Costs reserved.
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105, applied.
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd (2013) 210 FCR 1; Australian Airlines Commission v The Commonwealth (1986) 17 FCR 445; Adara Acquisitions Pty Ltd v Deal Corporation (Knox) Pty Ltd and Anor [2018] VSC 831; Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499; Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd [2018] FCA 142; Clough v Breen [2020] NSWSC 653; Re Businessworld Computers Pty Limited v Australian Telecommunications Commission [1988] FCA 127; Films Rover International Ltd & Ors v Cannon Film Sales Ltd [1987] 1 WLR 670, considered.

HUGHES v MILERA
[2021] SADC 66

This is an application for a mandatory injunction. The applicant seeks that the respondent, Mr Douglas Milera Snr, (the respondent) be injuncted to deliver up the vessel known as ‘The Capricorn’ to the applicant until further order.
The application was initially filed by Mr Hughes acting in person, alleged a breach of contract and sought an order in the following terms:
Injunction for return of vessel to obligate lease agreement. (reproduced verbatim)
The applicant is now represented and has filed an amended application seeking the following orders:
1.This application be heard urgently and as soon as possible prior to 7 May 2021.
2.Dogtooth Marine Pty Ltd be joined as the applicant to these proceedings and Darren Hughes be disjoined as the applicant to these proceedings.
3.An injunction be granted by order dated the __ day of ____ 2021 in this action whereby the first respondent Doug Milera is to deliver up the vessel known as ‘The Capricorn’ to Mr Darren Hughes director of the applicant Dogtooth Marine Pty Ltd on the ____ day of _____ 2021 until further order.
4.The applicant seeks the costs of and incidental to this application.
5.Such further orders or directions as the honourable Court deems fit.
That amended application is made on the grounds set out in the affidavits sworn by Mr Hughes on 29 April 2021 and 19 May 2021.
The respondent opposes all orders sought and seeks an order for his costs. He relies on his affidavit sworn on 13 May 2021 and that of his son sworn on 13 May 2021.
It is not disputed that I have power to issue an interlocutory injunction.[1]
[1] Uniform Civil Rules R 111.1(1).
Background
The applicant is a skipper and the director and shareholder of Dogtooth Marine Pty Ltd (‘the Company’) which trades as Port Adelaide Boat Hire and Tours. The Company leases wharf and berthing facilities at Port Adelaide from Renewal SA and runs a variety of water-based activities including fishing boat hire, boat tours and dolphin watching tours in the Port River Dolphin Sanctuary. The Company also contracts hire/drive and skippered commercial vessels out to commercial clients.
The respondent is a boat owner and the sole owner of the vessel known as The Capricorn. That vessel is insured in his name. The Capricorn is a powered catamaran approximately 8 m in length and powered by two motors. It is certified to carry one crewmember and seven unberthed passengers.[2] He is also the owner of a vessel known as ‘The Wardang Island Explorer’.
[2] Affidavit of Douglas Neil James Milera Snr dated 13 May 2021 Exhibit DM-1 ‘Certificate of Survey’.
In late 2019 the applicant was looking for suitable vessels in order to expand his business. He contacted the respondent and expressed interest in making use of his vessels. Whether the applicant approached the respondent in his personal capacity or on behalf of the Company is a matter of dispute between the parties. At that time, both The Wardang Island Explorer and The Capricorn were based at Port Victoria on the Yorke Peninsula. The respondent had a small business venture taking tourists on eco-tours throughout the Narungga Islands and, in particular, to Wardang Island. As at October 2019 Wardang Island was not accessible, having been closed for remedial work to be performed due to asbestos contamination.
On the account of the respondent, he told the applicant at the time of those discussions that he was part of the operation to reopen Wardang Island and expected it to reopen once the asbestos had been cleared. Once that occurred, he would be able to resume his business. He was of the view that it might take some time for Wardang Island to reopen and says that he agreed with the applicant that it was worth trialling The Wardang Island Explorer in the Adelaide tourism market.
On the account of the applicant, when he first approached the respondent he asked whether he could, on behalf of the Company, come to an agreement with him for the exclusive use of one or more of his vessels. He says that the respondent was excited about the prospect because his boats were idle at that time and that he would not require them for three to four years due to the asbestos removal being performed at Wardang Island. The applicant says that the agreement between the parties was forged during conversations between about September 2019 and sometime in October 2019. He says that it was agreed between himself, the Company and Doug that he would have exclusive use of The Wardang Island Explorer. In about January 2020 he says that it was agreed that he, on behalf of the Company, would also have exclusive use of The Capricorn on the same terms as The Wardang Island Explorer.
The applicant says that the terms of the agreement between himself and the respondent were as follows:
·The respondent would provide the company with exclusive use of the vessels for at least 3 to 4 years.
·The Company and the respondent would share equally the cost of fuel for the vessels.
·The respondent would pay for any repairs to the vessels.
·The applicant would assist with any repairs and labour where possible.
·The respondent agreed to pay the hull insurance for the vessels and the Company agreed to pay the public liability insurance on them.
·On receipt of payment for work done by the vessels the Company would pay the respondent 50% of the profit after payment of the expenses referred to above.
On the applicant’s account, the attraction of an agreement in the above terms was that it gave him security and a range of options for his business. He says that there was only one agreement between the Company and the respondent and that it was for both vessels with The Capricorn to be used first and then secondly for use of The Wardang Island Explorer when it was ready.[3]
[3] Affidavit of Darren Hughes dated 29 April 2021 [13].
The respondent arranged for The Wardang Island Explorer to be transported by land to Largs North. Once inspected, the vessel was found to have significant mechanical problems and clearly required extensive work. The applicant arranged for it to be taken to Arno’s Marine Services for motor repairs. The vessel remains at Arno’s Marine and has not been used by the applicant.
Contrary to the applicant’s account, the respondent says that the agreement was originally only for The Wardang Island Explorer on the following basis:
·it was only a trial;
·the arrangement was temporary;
·the respondent could withdraw from any arrangement with the applicant at any time;
·the respondent could take back the vessel for his own use or for any purpose, and
·it was agreed he would be paid for the use of his vessel.
The applicant sent a draft contract for the lease of The Wardang Island Explorer to the respondent in January 2020.[4] Of note, the applicant points to the fact that the draft is in the name of the Company as the lessee. The draft lease was not signed by either party.
[4] Affidavit of Douglas Neil James Milera Snr dated 13 May 2021 Exhibit DM-3.
Fugro
The applicant says that in about August 2020 he discussed the suitability of using The Capricorn for the purposes of Fugro Hydrographic Surveying (Fugro). The Capricorn was transported to Adelaide in August 2020 at the expense of the applicant. This occurred after he had travelled to Port Victoria to meet with the respondent and inspect the vessel. He says that at this meeting he entered an agreement for the vessel in identical terms to the oral agreement for The Wardang Island Explorer. On his case, the agreement was made in the name of the Company. The applicant paid for a Load Cell Rating test to be performed by a company called ‘Noble’. The applicant arranged for Fugro to have the vessel inspected so that contract negotiations with that company could be advanced. The vessel was launched in Port Adelaide with both the applicant and the respondent present.
At some time in 2020, Mr Hughes had entered into discussions with Fugro, an international company engaged in the business of providing hydrographic survey services. In 2020 Fugro was contracted to the Royal Australian Navy (the Navy) to perform hydrographic surveys of the Australian coastline and wanted to run tests for an autonomous survey vessel in South Australian waters. That technology is apparently relatively new. The applicant says that Fugro has contracts with the Navy which will extend over a period of the next 30 years. The applicant says that the Company entered a contract with Fugro to make The Capricorn available to tow the autonomous survey vessel whilst the tests were being performed. The Company provided The Capricorn as an inshore support and training vessel and the applicant says it is the only support vessel which has been used by Fugro since it commenced operations in Australian waters. His evidence is that the Company has the prospect of ongoing and potentially very lucrative work with Fugro into the indefinite future. The applicant says that he was the only preferred contractor with Fugro in this State. It is not disputed that the applicant entered into a contract with Fugro to make The Capricorn available and that the vessel was used by Fugro on occasions during 2020 and 2021 for the above purposes.
There is a dispute between the parties as to the extent to which the respondent was aware of the Fugro contract and of the applicant’s intentions in that regard. I am not able to finally resolve that dispute for the purpose of these interlocutory proceedings, but the respondent’s position in that regard does not appear to be particularly strong, at the very least in terms of the initial use of the vessel by Fugro.
Alterations were made to The Capricorn specifically to enable it to meet Fugro’s requirements. The applicant says that this was known to the respondent and with his agreement. Two new motors valued at approximately $60,000, purchased by the respondent as part of the refurbishment of The Wardang Island Explorer, were removed from it and fitted to The Capricorn, as well as larger tow points being custom made and fitted. WIFI and radio antennas and control boxes were fitted to the roof of the vessel. Mr Hughes says that he was in exclusive possession of the vessel from August 2020 and entitled to use it for any purpose. He was the only person who had access to the boat trailer. The vessel was moored to the Company’s mooring location which at the time he took possession of The Capricorn, was accessible only to him. Until events to which I refer below, shortly prior to the applicant filing these proceedings, he says that there was never any discussion with the respondent or anyone acting on his behalf about his having the use of the vessel.
For a period of time the arrangement seemed to operate smoothly and the applicant says that he developed a close working relationship with Fugro.[5] In October 2020, the applicant paid $5,000 to the respondent from the profits earned by the vessel. Similar payments both in the amount of $3,000 were paid to the respondent in November and December 2020. The applicant’s use of The Capricorn was not limited to Fugro work. He says that pursuant to the agreement with the respondent, the Company used The Capricorn for the following types of work:
·Fugro surveying operations and working with a Fugro vessel during Navy transfers.
·Working with a ‘Government vessel’ during crew transfers.
·Dolphin watching tours.
·Sightseeing tours.[6]
[5] Affidavit of Darren Hughes dated 29 April 2021 [54].
[6] Ibid [56].
On the applicant’s case, as a result of pursuing the Fugro work he put other income earning opportunities on hold.
The involvement of Douglas Milera Jnr
In about mid-March 2021, Mr Hughes started receiving correspondence from the respondent’s son Douglas Milera Jnr (Milera Jnr).
The applicant says that Milera Jnr put him on notice on 8 April 2021 that The Capricorn would ‘not be available until all of our invoices have been paid and are up-to-date. Fugro will have to wait as we are getting electrical work done on the boat. I hope Fugro work comes to fruition next week’. (emphasis added)[7]
[7] Affidavit of Darren Hughes dated 29 April 2021 [66]-[67].
This was the first the applicant knew of Milera Jnr’s involvement in the matter. He says that he had only ever dealt with the respondent and had contracted solely with him as owner of the vessel. The applicant contacted Arno’s Marine where the vessel had been taken for servicing and was told that the respondent and Milera Jnr had taken both sets of keys and would not be releasing the boat. The following day, the applicant says that he learned that the Mileras had taken the boat and its whereabouts was unknown.
It is the applicant's case that at this time there were no outstanding invoices payable to the respondent. Fugro work had been performed in March but the Company had not yet been paid for it. No invoice had been presented by the respondent. The applicant says that in desperation he borrowed $10,000 from his sister to make an advance payment of the monies owed to the respondent from that work. He says that the respondent told him the vessel would be returned once payment was made. The applicant says he paid further amounts of $5000 and $1140 relying on this representation. The vessel was not returned. On 11 April, the applicant sent via email a letter of demand to the respondent. He has not received a response to that letter. The applicant demanded that The Capricorn be returned to the Company by 7.00am the following day for the purposes of the existing agreed contract with Fugro. He insisted that the respondent agree to his terms by 8:30 PM that evening.
It is not necessary for present purposes to summarise all of Milera Jnr’s alleged involvement in the dispute. Suffice to say, the applicant says that Milera Jnr inserted himself into the contractual relationship between the Company and the respondent, took over all discussions and imposed his will on the respondent for reasons of his own. As to the nature of those reasons, the applicant suggests a desire on the part of Milera Jnr not to assist the respondent to re-establish the ecotourism business but to take over the Fugro work. He says that he was contacted by a representative from Fugro and advised that Milera Jnr had telephoned them in an attempt to do so but had been given short shrift.
The Capricorn has not been returned to the applicant.
Scope of applicant’s proposed action
The applicant proposes to bring an action for damages against the respondent for a breach of the asserted oral contract entered into in 2020.[8]
[8] T26.
In the alternative, the applicant proposes to allege a breach of s 18 of The Australian Consumer Law on the basis that the respondent represented to the applicant that he would provide the Company with The Capricorn for at least three years. This representation turned out to be false.
In the further alternative, he will submit that the respondent should be estopped from denying the promise to provide the Company with the vessel for at least three years.
As against Milera Jnr, it is proposed to bring an action for unlawful interference with contractual relations between the applicant and the respondent.
The test for interlocutory injunctions
As reiterated by the High Court in Australian Broadcasting Corporation v O’Neill,[9] when considering whether to grant an interlocutory injunction there are two primary questions which must be answered. The first is whether the applicant has made out a prima facie case.[10] The second is whether the inconvenience or injury which might be suffered by the applicant if an injunction is refused outweighs any injury which might be sustained by the respondent if an injunction is granted.
[9] (2006) 227 CLR 57.
[10] Ibid [65].
The principles in O’Neill were succinctly summarised by Collier J in Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd:[11]
[11] (2013) 210 FCR 1.
Circumstances in which a court will entertain an application for an interlocutory injunction were explained by the High Court of Australia in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; 229 ALR 457; [2006] HCA 46 (O’Neill). In summary, an applicant seeking interlocutory relief must demonstrate that (Gleeson CJ and Crennan J at [19]):
1.     there is a serious question to be tried as to the applicant’s entitlement to relief; and
2.the applicant is likely to suffer injury for which damages will not be an adequate remedy; and
3.     the balance of convenience favours the granting of an interlocutory injunction.
As Gummow and Hayne JJ further observed in O’Neill, in order for an applicant for interlocutory relief to demonstrate that there is a “serious question to be tried”:
•It is sufficient that the applicant show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: at [65].
•The applicant need not demonstrate more than a 50% chance of ultimate success: at [68]
•In that light the issue may be understood as whether the applicant has made out a prima facie case for relief: at [65], [70].
•      Whether the applicant shows a sufficient likelihood of success depends on the:
•      nature of the rights asserted; and
• practical consequences likely to flow from the interlocutory order sought. Particular considerations arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application: at [72].
Mandatory injunctions

In his submissions for the respondent, Mr Gentry contended that a higher degree of probability of success is required for a mandatory interlocutory injunction than for a prohibitory injunction.[12] The applicant submitted that that was not the case. This question has been considered in a number of cases. In Parmalat, Her Honour considered the matter:
In this proceeding the exercise of the court’s discretion to grant interlocutory relief is informed by the fact that the applicant seeks a mandatory interlocutory injunction. Although the set of circumstances under which such relief is granted is a matter for judicial discretion in each case, as a general principle courts approach such applications with some caution. In Queensland v Australian Telecommunications Commission(1985) 59 ALR 243 at 245 (Queensland) Gibbs CJ explained described the approach of the court as requiring a “high degree of assurance” compared with interlocutory injunctions restraining conduct:
Megarry J stated the principle in Shepherd Homes Ltd v Sandham[1971] 1 Ch 340 at 351 , in the following words: “… on motion, as contrasted with the trial, the court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable prohibitory injunction. In a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this is a higher standard than is required for a prohibitory injunction.” [Emphasis added.]
This approach has been adopted in numerous cases in this court and elsewhere:[13] (citations omitted)
[12] Australian Airlines Commission v The Commonwealth (1986) 17 FCR 445; Adara Acquisitions Pty Ltd v Deal Corporation (Knox) Pty Ltd and Anor [2018] VSC 831.
[13] Parmalat op cit [17]-[18].
Her Honour noted that Gummow J took a different view in Businessworld Computers Pty Ltd v Australian Telecommunications Commission,[14] an authority relied on in these proceedings by Mr Rice for the applicant. The approach favoured by Gummow J focused on the circumstances of the case and whether withholding a mandatory injunction would carry a greater risk of injustice than granting it even if the court did not feel a high degree of assurance about an applicant’s ultimate prospects of success. Her Honour noted that this approach had been followed in a number of Federal Court decisions.[15] Her Honour concluded:
While there is merit in the proposition that the court should not approach consideration of interlocutory injunctive relief differently depending on whether the relief sought is restraining or mandatory, on balance I am persuaded that the obligations imposed on a respondent following an order of the court granting mandatory interlocutory relief do necessitate some higher degree of assurance to the court that final relief will be granted. This is particularly so in circumstances where the mandatory orders lend themselves to a greater likelihood of ongoing court supervision, and the practical effect of the orders is, in effect, to finally determine the rights of the parties. I am also not persuaded that there is either injustice or illogic associated with the proposition that a higher standard of assurance is appropriate where an applicant presses for mandatory relief rather than restraining orders. (Simply by way of analogy, I note the higher degree of persuasion required by the law in certain civil cases following the landmark decision of the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] ALR 334 .)[16]
[14] (1988) 82 ALR 499.
[15] Parmalat op cit [20].
[16] Ibid [21].
Contrary to the view expressed by the court in Parmalat, in Mineralogy Pty Ltd v Sino Iron Pty Ltd,[17] having surveyed authorities on the point,[18] Newnes JA, with whom McClure P and Corboy J agreed, said:
While the ‘high degree of assurance’ test has been applied in a number of cases, it has by no means enjoyed universal acceptance. It was firmly rejected by the Privy Council in National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] UKPC 16 [19]–[21].
In Australia, a similar approach has been taken by the Court of Appeal of Victoria in Optus Networks Pty Ltd v Stonnington City Council[1996] 2 VR 209, 213, Optus Networks Pty Ltd v City of Boroondara[1997] 2 VR 318, 335 and Bradto Pty Ltd v Victoria [2006] VSCA 89 [35]; by the Court of Appeal of Queensland in Bingham v 7-Eleven Stores Pty Ltd [2003] QCA 402 [108]; and in numerous decisions at first instance in various courts, including those referred to previously and this court in JTA Le Roux Pty Ltd (as trustee for the FLR Family Trust) v Lawson (No 2) [2013] WASC 373 (in which many of the authorities are collected; see also, in that respect, Ocean Dynamics Charter Pty Ltd v Hamilton Island Enterprises Ltd [2015] FCA 460).
In my view, both principle and the weight of recent authority lead to the conclusion that no different standard applies in respect of an application for a mandatory injunction, although, as the authors of Meagher, Gummow & Lehane’s Equity Doctrines and Remedies (5th ed, LexisNexis Butterworths, 2015), point out:
… in the application of the normal tests, often, though not always, the fact that the relief sought is mandatory will tilt the balance of convenience in the defendant’s favour [21–395].
No doubt that is at least one of the reasons that mandatory interlocutory injunctions are rare.[19]
[17] [2016] WASCA 105.
[18] Ibid [76] – [85].
[19] Ibid [83] - [85].
The correctness of the above approach to the ‘serious question to be tried’ limb was not doubted by Beach J in Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd, where His Honour said:
The ABC v O’Neill test is equally applicable to mandatory injunctions in terms of the formulation of the test as distinct from its application in a particular case. The applicant for an injunction does not have to show anything additional, such as a “high degree of assurance”. This has been discussed in earlier authorities, including by Gummow J in Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499; [1988] FCA 206.[20]
[20] [2018] FCA 142 [16].
The decision of the court in Mineralogy was applied recently in Clough v Breen[21] where Rees J had the following to say:
In Australia, the test for a mandatory injunction is no different to an ‘ordinary’ prohibitive injunction. Nor has the requirement for “a higher degree of assurance” found wide acceptance….[22]
[21] [2020] NSWSC 653.
[22] Ibid [34].
I am satisfied that I should be guided by the statement of principle and the authorities referred to in Mineralogy. The principles in O’Neill’s case apply to mandatory injunctions and no higher test need be applied when considering the first limb. I note that the interaction between the first and second limb was considered by Beach J in Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd.[23]
[23] [2018] FCA 142 [16]-[19].
Consideration
I turn to the application of the principles to the asserted facts in this matter.
It is not necessary for me to address all the proposed causes of action that the applicant has indicated he intends ultimately to pursue. I am satisfied that the applicant has demonstrated a prima facie case for breach of contract and that there is a serious issue to be tried. The evidence of the applicant, if accepted, would be capable of establishing that there was an oral contract between the Company and the respondent for the lease of The Capricorn for at least three years. The respondent has submitted that the applicant was a mere bailee and that in any event on the facts alleged, any ‘lease’ over The Capricorn would be void for uncertainty because the duration of it could not be ascertained at the outset. I do not regard that conclusion as being inevitable at trial. It would be open to the applicant to argue that he had a lease for at least three years with an option to extend to four years depending on the circumstances of the respondent. Further, if the evidence of the applicant were to be accepted at trial he would at least have a claim for damages for the income lost due to his inability to use The Capricorn for the final three days of the contract with Fugro. That his evidence may or may not be accepted at trial on the question of whether the Fugro contract expired on 31 March 2020 does not affect the assessment of his case for present purposes.
The applicant has demonstrated that the first limb of the test for an injunction has been satisfied.
The applicant has not demonstrated that the second limb has been satisfied.
When addressing the question of why damages would not be an adequate remedy, the applicant submitted that if the vessel is not returned to the Company it would suffer reputational damage, including damage to goodwill. Such damage is not susceptible to precise calculation.[24] Further, it would not be able to undertake further work for Fugro in the immediate future. No doubt Fugro would search around for a vessel from a different provider. If a hiatus develops due to the Company not having the vessel, the relationship between the Company and Fugro would be damaged. Ongoing contract work might be permanently lost to the Company. Similarly, the Company would be prevented from continuing to undertake and develop dolphin tours using The Capricorn, having gone to considerable effort in having the vessel approved for that purpose.
[24] Re Businessworld Computers Pty Limited v Australian Telecommunications Commission [1988] FCA 127 [31].
As to the balance of convenience, it was submitted by the applicant that a mandatory injunction would not finally determine the dispute between the parties. It would rather just return them to the status quo prior to the vessel being withheld. From the point of view of the Company this may be correct, but the balance of convenience must obviously also be considered from the respondent’s position. He says that Wardang Island is now open for visitors, the remedial works being complete. His ability to resume and develop his eco-tourism venture using The Capricorn would be fettered for at least another couple of years. The respondent submits that he would potentially lose between $1,200 and $2,500 per day if The Capricorn was not available to him for that purpose.
Mr Rice submitted that the Company was exposed to an action for damages because it was unable to meet its obligations to Fugro. The Company would also lose significant ongoing income from the contract with Fugro. In addition, the vessel Strictly Business which the respondent has suggested the Company might lease in order to continue the Fugro work is a much larger vessel, has not been surveyed and approved by Fugro and would be far more expensive for the Company to lease, thereby significantly reducing the profitability of any ongoing Fugro work. The applicant also says that the vessel Strictly Business is not suitable for the sort of inshore work Fugro is doing. Whilst at the time of hearing the Company had not entered into a further contract with Fugro, it had been negotiating for additional work in the coming months. The Company has also had to cancel bookings for dolphin tours. The applicant strongly disputes that any damage has been caused to The Capricorn.
It was submitted by Mr Gentry that damages would be an adequate remedy. I accept that submission. As submitted by the respondent, the essence of the applicant’s complaint is of financial damage and financial hardship. His loss, if established, could be made good by damages.
With respect to the balance of convenience, Mr Gentry submitted that, properly understood, the applicant’s own affidavit evidence demonstrates that he does not specifically need The Capricorn to undertake Fugro work, it is simply more cost-effective[25] and finding another vessel would be difficult.[26] Whilst that would appear to be a reasonable submission on the basis of the applicant’s affidavit evidence, it ignores the significance of the applicant’s other evidence about the need to grasp the nettle and secure further Fugro work as a matter of urgency. It also ignores the fact that The Capricorn has been surveyed and approved for Fugro work and approved for dolphin tours. However, even giving weight to those further matters, I am of the view that the balance of convenience lies in not granting the relief sought in these circumstances. In reaching that conclusion I have taken into account that if I were to grant the mandatory injunction sought by the applicant, I would be finally determining the dispute between the parties on an interlocutory basis. Whilst the applicant submitted that this would not be the case, the injunction sought would see the vessel returned to the Company for the balance of the three years he claims to have contracted for with the respondent. No other alternative was advanced by the applicant. Further, whilst the applicant submits that there has not been a breakdown in the relationship between the Company and the respondent such as to render the performance of the mandatory injunction impracticable, the respondent has deposed very much to the contrary and has made allegations that the vessel has been damaged, and that there is a risk of further damage to the motors if it continues to perform Fugro work. Whilst the applicant says that these claims are specious, it seems clear enough that the commercial trust which previously existed between the parties has been significantly damaged.
[25] Affidavit of Darren Hughes dated 29 April 2021 [95].
[26] Ibid [96].
Finally, and taking a longer lens to the matter, I am not satisfied that there is a greater risk of injustice if I decline to grant the relief sought than if I were to grant it.[27] As I have said above, I am satisfied that the balance of convenience lies in refusing to grant the application. I dismiss the application for a mandatory injunction.
[27] Films Rover International Ltd & Ors v Cannon Film Sales Ltd [1987] 1 WLR 670, 681.
I am satisfied that it is appropriate to join the Company to these proceedings as an applicant. I am further satisfied that it is appropriate to join Douglas Milera Jnr to these proceedings as a respondent. The respondent opposes the applicant from being disjoined from the proceedings. The affidavit evidence is clear enough on this point. It is the case for the applicant that the Company and not he was the contracting party. I am satisfied that it is appropriate to disjoin the applicant from these proceedings save for the question of any application for costs on this application which may be made by the respondent Milera Snr.
I reserve the question of costs of this application.