Hyatt of Australia Limited v Coolum Resort Pty Limited

The matter before the court involved a dispute between Hyatt of Australia Limited and Coolum Resort Pty Limited. The applicant, Hyatt, managed the resort owned by the first and second respondents, in return for fees calculated on revenue and profit. The resort was running at a loss, and the respondents alleged that Hyatt had breached the duty of fidelity in the management agreement by running the resort to maximise revenue rather than profit. The respondents were obliged under the management agreement to provide funds to the applicant manager as required. The third respondent, who owned and funded the first and second respondent companies, refused to continue to provide funds as long as Hyatt remained the manager under the management agreement. The first and second respondent companies were in voluntary administration. Hyatt sought a continuation of an interim injunction to restrain the respondents from interfering with its access to the resort, giving directions to staff, or removing its name from the resort's name.

The court was required to decide whether Hyatt had a prima facie case and whether the balance of convenience favoured the granting of an injunction. The court considered the evidence presented and the legal principles relevant to the case. The court found that Hyatt had a prima facie case and that the balance of convenience favoured the granting of an injunction. The court considered the potential harm to Hyatt if the injunction was not granted, and the potential harm to the respondents if the injunction was granted. The court found that the potential harm to Hyatt outweighed the potential harm to the respondents.

The court granted the injunction until the conclusion of the trial or earlier order. The injunction required the respondents to refrain from interfering with Hyatt's access to the operating accounts for the resort, giving directions to staff working at the resort, removing or replacing signage at the resort, and describing the resort otherwise than as the Hyatt Regency Coolum Golf Resort and Spa. The court also noted that the injunction was limited to the period necessary to preserve the status quo pending the determination of the rights of the parties. The court ordered that the injunction would not prevent the respondents from conducting the administration of the companies under Part 5.3A of the Corporations Act 2001 (Cth).