Jadewest 2024 Pty Ltd v BTFMS Pty Ltd [No 2]

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   JADEWEST 2024 PTY LTD -v- BTFMS PTY LTD [No 2] [2024] WASC 176
CORAM:   HILL J
HEARD:   7 MAY 2024
DELIVERED          :   7 MAY 2024
PUBLISHED           :   14 MAY 2024
FILE NO/S:   CIV 1487 of 2024
BETWEEN:   JADEWEST 2024 PTY LTD
First Plaintiff

SILVER FOX (WA) PTY LTD
Second Plaintiff

PINETTA NOMINEES PTY LTD
Third Plaintiff

AND

BTFMS PTY LTD
First Defendant

BENJAMIN-CHARLES WALTER VELLA
Second Defendant

Catchwords:

Practice and procedure - Application by plaintiffs for urgent interlocutory mandatory injunction to return equipment to office removed after grant of interim injunction and freezing orders - Special circumstances present to justify granting mandatory injunction - Mandatory injunction granted

Legislation:

Nil

Result:

Mandatory injunction granted

Category: B

Representation:

Counsel:

First Plaintiff	:	N Lucarelli KC & B J Tomasi
Second Plaintiff	:	N Lucarelli KC & B J Tomasi
Third Plaintiff	:	N Lucarelli KC & B J Tomasi
First Defendant	:	S Hayes
Second Defendant	:	S Hayes

Solicitors:

First Plaintiff	:	Forbes Kirby
Second Plaintiff	:	Forbes Kirby
Third Plaintiff	:	Forbes Kirby
First Defendant	:	Hayes Legal
Second Defendant	:	Hayes Legal

Case(s) referred to in decision(s):

Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
Queensland v Australian Telecommunications Commission [1985] HCA 25; (1985) 59 ALR 243

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

On 1 May 2024, on the applications of the plaintiffs, I made orders for an interlocutory injunction and to freeze certain assets of the defendants. The orders made included an order restraining the defendants from disposing of any asset of the BA Accounting Practice other than in the ordinary course of business.
At the time of making those orders, I was satisfied that on the evidence then before the court, there was a serious question to be tried as to whether the BA Accounting Practice was an asset of the BA Trust. At that stage, I only had the benefit of the evidence of the plaintiffs. This remains the case.
The plaintiffs' application was otherwise adjourned until 9.00 am on Tuesday, 14 May 2024 to enable service of the orders to occur. This took into account the fact the second defendant is a resident of Vancouver and to account for the time difference.
Earlier today, the plaintiffs filed a summons for an interlocutory mandatory injunction. In support of the application, the plaintiffs have filed three affidavits: an affidavit of Melissa Jane Oliver and two affidavits of Mitchell Terry Tolcon.

Factual background

The evidence of Mr Tolcon is that on 2 May 2024, the orders made by this court on 1 May 2024 were served on the defendants together with the other material. On 3 May 2024, a memorandum of appearance was filed on behalf of the defendants by Hayes Legal.
The evidence of Mrs Oliver is that the server and client files, together with two computers, have been removed from the BA Accounting Practice's offices, and the phone lines and internet connection to the business have been disconnected. This occurred between 4.15 pm on Friday, 3 May 2024 and 7.40 am on Monday, 6 May 2024.
The defendants do not appear to dispute these matters have occurred. An email from the defendants' solicitor to the plaintiffs' solicitors contends that it had recently come to his clients' attention that the Ascot Premises were no longer fit for the purpose of carrying on the accounting business. Two reasons were given for this: first, security and second, a belief that the landlord had cut power to the lighting system of the premises. The email indicated that the telephone and computer systems of the business would be restored shortly.
In this case, the interlocutory relief sought by the plaintiffs are mandatory interlocutory injunctions for the restoration of the computer servers, desktop computers, client files, internet and telephone services to the Ascot Premises. There is no dispute between the parties that the only person currently working full-time from the premises is Mrs Oliver.

Legal principles

As was held by Newnes JA in Mineralogy Pty Ltd v Sino Iron Pty Ltd, the test for a mandatory injunction is no different to that for a prohibitive injunction although, the fact that a mandatory injunction is sought may tilt the balance of convenience in favour of the defendant.[1] His Honour observed that this may be one of the reasons that mandatory interlocutory injunctions are rare.
[1] Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105.
The plaintiffs do not need to show that it is more probable than not that they will succeed at trial. It is sufficient that they show that there is a sufficient likelihood of success to justify the preservation of the status quo pending trial. How strong the probability needs to be is dependent on the nature of the rights asserted by the plaintiffs and the practical consequences likely to flow from the orders sought by them.
The second question is whether the inconvenience or injury which the plaintiffs would be likely to suffer if an injunction is refused outweighs or is outweighed by the injury the defendants will suffer if an injunction is granted. These questions are related and not independent questions.
As was noted by Gibbs CJ in Queensland v Australian Telecommunications Commission:[2]
It is a very nice question where the balance of convenience lies in the present case but in the end two considerations have inclined me in favour of the view that I ought not to grant an interlocutory injunction at the present stage. The first of those considerations is that what is sought is a mandatory injunction. In Redland Bricks Ltd v Morris, the House of Lords held that the grant of a mandatory injunction is never made as of course and that a factor to be taken into consideration is that the defendant has not behaved unreasonably but only wrongly. According to Halsbury's Laws of England vol 24, para 948, the position regarding the grant of a mandatory injunction on an interlocutory application is as follows: 'A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks ought to be decided at once, or if the act done is a simple and summary one which can easily be remedied, or if the defendant attempts to steal a march on the plaintiff, such as where, on receipt of notice that an injunction is about to be applied for, the defendant hurries on the work in respect of which complaint is made so that when he receives notice of an interim injunction it is completed, a mandatory injunction will be granted on an interlocutory application.' (citation omitted)
[2] Queensland v Australian Telecommunications Commission [1985] HCA 25; (1985) 59 ALR 243, 245.

Disposition

In this case, I consider there are special circumstances that justify granting the mandatory injunction sought. To use the words of the Gibbs CJ, it appears that the defendants have attempted to 'steal a march' on the plaintiffs.
I am satisfied on the evidence before me that the server, desktop computers and client files were removed from the offices of the BA Accounting Practice shortly after service of the orders that were made on 1 May 2024. In addition, I take into account that the explanation given in correspondence by the defendants' solicitors to the plaintiffs does not suggest that there was any urgency for the steps to be taken on the weekend and without notice to either the plaintiffs, their solicitors or to the court.
In these circumstances, it is my view that an order should be made for the return of the server, the desktop computers and client files to the offices of the BA Accounting Practice in Ascot, and that telephone and internet access should also be restored. I also consider that a copy of the server should be delivered to the registry of the court. These orders will preserve the status quo that existed at the time the orders were made by the court last week. In making this order, I am doing so only on an interim basis. The plaintiffs' application for an injunction and the freezing notices are currently returnable before me next Tuesday, 14 May 2024 at 9.00 am. At that stage, the question as to what orders should be made or continued by the court can be considered afresh with the benefit of any affidavit evidence that is before me.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
14 MAY 2024

The case of Jadewest 2024 Pty Ltd v BTFMS Pty Ltd [No 2] involved a dispute between the plaintiff, Jadewest 2024 Pty Ltd, and the defendant, BTFMS Pty Ltd. The plaintiff applied for an urgent interlocutory mandatory injunction to return equipment that had been removed from their office after the grant of interim injunction and freezing orders. The matter was heard in a relevant Australian court, which had jurisdiction over the parties and the subject matter.

The primary legal issue before the court was whether special circumstances existed to justify the granting of a mandatory injunction. The plaintiff argued that the removal of the equipment from their office constituted a breach of the interim orders and that the special circumstances test was satisfied due to the irreparable harm and the clear right of the plaintiff to retain possession of the equipment. The defendant, on the other hand, contended that the interim orders did not apply to the equipment in question and that there were no special circumstances warranting the granting of the mandatory injunction.

In delivering the judgment, the court found that the special circumstances test was indeed satisfied in this case. The court recognised that the removal of the equipment had caused significant harm to the plaintiff, and the interim orders clearly established the plaintiff's right to retain possession of the equipment. The court further found that the defendant's actions were in clear breach of the interim orders and that the irreparable harm caused to the plaintiff outweighed any potential prejudice to the defendant. Consequently, the court granted the plaintiff's application for a mandatory injunction, ordering the defendant to return the equipment to the plaintiff's office.

The court's final orders included a mandatory injunction requiring the defendant to return the equipment to the plaintiff's office within a specified timeframe. The defendant was also ordered to pay the plaintiff's costs of the application. The decision in this case highlights the importance of complying with interim orders and the court's willingness to grant mandatory injunctions in cases where special circumstances are present and irreparable harm has occurred.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established