Jutco Pty Ltd v Tradequip Pty Ltd

[2001] VSC 271

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 6921 of 2001

JUTCO PTY. LTD.	Plaintiff
v.
TRADEQUIP PTY. LTD. AND OTHERS	Defendants

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JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	2 AUGUST 2001
DATE OF JUDGMENT:	2 AUGUST 2001
CASE MAY BE CITED AS:	JUTCO PTY. LTD. v. TRADEQUIP PTY. LTD. & ORS.
MEDIUM NEUTRAL CITATION:	[2001] VSC 271

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CATCHWORDS:      Interlocutory injunction – Doubtful whether serious issues to be fixed – Balance of convenience against grant of interlocutory relief.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. R.S. Randall	Wilson & Co.
For the Defendants	Dr. K. Hanscombe	Baker & Armstrong

HIS HONOUR:

1. This is the return of a summons filed in the court by the plaintiff Jutco Pty Ltd, whereby the plaintiff seeks injunctions restraining the defendants Tradequip Pty Ltd, Ying He, Bruce Andrew Yarwood and Victor Zoranzello from selling to the plaintiff's customers the plaintiff's products, each of which are identified in Exhibit CJW 1 to the affidavit of Christopher John Wanless sworn 2 August 2001.

1. The background to the application is set out in the rather lengthy affidavits filed on behalf of the parties.  In the circumstances, I consider that it is unnecessary to set out the detail of that material in these reasons for judgment.  Save to say, that until 13 June 2001 the second-named defendant was a director of the plaintiff and the third and fourth-named defendants were employees of the plaintiff.  It would appear that in February of 2001 the second-named defendant had learned that it was the intention of the other directors of the plaintiff to replace him as chairman of directors.  That much was clear from a memo written to the staff of the plaintiff by two of its directors on 27 February 2001.  Thereafter the second-named defendant contends that his position with the plaintiff became untenable.  On 25 May 2001 He caused the first-named defendant to be incorporated.  On 13 June he and the third-named defendant resigned and commenced employment with the first-named defendant.  The fourth-named defendant resigned from the employ of the plaintiff on 18 June and he too then commenced employment with the first-named defendant.  There is little doubt that the defendants are trading in competition to the plaintiff.

1. However, having considered all the material placed before me, I am not satisfied that it is appropriate in this case to grant the injunctive relief sought by the plaintiff.  Whilst I am prepared to assume for present purposes that there may be serious issues to be tried - and I stress the words "may be"  - in particular, whether the second-named defendant deliberately ran down the business of the plaintiff prior to his departure on 13 June and whether he, on behalf of the first-named defendant, did order stock normally sold by the plaintiff whilst in the employ of the plaintiff, that stock then to be sold by the first-named defendant, and finally, whether the first-named defendant has attempted to pass off its products as being those of the plaintiff.

1. In my opinion, the balance of convenience is such in this case as not to justify the grant of injunctive relief.

1. Counsel for the defendants has given an undertaking on their behalf that the defendants will keep records of all sales of products to customers who were previously customers of the plaintiff as identified in Exhibit CJW 1 to the affidavit of Christopher John Wanless sworn 2 August 2001.

1. In that situation, it would seem to me that if the plaintiff does establish an entitlement to relief against the defendants, it would be a comparatively simple matter to determine any loss suffered by it as a consequence of the actions of the defendants and it would be adequately compensated by an award of damages.

1. The second matter which has influenced me in that regard is the serious effect any such restraint would have upon the livelihood of the second, third and fourth-named defendants.  In that regard, I would refer to the contents of paragraph 30 and following of the affidavit of Frank He sworn on 1 August 2001.

1. In my view, the appropriate course to adopt in this proceeding is to give directions, the effect of which will be to bring the whole matter to trial as speedily as follows.

1. The orders I make then are the following:

1.  The summons of the plaintiff filed in the court on 27 July 2001 is dismissed.

2.  I order that the defendants deliver their defences and counterclaims, if any, by 16 August.

3.  I order that the plaintiff deliver its reply and defence to counterclaims, if any, by 30 August.

4.  I order that all parties mutually give discovery by 13 September.

5.  I refer the proceeding to the Listing Master to enable any further directions to be given in the proceeding on a date to be fixed by the associate to the Listing Master after 13 September 2001.

6.  I reserve to the parties liberty to apply.

7.  I reserve the costs of the application.

8.  I direct that this order be prepared by the solicitors for the plaintiff and brought to me within 48 hours for authentication.

9.  I direct that within seven days of its authentication a copy of the order be served on the associate to the Listing Master. 

(Discussion ensued.).

1. In my view, no harm will come to the defendants by simply reserving the costs.  If they are ultimately successful in the action, there is little doubt that a cost order will then be made in their favour.  I think it is appropriate in this particular case to reserve the costs and leave the whole question of cost ultimately to the trial judge.

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