Leawell Pty Ltd as Trustee for the Garton Smith Trust, in the matter of Watershed Premium Wines Ltd v Watershed Premium Wines Ltd

In this case, the applicant, Leawell Pty Ltd as Trustee for the Garton Smith Trust, sought an interim injunction against Watershed Premium Wines Ltd in the Federal Court of Australia. The applicant aimed to prevent the respondent from accepting any offers from shareholders and issuing or allotting shares in response to an offer made by the respondent. The offer in question related to the acquisition of certain parcels of shares in the respondent company, as detailed in the Offer Information Statement dated 24 December 2008.

The primary legal issue the court needed to address was whether the equitable principles traditionally applied in grant of injunctions also applied to the statutory context of section 1324(4) of the Corporations Act 2001 (Cth). The court considered whether the statutory purpose of section 1324(4) should be given effect by granting the injunction in this case, despite the absence of traditional equitable considerations. This involved interpreting the scope and intent of section 1324(4) in the context of the dispute and the potential impact on the applicant's rights.

The court determined that while the traditional equitable principles could guide the exercise of discretion in granting an injunction, the primary consideration under section 1324(4) was the statutory purpose itself. The court concluded that the grant of an interim injunction was appropriate to give effect to the statutory purpose of preventing unfair practices by the respondent. It found that the applicant had established a serious question to be tried and that the balance of convenience favoured the grant of the injunction. Consequently, the court revoked the previous orders made on 15 January 2009 and restrained the respondent from accepting any shareholder offers and issuing shares in relation to the specified parcels until further order. The court also granted liberty to each party to apply to vary or set aside the order within 48 hours' notice and ordered the costs to be in the cause.