Mint International Pty Ltd v Australian National University
[2017] ACTSC 161
•3 July 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Mint International Pty Ltd v Australian National University |
Citation: | [2017] ACTSC 161 |
Hearing Date(s): | 3 July 2017 |
DecisionDate: | 3 July 2017 |
ReasonsDate: | 4 July 2017 |
Before: | McWilliam AsJ |
Decision: | See [31] – [37] |
Catchwords: | CIVIL LAW – JURISDICTION, PRACTICE AND PROCEDURE – Application for interlocutory injunction – termination of licence by licensor – whether serious question to be tried – whether balance of convenience favours injunctive relief |
Legislation Cited: | Civil Procedures Rules 2006 (ACT)r 706, r 725 |
Cases Cited: | Appleton Papers Inc v Tomasetti Paper Pty Ltd[1983] 3 NSWLR 208 |
Parties: | Mint International Pty Ltd (Plaintiff) Australian National University (Defendant) |
Representation: | Counsel Mr F J Purnell SC with Mr J Raftery (Defendant) |
| Solicitors Mr Robens, Kamy Saeedi Law (Plaintiff) King & Wood Mallesons (Defendant) | |
File Number(s): | SC 238 of 2017 |
McWILLIAM AsJ:
On 3 July 2017, I made the orders sought in an urgent application for interlocutory injunctive relief, filed in Court the same day by the plaintiff, Mint International Pty Ltd.
In substance, the orders restrained the defendant, the Australian National University (University), from taking possession of premises owned by it, located at Building No. 16 in Acton in the Australian Capital Territory (Premises), in respect of which the plaintiff holds a licence. A further substantive order was made restraining the University from conduct that would adversely affect the plaintiff’s possession and enjoyment of the premises, pending the hearing of the dispute now before the Court, which was expedited and is now to be heard on 19 July 2017.
These are the reasons for my decision.
On the interlocutory application, the affidavits of the Director of Major Projects at the University, Mr Robert Regan Hitchcock, sworn 16 June 2017 and 3 July 2017, and the affidavit of the Director of the plaintiff, Mr Jie Min, sworn 27 June 2017, were before the Court without objection. The brief facts stated below are extracted from those affidavits.
The licence for the Premises was entered into on 29 April 2014, but backdated to commence on 25 November 2013 (Licence). It was common ground that the Licence was governed by the Leases (Commercial and Retail) Act 2001 (ACT) (the Act). Under s 12(5)(b) of the Act, the definition of a lease includes a licence.
The Particulars of the Licence indicate an initial term of five years with a conditional option for a further term of five years. Clause 29 of the Licence permits early termination on 90 days’ notice in certain circumstances, including if the University required the Premises for a higher priority University use.
On 4 April 2017, the University purported to issue a notice of termination, which required vacant possession of the Premises from 3 July 2017 (Notice), the terms of which were as follows:
TAKE NOTICE THAT the Licensor is exercising its right to terminate the Licence pursuant to clause 29.1 of the Licence on the grounds that the Licensor requires the Premises for a higher priority University use that is associated with the demolition of the Arts Centre and redevelopment of the precinct.
AND that termination will become effective 90 days from the date of service of this notice.
AND the Licensor demands possession of the Premises from the Licensee from 3 July 2017.Senior Counsel for the University confirmed that if no injunction were granted, it was the University’s intention to enter and take possession the next day, pursuant to the Notice. This created the urgency of the plaintiff’s application.
Relevant principles
The Court’s power to grant relief is to be found in s 20 of the Supreme Court Act 1933 (ACT) and is governed by Rule 706 of the Court Procedures Rules 2006 (ACT) (Rules) due to the urgency of the present application, in conjunction with Rule 725 of the Rules.
The relevant principles for the exercise of the Court’s discretion whether to grant interlocutory injunctive relief ought be uncontroversial. They were recently restated in Atarashii Stone Pty Ltd v Granite Transformations Pty Ltd [2017] ACTSC 116 (Atarashii) per Murrell CJ at [10], consistent with Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57 at 81-82; Murphy v Lush [1986] HCA 37; (1986) 65 ALR 651 at 652; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; 195 CLR 1 at 24; Bayblu Holdings Pty Ltd v Capital Finance Australia Limited [2011] NSWCA 39; 279 ALR 166 at [20]; Lucas Stuart Pty Ltd v Hemmes Hermitage Pty Ltd [2010] NSWCA 283 at [6]; Mendonca v Mason [2013] VSCA 280 at [37]-[39].
The Court is required to consider first, whether there is a serious question to be tried in the sense that there is a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo. Those words do not mean that the Court is required to form the view at this preliminary stage that the proceedings are ultimately likely to be successful. The Court considers the likelihood of success in the context of being sufficient to warrant the preservation of the status quo in the circumstances of the case presently before the Court: Australian Broadcasting Corporation v O’Neill (supra) at 68 [19], 82-84 [65]–[72]; Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-3; Shercliff v Engadine Acceptance Corp Pty Ltd[1978]1 NSWLR 729 at 737; Magna Alloys & Research Pty Ltd v Coffey[1981] VR 23 at 26-27; Appleton Papers Inc v Tomasetti Paper Pty Ltd[1983] 3 NSWLR 208 at 214, 218-219; Construction Engineering (Aust) Pty Ltd v Tambel (A'asia) Pty Ltd [1984] 1 NSWLR 274 at 280.
Second, the Court considers whether the balance of convenience favours the grant of injunctive relief. As part of that consideration, the Court will have regard to factors such as whether damages are an adequate remedy, the right to a livelihood, delay, impact on third parties, the strength of the plaintiff’s case and any undertakings that have been given: Willis Australia Group Services Pty Ltd v Griggs [2012] NSWSC 659; 222 IR 172 at [133], cited in Atarashii at [12].
The nature of these proceedings
Notwithstanding that a Statement of Claim was yet to be filed, the basis for the ultimate relief sought was adequately set out (for the purpose of considering the application of the above principles) in the Originating Application filed in Court.
In the substantive proceedings, the plaintiff first seeks to challenge whether the Notice was validly issued. If it was not, the plaintiff submits that there is no entitlement to take possession under the Notice.
Jurisdiction
At the outset, the University relied on s 122 of the Act to submit that the Court did not have the jurisdiction to even entertain the application for interlocutory relief. Section 122 of the Act is (relevantly) in the following terms:
Procedure for termination of lease by lessor etc
(1) If the lessor has a right to terminate the lease, the lessor may give written notice of termination to the tenant (the termination notice).
...
(2) Within 14 days after being given the termination notice (the "allowed period"), the tenant may—
(a) contest the termination by application to the Magistrates Court; or
(b) agree to the termination by written notice to the lessor.
(3) The termination takes effect in accordance with the terms of the termination notice if, within the allowed period, the tenant—
(a) does not contest the termination by application to the Magistrates Court; or
(b) agrees to the termination by written notice to the lessor.
(4) If the tenant contests the termination by application to the Magistrates Court within the allowed period—
(a) the termination does not have effect unless it is confirmed by the Magistrates Court; and
(b) if the termination is confirmed—it has effect on the day ordered by the court.
(5) The lease may be terminated by the lessor only in accordance with this section.
(6) If the tenant is in possession of the premises, the lessor may enter the premises to recover possession of the premises only—
(a) under a court order or warrant; or
(b) if the lease has been terminated in accordance with this section.
The University’s submission ought be rejected. First, s 122 of the Act does not, in terms, purport to exclude the Supreme Court’s jurisdiction under s 20 of the Supreme Court Act 1933 (ACT). That section has been stated, in the context of a consideration of s 23 of the Supreme Court Act 1970 (NSW), which is in substantially similar terms, to be equivalent to the inherent power of the Court as a superior court of record: see Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612 at [617], [459], [333]. Nor does the Act exclude the concurrent jurisdiction of the Supreme Court in an appropriate case, where the matters sought to be agitated extend beyond the jurisdiction of the Magistrates Court of the Australian Capital Territory.
Second, the statutory jurisdiction of this Court, at the very least, carries with it the authority to make decisions as to the existence of its jurisdiction in a matter. This includes the ability to determine the existence or otherwise of facts upon which its jurisdiction depends: see by analogy Minister for Immigration and Multicultural and Indigenous Affairs v B [2004] HCA 20; 219 CLR 365 at 393; R v Ross-Jones; Ex parte Green [1984] HCA 82; 156 CLR 185 at 193, 213, 215–216, 222–223; DMW and Anor v CGW [1982] HCA 73; 151 CLR 491 at 507.
It may transpire, once the facts of this case are established at a substantive hearing, that s 122 of the Act applied, such that the Notice had legal effect under that section. However, the plaintiff is entitled to test, among other things, whether the University, as lessor, had the right to terminate the lease in the manner it did, and whether the terms of the Notice were valid.
Consideration
A serious issue to be tried
The plaintiff primarily relies on the operation of s 78 of the Act, relevantly as follows:
Demolition
A lease that provides for termination of the lease because of the proposed demolition of the building containing the premises must include provisions to the effect of all of the following:
(a)the lease cannot be terminated because of the proposed demolition unless the lessor has given the tenant sufficient details of the proposed demolition to indicate a genuine proposal to demolish the building within a reasonable time after the lease is to be terminated;
(b)the lease cannot be terminated by the lessor because of the proposed demolition unless—
(i) if the lease is for a term of up to 1 year...
(ii) in any other case—the lessor has given the tenant at least 6 months written notice of the lessor's intention to terminate;(c)if the lease is terminated because of the proposed demolition before the end of the term of the lease—the lessor must pay the tenant reasonable compensation...;
(d) in working out reasonable compensation for paragraph (c),...
The plaintiff contends that s 78 of the Act required a period of 6 months’ written notice and proper compliance with the requirements of that section, rather than the 90 days’ notice relied upon by the University. To the extent that Clause 29 of the Licence is inconsistent with the requirements of s 78 of the Act, the plaintiff submits that Clause 29 is void and of no effect, pursuant to s 19 of the Act.
I am satisfied that at least that issue is ‘a serious question to be tried’, as the argument appears to be based on an available construction of the interaction between the terms of the Licence and the Act.
The plaintiff indicated that it would seek to expand the additional grounds contained in the Originating Application, which raised complaints of breach of contract, equitable estoppel, and breach of s 18 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law). Given my finding as to the first complaint, and as those claims were not fully articulated in the Originating Application, it is presently unnecessary to consider whether those additional grounds also raise serious questions to be tried. Suffice to say that on the oral submissions made by Mr Robens, solicitor for the plaintiff, the nature of those additional complaints appeared to me to be reasonably arguable and may well have a significant (as opposed to ultimately probable) prospect of success.
Balance of convenience
The issue of delay is of little consequence in the circumstances of this case, as it seems that proceedings were initially brought by both the plaintiff and defendant in the Magistrates Court as early as 26 May 2017, but the parties were concerned that the Magistrates Court did not have jurisdiction to hear the entirety of the application and those proceedings were mutually either withdrawn or discontinued on 29 June 2017. Why no application to transfer the proceedings was made to the Magistrates Court at that time was not a matter canvassed during the urgent interlocutory hearing before this Court.
Turning then to the question of hardship in the context of the balance of convenience, if the plaintiff were to be evicted and the University permitted to commence demolition of the Premises, it is clear that the plaintiff would have irrevocably lost the right to occupy the Premises and at least that aspect of the substantive proceedings would be rendered futile. Notwithstanding the University’s submission to the contrary, it is by no means clear to me that damages would be an adequate remedy for the loss of the plaintiff’s business and the right to earn a livelihood in that particular location.
As to the potential hardship for the defendant, Mr Hitchcock gave supplementary oral evidence as to the nature of the works to be carried out in the next fortnight and what works could still be carried out in the event that the University were restrained from taking possession of the Premises the next day. He was unable to provide the most recently revised schedule of planned works covering, relevantly, the proposed works for the next fortnight, and that evidence was not otherwise before the Court.
It became clear that the grant of an injunction in respect of these Premises only would not have the consequence of preventing the commencement of planned building works (referred to in detail in Mr Hitchcock’s affidavit evidence), or of stymieing preparatory works in other areas of the proposed development.
Mr Hitchcock also confirmed that the asserted costs in his affidavit of any delay of up to $28,000 per business day by reason of a potential claim made by the contractor, Lendlease Building Pty Ltd, and additional costs by reason of trade delays of up to $46,500 per day, were costs that might be incurred if the entire redevelopment works were delayed. Those asserted costs consequences are of much less significance in circumstances where the evidence demonstrated that the development could still be commenced and preparatory works commenced in other areas of the redevelopment site.
In any event, and with full knowledge of those asserted costs by reason of delay to the project, Mr Jie Min, the Director of the plaintiff, has proffered an undertaking as to damages, both personal and on behalf of the plaintiff.
Finally, the Court was in a position to list the hearing of the substantive matter on an expedited basis, so that the consequences to the defendant of any delay in commencing development works in respect of the Premises will likely be greatly minimised.
Accordingly, I was persuaded that the balance of convenience lay in favour of the grant of the injunctive relief sought.
I therefore made the following orders:
(a) That the time for service of the Originating Application be abridged and the application is to be heard instanter.
(b) Upon the plaintiff and its Director, Mr Jie Min, giving the usual undertaking as to damages, the defendant is restrained from:
(i) taking steps to implement the purported termination of the Commercial Licence between the parties, dated 29 April 2014, in respect of premises located at Building No. 16 at the Australian National University in Acton; and
(ii) taking any steps adverse to the plaintiff’s possession and enjoyment of the premises until 4:00pm on 19 July 2017.
(c) That the proceedings be expedited and listed for hearing before the Associate Judge on 19 July 2017 at 10:00am.
(d) That the plaintiff file its Statement of Claim, any further affidavit evidence on which it seeks to rely and any submissions on or before 7 July 2017.
(e) That the defendant file any Defence, affidavit evidence and submissions on or before 14 July 2017.
(f) That the parties have liberty to apply to the Court for further directions on 24 hours’ notice to either party.
(g) That the costs of this application be costs in the cause.
| I certify that the preceding 31 numbered paragraphs are a true copy of the Reasons for Judgment of her Honour, Associate Justice McWilliam. Associate: Date: 6 July 2017 |
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