Nutrien AG Solutions Ltd v Pingrup Traders Pty Ltd
[2022] WASC 251
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: NUTRIEN AG SOLUTIONS LTD -v- PINGRUP TRADERS PTY LTD [2022] WASC 251
CORAM: FORRESTER J
HEARD: 3 AUGUST 2022
DELIVERED : 3 AUGUST 2022
PUBLISHED : 5 AUGUST 2022
FILE NO/S: CIV 1725 of 2022
BETWEEN: NUTRIEN AG SOLUTIONS LTD
Plaintiff
AND
PINGRUP TRADERS PTY LTD
Respondent
Catchwords:
Injunctions - Interlocutory - Agent's lien - Whether serious question to be tried - Balance of convenience
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr C M Slater |
| Respondent | : | Mr T M Retallack |
Solicitors:
| Plaintiff | : | Hall & Wilcox (Perth) |
| Respondent | : | Lawfield Legal Practice |
Cases referred to in decision:
Active Property Marketing Services (Aust) Pty Ltd t/as Alpha Realty v Joelco Pty Ltd [2007] QSC 167
Bankstown City Council v Alamdo Holdings Pty Limited [2005] HCA 46; (2005) 223 CLR 660
Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) CLR 380
Crayshaw v Homfray (1820) 4 B & Ald 50
De Rucci International Pty Ltd v Zhu & Ors [2020] NSWSC 374
Fisher v Smith (1878) 4 App Cas 1
Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298
Hill v Venning (1979) 4 ACLR 555,
Lawrence v Fen Tigers Ltd [2014] UKSC 13; [2014] AC 822
Mineralogy v Sino Iron Pty Ltd [2016] WASCA 105
Proctor v Bayley (1889) 42 Ch D 390
Re Clune; Ex parte verge v Isabella Nominees Pty Ltd (in liq) (1988) 14 ACLR 261
Sino Iron Pty Ltd v Mineralogy [No.2] [2017] WASCA 76
Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110
FORRESTER J:
Background
On 13 July 2022, the plaintiff commenced proceedings against the defendant by filing a writ indorsed with a claim seeking:
An injunction to restrain the Defendant from dealing with certain of the Plaintiff's products (Products) presently located at 8 Sanderson Street, Pingrup WA 6343 and to require delivery up of the Products without which the Plaintiff will suffer damage and the absence of which will cause damage to the Products by reason of breaches by the Defendant of the agreement entitled 'Landmark Merchandise Partner/Fertiliser Deed Pingrup' dated 2011 and signed in about 2013 (Deed).
The writ also seeks damages for breach of the deed, damages for conversion or alternatively detinue by unlawful detention, and specific restitution.
The plaintiff filed an application on 13 July 2022 for urgent interlocutory orders.
The Notice of Motion sought orders in the following terms (among others):
(1) The Defendant be restrained and an injunction is hereby granted restraining it whether by itself, its officers, members, servants, agents or otherwise, until a date to be fixed from dealing with, touching, altering, moving affecting the Nutrien property set out in Schedule A (Products) at the property described as 8 Sanderson Street Pingrup WA 6343 (Premises) including but not limited to preventing the Plaintiff or its agents from entering onto the Premises and taking possession of the Products and removing them from the Premises.
(2) By a date to be fixed defendant shall deliver up to the custody of the plaintiff or its agents the Products by immediately making the Products available for collection by the plaintiff.
It is to be noted that the combination of the interlocutory orders sought has the same effect as the final order sought in the indorsement of claim.
Preliminary - waiver of the requirement for conferral pursuant to O 59 r 9(1)
The matter came before me on 15 July 2022. At that time, I was advised that the application for an interlocutory injunction had not, as at 13 July 2022, been preceded by any conferral. The plaintiff sought a waiver pursuant to O59 r 9(2) of the Rules of the Supreme Court1971 (WA).
It appears from the evidence now before me that the parties exchanged written correspondence on 14 and 15 July 2022[1] and then during an adjournment of the hearing on 15 July 2022 there was further oral conferral. There has also been conferral since that hearing.
[1] Annexed to the affidavit of Caleb Jonathon Simmons sworn on 22 July 2022 at CJS-1 and CJS-2.
Accordingly, I am satisfied that that the parties have now conferred and a waiver is no longer required.
The evidence and factual dispute
The plaintiff relied on the affidavit of Justin Ryan Lynn affirmed on 13 July 2022, the supplementary affidavit of Justin Ryan Lynn affirmed on 27 July 2022, the affidavit of Stacey Therese Martinez sworn on 28 July 2022 and the affidavit of David Allan Rogers affirmed on 2 August 2022.
The respondent relied upon the affidavit of Caleb Jonathon Simmons sworn on 22 July 2022 and the affidavit of Timothy Dale Borgward sworn on 25 July 2022.
A schedule has also been filed setting out the goods held by the defendant which are the subject of the application.
The background facts can be stated as follows. The plaintiff, Nutrien Ag Solutions Limited ('Nutrien'), supplies specialised products for the agricultural industry to local farmers. It does this by way of supplying the products to corporate stores, which are owned and staffed by Nutrien employees and affiliate stores, which are owned by independent traders who enter into an agreement with Nutrien to supply Nutrien products to farmers.[2]
[2] Affidavit of Justin Ryan Lynn affirmed 13 July 2022 [14] - [15].
At all relevant times prior to 2 March 2020, Nutrien was called Landmark Operations Limited ('Landmark').[3]
[3] Affidavit of Justin Ryan Lynn affirmed 13 July 2022 [6].
Pingrup Traders Pty Ltd ('Pingrup Traders') is a trading company which has premises in Pingrup, a town approximately 4 hours' drive south‑east of Perth. The directors of Pingrup are Timothy Borgward and Taryn Borgward.[4]
[4] Affidavit of Justin Ryan Lynn affirmed 13 July 2022 [9] - [10], JRL-3, JRL-4.
On 14 February 2013, the Borgwards, acting on behalf of Pingrup Traders signed a document entitled 'Landmark Merchandise Partner/Fertiliser Deed Pingrup' with Landmark ('the Deed').[5]
[5] Affidavit of Justin Ryan Lynn affirmed 13 July 2022 [11] - [12], JRL-7.
Unfortunately, a copy of the signed Deed was not able to be produced by Nutrien (an unsigned copy of the Deed was annexed to the affidavit of Mr Lynn), but, subject to one item, it does not seem to be in dispute that it was signed by both parties.
The disputed item is that Mr Borgward claims that the Deed he signed contained a clause which entitled him to agronomy payments of $5,000 per quarter.[6] He has produced a 2019 invoice issued by Landmark which includes a reference to such a payment.[7] In submissions I was informed he does not have a copy of that Deed.
[6] Affidavit of Timothy Dale Borgward sworn 25 July 2022 [7].
[7] Affidavit of Timothy Dale Borgward sworn 25 July 2022, TDB-1.
Nutrien has adduced evidence indicating that, while payments were once made regarding Mr Borgward's agronomy expertise, those payments were to cease as at September 2011, and Mr Borgward was advised of this.[8]
[8] Supplementary Affidavit of Justin Ryan Lynn affirmed 27 July 2022, JRL-19.
The term of the Deed expired 5 years after 1 November 2011, but a Holding Over clause provided that, with the permission of Landmark, and without other documentation being entered into, the business would continue to be conducted on a holding over basis determinable by Landmark or Pingrup Traders giving not less than three months' notice in writing to the other but otherwise on the terms set out in the Deed.[9]
[9] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-6 Schedule 1, Item 4, clause 3.2.
In November 2021, Nutrien sought to negotiate a new affiliate agreement with Pingrup Traders.[10]
[10] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-8.
By a letter which was undated but transmitted by email by Pingrup Traders to Nutrien dated 7 April 2022, Pingrup Traders sought to raise several disputes with Nutrien. Pingrup Traders claimed that Nutrien owed it $374,744 plus 7% interest. In that letter, Pingrup Traders acknowledged they were subject to what they called the '2011 agreement' which appears to be a reference to the Deed.[11]
[11] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-9.
On 12 May 2022, Pingrup Traders wrote to Nutrien by email indicating that it would not sign the new agreement and attaching an undated letter setting out the concerns they had with the new agreement being proposed and providing further information as to the basis for the claim from Nutrien.[12]
[12] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-10.
On 9 June 2022, Pingrup Traders wrote to Nutrien by email giving 3 months' notice of their intention to terminate the Deed.[13] There may well have been correspondence between 12 May 2022 and 9 June 2022 but, if there was, it has not been put before me.
[13] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-11.
On 10 June 2022, Nutrien acknowledged receipt of the email and the termination of the Deed and indicated that a team member would contact them to discuss 'the orderly termination of the relationship, transfer of assets and associated reconciliations and accounting, and requisitioning the stock to meet customer needs.'[14]
[14] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-12.
On 28 June 2022, Nutrien wrote to Pingrup Traders[15] asserting that it had come to Nutrien's attention that Pingrup Traders had been emailing sensitive and confidential Nutrien information outside of the Nutrien email network.[16] Nutrien asserted this was a material breach of the Deed and gave Pingrup Traders 7 days' notice of the steps it required be taken in order to remedy the breach. Failure to do so would, Nutrien asserted, result in the termination of the Deed without further notice, from midnight on 5 July 2022.[17]
[15] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-13.
[16] See also the Supplementary Affidavit of Justin Ryan Lynn affirmed 27 July 2022, JRL-20.
[17] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-13.
On 6 July 2022, Mr Lynn, acting on behalf of Nutrien, attended Pingrup Traders to retrieve the Nutrien stock which was being held at Pingrup Trader's premises for sale. Timothy Borgward handed the agent a letter dated 6 July 2022 (which was also emailed to Nutrien) asserting an Agent's lien over the stock and refusing to deliver up any of the stock unless and until Nutrien paid Pingrup Traders the sum of $681,008.18.[18]
[18] Affidavit of Justin Ryan Lynn affirmed 13 July 2022 [37] - [41], JRL14.
In the letter, Pingrup Traders claimed that the breach notice purportedly issued by Nutrien dated 28 June 2022 was defective because it did not specify the alleged breach as required by the Deed, and that Nutrien could not terminate the agreement without giving further written notice after Pingrup Traders had failed to remedy the breach within 7 days. Pingrup Traders claimed that Nutrien had already decided to terminate the agreement before 5 July 2022 and was not prepared to follow the Deed. As such, Pingrup Traders claimed Nutrien had repudiated the Deed and Pingrup Traders purported itself to terminate the Deed effective immediately. It acknowledged that clauses with continuing obligations, such as clauses 13, 16 and 17, continued to operate.
Mr Borgward claims that on 6 July 2022, when he spoke with Mr Lynn, Mr Lynn advised him that Pingrup Traders would be paid their commissions for June as normal. However, that has not occurred.[19] Mr Lynn says that he told Mr Borgward that this was on the basis that the property could be collected amicably.[20]
[19] Affidavit of Timothy Dale Borgward sworn 25 July 2022 [3].
[20] Supplementary affidavit of Justin Ryan Lynn affirmed 27 July 2022 [25].
Pingrup Traders did release some stock to Nutrien on 6 July 2022, which Nutrien says was valued at $93,812.79.[21] Nutrien says that on that date a delivery of Nutrien goods was made to Pingrup Traders, valued at $10,317.37.[22]
[21] Supplementary affidavit of Justin Ryan Lynn affirmed 27 July 2022, JRL 22, see also affidavit of Timothy Dale Borgward sworn 25 July 2022 [5].
[22] Agreed Schedule (Supplementary affidavit of Justin Ryan Lynn affirmed on 27 July 2022 [22] records this figure as $10,188.31.
On 6 July 2022, Nutrien replied to Pingrup Traders by email refuting the claim of an Agent's lien and referring to the provision of the Deed requiring Pingrup Traders to 'immediately deliver to Landmark…all Landmark property in your possession and control'.[23]
[23] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-15.
Mr Borgward claims that Nutrien 'refused to mediate' after receiving the 7 April 2022 notice from Pingrup Traders and that it did not offer to do so until 11 July 2022.[24] No documentary evidence of this was adduced.
[24] Affidavit of Timothy Dale Borgward sworn 25 July 2022 [10].
The writ and application for an urgent interlocutory injunction were lodged on 13 July 2022.
By letter dated 14 July 2022,[25] Lawfield (the solicitors for Pingrup Traders) wrote to Hall & Willcox (the solicitors for Nutrien) repeating the claim that Nutrien's breach notice was defective, and that it had repudiated the agreement, which repudiation had been accepted by Pingrup Traders. It also informed Nutrien that Pingrup Traders was claiming, over all stock in its possession:
(a)a general lien;
(b)in the alternative, a particular lien for expenses incurred in warehousing and attempting to sell the property;
(c)in addition, a warehouseman's lien under the Warehousemen's Lien Act 1958 (Vic). A Notice of Lien dated 14 April 2022 was attached.
[25] Affidavit of Caleb Jonathon Simmons sworn 22 July 2022, CJS-1.
Nutrien's claim that the Deed was inconsistent with a lien was refuted on the basis that the Deed requires 'Landmark property' to be returned on termination of the agreement, but that the definition of 'Landmark Property' does not include stock.
Pingrup Trader's' claim of $681,008.18 was particularised, as at 14 July 2022, as follows:
1.(a) $200,000 in agronomy service payments;
(b) $147,280 in inventory bonus commission payments;
(c) $27,494 in audit compliance commission payments; and
(d) $26,234.18 in interest for the above claims.
2. Unpaid commissions of at least $60,000 under the agreement for the month of June 2022 as stated to our client by Justin Lynn on 5 July 2022;
3. Anticipated commissions under the Agreement from 1 July 2022 to 8 September 2022, estimated to be $120,000;
4. Anticipated trailing commissions up to 8 September 2022, estimated to be $120,000; and
5. Legal costs.[26]
[26] Affidavit of Caleb Jonathon Simmons worn 22 July 2022, CJS-1.
On 15 July 2022, the parties appeared before me. It was conceded by Pingrup Traders that the value of the stock being held by it was worth considerably more than the amount claimed by it as a debt. In the circumstances, I made an order that Pingrup immediately deliver up a number of items said to be perishable to Nutrien. I restrained Pingrup Traders from dealing with the property and made programming orders for a hearing to be held on 3 August 2022.
The perishable property was delivered up as ordered and the amount collected was valued at $38,339.74.[27]
[27] Supplementary affidavit of Justin Ryan Lynn affirmed 27 July 2022 [21].
Nutrien claims that it has identified a number of issues with the accounts between Nutrien and Pingrup Traders, including that Pingrup Traders has failed to deposit some funds as contractually required and may have benefited from an overpayment. A full reconciliation is required in order to establish the amount claimed by Nutrien against Pingrup Traders.
Nutrien claims that the value of the disputed property held by Pingrup Traders is $1,361,299.42.[28] Of this, $191,021.40 is consignment stock.[29] Mr Borgward attests to the fact that all of this stock has now been transferred to the name of Pingrup Traders.[30]
[28] Supplementary affidavit of Justin Ryan Lynn affirmed 27 July 2022 [24].
[29] Supplementary affidavit of Justin Ryan Lynn affirmed 27 July 2022 [17].
[30] Affidavit of Timothy Dale Borgward worn 25 July 2022 [11].
Pingrup Traders claims an agent's lien over the Landmark Property, claiming that Nutrien owes Pingrup Traders $681,008.18.[31]
[31] Defendant's submissions [17].
Nutrien has produced evidence that the demand for particular products can change rapidly depending on agricultural conditions, customer demand and supply chain issues[32] and says that prices of various products can also change depending on market conditions and discounts. There is evidence before me that fungicides and herbicides are likely to be in particularly high demand at present due to recent rains.[33]
Relevant Terms of the Deed[34]
[32] Affidavit of David Allan Rogers affirmed 2 August 2022.
[33] Affidavit of David Allan Rogers affirmed 2 August 2022 [15].
[34] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-6.
Clause 12 of chapter 1 of the Deed is entitled 'Immediate Termination of the Deed'. Subclause 12.2 provides that if Pingrup Traders:
…default on your obligation to comply with any of your other obligations under the Deed…and fail to remedy any such default within seven (7) days…after written notice of it is given to you by Landmark advising…that Landmark intends to terminate this Deed because of the default…and what Landmark requires to be done to remedy the default, Landmark may at its option immediately terminate…this Deed…by giving you written notice of termination.
The letter dated 28 June 2022 from Nutrien to Pingrup Traders purported to be pursuant to subclause 12.2 of the Deed.[35]
[35] Affidavit of Justin Ryan Lynn affirmed 13 July 2022, JRL-13.
Clause 13 of chapter 1 of the Deed deals with the Consequences of Termination. Subclause 13.2 stated that, upon termination of the Deed, Pingrup Traders will:
…immediately deliver to Landmark (or otherwise dispose, remove or cover up or paint over as directed in writing by Landmark) all Landmark Property in your possession or control.
'Landmark Property' is not defined, although there is a provision in clause 1 which states:
'Landmark Property' includes all client lists, business names, logos, services, marks, designs, copyrights, specifications, manuals, computer equipment (including software), promotion, organisation and management instructions and processes which are or have been created, supplied or used by Landmark or are associated with Landmark.'
Clause 19.1 of chapter 1 entitles Landmark to set-off any amounts owed to Pingrup Traders from any amounts which may be payable.
Chapter 3, headed 'Merchandise Partner' has a heading 'Background' which reads:
A. Landmark is a supplier of rural merchandise across mainland Australia through its existing network of branches, members, agents, franchisees and wholesalers.
B. You carry on the business of retailing rural merchandise.
C. Landmark has agreed to appoint you and you have agreed to act as a consignment agent for the sale of a range of rural merchandise products as determined by agreement between Landmark and you from time to time ("the Products").
Under clause 4.1(k) of chapter 3 of the Deed, Pingrup Traders agreed to provide Landmark and its employees and agents unrestricted access to the stock and records and to the premises in which they are held during normal business hours or as otherwise reasonably requested.
Clause 5 of chapter 3 of the Deed states that 'Ownership of the Products will at all times remain with Landmark until sold to customers.'
Relevant Legal Principles
Injunctions
A plaintiff cannot establish an equity to an injunction simply because the plaintiff's legal rights are breached or in jeopardy.[36]
[36] Sino Iron Pty Ltd v Mineralogy [No.2] [2017] WASCA 76 [127] citing Proctor v Bayley (1889) 42 Ch D 390, 398; Lawrence v Fen Tigers Ltd [2014] UKSC 13; [2014] AC 822 [159] - [160]; Meagher, Gummow & Lehane’s, Equity: Doctrines and Remedies (5th ed, 2014) [21 - 040].
The common law remedy available to the plaintiff in this case is damages for breach of contract.[37] Accordingly, in equity's auxiliary jurisdiction, injunctive relief would ordinarily only be ordered if damages were not ascertainable or otherwise not an adequate remedy.[38]
[37] Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298 [2].
[38]Bankstown City Council v Alamdo Holdings Pty Limited [2005] HCA 46; (2005) 223 CLR 660 [11].
When equity's jurisdiction is involved in an application for an interlocutory injunction, it is necessary to identify the legal or equitable rights which are said to be determined at trial and in respect of which final relief is sought. The power to grant an interlocutory injunction is not to be exercised by reference to unconstrained notions of what appears to be just; it must be exercised by reference to the rights claimed by the applicant in the proceedings.[39]
[39] Sino Iron Pty Ltd v Mineralogy [No.2] [130] citing Cardile v LED Builders Pty Ltd[1999] HCA 18; (1999) CLR 380 [32].
The principles applicable to interlocutory injunctions are well established. They were summarised by Beech J in Twinside Pty Ltd v Venetian Nominees Pty Ltd as:
(a) whether there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be entitled to relief;
(b)whether the plaintiff will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and
(c) whether the balance of convenience favours the granting of an injunction. [40]
[40] Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 [7]-[12].
Where a party is seeking in effect what is a mandatory injunction, no more stringent or different legal test is to be applied than that which is applicable in seeking a prohibitory injunction.[41]
Liens
[41] Mineralogy v Sino Iron Pty Ltd[2016] WASCA 105 [76] - [85] (Newnes JA; McLure P and Corboy J agreed).
Every agent has a lien on the goods and chattels belonging to his or her principal in respect of all claims against the principal arising out of the agent's employment, whether for remuneration earned or for expenses or liabilities incurred, except where the right of lien is inconsistent with the contract between the parties, or is otherwise ousted by statute.[42]
[42]Re Clune; Ex parte verge v Isabella Nominees Pty Ltd (in liq) (1988) 14 ACLR 261, 226 (French J); Active Property Marketing Services (Aust) Pty Ltd t/as Alpha Realty v Joelco Pty Ltd [2007] QSC 167; (2007) Q ConvR 54-673 [22]-[27] (Wilson J); De Rucci International Pty Ltd v Zhu & Ors [2020] NSWSC 374 [58]-[59].
An agent's lien, whether particular, general or equitable, survives the termination of the agency or other revocation of the agent's authority.[43] However, the lien requires that payment be due and has not been made.[44]
[43] Hill v Venning (1979) 4 ACLR 555, 557-558 (Connolly J).
[44] Crayshaw v Homfray (1820) 4 B & Ald 50; Fisher v Smith (1878) 4 App Cas 1, 4.
Factual issues
In the present case, the application for an interlocutory injunction is based on a claim of breach of contract on the part of Pingrup Traders. Pingrup Traders is claimed to have failed to deliver up 'Landmark Property' being the agricultural products presently held by it and which were delivered to it for sale prior to the termination of the Deed, when that was a requirement of subclause 13.2 of the Deed.
The evidence available to me suggests that both parties agree that, at all relevant times, they were bound by the terms of the Deed. Further, the Deed was terminated either by Nutrien as at midnight on 5 July 2022 or by Pingrup Traders at 7.39am on 6 July 2022. The timing of the termination is not critical for present purposes.[45]
[45] There may later be an issue as to who had the right to terminate the Deed and when that termination was effective, when considering the extent of Pingrup Trader’s claim, as it purports to claim anticipated commissions and trailing commissions to be paid up until 8 September 2022.
Pingrup Traders claims an agent's lien over the Landmark Property, claiming that Nutrien owes Pingrup Traders $681,008.18. [46]
[46] Defendant's submissions [17].
The evidence before me as to the amount of the debt claimed by Pingrup is scant. The claim for agronomy costs, being the largest claim of $200,000, is heavily disputed. Pingrup Traders relies on a claim that the Deed contained an additional clause but did not supply documentary evidence of that. It also relies on a notation at the base of a 2019 invoice generated by Landmark. Nutrien, in turn, relies on an email from 2010 as to the cessation of those payments. There are 'anticipated commissions' and 'anticipated trailing commissions' claimed in the sum of $220,000 (which by their nature do not appear to be presently owing), as well as other commission payments in the sum of approximately $174,000. Mr Borgward in his affidavit has briefly set out the basis of those claims,[47] but given the lack of documentation supplied in relation to them, I have little ability to properly evaluate their legitimacy.
[47] Affidavit of Timothy Dale Borgward [8] - [9].
The total product value asserted to be held by Pingrup Traders is $1,361,299.42. This is markedly lower than the claimed $2.8m value asserted by Nutrien in its letter to Pingrup Traders dated 6 July 2022, but effectively double that claimed by Pingrup Traders. However, I deduct from that the consignment stock which now appears to be in the name of Pingrup Traders. While there may be a set-off claim in relation to that stock, Nutrien does not seek its return. The amount held by Pingrup Traders is thus valued at $1,170,278.02.
Nutrien has given an undertaking relevant to determination of its application for interlocutory relief.
Serious question to be tried
While Pingrup Traders claims that there is no obligation to return Landmark stock to Nutrien upon termination of the Deed, on the basis that stock is not referred to in the definition of the words 'Landmark Property', that term is not exclusively defined in the Deed. As outlined above, the words are defined in chapter 1 to include certain items.
However, the words 'the Products' are used to refer to the rural products to be supplied by Landmark and sold by Pingrup Traders. Clause 5 chapter 3 of the Deed clearly states that Landmark remains the owner of the Products until sold to customers.
As such, there is an arguable case that the stock is Landmark Property and cl 13.2(d) applies to require its immediate return.
Accordingly, in my view, having regard to the provisions of the Deed, there is a serious question to be tried as to whether Pingrup Traders is able to claim a lien in this case, such a claim being inconsistent with the contract between the parties. There is also a serious question to be tried about the extent of the debt able to be claimed.
Whether the plaintiff will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and
Nutrien claims that an urgent interlocutory injunction is required because some of the products are in very short supply and are required by local farmers for immediate use. Some of the products are only able to be used in a certain window having regard to the agricultural cycle, and thus the access to the products is time sensitive.
Nutrien also claims that, if customers do not purchase the products at Pingrup Traders the customers are likely to buy the products from a competitor. This would damage customer relationships for Nutrien and may mean the products held by Pingrup Traders cannot be sold later because the next time they are required will be during the next crop cycle, by which time the products will be past their expiration date.
There is also one product for which no substitute is available from competitors, which Nutrien claims may affect the harvest of those farmers. This product is not identified, and the state of the evidence of this claim is that it is speculative, at best.
Nutrien asserts that the majority of the products can be supplied to other affiliates for immediate and timely sale.
There is a final volume of product which is not claimed to involve time sensitivity which is valued at approximately $466,000.
The final relief sought, and the interlocutory relief sought, is the same; restraint on the defendant to prevent it dealing with the property and return of the property to Nutrien.
As the defendant points out, there is limited evidence supporting the plaintiff's claim that it will suffer damage, other than the relatively broad statements made by Mr Lynn in his affidavit and summarised above.
Nutrien does not depose as to why damages would not be an appropriate remedy for any established breach of contract by Pingrup Traders. In submissions before me it was asserted that the nature of the damage which would result would be very difficult to quantify, involving matters of goodwill and lack of certainty as to how much custom had actually been lost. However, in my view difficulty in making an assessment does not make damages an inadequate remedy.
I do not have information regarding the respective financial positions of the parties, and neither party has expressed a concern as to the other's ability to pay damages in the event they are unsuccessful in maintaining their position at the final hearing.
In the circumstances, I am not satisfied that the plaintiff will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted.
Whether the balance of convenience favours the granting of an injunction
If I am wrong in determining that Nutrien will not suffer irreparable injury for which damages will not be adequate compensation, there remains the question of the balance of convenience.
If Nutrien does not get access to its goods, it risks reputational damage and issues with potential loss of custom. There is also no purpose in having the property lay idle in a warehouse pending resolution of this matter, when the evidence establishes that it is needed by others now.
However, if I grant the interlocutory injunction, the need to proceed to final relief would be removed. Pingrup Traders' rights as asserted by it would be extinguished, without any ability on its part to have its claim against Nutrien properly assessed according to all available evidence. Obviously, Pingrup Traders also has the right to institute proceedings for the debt, which it has not yet done. However, as the defendant submits, one purpose of asserting the lien is as a mechanism to discourage the plaintiff from delaying proper payment of debts owed.
In the absence of any other factor, I would not have been inclined to find that the balance of convenience was in favour of granting the orders sought. However, during the hearing, Nutrien offered to pay the sum of $450,000 into court as a means to secure the release of all of the property. While that amount is insufficient to cover the entirety of the defendant's claim, in my view it was a sufficient sum to sway the balance of convenience in favour of the plaintiff. I make that finding on the basis that:
(1) there is a significant issue as to whether $220,000 claimed by the defendant could be an amount presently owed to the defendant, and thus can properly form the basis of the claimed lien;
(2) The plaintiff has also provided an undertaking in the usual terms to pay damages;
(3) the release of the property prevents damage being sustained by the plaintiff while leaving the defendant with a substantial sum operating in the same way as a lien.
The defendant did not consent to the orders. It was content with the sum of $450,000 paid into court, but only on the basis that it receive an immediate payment of $120,000 from that sum, asserting that sum to be immediately owing. However, I was not satisfied that was appropriate, given the evidence before me that Nutrien intends to seek to set-off claims against the amount presently owing.
Accordingly, orders will be made that, subject to the payment into court of cleared funds in the amount of $450,000, the property be delivered up to the plaintiff and that, until such time as that occurs, the defendant be restrained from dealing with the property.
I order that the costs of this application are to be in the cause.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AT
Associate to the Judge
8 AUGUST 2022
2
8
0