Orko Fertilizers Pty Ltd v McClymont

[2020] NSWSC 379

Supreme Court

New South Wales

Medium Neutral Citation:

ORKO Fertilizers Pty Ltd v McClymont [2020] NSWSC 379

Hearing dates:

On the papers

Decision date:

08 April 2020

Jurisdiction:

Equity - Commercial List

Before:

Ball J

Decision:

(1)   Order that the time for service of the Summons, Commercial List Statement, and the unsworn affidavit of Andrew Christopher be abridged to 12.00 noon on 9 April 2020.

 

(2)   Order that service of the Summons, Commercial List Statement and Mr Christopher’s affidavit be effected: (a) electronically, by email: (i) to the first defendant for and on behalf of himself and as director of the second defendant at [email protected]; (ii) copied to David Reid at [email protected]; and (b) in hard copy, sent by post within 2 business days after the date of this order and addressed to “Frank McClymont, xxxx QLD xxxx”.

 

(3)   Direct that the Summons be made returnable at 10.00 am on Wednesday, 15 April 2020 before the Commercial List Duty Judge.

 

(4)   Upon the plaintiffs giving the usual undertaking as to damages, order that until 5.00 pm on Wednesday, 15 April 2020, or further order of the Court, and subject to order (5), the defendants be restrained, whether by themselves or their servants and agents, from:

 

(a)   directly or indirectly communicating with any person in relation to the business, operations, management or trading activities of the first plaintiff;

 

(b)   engaging in any oral, written or electronic communication with the plaintiffs and their employees including without limitation the following individuals (i) John Kinghorn; (ii) Tom Boss; (iii) Marty Kim; (iv) Melissa Boyd; (v) Nigel Phelan; (vi) Kira Ang; and (vii) Greg Jones;

 

(c)   directly or indirectly, expressly or impliedly, disparaging, denigrating, criticising or permitting or authorising the disparagement of the plaintiffs and any of their employees or otherwise making, permitting or authorising the making of any statement in any way relating to or connected with the subject matter of the Deed of Settlement and Release dated 20 December 2019 and made between the plaintiffs and the defendants which is calculated or is reasonably likely to cause damage to any of the plaintiffs or their employees.

 

(5)   Order (4) does not apply in respect of any communications or statements which the defendants may choose to make or be asked to make: (a) to their legal advisers; (b) as required by law; or (c) to the police or any government authority (including without limitation any workplace safety authority in Queensland or elsewhere in Australia).

 (6)   Direct that the plaintiffs at the time they serve the Summons, serve on the defendants a copy of their submissions dated 8 April 2020 together with a copy of this judgment.

Catchwords:

INTERLOCUTORY INJUNCTION - Where defendants in breach of Deed of Settlement and Release -Where defendants agreed not to disparage or communicate with plaintiffs or persons connected to them - No issues of principle.

Legislation Cited:

Corporations Act 2001 (Cth)

Category:

Procedural and other rulings

Parties:

ORKO Fertilizers Pty Ltd (First Plaintiff)
Capri Trading Pty Ltd (Second Plaintiff)
HB Technology Pty Ltd (Third Plaintiff)
Maidenwell Diatomite Pty Ltd (Fourth Plaintiff)
John Vern McGuigan (Fifth Plaintiff)
James William McGuigan (Sixth Plaintiff)
Geoffrey Andrew Kinghorn (Seventh Plaintiff)
Frank McClymont (First Defendant)
Mollenry Pty Ltd (Second Defendant)

Representation:

Counsel:
C Conde (Plaintiffs)

  Solicitors:
Webb Henderson (Plaintiffs)

File Number(s):

2020/106465

Publication restriction:

None

Judgment

1. By a Summons filed on 7 April 2020, the plaintiffs relevantly seek an ex parte interlocutory injunction restraining the defendants from engaging in conduct said to be in breach of a Deed of Settlement and Release dated 20 December 2019 (the Deed) between the parties.

2. The Deed was entered into in relation to certain communications that the first defendant, Mr McClymont, had sent to customers of the first plaintiff, ORKO Fertilizers Pty Ltd (referred to in the Deed as “QLD Organics”) and to other persons. It contains a number of provisions by which the defendants agree not to disparage or communicate with the plaintiffs and persons connected to them. In particular:

1. By cl 6.1(c) the defendants covenant “to the maximum extent permitted at law, … not to directly or indirectly communicate with any person in relation to, without limitation, the business, operations, management or trading activities of QLD Organics”;

2. Clause 8.3 provides that “From the date of this Deed, subject to the terms of this Deed, [the Defendants] must not engage in any verbal, written or electronic communication with the Counterparties and their Related Persons, Customers and Suppliers, including but not limited to the following individuals: (a) John Kinghorn; (b) Tom Boss; (c) Marty Kim; (d) Melissa Boyd; (e) Nigel Phelan; (f) Kira Ang; and (g) Greg Jones. “Counterparties” is defined to be the Plaintiffs and “Related Persons” is defined to mean Related Bodies Corporate (as defined in s 50 of the Corporations Act 2001 (Cth)) and “all current and former officers, agents, servants, employees, third party contractors and sub-contractors of that party”. “Customer” is defined to mean “any person, firm or company who has been or is at any time a buyer of goods or services from QLD Organics and includes Prospective Customers”. “Prospective Customers” is defined to mean “any person, firm or company who has been engaged in negotiations with QLD Organics with a view to becoming a Customer of QLD Organics”.

3. Clause 12.1 provides that “Subject to law and the rights of the party in connection with the enforcement of this Deed, [the Defendants] or any of their Related Persons must not … (a) directly or indirectly, expressly or impliedly disparage, denigrate, criticise or permit or authorise the disparagement of the Counterparties and any of their Related Persons; or (b) otherwise make, permit or authorise the making of any statement in any way relating to or connected with the subject matter of this Deed which is calculated or is reasonably likely to cause damage to any of the other parties and any of their Related Persons (including damage to their respective reputations)”.

3. In January 2020, the first defendant sent a number of offensive and harassing communications to and about the plaintiffs and their staff (including at least some of the specific people identified in cl 8.3 of the Deed), including communications which are derogatory in relation to matters of race, same-sex attraction and the suffering of cancer. The first defendant has also sent communications which imply that physical violence is an appropriate means of addressing wrongs that the first defendant apparently claims have been done to him. It is not necessary to set out the contents of the relevant communications in this judgment.

4. It appears that the plaintiffs attempted to arrange a without prejudice meeting in late January 2020 with the first defendant to try to resolve his grievances to no avail and in early March 2020 the first defendant sent another series of derogatory communications to and about the plaintiffs.

5. On 16 March 2020, the plaintiffs’ solicitor, Mr Christopher, wrote to the defendants alleging breaches of the Deed and sought a written undertaking by 19 March 2020 that the defendants would abide by the Deed and stated that, in the absence of an undertaking, the plaintiffs would commence court proceedings.

6. That letter provoked a further flurry of correspondence from the first defendant. The response to Mr Christopher’s letter is illustrative. In it, the first defendant said, among other things:

These arsehole have committed a crime. That letter holds zero fucking sway in any way shape or form. Unlawfully communicating with police go fuck of yourself you ignaramous [sic], contract law has not [sic] place when the crime of murder or manslaughter has been committed.

I sent letters and made mention (I taped the board meetins [sic]) at board meeting about valid safety concerns. Which both of these rich, arrogant and devious pricks ignored. I have old mate McGuigan on tape and print "we are not Wesfarmers" in response to my safety concerns.

Tell those neligent [sic] murdering bastards to shut the fuck up and spend some time on the safety of their staff. They killed a guy last week to make a quid. Let me just say, uhhhmmm stop being a pair or crusty homesexual [sic] fannies and pay that guys wife for your negligence. $0.5 million. I wanna see the agreement and receipt.

The reference to the commission of a crime and to having “killed a guy last week” is a reference to an allegation made by the first defendant that the plaintiffs have breached workplace safety legislation.

7. In my opinion, the plaintiffs have a good arguable case that the first defendant has breached the Deed in sending the communications he has. In my opinion, the balance of convenience also favours granting an ex parte interlocutory injunction. As I have said, it appears that the plaintiffs have a strong case that the first defendant is in breach of the Deed. It is apparent from his correspondence in response to Mr Christopher’s letter dated 16 March 2020 that, unless restrained, the first defendant is likely to continue the conduct he has engaged in. There is no apparent reason why the plaintiffs should not be entitled to a final injunction to give effect to express negative covenants in the Deed. It seems plain that damages would not be an adequate remedy.

8. The form of the injunction sought in the Summons is, in some respects, too broad. It largely mirrors the obligations in the Deed. However, it is not apparent how the defendants could comply with some of those obligations. For example, it is not apparent how the defendants would know who were prospective customers of the plaintiffs. The orders that I propose to make take account of those considerations.

9. The plaintiffs accept that the injunction that they seek cannot restrain the defendants from communicating with their lawyers or the police or other governmental authorities responsible for administering the law and workplace safety legislation in particular. The orders that I propose to make also take account of that concession.

10. The orders of the Court therefore are:

1. Order that the time for service of the Summons, Commercial List Statement, and the unsworn affidavit of Andrew Christopher be abridged to 12.00 noon on 9 April 2020.

2. Order that service of the Summons, Commercial List Statement and Mr Christopher’s affidavit be effected: (a) electronically, by email: (i) to the first defendant for and on behalf of himself and as director of the second defendant at [email protected]; (ii) copied to David Reid at [email protected]; and (b) in hard copy, sent by post within 2 business days after the date of this order and addressed to “Frank McClymont, xxxxxx QLD xxxxxx”.

3. Direct that the Summons be made returnable at 10.00 am on Wednesday, 15 April 2020 before the Commercial List Duty Judge.

4. Upon the plaintiffs giving the usual undertaking as to damages, order that until 5.00 pm on Wednesday, 15 April 2020, or further order of the Court, and subject to order (5), the defendants be restrained, whether by themselves or their servants and agents, from:

1. directly or indirectly communicating with any person in relation to the business, operations, management or trading activities of the first plaintiff;

2. engaging in any oral, written or electronic communication with the plaintiffs and their employees including without limitation the following individuals (i) John Kinghorn; (ii) Tom Boss; (iii) Marty Kim; (iv) Melissa Boyd; (v) Nigel Phelan; (vi) Kira Ang; and (vii) Greg Jones;

3. directly or indirectly, expressly or impliedly, disparaging, denigrating, criticising or permitting or authorising the disparagement of the plaintiffs and any of their employees or otherwise making, permitting or authorising the making of any statement in any way relating to or connected with the subject matter of the Deed of Settlement and Release dated 20 December 2019 and made between the plaintiffs and the defendants which is calculated or is reasonably likely to cause damage to any of the plaintiffs or their employees.

5. Order (4) does not apply in respect of any communications or statements which the defendants may choose to make or be asked to make: (a) to their legal advisers; (b) as required by law; or (c) to the police or any government authority (including without limitation any workplace safety authority in Queensland or elsewhere in Australia).

6. Direct that the plaintiffs at the time they serve the Summons, serve on the defendants a copy of their submissions dated 8 April 2020 together with a copy of this judgment.

7. Direct that these orders may be taken out forthwith.

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Decision last updated: 09 April 2020