Orora Ltd v Lindsay Australia Ltd - [2015] VSC 197

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2015 01386

ORORA LIMITED	Applicant
v
LINDSAY AUSTRALIA LIMITED	Respondent

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JUDGE:	RIORDAN J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	31 MARCH 2015
DATE OF JUDGMENT:	1 APRIL 2015
CASE MAY BE CITED AS:	ORORA LTD v LINDSAY AUSTRALIA LTD
MEDIUM NEUTRAL CITATION:	[2015] VSC 197

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INJUNCTION — Interlocutory injunction application to compel performance of distribution agreement — Serious question to be tried — Balance of convenience — Inadequacy of damages — Whether mandatory or prohibitive — Interim injunction granted.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr S Horgan QC with Ms E Murphy	Minter Ellison
For the Respondent	Mr D Fraser QC with Mr B Mason	McCullough Robertson Lawyers

HIS HONOUR:

The applicant in this proceeding seeks interim relief in substance to compel continued performance of a distribution agreement, which it entered into with the respondent on 10 July 2009 (the ‘2009 Distribution Agreement’), together with certain discovery orders. The 2009 Distribution Agreement includes an arbitration agreement, but the abovementioned relief is sought pursuant to s 17J of the Commercial Arbitration Act 2011 (Vic) which provides as follows:

(1)The Court has the same power of issuing an interim measure in relation to arbitration proceedings as it has in relation to proceedings in courts.
(2)The Court is to exercise the power in accordance with its own procedures taking into account the specific features of a domestic commercial arbitration.

For the purpose of this interim application, the parties agree that the Court has power to deal with an urgent application for an injunction and other relief pursuant to the specific provision to that effect in cl 28.5 of the 2009 Distribution Agreement.

The claims

The applicant is a fibreglass and beverage packaging manufacturer and distributor. The respondent is a transport logistics and rural supply company. The respondent has distributed the applicant's corrugated fibreboard packaging products to customers through its rural stores division. Those customers are predominantly fruit and vegetable growers who use the respondent's transportation services, including the provision of packaging products, which are provided by the applicant.

The present dispute concerns the 2009 Distribution Agreement which commenced on 1 July 2009 and, in particular, the applicant's supply of packaging material from 1 January 2015 directly to a grower, Simpson Farms Pty Ltd (‘Simpson Farms’), which had previously been supplied by the respondent under the 2009 Distribution Agreement. The respondent claims that:

(a) such supply by the applicant is in breach of cl 10.3 of the 2009 Distribution Agreement;

(b) the breach, among other conduct, amounted to a repudiation of the 2009 Distribution Agreement; and

(c) it has accepted the applicant’s repudiation.

The applicant claims that the respondent wrongfully terminated the 2009 Distribution Agreement for alleged repudiation. It does not accept that the 2009 Distribution Agreement is at an end and seeks performance of it.

Summary of the facts

On 24 July 2002, the applicant (then Amcor), the respondent and P & H Supplies Pty…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] VSC 197
Decision Date: 1 APRIL 2015

CaseChat Overview and Summary

In the matter of Orora Limited versus Lindsay Australia Limited, the Federal Court of Australia was called upon to determine whether Orora was entitled to an interlocutory injunction compelling the performance of a distribution agreement. The dispute centred around whether Lindsay had failed to fulfil its obligations under the agreement, which related to the distribution of building products. Orora sought an injunction to enforce the terms of the agreement, arguing that damages would be inadequate to compensate for the loss of distribution rights.

The primary legal issue before the court was whether an interlocutory injunction should be granted to compel the performance of the distribution agreement. This required consideration of whether Orora had established a serious question to be tried, whether the balance of convenience favoured granting the injunction, and whether damages would be an inadequate remedy. The court also had to determine whether the injunction should be mandatory or prohibitive in nature.

In delivering its decision, the court found that Orora had established a serious question to be tried regarding Lindsay's alleged breaches of the distribution agreement. The court further found that the balance of convenience weighed in favour of Orora, as the loss of distribution rights would cause significant harm that could not be adequately compensated by damages alone. The court concluded that an interim injunction was warranted and, considering the nature of the agreement, a mandatory injunction was appropriate to compel performance. Accordingly, the court granted the injunction as sought by Orora.

The final orders of the court included the granting of an interim mandatory injunction requiring Lindsay to comply with the terms of the distribution agreement. This decision underscored the importance of enforcing contractual obligations in commercial relationships, particularly where specific performance is necessary to prevent irreparable harm.

Orders