Perdaman Chemicals and Fertilisers Pty Ltd v Griffin Coal Mining Company Pty Ltd [No 3]
[2011] WASCA 203 (S)
•29 SEPTEMBER 2011
PERDAMAN CHEMICALS AND FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 3] [2011] WASCA 203 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASCA 203 (S) | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:94/2011 | 19 SEPTEMBER 2011 & ON THE PAPERS | |
| Coram: | MARTIN CJ NEWNES JA MURPHY JA | 29/09/11 | |
| 12/12/11 | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Appellant's application regarding final relief refused Costs in the cause | ||
| B | |||
| PDF Version |
| Parties: | PERDAMAN CHEMICALS AND FERTILISERS PTY LTD THE GRIFFIN COAL MINING COMPANY PTY LTD |
Catchwords: | Costs and final orders Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 66 r 1 |
Case References: | O'Keefe Nominees Pty Ltd v BP Australia [No 2] (1995) 55 FCR 591 Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188 Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 3] [2011] WASCA 203 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : PERDAMAN CHEMICALS AND FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [No 3] [2011] WASCA 203 (S) CORAM : MARTIN CJ
- NEWNES JA
MURPHY JA
DECISION : 12 DECEMBER 2011 FILE NO/S : CACV 94 of 2011 BETWEEN : PERDAMAN CHEMICALS AND FERTILISERS PTY LTD
- Appellant
AND
THE GRIFFIN COAL MINING COMPANY PTY LTD
Respondent
(Page 2)
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : BEECH J
Citation : PERDAMAN CHEMICALS & FERTILISERS PTY LTD -v- THE GRIFFIN COAL MINING COMPANY PTY LTD [2011] WASC 188
File No : CIV 1925 of 2011
Catchwords:
Costs and final orders - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1
Result:
Appellant's application regarding final relief refused
Costs in the cause
Category: B
Representation:
Counsel:
Appellant : Mr A Myers QC & Mr M L Bennett
Respondent : Mr B W Walker SC & Mr B D Luscombe
Solicitors:
Appellant : Bennett & Co
Respondent : Clifford Chance
(Page 3)
Case(s) referred to in judgment(s):
O'Keefe Nominees Pty Ltd v BP Australia [No 2] (1995) 55 FCR 591
Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188
Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 3] [2011] WASCA 203
(Page 4)
1 JUDGMENT OF THE COURT: On 29 September 2011 the court published reasons for its decision to allow an appeal from the decision of the primary judge refusing to grant an interlocutory injunction restraining the respondent, The Griffin Coal Mining Company Pty Ltd (Griffin), from entering into any charge, pledge or other security as may be required by its sole shareholder, Lanco Resources Australia Pty Ltd (Lanco Australia), or by ICICI Bank Ltd (ICICI), Singapore branch, without first giving ten prior business days notice in writing to the plaintiff, Perdaman Chemicals and Fertilisers Pty Ltd (Perdaman): Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [No 3] [2011] WASCA 203.
2 At the time our reasons were published, there was contention between the parties as to the adequacy of an undertaking proffered by Griffin in lieu of the injunctive relief which had been sought, and in relation to the costs of the appeal. The parties agreed that those issues could be determined by the court on the papers, and a timetable was established for the exchange of written submissions dealing with those contentious issues. These are our reasons for concluding that the undertaking proffered by Griffin provides adequate protection to Perdaman, and that the costs of the appeal should be in the cause.
The adequacy of Griffin's undertaking
3 Upon publication of our reasons for upholding the appeal, Perdaman proffered written undertakings as to damages secured by the deposit of $100,000 to be held by its solicitors as security for the undertaking. Griffin proffered an undertaking that it would not enter into any charge, pledge or other security to secure obligations pursuant to the Negative Pledge Deed without first giving 10 prior business days' written notice to Perdaman, unless the security given arose in certain specified circumstances (which are not contentious).
4 Perdaman asserts that the undertaking proffered by Griffin in lieu of the injunctive relief sought by Perdaman is inadequate, essentially because it is limited to the grant of security pursuant to the Negative Pledge Deed. Perdaman submits that Griffin should be restrained from entering into any charge, pledge or other security to secure obligations under the Facility Agreement or the Negative Pledge Deed, unless Griffin proffers an undertaking to that effect.
5 The finance facility the subject of the Facility Agreement and which is secured in part by the Negative Pledge Deed is referred to briefly in our reasons at [34], and more fully in the reasons of the primary judge:
(Page 5)
- Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188 [40] - [46]. Griffin is not a party to the Facility Agreement. Lanco Australia and its sole shareholder are. The primary judge addressed the question of whether there was any obligation on the Lanco parties to the Facility Agreement to procure the grant of security by Griffin beyond that which is required by the Negative Pledge Deed. In that context he noted that 'Perdaman did not submit that the Facility Agreement required any more in this respect than what was contained in and required by the Negative Pledge Deed': reasons [197].
6 The trial judge went on to consider a submission by Perdaman to the effect that cl 2.16 of the Negative Pledge Deed created an additional obligation upon Griffin to execute a charge in favour of ICICI over and above that provided by the operation of cl 2.3 of that deed. The primary judge rejected that submission: reasons [202]. Perdaman appealed against that conclusion, repeating its submission based upon cl 2.16 of the Negative Pledge Deed and relying also upon Griffin's conduct as giving reasonable grounds for the apprehension that security might be granted in circumstances outside those referred to in cl 2.3 of the Negative Pledge Deed. No part of that ground of appeal advanced the proposition that Griffin had somehow become a party to, or subject to the obligations imposed by the Facility Agreement. In the result, it was not necessary to deal with this ground of appeal in our reasons because of our conclusion that the primary judge erred in his assessment of the prospects of Perdaman obtaining injunctive relief to restrain Griffin from granting security pursuant to the obligations imposed by the Negative Pledge Deed, and therefore is his assessment of the balance of convenience.
7 Perdaman advances a number of propositions in support of its contention that Griffin's obligation to give 10 days notice of the grant of security should extend to and include reference to the grant of security in respect of obligations arising under the Facility Agreement. Stripped to their essentials, two basic propositions are advanced.
8 First, Perdaman points to Griffin's obligation under (cl 3 of the Negative Pledge Deed to guarantee the punctual performance by each 'FA obligor' (obligor under the Facility Agreement) of the obligations under the Finance Documents, which include the Facility Agreement. However, as this guarantee is an obligation arising under the Negative Pledge Deed, it falls within the scope of the undertaking which has been proffered by Griffin.
(Page 6)
9 Second, Griffin asserts that upon execution of the Negative Pledge Deed, Griffin became an 'obligor' pursuant to the Facility Agreement, and subject to the obligations imposed by that agreement. However, this argument was not put to the primary judge, is not the subject of a ground of appeal and was not raised during the hearing of the appeal (although reference was made to the proposition in written submissions filed by Perdaman after the hearing, in response to a different point). The proposition should not now be entertained, even assuming that Perdaman could somehow establish the dubious proposition that subsequent execution of the Negative Pledge Deed made Griffin a party to the Facility Agreement, and bound by its obligations.
10 In our view the undertaking proffered by Griffin is sufficient to provide Perdaman with adequate protection against the risk created by the obligations imposed upon Griffin under the Negative Pledge Deed, which was the basis upon which Perdaman sought interlocutory relief before the primary judge and on appeal.
The costs of the appeal
11 It is the usual practice to order that the costs of an application for an interlocutory injunction be costs in the cause - that is to say, borne by the ultimate loser of the substantive proceedings (O'Keefe Nominees Pty Ltd v BP Australia [No 2] (1995) 55 FCR 591). That is because the determination of the application does not involve the determination of substantive rights or obligations, but only the assessment of whether there is an arguable case for the relief sought, and where the balance of convenience lies. An application brought reasonably for the preservation of the status quo pending the final determination of the proceedings can usually be regarded as an incidental cost of those proceedings, properly borne by the ultimate loser. However, different considerations apply if the application is brought or opposed unreasonably, or in a manner which unreasonably inflates the costs of the application to the parties. This is not such a case.
12 Pursuant to this practice the primary judge ordered the costs of Perdaman's unsuccessful application to be in the cause. Neither party seeks to disturb that order. However, Perdaman seeks an order for its costs of the appeal, pursuant to the general principle that a successful party will generally recover its costs: see O 66 r 1, Rules of the Supreme Court 1971 (WA). Perdaman submits that the appeal should be seen as separate and distinct from its application for interlocutory relief made to the primary judge.
(Page 7)
13 In our view Perdaman's appeal from the decision of the primary judge to refuse the interlocutory relief which it sought should be regarded as a component of that application for interlocutory relief. The appeal succeeded because we took a different view of the balance of convenience to that taken by the primary judge. The appeal was not caused or prolonged by any unreasonable conduct on the part of Griffin. The appeal did not determine the substantive rights and obligations of the parties, but merely addressed the arguability of the causes of action advanced by Perdaman, and where the balance of convenience lay. It remains to be seen whether Perdaman can establish the causes of action which it asserts. If it fails to establish those causes of action, it will follow that Griffin's freedom of action has been improperly restrained by the undertaking which it has proffered, and Perdaman may be liable on its undertaking as to damages. In these circumstances the proper order is that the costs of the appeal be in the cause.
14 Perdaman also submits that the costs of the appeal should be taxed without regard to the limit imposed by the relevant scale. It is not clear from the written submissions whether Perdaman seeks such an order irrespective of whether or not its application for costs is successful. But in any event, Perdaman's submission is unsupported by any information or material which would enable the court to assess whether the allowances provided in the scale are inadequate and the submission should therefore be rejected in any event.
Conclusion
15 For these reasons we consider that the undertaking proffered by Griffin is adequate, and in light of that undertaking, it is not appropriate to grant any interlocutory relief. We will order that the costs of the appeal be in the cause.
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