Perdaman Chemicals and Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd

[2011] WASCA 188

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 [2011] WASCA 188

CORAM:   PULLIN JA

HEARD:   29 AUGUST 2011

DELIVERED          :   29 AUGUST 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

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:

Appeal - Injunction pending appeal

Legislation:

Nil

Result:

Application for stay granted

Category:    B

Representation:

Counsel:

Appellant:     Mr M L Bennett

Respondent:     Mr B D Luscombe

Solicitors:

Appellant:     Bennett & Co

Respondent:     Clifford Chance

Case(s) referred to in judgment(s):

Apache Northwest Pty Ltd v Agostini [No 2] [2009] WASCA 231

DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

Jackson v Sterling Industries Ltd (1987) 162 CLR 612

Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188

Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473

1. PULLIN JA:  This is an application by the appellant for an injunction pending the hearing of the appeal.

2. The appellant sought an injunction or a freezing order before Beech J in the Supreme Court proceedings below.  What was sought was an injunction pursuant to a chambers summons dated 29 June 2011 seeking to restrain the respondent from entering into any charge, pledge or other security as may be required by its ultimate Australian parent company Lanco Resources Australia Pty Ltd or otherwise by ICICI Bank Ltd, Singapore branch or others pursuant to a facility agreement made 9 February 2011 or otherwise without first giving 10 prior business days' written notice to the present appellant.

3. The application for the injunction was dismissed.  His Honour gave reasons:  Perdaman Chemicals & Fertilisers Pty Ltd v The Griffin Coal Mining Company Pty Ltd [2011] WASC 188.

4. The appellant has now appealed against that decision and has sought an injunction in similar terms pending the hearing of the appeal.  The exercise of this court's discretion to grant an injunction pending the determination of an appeal has been held to exist:  see Apache Northwest Pty Ltd v Agostini [No 2] [2009] WASCA 231. The grant of an injunction is an implied incident of this court's substantive appellate jurisdiction: see DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226 [25]; Jackson v Sterling Industries Ltd (1987) 162 CLR 612, 618 ‑ 619. The implied incidental power to grant an injunction pending the hearing of an appeal takes the place of inherent jurisdiction. This being a statutory court, there is no inherent jurisdiction but there is the implied incidental powers to which I have referred.

5. The criteria for the grant of an injunction pending an appeal are analogous to those relevant to the grant of a stay of judgment pending the hearing of an appeal:  Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308. The considerations which have to be taken into account are first that the respondent, prima facie, has the benefit of a judgment of the court below and it is entitled to the benefit of the judgment. The appellant, if an injunction is to be granted, has to show that special circumstances exist and the onus is on the appellant to demonstrate that an injunction should be granted. Usually it is necessary to show that the appeal will be rendered nugatory if the injunction is not granted. Even if that can be shown, it is necessary to show reasonable prospects of success in order to obtain the grant of an injunction. Also, as usual, the balance of convenience has to be taken into account.

6. In this case, the appellant argues that the appeal could be rendered nugatory if the injunction is not granted because of its view about the correct construction of a negative pledge agreement which has been entered into by Griffin, the respondent, and the ICICI Bank.  In particular, attention has been directed to cl 2.3.1 by both parties.

7. The parties have a different view about the correct instruction of the clause.  It is not necessary to voice any opinion about the correct construction other than to note there is difference of opinion.  It has not been possible in the time available to me to fully digest the documents which have only been put before me today and cl 2.3.1 of the negative pledge should not be interpreted by reading its terms alone but by reading it in the context of all of the surrounding circumstances, the whole of the terms of the negative pledge deed and any surrounding documents which bear upon the correct construction of cl 2.3.1.

8. There is an argument open to the appellant which suggests that Griffin, that is the respondent, may be put in circumstances where it has to grant a security for all amounts outstanding under the finance documents.  On the construction contended for by the appellant, that would include all amounts which were advanced by ICICI, which includes the $800 million which it advanced in order to recapitalise the respondent after it came out of administration.  I am prepared to conclude that there are reasonable prospects of the appellant succeeding as that expression is understood in Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473 [56].

9. If that is so, then it is arguable that the appeal would be rendered nugatory if those circumstances came about because the application is argued on the assumption that there has been a breach of contract and an entitlement to damages.  If there is an entitlement to damages, that could only be recouped from the respondent's assets, which, according to the appellant's argument, might not be available because of the grant of the security referred to in cl 2.3.1 of the negative pledge deed between the respondent and its bank ICICI.

10. The most important factor in this matter, is the balance of convenience.  That is the maintenance of the status quo in this case.  It would not apparently inconvenience the respondent if an injunction were granted, particularly if it were granted on the terms that notice had to be given and that the injunction was only a restraint to prevent the transaction taking place unless notice is given.  The respondent argued that would infringe the right it has to enter into a contract, that is, to be free to enter into a contract of its choosing.  But, as indicated, it will not infringe that right if, in the context of this case, notice may be given by the respondent of an intention to enter into a transaction or if the respondent is given liberty to apply in circumstances where it might be inconvenienced in any way.

11. The other factor which is important is that I intend to make an urgent appeal order so that the case will be heard on 19 September 2011.  In those circumstances the period of the injunction pending appeal will be for a period of just less than three weeks.

12. I would propose that any order be in terms that the respondent be restrained without first giving a period of notice.  It might be sensible in the circumstances to say 21 days notice, but I will hear the parties in relation to that.  In any event, there will be liberty to the respondent to apply upon 48 hours' notice to discharge the injunction.