Profile Events Pty Ltd v West Beach Trust (NO. 2) - [2009] SADC 100

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
PROFILE EVENTS PTY LTD v WEST BEACH TRUST (NO. 2)
[2009] SADC 100
Reasons for Decision of His Honour Judge Soulio
29 September 2009
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS
Defendant's application to discharge injunction - whether injunction still operative - whether statutory prohibition against granting of injunction - whether changed circumstances justify discharge - injunction varied.
Crown Proceedings Act 1992 s 7, referred to.
West Beach Trust v Profile Events Pty Ltd [2008] SASC 221; Profile Events Pty Ltd v West Beach Trust [2008] SADC 30; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44; Metropolitan Petar v Mitreski [2008] NSWSC 243; Woods v Sheriff of Queensland (1895) QLJ 163; A.C.L.A v The Commonwealth (1979) 53 ALJR 588; Crowther v State of Queensland [2006] QCA 308; Air Express Pty Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249, considered.

PROFILE EVENTS PTY LTD v WEST BEACH TRUST (NO. 2)
[2009] SADC 100
Introduction

The parties have been involved for many years in complex litigation as to the plaintiff’s alleged right to conduct the business of a function centre on premises at West Beach, South Australia, administered by the defendant pursuant to the West Beach Recreation Reserve Act 1987 (‘the premises’).[1]
[1] See West Beach Trust v Profile Events Pty Ltd [2008] SASC 221; and Profile Events Pty Ltd v West Beach Trust [2008] SADC 30.
The trial of the substantive proceedings is due to commence in this court on 2 November this year. Accordingly, I do not propose to discuss in detail the merits of those proceedings, nor is it necessary to do so for the purposes of the present application.
It is necessary to briefly set out the background to the present application by the defendant to discharge an injunction granted in favour of the plaintiff.
Background
There is no formal lease agreement, the parties having been in dispute about the terms of the proposed lease for the premises. It is common ground that the plaintiff is, or at least previously has been, in possession of the premises pursuant to an equitable lease.
In 2004 the defendant purported to terminate the lease. In consequence the plaintiff commenced proceedings in the Adelaide Magistrates Court seeking injunctive relief restraining the defendant from evicting the plaintiff. Orders were made in that court in effect permitting the plaintiff to remain in possession of the premises upon condition that the plaintiff paid various sums including ongoing monthly rental payments. The proceedings were subsequently removed into this court. The defendant has thereafter attempted to discharge the injunctive relief; or alternatively to vary the amounts to be paid by the plaintiff.
The Substantive Proceedings
When the subject proceedings were instituted in 2004 the plaintiff sought declaratory relief as to its entitlement to maintain possession of the premises in addition to the injunctive relief to which I refer in more detail below. The action has, in the intervening period, become considerably more complex. The plaintiff now seeks substantial damages in respect of losses said to have been incurred as a result of the Trust’s refusal to execute a lease agreement on what are said to be agreed terms. The Trust in turn seeks damages against the plaintiff in respect of considerable losses said to have been incurred as a result of the plaintiff’s refusal to give up vacant possession of the premises.
Affidavit evidence relied on by the plaintiff sought to demonstrate that the plaintiff company is in difficult financial circumstances as a result of the Trust’s actions. The Trust sought an order for security as to costs. On 1 April 2008 the plaintiff agreed to provide security for costs in the amount of $70,000. That security was provided by way of bank guarantee with the guarantor being Litigation Lending Management Pty Ltd.
The Initial Injunction
On 5 October 2004 the Trust gave notice of termination of lease. The plaintiff disputed the termination, and in November 2004 instituted proceedings in the Adelaide Magistrates Court seeking, amongst other things, “an order restraining the defendant from taking possession of the premises until further order”.
On 7 December 2004 the Magistrate hearing the matter relevantly ordered:
2That the plaintiff continue in occupation of that part of the premises, which it currently enjoys.
3That the defendant Trust take no action without notice and without application to the court which might interfere with the capacity of the plaintiff company to trade in that part of the premises which it is currently in possession of, until the further hearing of this matter.
The Magistrate made further orders as to payment of rent, and interlocutory orders.
Although it is usual, on the making of an interlocutory injunction, to require an undertaking as to damages, the Magistrate granted the injunction without requiring such an undertaking.
The Initial Application to Remove the Injunction
The Magistrates Court action was removed to the District Court on 9 September 2005. On 6 March 2007 the Trust applied to this court seeking an order discharging the injunction made on 7 December 2004, and an order that the plaintiff surrender possession of the premises.
The Trust asserted that the period of the equitable lease had by then expired. The plaintiff contended that although the initial term of the lease was to expire on 2 December 2006, there were options for renewal for two further terms of five years.
The Trust subsequently filed an amended application seeking, in the alternative to the orders originally sought, an order varying the Magistrate’s order for payment of rent to provide for rental payments past and future to be adjusted for movements in the Consumer Price Index. The amended application also sought an order that the plaintiff provide an undertaking as to damages in the usual form, nunc pro tunc 7 December 2004.
On 1 April 2008 a Judge of this court ruled that there was no jurisdiction to discharge the injunction as that would require overturning the order of the Magistrate which could only by done by way of appeal. The District Court Judge did however partially grant the application in that she ordered that rental payments be increased in accordance with increases in the Consumer Price Index.
The Trust’s Appeal Against the Dismissal of the Initial Application
The Trust appealed the ruling insofar as it related to the dismissal of the application to discharge the injunction.
On appeal, White J held[2] that an interlocutory injunction may be varied or discharged if “new facts come into existence or are discovered which render its enforcement unjust.”[3] The “changed circumstances must be established by evidence.”[4] The “ordinary rule of practice” is that there must be a “material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the court on the hearing of the original application.”[5] These statements of general principle do not “limit the discretion of the court to review its interlocutory orders when it considers there is justice in so doing.”[6] The overriding principle is that the court “should do whatever the interests of justice require in the particular circumstances of the case.”[7] Furthermore the court “must remain in control of its interlocutory orders.”[8]
[2]    West Beach Trust v Profile Events Pty Ltd [2008] SASC 221.
[3]    Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson and Brennan JJ.
[4] Ibid.
[5]    Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46; Metropolitan Petar v Mitreski [2008] NSWSC 243 at [24].
[6]    Metropolitan Petar v Mitreski [2008] NSWSC 243 at [27].
[7] Ibid at para 24; Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46.
[8]    Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson, and Brennan JJ.
Regard must also be had to the terms of the original injunction. It may expressly contemplate the making of an application for variation or discharge. Deficiencies in the manner of expression of the original injunction may also constitute a reason for a court to later discharge or vary it.[9]
[9] West Beach Trust v Profile Events Pty Ltd [2008] SASC 221 judgment of White J delivered 11 August 2008 at paras 27-29.
If a court is satisfied that it has granted an interlocutory injunction in contravention of a statutory prohibition, there is no reason why it may not correct the position, rather than allowing the unlawful restraint to continue until the defendant can have it corrected on appeal. The belated discovery of a statutory prohibition on the grant of an injunction appears to be analogous to a belated discovery of a relevant fact. That is a circumstance in which a court may dissolve or vary an interlocutory injunction.[10]
[10] Ibid, and citing Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson, and Brennan JJ, Woods v Sheriff of Queensland (1895) QLJ 163 at 165.
On 11 August 2008 White J upheld the appeal, and remitted the matter to this court to be heard by another Judge.
Current Application to Discharge the Injunction
Injunction No Longer Operative
First, the Trust contended that the order granting the injunction had already lapsed. The Trust contended that the fact that the order contained the concluding phrase “until the further hearing of this matter” when made on 7 December 2004, particularly when contrasted with the order requiring payment of base rent “until further order”, indicated that there was a deliberate difference in terminology and that the order for injunctive relief, as I apprehend the argument, lapsed when the matter was next brought on.
I cannot interpret the order in that way. In my view the phrase “until the further hearing of this matter” could only mean either the hearing of the substantive issues between the parties, or a further hearing and determination relating to the issue of the injunction itself. I find that the order has not lapsed.
The Trust further contended that the order had been complied with “by (the Trust) giving notice to the plaintiff and by making application to this court” and that therefore the Trust was entitled to take action as the prohibition was on the Trust taking action “without notice and without application to the court”. In my view the order granting injunctive relief would be meaningless in the event that the mere giving of notice and lodging of an application entitled the restrained party to act contrary to the terms of the restraint. The purpose of the requirement to give notice and make application, must, in my view, have been in order to require the approval of the court before the Trust could act in a manner contrary to the restraint.
In the alternative, the Trust contended that having given notice and made application, it was for the plaintiff to satisfy the court that the injunction should be maintained. In my view that interpretation cannot stand. Requiring the beneficiary of injunctive relief to justify the maintaining of the restraint at any time the defendant brings a fresh application would only serve to encourage ongoing applications and would place an inappropriate burden on the plaintiff in such circumstances. As White J observed it “would be conducive to great injustice and enormous waste of judicial time and resources if there [was] no limit on the power of a party to have any interlocutory application or order re-litigated at will.”[11]
Statutory Prohibition
[11] West Beach Trust v Profile Events Pty Ltd [2008] SASC 221 citing Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46.
Next, the Trust contended that the Trust was, for the purposes of the Crown Proceedings Act 1992, the Crown, and that a mandatory injunction cannot be granted against the Crown.[12] The plaintiff disputed that the Trust was the Crown for that purpose.
[12] Crown Proceedings Act 1992 s 7(2).
Whilst it is true that the Trust performs commercial operations, in my view, that does not preclude the characterisation of the Trust as the Crown for the purposes of the Crown Proceedings Act. The Crown conducts many operations which are commercial in nature.
The Trust is established by the West Beach Recreation Reserve Act 1987. The Trust is subject to the control and direction of the Minister;[13] the members of the Trust are appointed by the Minister;[14] no liability attaches to a member of the Trust for any act or omission in good faith in the exercise of powers or functions or in the discharge of duties under the Act;[15] and liability that would but for subsection (2) lie against a Member of the Trust, lies instead against the Crown.[16]
[13] Section 7.
[14] Ibid.
[15] Section 12(2).
[16] Section 12(3).
Whilst officers and employees of the Trust are not employed in the public service of the state,[17] the Trust is required to report on the administration of the Act, to the Minister.[18]
[17] Section 15(3).
[18] Section 19(1).
Importantly section 21(1) of the Act provides:
Except as otherwise determined by the Treasurer, the Trust is liable to all such rates (other than rates that would be payable to a council), duties, taxes and imposts and has all such other liabilities and duties as would apply under the law of the State if the Trust were not an instrumentality of the Crown.
Having regard to the indicia referred to above, I would find, should it be necessary to do so, that the Trust is the Crown for the purposes of the Crown Proceedings Act.
The Trust contends that whilst the injunction is couched in prohibitive terms, it in fact does no more than translate into negative language the affirmative obligation created by the alleged agreement and accordingly is in fact a mandatory injunction.[19]
[19] A.C.L.A. v The Commonwealth (1979) 53 ALJR 588 at 590 per Mason J.
The Trust contends that given the terms of the order, the Trust is required to make the premises available to the plaintiff, maintain the premises such that the plaintiff can continue to trade in it, receive monies paid by the plaintiff, consider requests for Special Circumstances Licences, and monitor sound emissions from the premises.[20]
[20] It should be noted that the business of the plaintiff includes hosting indoor and outdoor functions including music festivals.
The wording of the injunction is indeed wide. The order originally sought by the plaintiff was an order:
To restrain the defendant, whether personally or by any agent, employee or other person whomsoever, from terminating the plaintiff’s occupation of the premises and as from re-entering upon the premises until further order of the court.
The injunction which was in fact imposed requires that the “Trust take no action without notice and without application to the court which might interfere with the capacity of the plaintiff company to trade in that part of the premises which it is currently in possession of, until the further hearing of this matter,” and is far wider than that originally sought.
However, in my view, to describe a requirement prohibiting the Trust from taking action which might interfere with the capacity of the plaintiff company to trade in the premises as translating in fact into a mandatory requirement to make the premises available, would mean that no prohibitive injunction could exist to prevent the Crown from evicting a tenant and re-entering upon the land. I do not consider that the suggested examples, namely that the injunction requires the Trust to receive monies paid by the plaintiff, consider requests for Special Circumstances Licences, and monitor sound emissions, are in fact requirements of the injunctive order. In my view the injunction is not a mandatory injunction.
Deficiencies in Expression
Next the Trust contends that the order is confusing and ambiguous and lacks clarity of scope. Counsel for the Trust contended that the penalties for breach of injunctive orders may be severe, and include actions for contempt. Whilst I have some doubt that contempt proceedings could be brought against the Crown[21] nevertheless the Crown, as a model litigant, is anxious to comply with orders of the court.
[21] Crowther v State of Queensland [2006] QCA 308.
The Trust is concerned as to the extent of its obligations. The plaintiff has, by its counsel, on three separate occasions in the Licensing Court suggested that the terms of the injunction require the Trust to give its consent to applications for licensing approval for outdoor music festivals. On the hearing of the present application counsel for the plaintiff resiled from such a proposition. Nevertheless, the fact that the issue was raised against the Trust is rightly a cause of concern on the part of the Trust.
Counsel for the plaintiff did not argue that the terms of the injunctive order were expressed with clarity, but rather contended that it was sufficiently clear that the effect of the order was to restrain the defendant from seeking to interfere with or disturb the plaintiff’s enjoyment of the land in breach of the equitable lease claimed by the plaintiff. I will return to that issue.
Changed Circumstances
Finally, the Trust contended that there were a number of changes in circumstances since the original order was made, which would justify the present discharge of the order. Counsel for the Trust pointed to the following:
·The original action was an action pursuant to the Retail and Commercial Leases Act 1995 which were limited in scope and would, it was anticipated, proceed through the court without delay.[22]
·The plaintiff has notified of a change of solicitors twice, and the defendant has notified of a change of solicitors once.
·There has been a significant expansion of the causes of action, and a consequent expansion of the complexity of the issues before the court.
·Expert reports originally relied upon by the plaintiff have now been superseded by the provision of a number of other reports from experts.
·The costs incurred by the Trust have substantially increased.
·The minimum five year lease term pursuant to the Retail and Commercial Leases Act 1995 has expired.
·The Trust has instituted a cross claim for damages.
·There is now a litigation funding entity funding the costs of the action.
[22] The proceedings have since been removed to the District Court.
The latter point is said to shift the balance of convenience as between the parties in that the plaintiff is able to pursue the proceedings at little or no cost to itself. On the other hand, the Trust contends, the defendant continues to incur the cost of the proceedings, is prevented from dealing with the premises, and bears the risk of being unable to recover damages in the event that it is successful in defending the claim and prosecuting its cross claim.
The plaintiff alleges a right of renewal of the agreement until December 2016. It is apparent that were the injunction to be lifted, and the defendant to take steps to evict the plaintiff, the plaintiff’s business would thereby be destroyed. That would be a very significant consequence. In my view that outweighs the possible consequence to the defendant of being unable to recover damages in the event that it is successful in the action, particularly given that at least base rent is being paid
Injunction Varied

In my view some form of injunction should be maintained, particularly having regard to the proximity of the trial of the substantive issues.
However I consider it appropriate to discharge the present order, having regard to the uncertainties it creates as to the obligations of the Trust. I would therefore grant the application to that limited extent, but substitute an order that “the defendant be restrained from terminating the plaintiff’s occupation of the premises and from re-entering the premises to take possession of the premises, until further order of the court.”
The Trust seeks an undertaking as to damages. Absent special circumstances an interlocutory injunction ought not be granted without such an undertaking being provided.[23] The insistence upon the giving of an undertaking is an important means of preventing injustice being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined.[24] The inability of an applicant for an injunction to provide such an undertaking is usually a reason to decline the grant of the interlocutory injunction, rather than a reason for the grant of the injunction unaccompanied by such an undertaking.
[23] Air Express Pty Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 260 per Aickin J, cited by White J West Beach Trust v Profile Events Pty Ltd [2008] SASC 221 judgment of White J delivered 11 August 2008 at para 37.
[24] Ibid at 311 per Gibbs J.
Conclusion
The order I propose maintaining an injunction is subject to an undertaking as to damages being given by the plaintiff company, and by the principal of the company Mr Andrew Cranage Friebe, nunc pro tunc 6 March 2007.[25]
[25] The date of the defendant’s original application to discharge the injunction.
Further, I propose to order that the plaintiff pay into court 10% of its turnover, being turnover rent pursuant to the lease agreement, if found to be established.
The defendant seeks an order that there be security for the undertaking as to damages. The defendant relies on the fact that the plaintiff has the backing of the litigation funding entity in making the submission that that entity should be called upon to provide security for the undertaking as to damages.
Having regard to the fact that the parties have been involved in the disputed arrangements at the premises since 2001, and that rental payments subject to CPI increases have been paid during the entire period[26], and that turnover rent is to be paid into court, I will not require security to be provided in respect of the undertaking of the plaintiff and its principal.
[26] Whether pursuant to the alleged agreement or pursuant to the order of the court.
Orders
I will hear counsel as to the precise terms of the principal order, the undertakings, the order as to payment into court, and as to any consequential orders.