Qi Wang –v- Kaymet Corporation Pty Limited

The matter of Qi Wang versus Kaymet Corporation Pty Limited was heard by the court, where the plaintiff sought an injunction against the defendant to prevent the leasing of strata units. The defendant argued for compensation, claiming that the injunction resulted in lost rental income. The court had to determine whether the defendant’s compensation should be adjusted to account for the unrealised capital gain in the value of the strata units during the period of the injunction.

The court considered whether the usual undertaking as to damages in equity applied, specifically if the defendant's compensation should be reduced by the unrealised capital gain. The court evaluated the principles of equity and the effect of the injunction on the defendant's financial position. It was established that the unrealised capital value of the strata units had increased significantly during the period of the injunction, surpassing the amount of lost rental income.

The court held that the compensation should not be reduced by the unrealised gain. The reasoning was based on the principle that the defendant’s loss was the lost rental income, and the unrealised capital gain in the strata units was an independent factor that did not offset the defendant's loss. The court found that the defendant's compensation remained the lost rental income, unaffected by the increase in property value. The court's decision concluded that the defendant's compensation should be based on the actual loss suffered due to the injunction, without adjustment for the unrealised capital gain.

The court ordered that Kaymet Corporation Pty Limited be compensated for the lost rental income, without reduction for the unrealised capital gain in the strata units. This decision upheld the principle that compensation should reflect the actual loss incurred due to the injunction, irrespective of any unrelated financial gains.