Range Resources Ltd v Pacific Islands Gold Nl
[1999] WASC 38
RANGE RESOURCES LTD -v- PACIFIC ISLANDS GOLD NL & ORS [1999] WASC 38
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 38 | |
| Case No: | CIV:2063/1998 | 10 MAY 1999 | |
| Coram: | MASTER SANDERSON | 21/05/99 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application refused | ||
| PDF Version |
| Parties: | RANGE RESOURCES LTD (ACN 002 522 009) PACIFIC ISLANDS GOLD NL (ACN 003 144 670) NATIONWIDE PACIFIC NL (ACN 003 283 378) MT KASI LTD |
Catchwords: | Summary judgment Equitable relief sought Turns on its own facts |
Legislation: | Rules of the Supreme Court 1971, O 14 |
Case References: | Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 Patrick Stevedores Operations No 2 Pty Ltd v MUA [1998] HCA 30 Anglo Australian Foods Ltd v Credit Suisse (1998) 1 ACSR 69 Ashmore v Corporation of Lloyd's [1992] 1 WLR 446 Australian Insurance Brokers v Hudig Langeveldt [1988] WAR 44 ANZ Executors and Trustee Company Limited v Qintex Australia Limited (1989) 2 ACSR 676 Beswick v Beswick [1968] AC 58 Boviard v Brown [1975] 2 NZLR 694 Burns v Stapleton (1959) 102 CLR 102 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 Duncombe v New York Properties Pty Ltd (1986) 1 QR 16 Ferguson v Wilson [1986] 2 Ch App 77 GAF Corp v Anchem Products Inc [1975] 1 Lloyd's Rep 601 Giannarelli v Wraith (1988) 165 CLR 543 Glyn's Bank Plc v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438 Gray v Lang (1955) 56 SR (NSW) 7 Greasley v Cooke [1980] 1 WLR 1306 Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Kensela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722 L Schuler A G v Wickman Machine Tool Sales Limited [1974] AC 235 Mackie v Clough [1891] 17 VLR 493 Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258 National Commercial Bank v Wimborne [1979] 11 NSWLR 156 Norton v Angus (1926) 38 CLR 523 Patel v Alli [1984] Ch 283 Peyman v Lanjani [1985] Ch 457 Phillips v Ellinson Bros Pty Ltd (1941) 65 CLR 221 Plain Ltd (Trustee) v Kenley & Royal Trust Co (1931) 1 DLR 468 Potenger v Genge (1967) 116 CLR 328 Rein v Stein (1892) 66 LT 469 Republic of India v India Steamship Co Ltd [1993] AC 410 Sharyn Development Co Pty Ltd (In Liq) v Official Receiver in Bankruptcy [1980] 5 ACLR 1 Thorby v Goldberg (1964) 112 CLR 597 Trident General Insurance Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107 Vitkovice Horni A Hutni Tezirstvo v Korner [1951] AC 869 Walker v Winbourne (1976) 137 CLR Re Washington Diamond Mining Co [1893] 3 Ch 95 Watson v Healy Lands Ltd [1965] NZLR 511 Williams v The Society of Lloyds [1994] 1 VR 274 Re Yorke (Stationers) Pty Ltd [1965] NSWR 446 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PACIFIC ISLANDS GOLD NL (ACN 003 144 670)
First Defendant
NATIONWIDE PACIFIC NL (ACN 003 283 378)
Second Defendant
MT KASI LTD
Third Defendant
Catchwords:
Summary judgment - Equitable relief sought - Turns on its own facts
Legislation:
Rules of the Supreme Court 1971, O 14
Result:
Application refused
(Page 2)
Representation:
Counsel:
Plaintiff : Mr P G Clifford
First Defendant : Mr N D C Dillon
Second Defendant : Mr N D C Dillon
Third Defendant : Mr N D C Dillon
Solicitors:
Plaintiff : Craig Readhead & Co
First Defendant : Corrs Chambers Westgarth
Second Defendant : Corrs Chambers Westgarth
Third Defendant : Corrs Chambers Westgarth
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Patrick Stevedores Operations No 2 Pty Ltd v MUA [1998] HCA 30
Case(s) also cited:
Anglo Australian Foods Ltd v Credit Suisse (1998) 1 ACSR 69
Ashmore v Corporation of Lloyd's [1992] 1 WLR 446
Australian Insurance Brokers v Hudig Langeveldt [1988] WAR 44
ANZ Executors and Trustee Company Limited v Qintex Australia Limited (1989) 2 ACSR 676
Beswick v Beswick [1968] AC 58
Boviard v Brown [1975] 2 NZLR 694
Burns v Stapleton (1959) 102 CLR 102
Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305
Duncombe v New York Properties Pty Ltd (1986) 1 QR 16
Ferguson v Wilson [1986] 2 Ch App 77
GAF Corp v Anchem Products Inc [1975] 1 Lloyd's Rep 601
Giannarelli v Wraith (1988) 165 CLR 543
Glyn's Bank Plc v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438
Gray v Lang (1955) 56 SR (NSW) 7
Greasley v Cooke [1980] 1 WLR 1306
(Page 3)
Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310
Kensela v Russell Kinsela Pty Ltd (1986) 4 NSWLR 722
L Schuler A G v Wickman Machine Tool Sales Limited [1974] AC 235
Mackie v Clough [1891] 17 VLR 493
Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258
National Commercial Bank v Wimborne [1979] 11 NSWLR 156
Norton v Angus (1926) 38 CLR 523
Patel v Alli [1984] Ch 283
Peyman v Lanjani [1985] Ch 457
Phillips v Ellinson Bros Pty Ltd (1941) 65 CLR 221
Plain Ltd (Trustee) v Kenley & Royal Trust Co (1931) 1 DLR 468
Potenger v Genge (1967) 116 CLR 328
Rein v Stein (1892) 66 LT 469
Republic of India v India Steamship Co Ltd [1993] AC 410
Sharyn Development Co Pty Ltd (In Liq) v Official Receiver in Bankruptcy [1980] 5 ACLR 1
Thorby v Goldberg (1964) 112 CLR 597
Trident General Insurance Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107
Vitkovice Horni A Hutni Tezirstvo v Korner [1951] AC 869
Walker v Winbourne (1976) 137 CLR
Re Washington Diamond Mining Co [1893] 3 Ch 95
Watson v Healy Lands Ltd [1965] NZLR 511
Williams v The Society of Lloyds [1994] 1 VR 274
Re Yorke (Stationers) Pty Ltd [1965] NSWR 446
(Page 4)
1 MASTER SANDERSON: This is the return of three chamber summonses. Chronologically, they are the plaintiff's chamber summons seeking summary judgment against all defendants filed 24 November 1998, the third defendant's chamber summons seeking to set aside service of the notice of the writ out of the jurisdiction dated 11 February 1999 and the first and second defendants' chamber summons seeking an extension of time for service of an amended defence dated 7 April 1999. I dealt, first, with the application of the third defendant seeking to set aside service of the notice of the writ. After hearing argument, I determined that this summons should be dismissed. I indicated I would publish reasons for that decision. This decision incorporates those reasons. I next dealt with the plaintiff's application for summary judgment which was amended to seek judgment only against the first and second defendants. At the conclusion of argument on that summons I indicated to the parties that I would reserve my decision. That meant the application of the first and second defendants for leave to amend their defence was not considered. Of course, if the plaintiff's summary judgment application against the first and second defendants is successful then the application to amend the defence falls away.
2 I should, at the outset, indicate the way the parties will be referred to throughout these reasons. The plaintiff will be referred to as "Range". In the documents referred to in this application and throughout the argument the first defendant was referred to by the unfortunate acronym of "PIG". While meaning no disrespect, that is the reference I will adopt. The second defendant I will refer to as "Nationwide" and the third defendant I will refer to as "Mt Kasi".
3 On 7 October 1998 the plaintiff obtained an order before a Master of this Court that it have leave to serve the third defendant with notice of the writ of summons in this matter outside the Commonwealth of Australia and in Fiji. The order specified that service was to be effected at the offices of the third defendant, being Sambhau Lal Buildings, PO Box 197, Savusavu, Fiji. On the date when the order was made this was, it would appear, the registered office of the third defendant: see the affidavit of Patrick Edward Ryan ("Ryan"), sworn 25 September 1998 and filed in support of the application for leave to serve notice of the writ out of the jurisdiction. By the time the notice came to be served the registered office of the third defendant had changed. This appears from the affidavit of service of Franz Georg Keil which appears as Annexure "A" to the affidavit of Stephanie Jane Unwin, sworn 3 May 1999. Mr Keil effected service at the then registered office. It is to be noted that the registered
(Page 5)
office was a firm of solicitors who have consistently acted for the third defendant.
4 There is no suggestion that the notice of the writ did not come to the attention of the third defendant. Just to ensure that there could be no doubt about this, the plaintiff served two directors of the third defendant resident within Western Australia. On what basis they did this is not clear. In any event, there can be no doubt that notice of the writ came to the attention of the third defendant.
5 Essentially, the application of the third defendant was based on a failure to comply with the order. It was argued that unless service was effected on the company at the address specified in the order, there was no compliance with the order and the third defendant was not properly before the court. Under O 10 r 4(2), on an application for leave to serve notice of the writ out of the jurisdiction, the plaintiff must show "in what place or country the defendant is or probably may be found". The requirement is very general. Although the actual registered office of the third defendant was specified in this order, it would have been enough if reference had been made simply to Fiji.
6 In the circumstances, there is no unfairness to the third defendant in this situation. It was served at its registered office, it was well aware of the writ by virtue of having received the notice. It cannot complain about service. For these reasons, I dismissed the third defendant's chamber summons. Under the provisions of O 12 r 6(2) the appearance thereupon became unconditional.
7 I turn then to the plaintiff's application for summary judgment. As I mentioned above, as originally framed, the plaintiff sought various orders against all three defendants. On the hearing of the application the orders sought were as follows:
"(1) The First and Second Defendants do cause the Third Defendant to deliver to the Plaintiff the executed Deed of Charge.
(2) The Defendants do pay the Plaintiff's costs of the application to be taxed."
8 At the hearing of these applications the same counsel represented all three defendants. Prior to hearing the summary judgment application, counsel, on behalf of Mt Kasi, urged that I adjourn the application to allow Mt Kasi to be heard. Counsel submitted that although the
(Page 6)
application was confined to the first and second defendants it concerned the third defendant because the order would require the first and second defendants to cause the third defendant to deliver up a certain document. Counsel for the first and second defendants wished to proceed. He submitted that while the document to be delivered up was to be executed by the third defendant, the relief claimed was against the first and second defendants. The third defendant had nothing to say in the issue as between the plaintiff and the first and second defendants.
9 In the event, I determined that the application should proceed. For reasons which I will expand upon below, I determined that all necessary material, perhaps with one reservation, was before the court. The one reservation is of particular importance and I will deal with it in the context of the summary judgment application as a whole.
10 The law governing the summary judgment application was not in dispute. The plaintiff is required under O 14 r 2(1) to verify on affidavit the statement of claim and to swear to a belief that the defendants have no defence to the action. That requirement has been met: see par 21 and par 26 of the affidavit of Ryan, sworn 24 November 1998. It then falls to the defendant to establish that it has a prima facie defence to the plaintiff's claim and in doing so it should condescend upon particulars: see Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109.
11 For present purposes, it is convenient if I detail the largely uncontested facts by reference to the affidavit material and then deal with the defences raised by the defendant. In adopting this approach I am mindful that this is a summary judgment application and the evidentiary onus rests with the defendant.
12 On 7 December 1990 Range entered into an agreement with PIG and Nationwide under which Range sold certain shares to Nationwide. PIG was said to be the beneficial owner of the entire issued capital of Nationwide. This Share Acquisition Agreement is to be found as Annexure "A" to the affidavit of Ryan, sworn 24 November 1998. Under the Definitions clause, being cl 1.1 of the Share Acquisition Agreement, "Charge" was defined to mean: "the deed in the form of the deed of charge annexed to this Agreement and marked 'A';". Further, the term "Company" was defined to mean "Mt Kasi Limited (formerly known as Range Resources Fiji Limited), a company incorporated in Fiji of care of Price Waterhouse, Dominion House, Thompson Street, Suva, Fiji". The effect the of the agreement was that Range would sell to Nationwide shares in Mt Kasi. In turn, Range would provide the finance to enable the
(Page 7)
purchase to be completed. Clause 5.2(a) and (b) deal with Range's obligations on or before completion of the sale. Once those obligations had been complied with then under cl 5.2(d) Nationwide was obliged "[to] deliver to the Vendor [Range] two copies of the Charge executed by the Company [Mt Kasi]".
13 Clause 7.1 requires Mt Kasi to repay certain loans to Range. In particular, Nationwide is obliged to "cause" Mt Kasi to repay to Range the balance of "outstanding loans". It is this repayment obligation which is covered by the Deed of Charge. Before dealing with the Deed of Charge itself, there is one further clause of the Share Acquisition Agreement which is relevant. That is cl 11 titled "Non-waiver". It reads as follows:
"Neither the failure of any party to enforce at any time any of the provisions of this Agreement nor the granting of any time or other indulgence shall be construed as a waiver of that provision or of the right of that party thereafter to enforce that or any other provision."
14 The Deed of Charge (see Annexure "A") is, in its terms, a fairly standard document. It is expressed to be a first charge over the assets and undertakings of the Mt Kasi (cl 3.1) and it is a fixed and floating charge (cl 3.2). By cl 4.1 Mt Kasi makes certain representations and gives certain warranties to Range. Subparagraph (e) of these undertakings and warranties is in the following terms:
"No litigation, arbitration, tax claim, dispute or administrative proceeding is presently current or pending or, to its knowledge, threatened, which is likely to have a material adverse effect upon it or its ability to perform its obligations under this Deed."
15 Clause 8 deals with events of default. Among the listed events of default there appears the following (subcl (k)):
"[It is an event of default if] the Chargor is unable to pay its debts when they fall due, or is deemed unable to pay its debts under any applicable legislation (other than as a result of failure to pay a debt or claim which is the subject of a good faith dispute);"
16 There is also an event of default if (subcl 8(l)):
"the Chargor enters into or resolves to enter into any arrangement, composition or compromise with or assignment
for the benefit of its creditors generally or any class of its creditors or proceedings are commenced to sanction any such arrangement, composition or compromise other than for the purposes of a reconstruction or amalgamation on terms approved by the Chargee;"
17 It is common ground that Mt Kasi has not entered into this Deed of Charge. Quite why it did not do so between December 1990 and September 1997 is not fully explained. It would appear that during the majority of this period there was common ownership between all four parties to this dispute. I will come to the common directorships and the interrelated nature of the parties in due course. But for the present it is apposite to note that there is no explanation for what occurred between the signing of the Share Acquisition Agreement in December 1990 and September 1997.
18 On 1 September 1997 Range, PIG and Nationwide entered into what was termed a "Share Acquisition Agreement - Amendment Agreement" (Annexure "B"). Recitals record that the parties had entered into the Share Acquisition Agreement on 7 December 1990 and that it had been agreed to amend that agreement. Clause 3 of this Agreement amended cl 7.1 of the Acquisition Agreement. Clause 3.2 of this Agreement is in the following terms:
"Notwithstanding anything to the contrary contained in or to be inferred from Clause 7.1, PIG and the Purchaser agree that they shall cause the Company to repay to the Vendor the balance of the Outstanding Loans in the amount of One Million Four Hundred Thousand Dollars ($1,400,000)."
19 The rest of cl 3 goes on to deal with the way in which repayment is to be made. These subclauses are not presently relevant. Clause 6 deals with "Further Assurances". Relevantly, it reads as follows:
"The Purchase and PIG shall cause the company:
6.1 To enter on the date hereof a Deed of Charge to secure the payments referred to in Clause 3.2, which sums shall be the 'Indebtedness' referred to in the Deed of Charge;"
20 There appears to be no doubt that the "Deed of Charge" referred to is the Deed of Charge which was annexed to the 1990 Agreement and which had never been signed. That interpretation was not disputed by the defendants' counsel. The effect of the Amendment Agreement was then
(Page 9)
twofold. First, it crystallised the amount of Mt Kasi's liability under the Deed of Charge. While that was left open-ended in the 1990 Agreement, the Amendment Agreement fixed the repayment amount at $1,400,000. Secondly, and perhaps more importantly, it updated the liability of the defendants to provide the Deed of Charge. Originally, the Deed of Charge was to be the defendants obligations under cl 5.2(d) to "deliver to the Vendor two copies of the Charge executed by the Company". Under the Amendment Agreement the defendants "shall cause" Mt Kasi to enter into the Charge. This is an altogether different undertaking. It is this latter or updated undertaking which Range now seeks to enforce.
21 It is common ground that the defendants did not cause the company to enter into the Deed of Charge after the Amendment Agreement was entered into. In par 8 of his affidavit of 24 November 1998 Ryan says that between November 1997 and August 1998 Range repeatedly requested the first and second defendants cause the third defendant to execute the Charge. No correspondence is annexed to Ryan's affidavit to support this evidence, but it was not challenged by either of the defendants. On 8 July 1998 solicitors for Mt Kasi wrote to Range's solicitors (Annexure "C") suggesting some amendments to the Deed of Charge. The amendments related to warranties impacting on the financial position of Mt Kasi. On 15 July 1998 the same solicitors, still acting on behalf of Mt Kasi, wrote to Range's solicitors (Annexure "D"). Relevantly, that letter reads:
"...
3. We think that the recitals and the substantive clauses of the charge should be amended to reflect that the directors are simply executing the charge to implement an agreement made by the company, at the earliest in 1990 and amended, or at the latest, in 1997. In this regard, we confirm that we are happy to discuss the form of these amendments.
... "
22 Further correspondence took place, but still the Deed was not signed. On 31 August 1998 the same solicitors wrote to Range's solicitors (Annexure "F") in the following terms:
" ... The obligation relied upon is that NPN [Nationwide], PIG and Mount Kazi are in default of their obligations to deliver the 'Deed of Charge required pursuant to Clause 5.2(d) of the
Agreement as varied by Clause 6.1 of the Acquisition Amendment Agreement.' Neither Mount Kazi nor Mount Kasi is party to either of the agreements referred to as the Agreement or the Acquisition Amendment Agreement. Thus either of those 2 companies cannot be in default of any obligation.
- The terms of any proposed Deed of Charge have been the subject of considerable correspondence, most recently our letter to you of 20 July 1998 and your reply of 21 July 1998. As is apparent from that correspondence the terms of any proposed Deed of Charge have not been agreed. Indeed you will be aware that in our view certain of the warranties that are asked for are simply impossible to give and indeed would be a mockery given the present state of affairs.
Furthermore, we advised in our letter of 20 July 1998 that the proposal you put forward for the execution of any Deed of Charge by Mount Kasi Limited was not possible for the reasons that it would entail, in effect, PIG incurring a further debt. As explained in that letter, given the present financial position of PIG, that may constitute an offence under the provisions of the Corporations Law of Australia.
Furthermore, given the present financial position of Mount Kasi Limited it may well be improper for that company, and its directors, to give a charge over its assets at a time when it is insolvent. That would be to prefer the interests of one creditor, ie Range Resources, over the interests of all other creditors. We think it unlikely that a Court would order specific performance of any obligation to execute such a charge, not accepting at all for the moment that there is any obligation on Mount Kasi Limited to give such a charge.
In respect of the obligations as to the payment of the debt you are aware that the operations at the Mount Kasi Mine are suspended and that, in those circumstances there is no current obligation to make any further payments in reduction of any debt due by Mount Kasi Limited to Range Resources. Further, the obligations imposed upon PIG and NPN [Nationwide] are such that, apart from any question involving the Deed of Charge, there is no obligation to make any payment of moneys at this time. In the circumstances we think that the Notice of Default given by your client is of no effect."
(Page 11)
23 Regrettably, Mt Kasi has suffered from the ill-winds of financial fortune. The defendants, in opposition to this application, rely upon an affidavit of Jerome Gino Vitale ("Vitale"), sworn 10 February 1999. Vitale is a director of Mt Kasi. He is also a director of Nationwide and PIG. He says that in mid 1998 the directors of PIG formed the view that there was doubt about the financial viability of Mt Kasi. A winding up application had been brought in the High Court of Fiji and it appeared Mt Kasi might be placed in liquidation. On 29 October 1998 a meeting of creditors was held in Suva, Fiji. At this meeting a scheme of arrangement was proposed to Mt Kasi's creditors. The scheme was approved by the meeting and subsequently sanctioned by the High Court of Fiji on 23 December 1998. Range attended the meeting of creditors but did not vote. When the scheme came before the High Court of Fiji for approval Range appeared and objected, largely on the grounds that it was a secured creditor whose interests were adversely affected by the scheme. Mr Justice Byrne of the High Court of Fiji dismissed Range's objections. His Honour appears to have done so for a variety of reasons but, regrettably, his written reasons for decision are not as yet available. Be that as it may, Range is, under the provisions of the scheme, now treated as an unsecured creditor and has lodged a proof of debt under protest.
24 The present fate of the scheme of arrangement is somewhat uncertain. Under the terms of the scheme Mt Kasi was to make what is termed a "first payment" to unsecured creditors. This payment was not made. I understand that application was made to the court for an extension of time to make the first payment and that application was successful. However, Mt Kasi has not met the revised timetable. I understand that an application for a further extension of time has been made but has not as yet been determined. Under cl 13.1 of the scheme the scheme is terminated if the first payment is not made. As the first payment has not been made, it is not entirely clear what the status of the scheme might presently be. There was no direct evidence on this point provided by any party.
25 It was submitted by the defendants that as the making of the orders sought by the plaintiff would impact upon the scheme, possibly to the detriment of the unsecured creditors who had supported the scheme, the orders sought ought not be made. To counter that, the plaintiff made a number of submissions. First it said that the scheme did not apply to secured creditors and if the defendants caused Mt Kasi to enter into the Deed of Charge Range would become a secured creditor and, thus, they would be taken outside the scope of the scheme. This reasoning may be correct, so far as it goes. But the fact is that the scheme was predicated on
(Page 12)
other secured creditors standing aside while payments under the scheme were made. In particular, PIG and Nationwide agreed to defer their entitlements from Mt Kasi. As I have noted below, if Mt Kasi were to enter into the Deed of Charge it would immediately be in breach of its terms. It has entered into a scheme of arrangement. What the consequences of that might be for Mt Kasi was not explored in submissions. Nor has Range tendered any evidence as to the effect of its signing the deed on its future. I mentioned earlier reservations I had about Range not being heard. The difficulty is readily apparent. However, the result might well be to scuttle the scheme of arrangement, thus adversely affecting the interests of Mt Kasi's unsecured creditors.
26 In my view, this is not a case where I should enter summary judgment against the defendants. Having reached that conclusion, it is not appropriate that I provide detailed reasons as to why the orders sought by the plaintiff should not be made. Were I to do so, my analysis of the equitable principles may conflict with those of the Judge who eventually tries the matter. But it is appropriate that I make some general comments as to why I have reached the conclusion that I have.
27 What the plaintiff seeks as against the defendants in these proceedings is a mandatory injunction. Counsel for the plaintiff, in the course of his submissions, referred to the relief sought as being an order for specific performance. But I think, on a proper analysis, as was submitted by counsel for the defendants, in truth what is sought is a mandatory injunction. It may be, at the end of the day, that the distinction between the remedies is not significant. But it is proper when looking at the relief claimed to determine with certainty just what remedies are available in equity.
28 There appears to be no reason in principle why a mandatory injunction could not issue in circumstances such as this. The third defendant is controlled by the first and second defendants. I accept that the issue of a mandatory injunction in these circumstances is not without its difficulties, but it does appear that even in difficult circumstances mandatory injunctive relief is available: see Patrick Stevedores Operations No 2 Pty Ltd v MUA [1998] HCA 30. That would suggest injunctive relief might well be granted unless the defendants are able to make out one of the equitable defences. If the correct view is that the relevant date of the defendants' undertaking is 1 September 1997 the defence of laches might well not be available. However, it might also be the case that the evidence establishes that the grant of equitable relief in this case will result in hardship to third parties. I am thinking particularly
(Page 13)
of the unsecured creditors of Mt Kasi who have supported the scheme of arrangement. The nature of the hardship that these unsecured creditors might suffer is unclear on the evidence but is a matter which, in my view, would need to be taken into account before equitable relief was granted. On that basis, it seems to me that summary judgment ought not be entered.
- 29 One cannot help but have sympathy for Range in the position in which it finds itself. It has a written undertaking from the first and second defendants that they will cause the third defendant, a company which they control, to enter into the Deed of Charge. The first and second defendants in clear breach of their legal obligations have refused to do what they promised to do. Range can hardly be blamed for taking summary judgment proceedings when the alternative is the delay and expense associated with a trial where, even if they are successful, the return is doubtful. But, in my view, this is simply not a matter which can be resolved on a summary judgment application. The first and second defendants should have unconditional leave to defend. The costs of the application, including the reserved costs, should be costs in the cause.
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