Rescando Pty Ltd v Brogan
[1999] WASC 204
RESCANDO PTY LTD -v- BROGAN & ANOR [1999] WASC 204
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 204 | |
| Case No: | CIV:2138/1999 | 18 OCTOBER 1999 | |
| Coram: | McKECHNIE J | 18/10/99 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | RESCANDO PTY LTD WILLIAM BROGAN WARRAGO PTY LTD |
Catchwords: | Interlocutory injunction No new principles |
Legislation: | Nil |
Case References: | Nil Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471 Foran v Wight (1989) 168 CLR 385 Patrick Stevedores Operations (No 2) & Ors v Maritime Union of Australia & Ors [1998] HCA 31; 153 ALR 641 Peter Turnbull & Co v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 R v Chief Constable of Devon and Cornwall; Ex parte Central Electricity Generating Board [1982] 1 QB 458 Sedleigh Denfield v O'Callaghan [1940] AC 880 Shevill v Builders' Licensing Board (1982) 149 CLR 620 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
WILLIAM BROGAN
First Defendant
WARRAGO PTY LTD
Second Defendant
Catchwords:
Interlocutory injunction - No new principles
Legislation:
Nil
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr L Tsaknis
First Defendant : Mr C L Zelestis QC & Mr R M Edel
Second Defendant : Mr C L Zelestis QC & Mr R M Edel
Solicitors:
Plaintiff : Fiocco Hopkins Nash
First Defendant : Gadens Lawyers
Second Defendant : Gadens Lawyers
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471
Foran v Wight (1989) 168 CLR 385
Patrick Stevedores Operations (No 2) & Ors v Maritime Union of Australia & Ors [1998] HCA 31; 153 ALR 641
Peter Turnbull & Co v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
R v Chief Constable of Devon and Cornwall; Ex parte Central Electricity Generating Board [1982] 1 QB 458
Sedleigh Denfield v O'Callaghan [1940] AC 880
Shevill v Builders' Licensing Board (1982) 149 CLR 620
(Page 3)
1 McKECHNIE J: This is an application for an injunction seeking orders:
"1. That Defendants do deliver or cause to be delivered forthwith to the Plaintiff at Southern Bills Bay on their respective moorings the vessels the subject of a Charter Agreement made between William Brogan, Warrago Pty Ltd, Rescando, Carlo Antonio Malievaz, Gillian Ena Bailye and Kenneth Bailye dated 20 May 1997, being more particularly the vessels named Miss Coral Bay I (Licence No. 1860) and Miss Coral Bay II (Licence No. 3379) appearing in Item 10 of the Schedule to that Agreement."
2 The application arises from a dispute. On the one hand is the owner of two boats together with a licence to conduct tours by way of glass-bottom boats over the coral reef at the Ningaloo Marine Park. On the other hand is the charterer to whom he has leased the boats and purported to assign the licence. I shall refer throughout this judgment to the plaintiffs as the charterers and the defendants as the owners.
3 On 5 October 1999 the owner purported to terminate the agreement. On 12 October 1999 security guards, on behalf of the owner, took possession of the boats. This injunction application has resulted.
4 To understand the events of recent days and the prior months it is necessary to have regard to the charter agreement entered into between the parties on 20 May 1997. The agreement acknowledged that the commencement date was 1 October 1996 and was for a period of three years, expiring on 30 September 1999. The licence was issued by the Executive Director of the Department of Conservation and Land Management (which I shall refer to as CALM). The agreement contained an option to renew and it is that option which is at the heart of this dispute. Clause 2.2 provides that the charterer shall give notice to renew the charter. Written notice was sent on 26 May 1999 and apparently accepted by the owner.
5 Nothing appears to have been done by the charterer until late September 1999 in order to further advance the renewal, even though by clause 2.2 specific obligations were cast upon the charterer in this respect. The next formal step appears to be a letter written by the charterers' solicitors to the owner. This letter says in part:
"In particular, we understand that under the Department of Conversation (sic) and Land Management's new licence issuing
(Page 4)
- arrangements there will be only one licence for a glass-bottom viewing vessel and that that licence will only permit the use of one vessel. Accordingly, it will not be possible for you to comply with your obligations under the Agreement to provide our client with a sub-licence to operate two glass-bottom viewing vessels when the Agreement expires on 30 September 1999, even assuming that you were successful in obtaining the available licence.
Our client has assumed that this is the reason it has not received a response to it's [sic] letter of 26 May 1999."
- It then goes on:
"In light of the foregoing, and in order to protect its substantial investment and to minimise its losses our client has requested that we advise you that they will be applying for a Licence on the 1st October 1999, that being the last day for applying for a licence, subject to the conditions attaching thereto as contained in the document calling for 'Expressions of Interest'."
7 On 5 October 1999, as I have said, the owners purported to terminate the contract on the basis that the application for a licence amounted to a breach of cl 17.8 of the charter agreement and other clauses which entitled the owners to terminate the agreement. After further correspondence the boats were seized on 12 October 1999.
8 It seems to be accepted by all parties that the continuation of the agreement after 31 December 1999 is problematic. I am mindful that this is an interlocutory hearing considering the grant of an injunction and that the plaintiff must establish the serious question to be tried. I am conscious that I have not heard full argument. However, notwithstanding the strictures which such an urgent hearing places on a Judge, it is nevertheless necessary for me to consider the terms of the agreement and it is back to that I now turn.
9 The agreement by cl 2.1 and cl 2.3 provides for the charter of the vessels and the grant of a personal licence to use the licence granted to the
(Page 5)
- owner by the Executive Director of CALM on 3 April 1995. That licence has been extended until 31 December 1999. However, the agreement acknowledged that the licence would expire on 30 June 1999, that is, within the period of the agreement.
10 In respect of the licence provisions, cl 17.1 of the agreement provides:
"The Charterer acknowledges and agrees that the charter of the Vessel pursuant to the terms of this Agreement is dependent upon the continuance of the Licence in good standing. The Charterer shall comply with all conditions and restrictions contained in the Licence or relating to any activity carried on pursuant to the Licence or this Agreement. Ther (sic) Charterer acknowledges that it has been provided with a copy of the Licence and has read and is familiar with the terms and conditions of the Licence."
- Clause 17.5:
"The Charterer acknowledges and agrees that the continuance of this Agreement is subject to and conditional upon either the Owner or the Sub-Lessor being granted a renewal of the Licence and covenants in favour of each of the Owner and Sub-Lessor that the Charterer shall not, during the currency of this Agreement, do or neglect to do any act or thing which would prejudice or be likely to prejudice the Licence or the likelihood of the Licence being renewed."
12 Support for this view is gathered by the factors already outlined; that the licence period was to expire some three months before the end of the agreement, whether or not an option was exercised.
(Page 6)
13 The charterers' case, and its excuse for its subsequent actions in applying for a licence, depends on its assertion that the owner was in breach of the agreement because it was not able to comply with the conditions of that agreement. This is because CALM has indicated that there will, in the New Year, be only one licence issued for one vessel to conduct glass-bottom tours of the Ningaloo reef.
14 I am unable to accept this contention. In my opinion continuation of the agreement, and therefore necessarily the grant of an option over a future period, is conditional upon the owner having possession of a CALM licence. In consequence I do not regard the actions of CALM in seeking to restrict the issue of a future licence as giving rise to a breach of contract by the owner.
15 I turn to the actions of the charterers in applying for a licence. It appears common cause that on 1 October 1999 the charterers carried out their expressed intention and applied to CALM for a licence to conduct glass-bottom tours in the Ningaloo Marine Park for the period from 1 January 2000. That action constituted a breach of the agreement, cl 17.8, which provides:
"In consideration of the Owner and the Sub-Lessor agreeing to enter into this Agreement, the Charterer covenants and agrees with each of the Owner and the Sub-Lessor that the Charterer shall not, during the currency of this Agreement apply for, hold or otherwise seek to obtain a licence (whether on its own account, as a shareholder in a company or as a member of a partnership or firm) or otherwise be involved in any enterprise having the benefit of or holding any rights under a licence, of the same or similar nature to the Licence within the Cruising Limits."
16 Argument today has focused on whether this was a breach of a fundamental kind justifying the owner to regard the contract as repudiated and therefore to terminate the agreement. It is not necessary for me to finally resolve this issue. It is sufficient for present purposes to note that the charterers' arguments do not carry sufficient persuasion to justify the grant of an injunction. In my opinion the terms are clear and the reason for them are also clear. The licence is an integral part of that which the owner has leased. Any application by the charterers during the currency of the agreement has the potential to undermine the value of the owners' property.
(Page 7)
17 The charterers' action was taken because of an apprehension that the owners were in breach of the agreement. For the reasons already expressed I consider this was a misapprehension. In my opinion the charterers have failed to raise a serious question to be tried and on the present limited state of the material the owners were justified in retaking possession of the vessels.
18 Counsel for the owners raised an argument which went to the root of the agreement, submitting that the licence was incapable of transfer in any event. While the point may have substance, it is not necessary that I deal with it in light of the decision I have reached as to the main issue.
19 If I am wrong about the question of the serious issue, I nevertheless do not consider that the balance of convenience favours the charterers. Any charter period will effectively come to an end on 31 December 1999, or that at least is highly likely. If at trial the charterers are successful in establishing liability against the owners, there is nothing to suggest that a remedy in damages will be insufficient, inclusive of any loss between now and the end of the year. In that regard I note what counsel has submitted in relation to the loss of goodwill, but nevertheless am not persuaded that a remedy in damages would be adequate.
20 Mindful of third parties as I am, on the present material I do not see that any failure to grant an injunction will have an adverse effect on persons who have made bookings with the charterers. The owners have expressed an intention of continuing the service and so third parties at least should not be greatly affected.
21 For these reasons I am of opinion that the application should fail.
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