Shi v Agostino Nominees Pty Ltd [No 2]
[2023] WASC 86
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SHI -v- AGOSTINO NOMINEES PTY LTD [No 2] [2023] WASC 86
CORAM: STRK J
HEARD: 14 MARCH 2023
DELIVERED : 14 MARCH 2023
PUBLISHED : 23 MARCH 2023
FILE NO/S: CIV 1098 of 2023
BETWEEN: WEIDONG SHI
Plaintiff
L&S Health Pty Ltd (ACN 638 088 972)
Second plaintiff
AND
AGOSTINO NOMINEES PTY LTD
Defendant
Catchwords:
Equity - Injunction - Application to discharge interlocutory injunction - Whether material change in circumstances or new material - Turns on own facts
Legislation:
Criminal Code 1913 (WA)
Property Law Act 1969 (WA)
Prostitution Act 2000 (WA)
Result:
Application refused
Representation:
Counsel:
| Plaintiff | : | M M de Kerloy |
| Second plaintiff | : | M M de Kerloy |
| Defendant | : | I R Freeman |
Solicitors:
| Plaintiff | : | Mony de Kerloy |
| Second plaintiff | : | Mony de Kerloy |
| Defendant | : | Lavan |
Case(s) referred to in decision(s):
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd (Unreported, WASC, Full Court, Library No 960641, BC 9605406, 8 October 1996)
Commonwealth Bank of Australia v The Law Debenture Trust Corporations PLC [No 4] [2018] WASC 165
Megafield Investments Pty Ltd v Stormpower Pty Ltd [2004] WASC 219
Metropolitan Petar v Mitreski [2003] NSWSC 1007
NSW v Russell [2022] NSWSC 1034
Omar v Darul-Iman (WA) Inc [2013] WASC 311
Re Hudson [1966] 1 Ch 209
Shi v Agostino Nominees Pty Ltd [2023] WASC 27
Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150
Table of Contents
Introduction
Current application
The evidence
Agostino Nominees' position
Mr Shi and L&S Health's position
Disposition
Undertaking
Conclusion and orders
STRK J:
(This judgment was delivered extemporaneously and has been edited from the transcript.)
Introduction
On 2 February 2023, the first plaintiff, Weidong Shi, applied to this court for urgent injunctive relief. Among other things, Mr Shi sought until further order of the court that an injunction be granted requiring the defendant, Agostino Nominees Pty Ltd, to provide Mr Shi with possession of the premises at Unit 11, 1904 Beach Road, Malaga, being part of the land in certificate of title volume 1922 folio 853 (Premises) to conduct his massage and beauty salon; and restraining Agostino Nominees from taking possession of the Premises and from interfering with Mr Shi's quiet enjoyment of the Premises.
For reasons delivered extemporaneously on 3 February 2023, which have since been published,[1] subject to Mr Shi's undertaking as to damages and upon his provision of an undertaking to the court in the form described at [42] of the published reasons, I granted an injunction in favour of Mr Shi in the following terms:
(a)Agostino Nominees be required to provide Mr Shi with possession of the premises at Unit 11, 1904 Beach Road, Malaga, in the State of Western Australia, and being part of the land in Certificate of Title Volume 1922 Folio 853 to conduct his massage and beauty salon; and
(b)Agostino Nominees be restrained from taking possession of the Premises and from interfering with Mr Shi's quiet enjoyment of the Premises.
[1] Shi v Agostino Nominees Pty Ltd [2023] WASC 27.
As was recorded at [45] and [46] of the published reasons, the injunction will continue until further order, the proceeding was admitted into the Commercial and Managed Cases List, and the parties were granted liberty to apply.
Mr Shi signed and filed the required undertaking to the court on 3 February 2023, and the injunction has since operated to restrain Agostino Nominees from taking possession of the Premises.
By the application of Mr Shi, L&S Health Pty Ltd (ACN 638 088 972) was joined as a second plaintiff to the proceeding on 28 February 2023. Mr Shi moved for L&S Health to be joined as a party to the proceeding on the basis that L&S Health was a company incorporated by Mr Shi, and L&S Health operates the business known as 'Malaga Massage' from the Premises.[2]
[2] Affidavit of K N Matieu sworn 22 February 2023, KNM-1 and KNM-2.
On 1 March 2023, L&S Health filed an undertaking as to damages in the usual form, and by an undertaking filed on 28 February 2023, Mr Shi in his capacity as the sole director of L&S Health undertook to the court that:
(a)there will be no conduct within the meaning of s 4 of the Prostitution Act 2000 (WA) proffered or conducted on the Premises (being Unit 11, 1904 Beach Road, Malaga in the state of Western Australia, and being part of the land in Certificate of Title Volume 1922 Folio 853);
(b)I will instruct the managers of the business conducted at the Premises that there must be no conduct within the meaning of s 4 of the Prostitution Act 2000 (WA) proffered or conducted on the Premises;
(c)I will instruct the employees of the business conducted at the Premises that there must be no conduct within the meaning of s 4 of the Prostitution Act 2000 (WA) proffered or conducted on the Premises; and
(d)I will instruct the managers of the business conducted at the Premises that they must supervise the employees of the business conducted at the Premises to ensure that the undertaking described in paragraph (a) above is complied with by all employees.
Pleadings have now been filed, and the proceeding has been listed for mediation on 30 March 2023. The court has set aside 6 to 9 June 2023 for an expedited trial should the proceeding not be settled at meditation.
The application
On 8 March 2023, Agostino Nominees' representatives informed the court of Agostino Nominees' intention to make an application to discharge the interlocutory injunction granted on 3 February 2023. By an application made by chamber summons filed on 9 March 2023, Agostino Nominees sought that the interlocutory injunction be discharged and that Mr Shi and L&S Health immediately give up possession of the Premises. Filed with the application was a memorandum of conferral, a minute of proposed orders and an outline of submissions. On 9 March 2023, orders were made by consent programming the application for an urgent hearing on 14 March 2023.
The evidence
The application to discharge the injunction made on behalf of Agostino Nominees was supported by two affidavits, both deposed by Robert David Critchley, a private investigator engaged by Agostino Nominees, and read at the hearing of the application.
Mr Critchley's second affidavit in this proceeding was sworn on 10 March 2023, to which he attached a document marked RDC‑1. In summary, Mr Critchley deposed to having been engaged as a private investigator by the owner of the Premises to undertake surveillance activity to determine whether the Premises was being used for the purposes of prostitution; his attendance at the Premises on 3 March 2023; and to having paid for services that he received at the Premises.
Mr Critchley attached to his affidavit marked RDC‑1 a field report dated 3 March 2023 in which Mr Critchley described interactions that he says took place as between him and an Asian female who identified herself as Dori on the Premises, which if proven would fall within the meaning of prostitution as defined in s 4 of the Prostitution Act 2000 (WA). Mr Critchley deposed that he prepared the field report, and that the content of the field report is true and correct.
An affidavit was filed and read in opposition to the application, deposed by Xiaoxue Guo on 10 March 2023, to which Ms Guo attached documents marked XG‑1 to XG‑4.
Ms Guo deposed to the circumstances in which she had been engaged to provide massage services at the Premises on 3 March 2023. She deposed that prior to commencing work on 3 March 2023, among other things, Mr Shi's wife, Shirong Cao, spoke to her and told her that Malaga Massage is a legitimate massage shop and it was prohibited to provide sexual services to clients.[3]
[3] Affidavit of X Guo sworn 10 March 2023 pars 5 - 7.
In short, Ms Guo's evidence contradicted that of Mr Critchley as to Ms Guo's interactions with Mr Critchley on 3 March 2023. Relevantly, Ms Guo deposed that she did not offer or provide any sexual services to Mr Critchley. She deposed as follows:[4]
I provided a 30-minute massage with the customer misbehaving by being naked, hitting on me, and pestering me after the massage.
[4] Affidavit of X Guo sworn 10 March 2023 par 32.
As to payment, Ms Guo deposed as follows:[5]
This customer attended the Massage Premises without an appointment at about 2.10pm and asked for a 30‑minute massage which costs $50. I asked for payment upfront and the customer handed me $50 in cash. I recorded this payment in the job‑slip record that I kept for the services I provided that day in accordance with my usual practice. Annexed hereto and marked 'XG‑3' is a true copy of the job‑slip dated 3 March 2023. The customer's payment entry is the last line‑item on the document. In due course I accounted to Shirong for my work and gave her the total cash payments of $200 I had received and logged from customers that day.
[5] Affidavit of X Guo sworn 10 March 2023 par 13.
On 14 March 2023, Mr Critchley swore a third affidavit in this proceeding, to which he attached documents marked RDC‑2 to RDC‑3. Mr Critchley's third affidavit was in effect a response to Ms Guo's affidavit, and he joined issue with Ms Guo's evidence. Mr Critchley deposed to having been provided with a copy of Ms Guo's affidavit; to his interactions with a female employee at the Premises on 3 March 2023; and to having paid for services at the Premises on 3 March 2023 which payments totalled $180. Mr Critchley attached to his affidavit a copy of a screenshot from his mobile telephone of his Commonwealth Bank mobile application which he said recorded the withdrawal of $100 in cash from a Commonwealth Bank automatic teller machine on 3 March 2023 at 1.58 pm AWST. Mr Critchley also attached a copy of a screenshot from his mobile telephone of his Commonwealth Bank mobile application which recorded payment of $55 via Mastercard to 'L&S Health Pty Ltd Malaga' on 3 March 2023 at 2.12 pm AWST.[6]
[6] Affidavit of R D Critchley sworn 14 March 2023, RDC‑2 and RDC‑3.
Agostino Nominees' position
On 9 March 2023, Agostino Nominees filed a written outline of submissions in support of its application for discharge of the interlocutory injunction granted on 3 February 2023.
Agostino Nominees relied on the affidavits of Mr Critchley sworn on 10 and 14 March 2023 as to conduct that Agostino Nominees maintained was both proffered and conducted on the Premises on 3 March 2023. It was submitted that by reason of Mr Critchley's evidence, the undertakings provided to the court by Mr Shi and L&S Health as to use of the Premises had been breached, as conduct within the meaning of s 4 of the Prostitution Act was both proffered and conducted on the Premises on 3 March 2023.[7]
[7] Defendant's submissions pars 8 - 9.
At the hearing on 14 March 2023, counsel for Agostino Nominees submitted that the court ought to be very concerned as to the veracity of the evidence relied upon by Mr Shi and L&S Health in opposition to the application, in light of the discrepancy in the evidence of Mr Critchley and Ms Guo in respect of payment for services said to have been received at the Premises on 3 March 2023.[8] It was noted that Mr Critchley's second affidavit annexed documentary evidence which on its face supported Mr Critchley's account of payment as deposed to in his second affidavit, and which it was submitted casted proper doubt over the evidence of Ms Guo.[9]
[8] ts 36 - 38 (14 March 2023).
[9] ts 36 - 38 (14 March 2023).
Referring to the principles summarised by Roberts‑Smith J in Megafield Investments Pty Ltd v Stormpower Pty Ltd,[10] counsel for Agostino Nominees submitted that the evidence suggested that new facts had come into existence which rendered the enforcement of the interlocutory injunction unjust, and therefore the court should consider discharging the injunction. It was submitted that the evidence demonstrated there was a probability of a breach of the terms of the injunction and the undertakings given, in circumstances where that conduct exposed Agostino Nominees to prosecution for contravention of s 190 of the Criminal Code 1913 (WA).[11]
[10] Megafield Investments Pty Ltd v Stormpower Pty Ltd [2004] WASC 219, see particularly [4] and [5].
[11] ts 38 (14 March 2023).
On this basis, counsel submitted that the interlocutory injunction granted on 3 February 2023 should be discharged and by reason of the Notice of Termination dated 1 February 2023, Mr Shi and L&S Health should forthwith return possession of the Premises to Agostino Nominees.[12]
[12] ts 38 (14 March 2023); defendant's submissions par 10.
Mr Shi and L&S Health's position
The application to discharge the injunction was opposed. On 13 March 2023 a written outline of submissions in response to the application to set aside the interlocutory injunction was filed, to which was attached copies of correspondence between the parties. At the hearing, counsel submitted that there was no credible evidence supporting a change in the status quo, only evidence of Agostino Nominees disturbing quiet enjoyment of the Premises.[13]
[13] ts 40 (14 March 2023).
Counsel submitted that in an application to vary or set aside an interlocutory injunction, Agostino Nominees must show that the circumstances have changed sufficiently to affect the continuation of the injunction.[14] It was submitted that in light of the affidavit of Ms Guo sworn 10 March 2023 in which Ms Guo denied that any sexual services were provided on 3 March 2023, contrary to the allegations contained in the affidavit evidence of Mr Critchley, and in the absence of any other evidence Agostino Nominees could not discharge its onus.[15]
[14] Plaintiffs' submissions filed 13 March 2023 par 7, citing Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd (Unreported, WASC, Full Court, Library No 960641, BC 9605406, 8 October 1996).
[15] ts 39 - 42 (14 March 2023); plaintiffs' submissions filed 13 March 2023 par 8.
It was further submitted by counsel that there were other matters the court could reasonably have regard to in weighing the evidence relied upon by Agostino Nominees against the evidence of Ms Guo, which among other things, included Mr Critchley's alleged use of a combination of cash and card payment.[16]
[16] ts 39 - 42 (14 March 2023); plaintiffs' submissions filed 13 March 2023 par 10(a) - (e).
On behalf of Mr Shi and L&S Health, counsel also complained as to the urgency with which the application was made. Counsel complained that there had been inadequate conferral and queried the bona fides of the applicant. In this regard, counsel noted as follows:[17]
(a)On 7 March 2023, the plaintiffs' solicitors received a letter which, in effect, gave them just over 24 hours to seek instructions and respond.
(b)The plaintiffs' solicitors then sought until 5.00 pm Thursday, 9 March 2023 (that is, just over 48 hours) to provide a substantive response, noting that there could be and there was no imminent threat to the interests of Agostino Nominees which could have mitigated against granting the plaintiffs an extra day to respond.
(c)In the circumstances, a fair chance to respond was called for, however, it was not given and Agostino Nominees proceeded to seek to have the application listed on the afternoon of 8 March 2023.
(d)Counsel submitted that it would be relevant whether the alleged breach was a one‑off or was caused by some other factor (one not in the control of the plaintiffs). By a letter dated 8 March 2023, a copy of any other reports prepared by Mr Critchley was requested of Agostino Nominees, but that request was refused.
(e)The combination of refusing to provide any reasonable time to respond and refusing to provide other material which might point to compliance with the terms of the lease and the undertakings provided to the court was characterised as conduct that was unreasonable on the part of Agostino Nominees.
[17] ts 41 - 42 (14 March 2023).
It was also submitted that having regard to Ms Guo's affidavit, Agostino Nominees had not heeded the obligations imposed on it by this court with respect to allowing quiet enjoyment of the Premises.[18]
[18] Plaintiffs' submissions filed 13 March 2023 par 11; ts 40 (14 March 2023).
Disposition
It is well established that a party making an application to discharge or vary an interlocutory injunction will need to show evidence of changed circumstances, or the discovery of new facts which could not reasonably have been put before the court at the original hearing, and the effect of which is to demonstrate that the situation in respect of the grant of interlocutory relief is materially different from that which applied when the order was originally made, so that it would be unjust to enforce the injunction in its original terms.[19]
[19] Omar v Darul-Iman (WA) Inc [2013] WASC 311 [41], citing Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 178 (Gibbs CJ, Aickin, Wilson & Brennan JJ); Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd (Unreported, WASC, Full Court, Library No 960641, BC 9605406, 8 October 1996), 4 ‑ 5 (Murray, Steytler & Parker JJ); Metropolitan Petar v Mitreski [2003] NSWSC 1007 [13] (Barrett J). See also the recent decision of Davies J in NSW v Russell [2022] NSWSC 1034 [21].
It is not appropriate to reconsider whether or not Mr Shi had made out a prima facie case. Agostino Nominees' application is not in the nature of an appeal or rehearing, founded on the contention that the order made on 3 February 2023 ought not to have been made. An application to vary or discharge an interlocutory injunction starts with the assumption that that order was rightly made. There is therefore no question of reversing or varying or rehearing the original decision or order. An application based upon the assumption that the order, the operation of which is sought to be discharged or varied, was wrongly made must fail. The only question to be determined by the court on 14 March 2023 was whether Agostino Nominees was entitled under the altered circumstances to be relieved from the operation of the order.[20]
[20] Lexis Nexis, Civil Procedure Western Australia [52.1.41], citing Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 (McClelland J) and Metropolitan Petar v Mitreski [2003] NSWSC 1007 [13] (Barrett J).
Such principles have been applied in cases where a party seeks to discharge an interlocutory injunction entirely, or to substantively vary the terms on which it had been granted. I did not understand there to be any contest with respect to the principles to be applied in the disposition of the application.
In the disposition of the application, I also proceeded on the basis that it would not be appropriate for the court to undertake a preliminary trial.[21] There remained a contest on the affidavits filed in this proceeding. There was a clear discrepancy with regard to payment. Mr Critchley's account was supported by some documentary evidence. However, there remained a real conflict. Mr Critchley deposed that sexual services were provided. Ms Guo deposed in very clear terms that sexual services were not provided. While there was some documentary evidence annexed to Mr Critchley's third affidavit filed in this proceeding, the discrepancy in evidence as to payment was not so persuasive as to ground a finding that the landscape was so materially different as to warrant the discharge of the injunction. The conflict on the evidence could not be resolved by my preferring the affidavit evidence of one deponent to another.
[21] Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618.
That is, on the additional evidence filed, it could not be said that the situation in respect of the grant of interlocutory relief on 14 March 2023 was materially different from that which was before the court when injunctive relief was granted, so that it would be unjust for the interlocutory injunction in its original terms to remain operative pending an expedited trial. There was before the court additional evidence of the alleged breach, and a contest on the evidence in relation to the same.
It was therefore appropriate that the application to discharge the interlocutory injunction be dismissed.
Undertaking
Finally, to the extent that Agostino Nominees referred to a breach of undertaking as a basis to discharge the interlocutory injunction, I made the following observations.
An undertaking is given to a court, and may be accepted in lieu of the grant of injunctive relief against the party giving the undertaking or may be required as a condition of the grant of injunctive relief. In this case, undertakings were given by Mr Shi and L&S Health as conditions to the grant of injunctive relief in their favour.
As an undertaking is a promise to the court, it does not confer any personal right or remedy on any other party,[22] rather an undertaking has the same effect as an injunction and non‑compliance with an undertaking may be enforced by proceedings for contempt.[23]
[22] Commonwealth Bank of Australia v The Law Debenture Trust Corporations PLC [No 4] [2018] WASC 165 [84], citing Re Hudson [1966] 1 Ch 209, 213 (Buckley LJ).
[23] Commonwealth Bank of Australia v The Law Debenture Trust Corporations PLC [No 4] [84], citing Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150, 164 ‑ 165.
In this case, there was a contest on the affidavit evidence as to whether the undertakings given by Mr Shi and L&S Health had been complied with, and that contest could not be resolved by preference of the evidence of one deponent over another.
Conclusion and orders
The application made by Agostino Nominees was dismissed, with costs reserved. In this case, the interests of justice required the interlocutory injunction to continue until further order.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RW
Associate to Honourable Justice Strk
23 MARCH 2023
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