Standards Australia Ltd v Record Funds Management Ltd

[2008] NSWSC 559

CITATION:	Standards Australia Ltd v Record Funds Management Ltd [2008] NSWSC 559
HEARING DATE(S):	27 & 28 May 2008
JUDGMENT DATE :	28 May 2008
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Interlocutory injunction granted.
CATCHWORDS:	EQUITY [338] - Equitable remedies - Injunctions - Interlocutory injunctions - Appropriate balancing exercise.
CATEGORY:	Procedural and other rulings
CASES CITED:	Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
PARTIES:	Standards Australia Limited (P) Record Funds Management Limited (D1) ASX Operations Pty Limited (D2)
FILE NUMBER(S):	SC 2948/08
COUNSEL:	K M Richardson (P) C A Moore (D1) T J Webster, Solicitor (D2)
SOLICITORS:	Minter Ellison (P) Mallesons Stephen Jaques (D1) Middletons (D2)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

WEDNESDAY, 28 MAY 2008

2948/08 STANDARDS AUSTRALIA LTD v RECORD FUNDS MANAGEMENT LTD & ANOR

JUDGMENT

1 HIS HONOUR: This is an application for interlocutory relief that affects the use of lifts in a city building. It has been contested with great vigour by Ms K Richardson of counsel for the plaintiff and Mr C A Moore of counsel for the first defendant. The second defendant was only joined at the heel of the hunt and Mr Webster, solicitor, appears for the second defendant. The first defendant is the landlord of the building, the plaintiff is the tenant of two upper floors of the building and the second defendant, ASX Operations Pty Limited, is the tenant of floors 1 to 8 of the building.

2 In determining the interlocutory application I have followed the course outlined by McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, 535 - 536 which I now set out.

“As I see it, the position is as follows. Where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled: see, eg, Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 216; A v Hayden (No 1) (1984) 59 ALJR 1 at 4-5; 56 ALR 73 at 79. Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question: see, eg, A v Hayden (No 1) (at 4; 78); Cohen v Peko-Wallsend (1986) 61 ALJR 57 at 59; 68 ALR 394 at 397. If the Court does decide the question of law the uncertainty is to that extent removed.

Unless the plaintiff shows that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425; 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283; 52 ALR 651; A v Hayden (No 1) ; Castlemaine-Tooheys Ltd v South Australia (1986) 60 ALJR 679; 67 ALR 553 and Cohen v Peko-Wallsend Ltd .

Apart from this, although normally the Court ‘does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case’ ( Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622), there are some kinds of case in which for the purpose of seeing where lies the balance of convenience (or more specifically ‘the balance of the risk of doing an injustice’ — see per May LJ in Cayne v Global Natural Resources plc [1984] 1 All ER 225 at 237, cf per Brennan J in Brayson Motors Pty Ltd v Federal Commissioner of Taxation (1983) 57 LJR 288 at 292; 46 ALR 279 at 285), it is desirable for the Court to evaluate the strength of the plaintiff's case for final relief: see, eg, Brayson Motors Pty Ltd v Federal Commissioner of Taxation (at 292; 285); Castlemaine-Tooheys Ltd v South Australia at 682; 559.”

3 The factual situation is that in this building there are six passenger lifts. At the time of the lease to the plaintiff, it had the use of all six passenger lifts to access its two floors. Subsequently, on 3 September 2007, the first defendant granted a lease to the second defendant whereby the second defendant was promised exclusive use of four of the six lifts. The first defendant now intends, by moving a security barrier and altering the operation of the lifts, to give exclusive use of four of the lifts to the second defendant. It says that, in return, it is giving exclusive use of the other two lifts to the tenants of levels 9 to 13 of the building, which floors include the plaintiff’s two floors. That statement is not quite correct, as those two lifts are the only lifts which operate to the parking basement, so that, as well as serving the top five floors, they must be used by everybody who moves from the parking basement into the other portions of the building.

4 The first defendant concedes that the plaintiff was initially given the use of all six lifts. However, it says that there are provisions in the lease whereby it is entitled to alter the access arrangements and that the plaintiff has no right to object to the alterations. The prima facie case sought to be made out by Ms Richardson on behalf of the plaintiff is that initially the plaintiff was entitled to the use of all six lifts, which, as I have noted, is not disputed. The plaintiff says, however, that the first defendant is not entitled to rely as it does on the provisions of the lease under which it seeks to change the access arrangements, as what it is doing does not fall within the terms of those provisions. Alternatively, the plaintiff says that, if the first defendant’s actions do fall within those provisions, the provisions can only be relied on if the first defendant establishes that it is reasonable for it to do so, and that it has not established reasonableness. The first defendant replies that, if the question of reasonableness arises, the onus of proof falls not on it but on the plaintiff.

5 The result of all this is that I have formed the view that the plaintiff has established that there are serious questions to be tried as to its entitlement to the use of all six lifts, as to the unavailability to the first defendant of the lease provisions by which it claims that it might unilaterally challenge access and, if it is entitled to the use of those provisions, that the first defendant bears the onus of proof of reasonableness, which is not at present established. On that basis, in dealing with the entitlement to injunctive relief, I turn to the question of the balance of convenience.

6 This is by no means easy. It is not at this stage clearly established what the effect of the changes will be and what inconvenience they will cause to the plaintiff’s business. Evidence is given that the plaintiff is apprehensive of disruption and the plaintiff relies heavily on the right that it says it has under its lease to the use of all six lifts.

7 The first defendant has laid before me four matters which it relies on as going to the balance of inconvenience. They are as follows:

(1) that the plaintiff has not established that its business will be inconvenienced;
(2) that on the first defendant’s side the works have taken time and trouble to organise that will be thrown away if the injunction is granted as sought;
(3) if the injunction is granted, the first defendant is likely to be in breach of its lease to the second defendant;
(4) that if the injunction is granted there will be serious inconvenience to the second defendant; the second defendant is “a piece of critical infrastructure” and it is important to it and, indeed, to the public that its security be maintained.

8 I have already mentioned that, whilst the degree of inconvenience to the plaintiff’s business is not clearly established, the plaintiff is apprehensive of disruption which it says would be caused by intrusion upon its clear right to the use of all six lifts. Secondly, so far as works will be disrupted and money thrown away by the granting of the injunction, it seems clear that the plaintiff is a body of substance and, if it is subsequently established that the injunction was not justified and money is lost by its grant on an interlocutory basis, that money will be able to be reimbursed under the plaintiff’s undertaking as to damages. Thirdly, in so far as the first defendant complains of the risk of it being in breach of its lease to the second defendant, this complaint lies ill in its mouth, as it chose to grant a lease to the second defendant apparently giving exclusive use to four lifts after it had granted a lease to the plaintiff giving the plaintiff a right to use all six lifts. Furthermore, in relation to that matter, some nine months have passed since the grant of the lease to the second defendant without the obligation to the second defendant being honoured. Fourthly, so far as the security of the second defendant is concerned, bearing in mind that the present ground floor barrier will be maintained in its present place, together with the need to use a security swipe in the lifts to reach the floors of the ASX, among other security arrangements, I do not regard on the material available before me the second defendant’s security as substantially compromised by the grant of an injunction.

9 I have carried out a balancing exercise among the serious questions to be tried as established by the plaintiff, the fact that the first defendant has a case to argue against the establishment of the plaintiff’s rights and the various matters as to the balance of convenience to which I have adverted. I have come to the conclusion that the correct solution is to grant an injunction as sought by the plaintiff. But the injunction I propose to grant is an injunction which will leave the ground floor barrier in its present place, rather than permitting it to be moved back. This was offered by the plaintiff as a concession, but is not desired by either the first defendant or the second defendant.

10 Mr Webster, who has appeared for the second defendant upon it being joined at the heel of the hunt, has not asked for an adjournment of the present application but has asked that leave be reserved to the second defendant to move to vary the injunction on notice if it is so advised. Whilst strictly leave is not necessary for an application to vary an injunction, I shall certainly at Mr Webster’s request have that specifically included in the orders.

11 I note Ms Richardson gives the usual undertaking as to damages. Orders encompassing my decision are to be handed up in the morning.

12 I propose to order that the costs of the application be the plaintiff’s costs in the proceedings. The proceedings are to continue on pleadings. A statement of claim is to be filed and served by 4 June 2008, defences filed by 18 June 2008 and the matter placed in the Expedition List on Friday, 20 June 2008. The plaintiff will have leave to file a notice of motion for expedition returnable before the Expedition Judge on 20 June 2008 and the proceedings are placed in the Expedition List on 20 June 2008. I shall direct that the injunctive order may be entered forthwith.

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