The Ink Group P/L v Hong Kong Bank of Australia Ltd
[1994] FCA 957
•20 OCTOBER 1994
THE INK GROUP PTY LIMITED v. HONG KONG BANK OF AUSTRALIA LIMITED, HONG KONG
BANK OF AUSTRALIA LIMITED AND KEVIN RICHARD SHIRLAW
No. NG 682 of 1994
FED No. 957/94
Number of pages - 11
Equitable Remedies
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
DAVIES J
CATCHWORDS
Equitable Remedies - interlocutory injunctions - interlocutory injunction sought to restrain appointment of receiver - whether interlocutory injunctions should be granted absent both an undertaking as to damages and a payment into Court of the sum claimed to be due.
Trade Practices Act 1974 (Cth) - s 80(6)
American Cyanamid Co v Ethicon Limited (1975) AC 396
Southern Tableland Insurance Brokers Pty Limited (in Liq) v Schomberg (1986) 11 ACLR 337
Inglis v The Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Mayfair Trading Co Pty Limited v Dreyer (1958) 101 CLR 428
HEARING
SYDNEY, 19 and 20 October 1994
#DATE 20:10:1994
#ADD 12:5:1995
Counsel for the applicant: P. Gray and R. Alkadamani
Solicitors for the applicant: Ternes and Salier
Counsel for the respondent: J.E. Thomson and K. Ottesen
Solicitors for the respondent:
and cross-claimant: Blake Dawson Waldron
Counsel for the cross-respondent: M. Oakes
Solicitors for the cross-respondent: Norton, Smith and Co.
Counsel for McPhersons: J. Sexton
ORDER
1. The application for an interlocutory injunction be refused with costs.
2. The interim injunction granted by Burchett J on 10 October 1994 be dissolved.
NOTE: Settlement and entry of orders is dealt with in Order 36 of
the Federal Court Rules.
JUDGE1
DAVIES J This is an application for orders restraining the respondent from exercising its rights under a fixed and floating charge dated 31 March 1993 and restraining Mr R.S. Furby and Mr M R Brown, appointed as receivers on 10 October 1994, from exercising their powers and functions as receivers. The applicant, The Ink Group Pty Limited ("The Ink Group"), is a company which trades in stationery and like goods including Christmas cards. It has two subsidiaries, one in the United Kingdom ("Ink UK") and another in New Zealand ("Ink NZ").
The financier to The Ink Group was the Hong Kong Bank of Australia Limited, ("the Bank"). The finance facility agreement is dated 31 March 1993. Clause 10 of the agreement provides inter alia:-
" 10.1 On Demand
(a) The Borrower shall repay the Principal Outstanding on demand by the Lender.
(b) Upon any demand by the Lender under paragraph
(a), the Borrower shall immediately pay the Principal Outstanding together with accrued interest and fees and all other moneys actually or contingently payable by the Borrower under this Agreement and unpaid and the Commitment shall be cancelled.
(c) The Borrower acknowledges that each Facility is an on demand facility and that the Lender may demand repayment of any Facility at any time notwithstanding that no Event of Default has occurred or is subsisting at the time of making such demand."
Events of default are set out in clause 17 of the agreement which provides:-
"17.1 Events of Default
Each of the following is an Event of Default (whether or not it is in the control of the Borrower)
(a) (Obligations under Transaction Documents) Any Relevant Company or any Shareholder fails:
(i) to pay when due any amount payable by it under any Transaction Document; ...
(d) (Winding up, arrangements, Insolvency etc.)
(i) Except for the purposes of a solvent reconstruction or amalgamation previously approved by the Lender:
(A) an application or an order is made, proceedings are commenced, a resolution is passed or proposed in a notice of meeting or an application to a court or other steps are taken for:
(1) the winding up, dissolution, official management, administration or statutory management of any Relevant Company; or
(2) any Relevant Company entering into any arrangement, compromise or composition with or assignment for the benefit of its creditors or any class of them; or ...
(m) (Control of Relevant Company) There is in the opinion of the Lender a change in the legal or beneficial ownership of, or in the management or control of, any Relevant Company."
On Friday 7 October 1994 the Bank served upon The Ink Group a notice of demand which read as follows:-
"We hereby demand from you in accordance with clause 10.1 of the Facility Agreement payment of the sum of AUD3,812,765.16 by no later than 4.00pm Monday 10 October 1994. Such sum being the Principal Outstanding together with accrued interest and fees and all other monies actually or contingently payable by you under the Facility Agreement and unpaid as at today's date. The Commitment (including the HKBA Guarantee Facility) is hereby cancelled in accordance with the terms of the Facility Agreement. We hereby give you notice that in default of the payment by you of the sum referred to above we intend to take such action to recover the said sum as we may determine in accordance with the Transaction Documents. Capitalised terms used in this letter have the meaning given to them in the Facility Agreement."
On Friday 7 October the directors of The Ink Group resolved that an administrator be appointed and, on the same day, Mr Kevin Richard Shirlaw was appointed administrator. At about 4.30 pm on Monday 10 October, after the expiry of the demand notice, the Bank by deed appointed Messrs Furby and Brown jointly and severally as receivers of all the property mortgaged under the charge, that is to say all the assets and undertaking of The Ink Group.
No challenge is made to the facility agreement itself or to the quantum of the sum, $3,812,765.16 claimed by the notice of demand. Nor is it in dispute that by 4.30 pm on 10 October that sum had not been paid on demand, that the directors of The Ink Group had taken steps for an administration nor that, if the $3,812,765.16 was payable, The Ink Group was then unable to pay its debts as they fell due.
Nevertheless, these proceedings have been brought on the instructions of the administrator alleging, in paragraph 12 of the statement of claim, that the applicant had sought and received assurances from the Bank that the Bank would not demand repayment under the facility until such time as a new facility at Barclays Limited ("Barclays") in the United Kingdom had been established. Paragraph 13 of the statement of claim alleges that the respondent had represented that the repayment of the facility would not be required until after the applicant's peak cash inflow period in January 1995. Paragraphs 18, 19 and 20 of the statement of claim read:-
"18. In the premises, the respondent has, by giving the assurances and making the representations, and then demanding repayment of the facility, engaged in conduct that is misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act.
19. Further, the respondent's conduct referred to in the preceding paragraph is unconscionable conduct in contravention of section 52A of the Trade Practices Act.
20. Further, and in the alternative, the respondent is estopped from demanding repayment of the facility until the new facility is finalised or until February 1995, after the applicant's peak cash inflow period."
In substance, the claim alleges that there was conduct on the part of the Bank which was misleading, deceptive and unconscionable and that the Bank is estopped from relying on the notice of demand served on 7 October and thereby from appointing the receivers. It is further alleged that the Bank is estopped from appointing receivers until the periods referred to in paragraphs 12 and 13 of the statement of claim have expired.
Before turning to the facts of the case, I should mention that two matters stand in the way of the grant of an interlocutory injunction. The first is that the administrator does not offer the usual undertaking as to damages. The usual practice in this regard is set out in Daniel's Chancery Practice, 8th ed Vol II at 1408, where it is stated:
"When an interlocutory injunction is granted either ex parte or on notice the party (generally the plaintiff) at whose instance the order was made is required to give an undertaking to abide by the order of the Court as to any damages the defendant may be put to by reason of the interim order; and such other terms are imposed upon him as the nature of the case may require.
It would be a rare case for an interlocutory injunction to be granted absent the giving of the usual undertaking unless the applicant be the Crown or the injunction was granted in accordance with a provision such as s 80(6) of the Trade Practices Act 1974 (Cth). Indeed, in Southern Tableland Insurance Brokers Pty Limited (in Liq) v Schomberg (1986) 11 ACLR 337 at 341, Young J said:-
"Although many judges and authors speak of the exception, I do not know of any case where it has been reported that a judge has found that special circumstances exist so that an undertaking should not be given ... Spry in the third edition of his Equity Remedies at p 465 says that the circumstances where it is not just and reasonable that an undertaking should be given are extremely rare."
The approach to the grant of interlocutory injunctions which has been enunciated in American Cyanamid Co v Ethicon Limited (1975) AC 396 proceeds on the footing that an undertaking as to damages will be required. This is because, absent the undertaking, there would be no ground, except in exceptional circumstances, for precluding the respondent from doing that which the respondent claims entitlement to do. Absent an undertaking as to damages, the status quo cannot be maintained.
In the exercise of their reserve powers, the directors have offered an undertaking on behalf of The Ink Group. But this undertaking would be worthless for the business and assets of the company are in the hands of the administrator. The directors themselves are unable to offer security, for their assets are already charged to the Bank. An undertaking from Ink UK and from Ink NZ have been offered, but both are outside the jurisdiction and both owe substantial sums to The Ink Group. Indeed, it seems that the funding of Ink UK and of Ink NZ was one of the causes of the financial troubles of The Ink Group. Furthermore, the respondent already has some charge, at least, in respect of those companies. I therefore approach the matter on the footing that no acceptable undertaking as to damages has been offered.
The second problem facing the applicant is that the applicant does not offer and indeed is unable to pay into Court the sum demanded by the Bank. The usual rule in a case where a creditor is seeking to enforce a security is that, as a condition of obtaining injunctive relief, the debtor whose property is subject to the security should be required to pay into court the sum claimed to be due.
The rule was discussed and applied by the High Court in Inglis v The Commonwealth Trading Bank of Australia (1972) 126 CLR 161. See also Harvey v McWatters (1948) 49 SR (NSW) 173; Blundell v Associated Securities Limited (1971) 19 FLR 17. The rule has been thought to have application as a usual rule even in those cases where sections 52 and 87 of the Trade Practices Act 1974 (Cth) are relied on, see Town and Country Sport Resorts (Holdings) Pty Limited v Partnership Pacific Limited (1988) 20 FCR 540.
The rule was founded on the equity of redemption and originally had a technical base. Gradually the matter came to be regarded as one in which it was sufficient if an equity were raised justifying equitable relief. Since the fusion of law and equity and since powers to grant relief have received a statutory base as in s 23 of the Federal Court of Australia Act 1976 (Cth), the discretion has become wider. But, as Dixon CJ said in Mayfair Trading Co Pty Limited v Dreyer (1958) 101 CLR 428 at 454: "no general desertion of the true principles of equity has been considered allowable in granting injunctions." Where the issues arise under a purely statutory base, such as under the Trade Practices Act, the principles of equity will nevertheless have less influence.
The rule as stated in Coote's Treatise of the Law of Mortgage, 5th edition, 1884, p 275 was that injunctive relief may be granted "but not without the actual deposit of the sum to which the mortgagee is entitled." That rule still applies in the law of the present day in the sense that, in the absence of a payment into court of the amount claimed or found to be due, a court will generally not interfere with the exercise, by a mortgagee or a receiver, of a power granted under a security. The principle has a basis in policy. See, for example, the remarks of Walsh J in Inglis at 165 where his Honour said:-
"The benefit of having a security for a debt would be greatly diminished if the fact that a debtor has raised claims for damages against the mortgagee were allowed to prevent any enforcement of the security until after the litigation of those claims had been completed."
The need for certainty in commercial transactions has been emphasised on many occasions.
These two rules, the usual undertaking as to damages and the usual rule for payment into Court, necessarily operate together as a payment into Court will reduce the likelihood of damage flowing from the grant of injunctive relief.
I turn now to the facts of the case. I can set those out only briefly, thereby omitting a great deal of the material before the Court. I merely wish to set out what I understand to be the substance of the matter.
On 10 February 1994, the Bank wrote to the directors of The Ink Group advising that, due to the failure to provide the Bank with certain information and in view of continuing breaches of various undertakings in its facility agreement, the Bank was reviewing its willingness to provide The Ink Group with continued financial accommodation. The letter went on to say that, notwithstanding a proposed meeting, the amounts currently outstanding and any further advances that the Bank might grant from time to time would remain subject to the Bank's right of repayment on demand.
On 16 June, the Bank wrote again mentioning that the borrower was in breach of financial undertakings. The letter stated that the Bank may be prepared to consider not demanding full and immediate repayment subject to certain terms and conditions, but the Bank reiterated its right to demand repayment at any time. On 4 July, a temporary excess was granted. Once again there was a reiteration of the Bank's right to demand repayment at any time. On 13 July, the Bank wrote to The Ink Group referring again to certain failures on the part of The Ink Group. This letter reconfirmed that the sums were on demand. The letter went on to request certain financial information and noted that the Bank reserved its right to appoint an investigating accountant chosen by the Bank to undertake a full review and to provide a report to the Bank. This letter also concluded by emphasising the Bank's right to demand repayment at any time.
On 14 July, The Ink Group forwarded the requested information to the Bank. By 19 July, Mr M R Brown of Coopers and Lybrand had been appointed to investigate and to report to the Bank.
On 28 July, after there had been discussion in the United Kingdom of a proposal that Barclays Bank would take over from the Midland Bank the financing of Ink UK, The Ink Group wrote to the Bank requesting the Bank's consent to the registration of a first charge to Barclays Bank over Ink UK. On 1 August, The Ink Group wrote to the Bank requesting an increase of the company's overdraft facility from 1.1 million to 2.6 million with temporary excesses up to $3 million for the months of September and October. The letter enclosed an updated cash flow and mentioned that the cash requirements and the cash flow assumed that arrears creditors, particularly the Taxation Office and McPhersons Limited, would go along with the proposed deferral arrangements.
On 4 August, the Bank notified The Ink Group that the Bank was prepared to consent to Barclay's proposal subject to certain terms and conditions which it stated. The Ink Group responded to that letter on 4 August stating that: "We are unable to accept the letter without, as a condition precedent, an assurance of the continuance and increase of the current HKBA facility." That letter was not responded to by the Bank in terms.
The request for an increased overdraft was dealt with by the Bank by a letter of 31 August 1994 which stated that the Bank had conditionally approved a temporary increase of $500,000 in The Ink Group's overdraft facility for ongoing working capital repayable on demand, but in any event by no later than 30 November 1994. That letter also repeated that nothing in it would constitute a waiver or fetter of the Bank's right to demand repayment at any time.
There is a copy letter in evidence which is exhibit "FF" to Ms Langton's affidavit. I will not refer to it as it may not have been sent. Mr Dawson, an officer of the Bank, gave evidence that he had not received it.
On 7 September, The Ink Group wrote saying that it was pleased to accept, in principle, the temporary and conditional offer of an increase in the overdraft facility. However, the letter specified some 19 conditions. The letter concluded as follows:
"We have approached this agreement in good faith and we will complete the facility with Barclays Bank and negotiate with our creditors in the same spirit. In doing so, we also rely absolutely on the continued good faith of the HongKong Bank."
The Ink Group's letter of 7 September 1994 was not acceptable to the Bank and it responded on 14 September to say that the terms and conditions of its offer were "not negotiable although we (the Bank) consider that some flexibility is required". The letter stated that:-
"In fact, sale of The Ink Group (NZ) Pty Limited ... within the timeframe previously discussed (and contained in our letter), with sales proceeds of a minimum AUD1.5 m. which would be applied to immediate permanent debt reduction was a key factor in (the Bank's) preparedness to consider the temporary increase.
We are now advised that this operation will not be sold in the time frame previously advised, rather it may be franchised with presumably the consequential detrimental impact on the level and timing of debt reduction."
The letter also referred to the fact that the refinancing of the UK operations gave rise to a concern because Barclays Bank required a deed of postponement which quarantined any improvement in the company's financial position from being repatriated in liquidation of the inter-group debt due to the Australian business. The letter concluded that:
"unless Ink is prepared to accept and comply with our requirements by 23 September 1994, HKBA will withdraw its offer and will consider cancelling its facilities to The Ink Group and reserves its right to seek full repayment."
On 21 September, The Ink Group responded that it did not accept the offered increase in the facility as it was too inflexible but, nevertheless, The Ink Group was "confident, that with the Bank's passive support we would be able to weather the current difficulties, even without temporary facility." The Ink Group's letter stated that "Certain creditors including McPherson's had deferred" and that McPherson's arrears of $1.4 million were rescheduled to 1 July 1995. Other like creditors were mentioned. In fact, by 4 October 1994 there was a letter from McPhersons to The Ink Group which showed that continued supply was conditional upon a repayment schedule which included additional cash flow payments the first of which would be in October 1994.
On 7 October, Mr R S Furby of Coopers and Lybrand wrote to the Bank to say that he had attended the company's premises to establish the current position of The Ink Group in relation to major outstanding creditors and proposed payments. Mr Furby reported that:-
"From our brief review of creditors levels and balances at 30 September 1994 the Company has made substantial inroads into the payment of past creditors and proposes during October and beyond to continue this program. The funding of such payments has been from stock and ultimately debtor realisations some of which, Ken Done and Myers, have been by special arrangement including discounts.
The Company indicates that this process will continue and this is reflected in the monthly cashflows with the inevitable result that assets over which the Bank has security will reduce, thereby putting the recovery of all monies outstanding as at the date of this letter at further increased risk.
Given this and the current level of past creditors which exist, some of which have been deferred (eg McPhersons subject to written confirmation) and those yet to be (eg Sales Tax) together with the trading cycle of the business over the next few months, I consider the Bank's security position will deteriorate with the risk of increasing loss of principal and interest over time. Based upon the above and our discussions with the Company, I consider it is not in the Bank's short to medium interests to continue the facilities to Ink."
Following upon that letter the Bank served its notice of demand.
In the light of these general facts, I now return to the applicant's contentions. Necessarily, I cannot state them as fully or as positively as counsel for The Ink Group might wish me to do. I think that I understand how counsel puts the submissions but, for the purpose of this motion, I can do no more than briefly refer to the main aspects of the evidence relied upon and the points which I see against the submissions.
The first matter relied upon is a conversation said to have taken place on 21 July 1994. Mr Lee, a director of The Ink Group, has given evidence of a meeting at the offices of the Bank. A Mr Thompson and perhaps Mr Dawson were present at that meeting. The cash flows to which I have earlier referred were discussed. Mr Lee has given evidence that Mr Thompson stated:-
"Based on these cash flows we won't be able to increase the facility to the level that you are requesting. The way your cash requirements will be dealt with is a combination of giving you an additional facility but keeping that to an absolute minimum in the additional facility and you pushing out the creditors and at this stage only pay minimum amounts to creditors."
It seems to me that Mr Thompson's remarks were made in the context of a proposed offer of additional finance. That offer was subsequently made and was rejected. It appears to me that whatever was said by Mr Thompson on 21 July cannot be relied upon as an undertaking by the Bank outside the context of what was then being discussed.
The next matter relied upon is that, in early August, Mr Dawson of the Bank said, according to Mr Lee, in a telephone conversation:-
"We are extremely keen for Barclay's facility to proceed. Look, we don't want anything to collapse the deal."
Again, this statement must be understood in the context. Later, it was the deed of postponement which Barclays required that concerned the Bank and the fact that the benefits of the re-financing of Ink UK would not be permitted to flow back to Australia and so reduce the liability to the Bank in Australia.
The next matter relied upon is a letter from Mr Lee to the Bank of 4 August. This letter indicated that The Ink Group would be unable to accept certain terms and conditions which the Bank had stated, without, as a condition precedent, an assurance of the continuance and increase of the Bank's current facility. The Bank did not respond and the assurance was not given.
In a letter of 7 September 1994, Mr Lee stated that:
"We also rely absolutely on the continued good faith of the HongKong Bank."
That was in a letter which set out 19 conditions. The Bank did not agree with some of these conditions, and expressed its disagreement within a few days.
Another matter relied upon is Mr Lee's evidence that, on 5 September 1994, he said:-
"It is important for us to have the assurance of the HongkongBank's continued support for us to proceed with the Barclays facility. It would be unconscionable for us as directors to accept the Barclays facility without that assurance."
Mr Lee went on to say in his affidavit, though he put the remark in brackets, that:-
"(John Dawson and Graham Thompson nodded, indicating that they approved.)" Mr Dawson has given evidence contradicting Mr Lee's evidence. Mr Thompson has not given evidence as he is presently overseas.
For my own part I would not take a nod as indicative of any assurance of support in view of the fact that the agreement between the parties was clearly set out in a formal written document and that was an agreement to which the Bank had referred on many occasions, making it quite clear the stance it took.
On 21 September 1994, Mr Lee wrote to the Bank declining its offer of the additional $500,000 overdraft and referring to The Ink Group's confidence that with the Bank's passive support it would be able to weather the current difficulties. This again seems to me to be simply a hopeful statement by The Ink Group. It does not appear to me to give rise to any undertaking by the Bank. The Bank did not express or imply any change from its reiterated view that the moneys due were on demand.
These are not all the matters that counsel for the applicant has relied upon but that is the type of evidence that has been placed before me and I do not think that I need go any further into the matter. The evidence appears to me to show no more than that The Ink Group directors were hoping for a commitment from the Bank but that no such commitment was given. The agreement between the parties was clear and was set out in the facility agreement. The agreement between the parties, and understood by the parties, was that the moneys due from The Ink Group were on demand. No other commitment was given.
Paragraph 13 of the statement of claim raises a representation that the repayment of the facility would not be required until after the applicant's peak cash inflow period of January 1995. The representation there relied upon was the conversation of 21 July 1994 and Mr Thompson's words at that time. It seems to me that Mr Thompson was doing no more in that conversation than discussing the situation with the directors of The Ink Group. Mr Thompson foreshadowed that the Bank would be prepared to grant additional assistance. The Bank later made the offer and the offer was not accepted. I do not see any undertaking from the Bank that there would be no repayment required until after the January 1995 period.
Counsel for The Ink Group has submitted that the Bank stood back and considered the appointment of a receiver while failing to inform The Ink Group that the appointment of a receiver might be one of the courses taken. Counsel relied, for example, on a note from Mr Thompson to another officer of the Bank of 22 July 1994 which said:
"We are seriously considering the appointment of a receiver as an alternative to the additional funding."
It seems to me, however, that the Bank made The Ink Group aware that it was concerned about the situation. That is clear from the fact that the Bank stated this in writing and put in an accountant to investigate The Ink Group's affairs and to report back to it. Additionally, there were, over the period, various discussions as to what might be done to remedy the position. Some of the matters that were discussed were the refinancing in the United Kingdom and the sale of Ink NZ. It appears to me that the evidence shows that The Ink Group was made aware that the Bank was concerned about its exposure.
Counsel for The Ink Group submitted that the Bank stood back and allowed Ink UK to obtain finance from Barclays Bank which it would not have been done had The Ink Group and Barclays Bank known that the Bank, that is to say the Hong Kong Bank, would call up its funds and appoint a receiver.
The evidence shows, however, that the Bank was at first happy for the transaction in the United Kingdom to proceed but it subsequently became concerned when it ascertained that no funds would be coming to The Ink Group from that refinancing, that no funds would come from Ink NZ and that the Bank's position was deteriorating because other creditors were being paid to its detriment. The Bank then took steps to protect its interest.
Counsel submitted that the directors had put their houses on the market to their detriment in reliance on the Bank's support of The Ink Group. However, their homes were already security for the Bank. The directors knew the financial position of The Ink Group. They knew the financial position was very difficult and that The Ink Group was unable to pay all the creditors as the debts fell due and they chose to take a step, namely to put their homes on the market, in order to overcome some of the financial problems that the company was facing.
Counsel submitted that the Bank allowed and encouraged the directors to postpone payment to creditors. Again, it seems to me that this was the directors' decision. The Bank indicated that it could not loan more than $500,000, which made deferment essential. Even before that time, the directors had been arranging for the deferment of the payment of certain of the obligations of The Ink Group. After the directors rejected the offered additional finance, it necessarily followed that the company could not pay all its creditors. The Bank acted only when Mr Furby reported that The Ink Group made payments to certain creditors to the Bank's detriment.
Counsel submitted that The Ink Group had spent money on stock, the Christmas stock, thus exposing suppliers to greater risk in so far as The Ink Group was concerned. It has not been shown, however, that anything that was happening at the time was other than normal trading for the Christmas period. It does not seem to me that the Bank was in any way responsible for the orders placed.
Overall, this is a case where the directors were faced with financial difficulties, The Ink Group sought to trade out of the problems and sought the continued support of the Bank. The Bank continued with that support until such time as it received advice that further support was undesirable. The Bank then formed the view that it should take steps under the deed in order to protect its security.
I have of course not attempted to decide this case but simply to express my impression gained from the limited evidence before me. But overall, it appears, on the evidence presently before me, that this is a very weak case insofar as it asserts that the Bank made representations to The Ink Group and its directors which misled them and which were unconscionable. Even had there been an undertaking as to damages and the moneys demanded had been paid into Court, I might have been in doubt as to whether The Ink Group had put forward an arguable case. But I do not need to decide that point.
As matters stand, it seems to me that it would be wrong to prevent the Bank from exercising its security. It is important that courts should not interfere lightly with the exercise of security rights. There is an important point of public interest involved. In my opinion, having regard to the lack of payment in and the lack of an undertaking as to damages, the balance of interest weighs heavily against the grant of an injunction. The Bank is a secured creditor. Only by refusing the injunction can its secured rights be protected.
On the other hand, if the Bank has engaged in conduct which was in breach of s52 or other provisions of the Trade Practices Act, damages can be recovered against it, and it will be in a position to pay. The Ink Group would not be likely to be in a position to do so.
For all these reasons, the application for an interlocutory injunction must be refused. I will dissolve the interim injunction granted by Burchett J and I will give the respondent the costs of the motion.
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