TOM'S Cranes Pty Ltd v Secure Funding Pty Ltd
[2015] WASC 374
•8 OCTOBER 2015
TOM'S CRANES PTY LTD -v- SECURE FUNDING PTY LTD [2015] WASC 374
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 374 | |
| 08/10/2015 | |||
| Case No: | CIV:2085/2015 | 24 JULY 2015 | |
| Coram: | SIMMONDS J | 24/07/15 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Interlocutory injunction granted preventing DF from hindering PF's access to their Assets on DF's property | ||
| B | |||
| PDF Version |
| Parties: | TOM'S CRANES PTY LTD CRANE RENTAL PTY LTD SECURE FUNDING PTY LTD |
Catchwords: | Interlocutory relief Injunction Access to assets Declaration Serious question to be tried Right of recaption |
Legislation: | Nil |
Case References: | Bedshed Franchising Pty Ltd v Battersby [2015] WASC 224 DW & JA Edwards Pty Ltd v Shih (1995) 7 BPR 14405 Fitzgerald v Kellion Estates Pty Ltd (1977) 2 BPR 9181 Flowfill Packaging Machines Pty Ltd v Fytore Pty Ltd (1993) A Tort Rep 81-244 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 Saratoga Integration Pty Ltd v Canjs Pty Ltd [2010] NSWSC 654 Toyota Finance Australia Ltd v Dennis [2002] NSWCA 369; (2002) 58 NSWLR 101 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- First Plaintiff
CRANE RENTAL PTY LTD
Second Plaintiff
AND
SECURE FUNDING PTY LTD
Defendant
Catchwords:
Interlocutory relief - Injunction - Access to assets - Declaration - Serious question to be tried - Right of recaption
Legislation:
Nil
Result:
Interlocutory injunction granted preventing DF from hindering PF's access to their Assets on DF's property
Category: B
Representation:
Counsel:
First Plaintiff : Mr G D Cobby
Second Plaintiff : Mr G D Cobby
Defendant : Mr J Garas
Solicitors:
First Plaintiff : Mendelawitz Morton
Second Plaintiff : Mendelawitz Morton
Defendant : Norton Rose Fulbright Australia
Case(s) referred to in judgment(s):
Bedshed Franchising Pty Ltd v Battersby [2015] WASC 224
DW & JA Edwards Pty Ltd v Shih (1995) 7 BPR 14405
Fitzgerald v Kellion Estates Pty Ltd (1977) 2 BPR 9181
Flowfill Packaging Machines Pty Ltd v Fytore Pty Ltd (1993) A Tort Rep 81-244
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Saratoga Integration Pty Ltd v Canjs Pty Ltd [2010] NSWSC 654
Toyota Finance Australia Ltd v Dennis [2002] NSWCA 369; (2002) 58 NSWLR 101
- SIMMONDS J:
(This judgment was delivered extemporaneously on 24 July 2015 and has been edited from the transcript.)
Introduction
1 This is an application for interlocutory relief (the present application). Principal orders sought are two.
2 One is to prevent the defendant 'hindering' the plaintiffs obtaining access between certain hours, Monday to Friday, to certain properties of the defendant for the purpose of removing certain personal property of the plaintiffs.
3 The other order sought is to restrain the defendant from removing, disposing, or otherwise dealing with that personal property of the plaintiffs.
4 The principal action is by writ claiming a declaration of entitlement to enter upon the properties described in the present application before me for the purposes of removing the plaintiffs' property described in the application before me, about which I will need to say a little more in a moment. That is in par 1 of the writ.
5 In pars 2 and 3 there is a claim for interlocutory injunctive relief in the same terms as the present application before me.
6 In par 4 there is an alternative claim for an order for delivery up of the plaintiffs' personal property. In par 5 there is a claim for damages for detinue.
7 There are also claims in par 6, interest, and in par 7, further or other relief.
Background
8 The background is taken from the affidavit of Cameron Hugh Shaw sworn 17 July 2015 (Mr Shaw's first affidavit of 17 July 2015) and for the most part appears to be uncontroversial except as I indicate.
9 Mr Shaw is one of two voluntary administrators for the first plaintiff and one of the liquidators of the second plaintiff.
10 Mr Shaw's first affidavit of 17 July 2015 is in the terms of an earlier affidavit of 14 July 2015 which had to be resworn. This background is also drawn from other affidavits filed for the purposes of the present application.
11 For the plaintiffs there is a further affidavit of Mr Shaw sworn 17 July 2015 (Mr Shaw's second affidavit of 17 July 2015).
12 For the defendant there is, firstly, an affidavit of Courtney Zelma Wright sworn 17 July 2015 (Ms Wright's affidavit of 17 July 2015). Ms Wright is corporate legal counsel employed by the defendant.
13 Secondly, there is the affidavit of Robert Jeffery Black sworn 22 July 2015 (Mr Black's affidavit of 22 July 2015). Mr Black is a solicitor in the firm of solicitors acting for the defendant.
14 The first plaintiff had been under voluntary administration since at least 29 October 2014. On 24 December 2014 the creditors of the first plaintiff resolved to accept the terms of a deed of company arrangement. On 2 December 2014 the second plaintiff, which had also been under voluntary administration at least since 29 October 2014, was placed into liquidation.
15 Both the first and second plaintiffs carried on then and continued to carry on, through their respective external administrators, the business of hiring out cranes and materials handling machinery to their clients for use on other sites.
16 The first plaintiff has owned an array of cranes and materials handling machinery (the Assets). The property of the subject of the present application is a subset of the Assets originally appearing as Annexure A to the writ of summons (the Annexure A Assets).
17 The list of the Annexure A Assets was compiled as described in Mr Shaw's second affidavit of 17 July 2015.
18 The list was Amended by Amended Annexure A (the Amended Table A Assets) to the plaintiffs' minute of orders sought dated 15 July 2015 (the plaintiffs' minute).
19 I understood the amendments to reflect the Assets removed after the issue of the writ as I will indicate.
20 When not on hire the Assets were stored at three properties: two in Malaga, respectively 138 Mulgul Road and 443 Victoria Road (the Malaga properties), and one in Forrestdale, 17 Cartwright Drive (the Forrestdale property). Collectively I will refer to these three properties as 'the properties'.
21 The Malaga properties were owned by the directors of the second plaintiff while the Forrestdale property was owned by a company related to them.
22 Those owners were indebted to the defendant.
23 On 9 March 2015 the defendant obtained a consent judgment in this court against the owners of the properties.
24 Under that judgment, amongst other things, the owners were required to deliver up vacant possession of the properties to the defendant.
25 By an email of 31 March 2015 the defendant informed the solicitors for the plaintiffs it intended to take possession of the properties.
26 Before and after that email there was correspondence between the plaintiffs and the defendants concerning the state of the properties and the steps needed to remove the Assets.
27 During that correspondence the defendant indicated it claimed an interest in some of the Assets. That interest was as holder of security interests derived from the company that owned the Forrestdale property.
28 However, it would seem the particular subset of the Assets the subject of the present application, that is, the Annexure A Assets and now the amended Table A Assets, are not property of the plaintiffs in respect of which the defendant asserts a right to immediate possession as opposed, it would seem, to a possible right to share in proceeds of any disposal of them.
29 On 18 May 2015 the plaintiffs and the defendant entered into three licence agreements, each in the same terms, one for each of the properties (the licence agreements).
30 The terms of each of the licence agreements included the following: the recital of the defendant as first ranking mortgagee of the relevant one of the properties; consideration in the form of a licence fee in varying amounts by the property concerned; the grant of a licence by the defendant to the plaintiffs to use the property concerned to conduct the business of the plaintiffs traded at the property concerned; and the plaintiffs to use the plaintiffs' best endeavours to remove any assets and scrap of that business by an auction or otherwise during the term of the licence, which was from 18 May 2015 - 2 July 2015, subject to earlier termination as provided for in the relevant licensing agreement.
31 The defendant agreed that the plaintiffs might sell all the Assets remaining on the property. In the event the defendant later claimed entitlement to proceeds of sale the defendant agreed to pay the reasonable costs and expenses of the plaintiffs relating to the sale. On termination of the relevant licencing agreement the plaintiffs were requested to deliver 'Vacant Possession' of the property concerned.
32 'Vacant Possession' is defined in each of the licence agreements in the same terms as follows:
Vacant Possession means exclusive possession of the Property in a condition which will place the Property in a saleable condition, without any assets or scrap (excluding any improvements or fixtures) from the Business remaining onsite.
33 During the period 18 May 2015 - 2 July 2015 the plaintiffs arranged for auctions at which some but not all of the Assets were sold with some collected and some since awaiting collection.
34 The remainder of the Assets not removed as a result of the auction or other action are on the properties. These are the subject of the present application.
35 By letter dated 3 July 2015 from the solicitor for an entity related to the defendant, the solicitors for the plaintiffs said this:
We refer to our letter dated 1 July 2015.
As you are aware, all three licences expired on 2 July 2015. Secure is currently making arrangements to lock up the Security Properties.
Your clients have failed to comply with their obligations under the licences to 'use their best endeavours to remove... assets and scrap of the Business' and deliver the Security Properties to Secure in a saleable condition, and by 2 July 2015.
Should your clients wish to remove the Business' assets and scrap, Secure is agreeable to allowing supervised access by prior appointment. Please contact Richard Abraham on ... to arrange access.
Should your clients fail to make satisfactory arrangements to remove the Business' assets and scrap within 7 days, I have been instructed to make an application to the Court for orders permitting Secure to dispose of the goods.
My client otherwise reserves all its rights. (original emphasis)
36 Further exchanges between the parties resulted in a letter dated 9 July 2015. Solicitors for the plaintiffs wrote to solicitors for the defendant in the following terms after making reference to the letter dated 3 July 2015:
Enclosed herewith is an itemisation of assets held on three properties located at 138 Mulgul Road, Malaga, 17 Cartwright Drive, Forrestdale and 443 Victoria Road, Malaga in Western Australia (collectively, the Properties).
Our client is entitled to immediate possession of these assets.
We are instructed to demand that your client acknowledge our client's right to possession of these assets by agreeing to provide our client with supervised but unrestricted access to the Properties to collect the assets from 7:30am to 5:00pm on each and every business day from the date of this letter until our client has relocated the assets to another location. As previously outlined to you, it is anticipated that this job will take twenty (20) business days assuming access to all of the Properties concurrently for the hours specified.
Our client confirms that it will meet the reasonable costs of additional supervisory personnel.
Alternatively, our client demands that you deliver the assets to an address to be nominated by our client.
Your client has also threatened to sell our client's assets. That threat is repugnant to our client's ownership of the assets.
If your client does not:
(a) either agree to grant the access or deliver the goods as set out above; and
(b) withdraw the threat to sell our client's assets
before close of business 10 July 2015 (being the expiry of your client's deadline) then our client will make such application to the Court as it considers fit in order to protect its interests.
37 Still further correspondence occurred. By letter dated 14 July 2015 solicitors for the defendant wrote to solicitors for the plaintiffs in terms that after reciting the plaintiffs 'proposal' (which appears to be that in the letter dated 9 July 2015) goes on:
Your Clients' Proposal still fails to provide the details requested in paragraph 14 of my letter of 6 July 2015.
Further, it makes no mention of any payment (which your clients previously offered for any additional time) or payment of my clients' reasonable costs to supervise the removal of items (i.e. the need for two supervisors).
I note that your proposal was also conditional upon a storage site being arranged by the end of last week (which we understand your clients asked John Martinazzo to arrange for them). Please confirm that your clients have now arranged an additional storage site.
My client is willing to allow your clients a final, short period of time ending 7 August 2015 to remove the items. However, any additional time is subject to the following terms:
• your clients immediately provide my client with a clear list of the items which they propose to remove, including details of where each item is located (i.e. which of the Security Properties) and how they propose to remove the items. It is unclear from your current List (and the lists attached to your 6 July 2015 letter) what items have been sold and collected from the Security Properties, and which of those items remain on the Security Properties and your clients propose to remove;
• your clients agree to pay the costs incurred by my client last week, in having to engage Mr Abraham to respond to your clients many requests for access;
• your clients agree to pay the costs of Mr Abraham and a second person (nominated by my client) to supervise the ongoing removal of items until 7 August 2015; and
• your clients agree to pay a further fee of $27,714.30 (plus GST), representing a pro rata rate for the further 20 days access requested calculated by reference to the previously agreed licence fee.
Please confirm by close of business on 15 July 2015 whether your clients are agreeable to the above terms.
Finally, please note that 138 Mulgul Road, Malaga is under contract. The contract terms require that the gantry cranes and their footings be removed; however, we are told that the purchaser will agree to retain the cranes. I understand that your clients have been in negotiations with the purchaser regarding the sale of the cranes. Please confirm whether your clients have come to an arrangement with the purchaser or whether they will remove the cranes.
My client otherwise reserves all its rights. (original emphasis)
38 I should note, in passing, that any concern of the defendant as to lack of clarity in any demand by the plaintiffs would, in my view, appear to have been sufficiently dealt with by the provision of the list of annexure A Assets including the amended Table A Assets.
39 By the letter dated 14 July 2015 the solicitors for the plaintiffs wrote to the solicitors for the defendant, in terms that, after referring to a number of matters, conclude as follows:
Our client is entitled to immediate possession of its assets.
If your client does not:
(a) either agree to grant the access or deliver the goods as set out in our letter to you dated 9 July 2015;
(b) withdraw the threat to sell our client's assets; and
(c) provide the information required herein by 3:30pm WST today
then our client will make such application to the Court as it considers fit in order to protect its interests.
40 I note from that letter, among other matters, it refers to two matters drawn to my attention by counsel for the defendant:
Further, our client is not required to pay rent in order to recover its goods: see Fitzgerald v Kellion Estates Pty Ltd (1977) 2 BPR 9, 181 and the cases that have followed it since. Notwithstanding that, our client is prepared to discuss a payment with you in order to resolve the issue as raised in our correspondence to your client of 30 June 2015.
As to the costs issues raised in your client's letter, please advise the costs of Mr Abraham. Our client specifically said that it would meet reasonable costs of supervision (see our letter to you dated 9 July 2015) during the removal of its assets. That information is solely within your client's knowledge.
41 By the email of 14 July 2015 corporate legal counsel acting for the defendant wrote to solicitors for the plaintiffs in the following terms:
I reiterate that my client is happy to grant access on the terms outlined in my letter of today's date. Further, my client is also agreeable to providing your clients with access for 20 business days, on the basis that an agreement can be reached within a reasonable timeframe.
I otherwise note that:
• my client has notified purchasers of the security properties that all chattels on the properties belong to third parties, and will be removed prior to settlement; and
• Mr Abraham's hourly rate is $400 (plus GST) per hour.
Please confirm what your clients are prepared to pay for access to the properties, and whether they agree to the [sic] my client's proposal.
42 I should note that Mr Black's affidavit of 22 July 2015 annexes emails exchanged between representatives of the parties.
43 I am satisfied that, for my purposes, that exchange shows a pattern of permitted access for the plaintiffs so far as the properties are concerned for the purposes of collection of what appear to be the Assets. That access is by arrangement between the parties on particular occasions for collections of what appear to be particular Assets.
The applicable law
44 I consider the following to be a sufficient statement for my purposes: Bedshed Franchising Pty Ltd v Battersby [2015] WASC 224 [64] - [72] (Beech J):
I apply the principles I set out in Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110.
The principles were explained by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill [provide citation]. Their Honours stated that the relevant principles are those stated in Beecham Group Ltd v Bristol Laboratories Pty Ltd [provide citation]. In Beecham, the two main inquiries were said to be whether the plaintiff had made out a prima facie case and whether the balance of convenience favours the grant of the injunction. The phrase 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks. The apparent statement by Lord Diplock in American Cyanamid Co v Ethicon Ltd [provide citation] that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, there will be a serious question to be tried, is not to be followed. The governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory orders sought.
The strength of the plaintiff's case and the balance of convenience are to be considered together. As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order. Where the balance of convenience weighs strongly in favour of an injunction, a prima facie case that is not particularly strong may nevertheless sustain the granting of an interlocutory injunction.
However, even an overwhelming balance of convenience in favour of an injunction cannot overcome the absence of a prima facie case. In Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171 Newnes JA (McLure and Pullin JJA agreeing) explained the position in the context of a caveat. In that context, his Honour observed that:
'The potential seriousness of the consequences of refusing relief must not, however, distract attention from the obligation that lies on a party seeking to maintain a caveat to show a sufficient likelihood of success to justify in the circumstances the maintenance of the caveat. A party who fails to show any likelihood of success does not overcome that by showing that they would suffer very severe consequences if relief were refused.'
The same applies to a party seeking an interlocutory injunction.
The authorities favour the position that the question of adequacy of damages is not an independent requirement, but rather is best considered as part of the balance of convenience.
The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial.
While the court takes into account the apparent strength of the plaintiff's case, the court does not undertake a preliminary trial or attempt a forecast of the ultimate result. Moreover, an application for interlocutory injunction is not an occasion to determine contested questions of fact and conflict in affidavit evidence.
In a passage recently cited with approval by the Full Federal Court, Mahoney JA made observations in Shercliff v Engadine Acceptance Corporation Pty Ltd [provide citation] about the use to which the defendant's evidence can be put in determining an application for an interlocutory injunction:
'But there are limitations upon the extent to which a judge is to take into account such evidence as the defendant may tender upon an interlocutory application. It is not his function to conduct a preliminary trial of the action, nor is it, in general, to resolve the conflict between the parties' evidence, and grant or refuse the application upon the basis of such findings. Where there is conflict of evidence, the use which may be made of the defendant's evidence in determining whether the plaintiff has made out a prima facie case is a limited one. For example, the plaintiff's evidence, considered alone, may be such a prima facie case as would be acceptable if submitted to a jury in a trial. But, when considered in the light of the defendant’s evidence, it may be explained away so as no longer to be such. Or the defendant's evidence, when juxtaposed to that of the plaintiff may show that there is in reality no such case, no real question between the parties, appropriate to warrant preserving the status quo until the hearing.' (footnotes omitted)
45 I consider that question to be that of the entitlement of the plaintiffs at the date of the issue of the writ of summons to have relief at least in the form of a declaration in par 1.
46 As has been seen, pars 2 and 3 is the present application.
47 I consider that authority which was cited to me establishes the following propositions of law:
• Proposition 1: it is lawful for a person entitled to possession of personal property to retake the personal property peaceably and in so doing commit what would otherwise be trespass to the property of another on whose property the personal property has been left by prior arrangement between the first person and the second person. This is provided that the second person is wrongfully detaining the personal property. This is often called a right of recaption.
• Proposition 2: such wrongful detention is made out by an effective demand that the second person not prevent the first person getting access to the personal property when he comes for them and a refusal of that demand.
• Proposition 3: an effective demand is one which makes it sufficiently clear to what personal property the first person seeks access.
• Proposition 4: a refusal may be made out by a failure to comply with a demand in all the circumstances.
• Proposition 5: no conditions may be placed on compliance with a demand save in a case where the second person does not know the first person's title and, having a bona fide doubt as to the title of the goods, detains them for a reasonable time for the purposes of clearing up that doubt.
48 The authority for Propositions 1, 2, 3 and 4 is Fitzgerald v Kellion Estates Pty Ltd (1977) 2 BPR 9181, 9186 - 9187 (Hutley & Hope JJA), 9191 - 9192 (Mahoney JA), and the authorities there cited.
49 The authorities for Proposition 5 is Flowfill Packaging Machines Pty Ltd v Fytore Pty Ltd (1993) A Tort Rep 81-244, 65,520 (Young J) and the authorities cited there, and Saratoga Integration Pty Ltd v Canjs Pty Ltd [2010] NSWSC 654 [22] (Macready AsJ).
50 I should indicate that there is authority against the view that a right of recaption extends to the use of force of any kind against a person whose possession was not wrongful in its inception: see Toyota Finance Australia Ltd v Dennis [2002] NSWCA 369; (2002) 58 NSWLR 101 [144] (Sheller JA, Meagher JA agreeing) and the authorities Sheller JA cites, compare [11] (Handley JA dissenting) and authority he cites; and compare also the Criminal Code (WA) s 253.
51 I do not consider this is a case that requires me to address the question of whether, by virtue of the Criminal Code s 253 or otherwise, that that is the position in this State.
52 I note that the right in Proposition 1 may be enforced by injunction: see DW & JA Edwards Pty Ltd v Shih (1995) 7 BPR 14405 (Young J).
53 It seems to me that the plaintiffs have made out an apparently strong case. I so conclude having regard to the plaintiffs' letter of 9 July 2015 in the context of the defendant's letters of 3 July 2015 and 14 July 2015 and other evidence. The letter of 9 July 2015 clearly asserts an entitlement within Proposition 1 which is an effective demand in my view, given the history of the dealings between the parties represented by the licensing agreements and the correspondence leading up to them.
54 It was suggested to me by the defendant that the plaintiffs might reasonably be seen to be 'cherry picking' among the Assets with ones not the subject of a declaration remaining on the properties. The evidence of the plaintiffs, while not being as clear as might be desired, is that the Assets subject to the declaration sought are the remainder of the Assets on the land: see Mr Shaw's first affidavit of 17 July 2015 pars 31 - 33. I do not see any evidence before me which calls that evidence into question.
55 It was put to me the demand was not effective to claim the entitlement as it allowed for negotiation at least of the amount for supervision. However, in my view that was a concession to allow for possible agreement while access was permitted. This in my view is what is indicated by the language of the plaintiffs' letters and is consistent with the conduct of the plaintiffs described in the email attached to Mr Black's affidavit of 22 July 2015.
56 The letter of the defendant of 14 July 2015, read with the letter of 3 July 2015, in my view, is to be seen as indicating that the defendant would not prevent the plaintiffs getting access to the Assets, but only on condition of payment of an ultimately-to-be-agreed amount for use of the lands and an ultimately-to-be-agreed amount for the defendant's supervision of that access.
57 However, it was put to me that the defendant's letter of 14 July 2015 was considered as a response to the plaintiffs' letters and that conduct described in the emails attached to Mr Black's affidavits rather indicated that there was no refusal of any demand.
58 As I understood the submission particular reference for this purpose was made to the defendant's email of 14 July 2015. Indeed, the failure to disclose that email together with matters in the emails attached to Mr Black's affidavit of 22 July 2015 was said to represent a failure in candour by the plaintiffs sufficient in the exercise of my discretion to disentitle them to the relief the plaintiffs seek.
59 However, in my view the defendant's email of 14 July 2015 rather indicates the defendant's maintenance of the position that access would only be permitted on conditions of payments to be made in amounts to be agreed. This is also indicated by the conduct to which Mr Shaw's first affidavit of 17 July 2015 at par 43 refers and is consistent with the email attachment to which par 44 refers. Such conditions are not permissible under Proposition 5.
60 Further, there is nothing inconsistent with such indications in the emails attached to Mr Black's affidavit of 22 July 2015. Rather, in my view those emails in the context of that email of 14 July 2015 might be seen to indicate the defendant was granting access in accordance with that position.
61 Finally, the reference to lack of candour is in my view inapt in an application like this one, inter partes for interlocutory relief.
62 In my view, the defendant had sufficient opportunity to put on additional materials which in its view countered the plaintiffs' case. The defendant availed itself of that opportunity. There was no indication the plaintiffs hindered the defendant in that regard.
63 This takes me then to the balance of convenience as part of which the matters of adequacy of damages is to be considered as the Bedshed case indicates.
64 The apparent strength of the plaintiffs' case as I have assessed it means that the balance of convenience may more readily be seen to move in favour of making the orders or at least the first of them sought.
65 The consequences for the plaintiffs were the interlocutory injunction in respect of hindrance not granted but the plaintiffs later succeeded following the final hearing are the costs referred to in Mr Shaw's affidavit (pars 46 - 49) as follows:
46. In addition to the matters outlined above, from the date of our appointment as administrators, Mr Albarran and I have continued to trade the businesses of the Plaintiffs.
47. This includes the administration of crane hire contracts and the servicing of the cranes and machinery.
48. To do so, the First Plaintiff often requires access to the Assets to obtain spare parts for these cranes on hire at very short notice as and when required. Without access to parts it is difficult or costly to service the cranes.
49. If the Plaintiffs are prevented access to the Assets it will be unable to provide the relevant services to its clients and will likely:
(a) Be in breach of their obligations to provide parts and ensure the cranes are serviceable;
(b) Be liable to pay penalty rates attributable until such time as the subject crane becomes operational again.
(c) Risk termination under the contracts due to breach.
- In my view, it may be noted the damages to compensate for the losses in pars 49(a) - (c) would not appear to me to be especially difficult to determine.
66 The consequences for the defendant were an interlocutory injunction granted but the plaintiffs later failed following the final hearing were put to me as the costs for the defendant and borrowers of the delays in the sale process and the length of settlement periods for sale of any of the properties sold after the end of the licence agreements and properties remaining to be sold.
67 Those delays were consequent on the large amount of personal property still to be removed from the properties considered with the cost of their removal: see the evidence in Ms Wright's affidavit of 17 July 2015 pars 16 - 18; and on the costs of clearance Mr Shaw's first affidavit of 17 July 2015 par 27.
68 However, these costs would fall to be assessed in my view by taking account of the extent to which they would be offset by any proceeds of any agreement with the plaintiffs or the payments sought by the defendant as a result of the negotiations between them, negotiations which I note had continued during the hearings of the present application, or the clearance of Assets by the defendant consistent with the plaintiffs' rights to them more promptly than clearance of them by the plaintiffs or by both parties.
69 I return below to such clearance by the defendant.
70 Damages to compensate for those costs so assessed would, it seems to me, clearly be substantially more difficult to determine than damages to compensate for the plaintiffs' losses. However, I should note that those costs of the defendant would be reduced significantly in my view by suitable conditions to relief for the plaintiffs as I will indicate.
71 In my view, the balance of convenience on those suitable conditions considered with the apparent strength of the plaintiffs' case in my view strongly favours the grant of at least the first of the forms of interlocutory relief sought.
72 I should note that the defendant put to me that the grant of interlocutory injunctive relief by the present application at least of the first kind would have the effect of interfering so as to deprive the defendant as mortgagee of the benefit of its security. I was referred to Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161, 164 - 165 (Barwick CJ, Menzies & Gibbs JJ agreeing). I considered in particular the judgment of Walsh J, affirmed on appeal by Barwick CJ, and Menzies and Gibbs JJ.
73 However, it is not apparent to me that the effect of the grant of the interlocutory injunction referred to would be to deprive the defendant of the benefit of its security as that was meant in Inglis. Rather the sale of the Forrestdale property which occurred notwithstanding the state of the properties complained of is it seems to me informative in that regard, although I understand the matter of that sale is not yet finalised.
74 I do not consider this point in fact takes me any further than the costs of the delays I must take account of as described.
75 I should add that the defendant pressed on me the relevance, to the undoubted discretion to grant relief still remaining, of what it said was the plaintiffs' breach of the licence agreements. That breach was the failure to provide 'Vacant Possession' as defined at the end of the term of the agreements.
76 I accept for my purposes such a breach has been shown.
77 However, I do not, of course, consider I have finally so determined. I note in that regard that the construction of the defined term is not altogether clear in the relevant respect.
78 I further accept for those purposes that such a breach would be relevant to show unclean hands, on which I note Meagher RP, Heydon JD & Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2015) s 3-090.
79 However, in my view account should also be taken of two matters.
80 One is that the effect of the relief the plaintiffs seek at least in the first of the two forms is to have them address at least the Assets' contribution to the state of the properties that on the evidence I have described is productive of the delays of which the defendant complains.
81 The other is the conditions on relief that would further that effect by enhancing the prospect of the plaintiffs' address in that regard being prompt: see Meagher RP, Heydon JD & Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2015) s 3-115 on 'washing' unclean hands.
82 When that account is taken, in my view the reason to refuse relief proffered dissolves.
83 I turn then to the matters of conditions for relief. The court has a wide discretion to be exercised judicially to condition the grant of an interlocutory injunction: see Supreme Court Act 1935 (WA) s 25(9).
84 In that regard, I have noted the terms of the license agreements.
85 I have noted, also, the evidence from the plaintiffs as to the period of time they would require to access the properties under the interlocutory injunction of the first kind. That period is at least 20 business days, and perhaps more: see Mr Shaw's first affidavit of 17 July 2015 at pars 33 - 34.
86 In my view, the defendant should be compensated for the use of the properties for a period of that kind of duration, having regard to the license agreements under which access for a significant duration for similar, if not identical, purposes was granted: see DW & JA Edwards v Shih (14,407) where a similar condition was imposed by Young J.
87 That compensation should, in my view, be calculated by applying the calculated daily rate under the license agreements for the period of access under the interlocutory injunction. I understood that daily rate to be that appearing in Ms Wright's affidavit of 17 July 2015 par 7 as the amount $1,385.71 for the day.
88 If the period of access is greater than 20 business days, it may be appropriate for the court to consider submissions for the increase of that rate pursuant to the liberty to apply in any orders it makes.
89 However, I do not consider it appropriate to make an order of a time limited kind as the defendant proposes. It seems to me that an order without such a limit better allows for some uncertainty as to the time the plaintiffs will require, while also recognising the interests of both parties in having the clearance of the remaining Assets from the properties in the manner I have described.
90 For the plaintiffs, it was suggested any such rate so calculated failed to take account of the fact that the purpose of access under the license agreements was not only to remove Assets, but also to trade.
91 However, in view of the connection between those two activities described in Mr Shaw's first affidavit of 17 July 2015 at par 49 (quoted above), it does not appear to me that the rate so calculated is inapt.
92 For the defendant, it was contended that the rate should also include compensation for supervision of access. Such compensation would be calculated by reference to the defendant's cost for providing a person to provide such supervision.
93 However, I note that no such provision was made under the license agreements.
94 I further note the evidence of Mr Shaw's second affidavit of 17 July 2015 at par 9 as to the practice under the licence agreements.
95 At the same time, I consider that in view of the substantial nature of the Amended Table A Assets, it would be appropriate to require as a condition of relief that the plaintiffs provide reasonable notification to the defendant of when they require access to the properties and for what purpose.
96 The defendant put to me that it had been less clear at the time of the license agreements that the rights of third parties might be implicated in removal activities of the plaintiffs. On that analysis, the defendant would require such supervision to protect it and others against a claim of wrongful interference with such rights.
97 However, it was not made clear to me to what extent it had been less clear then that such rights might be implicated. Further, it would seem to me that matters of that kind could more suitably be addressed by the defendant interpleading if necessary.
98 The defendant further put to me that payment for supervision would be appropriate by analogy with conditions for relief under the orders of the Anton Piller type.
99 I disagree. I consider the interlocutory injunction sought of the first sort not to be analogous to an order of that type as described in Civil Procedure Western Australia s 52B.1.1. The plaintiffs are not seeking access to the properties to search for a matter the defendant possesses which the plaintiffs should be able to have secured, not because of the plaintiffs' interest in that matter, but for other reasons. By interest I mean, of course, property interest.
100 I would not impose as a condition for relief such a payment for supervision.
101 However, I would include as a term of the interlocutory injunction of the first kind that I would grant that the order would not restrain the defendant from exercising any right it has to remove any property, including any of the Assets, to interplead in respect of any property including any of the Assets, or to proceed to exercise rights under the Disposal of Uncollected Goods Act 1970 (WA) in respect of any property including the Assets.
102 I have already indicated why I would provide for interpleader.
103 As to the rights of disposal referred to, I understood the plaintiffs to have no objection to such a provision, which would appear to me to be appropriate in any event. This is at least for the added incentive (to compensation for use on a daily basis) that it would seem to me to give the plaintiffs to attend to the removal they propose.
104 As to the right of removal, there is support for the right of a person in the position of the defendant to gather assets and remove them, so as to give persons in the position of plaintiffs access to them: see Fitzgerald (9190) (Hutley JA). Such a right would seem to me to follow from the nature of the right in Proposition 1 above in any event.
105 That right of removal would, of course, on its face, be inconsistent with the second proposed order sought by the present application. However, no authority for a right not to have property removed of the kind that is sought by that order was cited to me. It would be inconsistent with the right of removal I have drawn from Fitzgerald.
106 I accept a removal that was a wrongful interference with the plaintiffs' right of possession might be properly restrained by injunction. However, I was not directed to any evidence of the threat of such removal. An intention to seek an order under the Disposal of Uncollected Goods Act is not such a threat in my view. I would thus not make an order of the second proposed kind sought by the present application.
107 I should add that it was not in contest that, should I make an interlocutory injunction of the first kind sought by the present application, I should require a personal undertaking from each of the two liquidators and administrators of the plaintiffs. This is in view of the external administration of the plaintiffs which, at the very least, raises considerable doubts as to the ability of them to meet undertakings: see DW & JA Edwards v Shih (14,406) where, in similar circumstances, Young J required a similar undertaking.
108 That brings me then to my call for orders.
109 Having arrived at these determinations, I will hear from the parties as to the terms of the orders to give effect to those determinations.
110 I will also hear from the parties as to orders to be made as to costs.
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