Waters v Unagold Pty Ltd and Argentgate Pty Ltd
[1998] QCA 420
•18/12/1998
IN THE COURT OF APPEAL [1998] QCA 420 SUPREME COURT OF QUEENSLAND Appeal No. 11559 of 1998
Brisbane
[Waters v. Unagold P/L & Anor.]
BETWEEN:
DAVID WATERS
(Plaintiff)(Applicant) Appellant
AND:
UNAGOLD PTY LTD (ACN 010 916 506)
and ARGENTGATE PTY LTD (ACN 010 542 784)
(Defendants) Respondents Pincus JA
Thomas JA
Chesterman J
Judgment delivered 18 December 1998.
Judgment of the Court.
APPLICATION FOR INJUNCTIVE RELIEF DISMISSED. APPLICATION FOR ORDER THAT HEARING OF APPEAL BE EXPEDITED GRANTED. ORDER THAT THE PARTIES COMPLY WITH DIRECTIONS GIVEN BY THE REGISTRAR FOR THAT PURPOSE. COSTS OF THIS APPLICATION WILL BE THE RESPONDENTS' COSTS IN THE APPEAL.
CATCHWORDS: INJUNCTION - application for injunction pending appeal. Counsel: Mr C Hampson QC, with him Mr I Perkins for the appellant.
Mr P McMurdo QC, with him Mr P McQuade for the respondents.Solicitors: Michael L Podmore & Associates for the appellant
Corrs Chambers Westgarth for the respondents.Hearing Date: 17 December 1998 IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 11559 of 1998
Brisbane
Before Pincus J.A.
Thomas J.A.
Chesterman J.[Waters v. Unagold P/L & Anor.]
BETWEEN:
DAVID WATERS
(Plaintiff) (Applicant) Appellant
AND:
UNAGOLD PTY LTD (ACN 010 916 506)
and ARGENTGATE PTY LTD (ACN 010 542 784)
(Defendants) Respondents
REASONS FOR JUDGMENT - THE COURT
Judgment delivered 18 December 1998
The appellant, an unsuccessful applicant for interlocutory relief pending trial, has appealed
against decisions of Mackenzie J. refusing the relief applied for and refusing, also, an application for
a "holding order", being it appears, an order for relief pending an appeal. This is an application for
an order that the hearing of appeal be expedited and that an injunction be granted until the hearing
of the appeal restraining the respondents in various respects from negotiating with tenants of the
appellant.
The appellant's case is principally that a Mr R L Simmons made misleading representations
on behalf of the respondents which induced the appellant to grant certain easements. It is argued
on his behalf that what was said by Mr Simmons constituted conduct of the kind proscribed by
section 52 of the Trade Practices Act 1974 (Cth), subsection (1) of which reads as follows:"A corporation shall not, in trade or commerce, engage in conduct that is misleading
or deceptive or is likely to mislead or deceive."The primary judge has explained the issues rather fully in his reasons and it is unnecessary
to repeat all the details his Honour mentioned. The appellant is the proprietor of a shopping centre
at Enoggera of which the main tenants are and have at material times been a Subway and a Night
Owl shop. The former is mainly a take-away food and meal shop and the Night Owl is a general
store open for extended hours. Mr Simmons approached the appellant in 1996 because the
respondents desired to establish a shopping centre adjoining the appellant's and it was thought
necessary or desirable that the new centre have the advantage of certain easement rights in relation
to the land on which the appellant's centre stands. There were negotiations between the appellant
and Mr Simmons which resulted in an agreement being made on 5 July, 1996 requiring the appellant
to grant easements over his shopping centre in favour of the respondents’ adjoining land and
requiring the respondents to reciprocate.
That was carried into effect when easements were executed, apparently about May 1997.
In the meantime and subsequently the respondents have proceeded with their plans for the new
shopping centre, negotiating for tenants and arranging for finance and for the building of the centre.
The first indication of trouble between the parties, so far as the documents show, was a
letter of 30 July, 1997 about the proposed new shopping centre, written by solicitors on behalf of
the appellant to the respondents' solicitors which contained the following sentence, "Our client notes
that initially your client had intended to develop the site with a view to development of a Hungry
Jacks fast food restaurant and subsequently reference was made to development of the site in terms
of a medical centre and associated tenancies and also a restaurant theme." The letter said that if there was to be any variation proposed, this should be communicated "so that we can ensure that
the developments complement each other in final form".
A reply was sent dated 29 August, 1997 which said that the initial intention was to build a
medical centre as well as "various retail orientated tenancies". It said there had been delays and that
the opportunity of dealing with a particular medical group had been lost. There is an affidavit from
Mr Simmons which says that the lost opportunity was with a group called Aus-Care and
Mr Simmons annexes copies of correspondence with that group. He also says that attempts were
made to get various prospective medical centre tenants up to April/May 1998.
To come back to the letter of 29 August, 1997, it is said there, on behalf of the respondents:
"It is still our clients’ intention to obtain core food related tenancies and convenience type tenants
subject to availability of such tenants in the market". There was a prompt response to that letter,
dated 1 September, 1997, in which the appellant's solicitors complained about the stated intentions
of the respondents; it said, among other things, "Of particular concern, two lines in your second last
paragraph that referred to 'core food related tenancies and convenience type tenants'." The letter
went on to say, "Our client's position was clear that there was to be no competition to our client's
existing tenants".
To summarise, the initial complaint of 30 July, 1997 says that the respondents were to
develop a medical centre and associated tenancies and also a "restaurant theme". The letter of 1
September, 1997 adds that there was to be no competition with existing tenants.
Mr Waters' affidavit mentions meetings with Mr Simmons at which Mr Simmons said words
to the effect that there would be no competition between the tenants of the appellant's centre and
those of the respondents' centre. According to the appellant, Mr Simmons said also that "Consistent with the medical centre, it was proposed to tenant the centre on the defendant's land
by coffee shops come (sic) cafes come (sic) restaurants".
If the matter goes to trial, it may be suggested that the statement in Mr Waters' affidavit
which has just been quoted is not easily reconcilable with what is said in the correspondence, but
it is unnecessary for this Court to express a view about that. In his affidavit Mr Simmons admits that
it was intended to develop a medical centre on the new shopping area. He says he had in mind that
the development would "probably be primarily for medical centre, food, restaurant and local shop
uses". He says that he told the appellant that he would prefer the tenancies in the proposed centre
to be complementary to the existing centre rather than competing directly with the appellant's tenants
and that "together with a proposed medical centre, the defendants had in mind a food based centre
incorporating take-aways, snack bars and coffee shops".
This may be compared with the appellant's statement to which we have referred, mentioning
coffee shops, cafes, and restaurants.
What has brought the matter to a head is that the two most important tenants of the
appellant's centre propose to take space in the new centre. The respondents assert that they did
not approach the tenants to do so; if that is not so, then the respondents have breached clause 6.1
of the agreement to which we have referred, which contains a covenant that the respondents "will
not approach any Tenant of premises on the Adjoining Owners' land, including but not limited to
[certain of the tenants] with a view to influencing, encouraging, or enticing such Tenants to enter into
any Agreement for Lease or Lease of any part of the Developer's Land, Building or Buildings
erected or to be erected of the Developer's Land". We are in effect invited by the appellant to infer
that the two tenants who have it in mind to defect, those connected with the Subway shop and the Night Owl store, must have been approached in breach of clause 6.1; but there is no direct
evidence of that. The respondents say the approach came from the two tenants.
Section 51A of the Trade Practices Act 1974 has the effect that to put it simply, a
representation with respect to a future matter is misleading if the corporation which made it did not
have reasonable grounds for doing so. It may be expected that if there is a trial statements made
by Mr Simmons about the respondents’ intentions with respect to the new centre might be defended
on the ground that there were, when they were made, reasonable grounds for making them.
With respect to the same Act, there was some discussion as to whether or not the
appellant's case if accepted would prove that there was an understanding reached in breach of
section 45(2) of that Act, read with the definition of "exclusionary provision" in section 4D. We do
not think it desirable to discuss that point, or indeed the strength of the opposing cases, in further
detail. It is enough, on this aspect of the matter, to say that while we think that there is a serious
question to be tried we do not think it advisable to express a view as to its degree of strength.
With respect to the balance of convenience, each side has put in evidence suggesting that
lack of success in the present application might have disastrous consequences for it. We have
carefully considered what is said about that topic, reaching the view that, on the material that we
presently have, there would seem to be substantial detriment likely to be caused to the appellant if
no relief is granted here and similarly substantial detriment to the respondents if the opposite result
ensues.
In the end, we regard the opposing considerations, which were ably put by counsel, as finely
balanced on all main issues, namely the issue of liability, balance of convenience and what is the true
status quo. Mackenzie J., having refused the application for injunctive relief pending trial, also refused an application to grant an injunction pending appeal. We have found ourselves unable to
be satisfied that his Honour's discretion was wrongly exercised and see no sufficient reason for
exercising an independent discretion to grant an injunction in favour of the appellant. The application
for injunctive relief will be dismissed.
In the circumstances, it is uncertain whether the appellant will pursue the appeal against the
order of Mackenzie J. or rather concentrate on going to trial quickly. In case he determines on the
former course, it will be ordered that the hearing of appeal be expedited and that the parties comply
with directions given by the relevant Registrar for that purpose. The costs of this application will
be respondents' costs in the appeal.
0
0
0