Air New Zealand Limited v Wellington International Airport Limited HC WN CIV 2007 485 1756
[2008] NZHC 2438
•30 July 2008
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2007 485 1756
BETWEEN AIR NEW ZEALAND LIMITED First Plaintiff
ANDAIR NELSON LIMITED Second Plaintiff
ANDEAGLE AIRWAYS LIMITED Third Plaintiff
ANDZEAL 320 LIMITED Fourth Plaintiff
ANDMOUNT COOK AIRLINE LIMITED Fifth Plaintiff
ANDWELLINGTON INTERNATIONAL AIRPORT LIMITED
Defendant
CIV 2007 485 2221
AND BETWEEN WELLINGTON INTERNATIONAL AIRPORT LIMITED
Plaintiff
ANDAIR NEW ZEALAND LIMITED First Defendant
ANDAIR NELSON LIMITED Second Defendant
ANDEAGLE AIRWAYS LIMITED Third Defendant
ANDZEAL 320 LIMITED Fourth Defendant
AIR NEW ZEALAND LIMITED AND ORS V WELLINGTON INTERNATIONAL AIRPORT LIMITED HC WN CIV 2007 485 1756 30 July 2008
ANDMOUNT COOK AIRLINE LIMITED Fifth Defendant
Hearing: 17 April 2008
Counsel: D J Goddard QC and L A O'Gorman for Wellington International
Airport Limited (in support)
J A Farmer QC, D Cooper and R Woods for Air NZ Ltd & Ors (to oppose)
Judgment: 30 July 2008
SUPPLEMENTARY JUDGMENT OF WILD J
[1] My judgment of 24 April omitted to deal with WIAL’s application for an interim mandatory injunction, should its application for summary judgment be declined. In [4] of my 8 July minute, I confirmed that I would give a supplementary judgment dealing with that application, and regret not achieving my stated aim of doing that in the week beginning 14 July.
[2] I approach WIAL’s injunction application by applying the well established two-stage approach set out in Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA).
[3] Stage 1 requires WIAL to meet the threshold question of a serious case for trial. WIAL does that with ease.
[4] Stage 2 involves the balance of convenience. I consider the phrase “the balance of the risk of doing an injustice” better describes the process involved. The phrase is that of May LJ in Kane v Global Natural Resources Plc [1984] 1 All ER
225 (CA) at 237. The task involves balancing the injustice that will be caused to WIAL if an interim mandatory injunction is refused and WIAL ultimately succeeds in obtaining summary judgment against Air NZ, against the injustice that will result to Air NZ if an interim mandatory injunction is made, but then discharged in the
substantive judgment.
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[5] The leading statement of “the balance of convenience” remains that of Lord Diplock at 408-409 in American Cyanamid co v Ethicon Ltd [1975] AC 396. While stressing that the relevant factors and their weighting are case dependent, Lord Diplock suggested the following general approach.
[6] Step 1: the adequacy of damages. In the context of this proceeding, I equate summary judgment with damages. This is a two way consideration. If summary judgment will adequately compensate WIAL, and Air NZ is good for the judgment, no interim injunction should normally be granted. The converse is equally applicable. The difficulty of assessing loss (and thus the appropriate amount of a money judgment) is well recognised. Where real, that difficulty can render a money judgment an inadequate remedy.
[7] It is at this first step that I consider WIAL’s injunction application fails. There is no suggestion here of a difficulty in assessment of the amount of money that will be due to WIAL if the increased charges are upheld. Mr Goddard was constrained to accept that there will be no ultimate prejudice to WIAL provided a full commercial rate of interest is paid. I inquired further about this in the course of the teleconference with counsel on 8 July. The response was that interest is running on the unpaid portion of the charges, on either a contractual or statutory basis. I was not given details of the rates that might be applicable, though I am well aware of the prescribed rate(s) under s87 Judicature Act 1908. In the absence of definitive information, I assume that a “full commercial rate” of interest is running on the unpaid charges.
[8] It follows that a money judgment will adequately compensate WIAL, if Air
NZ’s challenge to the increased charges fails.
[9] Strictly, it is unnecessary to go further. I do so in case my views on the further steps in the balance should be relevant on any appeal.
[10] Step 2: status quo. Preservation of the status quo, as opposed to the recent change to it which has caused the dispute, is often a prudent course. But what is the status quo? A helpful answer is “the last peaceable state between the parties”, a
definition offered by Jeffries J in R & M Wright Ltd v Ellerslie Gateway Motels Ltd HC AK CP188/90 11 July 1990. But even the application of that definition can be arguable. Here, WIAL would say it was the position immediately before Air NZ refused to pay the increased charges. Air NZ would doubtless respond that it was the setting of those charges by WIAL which broke the peace. As Air NZ’s challenge is to the legality of those charges, on the basis that there was predetermination rather than proper consultation by WIAL, I consider the status quo is the position pertaining before WIAL fixed increased charges.
[11] Step 3: the uncompensatable disadvantages to each party, depending on whether an interim injunction is granted/refused. This is often (including in McGechan on Procedure at HR238.13) termed “the relative circumstances of the parties”. Factors that can loosely be marshalled under this head, and in no particular order, are:
a) Air NZ continues to make full use of Wellington Airport, despite not paying the increased part of the charges.
b)Air NZ is, however, paying the balance of the charges i.e. that part it does not challenge.
c) The fact that other airport users are paying the full charges i.e. unfairness as between users of Wellington Airport.
d)WIAL concedes that Air NZ’s challenge to the lawfulness of the increases on the grounds of predetermination is tenable, and that challenge is for trial on 10 November, just 3½ months away.
e) Air NZ has appealed the striking out of two other grounds of challenge to the lawfulness of the increases to the charges. Those appeals are for hearing on 19/20 November.
f) The fact that interest is running on the unpaid portion of the charges and that Air NZ is good for any judgment awarded against it in
respect of the unpaid part of the charges. These points are a reiteration of those dealt with at step 1.
g) The fact that WIAL can refund to Air NZ any part of the increased charges ultimately ruled to be unlawful.
h)The requirement that WIAL account for GST based on the full amount of the charges it is invoicing to Air NZ, notwithstanding that Air NZ is not paying those invoices in full.
[12] I do not see this diverse collection of factors as weighing decisively in favour of either granting or withholding interim injunctive relief. In short, step 3 is a neutral factor in the balance.
[13] Step 4: the relative strength of each party’s case as revealed by the affidavit evidence. This step is currently ungraspable, as the affidavit evidence relating to WIAL’s consultation process has yet to be filed. I gave timetabling directions about this in my 8 July minute.
[14] Because a mandatory interim injunction directs immediate action, rather than restraint, the Court tends to demand a higher standard of “proof”. In practical terms, the Court must feel a high degree of assurance that trial will confirm that the mandatory interim injunction was correctly granted. For the reason just explained, I do not have that high degree of assurance. The adequacy of the statutory consultation process is very much a live issue for trial in November.
Result
[15] WIAL’s alternative application for a mandatory interim injunction fails, and is accordingly dismissed.
[16] The tentative view as to costs I expressed at [92] of my 24 April judgment applies equally to this supplementary judgment.
Solicitors:
Buddle Findlay, Wellington for Wellington International Airport Ltd
Bell Gully, Auckland for Air NZ Ltd & Ors
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