Case: Sebel Furniture Limited v Acoustic &amp; Felts Pty Limited [2009] FCA 6
Outcome: applied
Sebel Furniture Limited v Acoustic &amp; Felts Pty Limited [2009] FCA 6 I discussed the relevant principles to be applied by this Court in considering whether or not to grant an interlocutory injunction in aid of private rights. At [19] [31], I said: In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 208 CLR 199 , a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. Their Honours who comprised the majority made clear that the final relief sought need not be injunctive in nature. See [8] to [21] (pp 216 220) (per Gleeson CJ); [59] to [61] (pp 231 232) (per Gaudron J); and [86] to [92] (pp 239 242); [98] to [100] (pp 244 246); and [105] (p 248) (per Gummow and Hayne JJ). At [10] (p 216), Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies , 5th edn, 1997 (pp 446 456). In his Reasons for Judgment, at [13] (p 218), Gleeson CJ expressly approved the following passage from the Reasons for Judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; (1986) 161 CLR 148 at 153: In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction. These remarks of Mason ACJ which were approved by Gleeson CJ echo the observations made by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622 623. In Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [65] (pp 81 82), when referring to the well-known passage in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; 118 CLR 618 at 622 623, Gummow and Hayne JJ said: By using the phrase "prima facie case", their Honours did 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. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [1968] HCA 1 ; [(1968) 118 CLR 618 at 620]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [1968] HCA 1 ; [(1968) 118 CLR 618 at 622]: "How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks." At [70] to [72] (pp 83 and 84), their Honours went on to explain the similarities and differences between the test expounded in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; 118 CLR 618 and the test articulated in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1 ; [1975] AC 396 as follows: When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham , depends upon the considerations emphasised in Beecham . However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is "[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried" [1975] UKHL 1 ; [[1975] AC 396 at 407]. That was followed by a proposition which appears to reverse matters of onus [1975] UKHL 1 ; [[1975] AC 396 at 408]: So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought. (Emphasis added.) Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration 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 order sought. The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535-536 and the article by Sofronoff, " Interlocutory Injunctions Having Final Effect ", Australian Law Journal, vol 61 (1987) 341.95]. The first consideration mentioned in Beecham , the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. At [10] to [12] I have summarised Sebel's claim for final relief. At [13] I have set out the claim for interlocutory relief with which these Reasons deal. Sebel's application for interlocutory relief is in aid of the private rights to which I have referred in [10] to [12] above. The remaining questions identified by Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; 161 CLR 148 require Sebel to show that: (a) it will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and (b) the balance of convenience favours the granting of an injunction. The first of these matters involves an assessment by the Court as to whether the claimant would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies , 7th edn, 2007 at pp 383 389; at pp 397 399; and at pp 457 462). The second of these matters requires the Court to exercise a discretion. In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the claimant if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the claimant for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted. In order to address the irreparable injury question, the balance of convenience and the balance of justice in the present case, it is necessary to consider the nature and strength of Sebel's case and the circumstances in which the respondent decided to compete with Sebel by importing the Titan chair into Australia and by promoting and selling that chair in this country. It is also necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally. In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at [65] and [66] (pp 41 43), Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, expressly adopted a passage from Spry, The Principles of Equitable Remedies (5th edn, 1997, at pp 402 403), which may be summarised as follows: (a) In assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances; (b) Whether those interests tend to favour the grant or the refusal of an injunction in any given case depends upon the circumstances of that case; and (c) Hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive. I will apply these principles in the present case. The Application for Leave to Amend the Originating Process Mr Davis sought leave to amend his Application in the manner described in [8] and [9] above. His application for leave to amend was opposed by the Registrar on the ground that each of the additional claims sought to be added to the Application was bound to fail. In my view, the claims made in proposed new pars 9B and 9C are both bound to fail. For that reason, I refuse leave to amend insofar as the inclusion of those paragraphs is concerned. Paragraph 9A raises different considerations although I think that the claim made in that paragraph is barely arguable. The Registrar did not point to any particular prejudice (other than costs) if par 9A were included.