Air Express Ltd v Ansett Transport Industries

[35]

The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'.

At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or 'so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument'; 'so to speak apparent at a glance'.

...

Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed (128 - 130).

[40]

20 The authors of the fourth edition of Meagher, Gummow & Lehane's Equity Doctrines & Remedies say at [21-410] that the importance of an undertaking is immense, as in the absence of an undertaking a defendant who is ultimately victorious at the final hearing has no recourse to recover the damages he may have incurred from complying with an interlocutory injunction: Chisholm v Rieff (1953) 2 FLR 211; Bond Brewing Holdings Ltd v National Australia Bank Ltd (No 2) [1991] VicRp 31; [1991] 1 VR 386; (1991) 1 ACSR 445. In Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [1981] HCA 75; (1981) 146 CLR 249 Gibbs J said that the object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking as to damages is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it (311). His Honour said that the insistence upon the giving of an undertaking 'is a very important, if not an essential, means of preventing injustice from being done by the court' when it makes an order at an interlocutory stage before the rights of the parties have been finally determined. Gibbs J said that the appellant could not obtain damages for any loss which resulted to it by reason of the injunction because at the time it was not a defendant and was not entitled to the benefit of the undertaking (314). Stephen J said that a plaintiff who sues for an injunction and obtains interlocutory relief, giving an undertaking to the court as the price of that relief, commits no wrongful act when, at the trial, he fails to obtain any perpetual injunction but, if as a result of the grant of interlocutory relief, the defendant has been harmed there will have been an injustice and, an undertaking having been given, the court 'will thereby have been armed with jurisdiction, otherwise lacking' to right that injustice and compensate the defendant for the harm done to him (319 - 320).

[62]

33 The court has jurisdiction to require a party seeking an injunction to give an undertaking for the benefit of third parties affected by the injunction: see Smith Kline Beecham Plc v Apotex Europe Ltd [2007] Ch 71, [31] (Jacob LJ, Sir Andrew Morritt C & Moore-Bick LJ concurring). Practice note CM14 issued by the Federal Court Chief Justice on 25 September 2009 provides that the usual undertaking as to damages if given to the court in relation to any interlocutory order made by it is an undertaking to submit to such order (if any) as the court may consider to be just for the payment of compensation to be assessed by the court or as it may direct, to any person, whether or not a party, adversely affected by the operation of interlocutory order. Rule 25.8 of the Uniform Civil Procedural Rules 2005 of New South Wales is in similar terms and refers to the payment of compensation to 'any person (whether or not a party) affected by the operation of the interlocutory order'. In the United Kingdom practice direction 25A - Interim Injunctions provides in [5.1] that any order for an injunction, unless the court orders otherwise, must contain an undertaking by the applicant to the court to pay any damages which the respondent sustains which the court considers the applicant should pay. Paragraph 5.1A provides that when the court makes an order for an injunction, it should consider whether to require an undertaking by the applicant to pay any damages sustained by a person other than the respondent, including another party to the proceedings or any other person who may suffer loss as a consequence of the order. Prior to the making of practice directions in jurisdictions that require a party seeking an interim injunction to give an undertaking for the benefit of third parties or providing for the court to consider whether to require such an undertaking, it had always been assumed that a person who is not a party to the proceedings does not have a claim as of right against a party who obtained a 'wrongful' interim injunction which caused him expense or damage: Smith Kline Beecham Plc v Apotex Europe Ltd, [30] (Jacob LJ).

Air Express Ltd v Ansett Transport Industries - [2010] WASC 242 - WASC 2010 case summary — Zoe

At a glance

Court

Decision date

Before

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Source

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Judgment (72 paragraphs)

INDOOR HOLDINGS PTY LTD -v- BENNETT [2010] WASC 242 (9 September 2010)

INDOOR HOLDINGS PTY LTD -v- BENNETT [2010] WASC 242 (9 September 2010)

Parties

Legislation Cited (3)

Cases Cited (5)