ASC INDUSTRIES PTY LTD -v- DEMOL INVESTMENTS PTY LTD [2025] WASC 548 (19 December 2025)

What was said at that meeting is materially in dispute.

1. The plaintiff's case is that the second defendant made certain oral representations, as pleaded at [14] and [15] of the statement of claim (the Representations).
2. The plaintiff's case is that it completed the purchase of the business and took the assignment of the leases relying on the Representations.
3. By their defence filed 28 November 2025, the defendants deny the Representations were made.
4. It is common ground that notices of redevelopment were served by the first defendant on the plaintiff on 10 February 2025, to the effect that the leases would be terminated pursuant to the redevelopment clause in 12 months.

1. I turn to the interlocutory injunction application.
2. The governing principles are well known and were not in dispute, and I have not set them out separately here.
3. The defendants accept that there is a serious question to be tried as to the making of the Representations, but there is a dispute between the parties as to the strength of the plaintiff's case.
4. The plaintiff says it has a strong prima facie case and places particular reliance on the evidence of Mr Harris as to the making of the Representations, but also places reliance on what it says is the second defendant's failure to go into full evidence as to his account of the relevant conversation on 30 December 2023.
5. The plaintiff says that the account given in the first De Mol affidavit at [43] is not a full account.
6. Ordinarily, of course, on an application such as this, conflicts of evidence are not to be resolved, and I intend to follow that here.
7. For the purposes of today, I accept that the plaintiff has a strongly arguable claim that the Representations were made.
8. It is not, of course, appropriate for me to descend into a detailed assessment, but it is not as obvious to me that the plaintiff has a strongly arguable claim to the relief sought in prayers A to D of the statement of claim.
9. Obviously, I am not making any judgment as to this, but I am not sure that it is without doubt that proving the Representations will necessarily lead to a grant of the relief in one of those prayers.
10. There is still a serious question to be tried, of course, that the plaintiff is entitled to one of the prayers A to D claimed, but I consider the chances of that relief being obtained are more finely balanced at this time.
11. Turning to the balance of convenience. Broadly, the defendants accept that the plaintiff will suffer if the first defendant is not restrained from acting on the notices of redevelopment.
12. And as I understand it, the defendants accept at least that it would lead to the plaintiff vacating the leased premises but say, in answer to that, that the costs of that would be able to be met by an award of damages.
13. Broadly, the plaintiff accepts that the first defendant will suffer loss in that its planned, redevelopment of the leased premises will be delayed and that it will lose a period of higher rents from redeveloped premises.
14. In giving the above summary of what appears to be common ground, I note that the plaintiff contends it will also suffer, at least, a loss of improvements made to the premises and a loss of customers because of its current physical location. For present purposes, I have accepted these as credible or plausible potential losses to be weighed in the balance of convenience.
15. The first defendant says that its redevelopment will cost more and take longer if it does not start in February 2026 as planned, and, rather, starts in April or May, assuming a successful judgment from its perspective, by the end of March or the beginning of April.
16. For present purposes, I accept these are credible and plausible potential losses, but it is difficult for me to, presently, quantify the scope of them and I accept that it has been difficult, in all of the circumstances, for the defendants to put on evidence as to the likely or possible quantum. Nonetheless, it poses a difficulty in putting some numbers around that potential loss.
17. The defendants also point, in the consideration of discretionary factors, to the plaintiff's delay in seeking the interlocutory injunction.
18. Despite retaining solicitors in February 2025, soon after the receipt of the notices of redevelopment, the proceedings were not commenced and the application for the injunction was not made until November 2025.
19. There is some explanation of the delay for the period between February and early September. That is, there were negotiations, it appears, between the parties as to a compromise or a resolution of their positions. But the defendants say, with some force, that the delay is wholly unexplained from 8 September to 3 November 2025.
20. I accept that this later delay weighs against the grant of the injunction, although not decisively.
21. The real point of difference, on the balance of convenience, is the value of the plaintiff's undertaking as to damages, which is in the usual form, and is currently unsecured.
22. I was told, and accept, that Mr Harris is prepared to proffer a personal undertaking in addition to the plaintiff's undertaking, and I have considered the question of any further security on the basis that there are those two undertakings already on the table, as it were.
23. In saying that about the undertaking which Mr Harris is prepared to proffer, I note that the evidence establishes that Mr Harris is not the registered proprietor of any land in Western Australia, and that a liquidator of one of his companies has expressed concerns as to Mr Harris's financial position as recently as September 2025. It appears, from the material, that Mr Harris's worth is in his investments in his companies, which may not be immediately realisable.
24. It is accepted by the plaintiff, broadly, that there is a power for the Court to order further security be provided. I to refer to and adopt the approach taken by the Full Federal Court in the decision of First Netcom Pty Ltd v Telstra Corporation Ltd [2000] FCA 1269; (2000) 101 FCR 77, where the Court set out at [23] - [25] what I regard to be, and have followed as, the applicable principles.
25. That is, if the Court is concerned that the undertaking proffered in the ordinary terms will not ensure the reality of adequate compensation to the party who is ultimately successful, the Court may, in effect, stipulate a further condition in connection with the undertaking, should the plaintiff elect to give that undertaking and so secure the injunction.
26. The Full Federal Court noted that strictly what the Court orders is the injunction, and the operation of that injunction may be expressed to be conditional on the giving of the further security, but the Court is not directing or ordering the performance of such a condition.
27. That is, it is entirely at the plaintiff's election as to whether to proffer the undertaking in those terms or not.
28. So, anything I say about the ordering of the provision of further security must be understood in light of the approach that I have just cited from, which I have sought to apply here.
29. In this case, I have considered the following factors:
    1. the newness of the plaintiff and its limited trading history;
    2. that it is a sole purpose company;
    3. the thinness of its assets; and
    4. its concentration of its assets.
30. I also consider that there are questions as to the plaintiff's financial position as disclosed by its balance sheet, which was attachment 'MPH‑53' to the second Harris affidavit.
31. If one accepts only the adjustment made by the defendants' aide‑mémoire 1 to remove the 'Loan-Mark', which appears to me to be reasonable, then that makes a significant difference to the net asset position, such that it raises a question from the balance sheet as to the plaintiff's financial position.
32. Further, I think there are questions over the plaintiff's net financial position, as was sought to be established by the third Harris affidavit which deposed to a net financial position of around $580,000.[8]
33. There is force in the submission made by the defendants as to the plaintiff's net financial position, through their aide-mémoire 3, that the plaintiff's net financial position is considerably lower than that deposed to in the third Harris affidavit.
34. Lastly, I have had regard to the question of when damages may come to be assessed on the undertaking as to damages, and accept the submission made by the plaintiff that would be, in all probability, in later 2026, assuming the trial and judgment progress on the timeline mentioned above, and as provided for by the programming orders made 12 December 2025.
35. If the plaintiff were materially unsuccessful in obtaining any of the relief in prayers A to D of the statement of claim, then the frailty of its financial position may become far more prominent by the time of coming to satisfy the undertaking as to damages.
36. That suggests to me strongly that the current undertakings proffered by themselves may not, to adopt the language of the Full Federal Court, 'ensure the reality of adequate compensation'.[9]
37. In those circumstances, I would grant the injunction sought if, in addition to the proffered undertakings, the plaintiff provided security by bank guarantee, bond, deposit into court, or something of that nature of $150,000.
38. In nominating that figure, I have made, necessarily, a broad-brush assessment of the defendant's possible damages, taking into account both the possibility of damages accepted by the plaintiff and those disputed by the plaintiff, and I have sought to take a very conservative view on the low side.

1. That brings me to the security for costs application.
2. The application is sought under s 1335 of the Corporations Act 2001 (Cth) (the Act), and/or under O 25 of the Rules of the Supreme Court 1971 (WA) (RSC). I only think I need to deal with the application under s 1335 of the Act.
3. I accept that the threshold has been met in s 1335 of the Act, largely for the reasons I have given above going to, the adequacy of the undertaking as to damages.
4. Once the threshold has been overcome, the parties were agreed on the principles to be applied to the discretionary judgment.
5. The plaintiff says principally that its proceedings are defensive in nature, and I have had regard to the authorities cited to me in the plaintiff's written submissions, but also by counsel at the hearing.
6. If I had to decide the characterisation question today, I am not sure I would accept that the proceedings were purely defensive. But, in any event, those authorities make it plain that even if the proceedings are defensive, that is not determinative, and the matter remains one of discretion.
7. In all of the circumstances on this case today, I would not find it weighs decisively against the application.
8. That really brings me then to the question of quantum.
9. There are two competing estimates prepared by the parties, with the plaintiff's solicitors making an estimate of $155,000 as being an appropriate quantum, and the defendants' solicitors making an estimate of $232,000.
10. As I understand the authorities, I am to make a broad-brush assessment, and the award I am to make is not intended to provide a full indemnity to the party seeking security.
11. Taking all of those matters into account, I would order security to be provided in the amount of $190,000.
12. There is an issue on the chamber summons for security, which is that I would not be minded to make the order sought in proposed order 2. It seems to me that, with respect, is not an appropriate order to make.
13. Rather, in order 1 on the fourth line, after 'costs of these proceedings', I would add, subject to hearing from counsel, the words 'to the conclusion of a four-day trial on 6 March 2026,' and then, obviously, I will order the lesser sum.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[6] First Harris affidavit [28] - [32].

[9] First Netcom Pty Ltd v Telstra Corporation Ltd [23].