Applicable legal principles
63 Section 80 of the Act confers on the Court power to grant injunctive relief in respect of infringements of Part IV of the Act. Section 80(1) provides:
(1) Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:
(a) a contravention of any of the following provisions:
(i) a provision of Part IV;
…
(b) attempting to contravene such a provision; or
(c) aiding, abetting, counselling or procuring a person to contravene such a provision; or
(d) inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or
(f) conspiring with others to contravene such a provision;
the Court may grant an injunction in such terms as the Court determines to be appropriate.
64 Injunctions restraining anti-competitive mergers under s 50 of the Act may only be sought by the ACCC. In this respect, s 80(1A) provides:
(1A) A person other than the Commission is not entitled to make an application under subsection (1) for an injunction by reason that a person has contravened or attempted to contravene or is proposing to contravene, or has been or is proposing to be involved in a contravention of, section 50, 60C or 60K.
65 The Court is also empowered to grant an interim injunction pending the determination of final relief under s 80(1). Section 80(2) provides:
(2) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).
66 The ACCC is not required to give an undertaking as to damages when seeking an interim injunction. Section 80(6) provides:
(6) Where the Minister or the Commission makes an application to the Court for the grant of an injunction under this section, the Court shall not require the applicant or any other person, as a condition of granting an interim injunction, to give any undertakings as to damages.
67 It has long been held that s 80 of the Act is an exclusive charter to grant injunctions restraining, or relating to, contraventions of the Act: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 162; Australian Competition and Consumer Commission v Pacific National (2020) 277 FCR 49 (Pacific National) at [326]. The power to grant an injunction is expressed in wide terms and confers a broad discretion on the Court: Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 (Foster) at [30]-[32].
68 The factors that are generally considered relevant to the grant of an interlocutory injunction in equity are usually considered applicable to the grant of an interim injunction under s 80(2). However, the Court's discretionary power under s 80 is not limited by equitable principles and factors relevant to the exercise of the discretion will also be informed by the subject matter and purpose of the Act: OD Transport Pty Ltd v WA Government Railways Commission (1987) 13 FCR 500 at 508 per French J, referred to with approval in Foster at [32]. As observed by the majority (Gaudron, McHugh, Gummow and Callinan JJ) in Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at [28]:
The term "injunction" is used in numerous statutes to identify a particular species of order, the making of which the law in question provides as part of a new regulatory or other regime, which may be supported by penal provisions. Notable examples in statutes presently in force nationally are found in s 80 of the Trade Practices Act … . These provisions empower courts to give a remedy in many cases where none would have been available in a court of equity in the exercise of its jurisdiction …
69 In ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 (ICI), Lockhart J (with whom French J agreed) observed (at 255-257) that:
Section 80 is essentially a public interest provision. Conduct of the kind proscribed by both Pts IV and V may be detrimental to the public interest because many persons can be affected and considerable loss or damage may be sustained by them.
…
Injunctions are traditionally employed to restrain repetition of conduct. A statutory provision that enables an injunction to be granted to prevent the commission of conduct that has never been done before and is not likely to be done again is a statutory enlargement of traditional equitable principles. But this is because traditional doctrine surrounding the grant of injunctive relief was developed primarily for the protection of private proprietary rights. Public interest injunctions are different. Parts IV and V of the Act involve matters of high public policy. Parts IV and V relate to practices and conduct that legislatures throughout the world in different forms and to different degrees, have decided are contrary to the public interest … These are legislative enactments of matters vital to the presence of free competition and enterprise and a just society. This does not mean that the traditional equitable doctrines are irrelevant. For example, it must be relevant to consider questions of repetition of conduct or whether it has ever occurred before or whether imminent substantial damage is likely: but the absence of any one or more of these elements is not fatal to the grant of an injunction under s 80.
70 In separate reasons, Gummow J expressed agreement with the view that, whilst in concept the statutory remedy provided for in s 80 is different from the equitable remedy of injunction as administered in the inherent jurisdiction of courts of equity, nevertheless in many practical respects it is not fundamentally distinct from the equitable remedy (at 266).
71 The equitable principles that guide the discretion to grant interlocutory relief are well established: see Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 (ABC v O'Neill) at [65]-[72], per Gummow and Hayne JJ, affirming Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 (Beecham) per Kitto, Taylor, Menzies and Owen JJ at 84-86. As explained in Beecham and ABC v O'Neill, two main inquiries arise for the Court's consideration:
(a) first, whether the applicant has a prima facie case; and
(b) second, whether the balance of convenience favours the grant of the injunction sought.
72 In respect of the prima facie case limb, the Court must be satisfied that the applicant has established a sufficient likelihood of success to justify the preservation of the status quo by the grant of the injunction, pending the trial. It is not necessary for the applicant to show that it is more probable than not that it will succeed at trial. How strong the likelihood needs to be, and whether it is "sufficient", will depend on the nature of the right asserted and the practical consequences likely to flow from an injunction, if granted: ABC v O'Neill at [65]-[66]; Beecham at 84-86. If there is a prima facie case, the Court must then consider the balance of convenience limb. The Court is to consider whether the inconvenience or injury that the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the inconvenience or injury that the respondent would suffer if an injunction were granted: ABC v O'Neill at [65]-[66]; Beecham at 84-86.
73 The rights of the applicant and respondent are not the only rights considered in determining where the balance of convenience lies: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 (Stevedores) at [65]. In Stevedores, the High Court adopted the following passage from Spry, The Principles of Equitable Remedies (5th ed, 1997) p. 402:
… the interests of the public and of third persons are relevant and have more or less weight according to the other material circumstances. So it has been said that courts of equity 'upon principle, will not ordinarily and without special necessity interfere by injunction, where the injunction will have the effect of very materially injuring the rights of third persons not before the courts'. Regard must be had 'not only to the dry strict rights of the plaintiff and the defendant, but also the surrounding circumstances, to the rights or interests of other persons which may be more or less involved'. So it is that where the plaintiff has prima facie a right to specific relief, the court will, in accordance with these principles, weigh the disadvantage or hardship that he would suffer if relief were refused against any hardship or disadvantage that might be caused to third persons or to the public generally if relief were granted, even though these latter considerations are only rarely found to be decisive. (Conversely, detriment that might be caused to third persons or to the public generally if an injunction were refused is taken into account.)
74 The prima facie case and balance of convenience questions are not independent of each other, although it will often be convenient to consider them successively: Trade Practices Commission v Santos (1992) 38 FCR 382 (Santos) at 392. Once the Court is satisfied that the first limb of the test is satisfied, the strength or weakness of the applicant's case may become a relevant factor in assessing the balance of convenience and whether to exercise the Court's discretion to grant the interlocutory relief sought: Santos at 396; Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472 per Woodward J (with whom Smithers and Sweeney JJ agreed).
75 Applications for interlocutory injunctions to restrain an acquisition alleged to contravene s 50 of the Act have been considered in a number of cases.
76 In Trade Practices Commission v Santos Limited (1992) ATPR 41-194, Heerey J considered an application by the Trade Practices Commission for an interim injunction to restrain a public takeover bid made by Santos for Sagasco Holdings Ltd. Santos proffered undertakings to the court to facilitate the making of a divestiture order if a breach of s 50 were established after acquisition. Justice Heerey refused the application for an injunction, deciding that the balance of convenience weighed in favour of accepting the Santos undertakings. In so finding, his Honour noted (at [40,622]) that:
The sort of considerations I have mentioned flow from the right to invest and trade freely in the securities of public listed companies - including the right to make and accept takeover bids which comply with the Corporations Law. This right should in my opinion be accorded value and respect by the courts. Without that right companies like Santos and Sagasco could not raise capital to carry on business, to create prosperity and employment and, incidentally, to compete with one another in the way the Trade Practices Act requires.
77 The Full Federal Court refused an application for leave to appeal from the decision of Heerey J: Santos (cited above). The Court formed the view that, in the case of a public takeover bid, where the only relief sought in the proceeding was injunctive relief to prevent the public bid proceeding, the determination of interlocutory relief would be determinative of final relief. In respect of a decision to grant injunctive relief, Hill J observed (at 393):
It is true that if ultimately the matter were decided favourably to Santos, that company would be in a position to renew a bid to purchase Sagasco shares. From a practical point of view, however, it is unlikely that the terms and conditions of the new bid would be identical to those presently offered. But whether or not that was so, inevitably it would be necessary for Santos to lodge new Part A statement and initiate a new takeover scheme, assuming that in the meantime no steps had been taken by the South Australian Government to dispose of its shares in Sagasco to some other purchaser. In a real and practical sense, therefore, the granting of an injunction restraining Sagasco from proceeding with its takeover offer has, vis-a-vis Santos, the consequence of finally determining the proceedings against it, so far as the present takeover scheme is concerned.
78 In respect of a decision to refuse injunctive relief, Hill J concluded (at 394):
It follows that the failure to grant an interlocutory injunction, in a case such as the present, would amount to a destruction of the very subject matter of the litigation itself. Failure to grant an injunction would remove any impediment upon Santos proceeding with its bid and ultimately, assuming that that bid is successful, acquiring the shares. Once there is an acquisition and unless the application now before the Court is amended, no relief thereafter could be granted to the Commission.
79 His Honour summarised the position as follows (at 394):
Thus, in a real sense, the issue, in a case such as the present, involves the court, when weighing the balance of convenience, being confronted with the starkest of possible alternatives: either the injunctive relief is granted, in which case as a practical matter the relief is permanent as against the respondent, or the injunction is refused, in which case the relief may be permanent as against the applicant.
80 His Honour recognised, though, that once the acquisition had been completed, it would be open to the Trade Practices Commission to seek an order for divestiture (at 397):
The remedy of divestiture is in reality an alternative remedy open to the Commission, albeit that it is one which could not be sought by the Commission until at least there had been an acquisition of the shares. In my view, a court considering whether to grant an interim injunction, in a case such as the present, must weigh up the real consequences to each party, taking in mind not only the public interest but also the private interests involved. There is, in my view, no presumption that an interim injunction should be granted, nor is there a presumption that an interim injunction should not be granted. The matter is one for a judicial exercise of discretion, taking into account all relevant matters.
81 Two years later, in Trade Practices Commission v Rank Commercial Ltd (1994) ATPR 41-324, Beaumont J granted an interim injunction restraining Rank Commercial (a New Zealand company that had entered into a form of joint venture with Coles Myer in relation to the division of the assets of Foodland post-acquisition) from proceeding with a takeover bid for shares in the capital of Foodland pending the final hearing of the principal proceeding. Rank Commercial and Coles Myer had offered a form of undertaking to the Court to preserve the independence of Foodland pending the determination of the proceeding. Notwithstanding the undertaking, Beaumont J considered that the balance of convenience favoured the grant of an injunction. His Honour took into account that shares in Foodland were reasonably widely held, and that undesirable complications in a bid proceeding could impact adversely on a significant section of the public. If the bid were to proceed upon the footing that, instead of restraining it, the Court accepted the undertakings, the bidder would face a dilemma with respect to the information it should provide in its Part A statement and uncertainty could be created in the minds of shareholders. Beaumont J determined that the interests of Foodland shareholders should be accorded substantial weight in judging where the balance of convenience lay.
82 The decision of Beaumont J was upheld on appeal to the Full Court: Trade Practices Commission v Rank Commercial Ltd (1994) 53 FCR 303. The Full Court disagreed, however, with Beaumont J's assessment of the confusion of shareholders as a significant, if not decisive, matter to be taken into account in assessing the balance of convenience. Their Honours observed (at 319) that:
But the interests of the shareholders, qua shareholders to whom a takeover offer is proposed, are not those which it is the object of s 50 of the TPA to protect. The protection of those interests is one of the objectives of the Corporations Law. It is not easily seen why those shareholders should be considered a section of the public so significant that their interests in certainty concerning takeover offers should be accorded substantial weight, as distinct perhaps from some relatively minor weight, in the exercise of a discretion conferred by s 80(2).
83 The Full Court discussed the factors taken into account by the Court in Santos, particularly the public interest in investing and trading freely in the securities of public listed companies (at 319). However, the Full Court also recognised that the ownership, control and structure of a commercial enterprise should not be altered by a transaction that is undertaken in contravention of s 50 of the Act. The Court observed (at 319-320):
In our view however this approach involves the error of overlooking or giving little weight to the fact that changes in the status quo affecting [Foodland], its ownership, control and structure would be likely, and they would be brought about by a number of steps constituting conduct as to the lawfulness of which there is a serious question to be tried.
84 The Court further observed that, if the acquisition were allowed to proceed, it would be too late to restrain it and that irreversible changes would have taken place in the ownership, control and structure of Foodland (at 321). The Court concluded that it would place "considerably less importance upon the offer of undertakings" than Beaumont J in the assessment of the balance of convenience (at 322).
85 In Australian Competition and Consumer Commission v Metcash Trading Ltd [2011] FCA 1079, Jacobson J refused an application for an interlocutory injunction to restrain the completion of a share sale agreement pending the determination of an appeal brought by the ACCC against a primary judgment of the Federal Court which had dismissed the ACCC's application for final injunctive relief. In assessing the balance of convenience, his Honour received evidence that the business to be acquired was performing poorly; that the uncertainty and delay was making it increasingly difficult to operate the business (particularly dealing with staff, bankers, suppliers and landlords); and that given the continued deterioration of the business, its continued existence depended upon the proposed acquisition being completed within a short period.
86 The more recent decision of Beach J in Australian Competition and Consumer Commission v Pacific National Pty Ltd [2018] FCA 1221 (ACCC v Pacific National) should be referred to, although the facts and allegations in that case differed from the present case, as did the form of injunctions sought (a mandatory injunction to maintain and operate a business that Aurizon intended to close failing a sale to Pacific National). The facts were that Aurizon had agreed to sell its Queensland Intermodal Business to Pacific National, conditional on ACCC approval. Aurizon announced that, if ACCC approval were not forthcoming, it would close the Queensland Intermodal Business. The ACCC commenced proceedings alleging, amongst other things, that that decision was part of an arrangement reached with Pacific National in contravention of s 45 of the Act. In determining whether to grant the mandatory injunction, his Honour observed (at [14]) that in circumstances where the applicant was the competition regulator, an assessment of the balance of convenience required consideration of the inconvenience, injury or injustice to the public interest, market actors and consumers flowing from potentially detrimental effects on competition in the relevant markets if the injunction sought were to be refused.
87 As noted above, s 80(6) provides that the ACCC is not required to give an undertaking as to damages when seeking an interim injunction. Different views have been expressed as to whether, in an application by the Commission under s 80(2) for an interim injunction, the absence of an undertaking as to damages should be taken into account in assessing the balance of convenience. The weight of authority appears to favour the view that the absence should be taken into account. In support of that view are the following authorities: APM Investments Pty Ltd v Trade Practices Commission (1983) 49 ALR 475 (APM Investments) at 485 per Smithers J and 508-509 per Fitzgerald J; Australian Competition and Consumer Commission v Allphones Retail Pty Ltd [2009] FCA 17; 253 ALR 324 at [26] per Foster J; ACCC v Pacific National at [15] per Beach J. The opposite view was expressed by Sheppard J in SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 at 187 and by Davies J in Santos at 389.
88 I consider that there is considerable force in the following observation of Davies J in Santos (at 389), based upon his Honour's review of the legislative history:
… the intent of s 80(6) would not be given effect if possible detriment arising from the grant of the injunction were taken into account and weighed against the lack of any countervailing undertaking by the Minister or the Commission. In my view, s 80(6) intends that the matter of the grant of an interim injunction will be considered as if the applicant had given an undertaking as to damages but that, in the formulation of its orders, the court shall not actually require an undertaking to be given.
89 Despite that, I consider that I should follow the view expressed by a majority of the Full Court in APM Investments. As a result, while the ACCC is not required to give an undertaking as to damages, that is a factor to be considered in the assessment of the balance of convenience.