BONTEMPO -v- MIRVAC (WA) PTY LTD [2012] WASC 104 (2 April 2012)

4 The Bontempos' application for urgent interim relief was filed on 6 January 2012. That day Hall J made the orders sought. The Bontempos relied on two affidavits in support of their urgent application. The same material was relied upon before me. First is the affidavit of a solicitor for the Bontempos, Ms Rhodes, sworn 6 January 2012. Her affidavit attaches, as attachment JER1, a true copy of the Acquisition Contract. Second is the affidavit of Mrs Bontempo.

5 The injunction that the Bontempos seek to extend relates to the looming expiry of a bank guarantee, arranged to be provided by the Bontempos in the amount of 10% of the purchase price, in favour of the Seller. (The bank guarantee was not provided to the deposit holder referred to on the face of the offer.)

6 The offer component of the Acquisition Contract provides by orthodox terms for payment of a deposit. The requirement is for a 'deposit of $895,000 of which $20,000 is paid now and $875,000 is to be paid within 30 days of acceptance, to be held by Mirvac Real Estate Pty Ltd REBA trust account ("the Deposit Holder"). The balance of the Purchase Price shall be paid on the Settlement Date'. The purchase price was $8.95 million and a settlement date is identified within annexure 1, the first of the 16 annexures to that contract.

7 It appears from the face page of the offer that the Bontempos' offer is to the deposit holder, Mirvac Real Estate Pty Ltd. A considerable space intervenes, eventually followed by the words 'as Agent for the Seller'.

8 The offer page refers to the Bontempos' offer to purchase apartment 16 being 'unless stated otherwise in the Special Conditions at the Purchase Price on the terms set out in the Schedule, the Conditions and the Special Conditions'.

9 The Joint Form of General Conditions for the Sale of Land (2002 revision) are referred to as being applicable to the contract; see the second page of the offer, which provides, from item 3:

The 2002 General Conditions are incorporated into this Contract so far as they are not varied by or inconsistent with the Conditions or Special Conditions of this Contract.

10 The General Conditions provide in orthodox fashion for payment of a deposit under arrangements as set out in General Conditions 1.1, 1.2 (see particularly subpars (a) through (c)), 1.7 and 1.10. General Condition 1.2 governs the manner in which the deposit is to be held and dealt with.

11 It will be remembered that the face page of the offer makes reference to Mirvac Real Estate Pty Ltd REBA trust account as the deposit holder, and for arrangements for the deposit being held by that corporation, as 'stakeholder'.

12 The definition of 'deposit' under General Condition 26.1 refers to 'money paid or payable under the Contract, as a deposit'. I also mention the definition in the General Conditions of 'Seller Agent'.

13 Annexure 1 to the Acquisition Contract contains the Special Conditions. They essentially 'trump' the General Conditions, to the extent of any inconsistency. As regards payment of the deposit (in this case 10% of the purchase price), the Special Conditions permit (contrary, I think, to the General Conditions) the provision of a bond or guarantee by the Bontempos. Relevantly, Special Condition 19.1 provides:

This clause 19 applies if the Seller accepts a bond or guarantee for the Deposit or any part of the Deposit.

If the bond or guarantee has an expiry date, the Buyer must, if Settlement has not taken place at least 3 months prior to that expiry date, deliver to the Seller a replacement bond or guarantee on the same terms and conditions as the original bond or guarantee except the bond or guarantee must expire at least 3 months after the Registration Date.

Special Condition 19.4 says that the obligations of the buyer under cl 19 are essential.

14 One oversight I immediately detect is that the Special Conditions do not specify whether the favouree of a bank guarantee given in lieu of a deposit is permitted to call upon the guarantee if the purchaser refuses to replace it.

15 Under Special Condition 19.2, the purchaser's obligation to replace the guarantee arises three months before the expiry date. Relevantly for this case, the expiry date, 11 February 2012, now looms. Therefore the obligation to replace the guarantee arose, under Special Condition 19.2, on 11 November 2011. However, Special Condition 19 does not say anywhere that if there is a refusal to provide a replacement bond or guarantee, the favouree would be entitled to call the guarantee before it expires. The clause is drawn on the basis that the bank guarantee facilitates settlement. It may never in fact be called, if settlement proceeds upon a payment of the full purchase price.

16 There is therefore something of a hiatus in the drafting of Special Condition 19. There is also a clash with the offer and the content of the General Conditions as regards a deposit. They envisage only money being paid by way of a deposit. Yet Special Condition 19 is paramount to the extent of any inconsistency. Clearly, it is framed by reference to depositlike arrangements, such as using a bank guarantee in lieu of money.

17 In some respects this arrangement presents as an attempt to squeeze a square peg (deposit by bank guarantee) into a round hole (deposit by money only). It is hardly surprising, therefore, that the present difficulty, which would never have arisen with a deposit of money, now manifests.

18 Part of the problem also springs from the fact that this is a temporally limited guarantee with a looming expiry date. It is possible to obtain bank guarantees which are unlimited in their duration. But here, there obviously has been a decision made to proffer and then accept a bank guarantee of finite duration.

19 It is not in dispute that in 2008 the Bontempos arranged for the unconditional bank guarantee to be provided by the Commonwealth Bank. The guarantee is found in Ms Rhodes' affidavit, page 150. However, the nominated party entitled to the benefit of the bank guarantee was arranged to be the Seller, not the party specified by the offer to be deposit holder, namely Mirvac Real Estate Pty Ltd.

20 Under the bank guarantee of 31 January 2008, the Commonwealth Bank unconditionally undertook to pay to the Seller, on written demand, $895,000. The guarantee expires, as I have indicated, by reference to certain events, the most relevant of which is 11 February 2012.

21 So the approach of 11 February 2012 adds some urgency to this application. That is in circumstances where the parties remain in hot dispute over whether or not the Bontempos validly terminated the Acquisition Contract.

22 By their case the Bontempos, by their then solicitors Jackson McDonald, in reliance upon the provisions of s 69D of the Strata Titles Act 1985 (WA), issued to the Seller a written notice of avoidance on or about 25 October 2010. They raised by that notice numerous issues still to be litigated within this action. Those issues include alleged breaches of the Strata Titles Act by the Seller and are said to provide a foundation, pursuant to s 69D of that Act, for their purported termination of the Acquisition Contract. They argue that they did terminate, validly, on 25 October 2010.

23 It is not possible on this interlocutory application to form or express views about the strength or otherwise of the Bontempos' arguments regarding their purported termination of the Acquisition Contract. The arguments concerned are very complex. A lot of them are factual.

24 For the purposes of this application it is sufficient that I recognise that both parties before me acknowledge that serious questions for a trial have been raised in the action by the Bontempos. Of course, the Seller contends that the Bontempos' obligations to settle under the Acquisition Contract remain on foot. They are said to be wholly unaffected by any matters that the Bontempos complain about as regards their s 69D notice of 25 October 2010. A trial, at least, will be necessary before the rival positions are resolved.

25 The Seller will press at trial for specific performance, effectively to compel the Bontempos to settle on the purchase of apartment 16 at the full purchase price of $8.95 million.

26 The Bontempos accept that the 'off the plan' apartment, which they contracted to acquire from the Seller back in January 2008, has now in effect reached the point of its actual construction.

27 A number of the Bontempos' s 69D notice grievances relate to asserted deficiencies or discrepancies over the final construction of apartment 16. These include alleged discrepancies between what has been constructed and the plans shown to them as prospective purchasers.

28 The important point today, however, is not the dispute over those issues. Rather, it is the fact that the parties accept now, in January 2012, that the registered strata plan for the apartment complex (also relevant as an event for the purpose of triggering the purchasers' obligation to settle under the Special Conditions at a settlement date) has come into being. That is relevant for the operation of Special Condition 4(b).

29 The Bontempos' argument proceeded before me on the basis that they accepted that registration of the strata plan had occurred on or about 19 October 2010.

30 According to the Bontempos' written submissions, they were notified by the defendant on or about 21 October 2010 of registration of the strata plan.

31 It will be remembered the Bontempos' notice of avoidance was issued on or about 25 October 2010, albeit dated 22 October 2010. It was issued in reliance upon s 69D of the Act: see Ms Rhodes' affidavit at page 170.

32 Affidavit materials read by the Bontempos indicate that on 20 December 2011 the Seller's solicitors drew the attention of the Bontempos' solicitors to the content of Special Condition 19 in the Acquisition Contract. Importantly, they also advised of the looming expiry of the bank guarantee on 11 February 2012.

33 The Seller's solicitors' 20 December 2011 letter continued:

Without prejudice to your clients' position regarding the purported avoidance of the Contract but to ensure that the status quo regarding the Deposit is maintained pending a final determination of this matter by the Court we are instructed to request that your client replace the Guarantee, or alternatively provide alternate security of the Deposit, as a matter of urgency and in the event no later than Friday 6 January 2012 (the Latest Date).

34 The solicitors for the Seller also advised the Bontempos' solicitors:

In the event that the Guarantee is not replaced, or alternate security acceptable to our client provided by, the Latest Date, we anticipate receiving instructions to call on the Guarantee and hold the proceeds as the Deposit under the contract.

We look forward to the receipt of a replacement Guarantee or alternate security.

35 The Bontempos by their solicitors responded on 4 January 2012, pointing out that the Bontempos took the view that the Acquisition Contract had now been validly terminated: see Ms Rhodes' affidavit, pages 205 to 206. They said that since the Seller was suing for specific performance, and had not yet purported to determine the Acquisition Contract, the deposit moneys would only be payable at a settlement of the transaction and not before.

36 The Bontempos' position was therefore that, with the Acquisition Contract being at an end, they were entitled to their deposit back. In effect, this amounted to a cancellation of the existing bank guarantee, on the basis that the Acquisition Contract had been validly determined back in October 2010.

37 The Bontempos' solicitors, from that premise, declined to provide a fresh replacement guarantee or any alternate security, since there was no contractual provision entitling the Seller to call the existing bank guarantee where specific performance was being sought.

38 They were the circumstances by which the matter came before Hall J in the court's summer recess, then before me on the application seeking an extension of his Honour's interim orders.

39 The demand by the Sellers' solicitors on 20 December 2011 for a provision of alternate security by not later than 6 January 2012 presents to me, particularly bearing in mind the time of year, as a wholly arbitrary deadline, given that the bank guarantee was not due to expire until 11 February 2012.

40 The urgency attached to the arbitrarily chosen date 6 January 2012, on my assessment of the materials, seems to be manufactured and unsupportable. Furthermore, I have already noted that, pursuant to Special Condition 19.2, where a bank guarantee has an expiry date, as in this case, an obligation to replace it on the same terms and conditions arises at least three months before the expiry date. Here, that was 11 November 2011.

41 It may be argued by reference to Special Condition 19.2 that it does not require that the purchaser be reminded by the Seller of an obligation to provide a replacement bond or guarantee. But in the present case, where the Bontempos have been contending for over a year that they have terminated the Acquisition Contract, the Seller's failure to raise this issue of the expiring bank guarantee earlier, until a peremptory demand on 20 December 2011, with the holidays and summer recess looming, requires a better explanation than that which has been provided.

42 This is not an application seeking a mandatory injunction by the Seller to compel the Bontempos to provide a replacement bank guarantee to the Seller, or a replacement bank guarantee to the identified favouree under the Acquisition Contract, Mirvac Real Estate Pty Ltd. Had such an application been made, the prospects of its success were problematic.

43 Special Condition 19.2 requires the purchaser to replace the guarantee if settlement has not taken place and the guarantee is due to expire in three months or less. The duration of the new guarantee must extend at least three months beyond the registration date of the strata plan. But, in this case, it is uncontroversial that the strata plan was registered in October 2010. Under Special Condition 19.2, then, the Bontempos are only obliged to provide a bank guarantee that extends to January 2011. Given that it is now January 2012, that is a rather unhelpful outcome.

44 Another curious feature about the bank guarantee arrangement effected between the parties is that, notwithstanding the face of the offer document's clear reference to the Mirvac Real Estate Pty Ltd REBA trust account as being the deposit holder, the bank guarantee was not actually given to that entity as favouree. Rather, as I have mentioned, the favouree under the guarantee was the Seller. That circumstance, which all parties accepted at the time, is very important in my view in resolving the present impasse.

45 'Off the plans' strata acquisitions are the subject of protective provisions, enacted for the benefit of purchasers, under Part V of the Strata Titles Act. Within Part V is s 70, to which I refer but will not set out. I mention specifically, however, subss (1), (2) and (3), the thrust of which is that an 'off the plans' strata purchaser is to be protected as regards a deposit paid, as well as all other moneys, in the period prior to the registration of a strata plan. Protection is afforded for the purchaser's funds by the requirement that moneys are to be held by a solicitor, real estate agent or settlement agent on trust for the purchaser. But there is an important temporal limitation to the duration of the protection, namely 'until the survey strata plan is registered'.

46 The protective importance of that provision is emphasised by s 70(3), which says that in the event of the protective provisions of s 70(2) being contravened, the purchaser may, at any time before the survey strata plan is registered, avoid the sale. I mention also s 70B.

47 The Bontempos submit that the bank guarantee arrangement contravened s 70(1) because it made the favouree of the bank guarantee the Seller, rather than an independent person such as a solicitor, real estate agent or settlement agent holding the deposit on trust.

48 Against that view, however, the Seller points to the incorporated General Conditions and the definition there of 'deposit' under General Condition 26.1 as meaning money, paid or payable under the contract as a deposit. The Seller submits that the protective provisions of s 70 within Part V of the Strata Titles Act were never in play here, because the bank guarantee arrangement meant that no money was paid or payable and so the statutory protections applicable to deposit moneys do not apply.

49 The Seller also argues that for this guarantee in lieu scenario, which both parties accepted essentially for the benefit of the purchasers, that there is, as I understood the submission, no deposit as such and that there can therefore be no potential breach of s 70(1).

50 As I have already said, my strong impression is that certain provisions in the pro forma offer and acceptance document, including certain of the incorporated 2002 Joint Form General Conditions, are out of harmony with the practical workings of a guarantee in lieu of deposit situation, as envisaged under Special Condition 19. Some smoothing of these drafting 'wrinkles' for a deposit provided otherwise than by money are called for.

51 I am not, at this point, persuaded on a prima facie basis that a bank guarantee in lieu of deposit scenario, envisaged under Special Condition 19, can properly be viewed as an arrangement not caught by the protective provisions of s 70 of the Act.

52 First, the definitions in General Condition 26.1 are all to be read as if prefaced by the words 'unless the context otherwise requires'. So the definition of 'deposit', although apparently encompassing only money paid or payable, is therefore not applicable, if the context requires otherwise. Here it does. And, as I have indicated, the Special Conditions are paramount over the General Conditions, in circumstances of inconsistency.

53 On a prima facie basis I read the words 'for the deposit', as used within Special Condition 19.1, as essentially meaning a Seller accepting a bond or guarantee 'in lieu of' money as the deposit otherwise payable in money under the contract.

54 I do not accept the Seller's argument that there was no identifiable deposit in this Acquisition Contract, once the parties chose to make arrangements under Special Condition 19 by the use of a bank guarantee.

55 I also note that the word 'deposit', as used in s 70 of the Strata Titles Act, does not carry any statutory definition that is tied to the exclusive receipt of money. Nor do I read the phrase in s 70(1), 'and/or other moneys payable to the purchaser' as dictating that the meaning of the word 'deposit' is to be read and understood as not extending any wider than money.

56 Here, the parties, for sensible commercial reasons, proceeded down a path by which an unconditional bank guarantee, in the amount of 10% of the purchase price, was arranged to be provided to the Seller from the Commonwealth Bank. The bank guarantee provided was to the Seller as favouree, in lieu of a deposit payment of moneys by the Bontempos as purchasers, of $875,000.

57 Interesting questions may have arisen if the Bontempos sought to terminate the Acquisition Contract pursuant to s 70(3) of the Strata Titles Act prior to the registration of the strata plan. That could have been a protected scenario of termination under s 70B. Termination in that window would have been on the basis that the bank guarantee was the deposit and was wrongly provided to the Seller. The argument would be that that was in violation of the policy rationale within s 70 which protects deposits as well as all other moneys from being received by vendors in an off the plans construction and acquisition scenario before registration of a strata plan eventuates. Such moneys must be held on trust for the purchaser before registration.

58 However, in the present case, it is uncontroversial that there was no purported termination by the Bontempos as purchasers on the basis of any depositrelated violation by the Seller which occurred prior to registration of the strata plan. Both parties accept that the apartment building in question had a registered strata plan on or about 19 October 2010.

59 From s 70 of the Strata Titles Act, indeed from Part V as a whole, it can be seen that the policy rationale of the legislature - to protect purchasers in off the plan scenarios - was finite in duration. The protection is limited in its duration until the survey strata plan is registered. Here, that has happened, so little more can be made of it.

60 I have approached the issues as to an extension of the interim injunction by reference to the principles governing injunctions generally, discussed by the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57. I do so on the basis that we essentially start afresh today and that the Bontempos should persuade me that this extended relief is appropriate.

61 I refer to observations by Gummow and Hayne JJ, as regards interlocutory injunctions, made between [65] and [72] in relation to the essential criteria of a prima facie case and the balance of convenience being weighed together.

62 The two factors are not stand alone, nonintersecting, considerations. There is an interrelationship between them. This was discussed by Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148, 156. So, in a practical sense, someone who comes to court with a very powerful argument as to a prima facie case or serious question may obtain relief in circumstances where their associated arguments about the balance of convenience are less powerful. Conversely, an overwhelming balance of convenience may be enough to found interlocutory relief in circumstances where a prima facie case was assessed as less strong. The considerations overlap.

63 A further factor that needs to be mentioned is that interlocutory injunctions sought in cases which are based upon common law causes of action for breach of contract such as the present need to be assessed somewhat differently from cases where equitable causes of action are pursued.

64 Here, I am dealing with a common law contract scenario. In the circumstances equity may grant relief (by way of specific performance on the Seller's counterclaim), but as the authors of Meagher, Gummow & Lehane's Equity: Doctrines & Remedies observe, this is a case of relief in the ancillary jurisdiction of a court of equity, exercised so as to assist the underlying common law cause of action. That is significant because in such situations, in contrast to the pursuit of equitable causes of action, the court must also weigh the issue of whether, rather than injunctive relief, relief by the standard common law remedy of damages is more appropriate.

65 The question, then, is whether damages would be an adequate remedy for the Bontempos if the injunction is refused, the guarantee is called upon, and at trial I ultimately determine that the guarantee was wrongly called upon.

66 The overall position on the extension application is finely balanced on my assessment of the materials. That can be illustrated and evaluated by hypothesising what might happen on the alternative scenarios. The first scenario is an extension of the injunction beyond today till at least 11 February 2012. It is clear that by 11 February 2012 the bank guarantee, if not called, will have expired. Once it is stale it cannot be called upon by the Seller.

67 On the hypothesis of extension of the injunction, as appears from the correspondence passing between the parties' solicitors, there will be no replacement of the expiring bank guarantee by a fresh bank guarantee favouring any Mirvac party (either the Seller or Mirvac Real Estate Pty Ltd, the nominated deposit holder). As a consequence, the Seller will lose the benefit of the existing guarantee. The case would then proceed to trial. And if the Bontempos are successful at trial, they will not have to settle. Their liability to the Seller will be nil. The original bank guarantee will have expired on 11 February 2012. If the Bontempos lose at trial and, on the Seller's counterclaim, an order for specific performance is made against them, the Seller will need to obtain from the Bontempos, by execution if necessary, $8.95 million, to compel them to perform their obligation under the Acquisition Contract.

68 On the other hand, were I to discharge the injunction today, the existing bank guarantee will almost certainly be called by the Seller before 11 February 2012. There is an argument over whether or not that would be a breach of the Acquisition Contract, in circumstances where the Seller presses for specific performance. As Gray J observed in Tambakis v Fergula [2010] SASC 122, (2010) 107 SASR 246 [52]:

Although described as 'unconditional', the bank guarantee is subject to the conditions of the contract which prescribe the circumstances in which the vendors can deal with the deposit. As earlier extracted, clause 4 of the contract provides for how the deposit shall be paid and applied. If there was a valid termination of the contract by the purchaser, the [vendors'] entitlement to call upon the guarantee is likely to be affected.

69 Notwithstanding an unconditional bank guarantee situation, the parties' contractual relationship is significant. It governs the circumstances in which access to the bank guarantee by way of deposit can be accessed.

70 There may be an arguable breach of the Acquisition Contract if the bank guarantee is called other than for settlement. But then the question is what real damage flows to the Bontempos from that possible breach, if any, since it is said by the Seller that what will occur upon the guarantee being called is that the Seller will transfer all funds to Mirvac Real Estate Pty Ltd, which entity will, in effect, then act as a stakeholder. The called moneys will be placed in an interestbearing trust account, pending the outcome of the trial and the success or otherwise of the Seller's counterclaim for specific performance.

71 It was frankly accepted by counsel for the Seller in argument before me that, as part of weighing the balance of convenience, neither outcome will bring about the 'end of the world' for either party. That is in circumstances where the Bontempos will be protected by all moneys called under the existing guarantee being put into a trust account and there invested and held pending the trial's outcome. On that basis, it is hard for the Bontempos to contend for any significant financial prejudice if the injunction is not continued, notwithstanding what could later be shown to be a breach of contract by the calling of the existing guarantee for a purpose other than one expressly provided for by the Acquisition Contract.

72 The reverse scenario would see the injunction continued. If Mirvac succeeds at trial on its counterclaim, it will need to obtain $8.95 million, rather than $8.055 million, from the Bontempos. That scenario does not appear to be hugely detrimental to the Seller, because the Seller will need to obtain a very significant sum from the Bontempos in any event.

73 The materials before me, particularly Mrs Bontempo's affidavit, indicate that the Bontempos hold considerable assets and are persons of financial substance. There is no suggestion that they are not in a position to perform on their obligations as purchasers if, at the end of the day, this court were of a view that the Seller's counterclaim succeeded with a result that the Bontempos need to perform, by paying over a full purchase price of $8.95 million.

74 In all the circumstances then, where either result on this application is hardly likely to be the 'end of the world' for either party, the decision is finely balanced.

75 The parties have, on my assessment, played 'hard ball' against each other to an equal degree. First of all, as I have indicated, is the peremptory demand by the Seller's solicitors issued on 20 December 2011, with what I assess to be an artificial deadline by a latest date of 6 January 2012. That conduct has precipitated what I assess to be the unnecessary urgency surrounding this application.

76 On the other hand, the Bontempos have flatly refused, as I read the correspondence, to replace the existing bank guarantee. They say through their solicitors, 'Our view is that the contract has been ended validly. Why should we have to go through the process of providing a replacement bank guarantee?' The Bontempos may prove to be right about that by the end of a trial. But equally they may not. In the latter case the present impasse will effectively see the Seller lose a right, or at least an advantage, which it holds at this time: the right to call on the bank guarantee before it expires.

77 Based upon the materials before me, I am in no doubt that it is fully within the financial capacity of the Bontempos to voluntarily bring about, on short notice, the issue of a replacement bank guarantee should they choose to do so. They choose not to do so. That is their right. But it seems to me that at present they proceed on the basis that they must necessarily be successful at a trial. It will take a trial to see whether or not they are right about that. In the interim, existing rights under the status quo should be preserved to the greatest extent achievable.

78 In all the circumstances, then, given what looms on the horizon, I reiterate the following key factors:

(a) a looming expiry of the bank guarantee on 11 February 2012;

(b) a likely calling of that bank guarantee threatened by the Seller, if no replacement bank guarantee is forthcoming;

(c) a firm refusal of the Bontempos to offer any replacement bank guarantee or security, even to Mirvac Real Estate Pty Ltd as favouree deposit holder, on the basis of their contention that they have validly terminated the Acquisition Contract; and

(d) undertakings offered to this court by both the Seller and Mirvac Real Estate Pty Ltd to hold all called proceeds of the existing bank guarantee, once called, on the basis of voluntary stakeholder arrangements and in an interestbearing trust account, pending the ultimate disposition of these proceedings by this court.

79 As I have said, the question is a finely balanced one. But in the end it is for the Bontempos as applicants for interlocutory injunctive relief to persuade me to the requisite standard, by reference to the criteria I have discussed, that the interim injunction should be extended.

80 It is tempting to express the question today on the basis of an extension of the injunction until trial. But in reality it would only be an extension to 12 February 2012. That is because the bank guarantee will expire on 11 February 2012. Expiration of the existing bank guarantee would significantly alter the existing status quo.

81 Extending the injunction would do more, in my assessment, than simply maintain the status quo. It would be an improvement of the status quo for the Bontempos, albeit a smallish one in overall moment.

82 I assess the Bontempos to have an arguable cause of action, and although the balance of convenience is finely balanced, it seems to me that damages for breach against the Seller would be an adequate remedy for the Bontempos, if the injunction is not extended and then the guarantee is adjudged at trial to have been wrongly called upon by the Seller.

83 I detect no significant prejudice to the Bontempos, in circumstances where the injunction is discharged, bearing in mind undertakings which are proffered to protect all moneys realised on the guarantee being called. So my ultimate assessment is that the plaintiffs, who need in the end to persuade me that it is appropriate to extend the present injunctive relief, have failed to meet the necessary standard.

84 On that basis, I will discharge the interim injunction granted by Hall J and then further extended by me, on the basis that it is, for reasons which I have expressed, not appropriate that it be extended further.

85 [NB: Subsequently the dispute as to the expiry of the bank guarantee was resolved by the parties on the basis of a replacement bank guarantee consensually provided, subject to certain undertakings given by the Seller.]