Crouch v Commissioner for Railways

Federal Court of Australia|1987-12-24|Before: Gummow J

Upon the applicant by its Counsel giving to the Court the usual undertaking as to damages and the further undertakings set out in para. (3) hereof ORDER THAT until the determination of these proceedings or further Order the respondent be restrained by itself, its servants and agents from continuing the disconnection of those telephone services that were immediately prior to 20 April 1988 provided by the respondent to the applicant for the premises 76 Parramatta Road, Annandale in the State of New South Wales (the

(a) the applicant will on or before 28 April 1988 pay into Court by bank cheque $15,000 such sum not to be paid out of Court without further Order.

(b) the applicant will on or before 28 April 1988 pay to the respondent the sum of $756.01 in respect of accounts dated 9 February 1988 and 11 March 1988 and the sum of $2,097.13 in respect of the account exhibit C in these proceedings.

(c) the applicant will pay to the respondent all sums due and payable under any further account issued by the respondent for current services and charges during the pendency of these proceedings.

a final basis at 10.15 am on 18 May 1988. (8) Direct that the matter stand over for further

Note: Settlement and entry of orders is dealt with by Order

CORAM: GUMMOW J. PLACE: SYDNEY. DATE: 22 APRIL 1988.

EX TEMPORE REASONS FOR JUDGMENT HIS HONOUR: [After making orders for interlocutory relief, and accepting undertakings by the applicant, continued as follows. ] These proceedings were commenced by application filed on Wednesday, 20 April 1988. The respondent is a body corporate

constituted by the Telecommunications Act 1975, s. 21. The

immediate cause of the dispute that provoked these proceedings was disconnection on that day of the services provided by the respondent to the premises occupied by its customer, the applicant, at 76 Parramatta Road, Annandale and used for the conduct of its business. The applicant seeks restoration of those services by interlocutory injunctive and like relief.

Administrative Decisions (Judicial Review) Act 1977 ("the ADUJR

Act") with the effect of staying proceedings under the decision~ which produced the disconnection to which I have referred. As the matter stands at present, it is not possible precisely to identify the particular decision, or the particular decision-maker, although this may become clear in the amended application which 'will be filed next week. However, the

Secondly, support is sought from the provisions of s. 39B of the Judiciary Act 1903, which invests this Court with injunctive jurisdiction in certain proceedings against officers of the Commonwealth. Section 39B reflects the terms of s. 75 (v) of the Constitution. In my view, it is plain (and no contrary authority is suggested) that the respondent corporation is not an "officer of the Commonwealth" within the meaning of these provisions. No question arises as to whether the Commissioners appointed under s. 22 of the

Telecommunications Act 1975 are officers of the Commonwealth.

that, pursuant to s. 32 of the Federal Court of Australia Act

1976, there is an associated matter arising in federal jurisdiction, being a matter which is associated with the

That associated matter is said to be a matter in which

the Commonwealth or a person being sued on behalf of the

Commonwealth is a party within the meaning of s. 75 (iii) of the Constitution. Mr. Stevens, who appeared for the respondent, was prepared at this stage not to dispute that the present proceedings against the respondent attracted that head of jurisdiction, within the meaning of the well-known authorities discussed by the High Court in Crouch v

Commissioner for Railways (Queensland) (1985) 159 CLR 22 at

40-42. I should also refer to O'Neil v Wratten (1986) 65 ALR

451 at 459-460, as supporting this conclusion. I note in doing so that the circumstances of the present case, in my view, are plainly distinguishable from the position that obtained under

the legislation considered in Pearce v Button (1986) 65 ALR 83.

I should deal also at this stage with submissions by the respondent as to the inappropriate nature of interlocutory relief of the type sought in this application. Although the injunction contained in paragraph (1) of the Orders I have made is expressed in prohibitory terms, it might well be regarded as positive in substance. Counsel for the applicant in proposing relief in the terms of paragraph (1) relied on what was done both by Gibbs J. and the Full Court in Bradley v The Commonwealth of Australia (1973) 128 CLR 557 at 559, 594. I approach the respondent's submissions on the footing that the

injunctive relief sought was mandatory in. substance.

Counsel for the respondent relied upon what was: later said by Gibbs CJ in refusing interlocutory relief in The State

of Queensland v Australian Telecommunications Commission (1985)

59 ALJR 562 at 563. In that case, the learned Chief Justice

relied upon English authority and in particular upon what he described as a statement of principle by Megarry J. in Shepherd

Homes Ltd. v Sandham [1971] Ch 340 at 351. His Lordship there

In a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was vightly granted; and this is a higher standard than is required for a prohibitory injunction.

It should be noted that the Shepherd Homes Ltd. case

predated American Cyanamid Co. v Ethicon Ltd. [1975] AC 396. Further, Megarry J. also said (at 349) that it was not possible to draw firm lines or impose any rigid classification, although in most circumstances a mandatory injunction was likely to be more drastic in its effect than a prohibitory injunction. The facts in that case showed delay by a plaintiff who also could nat show damage flowing to it from the alleged breach of the

In the present case, the applicant has moved expeditiously and there is no real dispute that the disconnection of telephonic services must seriously impede the

conduct of its business. In the State of Queensland case

Telecommunications Commission to maintain the PABX systems installed at the premises of the plaintiff was the result of industrial action taken by the employees of the Commission.

The result of the bans had been to render the Commission unable

to provide the service to maintain the systems. Considerations

of that sort traditionally, even on a final basis, have made courts reluctant to administer mandatory injunctive relief that is tantamount to specific performance. This is the point of the comment by Mason J. in another comparable decision, The

Administrative and Clerical Officers Association v The

Commonwealth (1979) 53 ALJR 588 at 590, as to enforcement of affirmative stipulations which do not lend themselves to

In contrast, the present case offers none of those special features which reflect equity's reluctance to compel the continuation of contractual or other associations requiring personal trust and confidence between the parties to the litigation or between the defendant and third parties, particularly where the question of satisfactory performance is

one of taste, opinion and degree (C.H. Giles & Co. Ltd. v

Morris [1972] 1 All ER 960 at 969-970, per Megarry J; Posner v

Scott-Lewis [1986] 3 All ER 513). Nor is there any difficulty

in framing the terms of mandatory relief so that there is sufficient definition of what will have to be done to comply

with the order: Tito v Waddell (No. 2) [1977] Ch 106 at 321

Megarry J. in the Shepherd Homes Ltd. case recently have been

discussed and distinguished by Hoffmann J. in Films Rover

International Ltd. v Cannon Film Sales Ltd. [1986] 3 All ER 772

(noted [1988] CLI 34). His Lordship (at 780-781) said:

(I] think it is important in this area to distinguish between fundamental principles

and what are sometimes described as 'guidelines', ie useful generalisations about the way to deal with the normal run of cases falling within a'particular category. The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the 'wrong' decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been 'wrong' in the sense I have described. The guidelines for the grant of both kinds of interlocutory injunctions are derived from this principle.

The passage quoted from Megarry J in Shepherd Homes Ltd v Sandham [1971] Ch 340 at qualified as it was by the words 'in a normal case', was plainly intended as a guideline rather than an independent principle. It is another way of saying that the features which justify describing an injunction as ''mandatory' will usually also have the consequence of creating a greater risk of injustice if it is granted rather than withheld at the interlocutory stage unless the court feels a 'high degree of assurance' that the plaintiff would be able to establish his right at a trial. I have taken the liberty of reformulating the proposition in this way in order to bring out two points. The first is to show that semantic arguments over whether the injunction as formulated can properly be classified as mandatory or prohibitory are barren. The question of substance. is whether the granting of the injunction would carry that higher risk of injustice which is normally associated with the grant of a mandatory injunction. The second point is that in cases in which there can be no dispute about the use of the term 'mandatory' to describe the injunction, the same question of substance will determine whether the case is /normal' and therefore within the guideline or 'exceptional' and therefore requiring special treatment. If it appears to the court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in

fact carry a greater risk of injustice than granting it even though the court does not feel a 'high degree of assurance' about the plaintiff's chances of establishing his right, there cannot be any rational basis for withholding the injunction.

In Shepherd Homes Ltd v Sandham Megarry J spelle out some of the reasons why mandatory injunctions generally carry a higher risk of injustice if granted at the interlocutory stage: they usually go further than the preservation of the status quo by requiring a party to take some new positive step or undo what he has done in the past; an order requiring a party to take positive steps usually causes more waste of time and money if it turns out to have been wrongly granted than an order which merely causes delay by restraining him from doing something which it appears at the trial he was entitled to do; a mandatory order usually gives a party the whole of the relief which he claims in the writ and makes it unlikely that there will be a trial. One could add other reasons, such as that mandatory injunctions (whether interlocutory or final) are often difficult to formulate with sufficient precision to be enforceable. In addition to all these practical considerations, there is also what might be loosely called a 'due process' question. An order requiring someone to do something is usually perceived as a more intrusive exercise of the coercive power of the state than an order requiring him temporarily to refrain from action. The court is therefore more reluctant to make such an order against a party who has not had the protection of a full hearing at trial.

these was a necessary concomitant of a mandatory injunction,

For myself, I would accept all that is there said as applicable to the grant or mandatory injunctions in what I might call the general equity jurisdiction. The present is such a case. Statutory grants of particular injunctive powers,

such as s. 80 of the Trade Practices Act 1974, may require

The reasoning of Hoffman J. is consistent with what is to be gleaned from consideration of the historical development of this remedy. The development of the jurisdiction of courts of equity to grant interlocutory injunctions, particularly interlocutory mandatory injunctions, has been traced, with reference to English and United States cases, in learned articles by Judge Klein, "Mandatory Injunctions", (1898) 12 Harv. Law Rev. 95, and by Professor Leubsdorf, "The Standard For Preliminary Injunctions", (1978) 91 Harv. Law Rev. 525. These writers indicate two matters of importance for the present case. First, it has long been the case that interlocutory mandatory injunctions would be more likely to issue where the defendant was compelled, not to embark upon a fresh course of conduct, but, as here, to revert to a course of conduct pursued before the occurrence of the acts or omissions that provoked the litigation. Secondly, whilst there has been a natural reluctance to decree burdensome relief without a full hearing, prohibitory injunctions may have that tendency just as much as mandatory relief, and there has never been general acceptance of any precise verbal formula controlling the grant of interlocutory mandatory relief. All that may usefully be said was perhaps said long ago by Knight Bruce VC in North of

England Junction Railway Co. v Clarence Railway Co. (1844) 1 Coll. 507 at 521-522; 63 ER 520 at 526-527:

This branch of [the court's] jurisdiction may be one not fit to be exercised without particular caution, but certainly it is one fit and necessary, under certain circumstances, to be exercised. Under what circumstances it should be exercised must be

a matter for judicial discretion, in each several case.

I am aware that the requirement, as a principle, of a "high degree of assurance" (being a higher standard than required for prohibitory injunctions), drawn from the decisions

of Megarry J. and Gibbs CJ, has attracted some support from

single judges of this Court (e.g. Australian National Airlines

Commission v The Commonwealth of Australia (1986) 66 ALR 545 at

552; Midland Milk v Victorian Dairy Industry Authority, 24

December 1987, unrep.). However, for reasons I have given, I would eschew any such principle. I would prefer the course

taken by both Powell J. in Fletcher Challenge Ltd. v Fletcher Challenge Pty. Ltd. [1981] 1 NSWLR 196 at 207-208 and Sheppard

J. in Holiday Inns (Pacific) Inc. v Leisure Developments (Qld) ; Pty. Ltd. (7 October 1987, unrep. pp. 18-25), as exemplifying

Nevertheless, Mr. Stevens submitted that this Court, both at first instance and presumably on appeal, was bound by considered statements of principle in decisions of single Justices of the High Court exercising its original jurisdiction. Hence, he submitted, I was bound by the passage

I have set out from The State of Queensland v Australian

Telecommunications Commission (1985) 59 ALUR 562 at 563. Whilst, of course, such decisions are deserving of the closest and respectful consideration, I believe Mr. Stevens' submission

is incorrect. Stare decisis involves courts being bound by

appellate decisions of courts standing above them and in the same hierarchy. A decision of a single Justice of the High Court is not such a decision. I refer to what was said, albeit with reference to the position of an intermediate court of appeal in relation to judgments of single Justices of the

High Court, in Bone v Commissioner of Stamp Duties [1972] 2

I turn now to the facts. The evidence, in exhibits A and B, shows the receipt by the applicant in January and February respectively of this year of two accounts issued by the respondent. They are bulky documents. The first account which I will call the January account was in the sum of $26,676.59. The February account was in the amount of $29,355.03. The February account, the evidence indicates, has been reduced by $5000 pursuant to discussions between the applicant and the respondent. It is not clear from the evidence given so far on behalf of the respondent what the basis was for the reduction. In addition, some items of the accounts have been paid by the respondent and there is now a balance of some $22,000 claimed as due and owing. In addition, there is the sum of $756.01 due in respect of accounts dated 9 February and 11 March. There is also a sum of $2097.13 due to be paid on 28 April 1988 under a later current account. Payment of these additional accounts has been provided for in the undertakings proffered by the applicant. There remains, however, as I have said, the sum of

approximately $22,000 under the accounts exhibits A and B.

The accounts were in respect of the period commencing on 5 May 1987; they thus covered a lengthy period. Mr. Ryan, the customer services manager of the respondent, who gave affidavit and oral evidence, stated in oral evidence his understanding of the reason for the delay in the preparation of the accounts as having been the "manpower situation", particularly with reference to the PABX systems. He said that it was not an unusual period of delay "in the PABX area". The evidence includes exhibit 2 which is a Telecom PABX rental agreement dated 17 March 1987 for a fixed term. The agreement

is a document of some complexity. It provides, inter alia,

for a rental of $8342 per year to be paid in quarterly instalments of $2085.60. It also appears that expenses and charges were incurred in relation to the installation of this

equipment and that these are reflected in the accounts.

The respondent's By-laws 21, 22, 23 and 24 provide for the payment of rental and the rendering of accounts for charges, including interim accounts. The By-laws are made

under the powers conferred by s. 111 of the Telecommunications

Act 1975. Sub-section 111 (1) includes a power to make By-laws

providing for or with respect to the terms and conditions governing the provision to or use by any person of

Accounts for calls and other charges due by a subscriber shall be rendered half-yearly, quarterly, bi-monthly or monthly as determined by the Commission and shall be payable within fourteen days.

(1) If a subscriber fails to pay the rental, service charges or other charges due by him within fourteen days of the due date, the Commission may disconnect the service or cancel the service and remove all lines, apparatus, equipment, instruments and fittings belonging to the Commission, without prejudice to the right of the Commission to recover such rental, service charges or other charges.

(2) Where a person is a subscriber to two or more services and fails to pay the rental, service charges or other charges in respect of any one of those services, the Commission may disconnect all of the services or cancel all of the services and

remove all the lines, equipment, instruments and fittings belonging to the Commission.

Mr. Stevens sought to characterise the accounts, exhibits A and B, both as periodic accounts under these By-laws and also as "interim accounts" within the meaning of By-law 24. By-law 24 provides for the issue of interim accounts; if they are not paid, the respondent is stated then to have the right to cancel the service and remove lines, apparatus, equipment,

On the other hand, Mr. Coles, (who appears for the applicant) points with some force to the difficulty of fitting the January and February accounts within the concept of the periodic account provisions. Further, my provisional view is there is some difficulty in accommodating what has occurred within the concept of an interim account within the meaning of By-law 24. In any event, Mr. Coles further submits that even if the accounts were authorised accounts within the sense of

the By-laws, there was nevertheless on 20 April and thereafter

a bona fide dispute as to a substantial element of the amounts

claimed. He submits there remained such a dispute, despite

I believe there is a serious question on the evidence as it presently stands, particularly, having regard to the evidence of Mr. Conyngham (for the applicant) and Mr. Ryan (for the respondent) as:to at least $7000 of the moneys claimed by the respondent. There is in particular an element of uncertainty as to the component of the charges relating to installation costs in respect of the PABX system. Plainly enough, some substantial element of the amount in issue will

There is also a complaint made by the applicant arising out of an alleged request for cancellation of the PABX service. The occasion for this was provided by the change in the nature of the several businesses conducted on the present and adjacent premises late in 1988. What happened was outlined in the letter, annexure K, to Mr. Conyngham's affidavit of 20 April 1988. Mr. Conyngham gave affidavit evidence that in or about October 1987 he had a conversation with an officer of the respondent at its Newtown offices. He states that he said words to the effect that:

(T]he computer shop [that is to say, the other business in question] is closed and we [meaning the present applicant] no longer want the PABX because it was to service us

and the computer shop. What do we do next? We need to get on to a new system.

Mr. Ryan in his evidence pointed to the undoubted circumstance that there is nothing to show that this conversation was followed up by any written communication. However, as Mr. Coles points out, the By-laws specify merely cancellation on seven days' notice; the requirement of confirmation in writing is something that may subsequently be

I do not regard this latter matter as of itself presenting an issue of any great substance for trial at the final hearing as matters now stand, the point being that the system still has been used without any further arrangements being made for some months and it should only have been expected on the part of the applicant that that use carried with it an obligation to pay. Nevertheless, as I have said, the other matters to which I have referred indicate that there is a serious question to be tried, within the meaning of the authorities, as to the quantum of the amount that is indeed due for the period commencing 5 May 1987 and ending on 5 January 1988. However, that of itself is not sufficient to give the applicant standing for injunctive relief. It is necessary for the applicant to show that in all these circumstances what is

involved is some legal right attracting injunctive relief.

Mr. Coles seeks to do this by relying on a combination of contractual and statutory rights flowing from the contract, exhibit 2, to which I have referred and from the

Telecommunications Act 1975 and the By-laws. Sub-section 6 (1)

The Commission shall perform its functions in such a manner as will best meet the social, industrial and commercial needs of the Australian people for telecommunication services and shall, so far as it is, in its opinion, reasonably practicable to do so, make its telecommunications services available throughout Australia for all people who reasonably require those services.

Sub-para. 6 (3) (b) of the Act provides that nothing in that section shall be taken as imposing on the Commission a duty

Telecommunications Commission (1985) 59 ALJR 562 at 563, after

referring to sub-s. 6 (1) of the Telecommunications Act 1975,

That subsection appears to support the view that Telecom has an obligation to make its services available whenever reasonably practicable. Any other view would indeed be surprising in the case of the grant of monopoly to supply an essential public service. Having considered Bradley v The Commonwealth (1973) 128 CLR 557; John Fairtax Ltd. v Australian Postal Commission [1977] 2 NSwLR 124 and John Fairfax v Australian Telecommunications Commission {1977] 2 NSWLR 400, I am of the opinion that there is a serious question to be tried as to the existence and nature of an obligation on the part of Telecom to maintain the PABX service of a subscriber.

In my view, the present is, if anything, a somewhat stronger case to be tried. What is involved here is not the imposition of a duty to perform work of a maintenance character as involved in the decisions referred to by Gibbs CJ. Rather, it is a question of the rights of withdrawal of services in the

complex of contractual and statutory provisions provided by the

statute, the By-laws and the Telecom rental agreement. I have not overlooked the reliance placed by Mr. Stevens on sub-para.

6 (3) (b) of the Telecommunications Act 1975. I find it hard

to believe that this was overlooked by Gibbs CJ before he spoke as he did in the above citation. Further, it is, in my view, somewhat difficult to suggest, when considered in the light of s. 111 and the By-laws, that what is involved here is an impermissible attempt at imposition of a duty on the Commission

enforceable by proceedings in a court of the kind spoken of in

I come then to the balance of convenience. The applicant, as its name might suggest, uses the services in question for the conduct of its business and requires in doing so to have access to a plurality of lines, notwithstanding the complaint apparently made that the present PABX system may be too large for its needs. Withdrawal of the services would, I infer from the materials before me, have a serious effect upon the conduct of the applicant's business and would be likely to injure the goodwill of that business. The difficulty of quantifying damages to goodwill was emphasised by the respondent, but, in truth, that difficulty strengthens the argument that an injunction is the appropriate remedy in this case. Further, though I do not place any particular reliance

on this, Mr. Coles points to s. 101 of the Telecommunications

Act 1975 as being a possible barrier to any claim against the

respondent for damages for wrongful conduct, and as an added

In my view, the balance of convenience also has to take into account the conduct of the applicant in failing to make further payments under the accounts in question when, as to a sizeable proportion thereof, there must be an obligation to pay. That, however, is in my view dealt with by the granting of relief on terms as to payment into court of a substantial sum, together with an undertaking to pay later current accounts. -This has been provided for in the orders

The present case is appropriate for mandatory interlocutory relief. The grant thereof will not, in any practical sense, decide the case on a final basis because the consequences can be undone if final relief is refused; if the applicant fails at the trial, disconnection will be a simple and inevitable step. In the meantime, the position of the respondent is secured by undertakings, on the part of the

applicant, inter alia, to pay promptly into court a substantial

proportion of the sum claimed by the respondent. On the other hand, the denial of mandatory relief is likely to mark severe injustice to the applicant by damage to its business and goodwill, and damage to goodwill is not readily reducible to monetary compensation. Nor, as I have already said, is this a case where there is any significant element of personal trust or confidence between the parties upon which the effective continuance of their relationship depends, or where there is"

difficulty in framing or observing the terms of an injunction.

It is for these reasons that earlier this morning I

gave the interlocutory relief to which I have referred. The

Orders of the Court giving that relief are as follows:

restrained by itself, its servants and agents from continuing the disconnection of those telephone services that were immediately prior to

(a) the applicant will on or before 28 April 1988 pay into Court by bank cheque $15,000 such sum not to be paid out of Court without further Order.

(c) the applicant will pay to the respondent all sums due and payable under any further account issued by the respondent for current services and charges during the pendency of these proceedings.

I certify that this and the eighteen (18) preceding pages are a true copy of the Reasons for Judgment of his Honour Mr.

Counsel for the Applicant: Mr. B. Coles instructed by

Counsel for the Respondent: Mr. C.J. Stevens instructed

Dates of Hearing: 20, 21 and 22 April 1988. Date of Judgment: 22 April 1988.

At a glance

Court

Decision date

Before

Source

Judgment (136 paragraphs)

Parties

Cases Cited (9)

Cited By (10)