Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd and anor

Gough & Gilmour Holdings Pty Ltd and ors v Caterpillar of Australia Ltd and anor - [2001] NSWIRComm 260 - NSWIRComm 1999 case summary — Zoe

[6]

SECOND RESPONDENT Caterpillar Inc. FILE NUMBER: IRC 5227 of 2000 CORAM: Boland J Unfair Contract - Interlocutory proceedings - Whether jurisdiction to order interim injunctive relief - Applicability of equity law principles under s 106 of the Industrial Relations Act 1996 - Promissory estoppel - Specific performance - Whether question of law should be decided at interlocutory stage - Commercial contract - Whether serious question to be tried - Balance of convenience - Application for interim relief granted. CATCHWORDS : Practice and Procedure - Power of Industrial Relations Commission of New South Wales in Court Session to grant interlocutory relief under s 106 of the Industrial Relations Act 1996 LEGISLATION CITED : Industrial Relations Act 1996 Trade Practices Act 1974 (Cth) Agro Holdings Ltd v Flexi-Coil (Australia) Pty Ltd (unreported, Nicholson J, 26 November 1999, [1999] FCA 1658) American Cyanamid Co v Ethicon Ltd [1975] AC 396 Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 Barclays Australia Investment Services Ltd v Nordby (1995) 99 IR 258 Barclay Mowlem Construction Ltd v Simon Engineering (Australia) Pty Ltd (1991) 23 NSWLR 451 Bowker v Prophecy Technologies Pty Ltd (unreported, Marks J, 26 May 1999 Brigitte Lipman v AG Lifestyle Management Pty Limited [2001] NSWIRComm 115 Brown v Rezitis (1970) 127 CLR 157 Canberra Star Motors Pty Ltd v Chrysler Jeep Automotive Distributors Australia Pty Ltd [1999] NSWIRComm 310 Canizales v Microsoft Corporation (2000) 99 IR 426 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Cardile v LED Builders Pty Limited (1998) 198 CLR494 Cocker v Tempest (1841) 7 MW 502 Collison v Hewston [2001] 103 IR 403 Cooper v Sithe Energies Australia Pty Limited [2000] NSWIRComm 132 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Darvall v NZI Securities Australia Ltd (1990) 21 NSWLR 36, (1990) 39 IR 215 Dataforce Pty Ltd v Brambles Holdings Ltd (1988) VR 771 Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 Dickins v Gibb Nominee Services Pty Ltd (1991) 43 IR 276 Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (unreported, Finkelstein J, 2 July 1999, [1999] FCA 903) Gough & Gilmour Holdings Pty Ltd and Ors v Caterpillar of Australia Ltd [2001] NSWIRComm 92 Grassby v The Queen (1989) 168 CLR 1 Henville v Walker [2001] HCA 52 Harcourt Brace & Co (Australia) Pty Limited v Cory (1998) 81 IR 321 CASES CITED : Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1985) 1 NSWLR 545 Heavener v Loomes (1924) 34 CLR 306 Jackson v Sterling Industries Limited (1987) 162 CLR 612 Kenoss Contractors Pty Limited v Allied Constructions Pty Limited (2001) 104 IR 66 Kurt Keller Pty Ltd v BMW Australia Ltd (1984) 1 NSWLR 353 Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 Loupos v Basa (1995) 62 IR 397 Maharaj v 7-Eleven Stores Pty Ltd (unreported,Peterson J, 4 April 1997)) Maiden v New Zealand Natural Pty Ltd (unreported, Hungerford J, 20 June 1997) Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 New South Wales v Health and Research Employees' Association of New South Wales (unreported, NSW Industrial Relations Commission, 31 March 1993) Parsons v Martin (1984) 5 FCR 235 Perkins v Grace Worldwide (Australia) Pty Ltd (1997) 72 IR 186 Patrick Stevedores Operations (No.2) Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 Port Macquarie Golf Club v Stead (1996) 64 IR 53 Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) (2000) 99 IR 69 Sanderson Motors (Sales) Pty Ltd v Yorkstar Motors Pty Ltd [1983] 1 NSWLR 513 Scanruby v Caltex [2001] NSWIRComm 8 Sea Acres Rainforest Centre Pty Limited v The State of New South Wales [2001] NSWIRComm 207 Stevenson v Barham (1977) 136 CLR 190 Starkey v Mitchforce Pty Ltd [2000] NSWIRComm 216 The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Teletech International Pty Limited v Medical Benefits Fund of Australia (No.3) (unreported, Peterson J, 30 November 1998) Transport Workers' Union of Australia, NSW Branch & Ors v Boral Resources (NSW) Pty Ltd (unreported, Peterson J, 3 December 1992) Walker v Industrial Court of New South Wales (1994) 53 IR 121 Wheeler v Selbon Pty Ltd t/as Parklands Nursery [1984] 1 NSWLR 555, (1984) 7 IR 383 Zakrzewski v Rodgers (2001) 106 IR 1 HEARING DATES: 09/27/2001; 09/28/2001; 10/02/2001 DATE OF JUDGMENT: 10/23/2001

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18 In a recent judgment, Haylen J had occasion to consider the Court's power to grant interlocutory relief in Sea Acres Rainforest Centre Pty Limited v The State of New South Wales [2001] NSWIRComm 207. At [49], his Honour said: 49 The High Court in Jackson v Stirling Industries Ltd and Hungerford J in Darvall pointed to the necessity to protect the Court's jurisdiction to enable it to act effectively within its jurisdiction. The cases have expressed the approach to be adopted in a number of ways: to protect against the frustration of the court's remedies; the need for the court to be given by implication whatever jurisdictional power that may be necessary for the exercise of those powers expressly conferred; to defeat any attempt at thwarting the court's process; the possession of powers which are necessary to enable the court to act effectively within such jurisdiction as is conferred upon it; referrable to the power of a court over its own process which is unlimited; (from Jackson v Sterling ); to prevent rendering less effective any judgment or order which may be obtained (Polly Peck ); to ensure that any final order that may be made will not be frustrated or put at nought ( Darvall ); to take such steps as are necessary to ensure the court is not denuded of the capacity to make an effective order ( Maharaj ); to prevent the denial to a successful litigant of the right to receive the amount of orders which the court considers just and reasonable in all the circumstances of the case ( Maiden ); and to protect the integrity of the processes of the court once those processes are set in motion ( CSR Ltd v Sigma ; Cardile ). The approach in these cases speak of preserving the whole of the jurisdiction to make orders - they do not contemplate a situation where some available orders or relief are removed from consideration or otherwise rendered inapplicable. The protection, understandably, is of the entire jurisdiction of the court: an interlocutory order will be made if a party takes some step which will render less effective any judgment or order which may be obtained or to overcome any attempted thwarting of the court's process (my emphasis). 19 I respectfully agree with his Honour's reasoning and conclusion. I think it is appropriate, however, given the importance of the issue and without repeating the analyses in Sea Acres and Collison v Hewston (2001) 103 IR 403, to summarise the basis for holding that the Commission in Court Session has an implied power under s 106 to provide injunctive relief "if a party takes some step which will render less effective any judgment or order which may be obtained or to overcome any attempted thwarting of the court's process": 1) The Commission in Court Session is a superior court of record: s 152(1) of the Industrial Relations Act 1996. The judicial functions of the Commission are those prescribed by s 153(1) and include proceedings under Pt 9 of Ch 2 of the Act. The Commission's general functions are those prescribed by s 146(1) of the Act. 2) The Act does not confer an express power on the Court to grant interim injunctions in s 106 proceedings: Darvall v NZI Securities Australia Ltd (1990) 21 NSWLR 36 at 41; (1990) 39 IR 215 at 220; Collison at 409. 3) It is well settled, however, every court undoubtedly possesses jurisdiction arising by implication upon the principle that a grant of power carries with it everything necessary for its exercise: Grassby v The Queen (1989) 168 CLR 1 at 16 per Dawson J. A statutory court, which is expressly given certain jurisdiction and powers must be taken to be given, by implication, whatever jurisdictional powers may be necessary for the exercise of those expressly conferred. The implied power to prevent abuse of process, is similar to, if not identical with, inherent power: Jackson at 623-624; Parsons v Martin (1984) 5 FCR 235 at 240-241. The counterpart of a court's power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion: CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391. Statutory provisions conferring jurisdiction or power on a court are not construed as subject to any limitation which is not strictly required by their language and purpose. Where a court is endowed with a particular jurisdiction, it enjoys the powers necessary to enable it to act effectively within that jurisdiction. Its powers are not ordinarily construed as restricted to defined or closed categories. This is because of the infinite variety of circumstances that may come before a court and require "appropriate orders": Cardile per Kirby J at 423. The power of each Court over its own processes is unlimited; it is a power incident to all Courts, inferior as well as superior; were it not so, the Court would be obliged to sit still and see its own processes abused for the purpose of injustice: Cocker v Tempest (1841) 7 MW 502 at 503-504 per Alderson B. 4) The High Court in Cardile at 400-401 adopted the following statement from Patrick Stevedores Operations (No.2) Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 33: The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceedings against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked: see Tait v The Queen (1962) 108 CLR 620.

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There is now a developed line of authority as to the issue of the power of the Commission in Court Session to grant interlocutory relief or interim relief in proceedings initiated under s 106 of the Act: Kenoss Contractors Pty Limited v Allied Constructions Pty Limited (2001) 104 IR 66 at 76. These authorities refer to the power not only to grant Mareva or asset preservation orders ( Wheeler v Selbon Pty Ltd t/as Parklands Nursery [1984] 1 NSWLR 555; (1984) 7 IR 383; Dickins; Loupos v Basa (1995) 62 IR 397 at 401 ; Cooper v Sithe Energies Australia Pty Limited [2000] NSWIRComm 132; Brigitte Lipman v AG Lifestyle Management Pty Limited [2001] NSWIRComm 115 at [8]) but also to the power of the Court: "to make interlocutory orders in the protection of its process and so as to ensure that any final orders made may not be frustrated or put at naught" ( Darvall at 43); "to take steps as are necessary step (sic) to ensure that the court is not denuded of the capacity to make an effective order" ( Maharaj v 7-Eleven Stores Pty Ltd (unreported, Peterson J, 4 April 1997)); to maintain the efficacy of the final relief sought ( Transport Workers' Union of Australia, NSW Branch & Ors v Boral Resources (NSW) Pty Ltd (unreported, Peterson J, 3 December 1992)); to prevent the denial to a successful litigant of the right to receive the amount of orders which the court considers just and reasonable in all the circumstances of the case ( Maiden v New Zealand Natural Pty Ltd (unreported, Hungerford J, 20 June 1997)); to grant interlocutory relief in the nature of injunctive orders provided that any order made is issued consistent with the inherent or implied power of the Court to protect its own processes ( Bowker v Prophecy Technologies Pty Ltd (unreported, Marks J, 26 May 1999)); to make an interlocutory order if a party takes some step which will render less effective any judgment or order which may be obtained or to overcome any attempted thwarting of the court's process ( Sea Acres at [49].

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At least in circumstances such as the present, courts should be careful to conserve relief so that they do not, in commercial matters, substitute lawyerly conscience for the hard-headed decisions of business people: cf State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 at 177 and Geftakis v Maritime Services Board of New South Wales (Court of Appeal, 20 November 1987, unreported). If courts do not show caution here they will effectively force on commercial parties terms which the court may think to be reasonable and as ought commonly to govern such a contract but which the parties have themselves held back from concluding. Moreover, the contract then enforced will not be that which the parties have concurred in but a different one, determined by the court: cf Kitto J in Whitlock at 457. 30 Mr Hall also referred to the decision of Peterson J in Scanruby v Caltex [2001] NSWIRComm 8 where his Honour said at [66], [67] and [85]: 66 I have formed the opinion that the expectation of Scanruby was not totally unjustified or a fabrication but that it never crystallised as even an informal offer, let alone an agreement. The tenure to be finally offered was hoped by Scanruby to be, but never actually confirmed as, a nine or ten year term, including option periods. While the circumstances of the provision of the initial agreements and leases left Scanruby in a position where it felt little if any alternative could be taken to execute them, there remains in the evidence a conundrum I have found extremely difficult to understand, if Scanruby's position was then as it is now claimed. That is that neither then nor at any stage thereafter in all the sequence of events and discussions through 1993 to 1998 that I have summarised, did Mr Dimis, or anybody else on Scanruby's behalf, including Mr Zacharatos, ever mention to a Caltex representative that Caltex had failed to honour a promise that Scanruby would have at least nine or ten years at the F3 site. If the expectation was grounded in some positive statement on behalf of Caltex to that effect, I find it impossible to understand how it could not have been identified repeatedly by Scanruby in the many discussions I have referred to. Equally how could that understanding of the parties' intention not be the subject of a note, letter or minute. Where there is to be found any such reference it is oblique and, taking into account the minutes from which I have extracted parts, suggestive of a desire rather than a perceived right. For example, there seems to me to be a world of difference between the minutes recording Mr Dimis having said "We need long tenure" and an alternative postulation such as "We need the long tenure we were promised at the outset by X on behalf of Caltex".

[64]

The dealership agreements between the first applicant and the first respondent are commercial contracts in respect of which the applicants are seeking by way of primary final relief what is, in effect, a permanent mandatory injunction to keep the dealership agreements on foot. The effect of granting the primary relief sought would be to maintain the dealership agreements in perpetuity and to unjustly enrich the second and third applicants. 2) The applicants claim that the respondents made certain pre and post contractual representations upon which the applicants relied to their detriment. The applicants' claim is, in effect, that in relying on these representations they were induced to buy the dealership, to invest in expanding the dealership and to expect that the dealership would continue unless their performance was unsatisfactory or they were guilty of serious and wilful misconduct. 3) It is appropriate for the Court to deal with the applicants' claims by applying relevant equity law principles, in particular, promissory estoppel. That is, a court of common law or equity may do what is required, but no more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs which assumption the other party has induced him or her to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness. 4) Given that: a. The evidence is that there were no clear and unequivocal representations made as alleged in the pleadings; b. There is a complete absence of trust and confidence between the applicants and the respondents; c. Promissory estoppel principles prevent the Court from providing final relief the effect of which would be to fulfil the applicants' expectations; d. The relief sought is in the nature of specific performance; there is no power to make the variation orders on a final basis. 5) On an application for an interlocutory injunction that raises question of law, the Court should proceed to decide those questions unless the determination requires a factual matrix that is not available until the facts in the entire proceedings have been proved. The Court has all the relevant facts necessary to make a determination at this interlocutory stage and that given there is no power to make the final variation orders by virtue of the principles of promissory estoppel the Court should so decide.

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51 Whilst the High Court in Marks expressly disavowed the proposition that the remedies provided by ss 82 and 87 of the Trade Practices Act are to be confined by analogies, whether with equity or otherwise, McHugh, Hayne and Callinan JJ went on to say, however, that: This is not to say that no help can be had from the common law in deciding what damages may be allowed under s 82 in cases of conduct contravening s 52. Very often, the amount of the loss or damage caused by a contravention of s 52 will coincide with what would have been allowed in an action for deceit. But that is because the inquiry in both cases is to find out what damage flowed from (in the sense of being caused by) the deceit or contravention. Leaving aside questions of remoteness of damages in assessing damages for deceit (a question that was left unresolved in Gould v Vaggelas ((1985) 157 CLR 215 at 223-224, per Gibbs CJ) the damages for deceit will be the sum representing the loss suffered by the plaintiff because the plaintiff altered its position in reliance on the defendant's misrepresentation. But the analogy cannot be pressed too far. It should not be pressed to the point of concluding that the only damages that may be allowed under s 82 are those that would be allowed in an action for deceit. The question presented by s 82 is not what would be allowed in deceit, it is what loss or damage has been caused by the conduct contravening the Act (my emphasis). 52 The difficulty of applying common law rules or principles in determining issues under s 106 was recognised by the Full Court (Fisher CJ, Bauer, Hill JJ) of the Industrial Court of New South Wales in New South Wales v Health and Research Employees' Association of New South Wales (unreported, NSW Industrial Relations Commission, 31 March 1993), at 80: It is clear that an instruction for the payment of a sum 'just in the circumstances' in s 88F(2) has a wider base than that generally available under the principles of common law damages. Indeed, the existence of s 88F indicates that the legislature found that common law remedies were not necessarily appropriate and it seems to follow, insofar as argument by analogy might be useful that, though persuasive, reliance solely upon common law rules as to damages may well be inappropriate.

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59 It was submitted that the evidence showed the following: 1) The relationship between Caterpillar and its dealers is critical. At its heart lies the concept of trust, respect and cooperation. The relationship is "personal" and so close that both "manufacturer and dealer must have unbounded mutual confidence in and respect for one another." 2) The dealership agreements each contain clauses that permit either party to end the relationship with or without cause upon the giving of 90 days' notice or such further period as may be agreed. 3) At the time the second and third applicants were applying to become dealer principals in 1988/89 they were assisted by legal, financial and other advisers. 4) Prior to becoming dealer principals the second and third applicants had extensive knowledge and experience regarding the operation of Caterpillar dealerships including the nature of the relationship and the reciprocal no-cause termination clauses. 5) At the time of appointment and acquisition of assets in 1988/89 the applicants obtained the benefit of the agreements and the process about which they now complain including that termination notices had been served on Waugh & Josephson; the applicants were selected as the preferred dealer candidate pursuant to a process similar to that which resulted in the selection of Westrac as preferred dealer candidate in the present case; the applicants acquired Waugh & Josephson's shares without paying any amount for goodwill in respect of the Caterpillar dealership. 6) There is no basis for accepting that the first and second (or third and fourth) assurances were made and no evidence that the applicants relied on the assurances. 7) In 1991 the second and third applicants sought to rely upon the terms of the agreements about which they now complain in order to justify not paying goodwill in connection with asset transfers and to effect a company restructure. In the context of the restructure it was accepted by the second and third applicants and their advisers that not only were there terms of the agreements entitling parties to give 90 days' notice but that there was no impediment to Caterpillar or the applicants effecting termination in accordance with their terms. 8) At the request of the applicants, the first respondent sold its shares back to the first applicant in 1994. At that time the applicants again relied upon the termination clauses in support of their position that no goodwill existed. 9) The second applicant was warned at the outset of the relationship about his approach to people. 10) The relationship between Caterpillar and the second and third applicants, and particularly Mr Gough, is and was difficult and troubled. 11) Differences of business philosophy and strategy existed and exist between Caterpillar and the second and third applicants. 12) Despite the existence of a legitimate basis for exercising its termination rights under the dealership agreements, Caterpillar sough to achieve a dealer transition amicably. 13) The conspiracy theory that Caterpillar sought to terminate the dealership to achieve consolidation is baseless. 14) Caterpillar encouraged the second and third applicants and Westrac to see if they could reach an agreement with respect to the sale of the applicants' assets, shares and the premium that Westrac was prepared to pay above asset values. The applicants were fully advised by legal and financial advisers. 15) On any view the conduct of the second and third applicants caused or contributed substantially to the breakdown in negotiations regarding the sale. 16) Despite a continued opportunity to carry out further negotiations the applicants have continued to refuse to participate in negotiations whether contingently or otherwise. 17) If the sale to Westrac had proceeded or does proceed then all customer and employee contracts will not be affected. 18) If an agreement with Westrac is not successfully negotiated by 15 December 2001 then appropriate steps will be taken regarding customers and employees in connection with setting up the new dealership 19) Caterpillar is and continues to be hindered in the conduct of its business. 20) To the extent that the position with the dealership is impacting upon the sales and financial performance within the dealership territory, Caterpillar continues to suffer financial loss.

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Whether the applicants had proper grounds for believing that in entering the dealership agreements and investing in the business they were doing so secure in the belief that the dealership agreements would not be terminated except in the event of serious and wilful misconduct and significant poor performance. This raises the question of the alleged first and second assurances and the extent, if any, that the applicants relied on them. Although the respondents contend that these assurances were not given, and indeed, it does not appear from the evidence thus far there were any written assurances, it does seem unusual, notwithstanding the respondents' submissions as to why the applicants would have proceeded to purchase the business in the absence of the alleged assurances, that two experienced businessmen would do so and make very significant investments in that business without some confidence in the fact that they would not be tipped out, without any reason having to be given, on 90 days' notice. The fact that the no-cause termination provision was reciprocal is not in itself an answer to allegations of unfairness. The impact of termination on 90 days' notice on the applicants would, I think, be quite different to that experienced by the respondents if they had received 90 days' notice of termination from the applicants. 2) Whilst the dealership agreements provide for 90 days' notice of termination without cause, the question arises as to the conduct of the respondents in arriving at a decision to terminate the agreements. For example, the respondents contended that the core reason for terminating the dealership was that they had lost trust and confidence in the applicants. Was that corporate view formulated on a reasonable and proper basis or tainted by prejudicial or misleading information generated by one or more employees of the first respondent? If this view was formed on an improper basis, and if the applicants had a proper foundation for believing they were relatively secure in the dealership and had a long-term future, was there unfairness in the respondents' decision to terminate the dealership? 3) Whether the dealership agreements were unfair in not providing for procedures to resolve disputes between the parties and that in the absence of such procedures the respondents conducted themselves in a manner that contributed to the breakdown in relationships. Alternatively, did the applicants exploit the absence of a disputes resolution procedure and conduct themselves in an unreasonable and obstructive manner? 4) Whether there was unfairness arising out of the respondents' refusal or failure to consider, as an alternative to terminating the dealership, allowing the second and third applicants to "step back" from the day to day management of the business and install a manager who had the confidence of the respondents. 5) Whether the limitations placed on the applicants in being unable to sell the dealership in the market place to any one other than a buyer approved by Caterpillar caused unfairness. For example, in having to negotiate with Westrac as Caterpillar's approved buyer were the applicants put in a disadvantaged bargaining position vis a vis Westrac? Did Caterpillar in fact remain neutral in the negotiations between Westrac and the applicants? Did Westrac seek to unfairly exploit its bargaining position in the negotiations with the applicants in that, for example, they knew that Caterpillar would ultimately terminate the dealership if the applicants refused to accept Westrac's offer? If so, was the applicants' refusal to accept what might have been an unreasonable offer from Westrac the cause of the eventual breakdown in negotiations? Was the applicants' rejection of Westrac's offer unreasonable in the circumstances? Notwithstanding Westrac's offer to re-open negotiations, would negotiations occur on even terms? What inferences are to be drawn from the applicants' refusal to re-enter negotiations with Westrac if only on a contingency basis? 6) Whether there is any substance in the alleged fourth assurance, namely, that if the applicants agreed to sell their shares the process would be "conducted on an amicable and reasonable basis without duress and would provide an opportunity … to receive a fair value for the shares; that [Caterpillar] would assist the applicants to achieve such an outcome; and, by implication, that if no agreement for sale at a fair value could be reached the applicants would retain the dealership". 7) It appears to be the case that in June 1999 the managing director of the first respondent said to Mr Gough that the relationship between Caterpillar and Gough & Gilmour was over and that Mr Gough should sell his shares. It also appears to be the case that Mr Gough was assured that Caterpillar would assist in the sale process. Did unfairness arise out of the fact that upon being advised in September 2000 that negotiations between the applicants and Westrac had broken down that shortly thereafter the first respondent issued notices to terminate the dealership agreements without further consultation with the applicants as to the causes of the breakdown and without inquiring what assistance the first respondent might provide in accordance with the alleged assurance given by Mr Curfman in June 1999? Alternatively, was it so manifestly apparent that the applicants were engaging in tactics designed to sabotage the negotiations that nothing could have been gained from offering assistance to the applicants? 8) Whether it would be contrary to the public interest for potentially a large number of employees to be made redundant on 90 days' notice as a consequence of the respondents' decision to terminate the dealership. The respondents have offered certain assurances in this regard. However - and not through any lack of good faith on the respondents' part - the Court remains to be satisfied that that the jobs of a large number of employees are not in jeopardy. How is the Court to be certain, for example, that if the termination were to proceed that Westrac would move quickly to purchase the shares at a fair price and employ all or even the majority of the employees of the first applicant on fair and reasonable terms? What happens to the employees if no sale has been effected by 15 December 2001? There may be some force in the respondents' submission that through procrastination and the delaying tactics employed by the applicants in negotiating the sale of assets and shares to Westrac, the applicants are to blame for jeopardising the continued employment of their own employees. However, there may equally be some force in the submission that at least part of the blame lies with Westrac for the tactics it adopted in the sale process and with the respondents for allegedly failing to offer any assistance, as allegedly promised, to the applicants once the negotiations with Westrac broke down.

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If it were assumed that the applicants did in fact rely on the alleged assurances, they have benefited because they have had the opportunity to be a Caterpillar dealer and receive "vast sums of money" as a result; 2) The position that the applicants would have been in had they not so relied on the alleged assurances was one where they would not have been a Caterpillar dealer and would not have received the many millions of dollars that they did receive and would continue to receive as a result of the sale of their shares and assets; 3) Accordingly, the loss of the Caterpillar dealership: a. Is not a detriment suffered by reliance upon the alleged assurances; b. Does not give rise to unfairness of a kind justifying the variations the applicants sought to make to the dealership agreements. 69 Mr Connock submitted that insofar as reliance by the applicants on the alleged assurances was said to have resulted in the incurring of additional expense, contractual liabilities or the loss of opportunity, these were all financial matters. That is, they did not warrant the granting of contractual relief of the kind sought. Further, that with respect to these financial matters, it did not follow that they were amounts that could be recovered. Whether these amounts could be recovered would depend upon an analysis of the financial detriment (if any) that the applicants suffered by allegedly relying on the alleged assurances. As the applicants did not suffer any financial detriment there could be no compensation justified under s 106(5). Indeed, the applicants enjoyed a financial benefit by relying on the alleged assurances and to grant the relief sought would be to unjustly enrich the applicants. It was further submitted that even if there was some financial detriment suffered by the applicants it would not justify the contractual relief sought and damages would be an adequate remedy. Finally, on this issue Mr Connock contended that a Court would not, in the exercise of its discretion, make orders forcing parties to stay together in circumstances where it is acknowledged that mutual trust, respect and cooperation is at the heart of the relationship and there could be no realistic prospect of those characteristics being present.

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