Gough & Gilmour Holdings Pty Ltd and Ors v Caterpillar of Australia Ltd & Ors

PARTIES : FIRST RESPONDENT Caterpillar of Australia Limited

SECOND RESPONDENT Caterpillar Inc.

THIRD RESPONDENT Caterpillar SARL

FOURTH RESPONDENT Caterpillar Overseas Credit Corporation SA FILE NUMBER: IRC 5227 of 2000 CORAM: Boland J CATCHWORDS : Unfair contract - Injunction - Whether injunction should be lifted in light of the Court's decision to refuse the applicant's primary relief - Leave granted to applicants to apply to amend summons in respect of alternative relief - Injunction to remain in place until question of alternative relief determined. Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No.9) [2001] NSWIRComm 260 CASES CITED : (Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 11) [2002] NSWIRComm 354) Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 12) [2002] NSWIRComm 379 Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Ors (No. 13) [2003] NSWIRComm 26 HEARING DATES: 02/24/2003 DATE OF JUDGMENT: 02/27/2003

APPLICANTS Mr M J Kimber SC with Mr A B Gotting of counsel Solicitor: Mr E Pritchard Harmers Workplace Lawyers LEGAL REPRESENTATIVES: RESPONDENTS Mr P M Hall QC with Mr M Connock of counsel Solicitor: Mr T Gooch Mallesons Stephen Jaques

JUDGMENT: - 3 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter No IRC 5227 of 2000 GOUGH & GILMOUR HOLDINGS PTY LIMITED & ORS v CATERPILLAR AUSTRALIA LIMITED & ORS

Application under s 106 of the Industrial Relations Act 1996 Interlocutory Judgment No. 14 [2003] IRComm 44

1 This judgment concerns the question of what should be done about injunctive orders made by the Court in Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No.9) [2001] NSWIRComm 260 on 24 October 2001. Those orders had the effect of restraining the respondents from terminating the dealership agreements between the applicants and the first respondent or otherwise prejudicing the applicants "Until the hearing and determination of the issues being considered by (the Court) in the first part of the split hearing in this proceeding or further order ..."

2 In a judgment handed down on 19 December 2002 (Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 11) [2002] NSWIRComm 354) the Court refused the primary relief sought by the applicants, that is, relief that would have allowed the applicants to remain in the dealership. At the request of the parties, the Court did not proceed to deal with the applicants' alternative claim for relief and decided to provide the parties with the opportunity to make further submissions once it was known what the Court's position was in respect of the claim for primary relief.

3 On 20 December 2002, the respondents filed a notice of motion in Court seeking orders that the injunctive orders made on 24 October 2001 be dissolved. It was submitted for the respondents that the injunctive orders ought be dissolved because now that the Court has decided against the applicants' claim that the dealership agreements remain on foot the applicants no longer needed the protection afforded by the injunctive orders. It was also submitted that it would be highly prejudicial to the rights and interests of the respondents that having been prevented from proceeding with the sale of the dealership for so long that they should be occasioned further delay when it was not justifiable.

4 The applicants submitted that the injunctions should remain in place, contending that the question of alternative relief was a matter yet to be determined by the Court. Further, that the claim for alternative relief was not limited to compensation. It was submitted that if the orders were dissolved it would be open to the respondents to issue notices in accordance with the terms of the dealership agreements giving 90 days' notice to terminate the dealership agreements in circumstances where the Court may decide that the alternative relief should be a notice period in excess of 90 days.

5 In Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Anor (No. 12) [2002] NSWIRComm 379, after dealing with an application by the applicants to join two additional respondents, the Court stated in relation to the injunctive orders: As to the terms of the injunctive orders, circumstances have changed considerably since those orders were made. In particular, the primary relief sought by the applicants has been refused. In light of the changed circumstances the parties are directed to hold discussions with a view to reaching agreement on revising the terms of the orders made on 24 October 2001 so that the respondents are not unreasonably restrained. The Court will hear the parties on this issue at 2.00 pm on 21 January 2003 as well as on the program of further hearing dates in respect of the alternative relief.

6 The parties, however, were unable to agree on any revision of the terms of the injunctive orders and the respondents continued to press strongly for their dissolution. As matters developed it became clear that the form of any alternative relief that might be available to the applicants would have a significant bearing on the injunctive orders that are currently in place. If compensation were the only available alternative remedy there could be no objection to dissolving the injunctions immediately. On the other hand, if relief were available in the form of an extended period of notice or variations that put in place a sale negotiation process then, prima facie, it seemed that the injunction should stay in place albeit, perhaps, in a revised form.

7 Consequently, the Court directed the applicants to provide details of their alternative relief and the parties were heard as to whether such relief was available to the applicants. In Gough & Gilmour Holdings Pty Limited & Ors v Caterpillar of Australia Limited & Ors (No. 13) [2003] NSWIRComm 26 the Court ordered that leave be granted to the applicants to apply to amend their claims for alternative relief. In the same judgment the Court said: I am not prepared to dissolve the injunctive orders at this stage although I consider there is scope for loosening the constraints on the respondents. I am not prepared to allow the respondents to move against the dealership in such a way that might interfere with the Court's treatment of the question of alternative relief. The parties are again directed to hold discussions with a view to reaching agreement on revising the terms of the orders made on 24 October 2001.

8 In accordance with directions the applicants, by way of notice of motion filed on 20 February 2003, moved the Court for orders amending the third further amended summons to specify the form and content of alternative relief sought by the applicants. The relief sought included variations to the overall arrangement found to have existed between the applicants and the respondents which would have the effect of making the respondents' right to terminate the dealership agreements conditional on compliance with what was said to be Caterpillar's "last resort policy". If the alternative relief were granted it would have the effect of superseding the respondents' existing right to terminate the dealership agreements by the giving of 90 days' notice.

9 On 24 February 2003 the Court was informed that the parties had been unable to reach agreement on revising the terms of the injunction. The Court had hoped that some compromise position could have been reached between the parties that would allow for a loosening of the terms of the injunction but that has not been achievable.

10 It is a matter of significant concern to the Court that the respondents continue to be restrained in managing their business 16 months after the injunctive orders were made. However, given that the issue of relief has not yet been finally determined in this matter and that there is at least the prospect that the relief granted might be something other than compensation, it would be premature to dissolve the orders.

11 The question remains whether, in light of the parties' failure to agree on how the orders might be amended, the Court should do so and, if so, to what extent. I have given careful consideration to each of the elements of order 1. of the orders of 24 October 2001 and I have come to the view that the balance of convenience is in favour of leaving them in place until final determination in this matter and I so determine.

12 I note the proposal by the respondents made in a letter to the applicants' solicitors on 7 January 2003, no doubt in good faith, to substitute the injunction with an undertaking in the following terms: 1. The Respondents, whether by their respective servants or agents, undertake not to take any further steps to remove the Applicants from the Dealership for a further period of 90 days from 19 December 2002; 2. The Applicants each undertake jointly and severally to the Commission: (i) to submit to such orders as the Commission may consider to be just for the payment of compensation to be assessed by the Commission or as it may direct to any person, whether or not a party to the proceedings, affected by the operation of the undertaking referred to in 1 above; and (ii) to take all necessary steps with due expedition and diligence during the 90 day period referred to in 1 above towards exiting the Dealership.

13 It was later put by the respondents in the course of proceedings that it was open to the Court to use the proposed undertaking as the basis for an order to be substituted for the injunctive orders. I take the view, however, the undertaking would not provide sufficient protection to the applicants and any reference to a notice period would pre-empt the outcome of any determination regarding alternative relief.

14 Whilst I have expressed concern about how long this matter is taking to resolve, it is to be noted that the outstanding issue of alternative relief will be dealt with by the Court in proceedings scheduled for 25, 27 and 28 March 2003. ________________________________ -

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