Sigma Constructions (Vic) Pty Ltd v Marvell Investments Pty Ltd [2004] VSCA 242

Court of Appeal (Vic)|2004-12-09|Before: BATT, VINCENT and NETTLE, JJ.A.

REAL PROPERTY - Licence - Whether irrevocable as coupled with grant - If revocable and revoked, whether injunction goes automatically to restrain entry by ex-licensee as trespasser on licensed land, without considering whether revocation was in breach of implied negative contractual stipulation.

ADMINISTRATIVE LAW - VCAT - Jurisdiction to hear "fair trading dispute" - Whether dispute between licensor and licensee was such - Whether rights in relation to real property granted "in trade or commerce" - Where licence granted by restaurant company over rear portion of its land for substantial sum - 1999, s.3 ("services") and s.108(1).

This is an appeal by leave on questions of law from the order made on 3 July 2003 by the Victorian Civil and Administrative Tribunal ("VCAT") constituted by a Vice President on the application of the present respondent, Maryvell Investments Pty Ltd ("Maryvell"), that the present appellant, Sigma Constructions Pty Ltd ("Sigma"), its servants and agents be permanently restrained from entering upon any part of the respondent's land situate at 333-335 Sydney Road, Brunswick.[1]

Maryvell is and was at all material times the owner of that land and was the proprietor of a restaurant business conducted upon the land until it was prohibited from doing so by the Chief Health Officer on hygiene grounds. The land, rectangular in shape, fronts the western side of Sydney Road. The restaurant building is at the front and behind it is an open area described (whether or not correctly) as a car park, which occupies about three-quarters of the block.

Sigma was building a residential development on premises owned by an associated company and situate at 341 Sydney Road ("Sigma's land") immediately to the north of Maryvell's land. The development incorporated an hotel occupying the front of Sigma's land. Because of the location, topography and surroundings of Sigma's land its construction work would be facilitated by having access to its land over the open area of Maryvell's land. Accordingly, it procured Maryvell's agreement to grant to it a licence over the greater part of that open area, and an agreement for a licence dated 18 July 2002 was entered into by Maryvell as licensor and Sigma as licensee under the common seal of the former and the signature of an authorized officer of the latter.

Clause 1 of the licence agreement provided that, in consideration of the sum of $25,000 paid that day, the licensor thereby licensed and authorized the licensee, its servants and agents, and all persons duly authorized by it or them, to enter upon and use the property for the purposes of temporarily storing material, plant and machinery required for the construction of buildings adjacent to the premises during each day from Monday to Saturday during the hours of 6.30 a.m. to 5 p.m. for a period of 15 months from the date of the agreement. The premises were defined as being the rear land at 335 Sydney Road up to ten metres from the rear wall of the restaurant building and excluding the garden area, as better described in an annexed plan.[2] Clause 2 provided in part:

"The licensor, its assigns and successors hereby charge their interest in the real estate situated at 335 Sydney Road, Brunswick ... to the licensee for the purpose of lodging a caveat on the title noting the interest of the licensee pursuant to this ... agreement and the licensor acknowledges that this charge irrevocably creates an estate or interest in the said real estate which entitles the licensee ... and/or its solicitors to lodge a caveat to secure such interest during the duration of this ... agreement. The licensee shall upon demand by the licensor ... immediately remove such caveat in the event that the licensor will seek to re-finance and/or encumber the subject property by way of mortgage or other charge and shall be entitled to re-lodge a caveat thereafter ... "

By clause 3 the licensor further granted to the licensee full and sufficient rights of way over and upon the property and the right to carry on any other activity required for the purposes of the construction and building works during the licensed hours, but with an obligation to clear all the area after those hours so that it was available for the use of the licensor and its patrons. Provision was made for the licensor to have access to the rear of the restaurant building. By clause 4, the licensee undertook to carry out a dilapidation report of the licensed area, to conduct the area so as not to injure the reputation of the restaurant premises or offend against any law or imperil any liquor licence or insurance and to make good at its own expense any damage caused to the licensed area. Clause 5 provided that the licence should continue during the possession of the premises and should be, at the option of the licensee, determined earlier than the stipulated date upon its giving 30 days' written notice to the licensor. Further, upon the building and external construction works having been completed to the licensee's satisfaction, the licence agreement was to lapse. The final provision that it is necessary to note is that found in clause 7, whereby the licence might be terminated by 14 days' written notice by the licensor if the licensee had failed upon request to carry out the terms and conditions in the agreement.

Almost immediately after the licence agreement was entered into differences arose between Maryvell and Sigma. Maryvell claimed, amongst other things, that Sigma's equipment had damaged its sewerage line and vents as well as the garden area and that Sigma had removed some rear stairs and also that Sigma was not vacating and clearing the site at the end of each period of authorized access. Sigma denied these claims or that it was otherwise in breach of the agreement. It also said that, if it had caused any damage, it was very minor and that in any event, as Maryvell was prohibited from conducting the restaurant by an Unclean Food Premises Closing Order made by the Chief Health Officer of the Department of Human Services under s.19(1) and (2) of the Food Act 1984, it had suffered no damage. Eventually, on 21 November 2002 Maryvell gave Sigma 14 days' notice of termination on the ground of failure to carry out the terms and conditions of the agreement upon request, expiring on midnight on 6 December 2002. The notice, although omitted from the Appeal Book, was tendered as Exhibit F before his Honour.

On 15 May 2003 Maryvell commenced a proceeding against Sigma in VCAT seeking an injunction to evict the latter from its premises and indemnity for all costs, expenses and damages caused by Sigma. Various interlocutory orders were made in the proceeding, including an order for the filing and service of points of claim and points of defence. By its points of claim dated 6 June 2003 Maryvell claimed a declaration that the licence agreement had been validly terminated, alternatively an order that it be rescinded pursuant to s.108 of the Fair Trading Act 1999; an injunction restraining Sigma from entering Maryvell's property; and damages. The matter was adjourned for a hearing on the merits for a permanent injunction on 25 and 26 June 2003. At that hearing Sigma challenged the jurisdiction of VCAT to hear and determine the proceeding. On 26 June 2003 the Vice President ruled that VCAT had jurisdiction.

In his reasons, his Honour pointed out that both parties were commercial entities, referring to their respective businesses. He summarized the provisions of the licence. His Honour accepted that the licence was the only one entered into by Maryvell with Sigma or with any party in relation to the subject land. It was a one-off arrangement. He stated that it was Sigma's argument that, for the purposes of ss.107 and 108 of the Fair Trading Act and the definition of services contained in s.3 of that Act, Maryvell was not engaging in trade or commerce, so that the Act had no application and VCAT accordingly no jurisdiction. Maryvell, on the other hand, contended that it was providing a service and that the licence provided a benefit or facility in trade or commerce. His Honour referred to several authorities and then expressed his clear and firm conclusion that the dispute was a fair trading dispute within the meaning of the Act and that VCAT had jurisdiction accordingly. The aspects of the case on the basis of which his Honour so concluded were (understanding "the applicant" and "the respondent" to be respectively Maryvell and Sigma) as follows:

"(1) The applicant is an entity engaging in trade or commerce, whether it, or its director Mr Velissaris, be the actual operator of the restaurant or whether some other entity be the actual operator of the restaurant at the subject premises. (2) The respondent is an entity engaging in trade or commerce. (3) One entity has, as a business transaction, licensed the other to occupy part of its premises in consideration of payment of a substantial sum. (4) The purpose of such licence is the use of the property for the storage of equipment used in the construction of the development - that is, for a commercial enterprise. (5) The subject land is used for a business activity. It is worthwhile comparing that the remarks of the Full Federal court in O'Brien v. Smolonogov[3] where the fact that the land was not used for any business activity was a factor which was considered. (6) The licence requires that the respondent, in conducting its business, have some regard to the business activities carried on either directly or indirectly by the applicant."

His Honour considered that the case fell clearly within the interpretation of "in trade or commerce" favoured by the majority of the High Court in Concrete Constructions (NSW) Pty Ltd v. Nelson [4]: it was a transaction which of its nature bore a trading or commercial nature, said his Honour. Finally, his Honour did not accept the submission for Sigma that there was a relevant distinction between a lease and a licence so as to make the decision of the Court of Appeal in Zeus and Ra Pty Ltd v. Nicolaou [5]distinguishable. Rather, he considered the reasoning in that case equally applicable to the licence in question before him.

On 27 June 2003 the substantive hearing commenced, with the principal or only director of Maryvell giving evidence on the question of whether Sigma had failed upon request to carry out the terms of the licence agreement. Shortly before lunch his Honour raised the question, apparently originally suggested by counsel for Maryvell, whether it was necessary to go into that in order to determine whether an injunction should be granted, having regard to the decision of Lush, J. in Porter v. Hannah Builders Pty Ltd[6] to the effect that the employer of a building contractor who was entitled under the building contract to exclusive possession of the building site could nevertheless revoke the licence at any time and obtain an injunction preventing the builder from entering upon the site even if that revocation was in breach of contract. That matter was argued after the luncheon adjournment and his Honour gave his decision on 30 June.

In his reasons his Honour referred to the licence, the notice of termination and the relief sought by Maryvell. He then stated that Porter v. Hannah Builders (if still good law and applicable on the facts) had the potential to deliver what counsel had described as a "knock out punch" insofar as the injunction was concerned. He took the applicable principle to be that stated by Lush, J.[7], namely, "that the essence of the principle applied in [Cowell v. Rosehill Racecourse Pty Ltd][8] is that the licence may be determined and the licensee transformed into a trespasser even if the determination involves a breach of contract". The licensee's remedy would then lie in damages, the Vice President said. He pointed out that Lush, J. had gone on to grant an interlocutory injunction. Counsel for Maryvell had argued that, if the licence in the present case was a mere licence, not linked to any grant or interest in land, it was a revocable licence, revocable at will, and even in breach of contract. If an appropriate termination of licence was given, the licensee became a trespasser and the applicant would be entitled to the injunction sought without there being any necessity to investigate the merits of alleged failures to comply with the terms and conditions. It seemed to his Honour that the determination of that argument at the outset made perfectly good sense, for there would be little point in hearing a large number of witnesses if, as a matter of law, Maryvell effectively must succeed in relation to the injunction without the necessity of either side's resorting to such evidence. There was urgency on both sides as Maryvell was arguing continuing loss and damage of considerable significance and Sigma was relying upon using the subject land to go ahead with its construction work.

So his Honour considered the argument based on Porter v. Hannah Builders. It was not suggested that it was not still good law. His Honour accepted as applicable the principle that he had distilled from the case. A purported notice of termination had been served. The issue was whether the licence was revocable or irrevocable. That turned on whether the licence was linked to an interest in land. Counsel for Sigma had relied upon clause 2 of the licence agreement, being an agreement said to be under seal. The argument was that the clause created a charge in much the same manner as where a loan was secured by a charge. A caveatable interest had been created. His Honour rejected that argument, saying:

"It seems to me that clause 2 does not represent a valid charge over the property so as to create an interest. It may use the words 'hereby charge' but it in fact secures nothing. The lodging of a caveat - untested - is no proof of a caveatable interest so as to create an interest in land. The purported charge is for the purposes of the caveat. The caveat takes one back to the licence agreement. The exercise is circular because nothing is at any stage secured. One ends back with the licence which confers or is linked to no interest. In [Avco Financial Services Ltd v. White[9] a loan was specifically secured by the charge. The nature of the Charge is neatly summarised in Re Price; ex parte Tinning[10] as follows: 'A charge sets aside some property, real or personal, by making a deduction from the absolute ownership of it, in favour of someone who is given by law or by agreement, will, or otherwise, the right to resort to the property to satisfy or discharge some obligation'. That does not exist here. No liability is secured by the purported charge. The document does not resemble something such as a fidelity bond. No debt of obligation is secured by the right to resort to property. Accordingly, in my opinion, clause 2 of the licence does not convert that licence into anything other than a mere licence. No link or coupling with any other interest in land or personal property exists. It is a mere licence revocable at will. It has been revoked. The licensee becomes a trespasser. The licensee may have a remedy in damages."

His Honour concluded his reasons by saying that unless there was further argument as to whether the next step, namely, the granting of an injunction, was to follow, he was of the view that the injunction sought should be granted. He raised whether there was something further to be said to the contrary because he wanted to be sure that the parties had finished their arguments.

Counsel for Maryvell submitted that the injunction should go. Counsel for Sigma submitted that injunctions did not follow as a matter of course. There were various requirements which courts adopted, such as clean hands and full disclosure, and the material here indicated, it was submitted, that Maryvell had been guilty of material non-disclosure and ought not to receive relief by way of injunction. Damages for wrongful occupation of land were a remedy Maryvell was entitled to. Counsel said that he could argue those points but the judge was obviously going to find against him on them because he had determined that the injunction would follow almost automatically as a matter of course. His Honour stated that in the present case he would take some persuading that that relief should not be granted. Counsel then switched to seeking a stay to enable papers to be lodged in the Court of Appeal.

On 3 July his Honour heard further argument on whether the permanent injunction sought should be granted and, if so, whether a stay of the order should be granted. He held affirmatively on both questions.

So far as the injunction was concerned, his Honour stated that if (as he had held) the licensee was a trespasser because of the valid termination of the licence, "the applicant licensor has established its case". He then referred to the argument of senior counsel for Sigma that to grant an injunction would effectively be to countenance, if not encourage, a potential breach of contract by the applicant, Maryvell, but his Honour rejected this, relying on the statement of Lush, J. in Porter v. Hannah Builders [11] that it was undesirable that the court should refuse an injunction designed to remove the trespasser and thus leave the plaintiff to remove him, if he could, by self-help. Maryvell, having been successful in its primary application, was entitled to the relief sought, namely, an injunction. His Honour was not dissuaded from that view by the argument that damages might prove an adequate remedy for it. Nor was he by the argument based upon the absence of good faith on the part of Maryvell, for that took one back to the assertions and counter-assertions contained in the material which had not been determined. The order set out in the first paragraph of these reasons was then made. Although expressed to be by consent, it is clear that the consent was only as to the wording of the order, which was clearly drafted by counsel, if an injunction was to go. The order did contain a stay until 11 July 2003. That stay was apparently continued to 28 July 2003 and on 25 July the Court of Appeal granted a stay until the hearing and determination of the present appeal.

There were two branches to Sigma's case on appeal. First, it was contended that VCAT erred in law in determining that it had jurisdiction to hear the proceeding and, more particularly, that it erred in determining that the arrangement constituted by the licence agreement was one made in commerce and that the dispute was a fair trading dispute within the meaning of the Fair Trading Act. Secondly, it was contended that the injunction should not have been granted because VCAT erred in determining that the licence was not one which was coupled with an interest in the land subject to the licence, in determining that the licence had been validly terminated, notwithstanding that there had been no determination as to the existence of any grounds for termination specified in the licence agreement, and in determining that Maryvell was entitled to the benefit of an injunction to give effect to or enforce the revocation.

I take first the question of jurisdiction. It was contended in the written outlines for Maryvell that because the order granting leave to appeal gave leave to appeal only against the order dated 3 July it was not open to Sigma to challenge the decision concerning jurisdiction. That submission is misconceived. First, there was no order made giving effect to the ruling on jurisdiction on 26 June 2003; in other words, the Court of Appeal's grant of leave did not involve the refusal of leave to appeal against an order of that date. Secondly, one can, both on general principle and under s.148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act), appeal only from orders (or, in another context, judgments), not from mere rulings. But the ruling provided the foundation for or the premise of the order granting the injunction and it was open to Sigma to challenge the injunction on the ground that it was made without jurisdiction because it was made in a proceeding in respect of which VCAT had no jurisdiction.

The Fair Trading Act by s.108(1) provided that VCAT "may hear and determine a fair trading dispute". By s.107(1) as in force at the material time, a "fair trading dispute" was defined as "a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier of or possible supplier of goods or services in relation to a supply or possible supply of goods or services". The applicability of that definition depends on the definition of "services" in s.3, there being no suggestion that "goods" were involved. So far as material, "services" are there defined as including:

"any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce ..."

By parity of reasoning with the Court's decision in Zeus and Ra[12], the licence agreement here provided, granted or conferred rights in relation to real property.

It was submitted for Sigma that the rights in relation to real property at 335 Sydney Road, Brunswick, that were provided, granted or conferred by the licence agreement were not provided, granted or conferred "in trade or commerce" because Maryvell had not previously granted and subsequently would be extremely unlikely to grant a licence over the open area of its land. The transaction was an isolated one in respect of the land and reliance was placed on O'Brien v. Smolonogov[13] and Argy v. Blunts & Lane Cove Real Estate Pty Ltd [14], the former being a decision of the Full Court of the Federal Court and the latter a decision of Hill, J. of that Court. It was also said (and may perhaps be assumed for present purposes) that the land the subject of the licence was desolate, nominally but not actually used as a car park and not used at any relevant time for any commercial activities. It was contended that Zeus and Ra was distinguishable both because there was jurisdiction in any event under the retail tenancies legislation (though that applied to only one of the two VCAT matters) and because a lease, which was involved there, carried with it the potentiality of renewal or further demise, that is, was commercial in character. Here the land the subject of the licence was not generally available for or required by anyone else. Sigma contended that the transaction had to be capable of repetition and had to be capable of occurring between persons generally in order for it to be in trade or commerce.

In my opinion, the Vice President was entirely correct in his ruling on jurisdiction. It might be sufficient to say, as I do, that I adopt his reasons. But out of deference for the argument for the appellant I add some additional observations.

It seems to me that the definition of "services" requires one to consider the question, at least principally, from the point of view of the supplier. Thus, the sale of a purely domestic dwelling by its owner to a developer or trader in real estate might not involve the provision in trade and commerce of rights in relation to real property, whereas if the parties were reversed, it almost certainly would. Although some allowance must be made for the different context in which the expression "in trade or commerce" there appeared the statement by four justices of the High Court in Concrete Constructions (N.S.W.) Pty Ltd v. Nelson[15] may be taken as a safe guide to what must be found if the expression is to be satisfied here. The provision, etc., of rights, etc., must be "in the course of ... activities or transactions which, of their nature, bear a trading or commercial character". In my opinion, notwithstanding that the licence was an isolated transaction and, unlike the first sale of goods by a new business, unlikely to be repeated, the granting of it was an activity or transaction which of its nature bore a trading or commercial character. For Maryvell was temporarily turning to account part of the premises on which it conducted, or used to conduct, a business. The fact that the transaction was divorced from the mainstream of Maryvell's business is, whilst relevant, not decisive. Although the question which arose in Federal Commissioner of Taxation v. Montgomery[16], to which Nettle, J.A. referred in the course of argument, was not the same as arises here, the case furnishes a helpful analogy. There the inducement payments granted to a lessee were held by the majority of the High Court to be properly characterised as revenue receipts because they arose from an adventure in the nature of trade undertaken in the course of a wider business activity, notwithstanding the singularity of the transaction and its extraordinary nature when judged by reference to transactions in which the lessee usually engaged. In my opinion, the Federal Court decisions relied on for Sigma are distinguishable. In O'Brien the land was not used for any business activity and the vendors were not, in selling, acting in the course of carrying on business. In Argy v. Blunts the relevant part of the decision was that the owner of a house by selling it, whether with or without agents and whether privately or by auction, does not do so in the course of a trade or business or in a business context and therefore does not do so in trade or commerce. But the licensor here was a company that was or had been engaged in business and the licence was granted over part of the land on which the business was or had been conducted.

A supplementary submission, said to be directed to jurisdiction, was advanced for Sigma. This was that under s.108(2) of the Fair Trading Act VCAT did not have power to grant an injunction and the order, if it is to be justified, must be justified under s.109(1), whereby in determining a trader-trader dispute VCAT may make any order it considers fair. But because the original application claimed damages that exceeded $15,000 and the claim for damages in the Points of Claim was unlimited, the dispute was not a "trader-trader dispute" within the definition of that expression in s.109(4) which has a ceiling of $10,000 for a claim.

It is true that s.108(2) does not authorize the granting of injunctions and it is also true that s.109(1), even if it would justify an injunction, is excluded because the monetary ceiling for a claim is exceeded. But the short answer to the submission is that it entirely overlooks s.123 of the VCAT Act, which by sub-s.(1) authorizes VCAT to grant, by order, an injunction "in any proceeding" if it is just and convenient to do so and by sub-s.(8) provides that VCAT's power under the section is in addition to any power of VCAT under an enabling enactment to make an order in the nature of an injunction.

Before leaving this submission I should make it clear that it in fact goes not to jurisdiction, but merely to the powers of VCAT in a proceeding in respect of which it has jurisdiction.

For the foregoing reasons the challenge to jurisdiction fails.

I turn now to the challenge to the grant of the injunction. I take first the argument that VCAT erred in determining that the licence was revocable when the licence was coupled with an interest in land constituted by the charge granted by clause 2. In my opinion, his Honour was correct in rejecting this submission for the reasons he gave. I add only one comment. The ultimate remedy of a chargee is a judicial sale. But there is no act or event to secure the performance or occurrence of which the purported charge is expressed to be given. One cannot envisage a sale ever being ordered. This shows that the purported charge is hollow.

The remaining two bases for challenging the grant of the injunction which I summarized earlier and which themselves represent more than two grounds of appeal may themselves be taken together. They are that his Honour erred in determining that the licence had been validly terminated notwithstanding that he made no determination as to the existence of any grounds for termination specified in the licence agreement and in particular clause 7 and erred in determining that Maryvell was entitled to the benefit of an injunction to give effect to or enforce the revocation. (I note in passing that his Honour in his reasons for decision on 3 July 2003, as recorded, used the expression "validly terminated" or "valid termination" four times on one page,[17] twice saying that he had ruled that the licence agreement was validly terminated. But it is clear on the proper construction of those reasons, which expressly acknowledged that the termination might be in breach of contract, and from his actual reasons for decision as to termination given earlier, that by "validly" his Honour meant effectually.)

The short point now argued is that an injunction is a discretionary remedy but his Honour, having held that the licence had been terminated and that Sigma had become a trespasser, treated the grant of a permanent injunction as the automatic consequence of his holding or, in other words, proceeded as though he had no discretion and, in particular, precluded himself by the course he adopted from considering, and thereby did not allow Sigma to raise for consideration, whether the termination was in breach of contract and, if so, whether the injunction should be refused for that reason. The point is, not that his Honour should have found that Maryvell had been in breach of contract in revoking the licence and refused the injunction on that ground, but that he should have considered those questions. That would have required the hearing and evaluation of the evidence which, in his laudable attempt to give the disputant parties a prompt decision, he held was unnecessary.

In my opinion, that argument should be upheld. As I shall endeavour to demonstrate, his Honour, from the time he considered Maryvell's proposal based on Porter v. Hannah Builders on 30 June 2003, was of the view that, if revocation of the licence was established, an injunction went as of course and, in particular, without investigating the merits of the alleged failures to comply with the terms and conditions of the licence agreement. Thus, on 30 June 2003 he seems to have approved counsel's description "knock out punch" and he spoke of Maryvell, in the event of termination and the licensee becoming a trespasser, being entitled to the injunction "without there being any necessity to investigate the merits of alleged failures to comply with the terms and conditions". With reference to Maryvell's argument for adopting the course proposed, his Honour clearly treated it as meaning that "as a matter of law, the applicant must effectively succeed in relation to the injunction without the necessity of either side resorting to such evidence". In the discussion following his Honour's querying whether the parties had concluded their arguments as to the grant of the injunction, counsel for Sigma raised discretionary considerations affecting injunctions, such as clean hands and full disclosure, but his Honour, whilst perhaps not embracing the view that the injunction was "automatic", said that he would take some persuading that the injunction should not be granted. On the next day of hearing, 3 July, which was the day when the injunction was actually granted, his Honour remained, as it seems to me, of the view he had earlier expressed. Thus, he said that if the licensee was a trespasser because of the valid termination of the licence, "the applicant lessor has established its case". That was the basis on which the injunction was sought. It is true that his Honour then recorded and dealt with the arguments of senior counsel for Sigma, but, as my earlier recitation of the facts shows, he did not accept any of them. In particular, of the argument based on the absence of good faith on the part of Maryvell, his Honour said that that took one back to the assertions and counter-assertions and "the merits", which had not been determined. Despite the latter fact his Honour granted the injunction.

Cases can be found where an injunction was granted in favour of a licensee to prevent the licensor from revoking, or acting upon the revocation of, the licence at least where it was not a fleeting one. For instance, Playgoers' Cooperative Theatres Ltd v. Workers Educational Association of New South Wales[18] and Bingham v. 7-Eleven Stores Pty Ltd [19]. The basis for the grant of injunction is that in every contractual licence there is an implied negative stipulation by the licensor not wrongfully to revoke the licence, not to treat the licensee as a trespasser until the licence has been validly determined. And the licensee may be granted an injunction as above-mentioned provided, perhaps, that to do so would not amount to granting specific performance of a contract in respect of which that remedy is not available: see generally Meagher, Gummow & Lehane: Equity Doctrines and Remedies[20]. Even as to the latter the need for constant supervision by the court is no longer an effective criterion for refusing specific performance: Patrick Stevedores Operations No.2 Pty Ltd v. Maritime Union of Australia[21].

But it is not necessary for Sigma to go so far in this case. It is sufficient for it to show that it is a material consideration to the grant of an injunction in favour of the licensor in a case such as this whether the licence was terminated in breach of contract. I consider that that question was material here. I do not think that the reasons of Lush, J. in Porter v. Hannah Builders[22] stand in the way of that conclusion. It is to be remembered that that case concerned a building contract, of which specific performance would not then at least have been granted. There were also public interest considerations present in that case which are not present here.

It was argued for Maryvell that his Honour had no discretion, alternatively, if he did, his discretion did not miscarry as he was entitled to allow Sigma's character as a trespasser to be decisive in the exercise of his discretion. What I have said disposes of the first argument and perhaps the second. In any case as to it, the topic precluded from consideration by his Honour was in my view material to the exercise of the discretion.

34 Because his Honour failed to consider a matter relevant to the exercise of his discretion to grant an injunction, being a matter which Sigma would have led evidence on and argued if its initial submission as to the course to be followed had not been rejected, his discretion miscarried. The error was, in my view, one of law.

The parties were agreed that, in the event the appeal succeeded, the matter should be remitted to VCAT because there were outstanding Maryvell's claim for a declaration that the licence agreement had been validly terminated and its claim for damages for breach of the agreement, but that the question of the injunction had ceased to be live (except in relation to the costs of the appeal) because the 15 months' term of the licence had expired by effluxion of time and Sigma, having completed its construction works with the benefit of the stays it obtained, no longer required access to Maryvell's land. Sigma has no claim for damages on foot and, the injunction being a permanent one, there was no undertaking as to damages. It is, therefore, not appropriate for this Court by its order in some way to provide for a such a claim. Sigma must take its own advice.

Subject to hearing counsel on any question of costs, the orders I propose are:

2. The order made on 3 July 2003 by the Victorian Civil and Administrative Tribunal (constituted by his Honour Judge Bowman, Vice President) in proceeding No. R79/2003 that Sigma Constructions Pty Ltd, its servants and agents be permanently restrained from entering upon any part of the applicant's land situated at 333-335 Sydney Road, Brunswick be set aside.

3. In place of that order, it be ordered that the application of Maryvell Investments Pty Ltd for a permanent injunction be dismissed.

4. Proceeding R79/2003 (apart from the claim for an injunction) be remitted to be further heard and determined with the hearing of further evidence by the Tribunal in accordance with law.

In the light of the submissions by both counsel as to the costs below, the Court will not make any order interfering with the reservation of the costs below.

As to the costs of the appeal, whilst sympathetic to some of the submissions Mr Attiwill made, the Court in the end comes back to the fact that the appellant did succeed and did get the order sought, and, having reviewed all the circumstances, the Court thinks that the ordinary rule that costs follow the event should apply. Of course, a certificate will be granted.

The order that I proposed in my judgment, with which the other members of the Court have agreed, will be the order of the Court save that in paragraph one there will be added the words "with costs, including reserved costs".

[1] Although questions of law were propounded to the Court which granted leave to appeal, the notice of appeal subsequently filed does not, as required by Rule 4.17(1)(b)(iv) of Chapter II of the Rules, set out any questions of law. No point was made of this.

[2] In my summary of the agreement I paraphrase various infelicitously or poorly drafted passages.

[12] At [75] and [76], per Charles and Eames, JJ.A.

[19] [2002] QSC 209; affirmed by the Queensland Court of Appeal, [2003] QCA 402.

[20] 4th edn., paras. [21-240] to [21-275].

At a glance

Court

Decision date

Before

Source

Judgment (67 paragraphs)

Parties