Village Roadshow Theatres Pty Ltd v Davenport [2000] VSC 332

Supreme Court of Victoria|2000-08-22|Before: Warren J

The application for the payment is brought in the context of a claim by the Village interests that there is an amount of $170,000 that was over paid to Lasry in respect of management fees. It was submitted on behalf of the Village interests that the over payment sum of $170,000 paid to Lasry substantially exceeded the $90,000 sum said to be owing by Staging Connections to Davenport and their interests.

Furthermore, it is apparent from the affidavit of Graeme Kearns sworn on 18 August 2000 that Lasry through its directors, the Davenports, has refused to authorise payments due to the corporate interests owned by Village. Further, it is alleged by Village that there is an amount of over $500,000 worth of administration fees owing to Staging Connections. In an affidavit sworn by Mr Terrence Davenport on 15 August 2000 in support of the application he has deposed (in para 11) that the monthly management fee is his sole source of regular income and that the withholding of such moneys is affecting his capacity to pay for the living expenses of the family and also his ability to fund the preparation of the cases of the Davenport interests in the Village and Davenport proceedings. He also deposes that his ability to meet other financial obligations is made difficult. No further facts or particulars are put before the court in support of the assertions by Mr Davenport as to his financial position.

Mr P. O'Callaghan QC who appeared with Mr L. Glick for the applicant, Davenport, urged that the injunction be ordered because it would preserve the status quo. It was urged that this would be achieved by the granting of the injunction ordering the payment of the management fees to Davenport. Mr O'Callaghan QC relied, in particular, upon the observations in Spry, Equitable Remedies (4th ed) p.557-558 to the effect that " ... it is more just that the position to be maintained be the position existing before the acts that are alleged to be unlawful took place, and a mandatory injunction directed to that purpose accordingly issues". It was urged on behalf of the Davenport interests that up until the issuing of the proceedings the management fees were being paid to Lasry for the purposes of the Davenport interests. It is said that the payments prior to the issue of the proceedings constituted the "status quo" and, therefore, the court should order the payment of overdue fees and future payments.

All this overlooks the fact that there has been a delay of some eight months since payment ceased to the bringing of this application before the court. In applications for mandatory injunctions, a plaintiff is not refused relief merely by reason of unreasonable delay; the defendant must be able to point to additional circumstances that render the grant of the particular relief in question unjust. (See Spry, p.543; also, Turner v General Motors (Australia) Pty Ltd [1929] HCA 22; (1929) 42 CLR 352, 422-429.) However, there is no material put before the court to explain the eight month period of delay.

In addition, there is the relevant factor as to whether damages are an adequate remedy. Generally in assessing whether damages are an adequate remedy and, also, assessing the delay on the part of an applicant for a mandatory injunction the courts appear to have applied the principal consideration as to whether it is just in all the circumstances that the plaintiff should be confined to his remedy in damages or deprived of the order because of delay: see Turner, supra; also, Belgrave Nominees Pty Ltd & Ors v Barlin-Scott Airconditioning Aust. (Pty Ltd) [1984] VicRp 75; (1984) VR 947; also, Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499.

An additional factor that has been considered by the courts has been whether or not there is a "high degree of assurance" that at the trial it will appear the injunction was rightly granted. (See Businessworld, supra; also, Shepherd Homes Limited v Sandham (1971) Ch 340, 351). The high assurance test has not been uniformly followed by the courts: see Businessworld, supra at 501-503; also, Films Rover International Limited v Cannon Film Sales Limited (1986) 3 All ER 722, 780-1. Consequently, in more recent times the courts have adopted the course that appears to "carry the lower risk of injustice" (per Films Rover International, supra at 780; see also, Patrick Stevedores Operations No. 2 Pty Ltd & Ors v Maritime Union of Aust & Ors [1998] HCA 30; (1998) 195 CLR 1, 31.) In a slightly different approach, Kaye J of this court in Belgrave, supra considered all the circumstances and determined that it would not be just to confine the plaintiffs to a remedy in damages and ordered a mandatory injunction.

Most recently the Appeal Division of this court in D.S. & N. Nominees Pty Ltd & Ors v Movieland Franchise Systems Pty Ltd, unreported judgment delivered 15 September 1994 appeared to maintain the high standard test. In that case the Appeal Division considered the granting of an injunction that required the appellants to cease the conduct of a business and the assignment of a lease of premises prior to trial. The circumstances before me are not so draconian. The applicants seek solely the payment of management fees to which they say they are entitled.

It is to be observed that in the proceeding the applicant, that is the Davenport interests, do not claim the management fees by way of counterclaim. Rather they seek payment of the moneys to be applied for the purposes identified.

I consider that on balance the lack of a claim or counterclaim by the Davenport interests distinguishes these circumstances from all of the authorities where a mandatory injunction was granted. The question or issue of the payment of the management fees is not a matter before the court. It may be a debt owed by the Staging Connections company that would ultimately be considered in any winding up but as matters stand it is not before me. The difficulties of the applicant are compounded, further, by the lack of substantiation or particularisation of the impecunious circumstances of them.

All these matters lead me to conclude the following:

(1) The applicants have not made out with a sufficiently high degree of assurance that at the trial it will appear that the injunction sought was rightly granted if it was to be granted.

(2) Even if that is not the correct test the applicants have not made out a sufficiently strong case of their entitlement to the moneys especially when allowance is made for the alleged over payment of moneys to them in the sum of $170,000.

(3) There has been delay of a high order and without explanation such as to operate against the exercise of the discretion. In this respect it is to be observed, also, that the trial is imminent being only eight weeks hence.

(4) The applicants have failed to demonstrate to a sufficient degree or at all the injustice that will be suffered by them if the fees are not paid. It is insufficient to make broad assertions as to financial impecuniosity and impact on family circumstances and preparation for trial without more particulars than the applicants have provided.

(5) There is no or no sufficient basis to disregard the assessment that damages are a sufficient remedy. In this respect it is to be observed that at any time the applicants can amend the Village or Davenport proceedings to bring a claim or counterclaim for the management fees they claim.

(6) The balance of convenience does not fall in favour of the applicants. In this respect I consider it is not sufficient to say that ultimately this court will order that one party buy the shares of the other party. Ultimately this court may order the winding up of the company which may have consequences for any payments made to the Davenports.

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (4)