FEDERAL COURT OF AUSTRALIA Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 PRACTICE AND PROCEDURE – interlocutory injunction – following dismissal of application – pending filing of notice of appeal – general principles – serious question to be tried – balance of convenience – no special or exceptional grounds required to warrant grant of relief – considerations analogous to stay orders pending appeal applicable within normal principles governing interlocutory relief – delay to public tender process – possible irreversible prejudice to successful respondent and tenderers – motion dismissed. Trade Practices Act 1976 (Cth) ss 45, 46, 47 Federal Court of Australia Act 1976 (Cth) ss 23, 25(2), 25(2B), 28, 29(1), (2) Federal Court of Australia Rules 1976 (Cth) O 37 r 10, O 52 r 17 Port Authorities Act 1999 (WA) s 35(4), 35(5) Bercove v Hermes (No 2) (1983) 51 ALR 105 followed Tuncak v Young (1987) 14 ALD 286 discussed Westaflex (Aust) Pty Ltd v Wood [1990] AIPC 36,227 cited Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 30 FCR 548 cited Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66 discussed Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498 cited Alexander and Ors v Cambridge Credit Corp Ltd (Receivers Appointed) (1985) 2 NSWLR 685 cited Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653 cited Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150 cited Bryant v Commonwealth Bank of Australia (1995) 134 ALR 460 cited Hollier v Australian Maritime Safety Authority (Fed Court, unrep, 27/4/98, Sundberg J) Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472 followed STIRLING HARBOUR SERVICES PTY LTD and ADSTEAM MARINE LIMITED v BUNBURY PORT AUTHORITY W 89 of 1999 FRENCH J 11 FEBRUARY 2000 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W89 OF 1999 BETWEEN: STIRLING HARBOUR SERVICES PTY LTD (ACN 008 767 600) First Applicant ADSTEAM MARINE LIMITED (ACN 065 888 440) Second Applicant AND: BUNBURY PORT AUTHORITY Respondent JUDGE: FRENCH DATE OF ORDER: 11 FEBRUARY 2000 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The Applicants' motion filed 8 February 2000 is dismissed. 2. The Applicants' are to pay the Respondent's costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W89 OF 1999 BETWEEN: STIRLING HARBOUR SERVICES PTY LTD (ACN 008 767 600) First Applicant ADSTEAM MARINE LIMITED (ACN 065 888 440) Second Applicant AND: BUNBURY PORT AUTHORITY Respondent JUDGE: FRENCH DATE: 11 FEBRUARY 2000 PLACE: PERTH REASONS FOR RULING ON MOTION FOR INJUNCTION PENDING APPEAL Introduction 1 Stirling Harbour Services Pty Ltd and Adsteam Marine Limited were unsuccessful in an application to this Court seeking to prevent the grant of an exclusive licence to the successful tenderer for the provision of towage services at the Port of Bunbury. They wish to appeal against the decision dismissing their application and seek an injunction, pending the appeal, which would freeze the tender process. Their motion raises questions about the principles which govern the grant of such injunctions and stay orders pending appeal and the balance of convenience in the present case. The Original Proceedings and the Motion for Interlocutory Relief 2 On 6 September 1999 an application was filed in this Court by Stirling Harbour Services Pty Limited and Adsteam Marine Limited claiming a declaration that the letting of a proposed tender by the Bunbury Port Authority (BPA) would be contrary to law in that it would involve a contravention by the BPA of ss 45, 46 and 47 of the Trade Practices Act 1976 (Cth) and of the Competition Code. The action arose out of the action of the BPA on 17 July 1999 in calling for tenders for the grant of an exclusive licence for a term of five to seven years to provide towage services to shipping operators using the Port of Bunbury. The present incumbent under a non-exclusive licence is Stirling Harbour Services Pty Ltd, a subsidiary of Adsteam Marine Limited. Pending the hearing and determination of the application undertakings were given by the BPA effectively freezing the tender process. Cross undertakings were given by the applicants to continue to provide services beyond the expiry of their present licence on 30 June 2000 pursuant to notice given by the BPA. The purpose of the cross undertaking was to ensure continuity of towage services notwithstanding any delay in the tendering process pursuant to the undertaking given by the BPA. The trial of the action proceeded on 14, 15, 16, 17 and 20 December 1999. Judgment was given on 28 January 2000 dismissing the application with costs. 3 On 8 February 2000 the applicants filed a motion for an injunction pending appeal. Subject to an undertaking, the terms of which were limited to damages sustained by the BPA and did not extend to third parties, the applicants sought orders restraining the BPA until the determination of the appeal or further order from: "(A) awarding any tenderer, in respect of supply of towage services for the Port of Bunbury, "preferred tenderer" status; (B) accepting any tender as submitted or varied or entering into any contract in respect of supply of towage services for the Port of Bunbury; or (C) making any recommendation or request to the Minister for Transport for approval in respect of any tender or licence in respect of the supply of towage services for the Port of Bunbury." Written submissions were filed and argument heard in relation to the motion on 9 February. At the time I indicated that I would not make any order restraining the award of preferred tenderer status, however I reserved until today on the question of the other orders sought. 4 At this stage the applicants have not filed any notice of appeal although a draft notice of appeal was attached to the outline of submissions. It is evidently intended to have the draft notice settled by senior counsel. Assuming the appeal notice is filed shortly, the earliest dates for hearing of the appeal in the ordinary course, would be in the May/June sittings of the Full Court. That is, of course, subject to any expedition order and special sitting that might be arranged having regard to the urgency of the matter. 5 I have been informed by counsel for the BPA that it would, in the ordinary course, award preferred tenderer status early in March and then enter upon a process of negotiation with the preferred tenderer. The grant of the exclusive licence is subject to ministerial approval pursuant to s 35(4) of the Port Authorities Act 1999 (WA). Such approval requires that the Minister consider that the public benefits of exclusivity exceed the public costs. On the provision of such approval, the Minister must table in Parliament, within fourteen days, full reasons for his decision to grant an exclusive licence (s 35(5)). There is no process of parliamentary disallowance for which the Act provides. The Power of the Court to Make the Order Sought 6 A party seeking to appeal against a decision of a single judge will not infrequently seek interlocutory orders or undertakings to preserve the status quo pending the hearing and determination of the appeal so that it will not, by reason of intervening events, become a useless and academic exercise. There are several categories of case in which an interlocutory order may be sought and they may involve different statutory provisions and rules of court. Broadly stated, most cases will fall into one or other of the following categories: 1. A judgment is given which imposes a positive obligation on the unsuccessful party to do some thing, eg to pay a money sum, to perform a contract or to carry out other specified acts. Judgments for debt or damages are included in this category. 2. A judgment is given which declares the rights of another party which may be exercised adversely to the unsuccessful party's interests or may impose some correlative obligation on the unsuccessful party when invoked. 3. A judgment is given which dismisses an application for relief on the part of the unsuccessful party. 7 Judgments of the kind made in the first two cases may logically be the subject of orders staying their enforcement or enjoyment pending the hearing and determination of an appeal. With one exception there is no express power under the Federal Court of Australia Act 1976 (Cth) for an order to be made staying the execution or enjoyment of such a judgment. The exception is s 29 which covers the case in which there is an appeal to the Full Federal Court from another court. That section provides: 29(1) Where an appeal to the Court from another court has been instituted- (a) the Court or a Judge, or a judge of that other court (not being a court of summary jurisdiction), may order, on such conditions (if any) as it or he or she thinks fit, a stay of all or any proceedings under the judgment appealed from; and (b) the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation or injunction or other order to which the appeal, in whole or in part relates. 29(2) This section does not affect the operation of any provision made under any other Act or by the Rules of Court for or in relation to the stay of proceedings." There is no equivalent of s 29 in relation to appeals to the Full Court from a decision of a single judge of the Court. 8 The powers of the Court in the exercise of its appellate jurisdiction are set out generally in s 28 and include the power, in s 28(1)(b), to: "(b) give such judgment, or make such order, as, in all the circumstances, it thinks fit, or refuse to make an order." It is at least arguable, notwithstanding the emphasis of s 28 on final judgments on appeal, that s 28(1)(b) may encompass interlocutory orders pending the determination of the appeal. Subsections 25(2) and (2B) set out matters which may be dealt with by a single judge in the exercise of the appellate jurisdiction of the Court, none of which extends to an order staying the operation of the judgment below. Paragraph 25(2)(d) covers the possibility of an application for an order to stay an order of a Full Court. For express authority in relation to stays of execution and stay orders generally pending the hearing and determination of an appeal, reference must be made to O 37 r 10 and O 52 r 17. Order 37 rule 10 provides: "The Court may stay execution of a judgment or order." 9 Order 52 r 17 provides: "17(1) An appeal to the Court shall not – (a) operate as a stay of execution or of proceedings under the judgment appealed from; or (b) invalidate any intermediate act or proceeding except so far as the Court or a Judge or the court below may direct. (2) The Court may vary or vacate any direction of the Court or the court below referred to in sub-rule (1). (3) An application for a direction of the Court or a Judge under sub-rule (1) shall be made to the Court or a Judge by motion upon notice, and may be made whether or not a similar application has been made to the court below. An application for a direction under sub-rule (2) shall be made to the Court by motion upon notice, and may be made whether or not a similar application has been made to the court below." 10 Such powers as are available to the Court under ss 28, 29 and O 52 cannot be invoked except in the exercise of its appellate jurisdiction. They cannot therefore be invoked unless and until an appeal or an application for leave to appeal has been instituted. A single judge exercising any such power under s 25 would be exercising appellate jurisdiction. If no appeal has been instituted the unsuccessful party seeking interlocutory relief from the effects of the judgment pending filing of a notice of appeal must make application under the original jurisdiction of the Court, ordinarily in the proceedings from which it is intended to bring the appeal. That will involve resort either to s 23 of the Federal Court Act or to O 37 r 10 if what is sought is a stay of execution. 11 Where an application has, as in this case, been dismissed, and no appeal instituted, the only resort will be to the original jurisdiction of the Court and its power to make interlocutory orders under s 23. There is nothing upon which a stay of execution under O 37 r 10 could operate. The first reported use of s 23, by an unsuccessful applicant, to restrain action by a successful respondent pending appeal against dismissal of the application was Bercove v Hermes (No 2) (1983) 51 ALR 105. Toohey J applied the general principle that: "…when a party is appealing, exercising his undoubted right of appeal, this Court ought to see that the appeal, if successful, is not nugatory." – citing Cotton LJ in Wilson v Church (No 2) (1879) 12 Ch D 454 at 458 and Erinford Properties Ltd v Cheshire County Council [1974] 1 Ch 261. (107) Acknowledging that he was exercising original not appellate jurisdiction, Toohey J made an order restraining the Public Service Board from considering a recommendation for the dismissal of the appellant from the Public Service until the determination of the appeal from the dismissal of the application for review of the decision to recommend dismissal. 12 In Tuncak v Young (1987) 14 ALD 286 I made an order under s 23 restraining the Minister for Immigration and Ethnic Affairs from deporting the applicant pending an appeal against the dismissal of an application for review of the relevant decision. The order was for a limited time sufficient to enable the applicant to apply to a Full Court for a continuance of the stay. Factors Relevant to the Exercise of the Power to Grant Interlocutory Relief Pending Appeal 13 The decision whether or not to grant an interlocutory injunction pending an appeal will be informed by general principles governing the grant of such injunctions and, within those general principles, considerations analogous to those which arise in relation to stay orders made in aid of the court's appellate jurisdiction under s 29 or O 52 r 17 and orders for stay of execution under O 37. The weight of authority in this Court does not require the applicant for a stay to demonstrate special or exceptional circumstances before the order will be made - Westaflex (Aust) Pty Ltd v Wood [1990] AIPC 36,227 at 36,228, Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 30 FCR 548 at 551, Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66 at 69, Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498 at 499. The Court generally has adopted the approach of the New South Wales Court of Appeal in Alexander & Ors v Cambridge Credit Corp Ltd (Receiver Appointed) (1985) 2 NSWLR 685 at 691. It has differed from the Supreme Court of Victoria in this respect – Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653 and Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150. The same approach was adopted by Kirby J in Bryant v Commonwealth Bank of Australia (1995) 134 ALR 460. While, as his Honour said, a stay is not granted simply for the asking, special or exceptional circumstances are not generally required to justify a stay of execution of orders the subject of an appeal which lies as of right. It may be that, as Heerey J observed in Amadio at 69, the difference is "more apparent than real since on any approach the party seeking a stay needs to show a reason why the stay should be granted". But broadly speaking, as was said in Powerflex Services at 499, the language of O 52 suggests "no limitations upon a broad discretion inhering in the court." 14 Accepting that the present case is one in which the order sought can only be granted under s 23 of the Federal Court Act there is no reason that the broad discretion conferred by the section should be fettered by rules requiring the demonstration of special or exceptional circumstances any more than the discretions conferred by s 29 or O 37 r 10 or O 52 r 17 are fettered by such rules. 15 The order sought by the applicants in this case is in the nature of an interlocutory injunction. In the ordinary course it is a necessary condition of the grant of such an injunction that the applicant demonstrate a serious case to be tried and that the balance of convenience favours imposition of the restraint. These requirements apply with equal force to a case, such as the present, where the restraint is sought effectively to prevent a party from exercising what have been found to be its rights after trial of an action – Hollier v Australian Maritime Safety Authority (Fed Court, unrep, 27/4/98, Sundberg J). It is to be remembered also that the strength of the case and the assessment of where the balance of convenience lies are interdependent – Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472. Where the applicant's case has been tried and found wanting there may nevertheless be a serious case to be tried on appeal. However, the Court's assessment of the strength of that case will be influenced by the fact that there has been an adverse judgment at first instance. It is relevant to the balance of convenience that the appeal may be nugatory if the restraint is not granted. It is also relevant that the successful party will be prejudiced if impeded in the exercise of its judicially vindicated rights. The factors relevant to the grant of an interlocutory injunction under s 23 pending appeal are similar to those applicable under s 29, O 37 and O 52, but capable of expression in terms of the considerations usually applied to the grant of interlocutory relief. The Contentions 16 The applicants submit that, absent the order sought, their appeal rights will be compromised by the intervention of third party rights. The BPA wishes to proceed to place a contract for towage services as soon as possible. In doing so it will enter into a contractual relationship with the successful tenderer, the terms of which cannot yet be fully ascertained except that it will be exclusive and for a term of five years with an option to extend for a further two years. As a result, it is submitted for the applicants that: 1. The BPA and the successful tenderer will acquire rights and obligations. 2. The tenderer will expend a considerable sum and commit to the expenditure of millions of dollars in acquiring tugs. 3. The applicants will expend money in closing down and redeploying their operation. So, it is said, the ability of the Full Court to determine the extent of invalidity of the tender contracts and to mould remedial orders would be gravely complicated. 17 The BPA on the other hand submits that if the appeal is successful the tender contract will be invalid to the extent so declared. The BPA and the tenderer could contract on the basis that if the appeal is successful an alternative provision providing for non-exclusivity would apply. The applicants will not be prejudiced because they can obtain relief to that effect if successful. 18 BPA says it will suffer from further delay in that: (a) It will need to re-tender due to current tenders "going out of date". In this connection it raises the hypothesis that the applicants' proceedings can be characterised as strategic litigation intended to cause a further tender process. (b) If there is a need to re-tender the BPA will have to bear the costs of the tender process and the additional costs of a re-tender. (c) Any subsequent re-tender may not attract tenderers other than the applicants because others will not want to become involved in a process of indeterminate delay and legal costs. (e) The BPA will lose the benefit of its proposed licence fee. Further it is submitted that third party tenderers will be prejudiced because they will have incurred costs in the tender process and will have lost their legal right to be considered unless they re-tender. The preferred tenderer runs the risk on a re-tender of losing its priority right to negotiate. The applicants' rights for the purpose of this application are said to be the same as other tenderers, they do not have any other rights which will be affected. They do not have a licence, their contract having been terminated. The public interest, it is submitted, will also be prejudiced by the delay and extra costs paid for towage services pending the new contract. Conclusion 19 Assuming a notice of appeal is filed within the next few days, there is no prospect of the appeal being heard in the February sittings. The next Full Court sittings commence on 8 May. It is possible that the applicants could obtain an order for an expedited hearing and a special sitting of a Full Court for that purpose. Even so there will be a delay of a further two or three months to a tender process which has already been delayed by this litigation. I accept that there is a real chance that further delay of this magnitude would put the whole tender process at risk. As it is, any preferred tenderer will enter contractual relations with the BPA in the knowledge of the possible consequences of a successful appeal. No doubt commercial and other measures will be taken to anticipate that possibility. 20 It can be accepted that there are serious questions to be argued on the appeal, although the draft notice of appeal as it presently stands suggests something of a "kitchen sink" approach to possible challenges to the findings underpinning the judgment at first instance. But relevantly to the balance of convenience I have come to the following conclusions: 1. The applicants have no private rights which are adversely affected by the continuance of the tender process. 2. The applicants are in no worse position if the tender process continues than if it is enjoined. In either event they will, if they want to remain in the market place, have to compete with other tenderers for either an exclusive or a non-exclusive licence. 3. Adverse impacts of a successful appeal upon BPA and the successful tenderer, if a contract is let in the meantime, are part of a commercial risk, the assessment of which is best left to them rather than imposed upon them by the Court. If the risk were unacceptable then they could voluntarily agree to suspend negotiations. It is not for the Court to apply its view of the risk they may face to the imposition of a restraint upon them. 4. If the tender process is enjoined pending the appeal, there is a significant risk it will have to be recommenced with costs and inconvenience to all concerned. That is a cost and inconvenience which would not necessarily be compensated pursuant to any undertaking, accepting that the present undertaking which is limited to compensation to BPA, were modified to extend to third parties. 5. The public interest is not at significant risk from continuance of the tender process. The view I have formed, based on the evidence in the case, is that the process adopted enhances rather than diminishes competition in relation to the relevant market. If that view is wrong, corrective orders can be made by the Court on appeal or the case remitted for consideration of appropriate orders at first instance. In my opinion, the balance of convenience lies against the granting of interlocutory relief and the applicants' motion will be dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French . Associate: Dated: 11 February 2000 Counsel for the Applicant: Mr P D Evans Solicitor for the Applicant: Freehill Hollingdale & Page Counsel for the Respondent: Mr C P Stevenson Solicitor for the Respondent: Mallesons Stephen Jaques Date of Hearing: 9 February 2000 Date of Judgment: 11 February 2000