FEDERAL COURT OF AUSTRALIA RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd (No 2) [2012] FCA 1311 Citation: RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd (No 2) [2012] FCA 1311 Parties: RPR MAINTENANCE PTY LTD (ACN 003 610 231) v MARMAX INVESTMENTS PTY LTD (ACN 001 147 511) and SPANLINE WEATHERSTRONG BUILDING SYSTEMS PTY LTD (ACN 002 968 087) File number: NSD 804 of 2012 Judge: YATES J Date of judgment: 23 November 2012 Date of hearing: Determined on the papers Date of last submissions: 20 July 2012 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 12 Counsel for the Applicant: Ms K Rees Solicitor for the Applicant: Newhouse & Arnold Solicitors Counsel for the First Respondent: Mr TJ Rickard Solicitor for the First Respondent: Martin & Holmes Legal IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 804 of 2012 BETWEEN: RPR MAINTENANCE PTY LTD (ACN 003 610 231) Applicant AND: MARMAX INVESTMENTS PTY LTD (ACN 001 147 511) First Respondent SPANLINE WEATHERSTRONG BUILDING SYSTEMS PTY LTD (ACN 002 968 087) Second Respondent JUDGE: YATES J DATE OF ORDER: 23 NOVEMBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first respondent's costs of the interlocutory application filed on 8 June 2012 be its costs in the cause. Note: Settlement and entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 804 of 2012 BETWEEN: RPR MAINTENANCE PTY LTD (ACN 003 610 231) Applicant AND: MARMAX INVESTMENTS PTY LTD (ACN 001 147 511) First Respondent SPANLINE WEATHERSTRONG BUILDING SYSTEMS PTY LTD (ACN 002 968 087) Second Respondent JUDGE: YATES J DATE: 23 NOVEMBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this proceeding the question of costs remains to be determined as between the applicant and the first respondent in respect of the applicant's partly successful application for interlocutory injunctive relief against the first respondent: see RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd [2012] FCA 681. 2 The applicant and the first respondent have been unable to agree upon the appropriate order for costs and have each provided written submissions on that question. The applicant's submissions 3 The applicant's position is that its costs and the first respondent's costs of the application for interlocutory injunctive relief should be their respective costs in the cause. It advances this position on the following basis. 4 There is no dispute that the first respondent has carried out work and supplied products to customers in the applicant's franchise area. After a protracted period of negotiation, the first respondent agreed to give an undertaking to the applicant "pending further agreement, final resolution or court order" to refrain from conducting further work in the applicant's territory and to refrain from destroying records. The first respondent intimated that the undertaking would be continued by consent upon the applicant commencing proceedings against the first respondent, as it had foreshadowed. However, the first respondent withdrew that undertaking and expressly stated that it did not consider itself bound by the obligations contained therein. In this connection the applicant points to my finding in RPR Maintenance at [68] that this may have given rise to some concern on the part of the applicant that the first respondent might not feel obliged to keep records. 5 The applicant points out that it was only on the hearing of its interlocutory application, and specifically in response to an enquiry made by me, that the first respondent offered to undertake to keep and maintain records until the determination of the proceeding. 6 The applicant submits that the fact that the first respondent withdrew its inter partes undertaking was pivotal to making its application for interlocutory injunctive relief. A significant part of the relief it sought was an order for the preservation of records. The undertaking finally given by the first respondent in the course of the hearing was one that had to be effectively extracted from it by the Court and represented a measure of protection that the applicant would not have obtained had it not pressed its application for interlocutory injunctive relief. 7 Finally, the applicant submits that the costs order it proposes recognises, appropriately, that both parties have had a measure of success on the application. The first respondent's submissions 8 The first respondent's position is that the applicant should pay its costs of the interlocutory application and that those costs should be ordered to be paid forthwith. It advances this position on the following basis. 9 The first respondent submits that the application for interlocutory relief "was a completely unsuccessful and ill conceived application". The behaviour complained of by the applicant had been occurring, in a very minimal way, for over five years. There was no urgency in the matter and damages were always an appropriate remedy should the first respondent ultimately be found to be liable to the applicant. It contends that the applicant's evidence was deficient in several glaring respects and that its claim was also ill-prepared given that three of the alleged breaches were not sites within the applicant's territory. It submits that its withdrawal of the inter partes undertaking was part of a "global" withdrawal which was made by the first respondent when the applicant failed to give it similar undertakings. It points to the fact that in RPR Maintenance at [68] I found that the evidence did not justify any finding that the first respondent had falsified any of its records. The first respondent also points to the fact that it is, in any event, obliged to keep appropriate records. It submits that when concerns were raised at the hearing about the withdrawal of the undertaking, it readily "reinstated" it. In those circumstances, it submits that there is no reason not to assume that, if the applicant had specifically requested its "reinstatement" prior to bringing the interlocutory application, the first respondent would have done so. Consideration 10 In my view the order proposed by the first respondent is not appropriate. I have no doubt that the preservation of records was an important matter of concern for the applicant, reflected by the fact that it was part of the inter partes undertaking that had been agreed upon. The first respondent's submission that, if requested, it would have "reinstated" that part of the undertaking dealing with the preservation of records rings somewhat hollow when it withdrew the undertaking in its entirety and made clear to the applicant that it did not consider itself to be bound by it. Its submission also rings hollow when regard is had to the fact that part of the interlocutory injunctive relief claimed by the applicant was an order to restrain the first respondent from destroying records and that, at the commencement of the hearing, the first respondent resisted all the applicant's claims for interlocutory relief. I doubt that a simple request from the applicant to "reinstate" that part of the undertaking would have been considered favourably by the first respondent outside the context of the applicant's application for interlocutory relief, let alone readily agreed to. Thus it seems to me that the applicant was certainly justified, in the result, by persisting with that claim for relief. 11 However, considered overall, the applicant was substantially unsuccessful in its claims for interlocutory relief. The greater part of the evidence, and the hearing itself, was devoted to dealing with the applicant's claimed entitlement to interlocutory relief for the alleged breaches of the contractual rights which the applicant asserts. Although establishing a prima facie case, the balance of convenience was plainly against the granting of interlocutory injunctive relief in that regard. For that reason, it does not seem to me that the order proposed by the applicant strikes the correct balance. In my view the first respondent can justly claim to have had greater success than the applicant in the end result. This should be reflected in the order for costs. Disposition 12 For these reasons I have concluded that the appropriate order is that the first respondent's costs of the interlocutory application filed on 8 June 2012 be its costs in the cause. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 23 November 2012