International Premium Nutrition Co Pty Ltd v Arrowpak [2006] NSWSC 773

New South Wales Supreme Court

CITATION : International Premium Nutrition Co Pty Ltd v Arrowpak [2006] NSWSC 773

HEARING DATE(S) : 21, 24, 26, and 28/07/06

JUDGMENT DATE : 26 July 2006

JURISDICTION : Equity Division

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 07/26/2006

DECISION : Order that, upon the plaintiff tendering to the defendant a bank cheque in the sum of $4,674.63, the defendant forthwith deliver to the plaintiff, its servants or agents the goods described in the defendant's invoice number 00114875 dated 16 March 2006. This order may be entered forthwith.

CATCHWORDS : EQUITY – Equitable remedies – Injunctions – Interlocutory injunctions – Parties entered into commercial contract for the mixing and packaging by defendant of goods produced by plaintiff – Goods defective – Plaintiff alleged defects arose through fault of defendant – Plaintiff refused to pay defendant's invoices – Defendant refused to release plaintiff's other goods – Whether balance of convenience favours grant of interlocutory injunction mandating release of plaintiff's goods – Interlocutory injunction granted – No question of principle.

CASES CITED : Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533

PARTIES : International Premium Nutrition Company Pty Ltd v Arrowpak Packaging Pty Ltd

FILE NUMBER(S) : SC 3865/06

COUNSEL : Plaintiff: N Cowap - Director of Plaintiff Defendant: J Jobson

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

WHITE J

Wednesday, 26 July 2006

3865/06 International Premium Nutrition Co Pty Ltd v Arrowpak Packaging Pty Ltd JUDGMENT 1 HIS HONOUR: This is an application for an order that the defendant hand over what is described in the summons as "the replacement batch of sachets". 2 The plaintiff is in the business of selling by wholesale products described as carbohydrate gel. These take the form of sachets of a liquid product containing glucose and other ingredients intended for consumption shortly before and during vigorous exercise. The defendant carries on business as a packager of materials, and was engaged by the plaintiff to mix the plaintiff's product and put it into flexible packaging. 3 The evidence was that the mixing process was to be undertaken by the defendant, in accordance with the protocol provided by the plaintiff, and, at least in the first instance, under the observation of the director of the plaintiff. There is a dispute as to the extent to which the plaintiff was responsible for the mixing process. 4 On or about 26 September 2005, the plaintiff placed an order, called a purchase order, with the defendant for the supply of quantities of vanilla gel, lemon/lime gel and espresso gel. The evidence on this application is that the batch of vanilla gel was mixed by the defendant on 13 October 2005, and the batches of espresso gel and lemon/lime gel were mixed on 19 October 2005. 5 The plaintiff claims that the batches of espresso gel and lemon/lime gel were defective, and claims that the defects arose through the fault of the defendant in filling the sachets with those products. There is a dispute as to whether the defects revealed in laboratory testing were attributable to this or to the mixing process and, if the latter, whether the faults were attributable to the instructions given by the plaintiff. In the view I take, it is not necessary to resolve these issues. 6 The defendant rendered invoices for the supply of the products on 31 October 2005. The invoices were not paid by the plaintiff. On 31 January 2006, the defendant sought payment of outstanding invoices asserting that the sum of $10,019.19 was overdue for payment. In response to that claim, the plaintiff asserted contamination of the batches of espresso gel and lemon/lime gel, the subject of its purchase order of 26 September 2005. 7 On 20 February 2006, the plaintiff asked the defendant to send its inventory to the plaintiff. This appears to have been a request for the delivery of packaging materials and, perhaps, other raw materials which the plaintiff supplied to the defendant in order for the defendant to carry out the mixing and filling processes. The defendant's position was that no stock would be released until the account was settled. 8 On 8 March 2006, the defendant asserted that it had no responsibility for the defects in the earlier product run. It stated: "Your payment of outstanding invoices must be paid in full before any consideration is made in running any future jobs. Our terms are for any future work will be payment in full paid into our account prior to the release of your goods."