New South Wales Supreme Court CITATION : NACA Logistics Group Pty Ltd v Patrick Port Services Pty Ltd [2007] NSWSC 516 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 04/05/07 JUDGMENT DATE : 4 May 2007 JURISDICTION : Equity Division JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 4 May 2007 DECISION : 1. Upon the plaintiff by its counsel giving the usual undertakings as to damages, order that until 5pm on 7/5/07 the defendant by itself, its servants and agents be restrained from acting upon its asserted termination of the Container Freight Station Services Agreement between the parties dated 8/4/04;; 2. Upon the plaintiff by its counsel giving the usual undertakings as to damages, and also undertaking to the Court to pay the sum of $257, 392.33 or such other sum as the parties might agree upon in writing into court by 4pm on 7/5/07, order that up to 5pm on Wednesday 9/5/07 the defendant by itself, its servants and agents be restrained from relying upon any asserted lien in relation to goods held by it or on its behalf pursuant to the Container Freight Station Services Agreement between the parties dated 8/4/04, to secure any moneys alleged to be owing by the plaintiff to it. CATCHWORDS : EQUITY – Equitable remedies – Injunctions – Interlocutory injunctions – Defendant and plaintiff parties to contract under which defendant provides container freight station services – Plaintiff purported to terminate contract on basis of material breaches – Defendant disputed plaintiff's entitlement to terminate, purported to accept termination as repudiation then purported to terminate contract – Claim to restrain defendant from acting upon its termination of the contract – Serious question to be tried as to whether plaintiff entitled to terminate contract or whether its conduct constituted a repudiation – Where termination would cause substantial damage to plaintiff – Balance of convenience in favour of granting injunction – Claim to restrain defendant from enforcing lien over goods deposited for storage by plaintiff as agent – Serious question to be tried as to whether defendant entitled to enforce a lien over goods – No sufficient reason to doubt adequacy of plaintiff's undertaking as to damages – Where, upon plaintiff's paying amounts owing under contract, balance of convenience favours restraining defendant from asserting lien – Injunction granted on terms. - (NSW) Warehousemen's Lien Act 1935, ss 3 and 4. LEGISLATION CITED : Warehousemen's Lien Act 1935 (NSW) NACA Logistics Group Pty Ltd PARTIES : v Patrick Port Services Pty Ltd FILE NUMBER(S) : SC 2579/07 COUNSEL : Plaintiff: M G McHugh Defendant: T W Marskell SOLICITORS : Plaintiff: Norton White Lawyers & Notaries Defendant: Clayton Utz IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST WHITE J Friday, 4 May 2007 2579/07 NACA Logistics Group Pty Ltd v Patrick Port Services Pty Ltd JUDGMENT 1 HIS HONOUR: These are my reasons for the orders I have just made. 2 This is an urgent application for interlocutory injunctive relief. The plaintiff acts as agent for a number of non-vessel-owning common carriers and provides warehousing, agency representation and supply chain management services to importers and exporters of goods to and from Australia. 3 On or about 8 April 2004, the entered into an agreement with the defendant for the provision by the defendant of container freight station services, including the loading and unloading, and the packing, unpacking and storage of goods for the plaintiff's customers. The goods in question are those of the plaintiff's customers. 4 On 25 January 2007, the plaintiff's solicitors purportedly gave notice of material breaches of the container freight station services agreement. The validity of that notice is in dispute. A further notice was given on 12 April 2007. On 27 April 2007, the plaintiff purportedly terminated that agreement effective from 5.00pm on 7 May 2007. The defendant disputes that the plaintiff was entitled to terminate the agreement. 5 On the afternoon of yesterday, 3 May 2007, the defendant gave notice that it treated the purported termination of the agreement as a repudiation, that it accepted the repudiation and itself terminated the agreement with effect from 5.00pm today. 6 There are two parts of the claim for interlocutory injunctive relief. The first is a claim to restrain the defendant from acting upon its termination of the agreement. I was told that that there are ships with goods to unload where the goods will not be unloaded if the defendant adheres to its claim to terminate the agreement as from 5.00pm today and that substantial damage is likely to be caused between now and 5.00pm on Monday. 7 There is no doubt that there is a serious question to be tried as to whether the plaintiff was entitled to terminate the container freight station services agreement or whether its conduct was a repudiation. The balance of convenience is all one way. 8 Whilst there was no evidence as to the value of the plaintiff's assets or the amount of its liabilities, it is clear that it conducts a very substantial business. The defendant itself says that it is presently servicing approximately 1,000 containers a month for the plaintiff, 10,000 shipments per month, and 100,000 pieces of cargo per month. In the urgent circumstances in which this application has been brought, I do not think there is any sufficient reason to doubt the adequacy of the plaintiff's undertaking as to damages. 9 Nor is there any evidence that the defendant will suffer damage if it is compelled to adhere to the terms of an agreement, which has been on foot for a number of years, for another three days. It is for these reasons that I granted the first of the interlocutory injunctions. 10 The second claim concerns a claim by the defendant of entitlement to a lien under ss 3 and 4 of the Warehousemen's Lien Act 1935 (NSW) on the goods which have been deposited with it for storage. The defendant, it appears, is entitled to make various claims in relation to such goods. It claims storage charges from the owners of the goods. These, I was told, are paid on collection of the goods. It is also entitled to make other charges, and has done so, for matters such as packing and unpacking containers, cartage and like services. The latter charges are payable by the plaintiff. 11 The plaintiff was provided with 30-day credit terms in respect of such charges. Prima facie, it would not be consistent with an agreement to allow the plaintiff 30 days' credit, for the defendant to seek to enforce a lien over the plaintiff's customers' goods before the 30 days had expired. I think there is at least a serious question to be tried that to enforce a lien in those circumstances would be a breach of the agreement between the parties pursuant to which such credit terms were provided. Although the goods in question are not the goods of the plaintiff, it has an equity to enforce, by injunction, the implied negative stipulation in the contract pursuant to which those credit terms were granted that where the debt for its charges had not become payable, a lien over the customers' goods would not be asserted. 12 It appears from the evidence of Mr Cecil of 4 May 2007 and the statements of account and reconciliations annexed to his affidavit that all outstanding invoices of more than 30 days have been paid. Accordingly, there is a serious question to be tried that the defendant is not presently entitled to assert the lien which it claims. 13 The plaintiff also offers an undertaking to pay into court a further amount of $257,392.33 by 4.00pm on Monday. This is an amount which the defendant, today, claimed was the amount overdue. Given that $185,333.86 has been paid today, the further payment of $257,392.33 by 4.00pm on Monday should more than cover the defendant's position in respect of amounts which are presently payable. 14 The defendant, in its correspondence, asserted that the effect of its acceptance of the plaintiff's repudiation of the container freight station services agreement was that the payment terms of giving 30 days' credit were no longer applicable. However, it did not appear on what basis that contention was advanced. None was adverted to in the course of submissions. 15 Again, the balance of convenience heavily favours maintaining the status quo by allowing the plaintiff's customers to continue to collect their goods on paying the relevant storages charges payable by them. 16 It is for these reasons that I granted the second of the interlocutory injunctions which I have just pronounced. ****** 21/05/2007 - 0 - Paragraph(s) 0 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.