Huang v Australian Postal Corporation [2009] NSWSC 29

New South Wales Supreme Court

CITATION : Huang v Australian Postal Corporation [2009] NSWSC 29

HEARING DATE(S) : 03/02/09 JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

EX TEMPORE JUDGMENT DATE : 3 February 2009

DECISION : Order extending injunctions previously granted for a week that the licensor be restrained from entering into any agreement with persons other than the plaintiffs with respect to the post offices to safeguard public interest.

CATCHWORDS : EQUITY [333]- Injunctions- Plaintiffs, licensees of post offices whose licences allegedly were wrongly terminated, seek to prevent the defendant from granting new licences in respect of those post offices- Order opposed by the defendant licensor- Concern of plaintiffs that they would lose goodwill of the two post offices- Whether to grant the injunction- Whether a prima facie case that the licences have not been properly terminated- Where the balance of convenience lies- Whether damages are an adequate remedy- Deep concern of the court that the public service be met and the interests of the public taken into account.

CASES CITED : Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581 Bircan v Portakaldali [2008] NSWSC 791

Mei Ling Huang (P1) PARTIES : Jie Xu (P2) Australian Postal Corporation (D)

FILE NUMBER(S) : SC 1069/09

COUNSEL : M Walton SC and M Cairns (P) I S Wylie (D)

SOLICITORS : Adamson Solicitors (P) Deacons (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 3 February 2009

1069/09 – HUANG v AUSTRALIAN POSTAL CORPORATION JUDGMENT 1 HIS HONOUR: This is an application made by the licensees of two post offices to prevent Australia Post, the former licensor, from proceeding to grant new licences in respect of the Harbord and Banksia post offices, pending the resolution of a dispute between the parties. The defendant has had the plaintiffs under observation for some time and the defendant has put before the Court evidence which appears to be credible, sustainable and lead strongly to the view that there have been matters which need to be fully explained in a number of areas. One area is, as I understand the evidence (and I say that because the matter has come on urgently this morning and I have had to read a lot of material very quickly) that trap parcels have been sent through the post offices controlled by the plaintiffs because there were complaints from members of the public that they had paid, say, $14 postage and when the parcel had been received by the recipient it only had $11 postage on it. Those trap parcels appeared to reinforce the view that there was some absorption of moneys paid for postage in the plaintiffs' system rather than the proper postage being affixed to parcels. 2 Secondly, there appears to be a strange situation that the post offices controlled by the plaintiffs only ordered a very limited number of $10 international stamps, yet seem to have used a very great number of them. There is some evidence to suggest that these extra stamps have been bought at a discount or as philatelic stamps which evidently the mark-up is greater than in the normal way of trade, and there is some suggestion as to how this came about. 3 There is then a series of allegations that the Australia Post EPOS system has been bypassed so that what checks there are on postage that has been received and ensure that it is actually applied to putting articles in the postal service, has meant that parcels have gone through without the full amount being accounted to Australia Post. Now there are other allegations, but essentially those seem to be the three. 4 The plaintiffs, it would appear, have been summonsed to appear before a Magistrate in respect of at least some of these matters, but I am indebted to counsel for not giving me all the material which shows just what the extent of those charges are. The defendant took the view that it should terminate the licences and it did so by notices given by 31 December 2008. The plaintiffs say that there is no fraud, that the defendant has not properly terminated the licence agreement and that it should be considered to be remaining on foot so that they can sell the post offices. No-one is operating the post offices at the moment, though there has been an arrangement made between the parties so that the public can access the post office boxes post office at Australia Post and put the mail into them. 5 The plaintiffs are content to have these post offices sold and, in the interim, for a person against whom no criticism can be made to operate the post offices. However, the primary order that the plaintiffs seek is an injunction to prevent the defendant from licensing someone else to the post office, because if that happens, they will lose their goodwill and the goodwill could be, of the two post offices together, up to a million dollars. 6 In this sort of case the Court has to consider whether there is a prima facie case that the licences have not been properly terminated, where the balance of convenience lies, and whether damages are an adequate remedy. As to the first question I have not had sufficient time to analyse the contract to see whether like a wrongful dismissal of an employee the effect of a wrongful purported termination is still to terminate the contract or whether one should treat such a contract as continuing and the defendant liable in breach for not doing the other things under the agreement. 7 However, there are a number of principles which were referred to in the judgment which Mr Wylie for the defendant handed up to me of Bircan v Portakaldali [2008] NSWSC 791 (I merely cite this because it notes the leading cases; it does not decide any principle). These may be summarized by saying that courts are reluctant to keep together parties who need to have a personal relationship and who obviously no longer have one. It also seems to me that the allegations which are made by the defendant, and which are not fully answered, are so serious that one would be reluctant to grant an injunction. I should add that I do note that the details of some of these allegations only came up quite recently, so there may well be a good reason why they have not been fully answered at this stage. 8 So far as the balance of convenience is concerned one would have thought that it should be possible for the post office to be operated by a skilled independent operator and there is some material before the Court to suggest that there are people in the community who are capable of doing that, that the case should then be expedited, heard on a final basis, say at the end of March, which would be the earliest it could be heard, and then when all the facts have been properly investigated, the decision can be made one way or the other, and in the meantime the public would have been served. 9 However, the defendant says that that is not appropriate because there are criminal proceedings pending and thus the great probability is that the case will not be heard at the end of March, but might take some time until after the criminal proceedings are disposed of. 10 In reply Mr Walton SC, who appears with Miss Cairns for the plaintiff, says that I should not infer that that is so because there are very strong commercial reasons why his clients may well wish to have these proceedings dealt with earlier, because they do involve perhaps up to a million dollars, which will otherwise be completely lost. He also says that the interests of the public have got to be considered. 11 The leading case on this point is the decision of Justice Jacobs in Aristoc Industries Pty Ltd v R A Wenham (Builders) Pty Ltd [1965] NSWR 581 esp at 589-590. In that case Mr Justice Jacobs was dealing with a case of a public building and he said that when you are dealing with situations involving public services, the Court must very strongly consider what are the interests of the public. Thus, in appropriate cases even if there is a case for an injunction it should be postponed for sufficient time to make sure the public is properly serviced. 12 I put to Mr Wylie, who appears for Australia Post, that it is absolutely necessary, in my view, that the public be provided with proper postal services in the Harbord and Banksia areas and that it should be a priority to have someone running these post offices. He clearly knew the Wenham decision and the point involved. He tried to obtain instructions, but was told that his instructions were to press for no order to be made. He kept repeating that Australia Post was very interested in the public, but the assistance that he was able to give to the Court because of his lack of instructions did not demonstrate that. Australia Post appeared to be far more interested in following its normal procedures rather than being of any service to the public in this area and that, as Justice Jacobs said in the Wenham case, is one of the most important things that needs to be considered by the Court. So that the balance of convenience is a matter that is really swinging in my mind at the moment, and I will very shortly indicate how that will turn out. 13 The third matter is as to whether damages are an adequate remedy. In my view they probably are. There would be some difficulty in calculating them, but there is some material before the Court at the moment which values the goodwill of the post offices. If Australia Post re-licence them, it will do so without a goodwill factor and, for instance, the damages can easily be considered to be the valuation less the amount that Australia Post received for them as being the goodwill factor. I cannot see any great difficulty there. 14 So the factors other than the public interest tell against the grant of any injunction. What should I do about the public interest factors? 15 It seems to me that the Court has to consider this very seriously and even if Australia Post does not wish to do so, the Court must use as much pressure as it can to see that the public interest is fulfilled. 16 Accordingly, in my view I should extend the injunctions granted by Justice Harrison during vacation for a week and I would hope that when the matter comes back before me next week that the parties will have discussed the matter and have put into play some interim regime and that the matter will be then set down for an early final hearing. If that is not able to be done, then I will further consider the interlocutory application. 17 Accordingly, I direct that the matter proceed by way of pleadings. I direct the plaintiff to file and serve a duly verified statement of claim no later than 11 February 2009. I note the continuation of the undertakings as to damages. I continue the order made by Justice Harrison in vacation until 12 February 2009 and stand the matter over to that day before me at 9.50am.