s1324 Injunctions - AGBC Pty Ltd & Anor v Dessa & Ors [2012] VSC 118

The matter of AGBC Pty Ltd & Anor v Dessa & Ors [2012] VSC 118 was an application by a liquidator for an interim injunction under s1324(4) of the Corporations Act 2001 (Cth).  The liquidator was seeking to restrain a previous director of the company in liquidation from removing the assets and confidential information of the company.

s1324 provides as follows:

(1) Where a person has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute:

(a) a contravention of this Act; or
(b) attempting to contravene this Act; or
(c) aiding, abetting, counselling or procuring a person to contravene this Act; or
(d) inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or
(e) being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) conspiring with others to contravene this Act;

the Court may, on the application of ASIC, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraining the first-mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing.

... 

(4) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).

Gardiner AsJ referred to ASIC v Mauer-Swisse Securities Limited and Anor [2002] NSWSC 741 and set out the principles for obtaining an injunction under s1324 (at [31]):

31 In Australian Securities and Investments Commission v MauerSwisse Securities Limited and anor,[2] Palmer J of the Equity Division of the Supreme Court of New South Wales considered the principles to be applied in applications for interim injunctions under s 1324(4) of the Act. He described an inconsistency in approach in the authorities as to the principles upon which the Court should act in an application for an interim injunction under the sub-section. In the judgment, he summarised the principles he considered should be applied. Those which have relevance in the present context are as follows:

– the jurisdiction which the Court exercises under s.1324 CA is a statutory jurisdiction, not the Court’s traditional equity jurisdiction;
– Parliament has made it increasingly clear by successive statutory enactments that the Court, in exercising its statutory jurisdiction under s.1324, is not to be confined by the considerations which would be applicable if it were exercising its traditional equity jurisdiction;
– amongst the considerations which the Court must take into account in an application for an injunction under s.1324 CA are the wider issues referred to by Austin J in Sweeney and Parkes, and by Davies AJ in Pegasus; they may be gathered under the broad question whether the injunction would have some utility or would serve some purpose within the contemplation of the Corporations Act;
– these considerations are to be taken into account regardless of whether the application is for a permanent injunction under s. 1324(1) or for an interim injunction under s. 1324(4);
– although the questions whether there is a serious question to be tried and where the balance of convenience lies will not circumscribe the Court’s consideration in an application for an interim injunction under s. 1324(4), the interests of justice will always require that those questions be examined carefully when restrictions are sought to be imposed before the case has been properly examined by the Court, even where the protection of the public is said to be involved: see per Young J (as his Honour then was), in Corporate Affairs Commission (NSW) v Lombard Nash International Pty Ltd (1986) 11 ACLR 566, at 570-571;

In reaching the decision to grant the interim injunction sought by the plaintiff, Gardiner AsJ approached the matter on the principles set out in Mauer-Swisse and then considered that even if the injunction was treated as a conventional application in the equitable jurisdiction of the court, there are sufficient facts to demonstrate a serious question to be tried and that the balance of convenience favours the granting of the orders. Gardiner AsJ referred to the Court of Appeal's decision in Bradto Pty Ltd v Victoria (2006) 15 VR 6 (at [38]):

38 I also consider that the balance of convenience favours the granting of the orders sought. As was observed in Bradto Pty Ltd v Victoria,[4] the Court must in determining whether to grant an interlocutory injunction:

... [T]ake whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial or in failing to grant an injunction to a party who succeeds at trial.

By way of summary:

• In AGBC Gardiner AsJ notes that the jurisdiction to grant an injunction under s1324 is a statutory one, and the considerations are different to those in the exercise of the Court's equitable jurisdiction. 
• The broad consideration for the granting of the injunction appears to be whether the injunction would have some utility or would serve some purpose within the contemplation of the Corporations Act. 
• The considerations in the equitable jurisdiction of whether there is a serious question to be tried and whether the balance of convenience favours the granting of the orders remain relevant.