Injunctions and disputed facts: Mendonca v Mason [2013] VSC 516

Mendonca v Mason [2013] VSC 516 was a hearing before Macaulay J in the Supreme Court of Victoria in which a tenant was seeking to restrain a landlord from taking possession of a property in which the tenant resided. In essence, a mortgagee took over from an insolvent landlord and claimed that she had not been paid and that the lease documents were non-existent. The tenant claimed to have paid the insolvent landlord and the two mortgagees, and that being removed from the premises would leave him homeless. The mortgagee alleged that payment to anyone other than her did not discharge the obligations to her.

Macaulay J discussed the principles for granting interlocutory injunctions. In particular, His Honour considered that contested facts do not automatically satisfy the 'serious question to be tried' limb, and that adequacy of damages is to be considered in the context of whether the defendant succeeded at trial.

The end result was that Macaulay J dismissed the injunction, finding that there was serious question to be tried, albeit a weak case, but that damages were an adequate remedy and that the balance of convenience favoured the mortgagee. In particular, Macaulay J questioned how the tenant could claim that he would be homeless when he claims to have been paying rent to the landlord and mortgagees on an ongoing basis, and he could apply those payments elsewhere.

On a 'serious question to be tried', His Honour said:

[21] Accepting that a genuine conflict on the evidence about a fact important to the claim often denotes a ‘serious question’ for trial, the mere existence of that conflict does not foreclose the court’s consideration of the strength of the plaintiff’s claim. In ABC v O’Neill, Gummow and Hayne JJ (Gleeson CJ and Crennan J agreeing) rejected the idea that so long as the court is satisfied that there is a question for determination that is not frivolous and vexatious there will necessarily be a serious question to be tried sufficient to satisfy the first of the usual elements. Instead, their Honours described the ‘governing consideration’ as ‘the strength of the probability of ultimate success [which] depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought’.

[22] Therefore, it is not necessarily sufficient, in order to shift the focus solely to the balance of convenience (including the adequacy of damages), for a plaintiff to simply identify a contested fact upon which his or her entitlement to relief depends. In assessing the seriousness of the question to be tried, the court will also consider the strength of the probability of success. The degree to which the court may wish to consider that relative strength will vary from case to case.

On whether damages are an adequate remedy, His Honour said:

[18] The second consideration (often combined with the third) is whether or not damages would be an adequate remedy. 

[36] If I declined to order an interlocutory injunction, yet Mendonca [the tenant] ultimately succeeded at trial, in my view damages would be an adequate remedy. In fact, it was not specifically put to me that damages would not be an adequate remedy.

The matter went on to appeal shortly after the decision, and the Court of Appeal dismissed the appeal. The special leave application was dismissed also.