Boral Formwork & Scaffolding Pty Ltd v Action Makers Limited [2003] NSWSC 557

Boral Formwork & Scaffolding Pty Ltd v Action Makers Limited [2003] NSWSC 557

Because there was a serious question to be tried about whether demanding the full invoice value was unconscionable, and because payment would leave Boral only as an unsecured creditor in a likely liquidation with a nil dividend, damages or proof in the insolvency would not be an adequate remedy; the balance of convenience therefore favoured a short interlocutory injunction.

Jurisdiction
Australia
Judgment Date
18 June 2003
Procedural Posture
Application for an Ex Parte Injunction Restraining Payment on an Unconditional Letter of Credit / Urgent Interlocutory Application
Outcome
Ex parte interlocutory injunction granted for a very short period.
Legal Topics
['unconditional Letters of Credit' 'interlocutory Injunctions' 'unconscionable Conduct' 'autonomy of Letters of Credit' 'balance of Convenience']
['banking and Finance' 'trade Practices' 'equity'] ['unconditional Letters of Credit' 'interlocutory Injunctions' 'unconscionable Conduct' 'autonomy of Letters of Credit' 'balance of Convenience']

Case Brief

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Procedural Posture

Application for an Ex Parte Injunction Restraining Payment on an Unconditional Letter of Credit / Urgent Interlocutory Application

Legal Issues

  1. 1 ['Whether there was a serious question to be tried that making demand for the full invoice value under the letter of credit constituted unconscionable conduct.' 'Whether the balance of convenience favoured an interlocutory injunction restraining National Australia Bank from paying on the letter of credit.']

Ratio Decidendi

Because there was a serious question to be tried about whether demanding the full invoice value was unconscionable, and because payment would leave Boral only as an unsecured creditor in a likely liquidation with a nil dividend, damages or proof in the insolvency would not be an adequate remedy; the balance of convenience therefore favoured a short interlocutory injunction.

Court Disposition

Ex parte interlocutory injunction granted for a very short period.

Orders

  • ['Upon the plaintiff by its counsel giving the usual undertaking as to damages, orders were made in accordance with the short minutes of order.' 'National Australia Bank was restrained from paying on the unconditional letter of credit for the short period necessary to enable better informed argument before the Court.']