Universal Publishers Pty Ltd v Australian Executor Trustees Limited [2013] NSWSC 2021

Universal Publishers Pty Ltd v Australian Executor Trustees Limited [2013] NSWSC 2021

The lease permitted the lessor to call on the bank guarantee only if the lessee was actually in default or breach, not merely if a bona fide claim was made. There was a serious question to be tried as to whether Universal was in breach. Damages would not be an adequate remedy if the guarantee were called on and ultimately Universal succeeded, given financial constraints of the trust. The balance of convenience favoured continuation of the injunction.

Parties
Plaintiff: Universal Publishers Pty Ltd; Defendant: Australian Executor Trustees Limited
Jurisdiction
Australia
Judgment Date
24 December 2013
Procedural Posture
Interlocutory Application / Interlocutory Injunction Application
Outcome
Interlocutory injunction continued; orders as per judgment paras [89]-[91]
Legal Topics
Equitable Remedies, Injunctions, Interlocutory Injunctions, Leases, Bank Guarantees, Construction of Lease
Equity Equitable Remedies Injunctions Interlocutory Injunctions Leases Bank Guarantees Construction of Lease

Case Brief

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Parties

Universal Publishers Pty Ltd

Plaintiff

Australian Executor Trustees Limited

Defendant

Procedural Posture

Interlocutory Application / Interlocutory Injunction Application

Legal Issues

  1. 1 Whether interlocutory injunction should be granted to restrain defendant from calling on bank guarantee pending outcome of proceedings
  2. 2 Whether defendant is entitled to demand bank guarantee for alleged breach of lease by plaintiff
  3. 3 Whether actual breach of lease is required before lessor can call on bank guarantee

Ratio Decidendi

The lease permitted the lessor to call on the bank guarantee only if the lessee was actually in default or breach, not merely if a bona fide claim was made. There was a serious question to be tried as to whether Universal was in breach. Damages would not be an adequate remedy if the guarantee were called on and ultimately Universal succeeded, given financial constraints of the trust. The balance of convenience favoured continuation of the injunction.

Court Disposition

Interlocutory injunction continued; orders as per judgment paras [89]-[91]

Orders

  • Defendant to pay plaintiff's costs of the application for interlocutory injunctive relief.
  • Proceedings 2013/363434 transferred to Common Law Division to be heard with 2012/348176, with evidence in one to be evidence in the other.