Seeking an injunction? The court might award damages instead

A person may apply to a court for an injunction in order to prevent threatened or actual and ongoing infringement of that person’s legal rights. When hearing an application for an injunction, most courts have jurisdiction to award damages instead of, or together with, an injunction. The Queensland Supreme Court has recently provided some guidance regarding the circumstances in which a court might do so.

The facts

The case of Emprja Pty Ltd v Red Engine Group Pty Ltd[1] involved an application for an injunction in the context of allegations of trespass and breach of contract.

The facts involved a contract for the mooring of a yacht at a marina at Airlie Beach. The applicant, Emprja Pty Ltd, operated the marina under a lease of crown land. The applicant subleased individual berths to yacht owners.

Red Engine Group Pty Ltd, the respondent, was a tenant under one such sublease. Commencing in 2008, the 20 year sublease contained a term requiring the respondent’s yacht to ‘have dimensions appropriate to the [b]erth’ at which it was to be moored.

It turned out that the respondent’s yacht exceeded the width of the berth by 10 centimetres. Upon discovering this, the applicant sought an injunction on grounds that the respondent’s vessel breached the sublease and was trespassing on the common area of the marina, being the area designated for other vessels to manoeuvre.

The Court’s findings

The injunction application was heard and determined by Jackson J of the Queensland Supreme Court. On the evidence, his Honour held that the respondent’s vessel had breached the terms of the sublease due to its excessive size and had trespassed on the applicant’s land by encroaching onto the common area of the marina. Having found such, his Honour proceeded to formulate the appropriate form of relief.

Damages instead of an injunction?

Starting with the position that a court’s jurisdiction to grant relief by way of injunction is equitable and discretionary, the Court held that its jurisdiction to award damages in lieu of, or together with, an injunction resides expressly in Queensland’s Civil Proceedings Act 2011. Section 8 of the Act states:

‘If a court has jurisdiction to hear an application for an injunction or specific performance, the court may award damages as well as, or instead of, an injunction or specific performance’.

Similar provisions exist in Victoria: see section 38 of the Supreme Court Act 1986 (Vic) and section 49 of the County Court Act 1958 (Vic).

Looking specifically to one of the bases on which the injunction had been sought — trespass — Jackson J held:

‘[A] number of cases recognise that an injunction may go to restrain a trespass even where the damage to the plaintiff is minimal. …
However … there may be cases that would otherwise fit within the working rule where the defendant’s conduct disentitles him or her from asking that damages may be assessed in substitution for an injunction’.[2]

His Honour noted that previous cases showed ‘it is not a matter of course that an award of damages will be granted instead of an injunction’,[3] and that the various criteria propounded by the courts on this question should not override ‘the statutory text and the discretion that is conferred by it’.[4] His Honour cited the Victorian decision in Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd,[5] where Dodds-Streeton JA, with whom Ashley JA and Cavanough AJA agreed, considered that any judicial formulation about how a discretion should be exercised is not to be considered an ‘inflexible code’.[6]

Looking to the particular facts of the case, Jackson J noted the following.

First, if damages were to be awarded instead of an injunction, the respondent would effectively be authorised to continue its trespass on the applicant’s property for the duration of the sublease. At the time of the injunction application, the sublease had a further 11 years to run.

Secondly, given the minimal impact of the respondent’s yacht’s protrusion onto the common area of the marina and in light of evidence that other vessels could still manoeuvre properly, the impact on the applicant’s rights was small.

Thirdly, in attempting to quantify damages, it was difficult to measure the applicant’s injury as there was no evidence about the value of the part of the common area onto which the yacht was protruding.

On the question of whether granting an injunction would be oppressive to the respondent, his Honour weighed the benefit to the applicant in awarding an injunction against the detriment to the respondent in doing so.

His Honour noted that it would be inconvenient to the respondent to remove its yacht from the berth, and that the detriment to the respondent would be greater than the benefit to the applicant should an injunction be granted. Moreover, in resisting the injunction, the respondent argued that the injury to the applicant was trivial and that an injunction would be oppressive to the respondent and disproportionate to the injury suffered.

Nonetheless, his Honour held that ‘it does not in my view amount to oppression to conclude that the applicant is entitled to an injunction to restrain the respondent from continuing to trespass onto the manoeuvring strip. Accordingly … it is not appropriate in the present case to award damages instead of granting an injunction to restrain the respondent’s trespass’.[7]

Having answered the question about whether damages or an injunction ought be awarded in light of the issue of trespass, his Honour considered it unnecessary to answer this same question in relation to the issue of breach of contract.

Who bears the onus of showing entitlement to damages rather than an injunction?

In his Honour’s reasons, Jackson J considered whether a defendant bears the onus of proving the plaintiff’s entitlement to damages instead of an injunction. His Honour referred to the recent decision of the Supreme Court of the United Kingdom in Lawrence v Fen Tigers Ltd[8] as authority for the view that the defendant does bear the onus. His Honour noted, however, that the view of that Court was not unanimous and ‘does not … necessarily represent the law in Australia although there is much to be said for the reasoning in that case, in my view’.[9]

Conclusion

The decision in Emprja Pty Ltd v Red Engine Group Pty Ltd usefully illustrates a situation where a court determined whether to award damages instead of, or together with, an injunction. The decision makes it clear that these matters are at a court’s discretion and turn on the particular facts at hand. Nonetheless, the decision shows that a court should not be limited to previous case law formulations and should instead adhere to the statutory text when exercising its discretion. Moreover, the decision is authority for the view that a court should not necessarily require the party resisting the injunction to show why damages would otherwise be appropriate.


[1]: [2017] QSC 33.

[2]: Ibid [67]–[68].

[3]: Ibid [69].

[4]: Ibid [70].

[5]: (2007) 20 VR 311.

[6]: Ibid 325.

[7]: Emprja Pty Ltd v Red Engine Group Pty Ltd [2017] QSC 33 [83].

[8]: [2014] AC 822.

[9]: Emprja Pty Ltd v Red Engine Group Pty Ltd [2017] QSC 33 [71].