Assessing whether a mandatory injunction will require a court’s ‘constant supervision’
A court’s power to grant injunctive relief, a form of equitable remedy, is discretionary. One factor that may weigh on the exercise of that discretion is the question of whether, if the injunction were granted, it would require the constant supervision of the court to ensure compliance with its terms. This particularly is the case where the terms of the injunction are mandatory, that is, where the court by its orders compels a party to do something. Where a dispute involves a contract between the parties, the effect of a mandatory injunction might be akin to an order for specific performance of the contract.
In Fonterra Australia Pty Ltd v Platt,[1] Attiwill J considered an application by a dairy goods manufacturer to restrain a dairy farmer from taking any action in furtherance of, or in reliance on, the farmer’s purported termination of a milk supply agreement. One matter his Honour considered was whether the injunction would require the Court to supervise the parties’ ongoing performance of their obligations under the contract while it effectively was kept on foot pending trial.
Background facts
The parties had been in milk-supply arrangements since 2017. Fonterra would purchase milk from the Platts, generated from their farm business in Gippsland, in order to then manufacture various dairy goods. In June 2024, the parties entered into a new contract for a supply period of two years.
At around the half-way point in the two-year contract, the Platts wrote to Fonterra and alleged that they had been misled into entering into the contract; they alleged that pre-contractual negotiations had been to the effect that the contract would only last for one year. In the letter, the Platts proposed a mutual termination of the contract.
Following a series of correspondence between the parties, including a letter in which the Platts further alleged that Fonterra had breached the contract by failing to review the minimum milk price for a particular financial year, in September 2024 the Platts purported to exercise their contractual right to terminate.
Fonterra applied to the Supreme Court for an interlocutory injunction. It submitted to the Court that the effect of its injunction would be mandatory and that, although interlocutory, would be sought in support of a final injunction to be sought at trial.
In resisting the injunction application, the Platts argued among other things that Fonterra’s claim for interlocutory and, ultimately, final injunctive relief would require the constant supervision of the Court to ensure the parties’ fulfilment of the milk-supply contract.
The Court’s consideration of the issue of ‘constant supervision’
In considering the Platts’ argument, Attiwill J first referred to a passage in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia,[2] in which a majority of the High Court noted that the issue of ‘constant supervision’ really was concerned with:
whether or not the person to whom the injunction is directed can clearly enough know what needs to be done on the terms of the injunction; and
the imperative of discouraging the possibility of repeated applications for rulings on compliance with orders which might require a party to carry on a particular activity over a short or long period of time.[3]
Both those matters arguably are bound up in the concern expressed in Pakenham Upper Fruit Co Ltd v Crosby, in which Isaacs and Rich JJ apprehended a scenario where a court ‘could never be sure that it was in a position to enforce its order without injustice’.[4]
Justice Attiwill rejected the Platts’ argument regarding the need for constant supervision.[5] In doing so, his Honour noted the following.
First, the terms of the proposed injunction were sufficiently clear.
Second, the injunction did not require the Platts to carry on the supply of milk to Fonterra; instead, because the injunction (merely) sought to put a halt on the Platts’ purported termination of the contract and sought to treat the contract as if it remained on foot, ’the substantive rights and obligations of the parties would be governed by the [c]ontract and not the injunctive relief’.[6] Put another way, the injunction did not on its terms purport to prescribe the parties’ rights and obligations under the contract (except, as his Honour went on to say, in respect of termination rights in the particular instance[7]) and instead sought to preserve the (external) source of those rights and obligations.
Third, and on a related point, no supervision was required in order to give effect to the legal rights provided for by the injunction.
Fourth, any supervision which might be required would be minimal and for a relatively short period of time. On that point, his Honour clarified:
The Court is centrally concerned with avoiding supervision arising from imprecision of an order, or supervision arising in the form of adjudicating nebulous obligations, rather than supervision arising from the relationship between, or co-operation of, the parties under the [c]ontract.[8]
His Honour considered that any supervision would be minimal given the fact the parties had been in supply agreements since 2017 and disputes between them historically had been minimal. His Honour also noted the fact that cooperation between the parties was a key element to the success of the contract.
Finally, whatever supervision that might be required did not, in his Honour’s assessment, prove determinative of Fonterra’s application.
For the above reasons, his Honour was satisfied that Fonterra had shown a strong prima facie case — sufficient at the interlocutory stage — that the final injunction it would seek at trial would not require so much supervision that the Court would refuse such relief at trial. And, for that and other reasons, the Court went on to grant the interlocutory injunction, finding that Fonterra had satisfied it as to the other usual principles relevant to the exercise of discretion at an interlocutory stage.
Relevance of the quality of the parties’ relationship
As described above, it was relevant to his Honour’s consideration of the question of ‘constant supervision’ that, in the circumstances, any supervision would be minimal given what appeared to have been historically a good enough working relationship between the parties.
The quality of the relationship of the parties to the contract the subject of injunctive relief was relevant in a decision of the Supreme Court of Western Australia, albeit to opposite effect. In Able Demolitions & Excavations Pty Ltd v BHP Billiton Direct Reduced Iron Pty Ltd,[9] a mining company entered into a contract with an industrial demolition company for the demolition, deconstruction, severance and removal of plant on one of its sites. There was, as in Fonterra, an application for an injunction in response to a purported termination of the contract. The evidence in that case, however, pointed to the relationship between the parties having ‘broken down’ and there being a loss of trust and confidence in the ability of the demolition company to safely carry out its work.[10] That impression, together with the Court’s related apprehension that constant supervision would be required in the circumstances, formed some of the key reasons for the Court’s decision to refuse injunctive relief in that case.
To conclude, while the decision whether or not to grant injunctive relief will turn on an assessment of the relevant facts, in a situation where an injunction is sought in response to a purported termination of a contract the quality of the parties’ relationship, historically, will likely be relevant. It may, as the cases show, bear upon a court’s consideration of whether ‘constant supervision’ — something inimical to injunctive relief — might be required.
[1]: [2025] VSC 608.
[2]: (1998) 195 CLR 1.
[3]: Ibid 47 [79].
[4]: (1924) 35 CLR 386, 395; see also Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1, 47 [81].
[5]: See Fonterra Australia Pty Ltd v Platt [2025] VSC 608, [59]–[64].
[6]: Ibid [61].
[7]: Ibid [89].
[8]: Ibid [63].
[9]: [2008] WASC 136.
[10]: Ibid [87].