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Supreme Court of Western Australia |
Last Updated: 3 October 2008
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION : ABLE DEMOLITIONS & EXCAVATIONS PTY LTD -v- BHP BILLITON DIRECT REDUCED IRON PTY LTD [No 2] [2008] WASC 212
CORAM : LE MIERE J
HEARD : 25 & 26 AUGUST 2008
DELIVERED : 3 OCTOBER 2008
FILE NO/S : CIV 1678 of 2008
BETWEEN : ABLE DEMOLITIONS & EXCAVATIONS PTY LTD (ACN 005 639 449)
Plaintiff
AND
BHP BILLITON DIRECT REDUCED IRON PTY LTD (ACN 058 025 960)
Defendant
Catchwords:
Civil procedure - Interlocutory orders - Injunctions -
Application to vary interlocutory injunction restraining the defendant from
acting upon or giving effect to its purported termination of its contract with
the plaintiff - Whether the plaintiff's plant and
equipment should remain on the
site - Defendant in control and possession of the site - Turns on own facts
Civil procedure - Interlocutory orders - Injunctions - Application to vary interlocutory injunction restraining the defendant from acting upon or giving effect to its purported termination of its contract with the plaintiff - Whether the defendant is allowed to move or physically interfere with the salvage, inventory items and briquetting assets on the site - Defendant in control and possession of the site - Turns on own facts
Legislation:
Occupational Safety and Health Act 1984 (WA)
Result:
Plaintiff to remove its plant and equipment from the
site
Defendant allowed to move or physically interfere with the salvage,
inventory items and briquetting assets on the site
Category: B
Representation:
Counsel:
Plaintiff : Mr M G Pendlebury
Defendant : Mr G M Abbott
Solicitors:
Plaintiff : Marks & Sands
Defendant : Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
1 LE MIERE J: The defendant applies to vary the orders made on 10 July 2008 which restrained the defendant (BHPBI) from acting upon or giving effect to its purported termination on 18 June 2008 of the contract between BHPBI and the plaintiff (Able) for the demolition of BHPBI's plant by Able. The background and circumstances leading to the orders made on 10 July 2008 are set out in my reasons for decision in Able Demolitions & Excavations Pty Ltd v BHP Billiton Direct Reduced Iron Pty Ltd [2008] WASC 136. These reasons for decision are to be read with those reasons for decision.
The 10 July 2008 orders2 On 23 June 2008 Able issued its chamber summons seeking injunctions restraining BHPBI from acting upon or giving effect to its purported termination on 18 June 2008 of the contract and requiring BHPBI to continue to treat the contract as remaining on foot and binding and to give effect to its terms. Broadly speaking, the orders sought by Able fell into two categories. The first category consisted of orders to restrain BHPBI from taking steps consequential upon or giving effect to the alleged termination of the contract. The second category consisted of orders to require BHPBI to direct Able to recommence work and to carry out the contract. I determined to grant an injunction restraining BHPBI from acting upon or giving effect to its purported termination of the contract but declined to grant any injunction requiring BHPBI to direct Able to recommence work under the contract or to otherwise perform the contract.
3 The solicitors for the parties received a copy of my reasons for decision on 9 July before they were published on 10 July 2008. On the publication of my reasons for decision counsel for Able presented a minute of proposed orders. I made the following orders in accordance with that minute:
(a) from giving any further directions purportedly pursuant to General Condition ('GC') 45.5 of the Contract;
(b) from acting upon any directions given to date purportedly pursuant to GC 45.5, including any such directions contained in the Defendants Notice 033 dated 18 June 2008;
(c) from exercising any rights of recourse to security pursuant to GC 8;
(d) from entering into any contract, agreement or understanding with any third party in respect of the carrying out of any part of the works under the Contract or otherwise allowing any third party to carry out any such works;
(e) from carrying out any part of the works under the Contract;
4 Counsel for Able also moved for orders restraining BHPBI:
(f) from taking any steps to prevent or in any way obstructing the Plaintiff from removing from the Site as defined in the Contract ('Site') and dealing as it sees fit with any or all items of the Plaintiff's plant and equipment;
(g) from taking any steps to prevent or in any way obstructing the Plaintiff from removing from the Site, selling and otherwise dealing as it sees fit with any part of the plant which the [plaintiff] has already severed or otherwise prepared for ready removal from the Site.
(h) save for any entitlement to require payment in accordance with and on the terms set out in GC 51, from taking any steps to prevent or in any way obstructing the plaintiff from exercising its rights under GC 51 in respect of removing from the Site, selling and otherwise dealing as it sees fit with any part of the Briquetting Assets, Briquetting Spare Parts and the Inventory Items.
5 Counsel for BHPBI opposed the making of those further orders sought by Able. I declined to make the further orders proposed by Able and instead adjourned the matter with liberty to apply on 48 hours notice. I did so to allow BHPBI further time to consider the proposed orders and to enable the parties to confer in relation to the proposed orders and, if agreement could not be reached following that conferral, to enable the parties to prepare further evidence or argument to put before the court regarding the proposed orders.
BHPBI's application to vary the orders6 The parties have agreed that [4(d)] of the orders made on 10 July 2008 be amended to enable BHPBI to enter into a contract, agreement or understanding with a third party in respect of the demolition works provided that BHPBI is restrained from entering into any contract with any third party for the carrying out of demolition at site other than a contract which contains terms to the effect that no demolition is to be carried out pending a determination of the plaintiff's claim for specific performance of the contract in these proceedings and the contract is subject to there not being an order for specific performance of the contract in these proceedings. The parties have also agreed to a further order being made that requires the plaintiff and its servants and agents to vacate four houses which the plaintiff's employees occupied. It is not necessary to say anything further about those orders.
7 BHPBI seeks an order which requires Able to remove from the site its plant and equipment. The plant and equipment is identified as items 1 to 17 and 23 to 31 of the Machinery List annexed as page 22 to the affidavit of Graeme Bradley Thomas sworn 14 August 2008. Able opposes the making of that proposed order.
Able's application to vary the orders8 Able now seeks further orders restraining BHPBI:
(g) without limiting the generality of orders 1, 2, 3 and 4(e) above, from moving, removing from site, altering or otherwise physically interfering with any part of the 'Company's Plant' as defined in the Contract, including any salvage items, the Briquetting Assets and any Inventory.
9 BHPBI opposes the making of that further order.
BHPBI's directions to demobilise10 On 10 April 2008 BHPBI, by its Company Representative, issued to Able Notice 026 directing Able to suspend work under the contract. The Notice included the following directions:
...
11 On 18 June 2008 BHPBI issued a notice of termination pursuant to cl 45 of the General Conditions. Also on 18 June 2008 BHPBI, by its Company Representative, issued Notice 33 pursuant to General Condition 45.5 giving Able directions in relation to demobilisation from the site. The notice included the following directions:
...
...
Level 2 access to restricted non-demolition work.
This will facilitate any work necessary for demobilisation of equipment released from the Site.
12 On 19 June 2008 Able's solicitors wrote to BHPBI's solicitors demanding an undertaking, amongst other things, that BHPBI would not in any way interfere with Able's property including plant and equipment on site. BHPBI's solicitors replied on 19 June stating that BHPBI was not prepared to give the requested undertaking. BHPBI's solicitors went on to state that during the following seven days BHPBI would not interfere with, amongst other things, Able's property, including plant and equipment.
13 On 23 June 2008 Able issued its chamber summons seeking injunctions restraining BHPBI from acting upon or giving effect to its purported termination on 18 June 2008 of the contract and requiring BHPBI to continue to treat the contract as remaining on foot and binding and to give effect to its terms.
14 On 25 June 2008 BHPBI's solicitors wrote to Able's solicitors stating that BHPBI was prepared to give an undertaking that until 2 July 2008 it would not, amongst other things, interfere with Able's property, including plant and equipment with a qualification that in the event of any cyclone threatening the site, BHPBI reserved the right to take whatever action it considered necessary to make safe the site and all property and equipment on or in its vicinity.
15 On 10 July 2008 I delivered my reasons for decision which allowed in part Able's application for interlocutory injunctions. As I have already stated, counsel for Able proposed that the reasons for decision be given effect to by, amongst other things, an order restraining BHPBI 'from taking any steps to prevent or any way obstructing [Able] from removing from the site and dealing as it sees fit with any or all items of [Able's] plant and equipment'. Able's counsel stated that it was essentially seeking that order 'to restrain BHPBI from stopping us from taking away our plant and equipment' (ts 122). Counsel for BHPBI opposed the making of the order proposed by Able. Counsel for BHPBI said that the difficulty with the proposed order was that 'there may be an entangling of the plant and equipment' with salvage and other items (ts 130). For example, counsel explained Able's trucks may have salvage items loaded on them. BHPBI resisted the making of an order which would permit Able removing from the site items of plant and equipment that had loaded on it salvage items which BHPBI said remained its property. I declined to make the order proposed by Able and instead adjourned the matter with liberty to apply on 48 hours notice.
16 On 14 July 2008 Able's solicitors faxed to BHPBI's solicitors a letter dated 11 July 2008 in which they stated that Able did not at that stage seek orders requiring the removal of plant and equipment. On 24 July 2008 BHPBI's solicitors replied stating that it had been clear since BHPBI's notice of termination of 18 June 2008 that BHPBI requires Able to remove its plant and equipment from the site and Able should do so. On 28 July 2008 Able's solicitors replied stating that Able did not intend to remove its plant and equipment from the site. Able's solicitors stated that removal of the plant and equipment would be a significant undertaking, requiring weeks of dismantling work and involving great cost.
17 On 16 July 2008 the parties' solicitors met in conference. The parties did not reach any agreement.
18 On 4 August 2008 Able's solicitor spoke to BHPBI's solicitor. Amongst other things BHPBI's solicitor raised the possibility of Able's plant and equipment being moved to another location or locations on the site. On 14 August 2008 Able's solicitor wrote to BHPBI's solicitors referring to the suggestion that Able's plant and equipment remain on the site providing it was moved to a location suitable to BHPBI and sought details of this suggestion. On 15 August 2008 BHPBI's solicitors wrote to Able's solicitors stating that BHPBI's position remained that it would seek orders for the removal of Able's plant and equipment from the site.
Reasons for judgment on 10 July 200819 In [2008] WASC 136 I found that the balance of convenience favoured the grant of injunctive relief to restrain BHPBI from taking steps consequential upon or giving effect to the alleged termination of the contract. In doing so I had regard to factors that Able submitted tipped the balance of convenience in its favour. One of those factors was:
The impact of General Conditions 45.5 and 45.6, which on their face entitle BHPBI to take possession of various items, including 'construction plant' for the purpose of the works.
20 I said that some of the matters which Able submitted would lead to the financial failure of Able might be averted by an order restraining BHPBI from giving effect to its purported termination of the contract. I said that there were three consequences of the termination of the contract that might be averted by an order restraining BHPBI from giving effect to the termination. The first was the consequences of termination provided for in General Condition 45.5 including the provision that Able shall comply with any directions by BHPBI to 'provide the Company with possession of all plant and equipment, materials and other things on the site or offsite, which are required for the work under the contract or for incorporation in the works'. I said that General Condition 45.5 provides that BHPBI may take possession of such as the construction plant and other things on or in the vicinity of the site as are owned by Able and are reasonably required to facilitate completion of the work under the contract. At that time the consequence adverse to Able that I considered was BHPBI taking possession of Able's plant and equipment and using it to complete the demolition work.
21 At the time the court made orders on 10 July 2008 the parties did not address, and the court did not give consideration to, the issue that has now been raised: should Able be required, or BHPBI be permitted to direct Able, to remove its plant and equipment from the site or should BHPBI be restrained from giving such a direction to Able.
22 On terminating the contract cl 45.5(b)(ii) confers on BHPBI the power to direct Able to remove its plant and equipment from the site. BHPBI is prevented from giving such a direction by the order that I made on 10 July 2008. As I have said, that order was made without consideration of whether or not BHPBI should be at liberty to give a direction to Able to remove its plant and equipment from the site. At the time of making the orders the court was concerned to restrain BHPBI from taking possession of Able's plant and equipment, not restraining BHPBI from giving to Able a direction that it remove its plant and equipment from the site.
BHPBI's submissions23 BHPBI submits that Able's right to access the site depends upon Able continuing to have the benefit of a licence to go on the land controlled by BHPBI. BHPBI has terminated, or purported to terminate, the contract. For the reasons I stated on 10 July 2008 there is a serious question to be tried about the lawfulness of the termination of the contract. However, BHPBI submits, there has been at least a purported termination of the contract by BHPBI and accordingly BHPBI has shown a prima facie case that Able's licence to access the site has been effectively terminated and that Able is a trespasser on the site. This is because irrespective of whether BHPBI's termination of the contract is lawful or unlawful Able's licence is cancelled when the contract is terminated or purportedly terminated. BHPBI submits that upon the cancellation of its licence Able lost any right that it had to access the site and became a trespasser and thereupon has no right to have any plant and equipment on the site that was the subject of the licence. BHPBI submits that interference with the site in this way impinges upon BHPBI's property rights and accordingly BHPBI has established a prima facie entitlement that Able should remove its plant and equipment from the site.
24 BHPBI submits that Able's current position as a trespasser is not affected by the likelihood or otherwise of its cause of action against BHPBI succeeding or whether Able might obtain an order for specific performance. The risk of injustice, BHPBI says, favours ordering Able to remove its plant and equipment from the site because Able is interfering with BHPBI's property rights in land, damages are an inadequate remedy to BHPBI and the presence of Able's plant and equipment interferes with BHPBI's control of the site. That is because Able's plant and equipment prevents BHPBI from making the site cyclone ready, it could be damaged and Able's refusal to remove the plant and equipment might expose BHPBI to further claims by Able if the plant and equipment is damaged and Able's plant and equipment interferes with BHPBI's care and maintenance and other obligations under the Occupational Safety and Health Act 1984 (WA) (OSH Act).
25 BHPBI says that Able's plant and equipment can be conveniently and relatively inexpensively moved to an alternative site approximately 12 km from the site, the removal of Able's plant and equipment into Able's sole control will remove a further layer of the court's ongoing supervision without requiring any immediate supervision by the court or raising safety issues and the removal of Able's plant and equipment does not affect any of Able's substantive rights in the action. BHPBI makes further submissions that are not necessary to enumerate.
26 The primary submission made by BHPBI is that the weightiest factor in determining the balance of the risk of injustice is the fact that Able is a trespasser. Balancing the prejudice between other competing factors is said to be secondary. It is incorrect to approach the balance by attempting to assess a monetary prejudice to BHPBI when its interest in real property is affected and the law recognises the inherent difficulty in assessing a monetary value of the enjoyment of real property rights.
The contention that Able is a trespasser27 There are three main types of licences: a bare licence, a contractual licence and a licence coupled with a grant. A bare licence is revokable at any time. A contractual licence may be revoked before it expires, even if the revocation is in breach of contract. A licence coupled with a grant constitutes an interest in land and is irrevocable. Counsel for Able submitted that the contract conferred upon Able a licence coupled with a grant. That is because the contract confers upon Able an interest in the Company's Plant. I do not accept that argument. General Condition 4.2 provides that title to the Company's Plant and each component of it does not pass to Able until the component is removed from the site.
28 There is a serious question to be tried that BHPBI wrongfully terminated the contract. At trial the court might order specific performance of the contract. However, counsel for BHPBI, Mr Abbott, submitted that the chances of Able obtaining an order for specific performance of the contract are 'remote'. Mr Abbott submitted that the contract is in the nature of a building contract and the general rule is that a building contract is not specifically enforceable and an aggrieved party is left to its remedy in damages. As I have said Mr Abbott submits that BHPBI's termination of the contract, even if unlawful, was effective to revoke Able's licence to remain on the site and by leaving its plant and equipment on the site Able is a trespasser.
29 Mr Abbott relied upon Cowell v Rosehill Racecourse Co Ltd [1937] HCA 17; (1937) 56 CLR 605 and Porter v Hannah Builders Pty Ltd [1969] VicRp 86; [1969] VR 673 in support of the proposition that a licence may be determined and the licensee transformed into a trespasser even if the determination involves a breach of contract. Mr Abbott submitted that in this case Able's licence to go onto the site had been revoked and by leaving its plant and equipment on the site Able was a trespasser and BHPBI was entitled to an order requiring Able to remove its plant and equipment from the site.
30 I have found that there is a serious question to be tried that the May show cause notice was not valid and the purported exercise of power in the termination notice was invalid. It is arguable that the termination notice was not valid and hence did not revoke Able's right to remain on the site.
31 BHPBI says that Able is interfering with its property rights and that is prima facie a matter in respect of which damages cannot be an adequate remedy and is enough to weigh the justice of the case in favour of orders to remove Able from the site. BHPBI refers to Graham v K D Morris & Sons Pty Ltd [1974] Qd R 1 in support of its argument. In that case the defendant was constructing a substantial building upon land adjoining the plaintiff's land. The defendant had caused a crane to be erected upon the building under construction. When the crane was not in operation the jib was left free to rotate so that when the wind was in the north the jib encroached 62 feet over the plaintiff's land and was suspended above the roof of her house. This frequently happened. W B Campbell J held that the defendant should be restrained until trial from trespassing on the plaintiff's land by virtue of its crane jib.
32 The present case is quite different from Graham v K D Morris & Sons Pty Ltd. In this case there is a serious question to be tried whether the contract has been validly terminated. Able's claim for specific performance of the contract remains to be determined at trial.
33 Mr Abbott submits that BHPBI revoked Able's right to remain on the site independently of its notice of termination of the contract. BHPBI says that it did so on 18 June 2008 by issuing to Able Notice 33. By Notice 33 BHPBI directed Able to demobilise by 25 June 2008. BHPBI did not revoke Able's licence to remain on the site. To the contrary, the notice made provisions for Able personnel to continue to attend the site.
Relief sought by Able34 In substance Able seeks the assistance of the court to restrain BHPBI from directing it to remove its plant and equipment from the site. In the absence of the orders made by the court on 10 July 2008 BHPBI has the right to give such directions under General Condition 45.5 of the contract and indeed to revoke Able's right to remain on the site and transform it into a trespasser. Able must show that the balance of convenience, or balance of injustice, favours the court restraining BHPBI from exercising those rights.
35 The relevant final relief sought by Able is an order for specific performance of the contract. In granting interlocutory relief, a court should generally grant the minimum relief necessary to do justice between the parties: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 [70].
36 The orders I made on 10 July 2008 averted some of the consequences of the termination of the contract that would, or might, render Able's claim for final declaratory and injunctive relief nugatory. I am not persuaded that it is necessary to restrain BHPBI from directing Able to remove its plant and equipment from the site in order to prevent Able's claim for final declaratory and injunctive relief being rendered nugatory.
37 Able says that if it is required to remove its plant and equipment from the site that will involve substantial cost. Also, Able says that if it is successful in obtaining an order for specific performance at trial it would then have to relocate its plant and equipment back to the site and that would cause delay in recommencing the work.
38 Mr Rossignoli in his affidavit of 31 July 2008 deposed that the cost of demobilising and removing Able's plant and equipment from its site to its depot in Melbourne would exceed $2 million. Mr Rossignoli deposed that if Able is successful in the proceedings and its plant and equipment are required to be returned to site the cost of the return transportation from Melbourne would be approximately 40% higher than the site to Melbourne trip. Mr Rossignoli further deposed that Able's financial position is such that it is not in a position to finance demobilisation and removal of its plant and equipment from its site at Port Hedland.
39 The accuracy of Mr Rossignoli's estimates of the cost of removing Able's plant and equipment to Melbourne and back to the site may be open to question in some respects. However, I am satisfied that the cost would be substantial. Counsel for BHPBI accepted that if the only option available to Able on removing its plant and equipment from the site was to transport it to Melbourne then the court should not require, or permit BHPBI to require, that Able remove its plant and equipment from the site. However, BHPBI says that Able may demobilise and transport its plant and equipment to an alternative site in Port Hedland.
Moving plant and equipment to alternative Port Hedland location40 Graeme Bradley Thomas is BHPBI's demolition superintendent for the project. He has experience in transporting over-dimensional loads and deposes to having 'a sound knowledge of the Western Australian permitting requirements for over-dimensional loads'. He has been employed at the site since 1995 in various roles and is currently on site most days. He is familiar with the location of various items at the site. Mr Thomas swore an affidavit on 14 August 2008 concerning demobilising Able's plant and equipment and transporting it to a site in Port Hedland.
41 Mr Thomas says that Able could move its plant and equipment to alternative premises in Port Hedland. He identifies suitable premises in Port Hedland including industrial premises at 10 Moorambine Street, Wedgefield (the Moorambine property) which is available for lease. The Moorambine property is 12.6 km from the site gatehouse. The Moorambine property is 3,850 sqm, has a shed and will be fenced on being leased. It is presently available for lease at a rental of $7,200 per calendar month including GST and variable outgoings. Mr Thomas also referred to a property described as the Murrena property which is 3,000 sqm but is no longer available for lease. Mr Thomas deposes that with careful parking and stacking of Able's plant and equipment each of the Murrena property and the Moorambine property has a capacity to store Able's plant and equipment. Mr Thomas says that a number of items of plant and equipment referred to by Mr Rossignoli in his affidavit of 31 July 2008 have been removed from and are no longer on the site. Mr Thomas considers that it will take three experienced persons (excluding any subcontractor support that may be required) 14 working days to prepare and make ready all of Able's plant and equipment for transportation from the site. He considers that it will take three experienced persons (excluding truck and train drivers) 14 working days (which may not be consecutive) to load all of Able's plant and equipment onto truckloads and heavy floats for transportation from the site. Mr Thomas has obtained a quotation from Boom Logistics in relation to the cost of transporting Able's plant and equipment from the site to the Murrena property which is 12 kms from the site gatehouse. The quotation is for $45,000 excluding GST, permit charges and a fuel levy.
42 Mr Rossignoli in his affidavit of 31 July 2008 deposed that it is impractical to move Able's plant and equipment to an alternative site in Port Hedland. Mr Rossignoli deposed that the labour and cost of dismantling the plant and equipment would be substantially the same as if it were transported to Melbourne and semitrailers and floats would be required to make the short haul. Those matters were addressed in detail by Mr Thomas in his affidavit of 14 August 2008. Mr Rossignoli swore a further affidavit on 21 August 2008. Mr Rossignoli referred to the affidavit of Mr Thomas sworn 14 August 2008. Mr Rossignoli said that the Moorambine property is not suitable because, amongst other things, it is too small. Mr Rossignoli says that storing the plant and equipment in or about Port Hedland would cover an area of at least 8,000 sqm and that in order that access to each piece of equipment can be achieved and for there to be serviceable points for access and egress the land would need to be in the vicinity of 20,000 sqm. Mr Rossignoli maintains that six experienced employees would take approximately four weeks to dismantle Able's plant and equipment in readiness for transport before any transportation can take place. Mr Rossignoli says that there is then the task of loading the plant and equipment which would require three men to remain on site until the last load had left.
43 I place no weight on Mr Rossignoli's statement that in order that access to each piece of equipment can be achieved and for there to be serviceable points for access and egress the land would need to be in the vicinity of 20,000 sqm. At the present time Able does not have access to any of its plant and equipment. Able has not sought access to its plant and equipment. If Able were to seek access to its plant and equipment on BHPBI's site for the purpose of servicing or maintaining the equipment that would most likely give rise to a need for the court to supervise the manner in which that access is to be exercised. That is because BHPBI says that it has control of the site and for safety and regulatory reasons it must supervise any Able personnel on the site and the carrying out of any work on the site. Furthermore, BHPBI says that the carrying out by Able of any work on the site, including servicing and maintaining its plant and equipment, would give rise to safety issues.
44 Mr Rossignoli says that storing Able's plant and equipment in or about Port Hedland would cover an area of at least 8,000 sqm. Mr Rossignoli's estimate of the area required to store the plant and equipment is based upon the list of plant and equipment in Annexure PR59 to his affidavit of 31 July 2008. In his affidavit of 14 August 2008 Mr Thomas deposes that some items of plant and equipment listed on Annexure PR59 have been removed from the site. Mr Rossignoli swore a further affidavit on 21 August 2008 in which he did not challenge Mr Thomas' statement that some items of plant and equipment listed in Annexure PR59 are no longer on the site. In his affidavit of 21 August 2008 Mr Rossignoli does not challenge Mr Thomas' account of the details of Able's plant and equipment on the site or the suitability of the alternative sites referred to by Mr Thomas except to make the assertion that an area of at least 8,000 sqm is required to store the plant and equipment.
45 In his affidavit of 14 August 2008 Mr Thomas stated, based on his knowledge of the transportation of machinery and plant and equipment, and of Able's plant and equipment, what would be required to move Able's plant and equipment to an alternative site in Port Hedland. In his affidavit of 21 August 2008 Mr Rossignoli did not dispute that evidence.
46 There are conflicts between the evidence of Mr Thomas and of Mr Rossignoli concerning the dismantling, transporting and storing of Able's plant and equipment. However, I am not satisfied by the evidence presented by Able that there is no alternative location or locations in or around Port Hedland to which Able's plant and equipment might be transported and stored. To dismantle Able's plant and equipment, transport it to an alternative site in or about Port Hedland and there store it would involve substantial cost. However, the cost is not in the same order as the cost of removing the plant and equipment to Melbourne. Mr Thomas obtained a quote for transporting Able's plant and equipment from the site to the Murrena property. The quote is for $45,000 plus GST, permit charges and a fuel levy. There would also be the cost of dismantling the equipment at the site. Furthermore, Able will have to meet the cost of storing the equipment at a site or sites in Port Hedland. However, that cost is nowhere near the cost of transporting the plant and equipment back to Melbourne. Able has not presented any evidence that it is not able to meet the costs of transporting its plant and equipment to an alternative site in Port Hedland.
47 Counsel for BHPBI submits that the balance of convenience favours Able being required to remove its plant and equipment from the site. Counsel puts forward the following matters. BHPBI is the controller of the site and wishes to ensure that the site is safe, including for the forthcoming cyclone season. The cyclone season is approaching. Able's plant and equipment should be removed to make the site cyclone ready for a number of reasons. First, in the event of a potential cyclone, the plant and equipment would be exposed to the risk of damage. The only way to protect it when it is sitting idle on the site would be to group it all together and tie each item to the others. This would not guarantee that it is protected from damage. Secondly, amongst Able's plant and equipment is a lot of loose material that needs to be secured in some way in the event of a cyclone. Thirdly, amongst Able's plant and equipment are some items that have the potential to become projectiles during a cyclone. Fourthly, Able's plant and equipment could be damaged by a cyclone, particularly that located under the Briquetting and Reactor building. Making the site cyclone safe will take time and the issue concerning Able's plant and equipment needs to be dealt with well in advance of the cyclone season. Able's conduct since 18 June 2008 shows that BHPBI will not get Able's co-operation if a cyclone threatens the site. In addition, Able's plant and equipment must be removed from site for two reasons. First, to enable BHPBI to comply with its care and maintenance and other obligations under the OSH Act. Secondly, to avoid further occasion for the supervision and co-operation issues to be raised on a constant and recurring basis and further application to the court, potentially each time Able requires one or more items of its plant and equipment. The removal of Able's plant and equipment eliminates safety concerns associated with its presence on the site and should mean that no further issues can arise between the parties about Able's plant and equipment that might require any intervention on the part of the court. The evidence shows the presence of Able's plant and equipment is a source of potential further court action between the parties.
48 Having regard to the balance of convenience issues raised by both parties, I conclude that the balance of convenience, or the balance of injustice, favours requiring, or permitting BHPBI to require, Able to remove its plant and equipment from the site.
49 On 4 August 2008 BHPBI's solicitors raised with Able's solicitors the possibility of having Able's plant and equipment moved to another location or locations on BHPBI's site. BHPBI submits that Able should remove its plant and equipment from the site completely because leaving the plant and equipment on the site interferes with BHPBI's property interest, the continuing presence of Able's plant and equipment on the site gives rise to the potential need for co-operation between the parties in the event that Able wishes to access any of the plant and equipment and there is the potential for the necessity of further supervision by the court.
50 I am not satisfied that the balance of convenience, or the balance of injustice, requires that Able be permitted to keep its plant equipment on the site, albeit moved to an alternative location directed by BHPBI. Able would have to dismantle its plant and equipment to the extent necessary to move it to another location on the site and would have to transport it to that location. That would involve work and cost to Able, although less than the cost of dismantling the plant and equipment and transporting it to another site in or around Port Hedland. Able would have to store and secure its plant and equipment at the alternative location so as to be able to withstand a cyclone without constituting a risk to other persons or property on the site and the risk of damage to itself. Those activities would require further work to be done by Able and require further co-operation between Able and BHPBI. It gives rise to the likelihood of safety issues and further controversies between the parties concerning safety issues and further supervision by the court being required.
51 For those reasons, the orders made on 10 July 2008 should be varied so as to permit BHPBI to direct Able to remove its plant and equipment from the site.
Company Plant, Briquetting Assets and Inventory Items52 Clause 1.1 of the contract defines Company's Plant, Briquetting Assets and Inventory Items. Company's Plant means the structures, plant, equipment, materials and substances comprising the Company's Hot Briquetted Iron production facilities on the site. In the course of demolishing the Company's Plant Able severed parts of the structures and plant from the remaining plant. The parties have referred to the severed plant or items as 'salvage'. The Briquetting Assets refers to the briquetting presses and briquetting equipment. The Inventory Items refers to spare parts and other items warehoused by BHPBI on the site and previously intended for use in operation, maintenance and repair of the Company's Plant.
53 On 24 July 2008 BHPBI's solicitors wrote to Able's solicitors. BHPBI's solicitors said that BHPBI proposed that the salvage, Inventory Items and Briquetting Assets remain at the site pending the judgment in the proceeding but that BHPBI reserves the right to move the salvage, Inventory Items and Briquetting Assets, or any part of them, within the site as circumstances may require and for any reason, whether for safety or otherwise. Further, BHPBI's solicitors said that the Inventory Items situated in the warehouse external to the site are occupying space that is required by BHPBI for its business purposes and BHPBI reserves the right to move the Inventory Items to the layup area at Able's risk and expense. The layup area is exposed to the elements. BHPBI's solicitors stated that BHPBI is prepared to release the Inventory Items and Briquetting Assets to Able on payment of the outstanding invoices.
54 BHPBI says that the orders made on 10 July 2008 do not prevent it from moving the salvage, Inventory Items and Briquetting Assets within the site.
55 Able submitted that any physical interference with or movement of the salvage, Inventory Items or Briquetting Assets by BHPBI would be in breach of the orders made on 10 July 2008, particularly order 1 which restrains BHPBI from acting upon or giving effect to its purported termination of the contract. Alternatively, Able submits that if the conduct threatened by BHPBI would not offend the orders made on 10 July 2008 then the orders should be extended to do so.
56 In my opinion the orders of 10 July 2008 do not restrain BHPBI from moving or physically interfering with the salvage, inventory items or briquetting assets. However, in case I am wrong in that conclusion and because it is necessary, or at least desirable, that the parties should know with as much certainty as possible what BHPBI is required to do, or to abstain from doing, by the 10 July 2008 orders, it is desirable that the orders be clarified to state whether BHPBI may or may not move or otherwise physically interfere with any of the Company's Plant.
Salvage57 Clause 4.1 of the contract provides that title to any part of the Company's Plant will not pass until the time that that component is removed from the site. BHPBI has title to the salvage items. Control and occupation of the site for the purposes of the OSH Act and Regulations and the Mines Safety and Inspection Act 1994 (WA) is vested solely in BHPBI. Responsibility for the site is now vested in BHPBI and it needs to take the steps required to secure the site and those items that remain on it, particularly during a cyclone.
58 Able submits that if BHPBI is free to move the salvage items within the site there is a sufficiently clear likelihood of reduction in value of the salvage items, either through them being damaged in being moved about or otherwise physically altered. Able further submits that there is a likelihood that, if it is allowed to resume work under the contract, Able would have to redo work that it has already done.
59 I am not satisfied that if it should later be found that BHPBI has wrongfully interfered with the salvage items on the site damages would not be an adequate remedy.
60 Furthermore, I am not persuaded that the balance of convenience requires that BHPBI be restrained from moving or physically interfering with the salvage on the site. I accept the submissions of BHPBI concerning the balance of convenience. Property in the salvage items remains in BHPBI. BHPBI has responsibility for the site. It needs to be able to deal with the salvage items on the site so as to make them and the site safe, particularly in the event of a cyclone. The prejudice to Able if BHPBI is at liberty to move the salvage items within the site does not outweigh the prejudice to BHPBI if it is restrained from physically dealing with the salvage items. I decline to make any further orders restraining BHPBI from moving or physically interfering with the salvage items.
Inventory Items61 All of the Inventory Items are the subject of the sale by BHPBI to Able under General Condition 51.3. Able agreed to purchase from BHPBI the Inventory Items for $2 million and BHPBI issued invoices to Able for this amount. Able has paid $500,000 and an amount of $1.5 million remains outstanding under the invoices. BHPBI submits that it has an unpaid sellers lien over the Inventory Items and that a person with the benefit of a lien over goods can move the goods around their premises and otherwise deal with the goods in a manner that is consistent with the dealings with their own goods.
62 I am not persuaded that the balance of convenience requires that BHPBI be restrained from moving or physically interfering with the Inventory Items on the site. In the absence of any court order, BHPBI has the right to move the goods around their premises and otherwise deal with the goods in a manner that is consistent with the dealings with their own goods. BHPBI is responsible for the site and for activities to be carried out on the site. Able's obligation to pay the balance owing to BHPBI for the Inventory Items, or any dispute it has with BHPBI concerning the Inventory Items, does not arise from the termination of the contract. It is not necessary to restrain BHPBI from dealing with the Inventory Items in order to prevent Able's claim for final declaratory and injunctive relief in these proceedings being rendered nugatory or to preserve Able's rights in the event that it obtains an order for specific performance at trial.
Briquetting Assets63 The Briquetting Assets consist of six briquetting presses. The Briquetting Assets are the subject of an agreement to purchase by Able. There is a dispute as to how much is owing by Able to BHPBI. BHPBI says that it is has an unpaid sellers lien over the Briquetting Assets and that that lien entitles it to move the goods about its premises.
64 I am not persuaded that the balance of convenience requires BHPBI to be restrained from moving or physically interfering with the Briquetting Assets on the site. BHPBI has control and occupation of the site. BHPBI has responsibility for the site and it needs to take the steps required to secure the site and all those items on it, particularly during a cyclone. It is not necessary to restrain BHPBI from dealing with the Briquetting Assets in order to ensure that Able's claim for final declaratory and injunctive relief is not rendered nugatory or to preserve Able's rights in the event that it is successful in obtaining an order for specific performance at trial.
65 For the reasons stated, I decline to make any orders restraining BHPBI from moving or physically interfering with the salvage, Inventory Items or Briquetting Assets on the site.
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URL: http://www.austlii.edu.au/au/cases/wa/WASC/2008/212.html