Interlocutory injunctions, undertaking on damages, public interest: Environment East Gippsland Inc v VicForests (No. 2) [2009] VSC 421 (29 September 2009)

October 2, 2009 |

It is ubiquitous that a successful applicant for interlocutory injunctive relief gives an undertaking as to damages. But not universal. In Environment East Gippsland Inc v VicForests (No. 2) Forrest J considered the principles involving injunctions where there is a public interest component to the proceeding.

Facts

Notwithstanding the Plaintiff/applicant (Environment East Gippsland Inc) giving undertakings the Defendant (Vic Forrest) argued that the undertakings were inadequate (which was clearly the case). The Defendant, not surprisingly sought security by a payment into court by the Plaintiff.

Decision

The court declined to order security. It regarded the case as being an exceptional case; the proceeding was brought in the public interest and it involved obligations of the state involving conservation (par 4).

Forrest J considered the relevant principles (at pars 12 – 15) which provide that undertakings are normally required but in their absence accept security, though a court can not require it. It is a very useful summary.

Citing the recent Blue Wedges injunction Forrest J said “…there exceptional circumstances which warrant departure from the general rule that a party, either by undertaking alone or with security, ensures that its opponent will not be out of pocket if the primary claim fails.” (par 17)

Factors which may give rise to the exceptional circumstances include:

  • the strength of the Plaintiff’s case (par 18)
  • the nature of the damage which the Plaintiff seeks to prevent if the injunction is not granted (par 18);
  • whether there is an issue of public importance (par 18)

The court should draw a distinction between cases involving private litigants, where undertakings or security are important, from cases involving public interest where that consideration is not as great (par 19). In support of this proposition Forrest relied upon authorities from the NSW Land and Environment Court. There is no real equivalent in Victoria. He did not make clear whether it was a question of weighting or a clear delineation.

Forrest J was far from persuaded with the assessment of loss. One issue he raised was that the forest would still be there at the end of the hearing if the Plaintiff lost. As such the trees could still be felled and the logs sold. It seems a strong argument. Vic Forrests claim of losing contracts because of non delivery had more than a whiff of assertion about it. As to the public interest issues his Honour considered the operation of the legislation and the need to protect native species ((pars 29 – 32). In this case the possibility of potential breach of the legislation and the genuine risk of damage to the potoroo were factors which influenced his decision not to require either an undertaking or security.

Issues

The development of this “exceptional circumstance” of not requiring undertaking as to damages or security in public interest litigation is a welcome development. It adds more flexibility to one area of the injunction process which was relatively inflexible (usually for good reason). It acknowledges that public interest plaintiffs are usually not well funded or asset rich. But they are usually the only groups who will take up the issues. At the moment these cases tend to revolve around environmental issues. Public interest litigation covers a broader gamut. Injunctive relief relating to the conduct of elections and free speech/censorship issues are traditionally regarded as involving the public interest. The principles enunciated by Forrest J may be useful in submissions about undertakings and security.

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