Federal Court of Australia

Oxford Insurance Brokers Pty Ltd v NTI Limited [2025] FCA 268

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory injunction granted by the Court on 26 February 2025 is discharged.

2.    The applicants are to pay the respondents’ costs of and incidental to this application for an interlocutory injunction to be agreed or taxed.

3.    By on or before 5.00pm (ACST) on Thursday 17 April 2025, the applicants are to file and serve a statement of claim.

4.    The matter is adjourned to a case management hearing at 10.00am (ACST) on Wednesday 7 May 2025.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’SULLIVAN J:

1    The first applicant, Oxford Insurance Brokers Pty Ltd, is an insurance broker specialising in the transport industry. The respondents, NTI Limited, Insurance Australia Limited and AAI Limited, respectively, provide specialised insurance to the transport industry. There exists, as between the first applicant and the respondents, an Agreement titled “Intermediary Terms of Trade Agreement” dated 11 March 2004, which governs the dealings between the first applicant and the respondents. The Agreement between the first applicant and the respondents contains a provision for termination by a party on 28 days’ notice or immediate termination for cause.

2    On 29 January 2025, the respondents sent a letter to the first applicant giving notice of termination of the Agreement with effect from 26 February 2025.

3    This is an application for the continuation of an interim interlocutory injunction, granted ex parte by the Court on 26 February 2025, restraining the first respondent, NTI Limited, from giving effect to the decision to terminate the Agreement between the first applicant and the respondents.

4    On 26 February 2025, the Court had ordered, amongst other things, that until 5.00pm (ACDT) on 13 March 2025, the respondents be restrained from giving effect to any termination of the Agreement, annexed as annexure DRW-19 to the affidavit of Deborah Ruth White sworn and filed 25 February 2025.

5    I heard argument today as to whether the interim interlocutory injunction should continue. There are two questions to consider with the benefit of full argument:

(1)    Has the first applicant shown a prima facie case? and

(2)    If so, does the balance of convenience favour the continuation of the injunction?

6    As to a prima facie case, the applicants frame their case on the basis of an implied term of good faith, alternatively statutory unconscionability, alternatively misleading and deceptive conduct.

7    The basic facts are not in dispute.

8    There is an issue over whether, amongst other things, a diminution of the first applicant’s business was a factor in the decision to issue the letter of termination and the reasons for any diminution. It is not possible to reach a conclusion about that issue at this point in time.

9    There is also a legal question as to whether, in the circumstances, there exists an implied term of good faith given the longstanding nature of the contractual arrangements between the parties. The first and second respondents submit that the implication of a duty to act in good faith in terminating the agreement would be to impose a condition on them inconsistent with the express terms of the agreement.

10    There is force in that submission but, ultimately, it is not possible to make a decision whether that is correct or not at this time. Overall, although not free from doubt, it seems to me that it cannot be said that the first applicant has failed to establish that on the evidence adduced on this application, there is a probability that, at trial, it will be held entitled to relief.

11    Nonetheless, for the reasons I am about to give, although the applicant has established a prima facie case, that case is not sufficiently strong to warrant the continuation of the injunction in this matter.

12    As to the balance of convenience, the business written by the applicants pursuant to the Agreement with the respondents comprises in the order of 40 per cent of the first applicant’s business. It may be accepted that termination will have a significant effect on the first applicant’s business. However, it cannot be said that the business will fail or that the first applicant will suffer irreparable injury for which damages will not be adequate compensation. That is an important consideration because, as difficult as it may be to quantify, I consider damages to be an adequate remedy.

13    There is an issue as to the continuing relationship between the first applicant and NTI. The evidence on this application gives the impression of a souring relationship. I formed the impression that the relationship between the parties is, at best, fractious.

14    The first and second respondents submit that they should not be kept to an ongoing commercial relationship against their wishes. That is a significant point.

15    A further factor against the continuation of the injunction is that the relief sought by way of an interlocutory injunction is, in effect, final relief. That is because if the applicants succeed in their case, there is nothing to stop the respondents from issuing another termination notice pursuant to the terms of the Agreement.

16    The two questions - that is, prima facie case and balance of convenience - are not independent in the sense that the more the balance of convenience supports a respondent and the more serious the consequences for a respondent, the stronger will be the prima facie case that the applicant may need to establish to support and/or continue an interlocutory injunction.

17    In my view, the balance of convenience favours the respondents strongly. In all the circumstances, the interlocutory injunction granted on 26 February 2025 must be discharged, and there will be orders accordingly.

Associate:

Dated:    27 March 2025