The Power of an Agreement


We recently received instructions from a client, Mr Author, to obtain an injunction restraining several parties from dealing with printing equipment owned by his company.
Mr Author was a director of Printer Pty Limited.  Printer owned certain printing equipment worth about $350,000.00 and had for the past two years permitted another company Book Pty Limited to use the equipment in connection with Book’s publishing business.  Not only was Mr Author the director and controlling mind of Printer, but Mr Author was also a director of Book.
The other director of Book was Ms Page.  During the past 2 or 3 months the relationship between Mr Author and Ms Page had become strained and had irrevocably broken down.
Book was in financial difficulties and had failed to pay its rent for a number of months.  Eventually Book was locked out of its premises by the landlord.
Ms Page formed a new company Magazine Pty Limited and appointed her brother as the director.  Magazine entered into a new lease with the landlord and took over the premises previously occupied by Book.  Magazine then started to use the printing equipment owned by Printer and previously used by Book to conduct its new business.  This was done without the consent of Printer, Book or Mr Author.
Within a week of this happening, our clients Printer and Mr Author successfully commenced Court proceedings against Magazine, Ms Page and her brother and obtained an injunction preventing them from using or otherwise dealing with the printing equipment owned by Printer; and secured the immediate return of the printing equipment.
These orders effectively shut down Magazine and put an end to their business.
Partnership disputes are not uncommon, but this whole situation could have been avoided had Printer and Mr Author put in place a proper agreement with Book which set out the terms on which Printer permitted Book to use the printing equipment.  If there had been an agreement in place, the agreement would have made it a lot more difficult for Magazine, Ms Page and her brother to use the equipment and a lot easier for Printer and Mr Author to recover it.
If you would like more information, please do not hesitate to contact Townsends Business & Corporate Lawyers on (02) 8296 6222.