Canon Medical Systems Limited v The Imaging Centre Assets Limited & Ors

Where the parties have prepared and tried the factual issues relevant to a monetary outcome, the court may grant appropriate relief even if the pleadings did not articulate that relief with complete precision, provided the opposing party understood the case and suffers no prejudice or injustice.

Costs may fairly be allocated by reference to the parties’ overall success at a high level. A more finely divided order may be refused where it would create unfairness or an appearance of unfairness. Injunctive relief should not impose additional controls on detailed commercial operations beyond the contractual obligations where the court cannot responsibly formulate or assess their consequences.

The judgment addressed consequential matters following a trial concerning the parties’ contractual relationship, including the unit sale claim, rental income, warranty and servicing charges, injunctive relief, costs, and an application for permission to appeal.

The court considered whether it could award TIC monetary relief for underpaid rental income resulting from unjustified set-offs when that relief had not been articulated as clearly as it might have been in the pleadings. It also determined the appropriate allocation of costs and whether the proposed injunction should contain an additional proviso concerning availability of Canon-equipped units.

1. Injunctive relief. The court refused the proposed additional proviso which would have encouraged or required Canon, when no Canon-equipped unit was available in the First Fleet, to consider sourcing a unit from the Second Fleet. The judgment’s existing proviso was sufficient: nothing in the injunction prevented action otherwise restrained where there was no First Fleet availability. The court would not attempt to legislate through the injunction for the detailed collaborative operation of the Master Agreement, particularly where the commercial consequences could not responsibly be assessed.
2. Costs. The appropriate approach was to reflect the parties’ general success at a first level of generality. The claimant was ordered to pay the first and third defendants’ costs of the claim and counterclaims, except their costs of and occasioned by the unit sale claim. The first and third defendants were ordered to pay the claimant’s costs of and occasioned by that claim. The liabilities were to be set off and subject to detailed assessment if not agreed. A more granular allocation was rejected because it risked unfairness and an appearance of unfairness.
3. Monetary relief and pleadings. The court rejected permission to appeal. The factual work necessary to determine whether rental had been underpaid through invalid set-offs had been undertaken at trial, with expert accounting evidence, and both parties understood the issue. Even if the monetary claim had not been pleaded as precisely as it could have been, there was no prejudice or injustice in granting relief arising from the account of dealings which the parties had prepared and tried.
4. The court also indicated that detailed assessment should recognise that the factual complexity, importance and potential value of the litigation justified costs exceeding the levels contemplated at costs budgeting.

The judgment was given by the trial judge after the substantive trial. Permission to appeal was refused because the proposed appeal had no real prospect of success.