Court of Appeal (WA)|2004-12-22|Before: Le Miere J, Steytler J, Miere J, Jenkins J

Mostert v Durban Roodepoort Deep, Ltd [2004] WASCA 309 (22 December 2004)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : MOSTERT -v- DURBAN ROODEPOORT DEEP, LTD [2004] WASCA 309

Application to dismiss or vary Mareva order - Whether leave required - Diminution and disposal of assets - Admissibility of affidavit - Settlement deed - Release - Confidentiality provisions - Sufficiency of allegations to justify continuation of order - Whether claims constitute a good arguable case - Points not taken below - When allowed to be raised on appeal - Delay

Application for extension of time to appeal refused

Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11

Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1

Goldspar Australia Pty Ltd v Council of the City of Sydney [2001] NSWCA 246

MetwallyUniversity of Wollongong (No 2) (1985) 59 ALJR 481

Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631

Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418

Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40

Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621

Benfield v Australian National Railways Commission (1992) 8 WAR 285

Brereton v Milstein [1988] VicRp 57; [1988] VR 508

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380

Fantasia v Otho Pty Ltd, unreported; SCt of WA; Library No 980054; 13 February 1998

First Industry Corporation v Goh [2002] WASC 68

Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612

Patterson v BTR Engineering (Australia) Ltd (1989) 18 NSWLR 319

Perth Mint v Mickelberg & (No 2) [1985] WAR 117

R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59

The State of Queensland & Anor v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

Uniflex (Australia) Pty Ltd v Hanneybel, unreported; SCt of WA; Library No 980465; 17 August 1998

Wing Luck Foods v Lay Choo Lim [1989] WAR 358

Woodvale Nominees Pty Ltd v Western Australia Real Estate Investment Ltd [2000] WASCA 189

1 STEYTLER J: I have had the advantage of reading, in draft, the judgment of Le Miere J. I agree with it and with the orders proposed by him.

2 LE MIERE J: The appellant seeks leave to appeal from the order of Heenan J, made on 20 January 2004, dismissing the application by the appellant that the orders made by Heenan J, on 23 December 2003, be set aside. The order made by Heenan J, on 23 December 2003, was a Mareva order restraining the appellant from disposing of or dealing with his property in Western Australia, subject to certain exceptions and provisos.

3 By motion dated 10 February 2004, the appellant sought leave to appeal against the orders made by Heenan J, on 20 January 2004. The appellant's motion came before Heenan J for directions on 5 March 2004. On the hearing of the motion, it was in issue whether the appellant required leave to appeal or had a right of appeal pursuant to s 60(1)(f) of the Supreme Court Act 1935 (WA). Heenan J ordered that in the event that at the hearing of the application for leave to appeal it was determined that leave is necessary, upon the undertaking of the appellant to file an application for an extension of time within which to appeal and a notice of appeal, the application for the extension of time and the proposed appeal be heard by the Full Court at the same time as the application for leave to appeal.

4 Section 60(1)(f) of the Supreme Court Act provides that leave of the judge to be appealed from or of the Full Court is required to appeal against any interlocutory order or interlocutory judgment, with certain exceptions. The exceptions include where an injunction is granted or refused. On 20 January 2004 Heenan J dismissed an application by the appellant to discharge or vary the Mareva order made by his Honour on 23 December 2003. The order of Heenan J on 20 January 2004 is not an order that granted or refused an injunction. It follows that leave is required to appeal against the order of 20 January 2004.

5 In general, leave to appeal will only be granted if the decision below was wrong or attended with sufficient doubt to justify the grant of leave and, in addition, that potential injustice would be done by leaving the decision unreversed. Nevertheless, the discretion to grant or withhold leave is a broad one which will be exercised having regard to those criteria, but not by applying them as if they were rigid or exhaustive criteria so that if for any other reason in the interests of justice, leave

should be granted, the Court will grant it: Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40 per Malcolm CJ, at 56 - 57, Rowland and Walsh JJ agreeing. In this case, whether leave to appeal should be granted depends on the merits of the proposed appeal.

6 The action brought by the respondent against the appellant, as first defendant, and other defendants, arises out of an agreement between the respondent and Noble Investments Pty Ltd, Leadenhall Australia Ltd and Advent Investors Pty Ltd, the third defendants in the action. The respondent pleads that on or about 7 December 1999 the appellant, purportedly on behalf of the respondent, and the third defendants signed the agreement. The agreement provides, amongst other things, that the respondent was to pay $1,115,000 to the third defendants in return for share transfer forms executed by each company for the transfer to the respondent of 11,150,000 shares in Continental Goldfields Ltd (the CNF shares), and the sum of $5,910,000 to Noble for "facilitating the acquisition" of the CNF shares by the respondent. The respondent pleads that the appellant executed the agreement without the authority of the respondent. The respondent pleads that as at December 1999 the CNF shares had a value of no more than $1,115,000 and there were no circumstances justifying the payment by the respondent of the facilitation fee. The respondent alleges that in executing the agreement the appellant acted in breach of statutory, fiduciary and common law duties as a director of the respondent. The respondent further alleges that the appellant conspired with the other defendants to injure the respondent by unlawful means and for an unlawful purpose. The respondent claims from the appellant compensation under the Corporations Law, equitable compensation, and indemnity in connection with certain payments and damages.

7 The respondent applied for a Mareva order by chamber summons dated 2 December 2003. The summons, amongst other things, sought to restrain the appellant from disposing of or dealing with his property in Western Australia, subject to certain exceptions and provisos. The summons was served on the appellant's solicitors.

8 The respondent's application for a Mareva order was supported by an affidavit sworn by David Johannes Botes on 28 November 2003 (the Botes Affidavit). Mr Botes is, or was at the time, the group risk manager and chief financial officer, international operations, of the respondent. Apart from introductory matters, Mr Botes's affidavit may conveniently be divided into three parts. The first part, pars 6 to 18, is entitled "The Misappropriation of Funds by [the appellant]". In those paragraphs Mr Botes swears to a series of matters concerning the conduct of the appellant in 1999. Mr Botes deposes that the appellant established offshore trusts and caused substantial sums, obtained from funds paid by the respondent's subsidiary company, DRDAPS, to be paid into those accounts. Mr Botes also deposes, in effect, that sham invoices were rendered to DRDAPS for consulting fees, with $600,000 of the payment made by DRDAPS in respect of those invoices being paid to the appellant. It also appears from Mr Botes's affidavit that a sham agreement was entered into, with $857,000 of the payment by DRDAPS in pursuance of the agreement being paid to the appellant. The respondent relied upon those matters to support its submission that the appellant had behaved dishonestly in the past and hence there was a risk that unless restrained from doing so the appellant would dispose of his assets within the jurisdiction so as to frustrate any judgment the respondent was able to obtain.

9 The second part of the Botes affidavit, pars 19 to 27, relates to the cause of action pleaded by the respondent against the appellant in the present action.

10 The third part of the affidavit concerns the amount of the respondent's claim against the appellant in the present action, $5,907,000, the appellant's assets in Australia and in South Africa and the sale by the appellant of property owned by the appellant at 97 Melville Beach Road, Applecross.

11 The respondent and its Australian subsidiaries (the DRD parties) had made certain allegations against the appellant. The appellant denied the allegations. The parties agreed to settle their differences on the terms set out in a deed of settlement that was executed by the parties on 21 August 2001 (the settlement deed). The appellant agreed to pay the DRD parties a certain amount by instalments. To secure the outstanding amount the appellant granted to the DRD parties a mortgage over the Melville Beach Road property. The settlement deed made provision for the discharge of the mortgage and the provision of a substitute security if the appellant wished to sell the Melville Beach Road property. The substitute security involved a mortgage over any property purchased by the appellant with the whole or part of the proceeds from the sale of the Melville Beach Road property

12 In his affidavit Mr Botes deposed that the appellant's solicitors had written to the respondent's solicitors requesting the respondent to discharge the mortgage. The respondent's solicitors had responded by asking what the appellant intended to do with the property and whether he intended to use the sale proceeds on assets in Australia and/or in his own name. The appellant's solicitors had replied, "Whilst your client may well be interested in the manner identified it is, with respect, none of its business".

13 The application for the Mareva order came on for hearing before Heenan J on 23 December 2003. Both parties were represented by counsel. The appellant filed no answering affidavit. Counsel for the appellant informed the Court that his client was in an invidious position and did not want to answer the allegations in the Botes affidavit because the settlement deed prevented the respondent from raising the issues Mr Botes had raised in pars 6 to 18 of his affidavit. Counsel submitted that the settlement deed released the appellant from any liability in respect of the transactions relied upon in the action and that Mr Botes was not entitled to advance the allegations made in his affidavit nor to press for the relief sought. Counsel submitted that instead of dealing with the application for the Mareva order the Court should give directions for hearing as a preliminary matter the issue whether Mr Botes could rely on the allegations made by him in his affidavit.

14 Heenan J declined to accede to that submission. His Honour pointed out that there was no evidence of the terms of the settlement deed and if the matters asserted by counsel for the appellant were not established then the affidavit of Mr Botes was not answered.

15 Heenan J said that he was left with the uncontradicted affidavit of Mr Botes that satisfied him that there was a prima facie risk of dissipation of assets. His Honour said there may be an answer which can refute that inference and so he determined to grant limited and temporary relief. His Honour granted the order restraining the appellant from disposing of or dealing with his property in Western Australia, subject to certain exceptions and provisos, and granted liberty to any party to apply for a variation or discharge of the injunction.

Appellant applies to set aside Mareva order

16 The appellant applied by chamber summons dated 24 December 2003 to set aside the orders made by Heenan J on 23 December. The application was supported by an affidavit sworn by the appellant on 24 December 2003.

17 This affidavit relevantly deals with two matters. First, the appellant deposes that in or about mid August 2001 the respondent made a number of allegations against him relating to his conduct as a director of the respondent (the Allegations). The appellant said he denied and continues to deny all of those allegations. The appellant deposed that he entered into the settlement deed with the respondent and others, dated 21 August 2001, a copy of which is annexed to his affidavit.

18 Schedule 1 of the settlement deed sets out the Allegations. The appellant deposes that the allegations made by Mr Botes in pars 6 to 18 of his affidavit relate to the same issues referred to in schedule 1 of the settlement deed, that is the Allegations.

19 Secondly, the appellant refers to two property transactions.

20 The first property transaction was that the appellant had entered into a contract for the sale of the house and land owned solely by him at Melville Beach Road for approximately $1.5 million. That property was encumbered by several charges, including the mortgage to the respondent who was notified of the proposed sale in order that arrangements could be made for the discharge of its mortgage. The completion of the sale of the Melville Beach Road property was an event for which the interim Mareva order made provision in the sense that the distribution of the proceeds of sale in a manner which would effect the discharge of secured liabilities and other proper expenses of the sale, certain other incidental expenses, and the preservation of the balance in a fund under the control of the appellant but subject to the Mareva order could all occur.

21 The second transaction was the purchase of a replacement property for a price of approximately $928,000 from the proceeds of the sale of the Melville Beach Road property after the discharge of the secured liability and other incidental expenses. A contract for the purchase of that property was executed. The purchaser of that property named on the contract was the appellant's wife or her nominee. The affidavit deposes that it was his intention, if permitted, to purchase the second property in the joint names of himself and his wife and for them to be registered as the sole proprietors as joint tenants. The whole of the purchase price for that second property was to be supplied by the balance of the funds emanating from the sale of the Melville Beach Road property. That would require the use of the funds that were to be kept in a holding account in the name of the appellant under the terms of the Mareva order and hence the application for a variation of the Mareva order.

22 That application came before Heenan J on 13 January 2004. Both parties were represented by counsel who made oral submissions.

23 One of the reasons relied upon by the appellant in support of the application for the discharge of the order on that occasion was that the appellant had entered into the two property transactions and that the completion of the second of those could not occur while the Mareva order stood in its original terms.

24 Heenan J refused to grant any variation to the order that would permit the completion of the purchase of the second property in any manner that utilised the net proceeds of the sale of the Melville Beach Road property. His Honour considered that the purchase of the second property for $900,000 from the proceeds of the sale of the Melville Beach Road property would involve use of the personal assets or property of the appellant in a manner which would convert so much of the property or money as was to be utilised into an asset jointly owned by the appellant and his wife, and hence would be a disposition by him of a portion of his previous sole estate and interest in that property. As such, it had the potential to effect a reduction in the assets of the appellant that might be available to satisfy any eventual judgment in favour of the respondent in these proceedings.

25 While making that ruling, Heenan J deferred any immediate determination of one of the other grounds upon which the appellant sought the discharge or variation of the Mareva order. It was then proposed that those issues could be brought on for hearing at a special appointment with written submissions from the parties about a fortnight or so later.

26 On 13 January 2004 the appellant's solicitors wrote to the Court referring to the proceedings heard by Heenan J earlier the same day, and to his Honour's "request that the parties provide him with further submissions and arguments about the admissibility of allegations contained in the Botes affidavit". The appellant's solicitors requested that pursuant to the liberty to apply granted on 23 December 2003, the matter be relisted for further hearing. The letter went on to say:

"The urgency is, until the Court decides the admissibility dispute as above and therefore whether the Mareva injunction granted on 23/12/03 and varied on 13/1/04 should continue, our client is not in a position to complete settlement of the purchase of property ..."

27 The application to vary or discharge the Mareva order came on for hearing before Heenan J on 20 January 2004.

28 In his reasons for decision of 20 January 2004 Heenan J found that there was a strong arguable case that the completion of the purchase of the second property by utilising the sum of $900,000, being the proceeds of the sale of the Melville Beach Road property after the satisfaction of secured liabilities and other proper expenses, would represent a transaction which effectively renders more difficult or jeopardises the recovery of any judgment which the respondents may eventually recover against the appellant. His Honour held that it was, in effect, the voluntary disposition of a joint interest in this new property to the appellant's wife who, once becoming registered as a joint tenant, would have an indefeasible interest in that property. She is not a party to the present action and any judgment recovered in the present action would not be a judgment enforceable against her. His Honour held that such a disposition of a joint interest would represent a diminution in the estate of the party making it which may give rise to an inference which would support the grant of Mareva relief. His Honour held that such an inference was justified in this case and that this transaction is by itself sufficient to warrant the continuation of the Mareva order.

29 Heenan J then went on to consider the appellant's contention that the Mareva order should never have been granted because reliance could never be placed upon the contents of the affidavit of Mr Botes. His Honour found that the affidavit is complemented and reinforced by the events relating to the sale and purchase of the two properties. Either alone or in combination with each other, those two sets of events were sufficient to sustain the Mareva order and to prevent the grant of a variation as sought by the appellant.

30 Nevertheless, his Honour went on to address the substance of the objections which were made by the appellant to the use of the Botes affidavit. His Honour noted that in pars 6 to 18 of the Botes affidavit, there is a series of matters sworn to relating to the conduct of Mr Mostert on previous occasions in 1999 which, as a matter of inference, lead to a conclusion that unless restrained there is a risk that he may deal with his assets in such a fashion as to obstruct, render more difficult or jeopardise the enforcement of any judgment which may eventually be obtained by the respondent in these proceedings.

31 The objection by the appellant was that the content of the Botes affidavit is not admissible because there are covenants in the settlement deed that prevent its use for this or any other similar purpose.

32 Heenan J referred to the settlement deed. His Honour said that it is a deed that purports to settle a dispute between the respondent and the appellant arising out of allegations set out in schedule 1 of the deed (the Allegations). His Honour found those allegations are essentially, although not in every respect identical with, the allegations contained in the Botes affidavit relied upon to support the inference of the existence of a risk of dealing with the appellant's assets in a manner that may defeat or obstruct any eventual judgment in these proceedings.

33 Heenan J said that the appellant submitted that the overall effect of the deed is to discharge the appellant from any liability whatsoever in respect of the Allegations and to provide an answer which may be pleaded as a complete bar to any proceedings brought in breach of the terms of the deed, that is any proceeding brought to advance, vindicate or enforce claims in respect of which the identified allegations were made. Further, the confidentiality provision contained in cl 11 of the deed was relied upon by the appellant for a contractual obligation restraining any use of the deed by the respondent and, in particular, the use employed by the narration of the allegations in the Botes affidavit.

34 His Honour found that there was nothing in the deed insofar as it contains provisions releasing the appellant from liability said to arise out of the Allegations that prevents the use of the Botes affidavit on the Mareva application.

35 His Honour then considered the confidentiality provisions in the deed. His Honour said that because of their precise terms there is nothing that obliges the respondent to keep confidential anything other than the terms of the deed. However, without finally determining the matter, his Honour was prepared to read the terms of the deed as including the Allegations, and hence the appellant contends that the use of the Allegations by the repetition of the substance of them in the Botes affidavit constitutes a breach of the confidentiality provision in the deed. His Honour rejected that submission even if, as a matter of construction, that were to be the effect of the deed. His Honour held that a true construction of the deed does not produce any such result because one of the exceptions to the obligation of confidentiality is that a party may disclose the terms of the deed to comply with any law or requirement of any court. That seemed to his Honour to mean that a party to the deed may disclose part or all of its terms if that is material to the disposition of some matter in issue before the Court, either as a matter of final or interlocutory relief. Further, his Honour held there were more fundamental reasons for concluding that such a confidentiality provision cannot prevent the use of the allegations in the Botes affidavit in support of the application for Mareva relief. The provisions are contractual provisions that have the effect of excluding the jurisdiction of a court or preventing a person or a party from adducing evidence to a court or preventing a party from prosecuting or starting a prosecution or from giving evidence at trial. Such provisions are unenforceable because they infringe the rules of public policy.

36 The draft notice of appeal contains 17 grounds of appeal. Many of those grounds are repetitive or overlapping. The proposed grounds of appeal, as explained or elaborated upon in oral argument, may be summarised as follows:

1. The Court erred in finding that the sale of the appellant's Melville Beach Road property and the use of the proceeds, or part of the proceeds, to purchase a property in the joint names of the appellant and his wife was sufficient to satisfy the Court that a danger exists of the appellant dissipating assets, other than in the ordinary course, so as to deprive the respondent of the fruits of any judgment it may obtain (grounds 1 and 17).

2. The Court erred in finding pars 6 to 18 of the Botes affidavit were admissible and remain admissible and could be relied upon by the respondent in support of its application for a Mareva order (grounds 2, 4 to 15).

3. The Court erred in finding that the relevant allegations in the Botes affidavit are sufficient, either alone or in combination with the sale of the Melville Beach Road property, to justify the continuation of the Mareva order (ground 3).

4. The Court erred by failing to consider whether the claims by the respondent constituted a good arguable case (ground 16).

5. The respondent delayed in applying for the Mareva order.

37 Heenan J held that the use by the appellant of the funds remaining from the sale of the Melville Beach Road property, after discharge of encumbrances and other proper payments, for the purchase of a property in the joint names of himself and his wife represented a diminution or disposal of the assets of the appellant. On the evidence before his honour that finding is plainly correct.

38 Heenan J held that such a diminution in the assets of a party, depending upon the context, might give rise to an inference that would support the grant of Mareva relief and in the present situation such an inference is justified.

39 In my view, his Honour was right to make that finding. The appellant was not disposing of assets in the ordinary course of business or the conduct of his affairs. In his affidavit of 24 December 2003 the appellant offers no explanation for the second property being purchased in the joint names of himself and his wife from the proceeds of the sale of the Melville Beach Road property owned solely by the appellant. In those circumstances it was open to the primary judge to draw the inference that he did. His Honour made no error in doing so.

40 These proposed grounds of appeal collectively contend that pars 6 to 18 of the Botes affidavit are inadmissible in these proceedings and/or cannot be relied upon by the respondent in support of its application for a Mareva order. The appellant contends that the terms of the settlement deed have that effect. The appellant relies upon the release in the settlement deed and the confidentiality clause of the deed. I will consider each in turn.

41 Clause 3.1 of the deed provides, in effect, that the plaintiff releases the appellant from all claims in respect of or arising out of any of the Allegations. The Allegations means the allegations and assertions set out in schedule 1.

42 The extent of that release is defined in cl 1.3. Inserting the appellant and the respondent in the appropriate places in par (a) of cl 1.3 provides as follows:

"Where [the respondent] releases [the appellant] from claims in respect of a matter or thing, [the respondent] will be deemed to have released and forever discharged [the appellant] from any or all claims, actions, disputes, differences, demands, proceedings, accounts, interest, costs (whether or not the subject of a court order), expenses and liabilities of whatever nature and however arising which [the respondent] may now have or at any time thereafter might have or, but for the execution of this Deed, might have had against [the appellant] arising out of or in any way connected with or incidental to that matter or thing."

43 Put in short form, the release by the respondent is that the respondent has released and discharged the appellant from any and all claims, etcetera, which the respondent may now have or at any time might have or, but for the execution of the deed, might have had against the appellant arising out of or in any way connected with or incidental to the Allegations. The words "claims, actions, disputes, [differences, demands, proceedings, accounts, interest, costs (whether or not the subject of a court order), expenses and liabilities]." and the words "arising out of or any way connected with or incidental to" are potentially of wide application. However, like all words they must take their meaning from their context. Clause 3.1 provides that the respondent will release the appellant from all claims in respect of or arising out of the Allegations. Clause 1.3(a) defines the extent of the release to be that the respondent will be deemed to have released and forever discharged the appellant from any and all claims, etcetera. Clauses 1.3 and 1.3(a) are concerned with a release and discharge. A release is the discharge or extinguishment of a right of action that a person has or claims to have against another by an unequivocal statement that the right of action no longer exists: Laws of Australia, 7.8, 25.

44 On its proper construction, cl 3.1 of the deed, read with cl 1.3(a), does not prevent the respondent from asserting the truth of the Allegations. The notion of one party releasing and discharging a second party from claims, actions, etcetera, is different from the notion of the second party undertaking a contractual obligation not to assert the truth of factual allegations. It would require clear or express words preventing the respondent from asserting the truth of the Allegations before the release and discharge provisions of the deed would be so construed. Clauses 3.1 and 1.3(a) do not contain such language.

45 Clause 11.1 of the settlement deed provides that, subject to cl 11.2, each party will keep the terms of the settlement deed confidential. The exception in cl 11.2 is that a party may disclose the terms of the deed to any professional advisers, on receipt of an undertaking from that person to keep the terms confidential; and to comply with any law or requirement of any court.

46 As a matter of construction, cl 11.1 does not preclude the respondent from repeating or asserting the truth of the Allegations. The Allegations are referred to in the deed, but they cannot properly be described as a term of the deed.

47 For the reasons stated above, the settlement deed does not contain any contractual provision preventing the respondent from referring to or asserting the truth of the Allegations in these proceedings. Paragraphs 6 to 18 of the Botes affidavit are admissible in these proceedings and may be relied upon by the respondent in support of its application for a Mareva order. Proposed grounds 2 and 4 to 15 are not made out.

48 This ground is that the Court erred in finding that the relevant allegations in the Botes affidavit are sufficient, either alone or in combination with the sale of the Melville Beach Road property, to justify the continuation of the Mareva order.

49 In pars 6 to 18 of the Botes affidavit, Mr Botes deposes to matters that give rise to an inference of dishonest conduct by the appellant in the past. I have already found that it was open to the primary judge to find that the events relating to the sale and purchase of the Melville Beach Road property and the replacement property are sufficient to sustain the Mareva order. It follows that it was open to the primary judge to find that the evidence of the events deposed to by Mr Botes in pars 6 to 18 of the Botes affidavit in combination with the events relating to the sale and purchase of the Melville Beach Road property and the replacement property are in combination sufficient to sustain the Mareva order and to refuse the variation of the order as sought by the appellant. Ground 3 of the appeal is not made out.

50 This ground is that the Court erred in failing to consider whether the claims by the respondent in these proceedings constituted a good arguable case. In oral argument the appellant took the argument further and submitted that the primary judge should have found on the evidence before the Court that the respondent had not made out a good arguable case.

51 To obtain a Mareva order, subject to certain exceptions not presently relevant, the plaintiff must satisfy the Court that he has a vested and accrued cause of action against the defendant and that the cause of action is sufficiently arguable to justify the granting of interlocutory relief. The respondent submitted that at the hearing giving rise to the order appealed from, the appellant did not raise the question of whether the respondent had made out a good arguable case against the appellant. The respondent submitted that the appellant should not be permitted to rely on this ground of appeal.

52 The appeal is by way of rehearing. There is power to correct an error of the kind asserted in this proposed ground of appeal, if it is an error. But the existence of the power does not mean that the appellant is entitled to have it exercised. Two principles apply.

53 First, where a point is not taken in the court below and evidence could have been given there which, by any possibility, could have prevented the point from succeeding, it cannot be taken afterwards: Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 at 438; Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7 - 8; Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 497; Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645; Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11 at [14]; Goldspar Australia Pty Ltd v Council of the City of Sydney [2001] NSWCA 246 at [22]. Similarly, the point cannot afterwards be taken where, if the point had been raised, the respondent might have conducted the case differently at trial: Multicon Engineering at 645; Chilcotin at [14]; Goldspar Australia at [22].

54 The second principle is that generally parties must be bound by the course they adopted at the trial: Metwally v University of Wollongong (No 2) (1985) 59 ALJR 481 at 483; Multicon Engineering at 645; Chilcotin at [15]. At least in part this principle is founded on public policy considerations favouring the finality of litigation and it may be that the appellant will not be permitted to make a new case on appeal even if the point is unaffected by possible further evidence or the way the opposing party would have conducted the case at trial: Chilcotin at [15]. The principle may come into play not only when the course taken at the trial was deliberate, but also if the appellant's conduct at the trial was affected by inadvertence: Chilcotin at [15].

55 In Multicon Engineering Mason P, with whom Gleeson CJ and Priestley JA agreed, said at 645 that a party does not have a right to insist that a new point may be decided on appeal simply because all of the facts have been established beyond controversy or the point is one of construction or of law, even constitutional law. That is because it remains a question of whether the appellate court "may find it expedient and in the interests of justice to entertain the point": Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 497. Whether the appellant should be permitted to assert the error on appeal therefore requires attention to the conduct of the proceedings below

56 The respondent applied for a Mareva order against the appellant by chamber summons on 2 December 2003. The application came on for hearing before Heenan J on 23 December 2003. The appellant was represented by counsel. After hearing from counsel, Heenan J granted the Mareva order on an interim basis and granted liberty to any party affected to apply for variation or discharge of the injunctions.

57 The appellant elected not to appeal against the order made by Heenan J on 23 December 2003. The appellant made a fresh application by chamber summons on 24 December 2003 to set aside the orders made by Heenan J on 23 December 2003.

58 The appellant's application came on for hearing before Heenan J on 13 January 2004. Counsel for the appellant did not raise the question of whether the respondent had made out a good arguable case against the appellant. The transcript of the proceedings before Heenan J on 13 January 2004 discloses that counsel for the appellant informed the Court:

"The issue that we focus upon ... is whether there is sufficient evidence of an intended dissipation [of assets by the appellant] to warrant the grant of what is called a Mareva injunction and my submission ... is there is not." (Transcript page 417)

"Because other issues relevant to the grant or maintaining of the Mareva injunction include whether there is a prima facie case established, which my friend hasn't challenged, and so I will say no more about that because I take it implicitly by the failure to refer to that issue that it's not contended that we have not established a prima facie case. " (Transcript page 424)

60 In reply, counsel for the appellant said that he did not have anything to say in response (Transcript page 428).

61 On 14 January 2004 Heenan J made some minor variations to the Mareva order that are not now relevant, but refused to discharge the order or vary it so as to permit the appellant to proceed with the settlement of the purchase of the replacement property using the funds from the sale of the Melville Beach Road property.

62 On 13 January 2004 Heenan J did not decide whether the allegations in the Botes affidavit concerning dishonest conduct by the appellant were admissible or could be relied upon by the respondent in support of its application for the grant or continuation of the Mareva order. His Honour indicated that the parties should file written submissions on that issue and it should be decided at a later time.

63 I have previously referred to a letter of the appellant's solicitors addressed to the court, dated 13 January 2004 and referring to proceedings before Heenan J of the same date and to his Honour's "request that the parties provide him with further submissions and arguments about the admissibility of allegations contained in the Botes affidavit". The appellant's solicitors requested that pursuant to the liberty to apply granted on 23 December 2003, the matter be relisted for further hearing. The letter went on to say:

"The urgency is, until the Court decides the admissibility dispute as above and therefore whether the Mareva injunction granted on 23/12/03 and varied on 13/1/04 should continue, our client is not in a position to complete settlement of the purchase of property ..."

64 That is how the matter came on for hearing before Heenan J on 20 January 2004. The appellant filed written submissions dated 19 January 2004.

"At issue is the construction and consequences of the settlement deed between [the respondent] and [the appellant] dated 31/8/01".

66 The written submissions did not raise the issue of whether the respondent had made out a good arguable case against the appellant.

67 The respondent filed an affidavit sworn by Dirk Maurice Fairweather, on 20 January 2004, and an outline of submissions. Neither the affidavit nor the outline of submissions addressed the issue of the respondent's cause of action against the appellant and whether the respondent had made out a good arguable case against the appellant.

68 The transcript of proceedings before Heenan J on 20 January 2004 shows that the question of whether the respondent had made out a good arguable case that it had a good cause of action against the appellant was not raised at the hearing. The appellant concedes that point in its supplementary submissions filed pursuant to this appeal and dated 26 July 2004. In those submissions, the appellant states that at the hearing on 20 January 2004 the appellant took issue with the admissibility of the Botes affidavit.

69 In the circumstances that I have outlined, the appellant should not be permitted to raise on appeal the question of whether the primary judge erred in not considering whether the respondent had made out a good arguable case against the appellant, or in failing to find that the respondent had not made out a good arguable case. That matter was in issue before the primary judge on 23 December 2003. It was a prerequisite to the making of the Mareva order that the Court be satisfied that the respondent had made out a good arguable case. The primary judge granted the Mareva order. The appellant elected not to appeal against that order.

70 The appellant then made two applications to vary or discharge the Mareva order. The application that led to the making of the order the subject of this appeal was made expressly on the basis that the issue was the admissibility of the Botes affidavit. The respondent filed an affidavit and an outline of submissions in opposition to the application of the appellant heard on 20 January 2004. The respondent did not address the question of a good arguable case. If the issue had been raised before Heenan J on 20 January 2004, the respondent might have tendered further relevant evidence on the point. It is too late to raise the point on appeal. The appellant must be bound by the course he adopted in not appealing against the Mareva order made on 23 December 2003 and applying to

vary or discharge it on grounds other than that which is sought to be raised by the proposed ground of appeal.

71 On the hearing of the appeal the appellant submitted that the respondent did not proceed diligently or expeditiously in applying for the Mareva order. The appellant submitted that, except for the fact of the appellant selling the Melville Beach Road property and using the net proceeds to purchase the replacement property, the respondent relied on allegations all of which it knew prior to 31 August 2001.

72 There is no merit in that submission. The appellant dissipating his assets by the sale of the Melville Beach Road property and the purchase of the replacement property in the joint names of himself and his wife occasioned the application for the Mareva order. It is not alleged by the appellant that there was any relevant delay by the respondent in applying for the Mareva order after the respondent had become aware of the appellant's intention to use the net proceeds from the sale of the Melville Beach Road property to purchase a replacement property in the joint names of himself and his wife.

73 The decision sought to be appealed from is not attended with sufficient doubt to justify the grant of leave to appeal. Furthermore, proposed ground of appeal 16 raises points not taken below and which the appellant should not be allowed to raise on appeal. For those reasons, I would refuse leave to appeal.

74 The application for an extension of time within which to appeal must be dismissed because there is no appeal as of right against the order of 20 January 2004.

75 JENKINS J: I have had the advantage of reading, in draft, the reasons to be published by Le Miere J. I agree with those reasons and have nothing to add.

Mostert v Durban Roodepoort Deep, Ltd [2004] WASCA 309

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (112 paragraphs)

Mostert v Durban Roodepoort Deep, Ltd [2004] WASCA 309 (22 December 2004)

Parties

Legislation Cited (1)

Cases Cited (13)