Beneficial Finance Corporation Ltd v Miraloma Pty Ltd

[1990] FCA 844

FEDERAL COURT OF AUSTRALIA )

-	IN THE
SOUTH AUSTRALIA DISTRICT REGISTRY j No. SG20 of 1990

)

GENERAL DIVISION	)
B E T W E E N : BENEFICIAL FINANCE CORPORATION
-- LIMITED

1. First Awwlicant

   SOUTH STATE FINANCE PTY.

-- LIMITED

Second Applicant

- an13 -

- MIRALOMA PTY. LIMITED

First Respondent

DEBASCO PTY. LIMITED

Second Respondent

CANEI3AP HOLDINGS PTY. LIMITED

Third Respondent

DENIS WILLIAM PIDCOCK

Fourth Respondent I

MICHAEL EDWARD GRACE

Fifth Respondent 1

REASONS FOR JUDGMENT

deficient, so much so that it ought to be struck out. I

- CORAM : VON DOUSSA J.

3 APRIL 1990

This motion commenced this morning as one for summary judgment. Mr Clayton, who appeared for the respondents, announced at the outset that one of the arguments he would advance would be to the effect that the statement of claim was

directed that that aspect of the case be first determined.
Argument ensued.

Mr Clayton raised a number of points regarding the adequacy of the statement of claim in support of his argument that no reasonable cause of action is disclosed by it. That argument depended in part upon the nature of the pleadings and in part upon the evidence that is before the Court which is to be treated as part of the background inf01:mation against which the pleadings are to be understood.

Having heard the argument on that aspect of the case from both counsel, I was satisfied that Mr Clayton had identified a number of issues that were clearly arguable, from the defendants1 point of view, as to the inadequacy of the statement of claim, and correspondingly as to there being arguable grounds of defence.

An application for summary juclgment must be approached with particular care. The Court should only exercise that power in very clear cases. Where the respondent to the proceedings establishes that it has a possible defence which is arguable in

law or in fact, the proper course usually is to allow the matter	to proceed to trial.
By reason of the matters identified by M Clayton concerning the statement of claim, I think that he has made it clear that it would not be a proper case for the Court to proceed to order summary judgment. Without going any further into the
meritsr it seems to me that Mr Clayton identified at least arguable matters and, for that reason, the case should proceed to

Having intimated my view on that issue, two applications were made, both by Mr Clayton. The first was that the interim injunction should be discharged, and the second was that the deficiencies in the statement of claim were more than merely arguable, in fact were so great, that some action should be taken procedurally to strike out all or part of the applicantsr

I will deal with those issues in the reverse order. In

my view, whilst Mr Clayton has identified some areas in the statement of claim upon which the applicants could possibly fail, and has done so to a sufficient degree to defeat the application for summary judgment, he has not so clearly demonstrated deficiencies in the pleadings such that I should, as a procedural step, strike out all or part of the statement of claim.

The applicants remain firm in their resolve that they have pleaded good causes of action.	They are causes of action
that raise complex issues. If they wish to pursue them it seems

to me the pleadings as they presently stand sufficiently identify those issues for the matter to proceed to trial. In saying that, I do not pass any view on whether the particulars that are given in relation to some of the aspects of the statement of claim are adequate, in particular whether the statement of claim Complies with the pleading rules as to fraud. I decline,

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therefore, the procedural application by Mr Clayton to strike
out any part of the applicantsr pleadings.

The other matter is the question of the injunction. The injunction presently in place is an interim one. The respondents are entitled to apply to have that discharged, as they have now done, and upon the rehearing of the application the onus is upon the applicants to establish that there should be an injunctive order remaining in place until trial. In my view, there are serious issues raised by the pleadings and the affidavits sufficient to support the grant of an interlocutory injunction.

I do not propose to re-canvass the matters that we have discussed in argument over the pleadings. I am satisfied that there is an arguable case from the applicants' point of view that Miraloma Pty. Limited has contravened s.52 of the Trade Practices - 1974 in the ways alleged in the statement of claim and that Act the other respondents were parties involved in that contravention. The real issue is whether, on the balance of convenience, an interlocutory injunction ought be put in place.

The respondents oppose the making of an interlocutory injunction on the grounds that the imposition of injunctions Would prejudice Mr Pidcock and Mr Grace, first as it will be seen as an imputation against their reputations in the financial circles in which they operate as fraud is alleged and, secondly, as it would prejudice them in negotiations with other parties in relation to issues which arise indirectly out of the same facts

the present proceedings.

As an alternative to injunctions they offer undertakings

in terms of the injunctions that would be made. Those

are offered on behalf of both Mr Pidcock and MK Grace and the companies of which they are directors, namely, the second and third respondents. It is a serious step to impose even an interlocutory injunction of the kind sought in this case upon individuals who fulfil the roles which Mr Grace and Mr

pidcock do in other respects. I am fully conscious of that.

On the other hand, the conduct that is alleged has serious implications. The fact of the conduct in its broad form is not denied by Mr Pidcock, although he puts forward an alternative explanation for why it occurred which puts a quite different complexion on some aspects of it from that which is alleged by the applicants. Also the amounts of money involved

The conduct to which I have just referred indicates that
at one point already in the matters which are the subject of

these proceedings, Messrs Pidcock and Grace may have acted

other parties who could be affected by their conduct. In those	Surreptitiously and in a way that concealed their activities from
circumstances, if the applicants are not prepared to accept the undertakings, which they are not, I think it is an appropriate case, on the balance of convenience, where injunctive orders

V.

In my view the injunctions previously in place, subject

to anything as to detail that the parties wish to raise, ought be until the trial of the action. The trial of the action

be expedited so that those injunctive reliefs can be finally determined as soon as practicable so that the parties to these proceedings, and any others that may be joined, know where they stand.

On the directions hearing I direct:

1.       The second to fifth respondents to request particulars of the statement of claim by 9 April.

2.       Applicants to give particulars and to notify any proposed amendments to the statement of claim to the respondents by 24 April 1990.

1. The second to fifth respondents to file defence and cross-claims by 1 May 1990.

2. If new parties are joined as cross-respondents by the second to fifth respondents, the second to fifth respondents are to serve the new parties as soon as possible after filing the cross-claim.

3. Applicants to file reply and defence to cross-claim by

4.00 pm on 4 May 1990.

1. Present parties to give mutual discovery by 18 May 1990.

2. I fix Tuesday, 12 June 1990 at. 10.15 am as the date of trial and I note that 12 to 15 June and 18 to 22 June are set aside.

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Liberty to apply on the directions hearing.

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I certify that this and

the preceding pages are
a true copy of the Reasons
for Judgment of Mr Justice

von Doussa.

Associate:

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counsel for the applicants	Mr S.T. Lane
solicitors for the applicants	Thomson Simmons
Counsel for the Znd, 3rd, 4th &
5th respondents	Mr D.E. Clayton
Solicitors for the Znd, 3rd, 4th
& 5th respondents	Fisher Jeffries
Date of hearing	3 April 1990

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