Blizzard v The Cape Grim Water Company Pty Ltd
[2004] TASSC 20
•19 March 2004
[2004] TASSC 20
CITATION: Blizzard v The Cape Grim Water Company Pty Ltd [2004] TASSC 20
PARTIES: BLIZZARD, Paul Geoffrey
v
THE CAPE GRIM WATER COMPANY PTY LTD
ACN 075 085 522
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 516/2003
DELIVERED ON: 19 March 2004
DELIVERED AT: Hobart
HEARING DATES: 15 March 2004
DECISION OF: Master S J Holt
CATCHWORDS:
Procedure – Tasmania – Practice under Rules of Court – Summary judgment – Leave to defend – General approach.
Supreme Court Rules 2000 (Tas) rr356 – 359.
Aust Dig Procedure [270]
REPRESENTATION:
Counsel:
Plaintiff: S R Worsley
Defendant: D Smith
Solicitors:
Plaintiff: Worsley Darcey & Associates
Defendant: Butler McIntyre & Butler
Judgment Number: [2002] TASSC 20
Number of Paragraphs: 17
Serial No 20/2004
File No 516/2003
PAUL GEOFFREY BLIZZARD v THE CAPE GRIM WATER COMPANY PTY LTD
REASONS FOR DECISION Master S J Holt
19 March 2004
The plaintiff, Paul Blizzard, was an original director of the defendant company, The Cape Grim Water Company Pty Ltd, which proposed to collect and bottle rainwater falling at Cape Grim in North West Tasmania and to market the product as the purist natural rainwater in the world. The plaintiff ceased his association with the defendant on 1 June 2001. The plaintiff’s statement of claim asserts two causes of action against the defendant. The first is contained in paragraphs 1 to 7. There it is alleged that on 1 June 2001 the defendant agreed in writing to make payments to the plaintiff “in consideration of certain services provided to the defendant” (presumably past services). Paragraph 3 of the statement of claim is as follows:
“It was a term of the Agreement that the Defendant would pay to the Plaintiff the following amounts on the following dates.
a) $2,500.00 on the 31st January 2002
b) $2,500.00 on the 31st July 2002
c) $10,000.00 on the 31st January 2003
d) $10,000 on the 31st July 2003
e) $15,000.00 on the 31st January 2004
f) $15,000 on the 31st July 2004.”
It is common ground that only the first two payments have been made.
By application filed 25 February 2004 the plaintiff seeks summary judgment pursuant to the Supreme Court Rules 2000, Part II Division 3. The amounts for which judgment is claimed are those amounts set out in subparagraphs (c), (d) and (e) of par3 of the statement of claim totalling $35,000. As Zeeman J explained in respect of the equivalent rules contained in the Rules of the Supreme Court 1965, in Triffit v Dare & Anor Tas U/R 91/1992, the provisions make it clear that a judge hearing the application may: dismiss the application; grant leave to the defendant to defend or give judgment for the plaintiff. If the defendant enters an appearance; a statement of claim which discloses a cause of action on which judgment is claimed has been served; the facts constituting the cause of action have been verified by affidavit and the deponent has bona fide stated a belief that there is no defence to the claim or the part for which judgment is sought the plaintiff will have brought himself within the Rules and the application ought not to be dismissed. If the defendant satisfies the judge that there is an issue to be tried or that there ought to be a trial for some other reason the appropriate order is that the defendant have leave to defend.
Here the defendant does not suggest that the application ought be dismissed. Although it appears that the claim for the $15,000 instalment allegedly due on 31 January 2004 involves a cause of action arising after the writ issued, no assertion has been made that that part of the claim will be defended on that basis: Coutts & Co v Duntroon Investment Corporation Ltd (1958) 1 All ER 51. The defendant, however, says that leave to defend ought be granted. The defendant says that it may have a counterclaim which can be set-off against the plaintiff’s claim under rr192(3) and 200.
Before turning to the evidence it is useful to set out the guiding principles upon which an application for summary judgment is to be approached.
Where the application is to prevent the continuance of the plaintiff’s action it must be very clear that the claim is groundless in order to justify summary intervention preventing the plaintiff from submitting his case for determination in the ordinary way before a judge or jury: Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) & Ors(1964) 112 CLR 125 at 129; Webster & Anor v Lampard (1993) 177 CLR 598 at 602 and Agar v Hyde (2000) 201 CLR 552 at 575 and 576.
Similarly where a plaintiff applies for summary judgment and a defendant seeks leave to defend, leave should only be withheld where there can be no doubt that the plaintiff is entitled to judgment: Jones v Stone [1894] AC 122 at 124; Jacobs v Booth’s Distillery Co (1901) 85 LT 262; Clarke & Anor v The Union Bank of Australia Ltd (1917) 23 CLR 5 at 8; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 at 333 and 334; Theseus Exploration NL v Foyster (1972) 126 CLR 507 at 514 and Fancourt v Mercantile Credits Ltd (1980 – 1982) 154 CLR 87 at 99.
Where there is a plausible counterclaim for damages which can be set-off against the plaintiff’s claim leave to defend should be given as to such part of the claim as might be extinguished if the set-off succeeds: Sheppards & Co v Wilkinson & Jarvis (1889) 6 TLR 13; Morgan & Son Ltd v S Martin Johnson & Co Ltd (1948) 2 ALL ER 196 at 200 and The State Bank of Victoria v Parry (1989) WAR 240 at 246.
Where the facts and matters set out do not go so far as to show a good defence either directly or by the setting-off of a counterclaim, but there are sufficient facts and matters put forward to lead to an inference that the claim might be successfully defended there should be leave to defend, but in such a case consideration needs to be given to the imposition of conditions or terms such as a requirement that the money claimed by the plaintiff or part of it be paid into court: Ray v Barker (1879) 4 Ex D 279 at 283; Wallingford v Mutual Society (1880) 5 App Cas 685 at 704; and The Cloverdell Lumber Co Pty Ltd v Abbott (1924) 34 CLR 122 at 128 and 129.
Returning to the present case, the defendant does not purport to have set out sufficient facts which if established would provide a good defence. If, however, it appears that the defendant, if granted leave to defend, can mount a plausible counterclaim which might be set-off so as to extinguish the whole or part of the plaintiff’s claim I should grant leave to defend as to so much of the claim as might be extinguished by the set-off. The final form of any orders, however, would need to await submissions from counsel as to the conditions or terms, if any, upon which such leave should be granted. If, on the other hand, it does not appear that the defendant can put forward a plausible counterclaim extinguishing all or part of the plaintiff’s claim I should not grant leave to defend, but instead simply leave the defendant to commence independent proceedings against the plaintiff if and when the defendant obtains sufficient information to bring a case. In such circumstances, as I have said, there being no submission that the plaintiff’s application should be dismissed I should give summary judgment for the plaintiff.
The defendant’s foreshadowed counterclaim is for damages for breach of a restraint of trade agreement. Incorporated in the contract under which the plaintiff sues is the plaintiff’s agreement not to engage either directly or indirectly in the collection, bottling and marketing of natural rainwater in Launceston for one year; in the State of Tasmania for two years; in the States of New South Wales and Victoria for three years and in the rest of Australia for four years. There was no restraint against overseas marketing and sales.
The presentation of the evidence at the hearing took an unusual course. The affidavit relied upon by the defendant was not served until a little over an hour before the commencement of the hearing. Counsel for the plaintiff took objection and the affidavit was not read. The defendant then called the deponent of the affidavit, Mr David Duckett, a director of the defendant company and led evidence from him without objection as to the adoption of that course. Thereafter Mr Duckett was cross-examined on his evidence without objection. Mr Duckett’s evidence was to the effect that at about the time of the incorporation of the defendant company the plaintiff, Mr Blizzard had been engaged in the collection of rainwater near Cape Grim. Thereafter with the assistance of the plaintiff the defendant set about raising finance and attending to matters including the design of a brochure to enable the defendant to make a profitable business out of the collection, bottling and sale of Cape Grim rain water. In about October 2002 Mr Duckett saw a brochure at the Circular Head Council Chambers in Smithton. He kept the brochure and it was received as part of the evidence. The brochure was entitled “BLIZZARD NATURAL TASMANIAN RAINWATER". The brochure referred to “Pure and healthy, natural Tasmanian rainwater collected 15 km from Cape Grim Weather station, Woolnorth, Tasmania – measuring the world’s cleanest air”. Mr Duckett referred the brochure to the other directors of the defendant company who as a consequence decided to pay no more money to Mr Blizzard. Copies of the defendant’s brochure used to promote Cape Grim water and the defendant’s information memorandum designed to attract investors were tendered. The defendant’s material, like the “Blizzard” brochure, makes reference to the remote location of Cape Grim; the purity of the rainwater which falls there and its excellence as drinking water. This was as far as the defendant’s evidence went. There was no evidence as to:
h who produced the “Blizzard” brochure;
h whether it was produced before or after the incorporation of the defendant;
h for how long the brochure had been at the Council chambers;
h how it came to be at the Council chambers;
h whether the plaintiff had produced or marketed any bottled water in the restraint area;
h whether any bottles of “Blizzard” water had been found;
h whether any other brochures had been found;
hwhether any endeavours had been made by the plaintiff to promote bottled water or secure investment funds for the business of collecting, bottling or marketing natural rainwater; or
hwhether any loss had been suffered by the defendant.
Counsel for the defendant did not submit that the finding of the brochure at the Circular Head Council Chambers justified termination of the agreement of 1 June 2001 which provided for the payments to the plaintiff. Nor did he submit that the defendant’s obligations under the agreement including the obligation to make payments to the plaintiff had come to an end. His submission was confined to the contention that there was enough in it for the defendant to make a plausible counterclaim for damages which might be set-off against the plaintiff’s claim for the instalments due under the contract. It was submitted that the following inferences should be drawn from the evidence. Firstly, that the plaintiff was connected with the brochure found in the Council chambers; secondly, that accordingly the plaintiff was undertaking activities directly or indirectly in connection with the collection, bottling and marketing of rainwater in breach of the restraint of trade agreement and, thirdly, that some damage may have been suffered by the defendant as a result.
Counsel for the defendant referred to one decision only, namely: Australian Can Co Pty Ltd v Levin & Co Pty Ltd (supra) and in particular took me to a passage where reference was made to Ray v Barker (supra). In Ray v Barker Brett LJ said at 283:
“The defendant, however, is to have leave to defend, either if he has a good defence upon the merits, or if he discloses ‘such facts as may be deemed sufficient to entitle him to defend’. If therefore the defendant shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff’s claim, he ought not to be debarred of all power to defeat the demand made upon him …”.
In Wallingford v Mutual Society (supra), Lord Blackburn said at 704:
“There may very well be facts brought before the Judge which satisfy him that it is reasonable, sometimes without any terms and sometimes with terms, that the defendant should be able to raise this question, and fight it if he pleases, although the Judge is by no means satisfied that it does amount to a defence upon the merits. I think that when the affidavits are brought forward to raise that defence they must, if I may use the expression, condescend upon particulars. It is not enough to swear, ‘I say I owe the man nothing’. … You mush satisfy the Judge that there is reasonable ground for saying so. So again if you swear that there was fraud, that will not do. It is difficult to define it, but you must give such an extent of definite facts pointing to the fraud as to satisfy the Judge that those are facts which make it reasonable that you should be allowed to raise that defence. And in like manner as to illegality, and every other defence that might be mentioned.”
Notwithstanding the facts put forward on behalf of the defendant and the inferences which I have been invited to draw, I am satisfied that the defendant is unable to plead a satisfactory counterclaim. I infer from the lack of evidence, that the defendant has no facts to plead other than the facts which I have already mentioned. The mere finding of a brochure at the Council chambers which has some similarities to the defendant’s material and which bears the name “Blizzard” in combination with the fact that the plaintiff has some interest and experience in promoting for profit Cape Grim natural water is grossly insufficient to provide a cause of action for damages for breach of the June 2001 restraint of trade agreement.
The defendant’s director, Mr Duckett, found the brochure as long ago as October 2002 and I infer that no further evidence has been found of any breach by the plaintiff, because if it had been found I would have expected that at least some of it would have been presented on the hearing of this summary judgment application. I have no reasonable ground for thinking that the defendant either now or in the near future will be able to plead a satisfactory counterclaim and set-off. It is not surprising that no draft defence and counterclaim has been supplied to me. Unlike Ritter v Northside Enterprises Pty Ltd (1975) 132 CLR 301, this is not a case where although evidence is yet to be obtained the material facts to be alleged can be set out with particularity. If at present the defendant is in no position to plead a defence, but has reason to believe that events may happen which will afford a defence a court might adjourn a summary judgment application on appropriate conditions: Brisbane City Council v Southern Electric Authority of Queensland 42 ALJR 78. But here there was no application for an adjournment and in any event summary judgment for the plaintiff will not prevent the defendant from pursuing a claim for any damages which may have been suffered as a result of a breach of the restraint of trade agreement. Without a pleaded defence there will be no trial and granting leave to defend would accordingly be pointless.
There will be an order giving summary judgment to the plaintiff for $35,000, being the moneys specified in the statement of claim par3(c), (d) and (e).
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