Campbell & Ors v Rivett & Ors - [2005] SADC 84

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CAMPBELL & ORS v RIVETT & ORS
Judgment of His Honour Judge Lee
22 September 2005
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - UNDERTAKING AS TO DAMAGES
Application by first defendant for order discharging or varying Mareva injunction – Mareva injunction initially made by consent and endorsed with usual undertaking by plaintiffs as to damages – plaintiffs did not and do not have financial capacity to satisfy a judgment that they pay damages to first defendant in accordance with their undertaking – whether plaintiffs’ lack of financial capacity should lead to a discharge or variation of injunction – factors and principles discussed – application dismissed.
Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249; Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1991) 56 SASR 515; Allen v Jambo Holdings Ltd (1980) 1 WLR 1252; Szentessy v Woo Ran (Australia) Pty Ltd (1985) 64 ACTR 98, considered.

PROCEDURE - COSTS - SECURITY FOR COSTS
Application by first and second defendants for security for costs against third plaintiff – third plaintiff an impecunious corporation – first and second plaintiffs also impecunious – defendants rely upon s 1335(1) of Corporations Law – protracted interlocutory history – delay in bringing application – other factors discussed – application dismissed.
Rule 97.01; Corporations Law s 1335(1), referred to.
Ariss v Express Interiors Pty Ltd (in liqu) (1996) 2 VR 507; Stack v Brisbane City Council (1996) 71 FCR 523; Southern Cross Exploration v Fire and All Risks Insurance (1985) 1 NSWLR 114; Buckley v Bennell Design and Constructions (1974) 1 ACLR 301; Octocane v SRJ Property Development (1999) 74SASR 471; Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564, considered.

CAMPBELL & ORS v RIVETT & ORS
[2005] SADC 84
Introduction

Two separate matters are before me for determination. The first concerns an application by the first defendant to discharge a Mareva injunction made earlier against him with respect to property in Queensland. The second concerns an appeal by the first and second defendants against the dismissal by a Master of their application against the third plaintiff for security for costs.
The action within which the matters arise, which I will call the principal action, concerns an allegation by the first and second plaintiffs that they were induced to enter into a contract to buy a service station business in Mt Gambier in March 1999 by the deceptive and misleading statements of the first defendant made on his own account and for his company, the second defendant. The third plaintiff was incorporated to act as trustee of a family trust and to be the trading entity of the first and second plaintiffs. The losses claimed include the difference between the $200,000 purchase price and the true value of the business, and the trading losses of the business since 1 July 1999. The third defendant is an accountancy firm,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Campbell & Ors v Rivett & Ors

Details

AGLC: Campbell v Rivett [2005] SADC 84
Case: [2005] SADC 84
Decision Date: 22 September 2005

CaseChat Overview and Summary

The case before the court involved an application by the first defendant for an order discharging or varying a Mareva injunction. The injunction had initially been made by consent and was endorsed with the usual undertaking by the plaintiffs as to damages. The crux of the dispute was whether the plaintiffs' lack of financial capacity to satisfy a judgment that they pay damages to the first defendant, in accordance with their undertaking, should lead to the discharge or variation of the injunction. The court was required to balance the principles and factors relevant to such an application.

The court examined the established legal framework for Mareva injunctions, noting the principles that guide the granting and maintenance of such injunctions. It highlighted that while the undertaking as to damages is a crucial element, the financial capacity of the plaintiffs to meet that undertaking is a significant factor to consider. The court discussed the balance between the need to protect the defendant's interests and the equitable considerations that underpin the granting of such injunctions. It considered the potential for injustice that could result from enforcing the injunction against plaintiffs who lack the financial means to satisfy the damages undertaking.

The court concluded that, despite the plaintiffs' lack of financial capacity to satisfy the damages undertaking, the principles of equity and the protection of the defendant's rights outweighed the need to discharge or vary the injunction. The court found that the plaintiffs' lack of financial capacity did not, in itself, justify the discharge or variation of the injunction. The application was dismissed, and the injunction remained in place, pending further orders.

Orders