Ceneavenue Pty Ltd v Martin

[2008] SASC 158

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

CENEAVENUE PTY LTD & ORS v MARTIN & ORS

[2008] SASC 158

Judgment of The Full Court

(The Honourable Justice Duggan, The Honourable Justice Debelle and The Honourable Justice Anderson)

18 June 2008

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUMMARY JUDGMENT

Appeal against order granting summary judgment – whether no reasonable basis for defending claim – relevant principles – appeal allowed – order for summary judgment set aside – application for summary judgment dismissed.

CORPORATIONS - SHARE CAPITAL - SHARES - VALUATION

Shares – proprietary company – shareholder’s agreement – shares to be valued by company’s accountant before transfer – whether implied term that valuer should act impartially – relevant principles.

Corporations Act 2001 (Cth) s 181, s 182, s 1317H; Supreme Court Rules 2006 r 119, r 232, r 233; Supreme Court Rules 1987 r 25; Supreme Court Rules 1947 O 10, O 14; Federal Court of Australia Act 1976 (Cth) s 31A; Uniform Civil Procedure Rules 1999 (Qld) r 292; Civil Procedure Rules (UK) Part 24, referred to.
Arenson v Arenson [1977] AC 405; Baber v Kenwood Manufacturing Co Ltd [1978] 1 Lloyds Rep 175; Campbell v Edwards [1976] 1 WLR 403; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; Gray v Morris [2004] 2 Qd R 118; Holt v Cox (1997) 23 ACSR 590; Swain v Hillman [2001] 1 All ER 91; Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1, applied.
Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469; Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; JT Nominees Pty Ltd v Macks (2007) 97 SASR 471, not followed.
Agar v Hyde (2000) 201 CLR 552; Australian and International Pilots Association v Qantas Airways Ltd (2006) 160 IR 1; Beevers v Port Phillip Sea Pilots Pty Ltd [2007] VSC 556; Belchier v Reynolds (1754) 3 Keny 87; 96 ER 1318; Bolton Pharmaceutical Co 100 Ltd v Doncaster Pharmaceuticals Group Ltd [2006] EWCA Civ 661; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Duke Group Ltd (in liq) v Arthur Young (White J, judgment no 2238, unreported, 20 April 1990); Ford Motor Co of Australia Ltd v Jefferson Ford Pty Ltd (2007) ATPR 42-167; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Grimwade v Beresford (1974) 9 SASR 157; Hickman & Co v Roberts [1913] AC 229; Hicks v Ruddock (2007) 156 FCR 574; Jones v Sherwood Computer Services Plc [1992] 1 WLR 277; Jewiss v Deputy Commissioner of Taxation (2006) 65 ATR 222; Lawrence v Griffiths (1987) 47 SASR 455; Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753; Leasefin Corporation Ltd v Clarke (Full Court, judgment no S3664, unreported, 16 October 1992); Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; Macro v Thompson (No 3) (1997) 2 BCLC 36; Miller v Garton Shires (a firm) [2006] EWCA Civ 1386; Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146; Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259; Rich v CGU Insurance Ltd (2005) 214 ALR 370; Sutcliffe v Thackrah [1974] AC 727; Wallingford v Mutual Society (1880) 5 App Cas 685; White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298, considered.

CENEAVENUE PTY LTD & ORS v MARTIN & ORS
[2008] SASC 158

Full Court        Duggan, Debelle and Anderson JJ

1. DUGGAN J:         I agree with the conclusion reached by Debelle J that the appeal should be allowed, that the orders made by the single judge should be set aside and that, in lieu thereof, there should be an order that the application for summary judgment be dismissed.

2. The relevant facts are set out in the reasons prepared by Debelle J.

3. I make the following comments on the issues which are of particular relevance to the question whether this was an appropriate case for summary judgment pursuant to r 232 and r 233 of the Supreme Court Civil Rules 2006.

   The allegations of bias and collusion

4. The defence of the second defendant, Gillmar Holdings Pty Ltd (“Gillmar”) and fourth defendant, Mrs Martin, asserts that Mr Andrew did not accord natural justice to Gillmar and that he was biased in carrying out the valuation of the shares pursuant to clause 2.2 of the Shareholder’s Agreement.  The relevant pleadings are as follows:

   88.As to paragraph 160 of the Statement of Claim, the second and fourth defendants:

   88.1    say that the determination by Mark Andrew is not binding;

   88.2    repeat paragraph 87 above and say that the determination was not made in accordance with the terms of the Shareholders Agreement;

   88.3    say further that it was an implied term of the Shareholders Agreement or in the alternative, and in any event, Mr Andrew was under a duty to accord natural justice to the second defendant;

   88.4   in breach of that implied term and/or in breach of his duty, Mr Andrew did not accord natural justice to the second defendant in that he:

   88.4.1.did not advise the second defendant that he was undertaking the valuation or preparing the report;

   88.4.2.did not provide the second defendant with the opportunity to make submissions;

   88.4.3.did not provide the second defendant with a copy of draft reports;

   88.4.4.received instructions and submissions from the first plaintiff and provided the first plaintiff with a copy of the draft report;

   88.5    say that Mr Andrew was biased in that:

   88.5.1.he received instructions from the first plaintiff to conduct the valuation without reference to the second defendant;

   88.5.2.he undertook his purported valuation on the basis submitted by the first plaintiff without advising the second defendant;

   88.5.3.he provided a draft report to the first plaintiff without providing a copy of that report to the second defendant;

   88.5.4.assumed that there had been misappropriations by the first defendant which would have a negative impact of the valuation, without giving the second defendant the opportunity to make submissions in relation to that assumption;

   88.5.5.he continued to act as accountant for the plaintiff companies and followed the instructions of Mr Bertram in relation thereto.

   88.6    further or in the alternative, Mr Andrew colluded with the first plaintiff, and the second defendant repeats the allegations contained in paragraph 88.5 above.

5. The judge dealt with the natural justice issue, but did not treat the allegations of bias and collusion as a separate issue.  This approach was understandable in the light of the emphasis given to the natural justice issue in submissions before him and the fact that there was some overlap between that issue and the claim of bias and collusion.

6. His Honour concluded that Mr Andrew was acting as an expert and not as an arbitrator.  Applying the authorities referred to in his reasons, he held that as Mr Andrew’s role was that of expert valuer, he was not required to observe any rules of procedural fairness when valuing the shares.

7. I respectfully agree with this conclusion.  However, it is necessary to consider, in addition, the allegations of bias and collusion and the cases referred to by Debelle J which establish that, although parties might agree to abide by a valuation by a nominated valuer, they are not bound by a valuation which is tainted by collusion or lack of impartiality on the part of the valuer.

8. It is apparent from the defence that the matters relied upon in para 88.4 to plead the denial of the natural justice argument are also pleaded in para 88.5 as part of the basis for the claim that there was bias on the part of the valuer and collusion between him and the plaintiff Ceneavenue Pty Ltd (“Ceneavenue”).  It is also pleaded that the valuer assumed there had been misappropriations by Mr Martin; a consideration which would have had a negative effect on the valuation of the shares.

9. Mr Andrew was not under a duty imposed by the rules of natural justice to consult with Mr Martin, but the fact that he did not do so in these circumstances is relied upon to support the allegations of bias and collusion.

10. The particulars of the alleged bias and collusion are brief, but it is important to bear in mind that discovery has not taken place.  There was no cross-examination by counsel for Gillmar on the affidavits filed by Ceneavenue, but cross-examination would have been restricted in the absence of discovery.

11. In Swain v Hillman[1] and Three Rivers District Council v Bank of England (No 3)[2] the House of Lords referred to the difficulties inherent in conducting mini trials in complex cases on the documents without discovery and without oral evidence.  In such cases it is appropriate for the court to consider whether, apart from the material presently before it, there is a realistic prospect that the evidence could be strengthened before trial by discovery or other means.  On the other hand, there must be some basis for pleadings which allege matters such as bias and collusion and it is not enough to hope that something might turn up. 

    [1] [2001] 1 All ER 91

    [2] [2003] 2 AC 1

12. Reference has been made to the fact that, in the present case, the valuation process was arranged between Ceneavenue and Mr Andrew.   Information relevant to the valuation was derived from sources which did not include the defendants.  The process took place in circumstances which were not made known to the defendants.

13. Although there may have been no duty to consult them, the defendants are entitled to investigate whether the valuation was carried out in an unbiased and impartial manner.  I have referred to the limited scope for cross-examination in the absence of discovery.  In my opinion these were relevant factors to be taken into account when determining whether it was appropriate to enter summary judgment on the transfer of shares issue.  In an application of this nature it is not for a defendant to call evidence for the purpose of establishing that there was a reasonable basis for defending a plaintiff’s claim.  The onus of proving the contrary is on the plaintiff.

14. I would not be prepared to say that the particulars which are pleaded in support of the claim of bias and collusion are sufficient to disclose a reasonable basis for contesting the share valuation issue.  The affidavits do not take the matter any further.  However, it is my view that there is at least a reasonable prospect that the particulars could be pleaded in more detail after discovery.  It is unnecessary to consider this aspect of the matter further because of my view on the other issues in the case.

    The Companies

15. Next there is the issue relating to the meaning of the term “the Companies” in clause 2.2.1 of the Shareholder’s Agreement.

16. The Shareholder’s Agreement states that, in the event that Mr Martin shall cease to be employed in the business, Gillmar “shall offer to sell all shares held by it in the companies to Ceneavenue”.  At the time of the agreement there were three companies in the group.  Three other companies were added to the group subsequently.  Gillmar was a shareholder in those companies.  The plaintiffs claim that the companies which were added subsequently are to be included in the reference to “the Companies” in the agreement.

17. There is no definition of the term “the Companies” in the agreement.  Mr Andrew included the additional companies for the purposes of his valuation and the shares in them are to be transferred to Ceneavenue if they come within the relevant description.  However, the defendants claim that Mr Andrew was acting contrary to the agreement by assuming that the additional companies were relevant to his calculation of the value of the business.

18. The judge pointed out in his reasons that the expressions “the Companies” and “the Business” are sometimes used interchangeably in the agreement.  He noted that “the Business” is defined as meaning “the Business of the Companies as presently conducted or as may hereafter be conducted”.  His Honour expressed the view that the inclusion of the additional companies in the phrase “the Companies” was necessary to give business efficacy to the contract.  He added that, if necessary, he would be prepared to hold that all companies are to be included in the phrase by necessary implication.

19. The judge’s construction of the contract is challenged.  The defendant Gillmar argues that the meaning of the phrase “the Companies” cannot be expanded to companies which were part of the group at the time of the execution of the agreement and that, when read as a whole, the wording of the agreement does not support the broader interpretation given to the phrase by the judge.  Further, it is argued that no such meaning can be implied, particularly where the factual context for such an implication is limited by the absence of oral evidence.

20. There is force in the reasoning of the judge.  However, the correctness of the interpretation which he has placed on the contract is not so obvious as to exclude reasonable arguments to the contrary.

21. Furthermore, I do not accept Ceneavenue’s argument that this issue can be set aside as having no practical importance for present purposes.  According to the case for Ceneavenue it would not make any difference to the calculation of the value of the shares controlled by the defendants if the companies which were added to the group were not included in the valuation.  However, this is disputed by Gillmar and it is difficult to arrive at a firm conclusion on the issue in the absence of further evidence.  In any event, there remains the important question as to whether the plaintiffs have the right to purchase the shares in those companies irrespective of their worth.

22. For these reasons I have concluded that the existence of this issue provided sufficient reason, in itself, to refuse the application for summary judgment.

    The claim for rectification

23. The defendants Gillmar and Mrs Martin have filed a defence and counterclaim.  The counterclaim includes a claim for rectification of the Shareholder’s Agreement.  The claim is based on the assertion that there was an agreement between the parties that Mr Martin would receive a profit bonus of $75,000 irrespective of the performance of the companies and that the loan under the Shareholder’s Agreement (including the $200,000 loan in relation to Wavals) would be repaid in full by the purchase of the shares in the companies by Ceneavenue.

24. For their part, the plaintiffs claim that the price of the shares to be paid by Ceneavenue should be set off against a liability of Gillmar to Ceneavenue in the amount of $1,326,885.04.

25. The application for summary judgment sought an order that the price be set off “against the liability of Gillmar to Ceneavenue in the amount of $1,326,885.04”.  The orders made by the judge were restricted to a declaration that Gillmar is liable to transfer the shares and a further order that Gillmar execute the documents to effect a transfer of them to Ceneavenue at a price of $929,475.

26. Gillmar argues that the rectification case has consequences for the operation of clause 2.2.2 of the Shareholder’s Agreement and that it is a matter which should be decided before the making of any order in relation to the transfer of the shares.  Ceneavenue argues that the rectification case does not impact on the value of the shares or any order that they should be transferred.  According to its argument, the rectification case relates only to the consequences of the transfer.

27. It is true to say that, in one sense, the rectification case gives rise to issues which are collateral to the valuation and transfer of the shares.  However, the plaintiffs claim a set off, being the difference between the balance of the share purchase loan and the market value of the shares, whereas, if the defendants’ rectification claim is accepted, the loan under the Shareholder’s Agreement would be repaid in full by the purchase of the shares by Ceneavenue.

28. The orders made by the judge on the application for summary judgment do not deal with the question whether Ceneavenue is required to pay the purchase price of $929,475 immediately upon execution of the share transfer documents.  Nor would it have been appropriate in my view, to make any such order in the light of the respective claims of the parties regarding set off and rectification.

29. Although r 233 enables summary judgment to be given on a particular issue without disposing of the claim as a whole, the rule states that such a course is discretionary.  In my view, it is inappropriate in the particular circumstances of this case to give summary judgment on the issue relating to the valuation and transfer of the shares before there has been a determination of the plaintiffs’ claim for a set off and the defendants’ claim for rectification.

    Mistakes

30. Finally, it was argued that Mr Andrew did not value the shares in accordance with the Shareholder’s Agreement.  The first limb of that argument is based on the contention of the defendants that the companies which were formed or acquired after the execution of the Shareholder’s Agreement should not have been included in the valuation.  I have already dealt with that aspect of the matter and expressed my agreement with Gillmar’s argument that this issue should not have been decided summarily.

31. The other limb of the argument is that Mr Andrew adopted an incorrect approach to determining the earnings before interest and tax (“EBIT”) of the business, in making the calculations required by clause 2.2.2 of the Agreement.  According to Ceneavenue’s outline of argument, the judge erred in finding that the selection of an appropriate EBIT was a question of judgment and therefore could not be viewed as a mistake which departed from the requirements of the Shareholder’s Agreement.

32. His Honour expressed this view in the following passage of his reasons:

    The selection of the appropriate EBIT and multiplier both involved questions of judgment and discretion.  There is nothing to suggest that Mr Andrew’s selection arrived at for the purpose of his valuation was so fundamentally wrong or unreasonable that it could vitiate the determination as not having been made in accordance with the Agreement.[3]

    [3]    Ceneavenue Pty Ltd & Ors v Martin & Ors [2007] SASC 465 at [74]

33. Mr Andrew explained in his affidavit of 24 April 2007 how he valued the shares in the companies.  He said that in valuing the business he adopted the EBIT of the group for the financial year ended 30 June 2006 as the future maintainable earnings of the group and then applied a multiplier of four to those earnings.

34. In my view, the judge was correct in describing the selection of the appropriate EBIT and multiplier as involving questions of judgment and the criticisms advanced by Gillmar on this aspect of the matter do not provide a reasonable basis for defending the plaintiffs’ claim.

    Conclusion

35. I agree with Debelle J’s analysis of the effect of r 232 and, for the reasons which I have given, I am of the view that Ceneavenue has not made out a case for summary judgment on the share transfer issue.

36. DEBELLE J:        This is an appeal against an order granting the plaintiff’s application for summary judgment. 

37. The issues concern the Renniks Group of Companies.  The following summary of the facts is taken from the reasons of the judge below.  In January 2004, the Renniks Group comprised the following companies:

    Renniks Assets Pty Ltd (“Renniks Assets”)

    Renniks Trading Pty Ltd (“Renniks Trading”)

    ACN 101163419 Pty Ltd (“Renniks Employment Old”)

    It is convenient to call these companies “the original Renniks Group”.  Four companies were later added to the group.  They are

    Wavals Trading Pty Ltd (“Wavals”)

    Renniks Exhibitions Pty Ltd (“Renniks Exhibitions”)

    Renniks Employment Services Pty Ltd (“Renniks Employment”)

    Party Hire Warehouse Pty Ltd (“Party Hire”)

    In January 2004 the plaintiff, Ceneavenue Pty Ltd (“Ceneavenue”) had acquired two thirds of the shares issued in each of the three companies in the original Renniks Group from people called Forster for a price of $2.7 million.  As Ceneavenue already held one third of the shares in each company in the original Renniks Group, Ceneavenue thereby held all of the shares in those companies.  Ceneavenue is controlled by Mr R A Bertram and his wife Mrs L G Bertram.  

1. From 16 January 2004 Andrew David Martin (“Mr Martin”) was employed as the Chief Executive Officer of the Renniks Group.  He is the first defendant in this action.  The appellant, Gillmar Holdings Pty Ltd (“Gillmar’) is the second defendant.  It is a company controlled by Mr Martin’s wife, Janine Beverley Martin (“Mrs Martin”) who is the fourth defendant.  Mrs Martin was also an employee of the Renniks Group.  The third defendant, Music Men (Aust) Pty Ltd is a company controlled by Mr and Mrs Martin.  It has no relevance for the purposes of this appeal. 

   The Shareholder’s Agreement

2. On 16 January 2004, the day on which Mr Martin was employed by the Renniks Group, an agreement was entered into between the three companies in the original Renniks Group, Ceneavenue, Gillmar and Mr Martin. The agreement is called “the Shareholder’s Agreement”.  It is alleged that, although dated 16 January 2004, it was not executed until July 2004.  It is said that in that period the parties were negotiating the terms of the agreement.   

3. The Shareholder’s Agreement defines the three companies in the original Renniks Group as “the Companies”.  Among other things, the Shareholder’s Agreement provides for the sale of 25 per cent of the shares of the companies in the original Renniks Group to Gillmar for a price of $1,137,500.  The parties agreed that the whole of the purchase price together with stamp duty on the transaction was to be advanced by Ceneavenue to Gillmar by an interest free loan.  The agreement contemplated that the loan would be repaid by deductions from dividends payable to Gillmar upon the shares in the companies.

4. Prior to the execution of the Shareholder’s Agreement, Mr and Mrs Martin had an interest in about 7.5 per cent of the shares in the original Renniks Group.  It is asserted by the appellant that the Shareholder’s Agreement dealt with the sale of those shares to Ceneavenue.  It is alleged that Mr Bertram acknowledged that interest and agreed to pay for that share and that he proposed that, instead of paying the Martins for that interest, that would be taken into account when they acquired a 25 per cent share of the companies.  Mrs Martin also alleges that Mr Bertram agreed that, if Ceneavenue purchased their 25 per cent interest, the loan for the purchase of the shares would be extinguished.   

5. The Shareholder’s Agreement provided in clause 2.2 for the terms on which Gillmar should sell the shares back to Ceneavenue if Mr Martin should cease to be employed by the Renniks Group.  Clause 2.2 provides:

   2.2     Transfer and Acquisition of Shares

   2.2.1  In the event that Martin, a key employee of [Renniks Employment Old] shall cease to be so employed for whatever reason, Gillmar shall offer to sell all shares held by it in the Companies to Ceneavenue and/or its nominee at the then “market value” thereof.

   2.2.2  For the purpose of paragraph 2.2.1, the market value of the shares shall be determined by the Accountant for the Companies for the time being and shall be fixed at the higher of:-

   2.2.2.1       actual market value;

   AND

   2.2.2.2(a)    where the EBIT of the Business shall then be One Million, Two Hundred and Fifty Thousand Dollars ($1,250,000.00) or in excess thereof, a figure calculated by reference to that price paid per share by Ceneavenue in the acquisition of the shares from the original shareholders (DARREN WAYNE FORSTER and BRIAN DAVID FORSTER and AILEEN FORSTER);

   OR

   (b)where the EBIT of the Business shall be less than One Million, Two Hundred and Fifty Thousand Dollars ($1,250,000.00), a figure calculated by reference to the price per share specified in (b) above adjusted pro rata to such EBIT figures.

   but shall not, in any event, exceed that sum represented by the price paid per share to the original shareholders by Ceneavenue multiplied by the number of shares held by Gillmar.

   2.2.3  In the event that Ceneavenue and/or its nominee does not acquire all the shares of Gillmar (whether at the price specified in paragraph 2.2.2 or otherwise), then notwithstanding any provision herein to the contrary any loan advanced by Ceneavenue (or any person, company or entity in any manner related to Cenavenue) may at the option of Gillmar remain outstanding in accordance with the terms and conditions otherwise applicable thereto and shall be repaid by Gillmar only upon:-

   2.2.3.1the sale of the shares to a third party; or

   2.2.3.2the expiration of a period of five (5) years from the cessation of the employment of Martin

   whichever shall first occur.

   Additional Companies

6. Wavals was not one of the companies in the original Renniks Group.  However, the acquisition of that company was being contemplated when the Shareholder’s Agreement was executed.  Clause 2.1.6 of the Shareholder’s Agreement provided:

   Notwithstanding any other provision of this Agreement, in the event that prior to repayment of the Purchase Price the Companies shall have acquired the of that company (sic) known as “Wavals” or its assets, Gillmar shall be required to forthwith make an immediate payment of interest upon the Loan in an amount of two hundred thousand dollars ($200,000.00) (“the Interest Payment”).

   The interest payment mentioned in clause 2.1.6 was to be advanced to Gillmar by Ceneavenue upon the same terms and conditions as the loan which enabled Gillmar to purchase shares in the companies in the original Renniks Group.

7. Wavals was acquired in about September 2004.  The acquisition was effected by Ceneavenue purchasing 75 per cent of the shares in the company and Gillmar purchasing the remaining 25 per cent.  Gillmar made no payment for the shares to Ceneavenue.  Instead, the share purchase loan was increased by a payment of $200,000 as provided in clause 2.1.6.  The total indebtedness of Gillmar was thereby increased to $1,337,500. 

8. In November 2004 Party Hire was incorporated.  Ceneavenue was allotted 75 per cent of the shares in Party Hire and Gillmar was allotted the remaining 25 per cent.  Gillmar made no payment for those shares.

9. In June 2005 Mr Martin recommended to the directors of Ceneavenue that the Renniks Group be restructured.  His proposal involved the incorporation of Renniks Employment to take over the functions previously performed by Renniks Employment Old and the establishment of Renniks Exhibitions which was to hire equipment to corporate exhibitions.  Ceneavenue accepted the recommendations and shares in those two companies were allotted to Ceneavenue and Gillmar in a same proportion as their share holdings in the other companies.  Gillmar made no payment for the shares.

10. Dividends were paid to Ceneavenue and Gillmar as shareholders in the Renniks Group.  The loan account of Gillmar was credited with dividend payments of $137,500 in the financial year ending 30 June 2005 and with an amount which has been disputed in the financial year ending 30 June 2006.  The dividends were paid in reduction of Gillmar’s loan account. 

11. The accountant for the Renniks Group was Mr M R Andrew.  The auditors of the Renniks Group were Edwards Marshall, the audit being conducted under the supervision of Mr H L McPharlin, a partner in that firm. 

    Mr Martin is Dismissed

12. On 4 October 2006 Mr Martin’s employment with the Renniks Group was terminated.  It is unnecessary to examine the detailed circumstances in which his employment was terminated.  It is alleged that he had misapplied funds of the companies. 

13. Immediately upon the termination of Mr Martin’s employment, Mr Bertram on behalf of Ceneavenue instructed Mr McPharlin to undertake an audit of the financial statements and records of the Renniks Group.  He also instructed Mr Andrew to value the market value of the shares of the companies in the Renniks Group pursuant to clause 2.2 of the Shareholder’s Agreement.  Mr Bertram had instructed Mr Andrew to value the shares having told Mr Martin that Ceneavenue would acquire Gillmar’s shareholding in the group.

    The Shares are Valued

14. On 6 October 2006, two days after the termination of Mr Martin’s employment, Mr Andrew sent a letter to Mr Karas at Lipman Karas, the solicitors for Ceneavenue.  In that letter he set out his valuation of the market value of Gillmar’s share in the Renniks Group and stated the amount due under the loan agreement by Gillmar to Ceneavenue.  That part of the letter containing the valuation of shares was in these terms:

    VALUE OF SHARES

    Pursuant to the shareholders (sic) agreement the value of the shares is the higher of market value or the price paid per share by Ceneavenue from the original shareholders.

    1)Market Value (Clause 2.2.2.1) – attached as Schedule 1 is a calculation of market value of $974,978 using an EBIT multiple of 4.  Pages offered us a multiple of 3 – 3.5 after Andrew’s indiscretions were detected.  The EBIT will most probably reduce as a result of the audit, therefore the value under this method will fall.

    2)Original Shareholder Method (Clause 2.2.2.2) – the price paid to the Forsters was $2.7M for their 2/3rds of the group.  Therefore this values the group at $4.05M and Andrew Martin’s 25% at $1,012,500.

    This Clause does not appear to require any adjustment for the excess of EBIT about $1.25M, rather it appears to be a flat figure based on the price paid to the original shareholders. 

    The letter had been sent in response to an email from the solicitors for Ceneavenue.  The email to which Mr Andrew replied has not been proved. 

15. On 4 December 2006, Mr Andrew sent to the solicitors for Ceneavenue an email stating that he intended to revise his valuation because Mr McPharlin had revised the debtors in the balance sheet which had affected his calculation of the market value of the shares in Ceneavenue.  On 7 December Mr Andrew delivered to the solicitors for Ceneavenue a revised assessment of the market value of the interest of Gillmar in the Renniks Group.  He valued it at $929,475, that is to say, $83,025 less than his valuation made on 6 October.  Mr Andrew then had the audit report from Mr McPharlin.

16. Although the original valuation was shown to the solicitors for Ceneavenue, neither Gillmar nor Mr or Mrs Martin was given an opportunity at any stage to make any representations to Mr Andrew as to how he should determine the market value of the shares. 

17. By notice in writing dated 8 December 2006 Ceneavenue sought to acquire the shares in the Renniks Group held by Gillmar and to call in the loan due by Gillmar.  The notice stated the intention of Ceneavenue to purchase the shares at a price of $929,475 on 15 December 2006, the value stated in Mr Andrew’s letter of 7 December.  Gillmar did not sell its shares in answer to that demand.

    This Action Commenced 

18. On 9 March 2007 Ceneavenue, Renniks Trading, Renniks Assets, Renniks Employment and Wavals commenced this action. In their statement of claim the plaintiffs claim that each of the defendants is liable to the Renniks Group for substantial sums of money arising out of the conduct of Mr and Mrs Martin whilst employed by the Renniks Group. Ceneavenue also claims against Gillmar and Mr Martin an amount said to be outstanding in respect of certain share purchase loans to which I shall refer in a moment. The plaintiffs claim damages against Mr and Mrs Martin for breaches of their respective employment contracts, declarations that the Martins have contravened ss 181 and 182 of the Corporations Act 2001 (Cth), orders for compensation under s 1317H of that Act, damages against Mr Martin for alleged breaches of fiduciary duties and other incidental declarations. In addition, Ceneavenue claims an order that Gillmar transfer to Ceneavenue its shares in all seven of the companies that now comprise the Renniks Group and an order that Gillmar pay Ceneavenue the sum of $397,410.04 pursuant to the Shareholder’s Agreement.

    Application for Summary Judgment

19. On 9 March 2007, the same day as the summons commencing this action was issued, the plaintiffs also applied for summary judgment seeking the following orders:

    1A declaration that Gillmar is liable to transfer its shares in the Renniks Group to Ceneavenue at a price of $929,475.

    2In order that Gillmar execute such documents as Ceneavenue may present to it to effect a transfer of its shares to Ceneavenue at a price of $929,475.

    The plaintiffs also sought summary judgment for amounts alleged to be due by Mr Martin, Gillmar, Music Men and Mrs Martin.  The application for summary judgment was for part only of the plaintiffs’ claims. 

20. Gillmar and Mrs Martin filed a defence and counter claim.  In addition, the parties filed affidavits in respect of the application for summary judgment.  The defendants filed affidavits opposing an order for summary judgment.  In that application Ceneavenue sought an order for the transfer of the shares held by Gillmar in all the companies in the Renniks Group at the price calculated in accordance with Mr Andrew’s valuation.  Ceneavenue did not seek an order for repayment of the monies advanced by a loan to Gillmar for the acquisition of the shares or for any other of the relief claimed in the statement of claim.  The resolution of the issue relating to the transfer of shares will affect the calculation of the amount of the balance of the loan said to be repayable by Gillmar to Ceneavenue.  

21. The application for summary judgment was heard by Bleby J on 13 and 14 June 2007.  On 24 December 2007 Bleby J made the following orders:

    1That Gillmar is liable to transfer its shares in Renniks Trading, Renniks Exhibitions, Renniks Assets, Renniks Employment Services, Wavals, Party Hire and Renniks Employment Old to Ceneavenue.

    2That Gillmar execute such documents as Ceneavenue may present to it to effect a transfer of the shares to Ceneavenue at the price of $929,475.

    3That Gillmar pay the costs of Ceneavenue of the application for summary judgment.

    Gillmar appeals to this court against those orders.

    Four Issues

22. For the purposes of this appeal, it is not necessary to notice every issue raised in the defence and counter-claim filed by Gillmar and Mrs Martin.  It is sufficient to note four.  The first concerned what was meant by the expression “the Companies” in clause 2.2 of the Shareholder’s Agreement.  The task imposed by clause 2.2 on the valuer was to determine the market value of the shares “in the Companies”.  The question for determination by the court is whether the expression “the Companies” was limited to the three companies in the original Renniks Group or whether it included all seven of the companies in the Group as at October 2006. 

23. Gillmar and Mrs Martin also seek rectification of the Shareholder’s Agreement alleging that it does not include two matters agreed with Ceneavenue.  The first is that Gillmar was to release an annual profit bonus of $75,000 and the second is that on the purchase of the shares by Ceneavenue the loan relating to the share purchase including the loan of $200,000 to purchase shares in Wavals would be extinguished.

24. The third question was whether Mr Andrew’s valuation had been made in accordance with the terms of the Shareholder’s Agreement.  It is alleged that he had neither properly determined market value nor the EBIT.

25. The fourth issue was whether Mr Andrew was biased and had colluded with Ceneavenue in preparing his valuation of market value and whether Gillmar had a right to be heard on the valuation of its shares.  

26. The judge identified four principle issues on the summary judgment application.  They were:

    1.Whether the accountant of the Renniks Group, in valuing the shares, was acting as a valuer or as an arbitrator.  There is no dispute that, if he was acting as arbitrator, Gillmar had a right to be heard and was not afforded that opportunity;

    2.If the accountant was acting as a valuer, whether, in the circumstances of the Shareholder’s Agreement, principles of natural justice applied such that Gillmar had a right to be heard on the valuation;

    3.If the accountant was acting as a valuer, whether the methodology he adopted can be challenged.  In particular, questions arise as to –

    (a)     the inclusion of Wavals in the valuation;

    (b)     the inclusion in the valuation of other companies added to the group after the date of the Shareholder’s Agreement; and

    (c)     whether the accountant’s determination of  EBIT and the appropriate multiplier can be questioned;

    4.Whether the right of Ceneavenue to acquire Gillmar’s shares under clause 2.2 of the Shareholder’s Agreement includes its shares in companies other than Renniks Assets, Renniks Trading and Renniks Employment Old, being the only companies comprising the Renniks Group at the date of the Shareholder’s Agreement.

    The issues in the first and second paragraphs are two aspects of the issue whether Mr Andrews was biased and had colluded with Ceneavenue and whether he was required to give notice and to hear Gillmar before making his valuation.  The issues in paragraphs 3 and 4 are two aspects of the question concerning the meaning of the expression “the Companies” in clause 2.2.  Paragraph 3(c) refers to the question whether the valuation can be questioned.  All are issues of substance. 

27. The issue as to the meaning of the expression “the Companies” in clause 2.2 is a question that does not admit of a ready answer.  The terms of clause 2.2.2.2 include a cap on the price to be paid for the shares to be sold by Gillmar to Ceneavenue.  That cap is fixed by that part of the clause 2.2.2.2 which reads:

    but shall not, in any event, exceed that sum represented by the price paid per share to the original shareholders by Ceneavenue multiplied by the number of shares held by Gillmar.

    That cap is $1,012,500, that is say, the price that Gillmar had initially paid for the shares.  Since that cap had been fixed, shares had been acquired in Wavals for which Gillmar had paid $200,000 and in the three other companies which had been incorporated after 16 January 2004.  A cap of $1,012,500 would mean that Gillmar would not be able to recover any benefit for the value of its shares in Wavals and in the three new companies if its shares in the three original companies in the Renniks Group had held their value as at 16 January 2004.  Another effect of the proviso is that Gillmar can never receive an amount in excess of the initial loan amount.  Despite the fact that Gillmar had borrowed a total of $1,137,500 to purchase the shares, it can never recover more than $1,012,000, a shortfall of $125,500.  There is a further question whether the shares in Wavals stand outside clause 2.2.  Other issues arise on the meaning of the clause.  There is, therefore, a real question whether the expression “the Companies” referred only to the three companies in the original Renniks Group or to all seven companies in the Group.  There is no suggestion that any of those issues are fanciful or spurious.  

28. The judge held that the accountant was acting as a valuer and not as an arbitrator; that the accountant was not required to have regard to the principles of natural justice when making his valuation so that Gillmar did not have a right to be heard on the valuation; that the expression “the Companies” meant all seven companies in the Renniks Group; and that the valuation could not be challenged.  He ordered Gillmar to transfer its shares to Ceneavenue for a price of $929,475. 

29. It is convenient to begin with the appeal against the judge’s conclusion that the accountant, Mr Andrew, was not acting as an arbitrator but as an expert valuer and that Gillmar had no right to be heard on the valuation. 

    Impartiality Implied

30. As the judge’s summary of the issues indicates the issues concerning the alleged partiality of Mr Andrew were presented as whether Mr Andrew was acting as an arbitrator or as an expert valuer and whether Gillmar had a right to be heard on the valuation.  The pleadings directly raised the question whether Mr Andrew had acted impartially when making his valuation of the shares.  However, both in the court below and in this appeal, counsel for all parties addressed the question of the capacity in which Mr Andrew acted and whether he had an obligation to hear Gillmar and the Martins.  That was not the correct question.  For the reasons that follow, the proper question was whether it was a term of the agreement that the valuer, Mr Andrew should act impartially.  While counsel referred on the appeal to some of the relevant cases, they did not reflect the correct principle. 

1. This is not the occasion to review the many authorities that consider whether a valuation made pursuant to a contract between the parties may be set aside if the valuer acts negligently: see, for example, Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; Holt v Cox (1997) 23 ACSR 590. For present purposes, the question is a more limited one. It concerns the alleged partiality of the accountant, Mr Andrew. Where parties to a contract have agreed that a third party is to value land or items of personal property, the question whether the valuation made by that third party is binding upon the parties depends on the terms of the contract, both expressed and implied. That is a well-established proposition. It is sufficient to refer to Campbell v Edwards [1976] 1 WLR 403 at 407 per Lord Denning MR; Baber v Kenwood Manufacturing Co Ltd [1978] 1 Lloyds Rep 175; Jones v Sherwood Computer Services Plc [1992] 1 WLR 277 at 284 per Dillon LJ; and to Holt v Cox at 596 where the Court of Appeal of the Supreme Court of New South Wales said:

   In Jones v Sherwood Computer Service Plc [1992] 1 WLR 277 at 284 Dillon LJ (with whom Balcombe LJ agreed) said:

   The starting point for the modern statement of the law is, in my judgment, the decision in Campbell v Edwards [1976] 1 WLR 403 and in particular the passage in the judgment of Lord Denning MR, at p 407:

   “It is simply the law of contract.  If two persons agree that the price of property should be fixed by a valuer on whom they agree, and he gives that valuation honestly and in good faith, they are bound by it.  Even if he made a mistake they are still bound by it.  The reason is because they have agreed to be bound by it.  If there were fraud or collusion, of course, it would be very different.  Fraud or collusion unravels everything”.

   That statement was, as a matter of principle and disregarding the earlier authorities, endorsed by Megaw LJ in Baber’s case [1978] 1 Lloyd’s Rep 175, 179, and concurred in by the other members of this court in Baber’s case.  It is in line with the passage, cited by Sir David Cairns in Baber’s case, at p 181, from the judgment of Sir John Strange MR in Belchier v Reynolds (1754) 3 Keny 87, 91:

   “Whatever be the real value is not now to be considered, for the parties made Harris their judge on that point; they thought proper to confide in his judgment and skill and must abide by it, unless they could have made it plainly appear that he had been guilty of some gross, fraud or impartiality”.

   There is no relevant express term in the Shareholder’s Agreement. 

2. However, it is an implied term of an agreement of this kind that the valuation is to be made honestly and impartially.  The proposition that a term will be implied that the valuer will act honestly and impartially is also well established.  In Belchier v Reynolds (1754) 3 Keny 87; 96 ER 1318 the parties had agreed to be bound by a valuation by one Harris. When holding that the parties were bound by his valuation, Sir John Strange MR made the remarks quoted by the Court of Appeal in Holt v Cox in the passage set out in the previous paragraph.  In Sutcliffe v Thackrah [1974] AC 727 at 745 Lord Morris of Borth-y-Gest said that a mutual valuer has “a duty which obviously must be fairly and honestly discharged”. In Arenson v Arenson [1977] AC 405 at 442 Lord Fraser stated that a mutual valuer has a duty “to act impartially between the parties”. In Baber v Kenwood at 181, Sir David Cairns said that the term that the valuation be made honestly and impartially “is taken for granted”. He said:

   Plainly it must be implied that the valuation is to be made honestly and impartially.  The only reason why that is not made an express term is that it is taken for granted.

   That proposition has been consistently applied since: Legal and General Life of Australia v A Hudson Pty Ltd at 335 per McHugh JA; Holt v Cox at 595 per Mason P; Jones v Sherwood Computer Services Plc at 284; Macro v Thompson (No 3) (1997) 2 BCLC 36; Beevers v Port Phillip Sea Pilots Pty Ltd [2007] VSC 556. That proposition is consistent also with the decision of the House of Lords in Hickman & Co v Roberts [1913] AC 229.

3. The principle that the valuation will not be binding if there is fraud or collusion is also well established: see Campbell v Edwards and other cases.  There is an obvious correspondence between the implied term as to honesty and impartiality and that principle. 

4. In Macro v Thompson (No 3) Robert Walker J expressed the view that actual partiality rather than the appearance of partiality is the crucial test.  He justified that conclusion in this way:

   Otherwise auditors (like architects and actuaries) who have a long-standing professional relationship with one party (or persons associated with one party) to a contract might be unduly inhibited, in continuing to discharge their professional duty to their client, by too high an insistence on avoiding even an impression of partiality.

   With respect, there seems to be much to commend that view.  The task of the valuer is not infrequently assigned to a person such as an auditor or accountant who has a professional or other association with one of the parties.  To apply the test of the appearance of partiality could, therefore, have a real potential to invalidate the valuation made by such a person.  In Beevers at [300] Dodds- Streeton J adopted a different view from that of Robert Walker J. She said:

   Given the sometimes fine distinction between an appearance of partiality and a finding of partiality on the balance of probabilities, I am not persuaded that the parties would intend to be bound by a valuation attended by a credible appearance, or soundly based apprehension, of partiality.  It is not necessary, however, to determine that question in the present case, because I conclude, on the balance of probabilities, that although Mr Ryan was not guilty of collusion, dishonesty or conscious partiality, he did not perform the valuation with the degree of independent skill and judgment and impartiality required of an expert acting between two parties.

   Those remarks suggest that an appearance of partiality will invalidate the valuation.  It is clear that Her Honour was not expressing a concluded view.  On this appeal, neither party addressed this question in their submissions.  It is undesirable, therefore, to express a concluded view on this aspect of the question of impartiality.   

5. The trial judge held that the question he had to consider was whether, if the accountant was acting as a valuer, the principles of natural justice applied so that Gillmar had a right to be heard.  He concluded that, when assessing the market value of the shares, the accountant was not required to observe the rules of procedural fairness and that Gillmar was not entitled to be heard on any question relating to that assessment.  He further held that the methodology of the valuation could not be challenged.  For the reasons already given, the judge has not addressed the correct question.  The question was what were the terms of the contract as to the manner in which the valuation was to be made.  It was an implied term of the Shareholder’s Agreement that, when making the valuation pursuant to clause 2.2 the valuer, Mr Andrew, should act honestly and impartially.  There is a real question whether he did so.  The issue has not been explored in evidence.   The appellants are entitled to examine that question.  From time to time the appellant sought discovery of all documents concerning the valuation of Mr Andrew including communications and instructions from Ceneavenue.  Ceneavenue has so far refused to discover those documents.  No order for discovery has yet been made.  Access to those documents might shed further light on the strengths and weaknesses of the case of each party on that issue.  This appeal must, therefore, be allowed on this ground.  If it is found that Mr Andrew did not act impartially, the valuation will be set aside and the court will have to determine whether it will value the shares itself or refer the question of value to a valuer or other suitable expert.

6. I turn to examine the question whether this was a fit case for summary judgment. 

   A Fit Case for Summary Judgment? 

7. Rule 232 provides the grounds on which parties may apply for summary judgment.  It is in these terms:

   232    (1)     The Court may, on application by a party, give summary judgment for that                    party.

   (2)     Summary judgment may only be given if the Court is satisfied that –

   (a)     if the applicant is a plaintiff – there is no reasonable basis for   defending the applicant’s claim; or

   (b)    if the applicant is a defendant – there is no reasonable basis for the   claim against the applicant.

   In order to appreciate the meaning and effect of Rule 232 it is necessary to examine the previous rules of court which provided for summary judgment.

8. Rule 25 of the Supreme Court Rules 1987 (“the 1987 Rules”) had prescribed four different kinds of application for summary judgment.  Three of those applications could be made by a plaintiff.  They were, first, a summons endorsed with a request for summary disposal (what under the Supreme Court Rules 1947 (“the 1947 Rules”) had been called a specially endorsed writ), a summons for immediate relief usually granted on the ground of urgency to decide issues capable of ready resolution, and the summons for judgment on the ground that the defendant has no arguable defence: see respectively Rules 25.01, 25.02 and 25.03. The fourth kind of application was available to a defendant, namely, the application for summary judgment on the ground that the plaintiff could not succeed on any possible view of the facts or the law: Rule 25.04.

9. The 2006 Rules make no provisions for a summons specially endorsed with an application for summary judgment as was provided in Rule 25.01.  Rule 25.01 was similar to what had been the specially endorsed writ issued pursuant to Order 14 in the 1947 Rules.  The circumstances in which an application for summary judgment under Order 14 might be ordered were examined by Walters J in Grimwade v Beresford (1974) 9 SASR 157 at 160 in these terms:

   It is well accepted that the purpose of Order 14 is to enable the plaintiff to obtain summary judgment without trial, if he can clearly prove his claim and the defendant is unable to set up a bona fide defence or to raise, by way of answer to the claim, an issue which ought to be tried (Roberts v Plant).  A defendant is bound to show that he has some reasonable grounds of defence to the action (Crump v Cavendish).  The Order “is intended to prevent a man clearly entitled to money from being delayed where there is no arguable defence to be brought forward” (Anglo-Italian Bank v Wells, per Jessel M.R. at p. 199).  To enable a defendant successfully to resist an application under the Order, sufficient facts and particulars must be given to show that there is really a bona fide defence (Wallingford v Mutual Society).  It is not enough merely to deny the debt, to allege fraud or misrepresentation, or to state a legal objection.

   On the other hand, the defence sought to be set up need only show that there are facts which may constitute a plausible defence and which demonstrate that there is a triable issue to be decided.  Generally speaking, leave to defend ought to be given unless there is patently no defence in law and no possibility of a real defence on questions of fact (Jacobs v Booth’s Distillery Co Ltd; Fieldrank Ltd v E Stein).  But in any case, as Lord Esher M.R. pointed out in Sheppards & Co v Wilkinson, “the summary jurisdiction conferred by this Order must be used with great care.  A defendant ought not to be shut out from defending unless it [is] very clear indeed that he [has] no case in the action under discussion”.  The power to give summary judgment under the Order is intended only to apply to cases “where there can be no reasonable doubt that the plaintiff is entitled to judgment, and where, therefore it is inexpedient to allow a defendant to defend for mere purposes of delay” (Jones v Stone).

   A defendant may well be able to show that he has a good defence to the claim on the merits; that a difficult point of law is involved; that there are serious questions of fact in debate which ought to be tried; that a real dispute or uncertainty exists as to the amount due, which necessitates the taking of an account in order to determine the issue; or that there are other circumstances showing reasonable grounds of a bona fide defence.  Any one or more of such factors would entitle him to defend.  Leave to defend should also be given where there is a fair question to be tired as to the interpretation of an instrument on which the action is based (Bowes v Caustic Soda and Chlorine Syndicate; Lindsay v Martin).  (Citations omitted). 

   The same principles applied to an application for summary judgment pursuant to Rule 25.01.  As will shortly be noted, the principles relating to summary judgment on a specially endorsed summons were also applied when the court was determining an application under Rule 25.03.

10. An application by way of summons for immediate relief as provided by Rule 25.02 may now be made pursuant to Rule 119 of the 2006 Rules by either a plaintiff or a defendant.  That procedure is based on what had been Order 10 of the 1947 Rules.  Rule 232 does not, therefore, apply to an application for urgent determination of a proceeding or an issue in a proceeding since that is now provided for in Rule 119. 

11. Paragraph (a) of Rule 232(2) is plainly the successor to Rule 25.03 of the 1987 Rules.  Rule 25.03 was a new rule.  It had no direct counterpart under the 1947 Rules although it was loosely based on Order 14 which had provided for a specially endorsed writ.  The plaintiff was entitled to summary judgment if he could satisfy the court that there was no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; Duke Group Ltd (in liq) v Arthur Young (White J, judgment no 2238, unreported, 20 April 1990).  In Fancourt the plaintiff had applied for summary judgment pursuant to Order 18 of the rules of the Supreme Court of Queensland. That rule is no longer in operation. It enabled the plaintiff to obtain a summary judgment unless the defendant showed that there was a question in dispute which ought to be tried or for some other reason there ought to be a trial. The High Court in a unanimous judgment held that the power to order summary judgment should not be exercised where there was a real question to be tried. It also referred to the caution with which the power to order summary judgment should be exercised. It said at 99:

    The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.

    The expression “no real question to be tried” connotes such factors as whether the defendant really has a bona fide defence: Wallingford v Mutual Society (1880) 5 App Cas 685; Grimwade v Beresford at 160, and that the defendant does not have an arguable defence which ought to be fairly tried: Lawrence v Griffiths (1987) 47 SASR 455 at 487 per Von Doussa J. The defendant must show that he is not wasting the court’s time or abusing the court’s procedures to delay or defeat a just claim by the plaintiff: Lawrence v Griffiths at 463 per White J. In this context, the word “real” is intended to distinguish a bona fide defence from one that is fanciful or spurious or an abuse of process seeking to delay and defeat the plaintiff’s just claim. The onus of satisfying the court that the application should be granted lies on the applicant. When considering whether that onus has been discharged, the court will look to the cogency of the defence as raised by the defendant: Leasefin Corporation Ltd v Clarke (Full Court, judgment no S3664, unreported, 16 October 1992).  All of that is conveyed by the expression “no real question to be tried”.

12. The issues in this case do not concern paragraph (b) of Rule 232(2). However, as the test in paragraph (b) is expressed in the same terms as that in paragraph (a), it is useful to consider it. Its predecessor was Rule 25.04, which also had no counterpart in the 1947 Rules although it might be said to have been loosely based on Order 10 which had enabled a defendant as well as a plaintiff to apply for immediate relief and have the action disposed of summarily. Rule 25.04 spelled out its own requirement for summary judgment, namely, that the plaintiff could not succeed on any possible view of the facts or the law. That test reflected the reasons of Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129. In common with an application by a plaintiff for summary judgment, it has been held that the power to order summary judgment on an application by a defendant against a plaintiff had to be exercised with caution so that “a case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury”: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J, a proposition followed and applied by Barwick CJ in General Steel at 129-130.

13. A comparison of the test in Rule 25.04 with the test in Rule 232(2)(b) readily discloses that the burden to be discharged by the defendant on an application under paragraph (b) is lighter than the burden that had to be discharged under Rule 25.04. The reasoning in General Steel is, therefore, no longer applicable.  I respectfully agree with Bleby J that the barrier to summary judgment on an application by a defendant has been lowered: JT Nominees Pty Ltd v Macks (2007) 97 SASR 471 at [61].

14. While there can be no doubt that paragraph (b) has significantly lightened the burden for a defendant seeking summary judgment, two questions nevertheless remain.  The first is what is meant by the expression “no reasonable basis” for the claim against the defendant and the second is whether the test is materially different from the test of a real question to be tried.  The fact that the expression “no reasonable basis” is used in both paragraphs (a) and (b) of Rule 232(2) suggests that the same test applies both when considering whether there is no reasonable basis for defending the plaintiff’s claim and when considering whether there is no reasonable basis for the claim against the defendant.  The test in Rule 232(2) requires the court first to identify the issues to be tried and then to assess whether the claim or defence has reasonable prospects of success.  In the case of an application for summary judgment by a plaintiff against a defendant, it is doubtful, therefore, whether there is a material difference between that test and the former test as it had been expressed in Fancourt.  That is because the question whether there is a real question to be tried denoted that the task for the court was to determine whether the issues at the trial are real or fanciful and have reasonable prospects of success. 

15. The question whether there is no reasonable basis for the claim or defence must be determined in a summary way.  It is entirely inappropriate for there to be a mini trial on that question.  It must, therefore, be evident or obvious that the party defending the application for summary judgment has no reasonable basis for the claim or the defence.  While adversarial argument will assist in the determination of that question, the question should be capable of ready resolution without prolonged argument.  A prolonged argument might suggest that there is a reasonable basis for the claim or the defence.  Comparison with the requirements in rules in other jurisdictions providing for summary judgment confirms these propositions.  

16. The terms used in Rule 232 are similar to those used in Part 24 of the Civil Procedure Rules (“CPR”) of the High Court of Justice in England.  CPR 24(2) provides for summary judgment in these terms:

    The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if – (a) it considers that – (i) that claimant has no real prospect of succeeding on the claim or issue; or (ii) that defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.

    I do not think it can be said that there is any material difference between no reasonable basis for the claim or for defending the claim and no real prospect of succeeding on the claim or successfully defending the claim.  Both require a summary assessment of the claim or defence and a summary determination of the prospects of success of the claim or defence.   In Swain v Hillman [2001] 1 All ER 91 Lord Woolf MR explained the meaning of the expression “no real prospect of succeeding” in these terms:

    The words “no real prospect of succeeding” do not need any amplification, they speak for themselves.  The word “real” distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a “realistic” as opposed “fanciful” prospect of success.

    Later, at 94, he added:

    It is important that a judge in appropriate cases should make use of the powers contained in Pt 24.  In doing so he or she gives effect to the overriding objectives contained in Pt 1.  It saves expense; it achieves expedition; it avoids the court’s resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice.  If a claimant has a case which is bound to fail, then it is in the claimant’s interests to know as soon as possible that that is the position.  Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible.

    Pill LJ expressed a like view as to the meaning of the rule, commenting that “real” was used in contradiction to “fanciful”.  Judge LJ agreed with Lord Woolf adding these comments:

    To give summary judgment against a litigant on papers without permitting him to advance his case before the hearing is a serious step.  The interests of justice overall will sometimes so require.  Hence the discretion in the court to give summary judgment against a claimant, but limited to those cases where, on the evidence, the claimant has no real prospect of succeeding.

    This is simple language, not susceptible to much elaboration, even forensically.  If there is a real prospect of success, the discretion to give summary judgment does not arise merely because the court concludes that success is improbable.  If that were the court’s conclusion, then it is provided with a different discretion, which is that the case should proceed but subject to appropriate conditions imposed by the court.

    The first paragraph of those remarks echoes the warning of the High Court in Fancourt.  The distinction drawn by the Court of Appeal between real prospects of success and fanciful prospects of success serves to emphasise that the court is considering whether there is a real question to be tried, that is to say, a claim or defence that is arguable and whether it has reasonable prospects of success. 

1. The reasoning of Lord Woolf was approved by the House of Lords in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at 259-260 per Lord Hope of Craighead, at 272-273 per Lord Hutton, and at 282-284 per Lord Hobhouse. Lord Steyn at 237 agreed with the Lords Hope and Hutton. Lord Hope at 260-261 examined the scope of the enquiry to be undertaken when considering an application for summary judgment:

   94For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that it has to be answered having regard to the overriding objective of dealing with the case justly.  But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is – what is to be the scope of that inquiry?

   95… The method by which issues of fact are tried in our courts is well settled.  After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence.  To that rule there are some well-recognised exceptions.  For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks.  In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible.  In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance.  It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based.  The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment.  But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence.  As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.

   Although he dissented in the result, Lord Hobhouse at [159] agreed with Lord Woolf in Swain v Hillman and at [158] expressed the scope of the enquiry in similar terms to those of Lord Hope:

   It requires the judge to undertake an exercise of judgment.  He must decide whether to exercise the power to decide the case without a trial and give a summary judgment.  It is a “discretionary” power, ie one where the choice whether to exercise the power lies within the jurisdiction of the judge.  Secondly, he must carry out the necessary exercise of assessing the prospects of success of the relevant party.  If he concludes that there is “no real prospect”, he may decide the case accordingly.  I stress this aspect because in the course of argument counsel referred to the relevant judgment of Clarke J as if he had made “findings” of fact.  He did not do so.  Under RSC Ord 14 as under CPR Part 24, the judge is making an assessment not conducting a trial or fact-finding exercise.  Whilst it must be remembered that the wood is composed of trees some of which may need to be looked at individually, it is the assessment of the whole that is called for.  A measure of analysis may be necessary but the “bottom line” is what ultimately matters.

   Shortly after that passage, Lord Hobhouse noted that the criterion is not probability but absence of reality:

   The criterion which the judge has to apply under Part 24 is not one of probability; it is absence of reality.  The majority in the Court of Appeal used the phrases “no realistic possibility” and distinguished between a practical possibility and “what is fanciful or inconceivable”.  Although used in a slightly different context these phrases appropriately express the same idea.

   It is to be noted that in the first paragraph of the quoted extract from Lord Hope’s speech that his Lordship emphasises the objective of a just determination of the case.  The reasoning in Swain v Hillman continues to be applied in England: see, for example, Miller v Garton Shires (a firm) [2006] EWCA Civ 1386 where Lindsay J speaking for the Court of Appeal remarked at [4] that the books are replete with warnings of the kind given by Lord Woolf that the judge should not conduct a mini trial. See also Bolton Pharmaceutical Co 100 Ltd v Doncaster Pharmaceuticals Group Ltd [2006] EWCA Civ 661.

2. Reference should also be made to Rule 292 of the Uniform Civil Procedure Rules 1999 in Queensland (“UCPR”).  The terms of CPR 24(2) provided the basis for that rule: Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at [11]. Rule 292 prescribes the circumstances in which the plaintiff may apply for summary judgment. The court has power to give judgment where “the defendant has no real prospect of successfully defending all or part of the plaintiff’s claim”. The observations of the Court of Appeal in Swain v Hillman and of the House of Lords in Three Rivers have been followed and applied by the Court of Appeal in Queensland.  In Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 Jones J, with whom McMurdo P and Cullinane J agreed, said at [38] that the statement by Lord Woolf is clearly consonant with the philosophy of the UCPR as expressed in Rule 5. Rule 5(1) states that the purpose of the rules is to facilitate “the just and expeditious resolution of the real issues in civil proceedings at a minimum expense”. The Court of Appeal in Queensland again applied the reasoning of Lord Woolf in Swain v Hillman and of the House of Lords in Three Rivers in Queensland University of Technology v Project Constructions (Aust) Pty Ltd(in liq) [2003] 1 Qd R 259 and in Deputy Commissioner of Taxation v Salcedo.  In the latter case, Williams JA cited with implicit approval the remarks of Jones J quoted above.

3. In Bernstrom at [36], Jones J said that Rule 293(2) was not only different in terms from the former rules of court but also reflected a change in philosophy from that embodied in the former rules and in the propositions identified in Fancourt.  In Deputy Commissioner of Taxation v Salcedo, Williams JA expressed a like view.  While she agreed with Williams JA, McMurdo P sounded a note of caution.  She said:

   [3]Nothing in the UCPR, however, detracts from the well established general principle that issues raised in proceedings will be determined summarily only in the clearest of cases.  Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde, recently cited with approval by Gleeson CJ, McHugh and Gummow JJ in Rich v CGU Insurance Ltd.

   “…Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes.  The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way”.  (Citations omitted).

   Atkinson J agreed with Williams JA. 

4. With respect, I am unable to share the view that the observations of the High Court in Fancourt are not compatible with a new rule such Rule 292 in the UCPR. It is compatible with Rule 232 of this court. I have already pointed out that there is no material difference between the test of real question to be tried and real prospect of success. I respectfully agree with Chesterman J in Gray v Morris [2004] 2 Qd R 118 at [19] that the approach of the Court of Appeal and of the House of Lords to CPR 24 is consistent with the view of a High Court as expressed in Fancourt.  Further, the warning in Fancourt is entirely compatible with the views expressed by the High Court in Agar v Hyde  (2000) 201 CLR 552 and in Rich v CGU Insurance Ltd (2005) 214 ALR 370. While the objective of the 2006 Rules of this court, like the UCPR in Queensland, is to avoid all unnecessary delay and promote efficiency in the resolution of civil disputes, the court must be careful that the interests of justice are not sacrificed on the altar of efficiency and expedition.

5. It has been said that the expression “no real prospects of succeeding” does not need any amplification and speaks for itself: Swain v Hillman at 91 per Lord Woolf MR followed and applied by the Court of Appeal in Queensland in both Berstrom and in Deputy Commissioner of Taxation v Salcedo.  With respect, I do not share that view.  While I agree that it is important not to put a gloss on the meaning of the rule, I respectfully agree with Chesterman J that the meaning of the rule is not plain and unambiguous.  It has been necessary in Swain v Hillman and in the two decisions of the Court of Appeal in Queensland to explain what is meant by the expression “real prospect of succeeding” or “real prospect of success”.  The meaning of the expression “there is no reasonable basis” for the claim or for defending the claim in Rule 232 is also not clear so that some explanation is required.   

6. Further assistance is to be gleaned from the decisions of the Federal Court of Australia.  In 2005, that court was invested with power to order summary judgment where there is no reasonable prospect of the claim or defence succeeding.  The court has emphasised the need for great care to be exercised on an application for summary judgment in terms similar to those expressed in Fancourt. The terms of s 31A(1) and (2) of the Federal Court of Australia Act 1976 (Cth) are very similar to those of Rule 292 of the UCPR. Section 31A provides:

   31A(1)     The Court may give judgment for one party against another in relation to the   whole or any part of a proceeding if:

   (a)     the first party is prosecuting the proceeding or that part of the   proceeding; and

   (b)     the Court is satisfied that the other party has no reasonable prospect of                successfully defending the proceeding or that part of the proceeding.

   (2)The Court may give judgment for one party against another in relation to the   whole or any part of a proceeding if:

   (a)     the first party is defending the proceeding or that part of the   proceeding; and

   (b)     the Court is satisfied that the other party has no reasonable prospect of                successfully prosecuting the proceeding or that part of the proceeding.

   (3)For the purposes of this section, a defence or a proceeding or part of a         proceeding need not be:

   (a)hopeless; or

   (b)bound to fail;

   for it to have no reasonable prospect of success.

   (4)     This section does not limit any powers that the Court has apart from this section. 

   Section 31A has been considered on a number of occasions. Most of the decisions concern s 31A(2) and have clearly established the proposition that the test in General Steel is no longer applicable and has been replaced by an easier test for defendants to establish, namely, that the plaintiff has no reasonable prospects of success: Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; Jewiss v Deputy Commissioner of Taxation (2006) 65 ATR 222 at [26]; White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at [54] where Lindgren J has reviewed the authorities; Australian and International Pilots Association v Qantas Airways Ltd (2006) 160 IR 1 at [23]; Hicks v Ruddock (2007) 156 FCR 574.

7. Notwithstanding that the test is now less onerous, members of the Federal Court have sounded a warning that care must be taken when applying the provisions of s 31A and that summary judgment should only be ordered in clear cases. In Boston Commercial Services, after reviewing a number of the relevant authorities, Rares J said at [45]:

   I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking v Bell (1947) 75 CLR 125, contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorise a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened “the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases”.

   Later, after noting that in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154-155 the High Court had said that a party should not be shut out from litigating an issue which was fairly arguable, he continued at [47]-[48]:

   The purpose of the enactment is to enable the court to deal with matters which should not be litigated because there is no reasonable prospect of any outcome but one. If there is a reasonable danger that a claim or defence could be dismissed under s 31A, which could succeed at a trial, the provision would create miscarriages of justice. It is a key feature of the judicial power under Ch III of the Constitution that the court be in a position to, and in fact does, quell a controversy. The exercise of the judicial power to prevent the substantive agitation of a controversy in which each side has a reasonable prospect of success would defeat, not advance, the ends of justice.

   It could not have been the intention of the parliament in introducing s 31A to the Federal Court Act to require the court to engage in lengthy and elaborate trials on an interlocutory basis for the purpose of determining whether or not a proceeding had no reasonable prospects of success. Obviously, there will be cases in which, because of their nature, it is necessary to undergo detailed analysis. However, the assessment of whether there is a reasonable prospect of successfully prosecuting the proceeding must depend upon the evidence and pleading the subject of the application.

   The warning that the court should exercise care when considering an application for summary judgment was repeated by Tamberlin J in Hicks v Ruddock:

   [12]Section 31A of the Federal Court of Australia Act was introduced to impose a lower requirement to dismiss an action by way of summary judgment than that which was imposed in General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125. In that case, the requirement was expressed in terms of "manifestly groundless" or "obviously untenable".

   [13]In a case where evidence can give colour and content to allegations and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading: see Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146 at [45]. The underlying principle is that the need for a summary judgment must be clear before the court will intervene to prevent a plaintiff submitting a case for determination in the usual way. Once it appears that there is a real issue to be determined, whether it be of fact or law, and that the rights of the parties depend on it, the court should not terminate the action by way of summary judgment. As Barwick CJ said in General Steel 112 CLR at 129-130, great care must be exercised to be sure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of the opportunity to have his or her case tried by the appointed tribunal. The general principle that a person should not lightly be shut out from a hearing is cogent – the onus on the party applying for summary judgment is heavy.

   For the reasons already expressed, I respectfully agree with these views.

8. My researches have only disclosed one decision of the Federal Court of Australia which deals with s 31A(1). It is Ford Motor Co of Australia Ltd v Jefferson Ford Pty Ltd (2007) ATPR 42-167 but in that case the approach to be adopted by a court on an application under s 31A(1) was not discussed.

9. For these reasons, Rule 232(2)(a) does not represent a significant departure from the previous practice in relation to an application for summary judgment by a plaintiff on the ground that the defendant has no arguable defence.  On an application for summary judgment by a plaintiff, the court will examine whether the asserted defence is real or fanciful.  It will consider whether the defence is bona fide.  It will assess whether the defendant has a real as opposed to a fanciful case.  It will have regard to the injunction in Fancourt which is in similar terms to that in Agar v Hyde.  The applicant for summary judgment must show that it is clear that the other party has no arguable case.  The test does not require the court to determine whether the defendant will succeed.  Instead, the court must consider only whether the ground or grounds relied on by the defendant are reasonably arguable.  The test in Rule 232(2)(a) is not, I think, materially different from the test whether there is a real question to be tried.

10. In JT Nominees Pty Ltd v Macks at [40]-[89], Bleby J considered the meaning and operation of paragraph (b) of Rule 232(2). In doing so he also examined the earlier procedures for summary judgment including the application for immediate relief. He concluded at [86] that paragraph (b) represents a substantial relaxation of the test that had been prescribed by Rule 25.04 of the 1987 Rules. I respectfully agree for the reasons expressed above, reasons which differ slightly from those of Bleby J.

11. His Honour also held at [87] that when applying the test in paragraph (b) “the court will be guided by similar considerations that have guided the operation of Rule 25.02 of the 1987 Rules”.  I respectfully disagree with that conclusion.  First, there is now a separate procedure in Rule 119 which deals with applications for urgent or immediate relief.  It is to be noted that Bleby J did not at any time refer to Rule 119 in his reasons in JT Nominees Pty Ltd v Macks. Secondly, as is apparent from the reasons above, Rule 25.04 was a new rule which prescribed its own test. While Rule 25.04 might ultimately be traced to Order 10 of the 1947 Rules, it must be recognised that Rule 25.04 was a new rule with its own test. All that paragraph (b) of Rule 232(2) does is substitute a new test different from the test that had hitherto existed. Paragraph (b) was not intended to invoke the considerations that guided applications for urgent or immediate relief. It is also implicit in the reasoning of Bleby J in JT Nominees Pty Ltd v Macks that paragraph (a) of Rule 232(2) will, like paragraph (b) of that rule, be guided by the considerations that have guided the operation of Rule 25.02 of the 1987 Rules.  That last conclusion is reinforced by an examination of Bleby J’s reasons on this application for summary judgment.  In paragraph 38 of his reasons he has considered factors which apply on an application for immediate relief.  For the reasons expressed above, I respectfully disagree.  The only question to be considered is whether there is a real question to be tried and whether that question has reasonable as distinct from fanciful prospects of success.  Once the court concludes that there are reasonable prospects of success, it must dismiss the application for summary judgment.   

1. In this case, Bleby J applied his reasoning in JT Nominees Pty Ltd v Macks.With respect, that reasoning has lead him into error.  In this case the appellants had in their defence pleaded issues that gave rise to an arguable defence.  They have been mentioned before.  It is sufficient to mention three.  The first concerned what was meant by the expression “the Companies” in clause 2.2.  The task imposed by clause 2.2 on the valuer was to determine the market value of the shares “in the Companies”.  There is a real question whether the expression “the Companies” included all of the companies in the Renniks Group or whether it was limited to the companies in the original Renniks Group at the date of the Shareholder’s Agreement.  Reference to the existence of the cap in clause 2.2.2 on the valuation of the shares is sufficient to illustrate that this is a real not fanciful question.  There are also the issue of rectification.  The second question was whether the valuation made by Mr Andrew contained errors and should be set aside on that ground.  The third was whether Mr Andrew had acted impartially and whether the valuation should be set aside on that ground.  Each of those issues is an issue of substance.  No one ground is either fanciful or spurious.  That is most graphically illustrated by the issues involved in the allegation that Mr Andrew had not acted impartially.  That involved both a question of law of some substance as well as issues of fact to be examined and determined.  Similarly, for the reasons already given, the determination of the proper interpretation of clause 2.2.2 involved real questions of construction.  When regard is had to the principles outlined above, it is clear that this was not a suitable case for summary judgment.  As Lord Hope of Craighead has said in Three Rivers at [95], summary judgment should only be ordered in “cases that are not fit for trial at all”.  This was not such a case.  In every respect this was an action to be tried, albeit an early trial. 

2. The judge directed himself on the question whether the case was fit for summary judgment in these terms:

   38On Ceneavenue’s case for summary judgment the relevant facts are not in dispute.  No oral evidence has been called or is necessary. Its case depends only on those undisputed facts and the proper interpretation of the Shareholder’s Agreement.  Both parties have had an opportunity to lead evidence of any primary facts on which they rely or from which inferences should properly be drawn.  In those circumstances I consider that this is an appropriate case for summary judgment if the criterion specified in r 232 of the Supreme Court (Civil) Rules 2006 can be met, namely that there is no reasonable basis for defending Ceneavenue’s present claim.  On the other hand, if Ceneavenue fails in any of the four issues which I have identified below, it will fail in its application either because it has no entitlement to the relief claimed or because the issue gives rise to matters which are inappropriate to be determined by an application for summary judgment.

   With respect, the judge has correctly directed himself that the question whether the case was fit for summary judgment turned on whether there is no reasonable basis for defending Ceneavenue’s present claim.  However, the judge did not consider that question.  Instead, he proceeded to determine each of the four issues he had identified.  When his reasons are examined, it is apparent the judge was using the procedure as a kind of application for immediate relief on the grounds of urgency of the kind authorised by Rule 25.01 of the 1987 Rules.  For the reasons already expressed, the judge erred in doing so.  The defence raised substantive issues, that is to say, the issues pleaded in the defence were real and not fanciful issues for determination.  That is also apparent from an examination of the judge’s reasons.  Once that conclusion had been reached, the judge should have dismissed the application for summary judgment.  Given the relative urgency of the matter, he could have ordered that there be an early trial of the action.  The judge, therefore, erred in deciding the issues summarily.  The appeal must be allowed on that ground also.  Other issues were raised on the appeal.  It is not appropriate for this court to address them as those issues might be coloured by evidence which is later adduced.  The orders made by the judge will be set aside.  That has the necessary consequence that all issues will have to be addressed again.   

   Conclusion

3. The judge has erred in his consideration of the issues concerning the allegation that Mr Andrew acted partially when making his valuation.  The appeal must, therefore, be allowed.  In addition, the judge erred in ordering summary judgment.  The appeal must be allowed on that ground also.  The course that the judge has taken has denied Gillmar and Mrs Martin the opportunity to call evidence and to cross-examine the plaintiff’s witnesses as well as proper discovery.  In all the circumstances, the proper course is to set aside the orders made by the judge and in their place order that the application for summary judgment be dismissed.

4. ANDERSON J.     I agree with the orders proposed by Debelle J and I agree with his reasons generally. In particular I agree with the reasons relating to whether this was an appropriate case for summary judgment under the Supreme Court Civil Rules 2006.