Crane v Worema Pty Ltd and Others No. Scgrg-00-889

[2000] SASC 433

CRANE v WOREMA PTY LTD, GAREMA PTY LTD (DEREGISTERED) AND WORROLONG PTY LTD
[2000] SASC 433

Magistrates Appeal:  Civil

1................ DEBELLE J...... This is an application for leave to appeal from the orders made by a magistrate on 25 August 2000. In addition, there is an application for orders in the nature of Mareva orders pending the hearing and determination of the appeal.

1. With commendable thoughtfulness, the solicitor for the plaintiff served the solicitors for the defendants with notices of the application. Both parties have appeared today. Both parties agree that it was desirable in the interests of the expedition of the action, and to reduce costs, that both the application for leave to appeal and the substantive issues be argued. Both parties are to be commended for this attitude.

2. The plaintiff alleges that she suffered personal injury while present at a fitness centre in Mount Gambier. The injuries are alleged to have occurred on 8 November 1999. The solicitors for the plaintiff searched to ascertain the operator of the fitness centre and the registered proprietor of the land on which the fitness centre stands. As a result of those searches, it was disclosed the first defendant is the operator of the fitness centre and the second and third defendants were the registered proprietors of the land.

3. The plaintiff issued her proceedings in August 2000. She claimed $30000 by way of damages. The plaintiff’s solicitors became aware of a restructuring of the corporate arrangements of the defendants. They were concerned that there might be a difficulty in recovering any judgment that the plaintiff might obtain. The plaintiff therefore applied ex parte for an order pursuant to s 26 of the Magistrates Court Act 1991 restraining the defendant from disposing of or dealing with the business known as the Squash Court Leisure and Fitness Centre and the land on which the centre stands. The order is in the nature of what is commonly called a Mareva order.

4. After the order had been served, the defendants applied to discharge the order. The application was heard and determined on 25 August 2000 by Mr Gurry SM. An affidavit sworn by Barry Neil Brook, a director of each of the defendants, was filed in support of the application. Mr Brook also gave oral evidence and was cross-examined by counsel for the plaintiff. Mr Gurry SM accepted the evidence of Mr Brook. He was satisfied that he was an honest and reliable witness. On the evidence before him, Mr Gurry was not satisfied that there was a substantial risk that the defendant would dispose of the fitness centre or the land. He, therefore, revoked the restraining order. He gave ex tempore reasons for his decision.

5. On 31 August 2000 the plaintiff’s solicitors wrote to the Registry of the Magistrates Court at Mount Gambier asking for a copy of the transcript of the reasons of the magistrate. The copy was not supplied until 11 September 2000.

6. In the meantime, on 8 September 2000, the plaintiff’s solicitors had written to the solicitors for the defendant seeking certain undertakings not to deal with the land. The defendants declined to give those undertakings.

7. This application for leave to appeal was not filed until 19 September 2000, notwithstanding that it was sent under cover of letter dated 11 September. Thus, the plaintiff is some 11 days late in filing the application. The delay is a short one. The delay is explained by the late delivery of the magistrate’s reasons. The defendants do not point to any prejudice. I therefore extend the time within which the application may be made.

8. I turn to the substance of the application. It is apparent that there have been some dealings in this land. It is unnecessary to go into the precise detail. It is sufficient to note that as long ago as 1997 arrangements were being made to restructure the corporate position of the various defendants. It was intended that the defendants Garema Pty Ltd and Worrolong Pty Ltd would transfer the land on which the fitness centre stands to a company called Oban (Mount Gambier) Pty Ltd (“Oban”). The transfer was executed in 1997. However, it had been neither stamped nor registered until August 2000. The plaintiff has a justified concern that she does not fall between two stools in suing the wrong defendant as landlord and finding that any potential for recovery pursuant to s 17D of the Wrongs Act 1936 is defeated because she has sued the wrong landlord.

9. Provided that Oban is added as a defendant and provided that Oban does not take any point that it was not at all material times the landlord of the premises, the plaintiff’s position is not, I think, materially disadvantaged. In the course of argument, I have discussed with Mr Manetta, who appeared for the defendants, the question whether Oban would undertake not to take any point that it was not at all material times the landlord. He has indicated that it will not be taking such a point. In any event, I think the appropriate course is simply to add Oban as a defendant and the plaintiffs can therefore proceed. This has the effect of enabling the plaintiff to be satisfied that all relevant parties are before the court.

10. There remains the question of the application for leave to appeal against the order discharging the restraining order. Subject to two matters, I am not satisfied that leave to appeal should be granted. The magistrate saw and heard Mr Brook give his evidence. As I have said, he found him to be an honest and reliable witness. He accepted his evidence. He was satisfied that there was nothing sinister in these arrangements. He had the advantage of seeing and hearing the witness. The finding that there was nothing sinister goes to the very basis upon which the application for the restraining order was made. I do not think there is any basis for interfering with that.

11. Mr Manetta very properly consents to an order that Oban be added as a defendant in these proceedings. Pursuant to Rule 97.18 I have power to make an order adding a defendant. I will, therefore, make an order allowing this appeal for the purpose of adding Oban as a defendant.

12. There remains the question of costs, both the order as to costs made by Mr Gurry SM and the costs of proceedings before me today. I deal first with the order made by Mr Gurry SM. It is appropriate to set aside that order for the following reasons. The plaintiff did not discover the true arrangements in relation to the ownership of this land until she had instituted the application for the restraining order. It is proper, therefore, that the costs of the proceedings before Mr Gurry SM should be her costs. For this reason also the application for leave will be granted and the appeal allowed.

13. I come to the question of the costs of the appeal. Mr Manetta says that the appeal was unnecessary. The issues, he says, could have been simply resolved had the plaintiff added Oban as a defendant. There is some force in that submission. However, I think that the appropriate order is to make the costs of this appeal costs in the cause. The effect of such an order will be that whoever succeeds at the end of the day will have the costs of today. Thus, if the defendants ultimately succeed they will have the costs. Further, it appears that this is a matter where the defendants have, to a degree, obstructed the plaintiff in resolving the situation. It is not until today that there has been any final resolution of the issues. That is, in part, evident from the fact that it is not until today that an affidavit has been filed on behalf of the defendants which provides further information in relation to the factual issues. For those reasons, I order that the costs of today be costs in the cause.

14. The orders will, therefore, be:

15. Application for leave to appeal allowed.

16. Appeal allowed.

17. Joining Oban (Mount Gambier)    Pty Ltd as a defendant in this action.

18. Setting aside the order for costs made by Mr Gurry SM on 25 August 2000 and substituting therefor an order that the plaintiff have the costs of the application.

19. The costs of this appeal be costs in the cause.