Durban Roodepoort Deep Ltd v Mostert - [2004] WASC 9

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DURBAN ROODEPOORT DEEP LTD -v- MOSTERT & ORS [2004] WASC 9

CORAM: EM HEENAN J

HEARD: 20 JANUARY 2004

DELIVERED : 20 JANUARY 2004

FILE NO/S: CIV 1772 of 2002

BETWEEN: DURBAN ROODEPOORT DEEP LTD (ARBN 086 277 616)
Plaintiff
AND
CHARLES PHILIP MOSTERT
First Defendant
JOHN STRATTON
Second Defendant
NOBLE INVESTMENTS PTY LTD (ACN 007 998 914)
LEADENHALL AUSTRALIA LTD (ACN 007 997 248)
ADVENT INVESTORS PTY LTD (ACN 008 134 209)
Third Defendants
TIMOTHY OWEN LEBBON
Fourth Defendant

Catchwords:

Interim Mareva order - Application to dismiss or vary

Legislation:

Nil

Result:

Application to discharge or vary Mareva order dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr D J Martino
First Defendant             :     Mr P G Clifford
Second Defendant         :     No appearance
Third Defendants          :     No appearance
Fourth Defendant          :     No appearance

Solicitors:

Plaintiff:     Allens Arthur Robinson
First Defendant             :     Haydn Robinson
Second Defendant         :     No appearance
Third Defendants          :     No appearance
Fourth Defendant          :     No appearance

Case(s) referred to in judgment(s):

A v Hayden (1984) 156 CLR 532
Fantasia v Otho Pty Ltd, unreported; SCt of WA; Library No 980054; 13 February 1998
First Industry Corporation v Goh [2002] WASC 68
Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410

Case(s) also cited:

Nil

EM HEENAN J: On 23 December 2003 I granted the plaintiff an interim Mareva order against the first defendant, the terms of which are apparent from the court record. The application for that order was based in part upon the contents of an affidavit of David Johannes Botes sworn 28 November 2003 which has been filed in the proceedings.
The plaintiff relied on that affidavit and in particular pars 6 to 18 of the affidavit to raise an arguable case that there was a risk that, unless restrained, the first defendant may deal with assets within the jurisdiction of this Court in such a way as to obstruct, prevent or jeopardise the effective enforcement of any judgment which might eventually be obtained against the first defendant by the plaintiff in the proceedings.
For reasons which I have previously given I granted the Mareva order on an interim basis allowing liberty to apply for it to be discharged and anticipating that any substantial argument about whether or not it should be continued would occur at the end of January. However, in the meantime a number of events have occurred which have lent urgency to the question of whether or not the Mareva order should continue or continue in the terms in which it was granted.
The first defendant has applied by summons dated 24 December 2003 for a discharge of the interim Mareva order which I made the previous day. That application came before me recently on 13 January 2004 and after hearing submissions from the parties I declined to discharge the order. One of the reasons relied upon by the first defendant in support of the application for the…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] WASC 9
Decision Date: 20 JANUARY 2004

CaseChat Overview and Summary

In the case of Durban Roodepoort Deep Ltd v Mostert, the plaintiff sought to maintain an interim Mareva order against the defendants. The defendants applied to dismiss or vary the order. The court was tasked with deciding whether the Mareva order should remain in place, and if so, whether it should be varied. The central issue was whether the affidavit of Mr. Botes, which included allegations of the defendant's past conduct, was admissible and sufficient to sustain the Mareva order. Additionally, the court had to determine whether certain covenants in a settlement deed precluded the use of the Botes affidavit for this purpose.

The court found that the affidavit of Mr. Botes was admissible and remained admissible. It was complemented by the events relating to the sale and purchase of two properties by the first defendant. These events, either alone or in combination with each other, were sufficient to sustain the Mareva order and prevent the grant of a variation as sought by the first defendant. The court held that the affidavit was admissible despite objections based on covenants in the settlement deed. The court reasoned that the affidavit justified an inference that there was a risk that the first defendant might deal with his assets in a way that could obstruct the enforcement of any judgment obtained by the plaintiff. This inference was sufficient to warrant the continuation of the Mareva order.

The court dismissed the application to vary or dismiss the Mareva order. It held that the affidavit of Mr. Botes, along with the events relating to the sale and purchase of the properties, provided a sufficient basis for the order. The court also found that the settlement deed did not preclude the use of the Botes affidavit for the purpose of sustaining the Mareva order.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

There is authority for the proposition that the purchase of property by a defendant as a joint proprietor with his wife is a disposition of an interest in favour of the spouse sufficient to warrant the grant of a Mareva order. Such decisions include First Industry Corporation v Goh [2002] WASC 68, and a decision of Heenan J in Fantasia v Otho Pty Ltd, unreported; SCt of WA; Library No 980054; 13 February 1998. As with all cases, careful attention needs to be given to the particular facts, and I draw no more from those two decisions for the present occasion than that they are demonstrations of the principle, otherwise obvious in itself, that such disposition of a joint interest will represent a diminution in the estate of the party making it which, depending upon the context, may give rise to an inference which would support the grant of Mareva relief. It seems to me in the present situation that such an inference is justified in this case, and that this transaction is by itself sufficient to warrant the continuation of the Mareva order. Perhaps, however, the question of whether or not the inference is sufficient to extend the Mareva order is not the correct way to approach these proceedings. Rather, the plaintiff contends that the Mareva order should never have been granted because reliance could never be placed upon the contents of the affidavit of Mr Botes set out in the passages which I have previously indicated. The submission is that if the order had never been made no question of the significance of subsequent events would arise for examination. It does not seem to me to be necessary to dwell on any potential significance in the order of approach to the factors which are relevant to the determination of this application because I am satisfied that the affidavit of Mr Botes, including the parts to which objection was taken, was admissible and remains admissible and sustain the grant of the Mareva relief. Put another way, the affidavit is complemented and reinforced by the events relating to the sale and purchase of the two properties which I have mentioned. Either alone or in combination with each other, those two sets of events would be sufficient to sustain the Mareva order and to prevent the grant of a variation as sought by the first defendant. It is, however, necessary for me to address the substance of the objections which were made by the first defendant to the use of the Botes affidavit. It can be said that, in pars 6 to 18 in the Botes affidavit, there is a series of matters sworn to relating to the conduct of Mr Botes on previous occasions in 1999 which, as a matter of inference, lead to a conclusion that unless restrained there is a risk that he may deal with his assets in such a fashion as to obstruct, render more difficult or jeopardise the enforcement of any judgment which may eventually be obtained by the plaintiff in these proceedings. The objection is not over whether or not the contents of the affidavit justifies such an inference. It is to whether or not the content of the affidavit is admissible at all because, so it is submitted, there are covenants in a deed which prevent its use for this or any other similar purpose. The deed referred to is a settlement deed dated 31 August 2001, made between the present plaintiff and two other associated corporations and the defendant. It is a deed which purports to settle on terms, which need not be mentioned, a dispute between the plaintiff and Mr Mostert arising out of allegations identified in the deed, set out at length in Sch 1. These are essentially, although not in every respect identical with, the allegations contained in the Botes affidavit relied upon to support the inference of the existence of a risk of dealing with the first defendant's assets in a manner which may defeat or obstruct any eventual judgment in these proceedings.