Durban Roodepoort Deep Ltd v Mostert

[2003] WASC 271

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   DURBAN ROODEPOORT DEEP LTD -v- MOSTERT & ORS [2003] WASC 271

CORAM:   EM HEENAN J

HEARD:   23 DECEMBER 2003

DELIVERED          :   23 DECEMBER 2003

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 - Granted pending application for entry to Expedited List

Legislation:

Nil

Result:

Interim Mareva order granted

Category:    B

Representation:

Counsel:

Plaintiff:     Mr G R Hancy

First Defendant             :     Mr H R Robinson

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):

Nil

Case(s) also cited:

Nil

1. EM HEENAN J:  In this litigation the plaintiff is seeking relief against the defendants in respect of a payment totalling some $5,907,000 made by the plaintiff to the third defendants in late 1999.  It is unnecessary on this occasion to outline exactly the basis for the plaintiff's claim but the substance of it is that the first defendant was an officer and director of the plaintiff and instrumental in effecting one agreement by which $5.907 million of the plaintiff's assets were used to pay to the third defendants being the moneys referred to under this agreement.  The control of the plaintiff has since changed and those presently in control, led by Mr David Botes, contend that this payment was a breach of duty, or a breach of a variety of duties, by the first defendant as a result of which compensation, damages or restitution should be payable.  There is a series of other complicated allegations in the statement of claim which need not be mentioned on this occasion.

2. The action is proceeding and there is a pending application for it to be dealt with, together with associated matters, by entry to the long causes list.  That application is before her Honour Johnson J and directions have been given for this to be listed for hearing on 30 January next.

3. The present application is an application for a Mareva type order brought by the plaintiff against the first defendant by summons dated 2 December 2003.  That was brought on for hearing before Barker J on 9 December and his Honour directed that it should be adjourned for hearing before Johnson J on a date to be fixed.  It has not been possible for the matter to be listed before Johnson J before the commencement of the Court vacation and now, in the early days of the Court vacation, it has been brought before me as an urgent matter for hearing.

4. What has prompted the application is that the plaintiff has learned that a house and land in Melville Beach Road in Attadale belonging to the first defendant is the subject of a recent contract for sale and that the sale is to be completed in the near future.  The plaintiff has learned about this because it is one of two mortgagees and it has been approached by the first defendant to make arrangements for the satisfaction of its mortgage.  On learning of this transaction the plaintiff asked for details of what is proposed to be done with the proceeds of the sale after the satisfaction of that mortgage and an earlier first mortgage but no informative information has been provided.

5. The plaintiff fears the worst and points to a variety of alleged conduct by the first defendant as giving rise to an inference that there is a risk of dissipation of the assets or payment or disposition of them in a way which may defeat, obstruct or impair the execution of any eventual judgment in these proceedings.  A detailed affidavit outlining these allegations sworn by Mr Botes on 28 November is relied on by the plaintiff in support of the application.  No answering affidavit has been put forward on behalf of the first defendant.

6. Today, counsel for the first defendant submitted that his client was in an invidious position and did not wish to answer the allegations in that affidavit because, so it was submitted, there was a collateral deed between the parties containing covenants which, so it was alleged, prevented the plaintiff from raising the issues sought to be raised.  It was submitted that this deed also released the first defendant from any alleged liability in respect of the transactions relied upon in the action and that, in the circumstances, Mr Botes was not entitled to advance the allegations contained in his affidavit of 28 November 2003, nor to press for the relief sought.

7. In these circumstances counsel for the first defendant urged that instead of dealing with the application for the Mareva order today the court should make orders and give directions suitable for identifying any issues over whether or not Mr Botes could rely on the allegations the subject of these objections and that further issues should be heard as a preliminary matter.  Only when an outcome of those intentions had been reached could this Mareva application proceed, if at all, was the first defendant's stance.

8. The difficulty which I see with the approach contended for by the first defendant is that there has been no evidence put on the record by the first defendant or on his behalf deposing to any matters which would support the contentions raised.  If there is a deed in existence, as there appears to be, which inhibits the matters of complaint which may be relied upon by the plaintiff or which grants releases in respect of past alleged conduct, then it would be a simple matter for that deed to be put in evidence annexed to an affidavit identifying it in order to advance that cause.  If that is not done the affidavit of Mr Botes is simply not answered.

9. It was submitted to me with some force that because, in the circumstances where it was acknowledged that there was a deed between the parties, proceedings should not go ahead on a footing which ignores the provisions of the deed and that the first defendant had an answer to the allegations which are being made by the plaintiff.  It may be that the first defendant does have an answer to the allegations which have been made by the plaintiff and it may be that there is something in the deed which prevents Mr Botes or the plaintiff from advancing some or all of the contentions which are being relied upon, but the fact of the matter is that the first defendant has not put forward any of those contentions.  The first defendant has not pleaded them in any form in answer to this present application and has not put the deed or any other material in evidence.

10. I am therefore left with the uncontradicted and unchallenged affidavit of Mr Botes which satisfies me that there is a prima facie risk of dissipation of assets.  I am conscious that there may be an answer which can refute that inference and so any relief that I might grant should be limited and temporary.  It seems to me that, having regard to the time of year and the situation which has arisen, I should grant an order in the terms of the minute of proposed orders for an interim Mareva injunction effective until to 4.30 pm on Friday, 30 January 2004, which is the day on which the application will come before her Honour Johnson J.  I also direct that there be liberty to any party to apply for a variation or discharge of this injunction.  I record that the injunction is granted on the undertaking as to damages proffered by the plaintiff.