EROM Pty Ltd v Croft

[2006] WASCA 244

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   EROM PTY LTD -v- CROFT [2006] WASCA 244

CORAM:   PULLIN JA

HEARD:   10 NOVEMBER 2006

DELIVERED          :   10 NOVEMBER 2006

FILE NO/S:   CACV 140 of 2006

BETWEEN:   EROM PTY LTD

Appellant

AND

JOHN CROFT
Respondent

ON APPEAL FROM:

Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA

Coram  :GROVES DCJ

Citation  :EROM PTY LTD -v- CROFT [2006] WADC 162

File No  :CIV 1225 of 2003

Catchwords:

Appeal - Interlocutory appeal - Application for leave to appeal - Turns on own facts

Legislation:

Nil

Result:

Leave to appeal granted

Category:    B

Representation:

Counsel:

Appellant:     Mr M A R Blundell

Respondent:     Mr P D C Robinson

Solicitors:

Appellant:     Solomon Brothers

Respondent:     Williams & Hughes

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

Nil

Case(s) also cited:

Nil

1. PULLIN JA:  This is an application for leave to appeal which I think should be dealt with at this stage.  The question is whether the decision below is attended by sufficient doubt to justify the grant of leave, and whether or not there will be substantial injustice if the decision below is left unreversed.

2. It is clear that the appellant could not be assured how this case is going to turn out after all the evidence has been led.  The defendant, Mr Croft, may claim he guaranteed Jadetex and that Jadetex was to give the charge, or he may claim that he was in the end guaranteeing Regalbird and not Jadetex.

3. The circumstances look to be complicated because if one takes what is in the statement of claim it seems, according to the appellant, that originally Jadetex was involved and Mr Croft agreed to guarantee Jadetex and Jadetex agreed to give the charge.  Then there was a telephone call, according to the plaintiff, when it was agreed that Regalbird be substituted for Jadetex and that Mr Croft would then guarantee repayment by Regalbird and that Regalbird would give the charge.  Subsequently a document was sent stating that the charge was being given by Regalbird, formerly Jadetex, which sounds as though in fact they were back to the original transaction and not the one that was the subject of the alleged novation and that Mr Croft was in fact, therefore, agreeing to guarantee Jadetex and not Regalbird because the name Regalbird was merely the new name for the original company Jadetex.

4. It is not clear what attitude Mr Croft might adopt when he files his pleadings, and in my opinion the appellant should be able to cover all possible legal consequences that flow from the dealings between the parties and the documents that passed between them.  To say that the appellant knows what the situation is and should be confined to what is said in one of these pleas does not recognise that the Court may disagree with what the appellant says it "knows" is the situation.  In those circumstances I consider that the decision is attended by sufficient doubt to justify the grant of leave. 

5. In relation to the second aspect, whether or not there would be substantial injustice if the decision below remained unreversed, it seems to me that the potential injustice and therefore a real injustice is that if the matter proceeds to a hearing and the District Court reached the view that the case might have succeeded if there had been an oral novation pleaded, or if estoppel had been pleaded, and that the appellant should not succeed because it had not been pleaded, then that creates the injustice.  The potentiality for that happening is a real prospect and it gives rise to the substantial injustice that justifies the grant of leave.

6. For those reasons, and for the fact also that in relation to the novation plea the oral novation is merely an alternative to the written novation agreement, which would seem to me to be a perfectly acceptable method of pleading, or arguably so, leave should be granted for that reason also.  So I would grant leave to appeal and then the matter can proceed to appeal in the usual way.