Fetzer v Tomblin & Tomblin & Ors No. Scciv-00-441

[2001] SASC 56

FETZER V TOMBLIN & TOMBLIN & ORS

[2001] SASC 56

Civil (Ex Tempore)

1................ LANDER J....... This is an application by the ‘plaintiff’ for the costs of a summary judgment application brought by the ‘plaintiff’ against the first and second defendants which was abandoned after the ‘plaintiff’ obtained the relief it sought by way of self-help.  There is also before me an application by the defendants against ‘the plaintiff’ for indemnity costs in respect of the same application.

1. This matter has an extraordinarily confused procedural history. Proceedings were first issued in this matter on 12 May 2000. The plaintiff, identified in the proceedings, was Hans Fetzer; the defendants were named as Harold George Tomblin, Tomblin & Teagle Pty Ltd, and the Australian Securities and Investments Commission.

2. A Statement of Claim was filed on 17 May 2000. In that Statement of Claim, reference was made in the first paragraph to a number of companies including Dresdner Finance Company Pty Ltd. The Statement of Claim sought relief in respect of different causes of actions against Mr Tomblin and Tomblin and Teagle Pty Ltd.  It asserted that Dresdner Finance Company Pty Ltd was plaintiff and entitled to relief.  In fact Dresdner Finance Company Pty Ltd had not then been joined as a plaintiff.  Moreover the Statement of Claim was incomplete in a number of respects. Indeed the Statement of Claim asserted that particulars would be given in due course.

3. On 8 February 2000 the defendant, Mr Tomblin had written to Mr Fetzer, the plaintiff, advising him that an amount of $451,012.31 had been recovered on behalf of Dresdner Finance Company Pty Ltd from an investment in ECCCL.  That letter also indicated that after payment of legal costs, all but the sum of $216,000 had been paid to Mr Fetzer. The letter claimed that that further sum of $216,000 was to be held ‘in trust’ pending settlement of another dispute between the plaintiff, Mr Fetzer, and the first defendant.

4. Dresdner Finance company Pty Ltd is apparently a trustee company of which the plaintiff, Mr Fetzer and the defendant, Mr Tomblin are directors and shareholders.

5. After receipt of that letter, the plaintiff instructed solicitors (those solicitors not being the solicitors presently acting for the plaintiff) who, on 26 April 2000 wrote to Mr Tomblin requiring him to pay to their trust account the sum of $216,000.  The letter further advised him that if the moneys were not paid within seven days legal proceedings would be commenced.  There is a difficulty about the claim in the letter.  The moneys, if they were owed to any entity, were owed to Dresdner Finance Company Pty Ltd.  Mr Fetzer himself had no apparent right to claim them.

6. On 3 May that letter was responded to by the defendant’s solicitors who asked the plaintiff’s solicitors whether they would advise as to the basis on which the amount of $216,000 was to be held by them in the trust account. They advised that once they had that information, their client would consider the direction. That information was never given.

7. These proceedings were instituted on 17 May 2000.

8. On 4 July 2000, an application was brought seeking an order that “the plaintiff Dresdner Finance Company Pty Ltd, (have) summary judgment against the first defendant or against the second defendant or against both of them in the amount of $216,000 plus interest on that amount pursuant to r 25.02 of the Supreme Court Rules.”

9. A ‘Statement of Claim’ was filed the same day.  There were then two Statements of Claim in the one action.  There were separate plaintiffs in each Statement of Claim.  The second “Statement of Claim” contains a number of procedural defects.

10. On 12 July 2000 Mr Fetzer’s present solicitors were advised that the sum of $216,000 was being held in a bank account for Dresdner Finance Company Pty Ltd.

11. After the issue of that application, a number of affidavits were filed exhibiting correspondence between the parties. In due course, immediately before the hearing of the summary judgment application, the defendants advised the plaintiff of the bank account in which the moneys were held. The moneys were always held in the Dresdner Finance Company Pty Ltd bank account and were never held by either the first or second defendants.

12. On obtaining that information, Mr Fetzer, who was a signatory to that bank account, went to the bank and withdrew that sum and appropriated it to himself. The plaintiff therefore obtained the relief he sought by way of self-help.

13. The summary judgment application could never have succeeded because Dresdner Finance Company Pty Ltd, the party making the application, was not, in fact, a plaintiff at the time the application was made. The application was based upon a Statement of Claim filed the same day, which was, with respect, hopelessly defective and could not have allowed for an order for summary judgment.

14. Moreover, however, the application could not have succeeded because the defendants at no time were possessed of the money. The money was always held in the account of the purported plaintiff, Dresdner Finance Company Pty Ltd.

15. I mention in passing that it is not clear to me that Mr Fetzer ever had authority to act in this action on behalf of Dresdner Finance Company Pty Ltd.  The authority must have depended upon a resolution of the directors.  The defendant, Mr Tomblin, was one of two directors.

16. During argument I mentioned that I had some sympathy for the plaintiff, Mr Fetzer, who has had some difficulty in obtaining information from the defendants. Mr Lane, who appeared for the defendants, indicated that on some occasions, the defendant might have appeared to have been slow in providing information, but that could be explained by a lack of precision in the requests for information.  There is something to be said for that submission. Indeed the original demand for the moneys was made by a person not entitled.

17. However, I think, in a sense the defendants’ refusal to be frank about the whereabouts of the bank account caused this application to be made.

18. It would have been easy for the defendants to indicate that the moneys had been banked to the account of the party entitled and to disclose the banking.  Mr Fetzer was entitled to know that because he was a director of the company. 

19. However, in my opinion, the applicant’s application for costs must fail because at the time the application was made, the applicant was not a plaintiff and simply could not have obtained summary judgment.

20. It was put that the plaintiff should have costs because of the defendants’ lack of frankness.  In my opinion, the applicant is not entitled to costs because of any inaction of the defendants because the applicant faces the same difficulty in that submission; the applicant was not the plaintiff at the time. The application for costs by Dresdner Finance Company Pty Ltd is refused.

21. The defendants, as I have said, seek indemnity costs because they submit the withdrawal of the $216,000 by Mr Fetzer whilst the summary judgment application was pending, was an abuse of process. I am not prepared to make any finding in respect of Mr Fetzer’s conduct on an application for costs. As I have already indicated, I think the defendants’ refusal to be frank about the whereabouts of the money and their own inaction drew the application which was later made.  In my opinion, having regard to the defendants’ own conduct, the defendants also should not be entitled to any order for costs as against Dresdner Finance Company Pty Ltd.  The defendants did not draw these procedural irregularities to the attention of the Master at any time.

22. In the circumstance of this matter, in my opinion it would be appropriate to make no order for costs on the application for summary judgment. There will be no order for costs.  Thus, because neither party has been successful on their application for costs, it follows that there can be no order for costs on this application.