Kent v Aspermont Ltd - [2003] WASC 231

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: KENT -v- ASPERMONT LTD [2003] WASC 231

CORAM: PULLIN J

HEARD: 5 NOVEMBER 2003

DELIVERED : 5 NOVEMBER 2003

FILE NO/S: CIV 2117 of 2002

BETWEEN: ANDREW LESLIE KENT
Plaintiff
AND
ASPERMONT LTD
Defendant

Catchwords:

Practice and procedure - Injunctions - Application to discharge injunction - Turns on own facts

Legislation:

Nil

Result:

Injunction discharged

Category: B

Representation:

Counsel:

Plaintiff: Mr M J Hawkins
Defendant: Mr P C S Van Hattem

Solicitors:

Plaintiff: O'Toole & Oprandi
Defendant: Coulsons

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

Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; FCt SCt of WA; Library No 960641; 8 October 1996

Case(s) also cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Austen & Butta Ltd v Shell Australia Ltd (1992) 10 ACLC 610
Automasters Australia Pty Ltd v Bruness Pty Ltd [1999] WASC 105
Bruness Pty Ltd v Automasters Australia Pty Ltd [2000] WASCA 157
Kent v Aspermont Ltd [2003] WASC 107
Lechmere Financial Corp v Aspermont Ltd [2003] FCA 1138
SDS Corp Ltd v Pasdonnay Pty Ltd [2003] WASC 147

PULLIN J: Aspermont Ltd seeks an order discharging an injunction which was granted by consent on 13 December 2002 and which restrained Aspermont from paying moneys to Lechmere as claimed by Lechmere.
Lechmere claims that Aspermont owes it a sum of money which, as at 21 October 2003, stood at $955,500. Lechmere served statutory demands in relation to this debt, which were the subject of applications by Aspermont to set them aside under section 149G of the Corporations Act. These applications were dismissed. Lechmere then brought an application under section 459P of the Corporations Act to wind up Aspermont, based on these statutory demands.
On 30 October 2003, R D Nicholson J in the Federal Court adjourned this application for winding up after a hearing and made orders that Aspermont forthwith pay into court the money required to be paid as a result of the statutory demands, that sum being $955,500, failing which the application to wind up should stand granted.
Another order made by his Honour was that, if before 18 November 2003 Aspermont had authorised the moneys paid into court to be paid to Lechmere, then the application to wind up would stand dismissed. If the sums paid into court were not paid out to Lechmere, then the matter was to be re‑listed for determination of the application that the defendant be wound up, and the date for hearing of that application is 18 November 2003.
Aspermont did pay into the Federal Court forthwith the sum of $955,500.
It is then necessary to pause at this point to mention the position between Lechmere and Mr Kent, the plaintiff in these proceedings. Mr Kent, in his affidavit of 28 August 2002 sworn in these proceedings, says:
"I had separately purchased a half interest in the business of Australian Mining Monthly from a Mr Leslie Calcraft (with whom I formerly operated the business in partnership) and Renwick Nominees Pty Ltd in 1993 and 1995. The total price paid was $780,000, and the money came from Drysdale BVI. My intention was always to deliver this asset into Aspermont once Australian Mining Monthly was sound and profitable."
In par 52, Mr Kent deposes:
"The background to the loan referred to is as follows:
(a)at my direction the sum of $780,000 was advanced to me by MacLellan in his capacity as my trustee through Drysdale BVI …"
In short, it seems to me from those paragraphs that I have referred to, other material in the affidavit, and from the endorsement on the writ in these proceedings, that Mr Kent claims that the chose in action, namely the debt owing by Aspermont to Lechmere, is a chose in action which, while legally owned by Lechmere, is held on trust by Lechmere for Mr Kent.
It is very difficult to understand how this happened from reading Mr Kent's affidavit of 28 August 2002. The difficulty, I think, probably arises from the language used in the affidavit, which may be the fault of the draftsman of the document rather than Mr Kent, but I cannot be certain about that. Examples can be seen in the two paragraphs that I have quoted. To say that the $780,000 "came" from Drysdale BVI says nothing about the transaction that was involved there. It may be how a layman speaks, but it does not help at all in deciding in legal terms what was happening in relation to that transaction. In par 52(a) it is said that:
"At my direction the sum of $780,000 was advanced to me by MacLellan in his capacity as my trustee through Drysdale BVI."
Exactly what happened there is not clear from those words. If one then looks at 52(c) of the affidavit, it is said by Mr Kent, "the money" - and this is referring to the $780,000 - "or its value in assets, was provided by me to Lechmere as my trustee so that in effect the loan was a loan to myself". Once again, it is very difficult to understand from that language exactly what was involved in the transactions. Nevertheless, the short summary which I have given seems to be what Mr Kent is driving at in his claim that he wants to run against Lechmere.
The action that I am concerned with is an action where Mr Kent sued Aspermont and Lechmere, seeking to resolve this issue about whether or not Lechmere was the beneficial owner of the debt owed by Aspermont or whether Mr Kent was the beneficial owner.
On 13 December 2002, having commenced these proceedings, Mr Kent applied in this court for an injunction restraining Aspermont from paying Lechmere the moneys which Lechmere claimed. The application for the injunction was consented to by Aspermont, and so the injunction was granted in the terms requested.
I now return to the Federal Court proceedings which were commenced by Lechmere. It seems that Mr Kent did not seek to intervene in those proceedings, but he now does intend to do so, so that the issues between Lechmere and Mr Kent can be fought out in that court; so that the party entitled to the moneys now sitting in the Federal Court can be resolved.
With that background, Aspermont applies to discharge the injunction, which will then permit it to give directions that the money sitting in the Federal Court be paid out to Lechmere. Aspermont wishes to do that. To obtain an order discharging the injunction, it is necessary for Aspermont to show that the situation in respect of the grant of interlocutory relief is materially different from that which applied when the order was originally made: Christmas Island Resort Pty Ltd v Casinos Australia International (Christmas Island) Pty Ltd, unreported; FCt SCt of WA; Library No 960641; 8 October 1996.
The situation when the injunction was granted was that there were statutory demands on foot, that is, statutory demands made by Lechmere against Aspermont; there were proceedings on foot by Mr Kent against Lechmere and Aspermont seeking declarations that the amounts claimed by Lechmere were payable to Mr Kent rather than to Lechmere; Mr Kent had obtained leave to serve notice of the proceedings on Lechmere, which is a corporation situated outside of Australia.
Since then, in my opinion, there have been material changes to the circumstances, and they are as follows. First, although the plaintiff, Mr Kent, had leave to serve notice of the writ on Lechmere in October 2002, service was not effected until February 2003, a delay of three months. Secondly, Mr Kent has not taken any step against Aspermont in the proceeding since the injunction was granted in December 2002. Thirdly, and more importantly, Lechmere has successfully contested the jurisdiction of the court to determine the dispute. Service of the writ which had been effected on Lechmere, has been set aside as a result of an order made by Master Sanderson. An appeal is pending against that decision, but is yet to be heard or determined. Fourthly, Lechmere has, since the grant of the injunction, applied to the Federal Court for Aspermont to be wound up in reliance on its failure to comply with the statutory demands. Finally, the Federal Court has heard the application for Aspermont to be wound up and has held that the presumption of insolvency, which arises by reason of non‑compliance with the statutory demands, has not been rebutted. That Court has made the orders which I have indicated. There is a real risk that if the moneys, which are sitting in the Federal Court, cannot be paid out to Lechmere, that Aspermont may be wound up. I am therefore satisfied that there are changed circumstances.
In my opinion, in reconsidering this matter, it is difficult to see that there can be a serious question to be tried if Lechmere is not a party to this litigation. I also consider that the balance of convenience now strongly favours Aspermont, that is, favours Aspermont in terms that there should not be the grant of an injunction or, put in terms of this application, favours an order discharging the injunction because of the circumstances which I have mentioned. Aspermont is a publicly‑listed company. There are shareholders who are interested in the affairs of that company, and Aspermont is, in effect, the innocent party in this dispute. It has been caught up in the dispute about who is entitled to the money which Aspermont is willing to pay, and has indeed paid.
What does trouble me, however, is that Lechmere has a presence in Western Australia in order to prosecute the Federal Court proceedings against Aspermont, but Mr Kent has run into difficulties in being able to pursue Lechmere because of Lechmere's successful steps to either resist service of these proceedings on it or its success in applying to set aside service. It seems to me, though, that if the money in the Federal Court is the subject of a dispute between Mr Kent and Lechmere, that it is the Federal Court which should be able to resolve that issue.
What I intend doing is ordering that the injunction should be discharged but that such order not take effect until 17 November 2003, which will give Mr Kent time to seek to intervene in the Federal Court proceedings and obtain such orders as it considers appropriate. If Mr Kent fails to obtain an order which may bring about a resolution of the claim that it makes in relation to the moneys in a way which removes the threat to Aspermont, then this order will be effective on 17 November 2003, and that will allow Aspermont to direct that the money in the Federal Court be paid out to Lechmere. I will also grant liberty to apply, so that if there are developments in the Federal Court the matter can be brought back on in this court for orders that might be appropriate in changed circumstances.