Lukosius v Rick Corbett Engine Reconditioners P/L No. DCCIV-96-1469 Judgment No. D3608

[1997] SADC 3608

Court

DISTRICT COURT OF SOUTH AUSTRALIA

Judgment of His Honour the Chief Judge

Hearing

04/02/97, 17/02/97.

Catchwords

PRACTICE AND PROCEDURE - ABUSE OF PROCESS - REVIEW OF MINOR CIVIL ACTION Husband and wife parties to proceedings in Family Court for settlement of property - final order made - subsequently husband brought minor civil action claiming damages for negligence from company of which wife managing director and majority shareholder. Held that magistrate had erred in ruling that claim barred by orders made in Family Court and that action should not have been dismissed as an abuse of process. Order of the Magistrates Court dismissing claim set aside - judgment for the plaintiff for the sum of $1,391.65.

Materials Considered

• W.G.H. Nominees Pty Ltd v Tomblin (1985) 123 LSJS 295, considered.

Representation

Applicant PETER LUKOSIUS:
In Person

Respondent RICK CORBETT ENGINE RECONDITIONERS PTY LTD:
Represented by: MRS E C CORBETT, DIRECTOR

DCCIV-96-1469

Judgment No. D3608

5 June 1997

(Civil: Minor Civil Review)

LUKOSIUS v RICK CORBETT ENGINE RECONDITIONERS PTY LTD

Civil - Minor Civil Review

The Chief Judge

This is an application to review a decision of the Magistrates Court in respect of a minor civil action.

By summons filed on 22 August 1996 the plaintiff sought to recover the sum of $1,391.65 from the defendant.The plaintiff has, at all times, been unrepresented in these proceedings.His claim, as endorsed on the summons, reads:-

"The plaintiff claims from the defendant the sum of $1391.65 being costs pursuant to fire damage to plaintiff's boat, occurring January 1994, and solicitors costs $150.00.Full particulars whereof the defendant has received."

The defendant filed a defence on 28 August 1996.The grounds of the defence were stated to be as follows:-

"1. Defendant denies any responsibility for any damage caused to plaintiff's boat.

2. All this was taken into account in the Family Court at property settlement on 24.5.96."

It is common ground that the plaintiff was at one time married to Mrs E.C. Corbett and that she is the majority shareholder in, and the managing director of, the defendant company.The marriage between the plaintiff and Mrs Corbett took place on 16 May 1992.The marriage, however, was not a lasting success. Husband and wife finally separated in June 1994.

Soon after that separation, Mrs Corbett instituted proceedings in the Family Court of Australia seeking possession of the matrimonial home and an order restraining the plaintiff from entering any residential or business premises occupied by her and a further order restraining the plaintiff from "assaulting, beating, molesting, harassing, communicating with or interfering with or annoying" her.Finally, she sought a settlement of the property owned by either of the parties to the marriage.

On 15 July 1994, and by consent, McGovern J made orders in the Family Court whereby the plaintiff was to pay certain moneys to Mrs Corbett and she was to transfer to him her interest in the former matrimonial home.Certain consequential orders were also made.The order so made was expressed to be of an interim nature and it included directions as to the future conduct of the proceedings.

The plaintiff filed an answer to Mrs Corbett's claim and, later, an amended answer and cross-application as to property matters was filed on his behalf. In the document last mentioned, the plaintiff pleaded, amongst other things, that "the following facts are relevant to the orders sought . also outstanding is the issue of liability for certain debts of the parties, namely, boat repairs at the cost of $1391.65 . ".

In the same application, the following pleadings were made on behalf of the plaintiff:-

"(19) The wife owns the premises situate at 44-46 Trigg Street, Blair Athol.

.

(21) These premises house the company Rick Corbett Engine Reconditioners Pty Ltd ("the Company") of which the wife owns 99% of the shares and receives a salary as Managing Director.The Company is the 'alter ego' of the wife.

.

(25) During the marriage a Hamilton Jet 16' Runabout boat which had been owned by the husband prior to marriage was stored at the Trigg Street premises in a shed extended for that purpose by the husband.

(26) In January 1993 through the negligence of employees of the company the boat was severely damaged by fire.There is an outstanding debt of $1,391.65 payable for the damage caused."

In her reply, Mrs Corbett denied the allegation contained in paragraph 26 and asserted that the fire had been caused by "spontaneous ignition of old flares stored in the boat."

The dispute between the plaintiff and Mrs Corbett as to property matters was finally resolved on 24 May 1996 when Gun J ordered:-

"(1) That in full and final settlement of all claims for settlement of property which either party has or may hereafter have against the other:-

(a) That each of the parties do retain the real property currently registered in each of their sole names including as to the husband the property situated at 24 Dene Road, Highbury in the State of South Australia being the whole of the land comprised and described in Certificate of Title Register Book Volume 5121 Folio 795 and the properties situated at 4 Colwood Avenue, Fulham Gardens and 19 Curzon Street, Camden Park in the said State and as to the wife the property situated at 7 Dene Road, Highbury in the State of South Australia and the property situated at 44-46 Trigg Street Blair Athol in the said State being the whole of the land comprised and described in Certificate of Title Register Book Volume 2313 Folio 154

(b) That the wife do retain as her sole property free of any claim by the husband all items of furniture, goods and chattels in and about the property at 7 Dene Road, Highbury or otherwise in her possession, power or control.

(c) That each of the parties do otherwise retain all the property both real and personal currently in their respective possession, power or control together with their respective entitlements under any insurance, assurance or superannuation policies.

(d) That each party do pay their own costs of and incidental to these proceedings."

That order clearly resolved all issues between the plaintiff and Mrs Corbett as to the division and settlement of property.

In these proceedings, however, the plaintiff pursues the claim in respect of the damage to his boat against the defendant company.As previously noted, Mrs Corbett is the majority shareholder in, and the managing director of, the company.

When this action came on for hearing in the Magistrates Court, the learned magistrate upheld a submission made on behalf of the defendant company that the claim constituted an abuse of the processes of the court.During the course of giving very brief reasons for her decision, the learned magistrate said:-

"I dismiss the claim as an abuse of process of the court.It is an attempt to relitigate issues which appear to have been finalised in the Family Court, and in my view the same principles apply in relation to this case as were applied in the High Court in the cases of Walton v Gardiner (1993) 177 CLR 378 and in Williams v Spautz (1992) 174 CLR 509.I do not consider a stay of proceedings to be the appropriate way of dealing with abuse of process in a minor civil action.I think it is preferable to exercise the power to dismiss the claim."

It is, of course, the plaintiff who has sought a review in this Court of the proceedings in the Magistrates Court.The issue upon which the learned magistrate determined the action has been re-argued during the course of the review.I have also received such evidence as the parties wished to adduce as to the facts upon which the plaintiff's claim is based.At the hearing before me, Mrs Corbett represented the defendant company, but, in doing so, she was assisted by, and handed up to me as part of her final address, notes that had been prepared for her by her solicitors as to the effect of the final order made by the Family Court.

As I have already noted, there is no doubt that the damage suffered by the plaintiff's boat in a fire, and the liability for the cost of its repair, was raised in the pleadings filed in the Family Court.The matter was raised as a relevant matter to be considered in the final determination of the issues that were before that Court.Allegations were made in the pleadings and references were made in the affidavits filed by the parties to the matter.That, however, is all that did happen.As I read the order of the Family Court, no adjudication was made upon the issue.There is nothing unusual in that.Final judgments are often made without express reference to all of the issues raised by the pleadings or in the evidence.

In the present case, indeed, it would seem that the Family Court deliberately declined the invitation extended in the pleadings of the parties to entertain in separate detail a series of minor issues.I refer to paragraph (c) of the order.Having referred to certain items of specific real and personal estate, the Court then directed that each of the parties should "retain all the property both real and personal currently in their respective possession, power or control . ".Any claim that the plaintiff may have had against the defendant company would seem to me to be personal property in his possession for the purposes of classifying it in terms of the order of the Family Court. Accordingly, there seems to me to be no doubt that the order did not extinguish any claim that the plaintiff may then have had against the defendant company. Had the plaintiff sought to pursue any claim against Mrs Corbett personally, that would have been a different matter by virtue of the operation of the general provisions of the Court's order.It is not to the point that the plaintiff, in his pleading, had referred to the defendant company as the "alter ego" of the plaintiff.That was merely an allegation.It is quite clear that in fact and in law the defendant company is an entirely different legal person from Mrs Corbett.

I am not to be taken as saying that the order of the Family Court could not have been made in such a way as to bar effectively the plaintiff's claim against the defendant company.That argument does not arise here and can be left to another day.In my opinion, the order that was actually made by the Family Court did not seek to impose and did not in fact impose any such bar. Indeed, the reverse is the case.It specifically preserved any asset in the plaintiff's "possession" at the time when the order was made.As I have said, I consider that the plaintiff's claim against the defendant company was such an asset.

For these reasons, I am persuaded that the plaintiff remains at liberty to pursue such claim as he may have against the defendant company and that no question of abuse of process arises in these proceedings.In my opinion, the learned magistrate fell into error when she was persuaded to the contrary.

On the evidence before me, I am satisfied that the plaintiff's boat was left for storage in the custody of the defendant company.It appears that the plaintiff financed the extension of the premises occupied by the defendant company to enable the boat to be stored there.The plaintiff, however, did not make any payment to the defendant company in respect of the storage of the boat.There is no question but that the boat was damaged by fire whilst it was held at the defendant's premises.There is a conflict in the evidence as to whether the fire occurred shortly before Christmas in 1993 or whether it occurred in January 1994.The matter is not of any great consequence.I am satisfied that it occurred on an extremely hot day.It appears from the evidence that the employees of the defendant company occasionally moved the boat out of the shed in which it was normally stored in order to gain better access to nearby plant, equipment and stores.When this was done, the boat was normally returned to the storage shed at the end of the day.There was a suggestion that the boat may have been left out in the defendant company's yard for a day or so before the fire, but I am satisfied, on the probabilities, that it was only moved outside on the day upon which the fire occurred.The boat was left outside in the hot summer sun.One of the defendant company's employees, who was allowed the use of the boat by the plaintiff, had previously taken the flares from their customary place of storage inside the boat and placed the box containing the flares on the fibreglass decking of the boat.At least one of the defendant company's employees had seen the flares and noted that they did not appear to be in very good condition.When the boat was pushed out into the sun on the day in question, the flares were left on the deck of the boat and in the full sunlight.During the course of the day, the flares ignited with the result that damage was done to the fabric of the boat itself.

True it is that the defendant company was not being paid to store the boat, but it is equally true that a gratuitous bailee owes a duty of care to the owner of goods bailed.A learned discussion as to the law applicable may be found in W.G.H. Nominees Pty Ltd v Tomblin (1985) 123 LSJS 295.In concluding his judgment in that case, Zelling J said (at p266):_

"When one looks at the total circumstances of this case, the comment of Palmer in his work on Bailment (1979) page 300 is obviously correct when he said:-

'Leaving aside the problem of the gratuitous professional bailee, who may perhaps be letting himself in for more than he bargained for, it seems that the universal formula of 'such care as is demanded by the circumstances of the case' can generally be manipulated to produce the just result.As to what these circumstances are, a useful statement comes from the American decision in McLaughlin v Sears, Roebuck & Co:-

. what is reasonable care must materially depend upon the nature, value and quality of the thing bailed, its liability to loss and injury, the circumstances under which it is deposited, and sometimes upon the character and confidence and particular dealings of the parties.' "

Accordingly, the defendant company owed a duty to the plaintiff to take reasonable care of the plaintiff's boat in all of the circumstances of the case.To place the boat outside on such a day was to ensure that its fibreglass decking would become extremely hot.To leave the flares, which did not appear to be in good condition, on the deck of the boat in those circumstances was to run a real risk that they would ignite.Common sense dictates that flares must ignite comparatively easily if they are to fulfil the purpose for which they are designed.Common sense also dictates that flares must be handled very carefully to avoid the risk of their being ignited accidentally.The need for considerable care was obvious on the day in question.It would have been a simple matter to place the flares in a much cooler and safer place.I am satisfied that the defendant company, through its employees, failed to exercise reasonable care in storing the boat on the day of the fire.

The evidence of Mr K.L. Noble as to the extent of the damage done to the boat was not challenged at the hearing before me, nor was there any challenge to the evidence of the plaintiff as to the cost of replacing the accessories not included in Mr Noble's assessment.In total, the damage done to the boat and its accessories amounted to the sum claimed.

For these reasons, the order of the Magistrates Court dismissing the action will be set aside and there will be judgment for the plaintiff for the sum of $1,391.65.I will hear the parties if any order is sought as to costs.

NOTE:

That the plaintiff was not represented at any stage.Any order as to costs would seem to be limited to the court costs plus witness fees.

5/6/97

The Chief Judge orders that the defendant pay the plaintiff's costs fixed at $271.00.