JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: MARY -v- SCHON [No 2] [2015] WADC 146
CORAM: DERRICK DCJ
HEARD: 6 NOVEMBER 2015
DELIVERED : 11 DECEMBER 2015
FILE NO/S: CIV 3629 of 2014
BETWEEN: BRANDON EDWARD MARY
Plaintiff
AND
IVAN THOMAS SCHON
Defendant
Catchwords:
Practice and procedure - Appeal against decision of registrar granting summary judgment to defendant - Alleged intentional interference by director of company in contractual relations between company and third party - Alleged misleading or deceptive conduct engaged in by director of company towards third party contracting with company - Alleged negligent misstatements made by director of company to third party contracting with company - Alleged misleading or deceptive conduct engaged in by director of company to the company
Legislation:
Australian Consumer Law
Corporations Act 2001 (Cth)
District Court Rules 2005 (WA)
Fair Trading Act 1987 (WA)
Rules of the Supreme Court 1971 (WA)
Trade Practices Act 1974 (Cth)
Result:
Appeal allowed in part
Representation:
Counsel:
Plaintiff: Mr C E Chenu
Defendant: Mr J P Cook
Solicitors:
Plaintiff: Bennett & Co
Defendant: Mendelawitz Morton
Case(s) referred to in judgment(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Apache Energy Ltd v Alcoa of Australia Ltd (No 2) [2013] WASCA 213; (2013) 45 WAR 379
Biscayne Partners Pty Ltd v Valance Corp Pty Ltd [2003] NSWSC 874
C Evans & Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194
Elovalis v Elovalis [2008] WASCA 141
Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994)
Gallop Investments Pty Ltd v Jones [2002] WASC 66
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 328
King v Milpurrurru (1996) 136 ALR 327
Marsh v Baxter [2015] WASCA 169; (2015) 49 WAR 1
Melville v Gibbs [2012] WASCA 207
Mentmore Manufacturing Co Ltd v National Merchandising Co Inc (1978) 89 DLR (3d) 195
O'Brien v Dawson (1941) 41 SR (NSW) 295
O'Brien v Dawson [1942] HCA 8; (1942) 66 CLR 18
Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980; (2000) 177 ALR 231
Rutherford v Poole [1953] VLR 130
Smec Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138
Smith v McCusker QC [2005] WASCA 226
Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507
Trevor Ivory Ltd v Anderson [1992] 2 NZLR 517
Tsaprazis v Goldcrest Properties Pty Ltd [2000] NSWSC 206; (2000) 18 ACLC 285
DERRICK DCJ:
Introduction
By chamber summons filed on 12 February 2015 the defendant made an application under O…
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- AGLC
- Mary v Schon [No 2] [2015] WADC 146
- Case
- [2015] WADC 146
- Decision Date
CaseChat Overview and Summary
The central legal issues before the court were whether the defendant had intentionally interfered with contractual relations between the company and third parties, whether the defendant had engaged in misleading or deceptive conduct towards third parties contracting with the company, and whether the defendant had made negligent misstatements to third parties. Additionally, the court had to determine whether the statement of claim should be construed broadly and generously, with any ambiguities assumed in favour of the plaintiff.
The court found that the statement of claim should indeed be construed broadly and generously, with any ambiguities assumed in favour of the plaintiff. It was held that on an application for summary judgment, it is not appropriate for the court to determine difficult questions of law unless they are straightforward or indisputable. The court emphasised that in dealing with a defendant's summary judgment application, it must be accepted that the plaintiff will be able to establish the material facts pleaded in the statement of claim. The court also noted that while it is not for the court to identify or accept some other cause of action not pleaded, the statement of claim should be construed broadly and generously, with any ambiguities clarified or assumed in favour of the plaintiff.
The court allowed the appeal, set aside the summary judgment, and ordered that the defendant's application for summary judgment be dismissed. The case was to proceed to trial on the merits.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Although the court may determine any difficult question of law on an application for summary judgment, it will usually be appropriate to leave the determination of such questions for trial: Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507, 514 – 515; Smec Australia v Valentine Falls Estate [20]. In dealing with a defendant's summary judgment application it must be accepted that the plaintiff will be able to establish the material facts pleaded in the statement of claim: Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608; Wright v Wright [2002] WASC 30 [13]; Gallop Investments Pty Ltd v Jones [2002] WASC 66 [4]. In Forsayth NL v Northern Gold NL (Unreported, WASCA, Library No 940012, 20 January 1994) Franklyn J said:It is not for the Court, on an O 16 application, to identify or accept some other cause of action, not pleaded, which the evidence before it might arguably support and which, possibly for good reason, was not relied on by the plaintiff in his statement of claim and then allow the statement of claim to remain on foot in reliance on a possible subsequent amendment. However, as Martin CJ observed in Elovalis v Elovalis [2008] WASCA 141 [46] when the context of Franklyn J's observations are taken into account it is clear that his Honour was referring to an 'entirely separate and discrete and unpleaded cause of action, and not to a nuance or variant of the basic cause of action pleaded'. To put it another way, the statement of claim should be construed broadly and generously, with any ambiguities either clarified or assumed in favour of the plaintiff: Smith v McCusker QC [2005] WASCA 226 [37]. On 7 November 2014 the plaintiff filed his writ of summons with an indorsement of claim. On 27 January 2015 the plaintiff filed his statement of claim. On 24 March 2015, that is, after the defendant had filed his application for summary judgment but before the application was heard, the plaintiff filed, pursuant to O 21 r 3(1) of the RSC as amended by r 48A of the DCR, an amended statement of claim. It was by reference to the amended statement of claim that the parties dealt with, and the registrar determined, the summary judgment application. I will from this point on refer to the amended statement of claim as the statement of claim. The defendant was the managing director of a company called SAS Telecom Pty Ltd (SAS). The other director of SAS was the defendant's wife. The sole shareholders in SAS were the defendant and his wife. They were each the beneficial owner of one ordinary share in the company. SAS provided satellite communication and equipment, and infrastructure services to new and existing mining camps throughout Western Australia. The plaintiff was (but no longer is) the defendant's son‑in‑law. During the period March 2007 to 31 October 2008 the plaintiff was employed by SAS as its general manager. On 31 October 2008 the plaintiff and SAS entered into a Separation Agreement by which the plaintiff's employment with SAS was terminated (the Separation Agreement). The Separation Agreement was, on the plaintiff's case, partly oral and partly in writing. The Separation Agreement, to the extent that it was in writing, was, so far as is presently relevant, in the following terms:Key Terms for Mutual Separation Agreementbetween BRANDON MARY (BM) & SASWithout prejudice until this agreement is signed by both parties, BM to resign position as General Manager, effective October 31, 2008, under the following terms and conditions:1.Commencing November 1, 2008 through March 31, 2009, BM's nominated company to be paid consultancy fee of $20,833.33 + GST per month, on the first day of each month in advance, beginning 1st November, 2008. BM will be entitled to up to three (3) days off during any month, yet unpaid.2.SAS will payout to BM 10% of SAS net profit from July 1, 2008 through October 31, 2008. This sum will be determined and fully funded by 10 November, 2008. Also paid on 31 October 2008 will be all accrued leave, with leave loading, as of close of business October 31, 2008.3.50% of Brandon Mary's 'loan' account will be deducted from the above amount. That sum to be deducted is $33,992.40. SAS relinquishes all rights to collect any further sums from that balance. Also, to be deducted is the airfare of BM to Satellite 2009, the cost of which will be taken form [sic] the AMEX bill of BEM.4.BM will be allowed to take leave between the afternoon of November 3, 2008, and through November 6, 2008, without prejudice to the remaining terms herein.5.During this 5 month period, BM will assist in an orderly transition of SAS management to a newly hired GM, MD or CEO. In addition BM will be available to consult to SAS on any matters required by SAS.…7.The consultancy agreement will be reviewed as of March 31, 2009, and SAS will then decide, if not before, at that time to cease or continue the consultancy for a stated period on the same financial terms as above or other as mutually agreed.8.No holiday or sick leave will accrue during this consultancy period. It is agreed that BM will have off three (3) weeks between December 24, 2008 and January 13, 2009. This will not be paid as accrued leave has already been paid as above.…12.BM will return all Laptops, Blackberrys, mobile phones etc that are the property of SAS by COB, November 3, 2008.13.Any interpretation of any terms of the above will be by mutually agreeable counsel. Each party acknowledges that this agreement was drafted jointly and accordingly the laws of interpretation against the drafter will not apply.