Mevahire Pty Ltd v Huxtable - [2022] WASC 429

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MEVAHIRE PTY LTD -v- HUXTABLE [2022] WASC 429
CORAM:   MASTER SANDERSON
HEARD:   12 OCTOBER 2022
DELIVERED          :   14 DECEMBER 2022
PUBLISHED           :   14 DECEMBER 2022
FILE NO/S:   CIV 1282 of 2021
BETWEEN:   MEVAHIRE PTY LTD
First Plaintiff
AND
CARL ALAN LOUIS HUXTABLE
First Defendant
CAMERON HUGH SHAW
Second Defendant
RICHARD ALBARRAN
Third Defendant

Catchwords:

Practice and procedure - Application by defendants for summary judgment and security for costs - Turns on own facts

Legislation:

Rules of Supreme Court 1971 (WA)
Corporations Act 2001 (Cth)

Result:

Both applications dismissed

Category: B

Representation:

Counsel:

First Plaintiff	:	T Langdon
First Defendant	:	J E Scovell
Second Defendant	:	J E Scovell
Third Defendant	:	J E Scovell

Solicitors:

First Plaintiff	:	Robert Grayden Legal
First Defendant	:	Edwards Mac Scovell Legal
Second Defendant	:	Edwards Mac Scovell Legal
Third Defendant	:	Edwards Mac Scovell Legal

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

Lee v Parker [No 2] [2022] FCA 582
Re Universal Distributing Co Ltd (In Liq) (1933) 48 CLR 171
Stewart v Atco Controls Pty Ltd (in liq) [2014] HCA 15
Westpac Banking Corporation v Anderson [2017] WASC 106

MASTER SANDERSON:

By amended chamber summons dated 9 August 2022, the defendants seek summary judgment under O 16 of the Rules of the Supreme Court 1971 (WA). Alternatively, they seek an order the plaintiff give security for costs. In support of the application, the defendants relied on two affidavits of Cameron Hugh Shaw, the first sworn 3 August 2022 and the second sworn 8 September 2022. They also relied on an affidavit of Bonnie Taylor affirmed 4 August 2022. For their part, the plaintiff relied on two affidavits of Gary James Clarke, the first sworn 25 August 2022 and the second sworn 14 September 2022. There were a number of objections taken to the various affidavits and I dealt with those objections during the course of the hearing. At that time I gave brief reasons for my decision. I said I would expand upon the reasons for my rulings in this judgment. It is convenient to deal with this issue at the outset.
The defendants objected to pars 42 to 58 of Mr Clarke's first affidavit. The defendants said those paragraphs disclosed without prejudice communications which were privileged. Furthermore, the communications sought to be adduced culminated in a Deed of Settlement entered into on 24 September 2020. That document is pleaded by the plaintiff. That being so, precontractual conduct, including antecedent negotiations, is irrelevant and can only be used in aid of the construction of the agreement if that agreement itself is ambiguous. The rule exists so as to require that the parties' intentions must be ascertained from the words they have used in the contract itself.
In my view, the defendants have made good their argument. I accept the material was provided by the plaintiff for a limited purpose and was not intended to undermine the clear wording of the settlement agreement.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] WASC 429
Decision Date

CaseChat Overview and Summary

Mevahire Pty Ltd brought a claim against Huxtable, seeking recovery of moneys held by the defendant. The case was heard in the Supreme Court of Western Australia. The dispute centered on whether the defendant could lawfully draw upon funds held by a liquidator, which were subject to a lien held by the plaintiff. The defendants argued for summary judgment on the basis that the plaintiff's claim was precluded by statute and common law, and that the plaintiff had failed to provide an affidavit in support of its case. The court was required to determine whether the plaintiff's claim was arguable and thus should proceed to trial, or whether it was so untenable that summary judgment should be granted.

The court found that the plaintiff's claim was arguable and should proceed to trial. The court dismissed the defendants' objection to the lack of an affidavit, noting that the summary judgment rules allow for a less formal approach than a full trial. The court also rejected the defendants' argument that the plaintiff's claim was precluded by statute and common law, finding that the plaintiff's position was consistent with established authority and that there were triable issues of fact. The court held that the plaintiff's rights and interests in the charged funds were not necessarily overridden by the defendants' rights to draw upon the funds, and that the plaintiff's claim was not so clearly untenable as to warrant summary judgment.

The court declined to explore in detail the defendants' arguments as to why the plaintiff's claim should fail, as it had already determined that the claim was arguable. The court noted that the plaintiff's claim was based on a lien held over funds held by a liquidator, and that the defendants had not demonstrated that this claim was necessarily precluded by statute or common law. The court found that there were triable issues of fact as to the nature and extent of the plaintiff's rights in the charged funds, and that these issues should be determined at trial.

The court dismissed the defendants' application for summary judgment and ordered that the case proceed to trial. The court did not make any specific orders as to costs or other matters.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In my view, there is no substance to this objection. Order 16 differs from O 14 in a number of ways. To enliven jurisdiction under O 14, a plaintiff must, by an authorised person, verify the contents of the statement of claim and swear to a belief there is no defence to the plaintiff's cause of action. Under O 16, r 1 anticipates the plaintiff's claim is as formulated in the statement of claim. It is not open to a plaintiff on an application by a defendant for summary judgment to argue there are claims not pleaded which would result in judgment in its favour. In Westpac Banking Corporation v Anderson [2017] WASC 106 [52] the position was put as follows:The principles in relation to the determination of applications for summary judgment are well established. A party should not ordinarily be denied the opportunity to have his or her case determined following trial, and for that reason, the jurisdiction to grant summary judgment should be reserved for the clearest of cases, where there is a high degree of certainty about the ultimate outcome of the action if it were allowed to go to trial. The question is whether, on the material before the Court, it has been demonstrated that the plaintiff's action should not be permitted to proceed to trial because it is apparent that it must fail. However, that does not mean that summary judgment will be given only where the case is so hopeless as not to require argument. Extensive argument may be necessary to demonstrate that a party's case is so clearly untenable that it cannot possibly succeed. What is common to both O 14 and O 16 is that the version of facts most favourable to the respondent to the summary judgment application must be accepted. Of course if those facts are directly contradicted by evidence led by an applicant then the respondent's evidence can be rejected. But evidence is only rejected in the clearest of cases. In this application there can be no suggestion that the fact Mr Huxtable did not swear an affidavit is significant. Order 14 and O 16 provide a summary procedure - that is to say, they are materially different from a trial where the best evidence rule applies. Of course it may be preferable to have the best evidence even on a summary judgment application. But an application will not fail, generally speaking, because the best evidence rule has not been observed. It is the defendants' position the plaintiff's claim must fail for four reasons. As I have determined the defendants' application for summary judgment fails, it is inappropriate for me to explore any of these issues in detail. What follows then is a broad analysis of the defendants' position and my conclusions as to why the plaintiff's position is arguable. The first argument put by the defendants is that the plaintiff's claim is at odds with established authority. The defendants say the secured creditor's rights over, and in connection with, assets held by a company in liquidation is prescribed by ch 5 of the Corporations Act and the common law that bears upon it. Equity will not intervene except where there is the existence of a wrong, or threatened wrong, and the absence of an adequate remedy at law. The defendants rely upon what was said by Dixon J in Re Universal Distributing Co Ltd (In Liq) (1933) 48 CLR 171. His Honour expressed the view that expenses reasonably incurred in the care, preservation and realisation of the property of a company in liquidation would be 'thrown against' the fund created by the liquidator's efforts, and concluded that the liquidator's remuneration for work done for the purpose of raising the fund should be charged against it. This principle, which has its origins in the law of salvage, was upheld by the High Court in Stewart v Atco Controls Pty Ltd (in liq) [2014] HCA 15. The defendants say that given the plaintiff expressly pleads that its rights and interests in the charged funds is subject to 'satisfaction of any right of indemnity or reimbursement the subject of an equitable lien or equitable charge arising by the operation of law for costs associated with their care, preservation and administration', there is no triable issue as to whether the defendants drawing upon the charged funds to enforce their lien was lawful.