MUNDAY

[2009] WASC 389

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   MUNDAY [2009] WASC 389

CORAM:   MASTER SANDERSON

HEARD:   7 DECEMBER 2009

DELIVERED          :   14 DECEMBER 2009

FILE NO/S:   COR 199 of 2009

BETWEEN:   CHRISTOPHER JOHN MUNDAY And

VINCENT ANTHONY SMITH In Their Capacity As Joint and Several Receivers of TRUST COMPANY LIMITED (ACN 004 027 749)
Plaintiffs
 

Catchwords:

Practice and procedure - Application for adjournment of trial - Turns on own facts

Legislation:

Nil

Result:

Trial adjourned

Category:    B

Representation:

Counsel:

Plaintiffs:     Mr I R Freeman

Intervener:     Mr M G Pendelbury

Solicitors:

Plaintiffs:     Lavan Legal

Intervener:     Murcia Pestell Hillard

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

Nil

1. MASTER SANDERSON:  This is the plaintiffs' application for declarations under s 418A and s 424 of the Corporations Act 2001 (Cth) that their appointment as receivers and managers of certain property of Trust Company Limited (Trust) was valid. In particular, the plaintiffs seek the declaration in relation to land in Sinagra (the Property). In their capacity as receivers and managers they are looking to sell the Property.

2. Westpac Banking Corporation (Westpac) has lent Trust funds with which Trust purchased and has partly developed the Property.  It is pursuant to this loan agreement that Westpac has appointed the plaintiffs receivers and managers of Trust.  DevGroup Funds Management Limited (DevGroup) seeks to intervene in these proceedings.  DevGroup is the responsible entity for a managed investment scheme known as DevGroup Property Fund No 2. 

3. DevGroup is not a party to the loan agreement between Westpac and Trust.  To that extent it does not have a direct interest in these proceedings.  But it claims its interests will be materially affected if the plaintiffs exercise their powers of receivers and managers in relation to the Property.  The plaintiffs oppose DevGroup being given leave to intervene in the proceedings.  That is one of the issues to be determined.

4. DevGroup allege that because of the dealings between Westpac and Trust an estoppel has arisen which would prevent Westpac exercising its contractual rights to appoint receivers and managers under the loan agreement with Trust.  The plaintiffs denied that is the case.  Clearly, if any estoppel has arisen, it is the result of interaction between officers of Westpac and Trust.  So there are questions of fact to be determined.  Affidavits have been filed - and they are extensive - and it is proposed to cross‑examine at least three witnesses.

5. This matter first came on for hearing on 22 October 2009.  I made certain directions on the assumption the action would take no more than three hours to hear.  It was then listed for hearing on 18 November 2009.  By the time the matter came on it was apparent three hours was nowhere near long enough for the hearing.  It was also clear without points of claim from DevGroup and an answer from the plaintiffs, there was a risk of the issues not being fully crystallised.  I then listed the matter for a two day hearing commencing 9 December 2009.  I took that course on the basis the Property had been sold and settlement was set for 28 December 2009.  The parties were of the view the matter had to be resolved well before the settlement date.

6. By summons filed 4 December 2009 DevGroup sought to have the trial dates vacated and they sought further interlocutory orders.  After hearing argument and over strong objection from the plaintiffs, I adjourned the matter to a date to be fixed.  I indicated I would publish reasons for that adjournment.  These are those reasons.

7. There were a number of factors which persuaded me the best course of action was to adjourn the trial.  First, although the Property has been sold and settlement is set for 28 December 2009, there is a clause in the sale contract which allows the receivers and managers at their discretion to postpone settlement for up to three months.  In other words, in the circumstances that have arisen, settlement would not have to take place until 28 March 2010.  Although that capacity to extend the settlement date does not remove all difficulties, it means the urgency to hear the matter in December is not absolute.

8. Second, DevGroup seek to join Westpac as a party to the proceedings.  Their argument is the validity of the appointment of the receivers and managers is directly related to the exercise of contractual powers in the loan documentation between Westpac and Trust.  DevGroup wish to ensure Westpac are bound by any decision as to the validity of the appointment of the receivers and managers.  The plaintiffs say Westpac are an unnecessary party and ought not be joined.  But clearly there is an argument to be had on this point - DevGroup's claim is not so unmeritorious it could be dismissed out of hand. 

9. Further, and on the same point, DevGroup wishes to obtain discovery from Westpac.  As I have said, DevGroup allege an estoppel has arisen as a result of interaction between officers of Westpac and Trust.  In such circumstances DevGroup say there is a real prospect officers of Westpac made notes which Westpac must have on file.  DevGroup claims discovery is essential.  The plaintiffs oppose any application for discovery, again arguing that it is unnecessary.  Once again, this is a matter which should be determined on an interlocutory application.

10. Finally, there is the question of the time available to hear the matter.  The plaintiffs maintain two days will be enough.  Counsel for DevGroup thought the matter may take longer.  It is difficult to make an assessment on the length of trial at this stage, but based upon the volume of affidavit material filed to date I had concerns the matter could be dealt with in two days.  That being the case, it seemed to me prudent to adjourn the matter and allow more time to be made available to the parties.

11. On top of these matters it seemed to me to proceed with the hearing on the allotted dates might run the risk of the action being compromised by undue haste.  Given the way the points of claim are put, these proceedings raise serious questions on which there is either no authority or very limited authority.  The first question - whether DevGroup should have the right to intervene - is in itself a difficult question.  Although there is a need for these matters to be resolved promptly, there are too many risks associated with undue haste.  In my view it would be better if more time was taken by the parties, perhaps with a view to having the action proceed in February 2010. 

12. For these reasons I ordered the matter be adjourned with the costs of the adjournment and the costs on DevGroup's chamber summons reserved to the trial judge.