3   &nbbp;&nnbp;& &nbbsp; &nbp; &nbp; &nbssp; &
sp; The matter has a complex history. There
has bitig betw betwhe parties, both in Australia and in the SupCourt of Vanuatu.&ntu.
bsp; The aTheicpplicant iant iant is the executor of the estate of
his late son, Paul Gerrard Ebbaceased (the deceased) who
dwho died in
Australia on 2 December 1998. The respondent is the wid w of the deceased.
The rdent and the dehe deceased
had separated some years before his death
but were not formally divorced.
ass="rmal" style="line-height: normal; margin-top: 1; : 1; margin-bottom: 1">
4 &   &nbp; &&nbp;; &nnsp;& &nbp; &nbp; &n p;
Probate of the deceased’s will was ed
o theicant in tpremet of sland on 23 July 1999, and was
re-seal-sealed in the Supreme
Court of Vanuatu ontu on 2 Se 2 Septembptember 19er 1999.&n99. n>
&bsp; ;&nbssp;&nbp; &nsp; ;&nbpp; &nnsp;&&nsp; &nbp; &nbbp;&n p;
span>A major asset of the estate comprised
s benelly oby the deceased compMacrogement
Group Inc (Inc (MacroMacro) which, in
turn, was the registered ered holdeholder of r of 1,1791,179,820
shares in Advanced Engine Technologies Inc (AET Inc), a company
listed on
the NASDAQ Stock Exchange in the United States of America. (In many e
documentsments, the number of shares
is mistakenly stated as 1,161,820.) AET Inc
stablished thed to develop olutionary combustion engine invention.
6 &nnsp;&&nsp;;&nspp;&nssp;&nsp;   Macro is a company incorporated in
accordance with the laws of Vanuatu. Its incorporator is Moorwl Rowland
Corporate
Services Ltd.&nbse reged ofis at the ofhe office fice of a of a firm of
Chartered Accountants in Vanuatu, Moores Rowland, and
the Director of the
companyity Holdings Ltd, is an entn entity controlled by Moores Rowland.
The partner of that firm
responsible for the administration of Macro is Mr
Laurie Harrison.
7On 23 August 1999 the respondent commenced
proceedings against the applicant in the Supreme Court of Vanuatu claiming
varieliefcludiclaim for family mily maintmaintenancenance. On 27 August
1999, before the proceedings had been served on the
applicant, the
respondent obtained an ex parte injunctive order restraining the applicant,
Macro and Moores Rowland from
doing anything dly or indirectly to
d dissipate or move assets of the estate out of Vanuatu. The ex parder
was suas
supported by “the usual undertaking” as to damages given by the
respondent.
8 &bsp; &nbbp;&nnbsp; &nbbsp; &nbp; &nbp; &nbssp;
span>The applicant wanted the matter quickly
re-listed before ourt ply tcharge the ex parte order, but
regrettably etered lengthy
delays in obtaiobtaining ning a heaa hearing.ring. On 27
September 1999 he issued a summons in the Court seeking to have the
ex parte
order set aside and replaced with appropriate undertakings by him. A copy
of that ss had been served on the
respondent on about 23 September
ber
1999, before it was issued. A hg date was not assigneiigneil 29 March
2000 when
the matter was set down for hearing before Coventry J for trialtrial on
14 June 2000. On thatthe tproceeded.&nbs. His Lordship
stout the
e
proceedings with the result that the ex parte injunctive order of 2ust
1999 was discharged.
9 & p; &nsp; &nsp; ;&nbpp; &nnsp;&&nsp; &nbp; &nb p;
/s Between 27 August 1999 and 16 June 2000,
the value of the AET shares on s on the Nthe NASDAQ Stock Exchange dropped
substantially
in value, the appl allerom $50 to $US 2.US 2.25.&n25.
bsp;
n>
10 p; &nsp; &nbbsp; &nbbsp;
&bsp; ;&nbssp;&nbp; &nsp; ;&nbpp; &nnsp;&&nsp; &nbp;
The ex parte order did not appoint a return
date when theer woe recered by the Coubsp; matte
invariable prle practicactice,
wee, we consider that this should be done.&nne. bsp; An exAn ex part ord order is made without the party affected by the order
having any opportunity
to be heard[1].
As a matter of baust justice, restraints imposed by ex parte orders should
be confined both in time and scope to that
which is absolutely necessary to
secure the plaintiff’s position, and to hold tatus quo, until the
d defendant has
the opportunity to be heard. The ex parte order sh
nominate an early date, usually a few days hence, when the Court will
reconsider the matter. The hearing shoulfixed havd having regard to
time required for the proceedings to be served, and
fand for the defendant to
obtain legal advice.
12 &   &nbp; &&nbp;; &nnsp;& &nbp; &nbp;
Had a hearing date been nominated in the
presene, itrobabat the evehich ive ro this
application would notd not have have
occu occurred.
p class="NumbeNumberedList" align="left" style="text-align: left; line-height: normal; margin: 1 0cm">
13 &nbs; &nbbsp; p;&nsp; &nbp; &&nbp;;&nbpp; &n sp;
Secondly, there is a paragraph of the ex
parte order which required the applicant to account to the respondent for
e assf
thete within the jure jurisdicisdiction tion within twenty eight days.
order gave rise to f to further proceedings between
the parties. There was
no need for such an order to be made on an ex parte application. An order
f that kind wasd was oat
should have been made onde only after the applicant had
been given the opportunity to be heard. s of that kind intendeaid
eaid
the plaintiff in the prosecution of the action uson usually can, and should, be
deferred until the other party has
thortunity to place material before
the Court and to beto be heard.
14 &nbbsp; &bsp;&nbp; &nbss;&nbbsp;&&nsp; &nsp; &nbbp;&n span>We return to the primary issue before this
Court. On theolution of the intetintetory ctionapplicant
applied f inquiry
as to damages under nder the uthe undertndertakingaking. Onuly 2000
Coventry ntry J ordered that the applicant w twenty eight
days file ande and
serve the affidavit material upon which he relied in support of his
application for paymf damages,
and allowed a fu a further twenty eight days
for the respondent to file answering affidavit material, and a further
period
for the applicant to reply thereto. His Lordsixed a date for afor a
conference “to fix the trial”. The direction required the parties on
that occasion to indicate if any of the deponents were required to give ora evidence.
>
15 &&nsp;;&nspp;&nssp; &nbp;
sspan lang="ang="EN-GB">In response to thiectioe
plicaled at afft that merely recited the NASDAQ Stock
ck
E Exchanxchange
trge tradingading pric price for AET shares on the date when the ex parte order
was made and when it was dissolved, and by
reference to exchange rates
calculated a claim for damages equating the drop in value of the shares to
$AUS 4,286,104.
The affidavit failed to asdress any other facts, and in
particular failed to address the question of causation. Whthere is
precedentedent to support the proposition that on an undertaking in support
injunction which resh restrains trading
in shares, the diminution in shares is an
indicator of loss (see, for example, Mansell v British Linen Company Bank
[1892] UKLawRpCh 114; [1892] 3 Ch 159), authority is clear that the party seeking damages
under an undertaking carries the onus of establishing both the quantum of
the loss claimed, and that the loss was caused by the undertaking, not by
the litigation itself or by some other cause:
Air Express Ltd v An
t
Transport Industries (Operations) Pty Ltd [1981] HCA 75; (1981) 146 CLR 249 per Gibbs J
at 312 – 313 and per Mason J at 325. All the facts must be iigated:
Mansell v British Linen Company Bank at 163.
16  &nbssp; &nsp; &nbbp;&nnbsp; &nbbsp;
p;
The respondent filed an affidavit in reply
which addressed the facts and denied the applicanntitl to ds
on several grounds.
First, sst, she alleged thed that on 8 October 1999 she9 she had
indicated through her solicitors that she would not unreasy
withhold
her consent for the sale of the shares if the applicant had a serious
proposition for the sale of the shares.
She deposed that therr sher she was
at no time asked to consent. Secondly, sherted that thet the applicant had
not
during the operation of the ex parte order had an intention to sell the
shares. Thirdly, she asserted thaoughout this time
the applicant was
not in possessionssion of the relevant share scrip and was not in a position to
sell hares even if
he had wished to do so, and she identified factual
material to support port that proposition.
17 &nbp; &nnbp;&&nbp;;&nbpp; &nsp; p;&nssp;
The matter was brought on for hearing
b CoveJ on ober when pears the respondent’s
solicitors pointed out that the appliapplicant’cant’s
affs affidaviidavit matt materialerial did not
address causation, and did not identify material facts that would support an
entitlement to damages. That is Lordship to directirect that the applicant
file and serve a Statement of Claim within
twenty eight days, and directed
that the respondent within een days thereafter file and serve a
“motion to stto strike out the Statement of Claim and supporting affidavits”.
The applicant was given leave to file further affidavits in support of his
claim.
&nsp; & p;&nbp; &nsp; &&nbp;;&nbpp; &nnsp;
p;
lpan lang="EN-GB">On 30 October 2000 an elaborate Statement
of Claim was fil the cant pleaded that tminutn
lue of the shares
ires in resn respect pect of which damages were claimed (and
nd
q quantiuantified) was caused by the ex parte order and
the restraining effect
which it had on the applicant and Moores Rowland.
<
19 style="font:7.0pt "Times New Roman"">   &nbssp;&nnbp; &nsp; &nbbp;&nnbsp; &nbbsp;
On 13 November 2000, at which time no
additional affidavit mal had filethe applicant, ndentough her solicsolicitorsitors,
iss, issued aued a summ summons sons seeking an order that
“the Defendant’s Statement of Claim for damages as a result of the
injunction of 27 August 1999 be struck out
and the Application for damages be dismissed”.
This summons was supported by affidavits from the respondent’s solicitors
which deposed to facts said to establish that
the applicant was unable
through the period thatex parte injunction was in force to dispose of
the AEhe AET shares.
0cm">
20 &nbp; &nbssp; &nbssp;
p;
That summons came before Coventry J on 7
December 2000. On 13 December hp, whort port published
reasons, adjourned consideration.&nbn.
Hsp; He held that the application was
premature as the applicant wished to file further affidavit materialp; It is
clear from trom the published reasons that the respondent’s application was not
made under the Rules of Court as an application
to strike out the pleading
on the ground that it failed to disclose a cause of action. Rather, it was
applicaplication
made in the inherent jurisdiction of the Court on the basis
that the affidavits before the Court did notort the pleadings,
and were
insufficient to establish causation. His Lordship ohip observsp:
p;&nssp; p;
“T “The plae plainplaintiff went through the existing affidavits, particularly in the
defendant’s
case and said, quite simply, unless
that evidence is changed radically then no additional or explanatory
affidavits can save the claim.
This is particularly so if the affidavits in
the plaintiff’s case are used. She asked turt to exercisercise its inherent
jurisdiction.”
2n style="font:7.0pt "Times New Roman""> &nbs; &nbbsp;&&nbp; &nsp; &nbbp;&nnbp;& &nbbsp;
p;
That the application was made under the
inherent jurisdictiostrik the claim is also rted e
ading to his Lhis Lordshordship’s
ip’s reasoreasons whns which reads:
&nbssp; &nbssp;
“I “Interimterim erim Ruling on Application to Strike Out a Claim Made Pursuant to an
Undertaking
as to Damages”
22 &nbp; &nnbsp;;&nbp; &nsp; &nnbp;&&nbp;; &nnbsp;
p;
On 24 January 2001 further affidavits were
filed by the applicant, his son Mr J J Ebbage who had beensting
er in the administration
ofon of the the estate, and from his principal soliciolicitor
in Queensland, Mr G J Hamilton.
23 & p; &nsp; &nsp; ;&nbpp; &nnsp;&&nsp;
p;
lpan lang="EN-GB"> Febr2001 Coventry J gave
directions requiring the applicant to complete his affs affidaviidavit material
by 1
March 2001 and the respondent to complete her8 Mar01, and fixed a
d a
date for hearing of the respondent’s
motion to strike out the claim. That
application came on for hearing on 26 March 2001 and resulted in the order
against
which the applicant now seeks leave to appeal.<
24Before Coventry J, the parties filed
detailed written submissions which were supplemented by oral submissions.
It is
plain from thp respondent’s submissions the Court was being
i invited to exercise its inherent jurisdiction to strike out
the proceedings
on the basis that thidavit material that had been filed failed to
establitablish loss caused by undertaking,
and, on the contrary material advanced
through the respondent’s affidavits, not challenged by the applicant, showed
positively
that the applicant had not been in a position to sell the shares
throughout the period in question.
25 &nnsp;&&nsp;;&nspp;&nssp;&nsp;
The formal order made byntry 30
arch was t> “Thim ma the dant ant t the
unde undertakirtaking inng in dama damages gges
given iven by thby the plae plaintiff upon the making of the ex
parte order of 27 August 1999 is hereby
struck out”. TGB">The order itself, and his
Lordship’s reasons, speak of striking out the claim, not the Statement of
Claim. The reasonsclear
the orderorder was made pursuant to the
inherenherent jurisdiction of the Court to stay or dismiss an action which is an abuse
of its process or is frivolous or vexatious. His Lordshind that
t the the claim was frivolous or vexatious because it
could not be supported on
the affidavit material filed by the applicant. His Lordmade the order
r
bonly on his interpretation
tion of the affidavit material filed by the
applicant, a point emphasised by his Lordship in his reafor refusing
leave
to appeal.
<
26 style="font:7.0pt "Times New Roman"">   &nbssp;&nnbp; &nsp; &nbbp;&nnbsp; &nbbsp;
The applicant contends that leave to appeal
should be granteduse, said Lordship erredailin
y a principle iple firstfirst
esta establishblished ined in Will Willis v Earl Howe [1893] UKLawRpCh 68; [1893] 2 Ch 545,
and in consequence the wrong test was applied by his Lordship in ruling that
the claim should be struck out. Furthe
is said that in anyn any event his
Lordship misapprehended the facts. It is contended there was was
conflicting affidavit
material which ward a trial at which the
deponents could be cross-examiexamined. The applicant contended that this Court
has at no stonsidered the power of the the Court in its inherent
jurisdiction to strike out proceedings, and that it
should take this
ortunity to do so.
27 &nsp; &nbbsp; &nbbsp; &nbp;
p;
The inherent power of a court of record to
stay or dismiss proceedings that n abu its ss or are
frivolous or vexatious
is long standing aing and well established: see Thei>The
White Book [The Supreme Court Practice 1997, 18/19/18], Bullen & Leake &
Jacob’s Precedents of Pleadings 12th ed., p 149 - 150, and
Jacobs and Goldrein , Sweet-Maxwell,
1990 at pp 227 – 229. It is not sted that his Lois Lordship in any manner
misapprehended the scope of
the jurisdiction, save that in its exercise it
is said that he failed to apply nciple established in Willis v Earl
Howe.  Hisship correctly recognisognised that the jurisdiction is
distinct from the powers of the Court conferred by the Rules
to strike out
pleadings which on their face fail to disclose a of action. He
recog that that the jurisdiction
is one which ought to be sparingly
exercised, and only in exceptional cases (as to which see Lord Herschell in
Metropolitan Bank v Pooley (1885) 10 App Cas 210 at 219).
28 &nbp; &nnbp;&&nbp;;&nbpp; &nsp; p;&nssp;
Counsel for the applicant contends that
Willis v Earl Howe established that the scope for leading evidence on a
ike oplicais limited to the esta establishblishment ment of incontrovertible
facts which in themselves show that the cause of action is not
maintainable. We think this is as upon Willis v Earl Howe which
the decision does not support. As a matter of, the proceeroceedings in that
case were dismissed because the Statement
of Claim asserted facts which were
notoriourong. However, the reasons of tue Court do not in terms so
limit the scope
for for affidavits. The defendant, without driivering a
Statement of Defence, had moved the Court to take the Statement of
Claim off
the file as not disclosing easonable cause of action and to dismiss the
action as frivolous and vexatious.
nbsp; The n was supported wted with an
affidavit which addressed the facts. Lindley LJ at 551, havireaalready
decided
that the case should be dismissed e ground that it did not
relevantly allege a fraud toud to support the relief claimed, went
on to say:
&nnsp;&&nsp;;&nspp;&nssp; “sp; “But when we look at the affidavit filed by the
defendant’s solicitor, Mr Trower - and
it has been settled that an
icati this may pport affis – it isit is obvi obvious tous that
hat
this this is a most
hopeless action. The about the supp>supposititious child has been circulated since 1853, and the plaintiff’s predecessors in
tle might have discovered the fraud long ago, if fraud ther
there was, without
any difficulty. The action is utterly hopeless and without foundation, and
I therefore think Mr Justice
Kekewich was right in not allowing it to go
on.” an>
&n/span>
Bowen LJ agreed, and Kay LJ at
554 said:
&nbssp; &nsp; &nbbp;&n
“An affidavit has been filed on behalf of the Defendant,
as the pce al to shat tctionrivolr vexatious.
According to that
afft affidaviidavit, tht, the foue foundatindation ofon of the Plaintiff’s case … has
been publicly alleged again and again
for many years. It has been ground fond for more than one action by claimants of this estate, who have failed
….”
29; &nsp; &nbbsp; &nbbsp;
p;
What is clear from Willis v Earl Howe
is that all the facts of the case must be investigated and this can be done
on affidavits. This is in accordance the
judgments in Metropetropolitan
Bank v Pooley, decided a few years before. In that Lord Blackburn
n
a – 221 had said in relation to the inherent jurisdiction:
pan lang="EN-GB"> &nnbsp;;&nspp;&nsp; &nsp; “ “From early times (Ies (I rather think, though I have not looked at it enough
to
say, from the earliest times) the court had inherently
in its powerrightee ths process wass was nots not abus abused by a
proceeding without reasonable grounds, so as to be
vexatious and harassing –
the court had a right to protect itself against such an abuse,
but that was not done upon
demurrer, or upon the record, or upon the verdict of a jury or evidence
taken in that way,
but it was done by the court informing its conscience
upon affidavits and by a summary order to stay the
action which was brought under such circumstances as to be an abuse of the
process
of the court, and in a proper case they did stay the action.”
(emphasis added)
class="NumbeNumberedList" align="left" style="text-align: left; line-height: normal; margin: 1 0cm">
30 nbsp; p; ; &nbbp; &nbp; &nbs; p;
span>In our opinion, it is clearly established thatupporan aption underinherent jurisdiction,
affidaffidavitsavits may be adduced,
unconfined by any runy rule ofle of prin principleciple which limits
them to the establishment of “incontrovertible facts”.
31 p; &nbp;&nbp; p; &nnsp;&&nsp; &nbp;
s n>Affidavits filed in support of an
application may btesteaffid from the side cont
effect. If this occursccurs, it isit
is probable that the Court will will not bnot be sate satisfieisfied
that the facts are sufficientear to conclude that the
action is bound
to fail. It is wstablished that that that the Court should not exercise the
inherent jurisdiction if
there is any reasonable prospect that the
resolution of disputes within the evidence, if resolvvourably to the
partyparty
opposing dismissal, could support that party’s claim. <
32 &nnsp;&&nsp;;&nspp;&nssp;&nsp; p;&nssp;
In the present caseare ntisfi tis Lop misunderstood the law in that respect. He e He expressed hsed hisd his
is
u ultimate
conclusion as follows:
&nnsp;&&nsp;;
sp “ here here is nothing on the face of the affidavits to show that at any time
between 27 August
1999 and 16 June 2000 thentiffin a ion t deth thres had the restraistraininspan>g ordg order noer not beet been made.
Indeed, the contrs s is so. Had the [defendant] ut, ont, on 27 August,
immediately
to sell or otherwise deal with the shares then [he] would not
have been in ation so by 16 June 2000, irrespective of the
re restraining order.
<
&nnbsp;; &
In the cthe circ circ circumstances, there is no evidence of any loss to the defendant as a
sult e resing
oan laN-GB"nd I e out the
claim.”
/p>
<
33 nbsp; p; &nbp; &nbssp; &nbssp;
In our opinion, as there is no reason to
doubt the existence, nature and scope of the inherenisdicof th Court, and as we are
satisfied that hist his Lord Lordship ship did not misapprehend the
function of affidavits on such an application, we are not
satisfied that
these matters provide a ground for granting leave to appeal. In the absence
ny impy important issue of
law that requires the consideration of the Court
of Appeal, to obtain a grant of leave the applicant must at the least show
at there is a reasonable prospect that the appeal would sucd succeed if leave
were granted. In this case the applicant
would have to show that his
Lordship erred in his interpretation of the affidavit material, and that he
should have coed
that there were areas of contention worthy of trial
which, if resolved favourably ably to the applicant, could lead to an award
of
damages in his favour.
an style="font:7.0pt "Times New Roman""> &nbp; &nnbsp;;&nbp; &nsp; &nnbp;&&nbp;; &nnbsp;
p;
In his reasons for decision, his Lordship
addressed the twocipleentio the respondentst the
idence failed iled to shto show
thow that that the appe applicant had an intention to sell the
the
shares during the relevant time, and secondly that, whatever
the applicant’s
intention, he was at no time in a position to sell them.
35&nbbsp;   &nbbp;&nnbp;& &nbbsp; &nbp; &nbp;
On the first ground, his Lordship ruled in
favour of the applicant, observing that the applicant had sworn that if he
had been free to do so he woave she sh bsp; The mThe matteratter was
decided against the applicant on the second ground.
36 p;&nssp; p; &nbp; &nbp; ;
p span>On the second gr the ndent cond thapan><
(a) p;&nssp; p; &nbp; &nbp;
n>tha estate did not not have the share scrip and could not obtain it, or
lawfully
obtain a replacement;
clasote" ="left" style="text-align: left; maleft: 36.0pt; margin-top: 1; : 1; margimargin-botn-bottom: tom: 1">
<
(b) & p; &nsp; &nsp; ;&nbpp; &n sp;
throughooughout the period a third party, completutsid control
of the respondents, blocked the applicant from gaining the informaformation
tion
needed to sell the shares; and
(c) p; &nsp; &nbbsp;
span>a fourthourth partyparty, as known to the applicant, was making a claim to the
beneficial
interest in the shares.
37 &nbs; p;&nssp; p; &nbp;
p;
His Lordship concluded that the applicant’s
afits, read eir ety, ped noence contradicting
these propositpositions.ions. 
As to the first contentionntion, his Lordshipdship obse observed that
the applicant accepted that he did not have the share
scrip. The applicant
cond tded that he would have been able to replace the share scrip, and in
support of that assertion
tendered a letter from a solicitor instructed on
his behalf in the United States inember 2000, that is some thme three months
after the injunction had been discharged. Whilat letter identifies
ies
statutory provisions which permit the replacement
of share scrip where it
has been “lost, stolen or destroyed” his hip did not consider
that during the relevant time thme the applicant was in a position honestly to
declare that
to be the situation. We are not peed that his Lhis Lordship
erred in that conclusion.
38 &&nsp;;&nspp;&nssp; &nbp;
sspan lang="ang="EN-GB">The applicant’s afit mal dep
on 1ember the applicant had made contact with Mr H Mr Harrisarrison aton
at
Moo Moores Rres Rowland. Mr Harrison informed him that the deceased was the
beneficial owner of the shares
in Macro. At that time Mr Harrisoeedgreed
that the applicant could attend Vanuatu to it the company records.
However14
December mber mber 1998 Mr Harrison informed him that he would not
disclose any intion to him until probate hate had been issued
in Australia
and re-sealed in Vanuatu. In an afit sworn on 2 May May 2000 the applicant
deposed that:
;&nbssp; &bsp; &nb p;
“On 18 Septembptember 1999, I had a further telephone conversation with Harrison. During that telepconversatersation
Harrison informed me that I
obvi obviously represented a beneficial owner in the Vanuatu companies, but there were ‘others’
involved who also claimed to have a beneficial interest in those
companies, he would not provide me with information regarding the Vanuatu
companies.
&nbssp; &nsp; &nbbp;&n
arrison refused tsed to discloseclose to me how many or who the
other claimed beneficial owners in the Vanuatu coes websp; ated
as tcompawere inte internatirnational
onal compacompanies,nies, they they were governed by
the International
Companies Act 1992 and that there were secrecy
provisions preventing him disclosing information to me. During this
tone cone conversation,
Harrison said that he had received facsimile
transmissions from
‘other parties’‘other
parties’ were.
lass="QuoteQuote" align="left" style="text-align: left; text-indent: -36.0pt; margin-left: 36.0pt; margin-top: 1; margin-bottom:
& p; &nsp; &nsp; ; bsp;
BylCivil Case Case No 103 of 1999 dated 4 November 1999 and filed herein, I as
the executor
of the estate and as plaintiff sought orders against various
persons iing trtnerMoores Rowland cond compellmpelling Ming Moores
Rowland,
its servants, agents and all trust and nominee companies
controlled by it to disclose to my solicitors for their inspection
information concerning the Vanuatu companies and details
of any bank
accounts held by those companies. That originating summons is still
pending.”
39 &nbs; &nbbsp;&&nbp; &nsp; &nbbp;&nnbp;& &nbbsp;
p;
In an affidavit of Mr John Ebbage on
12 Seer 20 procgs inFamily Court of Australia at
Brisbane (an exhn exhibit ibit to anto
an affi affidavitdavit of t of the applicant filed on 24 January
2001), in explaining the inability of the executor of the
estate to comply
with the order requiring him to account for the Vanuatu assets to the
respondent, he said:
&nnbsp; &nnbsp;
“U “Unfortnfortnfortunately, all of the books and records relating to the assets of the
estate
were held by a firm of accountants in Vanuatu, Moores Rowland who
simply refused to provide the executor with information regarding
the estate
assets which were controlled by Moores Rowland. Mooresand’s
corresporespondence raised various excuses as
to why they would not disclose
information. One excuse was that twere
‘other parties’
who were communic with Moores Rowland, threatening
them and maintaining that they
[the other parties]
had an interest in the estate’s assets. Another reason articulated by
Moores Rowland was that any disclosure of any
information regarding
companies incorporated in Vanuatu would be in h of section 125 of the
Republic of Vanuatu
International Companies Act No 32 of 1992.”
40 &nsp; & &nbbsp; &nbp; &nbp; &nbbp;&nnbsp;
Later, the deponent said that Moores
Rowland also referred to thpartenctioa reason for not
supplyie infion.& However,ever,
the the clearclear impo import ofrt of the the material before
his Lordship was that Moores Rowland would not have provided
details of the
assets of the estate without order of the Court directing them to do so,
even if the ex parte injunction
had not been made.
4n style="font:7.0pt "Times New Roman""> &nbs; &nbbsp;&&nbp; &nsp; &nbbp;&nnbp;& &nbbsp;
p;
It emerges from these affidavits that at
least until 2 May 2he apnt di have informatiout t e’s assets in V in Vanuatanuatu
sufu sufficieficient tont to enable him conscientiously to swear wear
an affidavit that AET share scrip registered in the name
of Macro was lost,
stolen or destroyed. He simply had no iation abon about the assets, let
alone the difficulties of
establishing title to them. Th also borne
out byut by an affidavit of Mr G J Hamiltorn on 8 February 2000, also filed
on the applicant’sant’s behalf, in which he deposes that on 22 September 1999 he
told espondent’s solicitor in thin the precincts
of the Family Court in
Brisbane that the applicant “was unaware of the nature of any assets of
the estate of the deceased in Vanuatu” because Mr Harrison refused to
provide any information on the topic.
42&nbs> &nbbsp; &nsp; &nbbp;&nnbp;& &nbbsp; &nbp;
p;
Moreover, the applicant’s affidavit deposed
to repeated attempts to arrange a listing of thlicanotionave
the ex parte
injunction setn set aside. The applicad his shis soli soliciolicitors
believed that a hearing would be obtained within a week
or two of the order
being made, and, when this did not happen, arranged for the summons filed at
Court on 27 September
1999 to be prepared. Thereaftey continued to
to
believe that an early listing would be available. In these circumstant
is significant that the applicant produced no evidence that during that
period steps were being taken by him tain
control of scrip to enable a
sale. That this was notening beag bears out tout the conclusion that the
applicant had
insufficient information about the Vanuatu assets of the
estate to take any action in that respect.
43 & &nsp; &nbssp; &nbssp;
“(a) &nPriorhe ex parte orderorderorders being vacated on 16
June 2000, I had made some general enquiries as to the whereabouts
of the Macnagemhare scrip;
(b)   &nbssp; ;&nspp; &nbp; &nbp; subsequont to the mthe making of the order on 16 June 2000, information
arising out of discovery proceedings in an a comm by
m in the
United States fo reco(of) assets beneficneficiallyially owne owned by d by the Ethe Estate
and further enquiries
by myself confirm my earlier view that the share scrip
had been lost, destroyed or stolen;
&nb"> &nnbsp; &nsp; &nbbp;&nnbp;&&nbp;; &nsp;
in ort tou fire first week in September 2000, I instructed Minter
Ellison to make an application T Increplat share scnbsp;
Minllison did so d so and band by facy facsimile transmission dated 18 Septembetember 200r 2000
0
from Mr Neil Cummings,
the solicitor for AET Inc, to Minter Ellison’s New
Mexican agents, Keleher & McLeod, Mr Cummings confirmed that he had
issued
instructions to AET Inc’s stock transfer agent to issue duplicate
certificates and forward the certificates to
myself at my home address at
Coorparoo in Brisbane. Now prodand shown to me anme and marked with the
Letter
‘C’
is a true copy of a facsimile transmission dated mber 18, 2000 from M
Neil Cummings & Associates to Keleher
& McLeod. (It is noted from the
e
reference to Macro Management in this fax is
‘Macro Management Ltd’ lang="EN-GB">,
however, shortly after Minter Ellisonlison received a copy of this facsimile
transmission, they advised
Mr Cummings that the correct name of the company
was ‘Macro Management
Group Inc’ and Mr Cummings noted his records
accordingly.)”
44 &bsp; ;&nbssp;&nbp; &nsp; ;&nbpp; &nnsp;&&nsp; &nbp;
Paragraph (a) fails to recognist at leas2 May the cant o useful inforinformation about the AET
share scri scrip.&nbp. Tsp;
The bahe celance of t of the information deposed to does not provide a
basis for holding that in the short period between 2
May 2000 and 16 June
2000 the applicant had any prospect of obtaireplacement share scrip
p
even if he came into possession
of information during that time which would
justify him swearing a declaration that the original share scrip was lost,
stolen or destroyed.
45 ;&nspp;&nssp; p; &nbp; &nbp; span lang="ang="EN-GB">When other inform befos Lor
ed byrespo, butart emanating from the applicanlicant, ist, is take taken
n
in into coto considensideration the hopelessness of the applicant’s claim becomes even
more obvious. First,applicant
had filed iled an affidavit from Mr Philip
Wainwright, an international investment banker, that indicated that at the
best it would take about two months to obtain replacement share scrip and,
further, in the circumstances revealed in all the
affidavit material, Mr
Wainwright was of the opinion that share scrip could not be replaced having
regard to other competing
claims and litigation over the same shares.
46 &nnbsp;; &nsp; &nsp; &&nbp;; &nnsp;&
p;
Aidavirn on 9 October 2000 by Mr
M G Adamson, the respondent’s solicitor, exhibithibited a ed a verified derivative
complaint
for injunctive relief filed in the Sor Court of the State of
of
California, County of Los Angeles, by the applicant on 30
June 2000. The
allegations in aein are verified on oath by the applicant as correct. The
allegations included uded that
a third party, Mr S C Manthe companies
apparently controlled by him, had become the registered owner of the AET
AET
shares between the date of deathhe deceased and 30 June 199e 1999 (i.e.
before the ex parte order was made). The Californroceedings
alls allege
that Mr Manthey, acting without the knowledge and consent of the deceased’s
estate, fraudulently transferred
to off-shore coms in his control
shares in AET including shares in Main Macro’s name. The relief claimed des
s
an
injunction mandating that Mr Manthey deliver to the applicant the
certificate for the “1.161820” shares which Macro beneficially
in AET.
ass="Quot"Quote" alignalign="left" style="text-align: left; margin-left: 0cm; margin-top: 1; margin-bottom: 1">
47 &nbbsp; &bsp;&nbp; &nbss;&nbbsp;&&nsp; &nsp; &nbbp;&n span>It appears from this affidavit that at some
time between 2 May 2000 and 30 June 2000 whe apnt ved the
pleadings in alifornian
proceedings, that that he obhe obtainetained infd information about
Macro’s shareholding in AET, and learned that the shares
had been
transferred to others.
48 &nnbsp; nbsp;&nbp; &nbss;&nbbs;&nnbsp; &nsp; &nbbp;&nnbsp;
In the face of all this evidence it is
hardly suing tis Lop was sati thatng thevant
ti time thme the applicant was not
in a position to n to sell sell the sthe shareshares even if there
had been no injunction.
49 &bsp; ;&nbssp;&nbp; &nsp; ;&nbpp; &nnsp;&&nsp; &nbp;
On point (b), his Lordship held:
&nbbsp;& p;&bsp; &bsp; “T reThere is much evideevidence to show that the
[applicant]
sought information concernicerning thng the shares from the third party, Mr Harrison,
but the latter refused to disclose that
information as he had received other claims to beneficial ownership and had
regard to his statutory
obligations of secrecy under the
International Companies Act.”
50 &   &nbp; &&nbp;; &nnsp;& &nbp; &nbp;
That conclusion is in accordance with the
affidavit material adduced by the applican welly theondent,
and the substance
of it was not in contention.
p class="NumbeNumberedList" align="left" style="text-align: left; line-height: normal; margin: 1 0cm">
51 &nbs; &nbbsp; p;&nsp; &nbp; &&nbp;;&nbpp; &n sp;
On point (c) (that a fourth party was
claiming beneficial interesthe sh, hisship noted that in the
eparaoceedings brought
bght by they the appl applicanticant agai against Moores Rowland, he was
eventually given access to information about the estate’s
assets. However,
his Lordship said:
&nnbsp; &nsp; &nbbp;&nnbp;&&nsp;
p;
“By that time, if not earlier, it was clear that
the fourth party was claiming a beneficial interest in the shares in
liton clg tha on foot.”span>
class="NumbeNumberedList" align="left" style="text-align: left; line-height: normal; margin: 1 0cm">
52 &nbssp;&nnsp;&&nsp; &nsp; &nbbp;&nnbsp; &nb In writtemissicounsr the
applicant has identified the fourth party as Mr Manthey.&nby. Csp; Counseounsel the
Court
to an exhibit of the affidavit of Mr Adamson sworn on 13 February 2000
which exhibited a copy of proceedings, in the Supreme
Court of Queensland by
Mr Manthey at the applicant and others hers in which Mr Manthey asserts that
he is beneficially
entitled to the AET shares held by Macro. Those
proceedings were not commenced until 18 December 2000. That the proceedings
ere were not commenced by Mr Manthey until that date is said to support the
proposition that during the currency of the ex
parte injunction the
appl could have dealt with the AET shares originally registeredtered to
Macro had the share scrip
been replaced. Even though nthey did not not
issue the proceedings until December 2000, it is plain that he was claiming
to be beneficially end to the shares long before that – indeed he had
arranged for their transfer into ento entities
controlled by him before 30 June
1999. We do not thhat the date oate of the issue of the proceedings by Mr
Manthey in
Queensland advances the applicant’s case. The fact remthat
the the applicant was unaware of the nature of the deceased’s
assets in Vanuatu
until very close to the day on which the ex parte injunction was dissolved,
and could not have obtained
before that date replacement scrip. Moreover,
the facts as dias disclosed by the affidavit evidence, hardly support the
proposition
that the share scrip was lost, stolen or destroyed. Rather,
tupport the the conclusion that the scrip was held by another
party who
claimed to be entitled to it.
nbsp; p; &nbp; &nbssp; &nbssp;
The applicant also complains that an
affidavit which he t to at thring on 26h 200
ected by his Lordship. bsp; HavinHaving
regg regard tard to theo the vari various directions that had
been made as to the filing of affidavits before that hearing,
we do not
consider that his Honour erred in ruling that the affidavit was too late.
However,ing turns onns on it as
the affidavit addressed an aspect of the
case upon which his Lordship did not rely, namely that th shares were
“restricted shares”.
54 p; &nbp;&nbp; p; &nnsp;&&nsp; &nbp;
s n>In our opinion, his Lordship was correct in
holding ther no ece disclos the avit ial that
would support port the ithe
issue of causation which the applicanticant was was requirequired tred to
establish. Counsel for pplicant contecontends that
no decision on that
issue should have been made until the witnesses had been cross-examined.&nIn
our opinion his Lordship
was entitled to bring the proceedings to an end
whe when he did. Directions had been mn thrn three occasions requiring the
applicant to file in affidavit form the material upon which he relied to
suppor claim. He had been given everyrtuportunity
to do so. His
dship receiveceiveceived lengthy written and oral submissions based on those
affidavits. e unable to detect
in the the procedures which the parties
followed, and in the ruli his Lordship, any injusticustice to the
applicant.
Even if thter had been alln allowed to proceed to trial, it
would have been open to counsel for the respondent to apply to
have the
claim dismissed on the ground that the supporting evidencee adduced by
the appl applicants failed to prove the
necessary ingredients of the claim. There is no reason to thio think that the outcome would have been any different.
55 ;&nbssp;&nbs;&nbs; &nbp; & &nbssp; &nbp; &nbs;
Finally, we wish to stress that whilst the
inherent dictis beecessfully engag this to ds
the applicant’s nt’s claimclaim,
this outcome should not be interpreerpreted ated as anys any
departure from the accepted principle that the inherent jurisdiction
is one
to be sparingly used only in exceptional cases. The present case for a
combination of reasons was of that kind.
It concerned an inqus to
to
damages under an undertaking, where the exe of the Court power to
enforce the undertaking
is discretionary (see Cheltenham anam and Glouchester
Building Society ketts [1993] 4 All ER 2 ER 276 at 281); under the
proe adoptadopted by the Court for that inquiry, directions had three times
been given to the applicant to file the affidavit material upon which he
intended to rely; and there rs to been commocommon
agre agreement between
his Lordship and counsel for the parties that at the hearing on 26 March
20e matter was to be
dealt with under the inherent jurisdiction.
p class="NumbeNumberedList" align="left" style="text-align: left; line-height: normal; margin: 1 0cm">
56 &nbs; &nbbsp; p;&nsp; &nbp; &&nbp;;&nbpp; &n sp;
In our opinion, as an appeal on the grou ifiedhe prd Notf Appould have no reasonable able
prospect of success, we considensider
thar that leat leave tove to appe appeal should be refused with
costs.
DATED AT
PORT-VILA this 12th day of June 2001.
ON BEHALF OF THE COURT
J. von DOUSSA J
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