Case: Milcap Publishing Group AB v Coranto Corporation Pty Ltd (1995) 32 IPR 34
Outcome: followed
The Magistrate's reasons bear repetition to some extent: "31. In my view, it is perfectly clear from a reading of the transcript of the Registrar's examination which took place on 22 December 2005 that the bankrupt had stated a belief that the jewellery was given to her as a gift and, as she described it, "They were mine." But also it is equally clear that she immediately proceeded to say "But but they weren't" and that "They were owned by Sira Properties". Elsewhere in the material, it is clear that the bankrupt confirmed that on the previous occasion when she gave evidence, the evidence was to the effect that the jewellery might be the property of Sira Properties. 32. Whilst the court is prepared to make due allowance for the fact that when the application was made before this court on 23 December 2005 the transcript of the previous day's examination was not available, the fact remains that both senior counsel and Mr King were present both on 22 December 2005 before the Registrar and before this court upon the hearing of the urgent ex parte application on 23 December 2005." The Magistrate then quoted from Thomas A Edison Ltd v Bullock [1912] HCA 72 ; (1912) 15 CLR 679 at 681-682 and Milcap Publishing Group AB v Coranto Corporation Pty Ltd (1995) 32 IPR 34 at 36. He went on to say: 40. In my view, the making of ex parte orders by any court is a significant and serious process to be undertaken, and it should be undertaken with due care. Applying [Thomas A Edison] to the present case, it is clear in my view having regard to a comparison between the first King affidavit [(ie the affidavit described at [8])] and in particular paragraph 11 thereof [(ie the paragraph where what is set out in the first sentence at [8](g) appears)] and the limited extract of the evidence of the bankrupt that the court was not at the ex parte hearing provided with all the evidence which was then known to either the deponent and/or his client , and indeed counsel who appeared both before this court and the s.81 examination. 41. For a bankrupt's evidence to be limited in the way it is sought to be limited in the first King affidavit, in my view can only result in the court being misled. It is the responsibility of parties seeking to make an ex parte application, to bring to the notice of the court all facts material to the determination of the right to that order and I accept that it is no excuse for any party to indicate that he or she was not aware of the importance of the material. 42. As indicated by the High Court in [Thomas A Edison], uberrima fides is required. If a party induces a court to act in the absence of another party, and in doing so fails in its obligation, in my view, to paraphrase the words of the High Court, unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. 43. It seems logical to me and irresistible that if the bankrupt or indeed if the First Respondent had been present upon the hearing of the application by this court on 23 December 2005, then the complete extract of the bankrupt's evidence would have been referred to along with other extracts during the course of the examination before the Registrar, indicating that a concession was made by the bankrupt that the jewellery was owned by the Second Respondent, even though the bankrupt believed the jewellery had been a gift and that it belonged to her or, to use her words, was "mine". ... 48. The decision to proceed on an ex parte basis is a significant decision which should not be regarded as a decision to be taken lightly by legal practitioners. In this instance, the proceedings commenced arguably on the wrong form, failed to seek substantive relief, and more significantly relied upon what I find to be inadequate and misleading affidavit evidence in relation to the full extent of the evidence given concerning a crucial issue of significance to the court's deliberation, based upon the bankruptcy evidence of the previous day's section 81 examination. 49. Having embarked upon the ex parte urgent application, then the Applicant does so at the Applicant's peril. The duty to act with utmost good faith is a significant duty, and for the reasons stated I am satisfied in this instance that that duty has not been discharged. In my view it follows that the orders made by the court on 23 December 2005 should therefore be discharged. 50. That leaves the question of whether the court should in the circumstances grant leave to the Applicant to now amend the [FMCA] application retrospectively, to replicate the orders sought as interim orders in that part of the [FMCA] application referring to final orders. In my view, in the exercise of the discretion, whilst the court from a practical point of view may be tempted to permit the amendment, it would seem to be unfair and contrary to the interests of justice to permit an Applicant who has failed to exercise the utmost good faith in bringing an ex parte application to then convert that application, flawed as it clearly has been found to be, to an application for substantive relief. In my view the proper course is to refuse the application to amend and to simply dismiss the [FMCA] application and otherwise discharge the orders made by the court on 23 December 2005." (The emphasis is mine.) 24 In Milcap Publishing , Davies J said at 35: "When an ex parte order is sought, the person seeking the order must be frank and disclose to the court all the matters which, if put before the court, might have an effect upon the court's decision. The facts that should be disclosed go both to matters of liability and matters of discretion. If a fact is material in that it would be a matter to be taken into account by a court in the making of the decision to grant an injunction or in the formulation of an order that is to be made, it is a matter that ought to be disclosed." (The emphasis is mine.) I think it clear that that test has been satisfied. A reasonable person in the Magistrate's position would have taken into account what the bankrupt was in fact saying at her second examination in deciding whether or not to grant the mandatory injunction. Undoubtedly, that information might have affected that decision. 25 The applicant contended that the Court should apply the test in Re South Downs Packers . In that case, Connolly J said at 566 that "[a] non-disclosure will not be material unless it be likely to influence the court in acceding to the application". (The emphasis is mine.) Though I prefer to follow Milcap Publishing as it is a decision of this Court, the application of the test in Re South Downs Packers would not lead to a different result. 26 The applicant also contended that the Magistrate erred when he said at para 40 of his reasons (see the second passage quoted at [12]) that "the court was not ... provided with all the evidence which was then known to either the deponent and/or his client". (The emphasis is mine.) His Honour posited and said he would apply the tests found in Thomas A Edison and Milcap Publishing . A fair reading of his reasons discloses that, notwithstanding the language of para 40, the Magistrate correctly applied those tests. At para 35, his Honour said that the respondents had contended that a comparison between Mr King's affidavit and the transcript of the bankrupt's second examination showed that the court "was clearly misled in relation to what could be described as a crucial issue" leading to the granting of the mandatory injunction. The "crucial issue" to which his Honour referred is that highlighted at [23]: that the bankrupt had conceded that she did not own the jewellery in question. The Magistrate's reference to "all the evidence" was a reference to all the evidence going to the "crucial issue". The comparison shows that the concession was not disclosed by Mr King's affidavit. The Magistrate's reference to "all the evidence then known " (emphasis added) shows that the Magistrate was engaging in the comparison. That is further shown by his statements that the material before him on 23 December 2005 was: &#8226; "incomplete and ... had the effect of misleading the court in relation to the true state of the evidence which had been given by the bankrupt on the previous day " (para 44); and &#8226; "inadequate and misleading ... in relation to the full extent of the evidence given concerning a crucial issue of significance to the court's deliberation , based upon the ... evidence of the previous day's ... examination " (para 48). (The emphases are mine.) Further, the Magistrate said at para 43 that: "It seems logical to me and irresistible that if the bankrupt or indeed if the First Respondent had been present upon the hearing of the application by this court on 23 December 2005, then the complete extract of the bankrupt's evidence would have been referred to along with other extracts during the course of the examination before the Registrar, indicating that a concession was made by the bankrupt that the jewellery was owned by the Second Respondent, even though the bankrupt believed the jewellery had been a gift and that it belonged to her or, to use her words, was 'mine'." In each of the two paras preceding the one I have just quoted, the Magistrate said that the obligation of a party seeking an order ex parte was to bring forward all material facts. Clearly, the Magistrate was of the opinion that all material evidence on the crucial issue equated with all the evidence on the crucial issue. He was correct in that opinion.