New South Wales Supreme Court CITATION : Donato v Thermo-Tec Products Pty Ltd [2000] NSWSC 236 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 5214/97 HEARING DATE(S) : 17 March 2000 JUDGMENT DATE : 17 March 2000 Virginia Donato (P1) Anthony Donato (P2) Thermo-Tec Products Pty Ltd (D1) Jacobs Electronics Australasia Pty Ltd (D2) PARTIES : Durable Products Pty Ltd (D3) Consumable Products Pty Ltd (D4) Nicholas Mangraviti (D5) Tina Mangraviti (D6) Joseph Mangraviti (D7) JUDGMENT OF : Hamilton J COUNSEL : N Adams (Trustee) M Zammitt (D5-7) Abbott Tout (P1 & 2) SOLICITORS : J Pappas (Trustee) Horowitz & Bilinsky (D4-7) CATCHWORDS : EQUITY [378] - Equitable remedies - Injunctions - Practice and procedure - Other matters - Costs - Ex parte injunction - Whether trustee acted unreasonably in making ex parte application without notice. LEGISLATION CITED : Evidence Act 1995, s 80 DECISION : Defendants ordered to pay trustee's costs of ex parte injunction application. - 6 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J FRIDAY, 17 MARCH 2000 5214/97 VIRGINIA DONATO & 1 OR v THERMO-TEC PRODUCTS PTY LTD & 6 ORS JUDGMENT HIS HONOUR: 1 Before me are cross applications for the costs of an application for ex parte injunctions which were granted by me in vacation on 9 January 1998. The suit in which they were granted was a suit by plaintiffs against various defendants for the removal of a trustee. In those proceedings orders had already been made by consent by Windeyer J on 23 December 1997. Those orders removed the first three defendants as trustees of various trusts, appointed the present applicant, Schon Gregory Condon ("the trustee") trustee of the trusts in lieu, and ordered that the property of the trusts vest in the trustee. They also ordered the delivery up to the trustee "as demanded by him" of all records and property of the trusts retained by any of the defendants including the fourth to seventh defendants who are the other active parties in the context before me, and whom I shall collectively describe in these reasons as "the defendants". 2 There appeared before me on the ex parte application counsel for the trustee and a solicitor for the plaintiffs. I made orders ex parte on the usual undertaking as to damages given by the plaintiffs for the trustee to be given access to certain property and books of account. I did at that time reserve all questions of costs and it is pursuant to that reservation that the present motions are brought before me. 3 As to a procedural matter, the trustee had not at the time of the ex parte application before me been joined as a party to the proceedings only one further thing of substance occurred in the proceedings after my determination of the ex parte application on 9 January 1998. That is, on 15 January 1998, the defendants applied to have Mr Condon removed as trustee and replaced by a Mr Vouris. That application was heard in February 1998 by Cohen J and dismissed. On the hearing of the application before Cohen J, the plaintiffs appeared by counsel and the trustee also appeared by counsel and contested the application, again without having been formally joined as a party in the principal proceedings. 4 The motions before me are a motion by the trustee for an order for his costs of the ex parte application and a motion by the defendants for their costs of the application. No application for costs is made by or on behalf of the plaintiffs. 5 As I have said, the trustee had not been joined at the time of the ex parte application before me and, the proceedings in effect having gone no further, has not subsequently been joined as a party. However, it is he who by his solicitors and counsel have brought the application by notice of motion dated 5 May 1999 for costs, as well as the defendants, as I have said, by their motion applying for costs. In so far as there is any procedural irregularity arising from the non joinder of the trustee formally in the proceedings, no objection has been taken to my hearing and determining his application before me on that ground and making an order in his favour if deemed appropriate upon the facts before me. If to any extent this is a procedural irregularity it could be cured by his being joined as a party to the proceedings, but it seems to me that it is not worth taking that matter further and, in light of the way in which the matter has been conducted, I simply proceed to determine his notice of motion as it has been brought as well as determining the defendants' notice of motion. 6 I do not propose in these short reasons for judgment to go into all the facts of the matter. Evidence has been led before me this morning by way of affidavit and by way of cross examination of Joseph Mangraviti, one of the defendants. What occurred, after the making of Windeyer J's orders on 23 December 1997, is that Mr Kite, an employee of the trustee, attended at premises at 24A Anzac Street Greenacre ("the premises") where the business operations of the trusts were conducted and inspected some property of the trusts in a building there. Some arrangement was made for there to be a further examination on 12 January 1998, after the holiday period, but in fact, Mr Condon, the trustee, attended with a considerable party of people to attempt to gain access to the premises and see or take possession of property of the trusts on 7 January 1998. Nicholas Mangraviti, the fifth defendant, and a son of Joseph Mangraviti, was alone inside the premises. The persons he first perceived as leading the party and attempting to gain access were the plaintiffs, Virginia Donato and Tony Donato, who are related to him. There was hostility and there had been an unfortunate incident previously among the family members, no doubt not entirely unrelated to the litigation or its subject matter. The people there included not only the Donatos, but Mr Kite and the trustee, and various solicitors attending upon them. 7 It is perhaps not entirely fortunate that there was such a large party and that, initially at least, the plaintiffs were in the forefront. Nonetheless, it is apparent the trustee, for reasons assigned in his affidavit, had developed fears as to whether or not the property of the trusts had been revealed properly to his employee Mr Kite on Mr Kite's earlier visit. It is true that the order of the Court was for the delivery up of records and property upon demand and there was no demand to found or no appointment made specifically for the attendance on 7 January 1998. Nicholas Mangraviti telephoned his father, an accountant who had an office in Burwood, and Joseph Mangraviti called the police. Joseph Mangraviti then went from his Burwood office to the premises. Upon his arrival there Nicholas Mangraviti was still inside the building, Joseph Mangraviti was present outside, and police officers had arrived. Certainly, at some stage, Nicholas Mangraviti recognised Mr Kite among the people present, because Nicholas Mangraviti had been present at the premises on 24 December 1997 when Mr Kite went there on the trustee's behalf. For the same reason, Joseph Mangraviti was also well acquainted with Mr Kite and saw him, Mr Kite, there at the premises on his arrival. No doubt the trustee was also present, but it is said that he was not at that time recognised by either Nicholas or Joseph Mangraviti, and I see no reason to doubt that that proposition is correct. The situation, however, is that Joseph Mangraviti, the senior family member present, did not approach Mr Kite, but simply maintained the stance that none of the people involved would be admitted to the premises. He did not approach Mr Kite and ask him what he was doing there. He did not suggest that it was rude or inappropriate for Mr Kite and others to be there when an appointment had been made for 12 January 1998. He did not ask what Mr Kite wanted. He did not suggest that it was perhaps inappropriate for so many people to enter the premises to look for property of the trust, or inquire why so many people were necessary, or ask whether perhaps the trustee or Mr Kite alone or with a more limited number of people could make the inspection or pursue the inquiries they wanted. He did swear an affidavit and was cross-examined as to the reasons why he acted as he did at the premises on 7 January 1998. He was a most unimpressive witness and his evidence about that subject matter was not impressive. He emphasised that he was himself a senior accountant and was under obligation always to act professionally. He stated that part of his professional regime was to see nobody at any time without an appointment. He made it plain that he conceded that he deliberately did not approach Mr Kite or inquire what Mr Kite was doing there. He even said in evidence, that he had no idea what Mr Kite was doing at Greenacre on that day, or that he was there on the trustee's business, which I find it quite impossible to believe. 8 It is put on the defendants' behalf that it was rude and inconsiderate for the trustee to attend with a large number of people on that day without notice, particularly so when there were emotional feelings between the plaintiffs on the one hand and the Mangravitis on the other, and that it was unreasonable for him to do so. However, I do not regard the trustees going there with Mr Kite and other people on that day, to attempt to establish the situation as to the property, as unreasonable or inappropriate. In the circumstances, I do not regard as unreasonable his failing to give notice before attendance, when it would seem that he had developed fears as to whether full disclosure of property and records had previously been made to his employee and as to the safety of those items; in view of the fears it was his duty to secure the property. Insofar as an emotional situation and difficulties were created by that attendance, Joseph Mangraviti, an accountant, as he emphasised, did not attempt to deal with that situation in any reasonable way. I am not so critical of his calling the police and himself hastening to Greenacre when he feared that his son, who had previously been involved in some altercation with relatives, was alone there and faced with a large party of people. What I am critical of is the manner in which he dealt with the situation when he arrived there and saw Mr Kite, well known to him as the trustee's representative as Mr Kite was. 9 Once Mr Condon had been excluded from the premises with the aid of the police, and without any inquiry as to why his party was there, it is in my view quite understandable that Mr Condon, a trustee with particular duties to the Court of Equity to take possession of the trust property and to carry out the trusts, should approach this Court for further orders to ensure that the same came into his possession and should do so without further notice. The maintaining of the trust property behind locked doors on the 7th could not but increase his fears as to the safety of the trust property. 10 It will appear from the above that I do not take the view either that the trustee's action in going to the property on 7 January 1998, as has been described, was unreasonable in all the circumstances, or that his action in applying for and obtaining ex parte orders from the Court on 9 January 1998 was unreasonable. 11 I should add that one piece of evidence that was put to me was an affidavit of John Vouris, himself an accountant, and indeed the accountant whom the defendants subsequently proposed to replace Mr Condon as the trustee. Mr Vouris' affidavit was to the effect that, having been shown essentially the material that was put before me, his view was that the trustee's actions were unreasonable. I did admit this evidence in the light of the abolition by the Evidence Act 1995 s 80 of the rule prohibiting opinion evidence going to matters to be decided by the Court, although indicating at the time that in all the circumstances I considered the evidence likely to have little, or perhaps no, effect on my determination of the applications. The evidence is therefore before me, but I should indicate that it has in fact had in effect no influence upon my determination of the applications. I think it appropriate to act upon the views that I myself have formed from the evidence of what occurred. 12 The result of the above conclusions will be that I shall order that the defendants, that is, the fourth, fifth, sixth and seventh defendants in the proceedings, to pay the costs of the trustee, Schon Gregory Condon, of the ex parte application before me on 9 January 1998 and also pay the trustee's costs of the two motions relating to the costs of the ex parte application. The defendants' notice of motion will be dismissed. …oOo… Last Modified: 09/25/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.