In the matter of Credit Clear Limited [2022] VSC 206 (29 April 2022): security for costs,

May 3, 2022

Justice Riordan considered an appeal against an order for security for costs in In the matter of Credit Clear Limited [2022] VSC 206.  The appellants were unsuccessful across the board. 

FACTS

By originating process filed 15 July 2020, the plaintiffs made an application under:

(a) sections 175, 232, 233, 461(1)(k), 1041H(1), 1324(1) and 1325 of the Corporations Act 2001 (Cth) (‘the Act’);

(b) sections 12DA and 12GM of the Australian Securities and Investments Commission Act 2001(Cth) (‘the ASIC Act’);

(c) Sections 237 and 243 of the Australian Consumer Law, being Schedule 2 of the Competition and Consumer Act 2020 (Cth) (‘ACL’); and

(d) the inherent jurisdiction of the Court [2].

The plaintiffs sought the following substantive relief in their points of claim [4]:

(a) The first plaintiff (‘Mr McKendrick’) sought to be reinstated as a director of the first respondent (‘Credit Clear’).

(b) The appellant sought the following relief:

B. Declarations and or orders under s 1325 of the Act, alternatively s 233(1)(c) and or (j) of the Act, s 12GM of the ASIC Act and or ss 237 and 243 of the ACL, that the Separation Agreement dated 11 November 2016 and Intellectual Property Assignment Agreement dated 11 November 2016 (by which the plaintiffs were forced to give up their interests in the first defendant together with the intellectual property rights owned by the first plaintiff) are void on the grounds they were procured under duress, undue influence, unconscionable conduct and or misleading and deceptive conduct in contravention of 1041H(1) of the Act, s 12DA of the ASIC Act and or s 18 of the ACL;

C. A declaration that the second plaintiff is entitled to hold 20% of the issued ordinary shares in the first defendant;

D. Rectification of the share register of the first defendant pursuant to s 175 of the Act to reinstate the second plaintiff as a member and to record that it holds a number of fully paid ordinary shares representing 20% of issued shares in the first defendant alternatively that it holds 6,805,555 fully paid ordinary shares in the first defendant;

E. A declaration that the affairs of the first defendant are being conducted contrary to the interests of the members as a whole and or are oppressive to, or unfairly prejudicial to, or unfairly discriminatory against the second plaintiff, or in the interests of and to the benefit of the second to third defendants and not the first defendant or its members;

F. An order that the second and or third defendants purchase the second plaintiff’s shareholding in the first defendant at fair value; Read the rest of this entry »

Re Slodyczka & Farren Pty Ltd (Costs) [2022] VSC 102 (4 March 2022): application for costs by the defendant; where presumption of insolvency rebutted, multiple defences relied upon

March 9, 2022

The postscript to Re Slodyczka & Farren Pty Ltd [2022] VSC 102 is a decision by Associate Justice Hetyey regarding costs of the application. 

FACTS

in the substantive judgment  the plaintiff’s application to wind up the defendant in insolvency was dismissed.

The relevant facts for the purpose of considering a costs order were:

  • whilst the matter was commenced by originating process filed on 11 April 2021, there were delays and adjournments [2] resulted in two previous costs orders being made being:
    • on 7 July 2021, consent orders were made which, among other things, required the plaintiff to pay the defendant’s costs thrown away by reason of an adjournment of the hearing originally scheduled that day (‘the first costs order’).
    • at the next hearing date, on 27 July 2021, it was adjourned at the request of the defendant to enable it to put on supplementary material on the question of solvency, including audited accounts for the 2019/2020 and 2020/2021 financial years. The plaintiff’s costs of the hearing be reserved (‘the second costs order’).

The defendant opposed the winding up application on the following alternative bases [4]:

(a) service of the plaintiff’s statutory demand dated 3 February 2021 (‘the statutory demand or the demand’) was defective;

(b) the defendant was solvent and could displace the statutory presumption of insolvency;

(c) the defendant should be given leave pursuant to s 459S of the Corporations Act2001 (Cth) (‘theCorporations Act’) to oppose the winding up application on a ground or grounds it could have relied on for the purpose of an application to set the demand aside. The grounds sought to be raised were: (i) there was a genuine dispute about the amount of the debt claimed in the statutory demand in accordance with s 459H(1)(a); (ii) the defendant had an offsetting claim for the purpose of s 459H(1)(b) of the Corporations Act; and (iii) the demand was defective and a substantial injustice would be caused to the defendant if the demand was not set aside pursuant to s 459J(1)(a) of the Corporations Act; and

(d) pursuant to s 467(1)(a) of the Corporations Act, the Court should dismiss the plaintiff’s application as a matter of discretion.

In the substantive judgment the court held that, [5]:

  • the defendant failed to rebut the presumption of service of the statutory demand under s 29(1) of the Acts Interpretation Act 1901 (Cth).
  • the defendant succeeded in displacing the statutory presumption of insolvency on the basis that it was cash flow positive and balance sheet solvent. The proceeding was dismissed on this basis.
  • the defendant’s application under s 459S of the Corporations Act was not granted because the grounds sought to be raised in respect of the plaintiff’s debt were not material to proving solvency however  had the defendant failed to establish solvency the corut would haveultimately have granted it leave
  • the defendant could not to pursue its argument that the Court should dismiss the plaintiff’s application in accordance with the Court’s discretion under s 467(1)(a) of the Corporations Act because of a lack of proper notice to the plaintiff Read the rest of this entry »

Yuanda Vic Pty Ltd v Facade Designs International Pty Ltd [2020] VSCA 269 (16 October 2020): application for stay pending appeal, special or exceptional circumstances

October 20, 2020

In Yuanda Vic Pty Ltd v Facade Designs International Pty Ltd [2020] VSCA 269 the Court of Appeal granted a stay of payment pending hearing of an appeal.  It is an interesting and valuable decision because it is a comprehensive analysis of the principles associated with making a stay application.  It is also notable because the application was successful, a difficult result to achieve normally. 

FACTS

Under a supply and installation agreement dated 13 April 2018 (‘the Contract’), the respondent, (“Facade Designs”) agreed to  instal  façade elements manufactured and supplied by the applicant (“Yuanda”) as part of the construction of commercial and residential towers at 447 Collins Street known as ‘the Arch on Collins’ (‘the Project’) for the price of $14.5 million [5]. Facade Designs provided works from September 2018 until November 2019 when the Contract was terminated [6]

On 30 September 2019, Facade Designs provided a payment claim under s 14 of the Building and Construction Industry Security of Payment Act 2002 (‘the Act’) for $4,584,820.68 (inclusive of GST) (‘the Payment Claim’) [7].  Yuanda paid Facade Designs paid  $1,115,455 (inclusive of GST) on 2 October 2019, reducing the amount claimed to $3,469,365.58 [8].

Yuanda failed to provide a payment schedule to the respondent within 10 business days of receiving the Payment Claim, as contemplated by s 15 of the Act [9]. Pursuant to s 15(4) Yuanda became liable to pay Facade Designs the amount claimed on 30 October 2019  [10].  The applicant failed to pay the amount claimed [11]. Facade Designs conceded some reductions and  sought judgment pursuant to s 16(2)(a) of the Act [12].

The Court rejected Yuanda’s  contention that:

(a) the Payment Claim was invalid because it did not sufficiently identify the construction work or related goods and services to which the progress payments related within the meaning of s 14(2)(c) of the Act and as a consequence it was not liable to pay the amount under s 15(4) of the Act (‘the Adequacy of the Payment Claim’); and

(b) the Payment Claim included excluded amounts within the meaning of s 14(3)(b) and pursuant to s 16(4)(a)(ii) of the Act .

In relation to the excluded amounts issue the court held that, in determining Read the rest of this entry »

Australian Information Commission v Facebook Inc [2020] FCA 531 (22 April 2020): application for service outside of Australia, the Commissioner’s prima facie case. The opening round in the first civil proceeding for breach of the Privacy Act by the Commissioner

April 26, 2020

On 23 April 2020 in  Australian Information Commission v Facebook Inc the Australian Information Commissioner successfully obtained interim suppression and non publication orders and orders to serve outside Australia and substituted service against Facebook Inc.

This is the first of what is likely Read the rest of this entry »

Omar Property Pty Ltd & Others v Amcor Flexibles (Port Melbourne) Pty Ltd [2019] VSC 446 (3 July 2019); discovery, content of pleadings and redactions

July 22, 2019

In Omar Property Pty Ltd & Others v Amcor Flexibles (Port Melbourne) Pty Ltd [2019] VSC 446 the Supreme Court, per Mukhtar AsJ considered the principles of ambit of discovery and the use of redactions in a hard fought discovery application.

FACTS

The five-day trial dated was vacated because of three intervening discovery fights [1].

This decision related to the first fight.

The proceeding is a dispute over a commercial lease of industrial premises. The question is whether the defendant has validly exercised an option to renew its lease or is entitled to renew the lease. The plaintiff says Read the rest of this entry »

Yang v Finder Earth Pty Ltd [2019] VSCA 22 (15 February 2019): application to set aside default judgment, importance of pleading

March 4, 2019

The Victorian Court of Appeal in Yang v Finder Earth Pty Ltd [2019] VSCA 22 again highlighted the caution the courts are now taking in dealing with applications which determine a claim without trial such as summary judgment applications and default judgment applications. It is also a case which highlights the fact that pleadings matter. 

FACTS

Luo and Yang entered into the principal agreement, in October 2015 (the ‘agreement’) [8] for the stated purpose of:

to successfully obtain the 888 visa for Luo and her family to migrate to Australia and to be granted the Permanent Resident Visa (hereinafter referred to as ‘the Immigration Project’).

The agreement:

  • was described as a partnership between Luo and Yang

Read the rest of this entry »

Trkulja v Google LLC [2018] HCA 25 (13 June 2018): Defamation, publication, summary dismissal, imputations arising out search engine results

September 2, 2018

The High Court in Trkulja v Google LLC [2018] HCA 25 upheld an appeal from the Victorian Court of Appeal regarding a summary judgment application. It is a very significant decision in relation to pleading the of defamation when the imputations arise from search engine results.

FACTS

While not enamoured of the drafting the Court noted that the Appellant’s (Trkulja”) Amended Statement of Claim was  sufficiently comprehensible to convey that Trkulja alleged that:

  • Google defamed him by publishing images which convey imputations that he:
    • “is a hardened and serious criminal in Melbourne”, in the same league as figures such as “convicted murderer” Carl Williams, “underworld killer” Andrew “Benji” Veniamin, “notorious murderer” Tony Mokbel and “Mafia Boss” Mario Rocco Condello;
    • is an associate of Veniamin, Williams and Mokbel; and
    • is “such a significant figure in the Melbourne criminal underworld that events involving him are recorded on a website that chronicles crime in [the] Melbourne criminal underworld”[3].
  • Google published the defamatory images between 1 December 2012 and 3 March 2014 to persons in Victoria, including several named persons, upon those persons accessing the Google website, searching for  Trkulja’s name or alias (Michael Trkulja and Milorad Trkulja), and then viewing and perceiving the images presented on-screen in response to the search [4].
  • the allegedly defamatory matters  comprising two groups:
    • “the Google Images matter” and
    • “the Google Web matter” [5]
  • some of the pages include an image that contains text stating, inter alia, “Google lawsuit in court”, “COLOURFUL Melbourne identity Michael Trkulja” and “Mr Trkulja an associate of Mick Gatto” [7]
  •  the images matter and the web matter are defamatory of  Trkulja in their natural and ordinary meaning and  carry the following defamatory imputations:

Read the rest of this entry »

Harstedt Pty Ltd v Tomanek [2018] VSCA 84 (10 April 2018): Trustees and trust, accessorial liability, the second limb of Barnes v Addy, fraudulent breach of trust

April 15, 2018

The Victorian Court of Appeal in Harstedt Pty Ltd v Tomanek [2018] VSCA 84 considered the operation of the second limb of Barnes v Addy and, in particular the requirement to establish knowing assistance.

FACTS

The genesis of the action and appeal was a failed investment scheme known as a private placement program. Investors were promised profits which were to be generated by the investment of capital by a humanitarian organisation [1].

The director of Harstedt, Jeffrey Olsen, had been a stockbroker for about 15 years. In late 2006, he was approached by Noel Carter who said that he had an investment proposal. The investment was described as a ‘private placement program’ for a not-for-profit humanitarian organisation called the ‘Isaiah 61 Foundation’ which would use investors’ capital to make substantial profits under an agreement [4].  Olsen was initially not interested as it offered no capital protection .

At a conference at Carter’s office on 3 March 2007,  Olsen met Stephen Moriarty (“Moriaty”). To meet Olsen’s concerns about capital protection Moriarty  said that funds contributed by Australian investors would stay in Australia in a ‘non-depleting’ account and that the funds would not Read the rest of this entry »

X v Twitter Inc [2017] NSWSC 1300 (28 September 2017): equity, injunction regarding tweets, confidential information, Norwich Orders.

October 29, 2017

In X v Twitter Inc [2017] NSWSC 1300 the Supreme Court of New South Wales, per Pembroke J, issued a final injunction regarding a post on Twitter. In doing so the Court considered in detail the scope and operation of injunctions on Twitter, a platform with much of its operations located outside Australia.

FACTS

Between 16 and 19 May the first offending tweets appeared [6] with the author of the tweets used a twitter handle that falsely adopted the name of the plaintiff’s CEO.

On 19 May, the plaintiff’s solicitors wrote to Twitter Inc:

  • drawing attention to the tweets,
  • the offending information contained in them and
  • the user’s impersonation of the plaintiff’s CEO.
  • requesting Twitter Inc to:
    • remove the offending material from the Twitter website;
    • to deactivate the ‘fake’ user’s account;
    • to take all other steps available to it to prevent the user from publishing further confidential information on the Twitter website; and
    • to provide the identity and contact information of the user.

Twitter responded Read the rest of this entry »

Re Convector Grain Pty Ltd (In Liquidation) [2017] VSC 473 (16 August 2017): Corporations Act sections 588F and 1322, power to amend, liquidator’s action, rule 3.02

September 19, 2017

Associate Justice Randall in Re Convector Grain Pty Ltd (In Liquidation) [2017] VSC 473 rejected an application for an extension of time on the service of originating process. In doing so his Honour undertook a very comprehensive review of the interaction of the Civil Procedure Rules with the Corporations Rules and section 1322 of the Corporations Act.

FACTS

The second and third plaintiffs, liquidators of the first plaintiff (‘Convector Grain’), sought relief under s 588FF(1) of the Corporations Act 2001 (Cth) (‘the Act’) that a preference in the sum of $337,928.27 be repaid to Convector Grain [1].

The liquidators were appointed as voluntary administrators in place of those originally appointed on 5 September 2013. By resolution made on 10 February 2014 they became liquidators of Convector Grain [14].

This proceeding is Read the rest of this entry »