Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499
Hearing dates:
8-11 August, 23-25 October 2023
Date of orders:
03 May 2024
Decision date:
03 May 2024
Jurisdiction:
Equity
Before:
Meek J
Decision:
Findings in favour of plaintiffs against first defendant on contractual claim. Findings against the plaintiffs’ claims against second defendant. Parties to bring in short minutes of order.
Catchwords:
COMMERCIAL — Investment arrangements — D1, a licensed real estate agent, and D2, a solicitor trading as Oracle Law, secured office premises in Queensland and worked from separate parts of the premises — D1 assisted D2 to set up office, referred conveyancing matters to Oracle Law, was given title “business development manager” and used an Oracle Law email address — D1 met P1’s director and stated he was a lawyer — D1 assisted P1 with loan arrangements regarding two associates of P1 — D1 and D2 subsequently left office premises and parted ways — D1 sought from D2 and was permitted to retain use of Oracle Law email address — P1’s director introduced P2 to D1 — D1 presented investment proposals to plaintiffs — P1 paid $10,000 and P2 paid $200,000 to D1 to be invested by him via a trading platform under asset management agreements (“AMAs”) and funds were not repaid — Plaintiffs claim that D1 represented to them that he was a lawyer, that the investments were risk-free or virtually risk-free, would give 100% return after 90 days, and were government controlled (“representations”) — Plaintiffs seek to recover against D1 based on contract, guarantee, breach of fiduciary duties or misrepresentation, pursuant to s 1041I(1) of the Corporations Act2001 (Cth) (“Corporations Act”) and s 236 of the Australian Consumer Law (“ACL”) and for negligence — Plaintiffs allege that D1 was an employee or officeholder of Oracle Law and seek to recover against D2 under the compensatory limb of the Court’s inherent supervisory jurisdiction, and by negligence, with alternative claims based on vicarious liability and breaches of the ACL — D2 cross-claims against D1 for contribution or indemnity
EVIDENCE — Privilege against self-incrimination — There is a distinction between the prohibition against drawing an adverse inference from a claim of privilege and adverse inferences that may arise from the absence of evidence which a party or witness could be expected to give (Jones v Dunkel) — It is not permissible to draw an adverse inference from a witness’ exercise of his or her privilege against self-incrimination
CONTRACT — Construction — Issues regarding aspects of AMAs that bear upon repayment — Whether trade period had commenced — “official start date” an undefined term but no real dispute that the 90-day period had commenced — Whether “return” refers to the initial investment or also the profit on the initial investment — Properly construed, “return” only refers to the profit component, accordingly, there was an unqualified obligation under the AMAs to pay…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499
Case
[2024] NSWSC 499
Decision Date
CaseChat Overview and Summary
Adelaide Concrete Cutting & Drilling Pty Ltd and another v Marino (No 2) involved a dispute between the plaintiffs, Adelaide Concrete Cutting & Drilling Pty Ltd and another individual, and the defendants, a licensed real estate agent and a solicitor, regarding investments made under asset management agreements. The plaintiffs alleged that the real estate agent misrepresented himself as a lawyer, promised risk-free investments with guaranteed returns, and failed to repay their investments. The plaintiffs sought recovery against both defendants based on contract, guarantee, fiduciary duties, misrepresentation, negligence, and under various statutory provisions. The defendants denied the allegations and asserted cross-claims for contribution or indemnity.
The court was required to determine whether the real estate agent owed fiduciary duties to the plaintiffs, whether the plaintiffs were entitled to rescind the asset management agreements, and if the solicitor could be held liable under the compensatory limb of the Court’s inherent supervisory jurisdiction. The court also had to consider the impact of the plaintiffs' failure to properly frame and list the issues, and the inadequacies in the Court Book, on the progression and costs of the case.
The court found that the real estate agent was not a fiduciary of the plaintiffs as the alleged duties were proscriptive in nature and not prescriptive. The court also held that the plaintiffs had affirmed the asset management agreements and, therefore, could not rescind them. The claims against the solicitor under the supervisory jurisdiction were dismissed as the plaintiffs failed to establish gross negligence or a "culpable quality" of negligence. The court noted that the presentation of the case, including the Court Book, was not conducive to a just, quick, and cheap resolution of the issues and directed the parties to address the proportionality provisions of the Civil Procedure Act 2005 (NSW) in relation to costs.
The court ruled in favour of the plaintiffs against the real estate agent on the contractual and misleading or deceptive conduct claims, but declined to make findings on other claims due to the success of the contractual claim and the plaintiffs' failure to address essential aspects of those claims. The claims against the solicitor were dismissed. The court highlighted the importance of proper framing of issues and adherence to procedural directions to facilitate the efficient resolution of disputes.