Akea Limited v Paltar Petroleum Limited - [2017] NSWSC 319

Supreme Court

New South Wales

Medium Neutral Citation: Akea Limited v Paltar Petroleum Limited [2017] NSWSC 319
Hearing dates: 29 March 2017
Decision date: 29 March 2017
Jurisdiction: Equity - Commercial List
Before: Ball J
Decision:
The plaintiff given leave to file in court further amended summons

Catchwords: PRACTICE AND PROCEDURE – summons – application to file further amended summons – whether defendants would be unfairly prejudiced if the amendment were allowed and no adjournment granted
Legislation Cited: Australian Consumer Law ss 237(1) and 243
Australian Securities and Investment Commission Act 2001 (Cth)
Civil Procedure Act 2005 (NSW) ss 56 to 60
Corporations Act 2001 (Cth)
Cases Cited: Haydon v Jackson (1988) ATPR 40-845
Morellini v Adams [2011] WASCA 84
Category: Procedural and other rulings
Parties: Akea Limited (First Plaintiff)
Guangyue Qian (Second Plaintiff)
Xinyu Wang (Third Plaintiff)
Paltar Petroleum Limited (First Defendant)
Marc Alan Bruner (Second Defendant)
Darryl John Causbrook (Third Defendant)
Hamish Leslie McIntosh (Fourth Defendant)
Stephen Wee (Seventh Defendant)
Representation:
Counsel:
GKJ Rich SC with S Lawrance (Plaintiffs)
I Jackman SC with D Klineberg (First to Fourth Defendants)
PS Braham SC with Y Shariff (Seventh Defendant)
Solicitors:
Arnold Bloch Liebler (Plaintiffs)
North Rose Fulbright (First to Fourth Defendants)
Deutsch Miller (Seventh Defendant)

File Number(s): 2015/89532
Publication restriction: None

EX TEMPORE Judgment

In these proceedings, the plaintiffs claim damages for misleading and deceptive conduct and unconscionable conduct in connection with the issue to them by the first defendant, Paltar, of a convertible note. The amount invested was $5 million. Under the terms of the convertible note, Paltar had a right which it exercised to issue to the first plaintiff, Akea, five million shares in repayment of the amount due under the note. Relevantly, the claim for damages is made against Paltar and a number of its directors who are said to have engaged in misleading, deceptive or unconscionable conduct or to have been involved in contraventions by Paltar.
By their amended commercial list statement, the plaintiffs claim damages calculated as the difference between the amount they invested and the value of the shares issued under the convertible note, which they say is zero. Neither party has sought to lead expert evidence concerning the value of the shares. It is the plaintiffs’ case that the court can infer that the shares have no value from the financial statements of the company, the absence of up-to-date financial statements and a number of other facts concerning the financial position of the company, including the apparent loss of certain petroleum exploration licences held by the company following the failure to pay the requisite fees.
It is the first to fourth defendants' case that the plaintiffs have failed to prove that the shares are worthless and as a consequence, the plaintiffs have failed to prove the loss they claim, with the result that the case must fail.
During the hearing on 28 March 2017, the plaintiffs made an application to amend their claim to claim, as damages, the difference between the amount…

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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Details

Case: [2017] NSWSC 319
Decision Date: 29 March 2017

CaseChat Overview and Summary

In the case of Akea Limited v Paltar Petroleum Limited, the dispute involved the procedural aspects of a summons. Akea Limited sought to file a further amended summons, which Paltar Petroleum Limited opposed. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether allowing Akea Limited to file a further amended summons without granting an adjournment would unfairly prejudice Paltar Petroleum Limited.

The court considered whether the defendants would face undue disadvantage if the amendment was permitted without an adjournment. Factors such as the timing of the application, the nature of the proposed amendment, and the impact on the defendants' ability to prepare a proper defence were examined. The court assessed whether the amendment could be considered an abuse of process and whether there were any exceptional circumstances that warranted granting an adjournment. The court concluded that allowing the amendment without an adjournment would not unfairly prejudice Paltar Petroleum Limited.

Consequently, the Supreme Court of New South Wales granted Akea Limited's application to file a further amended summons. The court ruled that there was no undue prejudice to Paltar Petroleum Limited in permitting the amendment without an adjournment. The decision emphasised the importance of balancing the rights of the parties with the need for a fair and efficient legal process.

Orders