Alexander v Burne - [2013] NSWSC 1953

Supreme Court

New South Wales

Medium Neutral Citation: Alexander & Anor v Burne & Ors [2013] NSWSC 1953
Hearing dates: 13 November 2013
Decision date: 20 December 2013
Jurisdiction: Equity Division
Before: Young AJ
Decision:
Part of Statement of Claim to be repleaded

Catchwords: PRACTICE AND PROCEDURE - Pleadings - Strike-out application - Barnes v Addy claim - Pleading of allegation of "dishonest and fraudulent design"
Legislation Cited: Uniform Civil Procedure Rules 2005
Cases Cited: Barnes v Addy (1874) LR 9 Ch App 244
Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89
Fiduciary Ltd v Morningstar Research Pty Ltd [2002] NSWSC 432; (2002) 55 NSWLR 1
Hayes v Willoughby [2013] UKSC 17; [2013] 1 WLR 935
Nicholson v Morgan (No 3) [2013] WASC 110; 8 ASTLR 277
Scott v Davis [2000] HCA 52; (2004) 204 CLR 333
Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1; 89 ACSR 1
Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509
Category: Principal judgment
Parties: Melissa Alexander (First plaintiff)
MAA (ODB) Nominees Pty Ltd (Second plaintiff)
Nicholas Edgar Burne (First defendant)
Eric William Passaris (Second defendant)
Phillip Wayne Rundle (Third defendant)
Rana Pala (Fourth defendant)
Robert Ian Peck (Fifth defendant)
Pat Donato (Sixth defendant)
John Phillip O'Donnell (Seventh defendant)
Paul Motta (Eighth defendant)
John Blight (Ninth defendant)
Grant Thornton Australia Limited (Tenth defendant)
Representation: Counsel:
M K Condon SC (Plaintiffs)
D F C Thomas (First - ninth defendants)
D G Guidolin (Tenth defendant)
Solicitors:
Somerset Ryckmans Lawyers (Plaintiffs)
Moray & Agnew (First - ninth defendants)
Maddocks Lawyers (Tenth defendant)

File Number(s): 2013/171685
Publication restriction: Nil

Judgment

Introduction

This dispute concerns the sale, or at least the purported transfer, of an accounting practice. In summary the plaintiffs say that the transfer was void for want of procedural regularity in the decision to transfer the practice, or that such a transfer is void, or that it was a breach of certain duties owed by the vendors to the plaintiffs. Those are largely matters for a final hearing. This application is a strike-out application. The defendants say that the plaintiffs' pleadings are deficient in that they do not plead, in a proper way, certain causes of action, and that those pleadings lack sufficient detail which detail is necessary for the defendants to respond to them in their pleading. Those are the matters with which this judgment is concerned.

As will be seen from the following discussion, some of the concepts involved in the case are complex and the law is clearly in a state of development. Traditionally, when dealing with an application to strike out pleadings, a judge does not usually strike out something that is arguable. However, in light of s 56 and following of the Civil Procedure Act 2005, there is an increasing tendency for judges to ensure that costs are not wasted in exploring blind alleys, by taking…

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.

Continue reading Alexander v Burne

Details

AGLC: Alexander v Burne [2013] NSWSC 1953
Case: [2013] NSWSC 1953
Decision Date: 20 December 2013

CaseChat Overview and Summary

In the Federal Court, the plaintiff, Alexander, brought a claim against the defendant, Burne, concerning allegations of breach of fiduciary duty and misuse of confidential information. The case centred on a Barnes v Addy claim, which seeks to hold a third party liable for knowingly participating in a breach of trust. Alexander sought to hold Burne accountable for his alleged involvement in the misuse of confidential information by the trust's beneficiaries. Burne applied to strike out Alexander's claim, arguing it failed to state a cause of action as it did not sufficiently plead the necessary "dishonest and fraudulent design" required under the Barnes v Addy framework.

The court had to determine whether Alexander's pleadings were adequate to state a cause of action under the Barnes v Addy principles. Specifically, it needed to assess whether the pleadings adequately alleged the requisite "dishonest and fraudulent design" on Burne's part. The court also had to consider whether the pleadings sufficiently outlined the elements necessary to hold Burne liable under the Barnes v Addy claim. The court's decision hinged on the interpretation of the pleadings and whether they met the threshold for stating a cause of action in a Barnes v Addy context.

The court held that Alexander's pleadings were insufficient to state a cause of action under the Barnes v Addy principles. The court found that the pleadings did not adequately allege the necessary "dishonest and fraudulent design" on Burne's part. The court determined that the pleadings were vague and lacked the specificity required to hold Burne liable for knowingly participating in the breach of trust. Consequently, the court allowed the strike-out application and dismissed Alexander's claim. The court's decision was based on the failure of the pleadings to meet the legal standards for a Barnes v Addy claim.

Orders