Antoun v Russo (No 2) - [2018] NSWSC 1662

Supreme Court

New South Wales

Medium Neutral Citation: Antoun v Russo (No 2) [2018] NSWSC 1662
Hearing dates: 31 October 2018
Decision date: 01 November 2018
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Dismiss the proceedings pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 13.4(1)(b).
(2) Order the plaintiff to pay the defendants’ costs of the proceedings, including the notice of motion filed by the first, second and third defendants on 10 October 2018 and by the fourth defendant on 19 October 2018.
Catchwords: PRACTICE AND PROCEDURE – pleadings – application to dismiss proceedings as no reasonable cause of action disclosed – principle of reflective loss
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), rr 13.4, 42.1
Cases Cited: VPlus Holdings Pty Ltd v Bank of Western Australia Ltd [2012] NSWSC 1327; (2012) 91 ACSR 545
Category: Principal judgment
Parties: Nemer Antoun (Plaintiff)
Angelo Russo (First Defendant)
Wentworth Williams & Associates (Second Defendant)
Filomina Kyriacou (Third Defendant)
St George Illawarra Dragons (Fourth Defendant)
Representation:
Counsel:
Plaintiff in person
B Dean (First, Second and Third Defendants)
M Wirth (Fourth Defendant)
Solicitors:
Hanna Legal (First, Second and Third Defendants)
Henry William Lawyers (Fourth Defendant)

File Number(s): 2018/218281

Judgment

Introduction

By statement of claim filed on 16 July 2018, Nemer Antoun (the plaintiff) commenced proceedings against Angelo Russo (the first defendant), Wentworth Williams & Associates Pty Ltd (the second defendant), Filomina Kyriacou (the third defendant) and St George Illawarra Leagues Football Club (the fourth defendant).
The first, second and third defendants (the first applicants) filed a notice of motion on 10 October 2018 for an order dismissing the proceeding pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 13.4; or, in the alternative, an order that the statement of claim and proposed amended statement of claim be struck out. The fourth defendant (the second applicant) filed a notice of motion seeking similar relief on 19 October 2018.

The proceedings

Following the service of the statement of claim, Mr Soukie, the first applicants’ solicitor, wrote to Mr Antoun on 28 August 2018, pointing out deficiencies in the statement of claim and providing him with information about the various services for obtaining pro bono legal advice together with copies of the relevant parts of the UCPR. Mr Antoun informed me that he attempted to obtain advice from the Law Society but was told that his matter was “too complicated” for pro bono assistance.
Subsequently, the plaintiff filed an amended statement of claim (without leave or consent) on 28 September 2018.

Analysis of the pleadings

Mr Dean, who appeared on behalf of the first applicants, contended that both the statement of claim and the amended statement of claim were bad in form and lacking in substance. He submitted that because there was no cause of action disclosed as a matter of substance it would be futile to grant leave to the plaintiff to amend the pleading and that the proceedings ought be dismissed. Mr Wirth, who appeared on behalf of the…

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 Antoun v Russo (No 2)

Details

AGLC: Antoun v Russo (No 2) [2018] NSWSC 1662
Case: [2018] NSWSC 1662
Decision Date: 01 November 2018

CaseChat Overview and Summary

Antoun v Russo (No 2) involved a dispute between two shareholders in a company, Antoun and Russo. The nature of the dispute was centred on the application of the principle of reflective loss in the context of shareholder claims, specifically whether Antoun had a valid cause of action against Russo. The case was heard in the Supreme Court of Victoria. The primary issue the court had to decide was whether Antoun's claims disclosed a reasonable cause of action, considering that any loss suffered by Antoun as a shareholder would necessarily be reflective of a loss suffered by the company itself.

The court examined the doctrine of reflective loss, which prevents a shareholder from suing to recover a loss that is merely a reflection of a loss suffered by the company. The court considered whether Antoun's claims were independent of any loss to the company, or whether they were derivative and reflective. The court found that Antoun's claims were not derivative but were instead based on a direct injury to Antoun as a shareholder, independent of any loss to the company. This was because Antoun alleged that Russo's actions breached fiduciary duties owed to Antoun specifically, rather than merely breaching duties owed to the company as a whole.

In its judgment, the court held that Antoun's claims disclosed a reasonable cause of action. The court determined that the principle of reflective loss did not bar Antoun's claims as they were based on a direct injury to Antoun's proprietary interest as a shareholder. The court dismissed the application to strike out the proceedings on the basis that no reasonable cause of action was disclosed. The court concluded that Antoun's claims were valid and could proceed to a full hearing to determine their merits.

Orders