Aquisite Pty Ltd v Moss (No 2) - [2023] FCA 727

FEDERAL COURT OF AUSTRALIA
Aquisite Pty Ltd v Moss (No 2) [2023] FCA 727

File number(s): VID 1401 of 2019

Judgment of: MCELWAINE J

Date of judgment: 30 June 2023

Catchwords:
CORPORATIONS – declaration that first defendant was a director in fact – judgment entered against first and third defendants with pre-judgment interest

COSTS – application by plaintiff for indemnity costs against defendants by reason of Calderbank offer – where plaintiff was successful against first and third defendants only – indemnity costs order made against first and third defendants – application by second and fourth defendants for party and party costs –party and party costs order made against plaintiff in favour of second and fourth defendants

Legislation: Federal Court of Australia Act 1976 (Cth) ss 51A, 52

Cases cited:
Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (No 2) [2018] FCAFC 112

BCI Finances Pty Ltd (in liq) v Binetter (No 5) [2017] FCA 1524

Kimber v Clark in his capacity as trustee of the property of Kimber (No 2) [2023] FCAFC 88

Powell & Duncan (Noelex Yachts Aust) v Fryer (2001) 37 ACSR 589; [2001] SASC 59

Re Mike Electric (Aust) Pty Ltd (in liq) (1983) 71 FLR 117

Smith v Bone (No 2) (2015) 233 FCR 568; [2015] FCA 389

Division: General Division

Registry: Victoria

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 24

Date of last submissions: 6 June 2023 (Second and Third Defendants)
8 June 2023 (Plaintiff)

Date of hearing: Determined on the papers

Counsel for the Plaintiff: Mr J Petras

Solicitor for the Plaintiff: Aitken Partners

Solicitor for the Defendants: Ms H Mastos of Bancroft Lawyers

ORDERS

VID 1401 of 2019

BETWEEN:
AQUISITE PTY LTD

Plaintiff

AND:
PAUL RONALD MOSS

First Defendant

PRM INVESTMENTS PTY LTD (ACN 066 434 115)

Second Defendant

SARAH ELIZABETH MOSS (and another named in the Schedule)

Third Defendant

ORDER MADE BY:

MCELWAINE J

DATE OF ORDER:

30 JUNE 2023

THE COURT ORDERS AND DECLARES THAT:
1.Between 2 March 2016 and 31 May 2017, the first defendant was a director of Amici Food Manufacturer Pty Ltd (in liq) (ACN 611 078 865) within the meaning of the definition of director at s 9 of the Corporations Act 2001 (Cth).
2.There be judgment for the plaintiff against the first defendant in the sum of $618,465.87.
3.Pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth), in addition to the amount specified in (2) the first defendant must pay pre-judgment interest in the amount of $183,277.70.
4.There be judgment for the plaintiff against the third defendant in the sum of $13,922.
5.Pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth), in addition to the amount specified in (4) the third defendant must pay pre-judgment interest in the sum of $2,411.08.
6.The first defendant is to pay the plaintiff’s costs of the proceeding against him on a party and party basis to 30 November 2020 and thereafter on…

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 Aquisite Pty Ltd v Moss (No 2)

Details

AGLC: Aquisite Pty Ltd v Moss (No 2) [2023] FCA 727
Case: [2023] FCA 727
Decision Date: 30 June 2023

CaseChat Overview and Summary

Aquisite Pty Ltd, the plaintiff, sought a declaration that the first defendant, Mr Moss, was a director in fact of the company. The case was heard in the Federal Circuit Court of Australia, with the appeal being heard in the Federal Court of Australia. The plaintiff also sought judgment against the first and third defendants for breach of statutory duties under the Corporations Act 2001 (Cth), and pre-judgment interest on those amounts. The second and fourth defendants, who were also named in the proceeding, were not found to be directors and were not subject to the judgment for breach of statutory duties.

The primary legal issues in the case were whether Mr Moss was a director in fact, and if so, whether the first and third defendants were liable for breach of statutory duties. The court considered whether the first and third defendants exercised their powers and discharged their duties with the care and diligence of a reasonable person in the position. The court also examined whether the first and third defendants were liable for pre-judgment interest on the amounts owed to the plaintiff. Additionally, the court considered the plaintiff's application for indemnity costs against the defendants and the second and fourth defendants' application for party and party costs.

The court found that Mr Moss was a director in fact and that the first and third defendants were liable for breach of statutory duties. The court held that the first and third defendants failed to exercise their powers and discharge their duties with the care and diligence of a reasonable person in their position. The court granted the plaintiff's application for pre-judgment interest on the amounts owed to the plaintiff. The court also made an order for indemnity costs against the first and third defendants, and an order for party and party costs in favour of the second and fourth defendants against the plaintiff.

The court ordered that the first defendant was a director in fact and that the first and third defendants were liable for breach of statutory duties. The court ordered the first and third defendants to pay the plaintiff's costs on an indemnity basis. The court also ordered that the second and fourth defendants were to receive party and party costs from the plaintiff. The court's decision provides clarity on the legal status of Mr Moss as a director and the liability of the first and third defendants for breach of statutory duties.

Orders