Bozic v Billis [No 2]
[2021] WASC 238
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BOZIC -v- BILLIS [No 2] [2021] WASC 238
CORAM: ALLANSON J
HEARD: ON THE PAPERS
DELIVERED : 16 JULY 2021
PUBLISHED : 16 JULY 2021
FILE NO/S: CIV 2557 of 2017
BETWEEN: FRANJO BOZIC
Plaintiff
AND
ANTON BILLIS
First Defendant
TRIBUNE RESOURCES LTD
Third Defendant
PHANATCHANKORN WICHAIKUL
Fourth Defendant
Catchwords:
Practice and procedure - Application to replead following strike out of statement of claim - Whether claim of fraud against first defendant pleaded with sufficient particularity - Turns on facts
Practice and procedure - Application to replead following strike out of statement of claim - Where plaintiff seeks leave to plead new claim against third defendant for breach of duty in 2010 - Whether claim against third defendant set out in writ - Whether claim would be vulnerable to strike out on limitation grounds
Practice and procedure - Where plaintiff alleges private right of action based on statutory obligation of third defendant under s 169(3) of the Corporations Act 2001 (Cth) - Whether proposed statement of claim pleads a reasonable cause of action against third defendant
Practice and procedure - Where plaintiff alleges fourth defendant participated in or was privy to fraud of first defendant - Whether facts pleaded give rise to reasonable cause of action
Legislation:
Nil
Result:
Leave refused for proposed pleas against third and fourth defendants
Leave granted for proposed claim against first defendant
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Westmont Legal |
| First Defendant | : | Armeli & Molony Lawyers |
| Third Defendant | : | Nova Legal |
| Fourth Defendant | : | Armeli & Molony Lawyers |
Case(s) referred to in decision(s):
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
ALLANSON J:
Introduction
In 2010, the plaintiff, Franjo Bozic, was registered as the holder of 224,000 shares in the third defendant, Tribune Resources Ltd. In March 2010, the shares were transferred into the name of the fourth defendant, Phanatchankorn Wichaikul. Mr Bozic alleges that the shares were transferred by the first defendant, Anton Billis. He further alleges that the transfer was done without his consent or authority and was fraudulent.
The plaintiff commenced these proceedings in September 2017. A curious feature of his proposed case is that he seeks damages against Tribune Resources, but not against Mr Billis who, he alleges, committed fraud.
Mr Bozic filed a statement of claim on 3 November 2017. It was subsequently amended twice in 2020.
On 7 April 2021, on the application of Mr Billis and Ms Wichaikul, I ordered that three paragraphs of the further amended statement of claim, filed on 5 November 2020, be struck out. I further ordered that Mr Bozic have 21 days to apply for leave to re‑plead, with the application to be supported by a minute of proposed substituted statement of claim.
Mr Bozic filed a minute of substituted statement of claim and an application for leave to re-plead within the time allowed. The proposed minute re-pleads the case against Mr Billis and Ms Wichaikul, but also pleads a new case against Tribune Resources.
Mr Bozic filed a further minute on 5 May 2021, which expands on the plea.
The defendants object to Mr Bozic being given leave to proceed on the proposed substituted statement of claim.
Tribune Resources
Tribune Resources is a publicly listed company. Mr Billis is managing director of Tribune Resources.
Mr Bozic alleges that, on or about 1 March 2010, Mr Billis, with the intention to defraud Mr Bozic, caused Tribune Resources to transfer the shares to the Ms Wichaikul.[1]
[1] Substituted statement of claim [6]. The plea - in an obvious error - refers to the second defendant.
In a new plea, Mr Bozic alleges that Tribune Resources owed a duty to accurately maintain its share register and breached that duty in accepting the transfer form and transferring the shares.[2] He claims damages against Tribune Resources. In the minute of 5 May 2021, Mr Bozic particularises the loss he suffered, and claims against Tribune Resources for dividends not received during the period he was not registered as the holder of the shares.
[2] Substituted statement of claim [8] - [9].
The claim now advanced by Mr Bozic for breach of duty is not set out in the writ filed 15 September 2017, or in any subsequent amendments to the writ or statement of claim before the current plea.[3] While Mr Bozic had claimed damages against Tribune Resources, those damages were claimed for breach of contract, for fraudulently inducing Mr Bozic to enter a contract, and for the fraud of Mr Billis as its managing director. Those claims were abandoned in the amended statement of claim filed 25 September 2020, and the only relief then sought against Tribune Resources was for rectification of the share register.
[3] See Rules of the Supreme Court 1971 (WA), O20 r 2.
It is a sufficient reason to not allow the proposed amendment that the cause of action now raised for the first time is outside the indorsement on the writ.
Tribune Resources also submits that the proposed plea is defective for other reasons. The substituted statement of claim seeks to raise a claim - in negligence or breach of statutory duty - 11 years after the plaintiff pleads that he suffered loss and damage. The damage, on the plaintiff's case, is the loss of legal title to the shares in March 2010. Although the plaintiff only claims loss of dividends from 2017, that loss is consequential on the earlier loss of title to the shares.
The claim would be vulnerable to strike out or summary judgment on the ground that it is clearly out of time.
Tribune Resources further submits that the plea must fail for another reason. The plaintiff's claim is based upon an alleged negligent breach of a statutory duty under s 169(3) of the Corporations Act 2001 (Cth). Tribune Resources submits, first, that on its proper construction, s 169(3) does not create a statutory duty which gives rise to a private right of action.
The principle on which Tribune Resources relies is well settled:
A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to afford protection. The question is one of the construction of the statute…[4]
[4] Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 424.
Tribune Resources submits that the duty alleged goes beyond the terms of the statute relied on: it would impose a duty on a publicly listed company trading on the ASX to investigate and verify every transfer of shares. Although, from the plaintiff's pleading, the relevant transaction was not on market, that is not material to the construction of s 169(3). That is, the statutory obligation for which Mr Bozic contends would apply to transfers however carried out.
I am satisfied that the submissions made on behalf of Tribune Resources are correct.
In the orders made on 12 May 2021, Mr Bozic was given to 26 May 2021 to file responsive submissions (all defendants had filed their submissions on 11 May 2021). He has filed nothing.
Mr Bozic will not be permitted to amend in the terms proposed.
Mr Billis
Mr Bozic seeks to re-plead a cause of action against Mr Billis which was previously pleaded inadequately.
He alleges, in pars 5, and 6:
5. Up until about 8 March 2010 the Plaintiff was the registered holder of 224,000 shares (the Shares) in the Third Defendant.
6. On or about 1 March 2010 the First Defendant, with intention to defraud the Plaintiff, and without the plaintiff's authority or consent caused the Second Defendant [sic] to transfer the Shares, to the Fourth Defendant, for no consideration.
Although pleaded as particulars to [6], the plaintiff also alleges the following facts:
(1)the transfer was given effect under a standard transfer form signed by the first defendant as 'F Boznic' or 'F Bozic';
(2)the form was signed 'in an attempt to simulate the plaintiff's name and signature';
(3)no consideration was paid to Mr Bozic;
(4)the stated consideration was that the shares were held on trust by F Boznic for Ms Wichaikul;
(5)the shares were transferred to Ms Wichaikul without Mr Bozic's authority.
Mr Bozic seeks a declaration that the transfer of the Tribune Resources shares was a fraud carried out by Mr Billis.
The plea is sufficient for Mr Billis to know the case he must meet.
Ms Wichaikul
The plaintiff pleads, in [7]:
On or about 1 March 2010, the Fourth Defendant received the Shares from the Transfer knowing she had paid no valuable consideration for the Shares, and knowing they were not held by the Plaintiff on trust for her because no such trust existed and thereby participated in the fraud of the First Defendant.
In the prayer for relief, Mr Bozic seeks a declaration that the transfer of his shares was a fraud carried out by Mr Billis in which Ms Wichaikul 'participated or was privy'.
The defect in the plea is that it does not set out facts from which Mr Bozic could establish participation by Ms Wichaikul in the fraud alleged in [6]. Mr Bozic does not allege that Ms Wichaikul actually participated in conduct by Mr Billis by simulating Mr Bozic's signature to effect the transfer without his authority or consent, or that she knew or ought to have known that had occurred.
The proposed plea against Ms Wichaikul will not be permitted.
Conclusion
I will hear the parties on the orders required to give effect to these reasons. The proposed substituted statement of claim adopts a minimalist approach to pleading. The consequences of allowing only part of it to stand must be considered, including whether the declaration sought by Mr Bozic is of any utility if there is no surviving claim against Ms Wichaikul, and where 11 years have passed since the shares were registered in her name.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Associate to the Honourable Justice Allanson
16 JULY 2021
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