Bray v Dye (No 2) - [2010] VSC 152

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4356 of 2007

BARRY PETER BRAY and SARAH GILLIAN GILBERT	Plaintiffs
and
VICTOR RAYMOND DYE and ROGER DARREN GRANT	Defendants

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	4 March 2010
DATE OF JUDGMENT:	10 May 2010
CASE MAY BE CITED AS:	Bray v Dye (No 2)
MEDIUM NEUTRAL CITATION:	[2010] VSC 152

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Costs – Plaintiff joined without her authority – Orders for costs made against improperly joined plaintiff – Legal representatives substituted for improperly joined plaintiff and bound in her place by the orders for costs.

Legal Practitioners – Misrepresentation of plaintiff’s authority – Plaintiff “put forward” as party who could be made liable for an order for costs – Failure by solicitor and counsel to make necessary enquiry.

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APPEARANCES:	Counsel	Solicitors
For the Applicant, Sarah Gillian Gilbert	Mr A Swanwick	M W Law
For the Defendants	Mr G T Bigmore QC	Deacons
For Goldsmiths Barristers and Solicitors Pty Ltd	Mr D Klempfner	Monahan + Rowell
For Mr Sandbach of counsel	Mr N Pane	Lander & Rogers
For Mr Bray	Mr D C Harrison	DLA Phillips Fox

HIS HONOUR:

On 1 April 2009, I delivered judgment in the main proceeding.[1] On 20 April 2009 I made orders for costs against both plaintiffs. It is now common ground that the second plaintiff, Sarah Gillian Gilbert, did not authorise the commencement or continuation of this proceeding on her behalf. Ms Gilbert has applied to reinstate the proceeding and for orders indemnifying her in respect of the costs orders made against her.
[1]Bray v Dye [2009] VSC 113.

In April 2004, Barry Peter Bray and Ms Gilbert advanced money to Graphics 103 Pty Ltd (“Graphics”) and Rowprint Services (Vic) Pty Ltd (“Rowprint”) under written loan agreements. Each company secured the loans by charging its assets in favour of the lenders. The businesses failed and the borrowers defaulted. The defendants, Victor Raymond Dye and Roger Darren Grant were initially appointed as administrators and then liquidators of the companies. The dispute in the main proceeding arose out of the defendants’ management of the administration and liquidation and their alleged failure to account to the plaintiffs for the proceeds from the realisation of charged assets.

The main proceeding was commenced by writ on 25 January 2007. The claim then made by the plaintiffs was that the defendants pay to them the whole of the proceeds of realisation of the assets of Graphics and Rowprint which came into their hands as administrators and later liquidators, less any employee claims having priority pursuant to s 561 of the Corporations Act 2001 (“the Act”), but not exceeding the sum of $342,755.53 together with interest thereon. That was the amount then said to be outstanding under the loan agreements. The plaintiffs also sought an inquiry into the defendants’ failure to comply with the requirements of s 420A of the Act when selling the assets of Rowprint and Graphics.

Throughout 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 Bray v Dye (No 2)

Details

AGLC: Bray v Dye (No 2) [2010] VSC 152
Case: [2010] VSC 152
Decision Date: 10 May 2010

CaseChat Overview and Summary

The case of Bray v Dye (No 2) involved a dispute where costs were awarded against a plaintiff who had been joined to the proceedings without her authority. The matter was heard in the Federal Court of Australia. The plaintiff, Ms Bray, was improperly joined to the proceedings by her legal representatives, who misrepresented her authority to be a party to the dispute. The defendants sought an order for costs against Ms Bray, who was subsequently substituted as a party to the proceedings. The court was required to determine whether the costs order could validly be made against Ms Bray and whether her legal representatives could be held liable for the costs due to their misrepresentation.

The court found that the costs order made against Ms Bray was valid as her legal representatives had substituted her as a party and, as such, she was bound by the orders for costs. The court further held that the solicitor and counsel were negligent in failing to make necessary enquiries regarding Ms Bray’s authority to be a party to the proceedings. The court found that the misrepresentation by the legal representatives of Ms Bray’s authority resulted in her being improperly joined to the proceedings, which led to the costs order being made against her. The court held that the legal representatives were liable for the costs due to their failure to make the necessary enquiries.

The court ordered that the legal representatives be held liable for the costs of the proceedings, as they had misrepresented Ms Bray’s authority and failed to make the necessary enquiries. The court also ordered that the costs be paid by the legal representatives, who were substituted for Ms Bray in the proceedings. The court’s decision highlights the importance of legal representatives ensuring that their clients are properly joined to proceedings and that they have the necessary authority to be a party to the dispute.

Orders