Break Fast Investments Pty Ltd v Kheir

[2014] VCC 162

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
EXPEDITED CASES DIVISION

Case No. CI-13-00253

BREAK FAST INVESTMENTS PTY LTD	Plaintiff
v.
VICTOR KHEIR & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	26 February 2014
DATE OF JUDGMENT:	27 February 2014
CASE MAY BE CITED AS:	Break Fast Investments Pty Ltd v. Kheir & Ors
MEDIUM NEUTRAL CITATION:	[2014] VCC 162

REASONS FOR JUDGMENT

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Catchwords:              Practice and procedure – Application by third defendant to join further persons as defendants and third parties – Application made in the week before trial fixed for hearing – Director of the plaintiff prepared to agree to orders joining him as a party – Former director of the plaintiff joined as a defendant for the purposes only of apportionment provisions of the Wrongs Act 1958 (Vic) – Application to serve third party notice on the former director refused because the trial date would need to be vacated in that event.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Vout	Foster Nicholson Jones
For the First and Second Defendants	Mr N. Andreou	Nevett Ford
For the Third Defendant	Mr N. Jones	Macquarie Lawyers

HIS HONOUR:

1The third defendant seeks, by summons filed 25 February 2014, a number of procedural orders including the joinder of two further parties. However, the trial of the proceeding is fixed for next Monday, 3 March 2014 and it is likely that the granting of the orders, or some of them, would involve the trial date being vacated.

2The plaintiff seeks the repayment of sums totalling $65,000 paid to the first defendant in 2009. Money was owed to the first defendant for building works carried out at commercial premises in East Brunswick. The plaintiff alleges the works were carried out at the request of the third defendant, apparently as “agent of the lessee of a leasehold” of the East Brunswick property. The first defendant was apparently told that the invoice for the work should be delivered to the plaintiff. The second defendant was responsible for the dealings with the third defendant and, subsequently with the plaintiff. He dealt with Mr Christos Voukidis, a director of the plaintiff.

3The other director of the plaintiff was Mr Theodore Baker. Mr Baker said that Mr Voukidis misled him and as a consequence, the invoice and two further invoices were paid by the plaintiff to the first defendant.

4The claims brought in the proceeding are as follows:

a.against the first defendant, for money had and received and for misleading and deceptive conduct in breach of section 9 of the Fair Trading Act1999 (Vic) and section 52 of the Trade Practices Act 1975 (Cth);

b.against the second and third defendants, for aiding and abetting the misleading and deceptive conduct, in the third defendant’s case, in breach only of the Fair Trading Act;

c.against all three defendants for conspiracy or deceit arising out of an agreement to deceive the plaintiff between the defendants and Mr Voukidis.

5The action was brought by writ dated 22 January 2013. Upon the hearing of a summary judgment application against the first and second defendants, the defendants were granted leave to defend. The third defendant was served with an amended writ and statement of claim on 10 May 2013. He failed to enter an appearance and judgment in default was issued against him on 9 December 2013.

6The default judgment against the third defendant was set aside by consent on 4 February 2014. The consent orders included the following:

“2.       The third defendant is to file and serve his defence which indentifies all the material facts upon which he relies by 4pm on 7 February 2014.

4. The third defendant is to make no application to set aside the trial date of 3 March 2014, which trial date is confirmed.”

7The third defendant filed a defence on 7 February 2014. He denied the critical allegations in the further amended statement of claim that, at his request and that of Voukidis, the invoices were rendered to the plaintiff by the first and/or second defendant.

8In paragraph 25 of the defence, the third defendant alleges that the plaintiff’s claim is an apportionable claim, and that if found liable to the plaintiff, he would be “entitled to an apportionment of any liability between him and the first and second defendant and any other parties who may be joined to this proceeding who are responsible for the plaintiff’s claimed loss and damage”. The “other parties” were not identified in the pleading.

9By his summons dated 25 February 2014, the third defendant seeks:

a.leave to file and serve a third party notice against Christos Voukidis and Theodore Baker;

b.leave to join Christos Voukidis and Theodore Baker as defendants for the purposes of the apportionment legislation;

c.leave to file and serve notices of contribution against the first and second defendants.

10The orders, including the order in 9(c), are not opposed by the first and second defendants. The first and second defendants in turn seek leave to file and serve a  notice of contribution against the third defendant. The third defendant does not oppose that order.

11Mr Baker is still a director of the plaintiff. He will give evidence at the trial. At my suggestion, plaintiff’s counsel Mr Vout, sought instructions as to the plaintiff’s attitude to the orders sought that relate to Mr Baker and whether Mr Baker would give instructions to the plaintiff’s solicitor in order to allow these matters to proceed at the trial commencing on Monday.

12As a result, Mr Vout has informed the Court that, provided no order is made giving the third defendant leave to file and serve a third party notice against Mr Voukidis, the plaintiff would not oppose orders that:

a.the third defendant have leave to file and serve a third party notice against Mr Baker in the form of the notice and statement of claim recently served;

b.that Christos Voukidis and Theodore Baker be joined as defendants to the proceeding pursuant to section 24AL of the Wrongs Act 1958 (Vic) so that the third defendant might seek apportionment of any loss or damages awarded against him on the basis that Christos Voukidis and Theodore Baker are concurrent wrongdoers.

13Mr Baker indicated that he will instruct the plaintiff’s solicitors and that these matters can proceed as part of the hearing next week. This concession facilitates the resolution of the present application as it only leaves outstanding the third defendant’s application to serve a third party notice against Mr Voukidis.

14I propose to refuse the third defendant’s application for leave to serve a third party notice on Christos Voukidis. In my view, this would not be appropriate for the following reasons:

a.if leave were granted, the trial would probably need to be vacated. The proceeding commenced by the plaintiff and the proposed third party proceeding against Mr Voukidis could not be effectively separated. Mr Voukidis could not effectively defend the third party proceeding if he were not permitted to participate in the trial of the proceeding between the plaintiff and the third defendant and to test the evidence produced at the trial, particularly the oral testimony of Mr Baker;

b.counsel for the first and second defendants, Mr Andreou, informed the Court that Mr Voukidis had not yet been served with the subpoena issued to secure his attendance as a witness at the trial. It seems impossible, therefore, for Mr Voukidis to be served with the third party proceeding and be in a position to appear at the trial on Monday to defend the third party proceeding;

c.the orders consented to by the third defendant on 4 February 2014 anticipated that the trial would proceed on the date fixed and the third defendant would raise all issues to be litigated in his defence;

d.the third defendant did not participate in the proceeding until he brought the application to set aside the default judgment. The present applications could have been made at that time and been determined weeks rather than days before the trial;

e.the amount of the plaintiff’s claim is relatively modest. The relief sought in the proposed third party notice is, at most, a claim for contribution of a fraction of the plaintiff’s claim. It is likely that the costs thrown away by vacating the trial would at least equal the amount the third defendant wishes to put in issue.

15One final matter was raised. The first and second defendants on 24 February 2014 gave notice to the third defendant that they wished to bring a third party proceeding as well as contribution proceedings against him. The first and second defendants allege that the third defendant should be liable to them as a result of the dealings between the parties at the time the third defendant allegedly directed the second defendant to seek payment from the plaintiff of the monies owing for the building works at East Brunswick. In circumstances where the third defendant seeks reciprocal orders to permit him to file a notice of contribution, and the issues raised by the draft pleading in the proposed third party claim served last Monday will be traversed at the trial in any event, I see no reason why the third party notice against the third defendant should not be filed.

16       Accordingly, I propose to make the following orders:

1.The trial date of 3 March 2014 is confirmed.

2.Leave to the third party to file and serve a third party notice against Theodore Baker in the form of the notice and statement of claim recently served. By 4pm on 28 February 2014, the third defendant must serve upon the plaintiff and the first and second defendants an amended third party notice and statement of claim which delete the claims made against Christos Voukidis.

3.Christos Voukidis and Theodore Baker be joined as defendants to the proceeding pursuant to s. 24AL of the Wrongs Act 1958 (Vic) so that the third defendant may seek apportionment of any loss or damage ordered against him to the plaintiff, on the basis that Christos Voukidis and Theodore Baker are concurrent wrongdoers. By 4pm on 28 February 2014, the third defendant must amend the writ to note the added defendants. Further service of the amended writ and further service of the amended defence by the third defendant is dispensed with, including upon Christos Voukidis as no relief is sought against him by any party.

4.Leave to the third party to file and serve a notice of contribution against the first and second defendants. The notice of contribution must be filed and served by 4pm on 28 February 2014.

5.Leave to the first and second defendants to file and serve a notice of contribution against the third defendant. Such notice must be filed and served by 4pm on 28 February 2014.

6.It is noted that plaintiff’s counsel informed the Court that Mr Theodore Baker has instructed the plaintiff’s solicitors to act on his behalf to defend the third party notice brought by the third defendant and that the third party proceeding against him can proceed at the trial commencing 3 March 2014.

7.The third defendant’s application to file and serve a third party notice against Christos Voukidis is dismissed.

8.The plaintiff’s costs of the third defendant’s summons filed 25 February 2014, including the costs of the hearing today, are to be paid by the third defendant as assessed by the Costs Court in default of agreement. The first and second defendant’s costs of the third defendant’s summons filed 25 February 2014, including the hearing today, are to be costs in the cause in the proceedings between the first and second defendants and the third defendant. There shall be no order for costs in respect of the third defendant’s costs in respect of its summons, including the hearing today.

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Certificate

I certify that the preceding 5 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 27 February 2014.

Dated: 27 February 2014

Catherine Kusiak

Associate to His Honour Judge Anderson