FEDERAL COURT OF AUSTRALIA
Bucovaz v OT Markets Pty Ltd [2021] FCA 351
File number(s): VID 751 of 2019 Judgment of: KENNY J Date of judgment: 13 April 2021 Catchwords: CORPORATIONS – interlocutory application for leave to continue proceedings against companies in liquidation – insurance policy might provide an indemnity in respect of the alleged liability – leave granted subject to condition
PRACTICE AND PROCEDURE – parties – joinder – interlocutory application to join insurer and managing agent as respondents – insurer and managing agent joined as respondents
Legislation: Corporations Act 2001 (Cth) ss 471B, 562
Federal Court of Australia Act 1976 (Cth) ss 21, 22
Federal Court Rules 2011 (Cth) rr 8.21, 9.05, 16.53
Cases cited: Employers Reinsurance Corporation v Ashmere Cove Pty Ltd [2008] FCAFC 28
Re Gordon Grant and Grant Pty Ltd (1982) 1 ACLC 196
Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749
The Owners-Strata Plan 62658 v Mestrez Pty Ltd [2012] NSWSC 1259
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 33 Date of last submission/s: 31 March 2021 Date of hearing: 6 April 2021 Counsel for the Applicant Mr D McAloon Solicitor for the Applicant Coulter Roache Solicitor for the First Respondent Ms L Thompson of Piper Alderman Solicitor for the Second Respondent Mr S Kingston of Maddocks ORDERS
VID 751 of 2019 BETWEEN: GAIL BUCOVAZ
Applicant
AND: OT MARKETS PTY LTD
First Respondent
AGM MARKETS PTY LTD
Second Respondent
ORDER MADE BY:
KENNY J
DATE OF ORDER:
13 APRIL 2021
THE COURT ORDERS THAT:
1.Subject to the condition in Order 2, the applicant have leave pursuant to s 471B of the Corporations Act 2001 (Cth) to proceed with this proceeding against the first and second respondents in respect of the causes of action alleged in her statement of claim filed on 11 July 2019.
2.Leave pursuant to s 471B of the Corporations Act 2001 (Cth) is granted on the condition that the applicant is prohibited from enforcing any judgment obtained against the first and/or second respondent without first obtaining leave of the Court.
3.The Members of Lloyd’s Syndicate ACA 2014 be joined as the third respondent to the proceeding pursuant to r 9.05(1)(b) of the Federal Court Rules 2011 (Cth).
4.Hamilton Managing Agency Limited (UK company 05832065) (formerly known as Pembroke Managing Agency Limited) be joined as the fourth respondent to the proceeding (in its capacity as managing agent on behalf of the underwriting members of Lloyd’s Syndicate ACA 2014) pursuant to r 9.05(1)(b) of the Federal Court Rules 2011 (Cth).
5.Pursuant to rr 8.21 and 16.53 of the Federal Court Rules 2011 (Cth), the applicant have leave to file and serve an amended originating application and an amended statement of claim in the form of the amended originating application and amended statement of claim filed on 12 April 2021.
6.There be a case…
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- Case
- [2021] FCA 351
- Decision Date
CaseChat Overview and Summary
The legal issues before the court included whether the applicant was entitled to leave to continue the proceedings against the companies in liquidation and whether the insurer and managing agent should be joined as respondents. The court had to consider the provisions of the Corporations Act 2001 (Cth) and the Federal Court Rules 2011 (Cth) in determining these issues.
The court granted the applicant leave to continue the proceedings against the respondents in liquidation, subject to the condition that any judgment obtained against the respondents could not be enforced without first obtaining leave of the Court. The court also ordered that the insurer under the insurance policy and the managing agent be joined as respondents. The court further granted the applicant leave to file and serve an amended originating application and an amended statement of claim.
The final orders included granting leave to the applicant to proceed with the proceeding against the respondents, prohibiting enforcement of any judgment without leave, joining the insurer and managing agent as respondents, allowing the filing and serving of an amended originating application and an amended statement of claim, scheduling a case management hearing, and reserving costs.
Orders
Orders of the court
1. Subject to the condition in Order 2, the applicant have leave pursuant to s 471B of the Corporations Act 2001 (Cth) to proceed with this proceeding against the first and second respondents in respect of the causes of action alleged in her statement of claim filed on 11 July 2019.
2. Leave pursuant to s 471B of the Corporations Act 2001 (Cth) is granted on the condition that the applicant is prohibited from enforcing any judgment obtained against the first and/or second respondent without first obtaining leave of the Court.
3. The Members of Lloyd’s Syndicate ACA 2014 be joined as the third respondent to the proceeding pursuant to r 9.05(1)(b) of the Federal Court Rules 2011 (Cth).
4. Hamilton Managing Agency Limited (UK company 05832065) (formerly known as Pembroke Managing Agency Limited) be joined as the fourth respondent to the proceeding (in its capacity as managing agent on behalf of the underwriting members of Lloyd’s Syndicate ACA 2014) pursuant to r 9.05(1)(b) of the Federal Court Rules 2011 (Cth).
5. Pursuant to rr 8.21 and 16.53 of the Federal Court Rules 2011 (Cth), the applicant have leave to file and serve an amended originating application and an amended statement of claim in the form of the amended originating application and amended statement of claim filed on 12 April 2021.
6. There be a case management hearing at 9:30am on 1 June 2021.
7. There be liberty to apply on reasonable notice.
8. Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
By an interlocutory application filed on 15 March 2021, the applicant seeks leave pursuant to s 471B of the Corporations Act 2001 (Cth), to continue this proceeding against the first and second respondents in respect of the causes of action alleged in the applicant’s statement of claim filed on 11 July 2019. The applicant also seeks to have joined as a respondent the insurer under insurance policy IL1707768 (the Policy), as well as leave to file and serve an amended originating application and an amended statement of claim. The application was supported by the affidavit of Charlie Victoria Clark affirmed on 11 March 2021. An affidavit was sworn by Mathew Terence Gollant, as the liquidator for OT Markets Pty Ltd, the first respondent in the proceeding, in which he stated that he did not consent to nor oppose the applicant’s application. An affidavit was also sworn by John Ross Lindholm, as one of the two liquidators of AGM Markets Pty Ltd, the second respondent in the proceeding, in which he stated that he did not oppose the grant of leave to continue the proceeding against AGM Markets. The liquidators for both the first and second respondents also stated that they did not intend to take part in the proceedings. The liquidator for OT Markets also sought an order to the effect that no judgment could be obtained against OT Markets without notice of an intention to do so or without first obtaining the leave of the Court. The applicant accepted the desirability of an order to the latter effect, and as I indicated to Ms Thompson who appeared for OT Markets, the liquidators would be required to be notified before any such leave were given. The applicant and OT Markets (and its liquidator) each filed helpful written submissions. AGM Markets did not file written submissions, its liquidator advising by email that the liquidation is unfunded. Briefly stated, the applicant is a former client of OT Markets. OT Markets carried on a financial services business providing an online trading platform in foreign exchange contracts and contracts for difference principally to people in Australia, including to retail customers. In addition, according to Mr Gollant’s affidavit, it seems that OT Markets also provided financial product advice to retail customers in Australia and issued those products and provided those services on behalf of AGM Markets. In his affidavit, Mr Gollant further deposes that OT Markets and AGM Markets “entered into a written Corporate Authorised Representative Agreement dated 18 September 2017, pursuant to which [AGM Markets], as the holder of Australian Financial Services Licence No. 4226622 [], appointed [OT Markets] to act on its behalf to provide financial services”. The applicant commenced proceedings against the first and second respondents on 11 July 2019, claiming loss and damage arising from the respondents’ misleading and deceptive conduct, breach of retainer and duty of care, and breach of certain disclosure obligations owed to her. In substance, the applicant sought compensation from the respondents for the loss occasioned to her by virtue of the manner in which the respondents had provided financial advice in connection with derivative instruments, particularly margin foreign exchange contracts.