Burzynski and Ors v Deguerre Pty Ltd and Ors (Ruling)
[2012] VCC 865
•21 June 2012
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted |
AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION
GENERAL DIVISION
Case No. CI-10-00378
| SIGMUND BURZYNSKI & ORS (as per the Schedule of Parties) | Plaintiffs |
| v | |
| DEGUERRE PTY LTD (Trading as “MOMENTUM FINANCIAL GROUP” formerly “C A Results” and “Ainsworth Business Solution”) & OTHERS (as per the Schedule of Parties) | Defendants |
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JUDGE: | HIS HONOUR JUDGE MISSO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 June 2012 | |
DATE OF RULING: | 21 June 2012 | |
CASE MAY BE CITED AS: | Burzynski & Ors v Deguerre Pty Ltd & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 865 | |
RULING
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SUBJECT: PRACTICE AND PROCEDURE
CATCHWORDS: pleadings – application for judgement pursuant to Rule 23.03 of the County Court Civil Procedure Rules 2008 and/or pursuant to section 63 of the Civil Procedure Act 2008.
LEGISLATION: County Court Civil Procedure Rules 2008, Rule 23.03; and/or Civil Procedure Act 2008, section 63
RULING: Defendants’ application dismissed
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J Isles | Property & Business Commercial Lawyers |
| For the First, Third, Fourth and Fifth Defendants | Mr J Evans | Marsh & Maher |
SCHEDULE OF PARTIES
| SIGMUND BURZYNSKI | First Plaintiff |
| JEAN BURZYNSKI | Second Plaintiff |
| ASSOCIATED PSYCHOLOGY SERVICES PTY LTD (ACN 074 598 959) | Third Plaintiff |
| PORT PHILLIP PSYCHOLOGY PTY LTD (ACN 069 228 182) | Fourth Plaintiff |
| BURZYNSKI ENTERPRISES PTY LTD (ACN 107 149 155) | Fifth Plaintiff |
| TREVALE PTY LTD (ACN 074 598 959) | Sixth Plaintiff |
| ESTABROOK PTY LTD (ACN 074 599 477) | Seventh Plaintiff |
AND
| DEGUERRE PTY LTD (ACN 083 385 531) (Trading as “MOMENTUM FINANCIAL GROUP” formerly “C A Results” and “Ainsworth Business Solution”) | First Defendant | |
| SCOTT ANDREW AINSWORTH | Second Defendant | |
| MARK WILLIAM AINSWORTH | Third Defendant | |
| WILLIAM EDWARD AINSWORTH | Fourth Defendant | |
| SCOTT ANDREW KITCHIN | Fifth Defendant | |
HIS HONOUR:
Introduction
1 By an Amended Summons filed 4 May 2012, the third, fourth and fifth defendants, among other things, seek to have the proceeding against them dealt with in accordance with Rule 23.03 of the County Court Civil Procedure Rules 2008 and/or pursuant to section 63 of the Civil Procedure Act 2008.
2 Mr Evans of counsel appeared for the first, third, fourth and fifth defendants, and Mr Isles appeared for the plaintiffs.
The Pleadings
3 Mr Evans referred me to the Amended Statement of Claim filed pursuant to an order I made in this proceeding on 27 June 2008.
4 I was referred to paragraph 8, which pleads, among other things, that the first defendant held itself out as the provider of accounting and taxation services, and at various times from 2001 traded under the names "CA Results", "Ainsworth Business Solutions", and "Momentum Financial Group".
5 I was next referred to paragraph 8A, which pleads an alternative to paragraph 8, that the second, third, fourth and fifth defendants were partners in accounting businesses, and, among other things, were partners in an accounting partnership which held itself out as the provider of accounting and taxation services, and at various times in 2001 traded under the names of "CA Results", "Ainsworth Business Solutions", and "Momentum Financial Group".
6 I was next referred to paragraph 9, which specifically pleads against the fifth defendant, among other things, that he was an employee of the first defendant, that he held himself to be an accountant, and that he held himself out to be a provider of accounting and taxation services.
7 Mr Evans referred me to an affidavit of Mr Gad Kolsky, Solicitor, of Property & Business Commercial Lawyers, and Solicitor for the plaintiffs, sworn 23 April 2012. In that connection he referred me to paragraph 10 of the Amended Statement of Claim which pleads that the first defendant and/or the fifth defendant and/or the second, third and fourth defendants entered into an agreement with the plaintiffs to provide accounting and taxation services and to act as the registered tax agent for the plaintiffs. He referred me to the Particulars subjoined to paragraph 10, and submitted that on examination of three documents referred to as Particulars of that part of the agreement which was in writing, that the allegations against the third, fourth and fifth defendants cannot be sustained.
8 The Particulars commence with a reference to the agreement being partly in writing, partly oral and partly to be implied. Insofar as it was in writing, it comprised a letter from Ainsworth Business Solutions to the first plaintiff dated 27 April 2001, a facsimile from Ainsworth Business Solutions to Mr Garry Clamp, accountant, dated 15 June 2001, and a letter from CA Results to the first and second plaintiffs dated 1 November 2001. The documents are referred to as Exhibit "GK-12" of Mr Kolsky’s affidavit.
9 The letter dated 27 April 2001 was signed by the fifth defendant on the letterhead of Ainsworth Business Solutions to the first plaintiff. It describes the services which Ainsworth Business Solutions were able to provide the plaintiffs.
10 The facsimile transmission dated 15 June 2001 was signed by the fifth defendant on the letterhead of Ainsworth Business Solutions addressed to Mr Clamp, who was the plaintiffs’ former accountant. It purports to establish a retainer by the plaintiffs of Ainsworth Business Solutions, who made a request in the facsimile transmission of Mr Clamp for the provision of payroll documents, taxation returns, business activity statements/instalment activity statements and superannuation fund documents.
11 The letter dated 1 November 2001 was signed by the first defendant on the letterhead of CA Results to Associated Psychology Services Pty Ltd, informing two persons named Marcus and Siggy (I assume from other documents that Marcus is a reference to Marcus Romanic and the reference to Siggy is a reference to the first plaintiff). It sets out the services which CA Results would provide Associated Psychology Services Pty Ltd. Mr Evans referred me to the ABN number on the letterhead of 59 996 137 658, which is the same ABN number as Ainsworth Business Solutions.
12 It is difficult to know what to make of these documents because the first two documents are on the letterhead of Ainsworth Business Solutions. On the first two documents the names of the following persons appear – W.E (Bill) Ainsworth; Scott A Kitchen; Mark W Ainsworth; and Justin C Brilliant. These documents point to each of the persons just mentioned as being the operators of the business known as Ainsworth Business Solutions. However, subsequently, the letter dated 1 November 2001 is on a different letterhead, that of CA Results, with the ABN number of Ainsworth Business Solutions endorsed on its letterhead. The change of business name from Ainsworth Business Solutions to CA Results is not explained by the writer of the letter dated 1 November 2001.
13 The particulars of the agreement relied upon by the plaintiffs is not limited to these documents. It includes conversations between the first plaintiff and Marcus Romanic, and the fourth and fifth defendants. The conversations are said to have occurred on 27 April 2001, and presumably before the correspondence relied upon by the plaintiff, as evidence of the oral part of the agreement. The substance of the conversation which is most relevant to this application is in paragraph 10(c) of the Amended Statement of Claim during which the first plaintiff and Marcus Romanic asked the fourth and fifth defendants whether "the accounting firm" could attend to rectify the failures of their previous accountant, Mr Clamp.
14 The second plaintiff swore an affidavit on 27 April 2012 in which she says that she met with the fourth and fifth defendants regarding the taxation obligations of the plaintiffs, and in particular, she met with the first defendant more often, but she also had dealings with the third defendant.
15 I was referred to the affidavit of Scott Andrew Kitchen (the fifth defendant) sworn 26 March 2012 in which he sets out in paragraphs 3-7, the corporate history of the first defendant; its directors; the formation of the Deguerre Unit Trust; and the proprietorship by the first defendant of the following businesses: Ainsworth Business Solutions; CA Results; W E Ainsworth & Co and Momentum Financial Group.
16 In an effort to make some sense of who the plaintiffs were dealing with, the following is a chronology which I have constructed from the Amended Statement of Claim:
· The first plaintiff and Marcus Romanic met with the fourth and fifth defendants on 27 April 2001. The conversations were to the effect that the accounting firm operated by the fourth and fifth defendants was engaged by the first plaintiff and Marcus Romanic.
· The engagement did not disclose all of the individuals and corporate and business entities which were trading entities of the accounting firm. That became known to the first plaintiff and Marcus Romanic through the correspondence and the facsimile transmission which I have referred to above.
17 Mr Kolsky swore a second affidavit on 6 June 2012 in which he deposes to searches he undertook of the corporate and business names referred to in the pleadings; in the correspondence referred to above; and identifying the names of the directors of Deguerre and the proprietors of the business names referred to above. What is common is a reference to the first, third, fourth and fifth defendants. The second defendant does not exist. The plaintiff will discontinue the proceeding against the second defendant.
18 Mr Isles provided me with an outline of argument in which he submitted that the pleadings reflect the meetings which the first plaintiff and Marcus Romanic had with Deguerre and the third, fourth and fifth defendants. He made more elaborate submissions. I will refer to some of his submissions later.
Disposition
19 It seems to me that the synthesis of the parts of the pleadings which have been subjected to challenge in this application plead that there was an agreement between the plaintiffs and the first defendant and the third, fourth and fifth defendants.
20 The Particulars satisfy me that the correspondence refers to the third, fourth and fifth defendants, and the conversations which occurred on 27 April 2001 were with the fourth and fifth defendants.
21 The difficulty facing the plaintiff has been to identify who the individuals are who were members of the accounting firm, and in particular, when the letterhead on the correspondence changed from one business name to another within the same year. Mr Evans submitted that the Particulars fall short of demonstrating that the agreement was with the third, fourth and fifth defendants, and only with the first defendant. He relied upon the affidavit of Mr Kitchin to demonstrate the individuals who were directors of Deguerre at relevant times. However, what concerns me is the submission made by Mr Isles that the plaintiff's dealt with individuals who they believed to be members of an accounting firm, and whether they held themselves out for an undisclosed principal, being the first defendant, or one of the business names.
22 It may be that there is something in the submissions made by Mr Evans; however, in order to give judgment for the third, fourth and fifth defendants, I need to be satisfied that they have a good defence on the merits: Rule 23.03, or I may give summary judgment if I am satisfied that the claim against the third, fourth and fifth defendants has no real prospect of success: section 63 of the Civil Procedure Act 2010. The test under section 63 is a more liberal test than that under Rule 23.03.
23 I have endeavoured to trace through the pleadings and the affidavit material to construct a picture of who the plaintiffs were dealing with and who were parties to the agreement. It seems to me that it is a difficult exercise, and a particularly difficult exercise when based on an attack on pleadings supported by evidence on affidavit which is untested. It may be that the plaintiffs will prove that there was an accounting firm of which the third, fourth and fifth defendants were members, despite the first defendant being in the background and the myriad of business names through which it traded.
24 Whilst I have some doubts about whether the pleadings do demonstrate that the plaintiffs entered into an agreement with the third, fourth and fifth defendants, I consider that it is a matter for evidence at trial to determine whether they held themselves out individually or collectively as an accounting firm, or as directors of the first defendant.
25 It is for these reasons that I dismiss the Summons and I order that the first, third, fourth and fifth defendants pay the plaintiffs costs to be assessed by the Costs Court, in default of agreement.
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