Byrnes v Brisconnections Management Company Limited
[2009] FCA 736
•2 June 2009
FEDERAL COURT OF AUSTRALIA
Byrnes v Brisconnections Management Company Limited [2009] FCA 736
Corporations Act 2001 (Cth) ss 601FC, 1022B(2)(c), 1022B(3)
Federal Court Rules O 11 r 16
Trade Practices Act 1974 (Cth) s 52JAMES WARREN BYRNES v BRISCONNECTIONS MANAGEMENT COMPANY LIMITED (AS RESPONSIBLE ENTITY FOR THE BRISCONNECTIONS INVESTMENT TRUST AND THE BRISCONNECTIONS HOLDING TRUST) AND ORS
NSD 348 of 2009
EMMETT J
2 JUNE 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 348 of 2009
BETWEEN: JAMES WARREN BYRNES
Plaintiff
AND: BRISCONNECTIONS MANAGEMENT COMPANY LIMITED (AS RESPONSIBLE ENTITY FOR THE BRISCONNECTIONS INVESTMENT TRUST AND THE BRISCONNECTIONS HOLDING TRUST) (ACN 128 614 291)
First DefendantMACQUARIE CAPITAL ADVISORS LIMITED
(ACN 123 199 548)
Second DefendantMACQUARIE BANK LIMITED (ACN 008 583 542)
Third Defendant
JUDGE:
EMMETT J
DATE OF ORDER:
2 JUNE 2009
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The Amended Statement of Claim filed on 15 May 2009 be struck out.
2.The proceeding be dismissed.
3.The Plaintiff pay the Defendants’ costs of the proceeding.
4.Liberty be reserved to the Defendants to file any application they wish to make as to a further order as to costs within seven days.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 348 of 2009
BETWEEN: JAMES WARREN BYRNES
Plaintiff
AND: BRISCONNECTIONS MANAGEMENT COMPANY LIMITED (AS RESPONSIBLE ENTITY FOR THE BRISCONNECTIONS INVESTMENT TRUST AND THE BRISCONNECTIONS HOLDING TRUST) (ACN 128 614 291)
First DefendantMACQUARIE CAPITAL ADVISORS LIMITED
(ACN 123 199 548)
Second DefendantMACQUARIE BANK LIMITED (ACN 008 583 542)
Third Defendant
JUDGE:
EMMETT J
DATE:
2 JUNE 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This proceeding was commenced on 24 April 2009 by the filing of an application and statement of claim. The plaintiff was described as James Warren Byrnes. Three defendants were joined, being Brisconnections Management Company Ltd, as responsible entity for two trusts, Macquarie Capital Advisers Ltd and Macquarie Bank Ltd. The statement of claim began with an allegation that Mr Byrnes is a representative party acting on behalf of himself and group members consisting of all persons or corporations in Australia who have been a unit holder in the managed investment scheme managed by Brisconnections Management Company Ltd.
The statement of claim alleged that the first defendant lodged a product disclosure statement (the Product Disclosure Statement) with the Australian Securities and Investments Commission in relation to a $1.2 billion initial public offering in connection with a scheme for the building, construction and management of the Airport Link Project in Brisbane. It is alleged that the defendants engaged in conduct that was misleading or deceptive. The allegation was that that was a contravention of s 52 of the Trade Practices Act 1974 (Cth). That allegation appears to have been misconceived.
A motion was filed on 30 April 2009 on behalf of the second and third defendants seeking that the whole of the statement of claim be struck out pursuant to Order 11 rule 16 of the Federal Court Rules. On 1 May 2009, I ordered that the statement of claim be struck out. However, I granted leave to the plaintiff to file an amended statement of claim no later than 15 May 2009. On that day, an amended statement of claim was filed. However, notwithstanding that no leave had been given, an additional plaintiff was joined, the third defendant was no longer shown as a defendant, and Mr Trevor Rowe as shown as third defendant.
In the amended statement of claim the group was described as those persons who were allotted staple units in the two trusts of which the first defendant is responsible entity by application made pursuant to the Product Disclosure Statement together with those persons who purchased staple units on market. Paragraph 5 alleged that the plaintiff is a person who falls within that description of group members. The amended statement of claim described James Warren Byrnes and Cynthia Lachat as the plaintiff. It is undisputed that Mr Byrnes does not fall within the description of the group contained in the amended statement of claim.
Paragraph 12 of the amended statement of claim asserts that each of the defendants was and is a liable person as defined by s 1022B(3) of the Corporations Act 2001 (Cth) (the Corporations Act). That allegation is particularised by an assertion that the first defendant was the person by whom, or on whose behalf, the Product Disclosure Statement was prepared and an allegation that the second defendant and the third defendant (Mr Rowe) were persons who were involved in the preparation of the Product Disclosure Statement. No particulars of the involvement of Mr Rowe were furnished.
Paragraph 17 of the amended statement of claim alleges that group members have suffered loss or damage within the meaning of s 1022B(2)(c) because the Product Disclosure Statement was defective. That allegation is particularised by an assertion that, had the Product Disclosure Statement not been defective, group members would not have been allotted stapled units because misstatements and omissions alleged were material and a reasonable person would not have applied for the units. That assertion does not make sense. It may be that a connecting assertion is intended to be implied that a reasonable person would not have applied for the units had such a person been informed of the misstatements and omissions. However, the statement of claim does not say that.
Paragraph 42 of the amended statement of claim asserts that trading in the stapled units was suspended on 5 April 2009. However, Mr Byrnes acquired his units on the following day. Paragraph 66 then asserts that, by reason of breaches of s 601FC of the Corporations Act, group members have suffered loss or damage. The allegation is that group members who were allotted units failed to dispose of units which they would otherwise have disposed of in a more timely fashion had the market been fully informed. Secondly, it is asserted that group members would not have acquired units on market had the market been more fully informed as to the invested intentions and activities of those described as the sponsors.
Counsel for the plaintiff has foreshadowed that the amended statement of claim will not be pressed because the description of the group members does not represent the claim that is to be brought. Counsel intimated that a further amended statement of claim would describe the group in terms closer to that described in the original statement of claim than in the amended statement of claim. On that basis, Mr Byrnes may be a member of the group. No evidence has been presented at this stage to explain how Ms Lachat came to be joined as a plaintiff and why she should be joined as a plaintiff, or how Mr Rowe came to be shown as third defendant.
This proceeding came before the Court originally as a matter of some considerable urgency. The defendants and the Court were put to inconvenience in having the proceeding listed urgently, because an application for urgent interlocutory relief was foreshadowed. However, when the proceeding first came before the Court, the plaintiff indicated that the application for interlocutory relief would not be pursued. It was also intimated that amendments were to be made to the statement of claim. Ultimately, it was conceded that the statement of claim in its form could not succeed and for that reason I struck out the statement of claim, as I have already indicated.
There are now two possible courses open. One is to afford Mr Byrnes the opportunity of filing a further amended statement of claim disclosing the case that he wishes to make. It would also be necessary, as I understand Mr Byrnes’ intentions, to file an amended application. Mr Byrnes also seeks leave to have Ms Lachat substituted as plaintiff. At this stage, counsel for Mr Byrnes has indicated that he may be able to file a further amended statement of claim within two weeks, but would prefer to have three weeks to do so. There does not appear to be any urgency in the matter and it is clear that the formulation of the proposed class action or group claim has not reached any degree of finality.
I would not be confident – and I do not intend any personal criticism by that observation – that an amended statement of claim, in a form that could be proceeded with, would be filed within three weeks. The proceeding as presently constituted could not succeed. Whether or not there is a pleadable action on behalf of a group is something about which I can express no view whatsoever at the moment.
The only prejudice to the summary dismissal of the proceeding at this stage would be the loss of the filing fee that has been filed. Clearly all of the costs to date have been thrown away. In all of the circumstances, I consider that the appropriate course is to order that the proceeding be dismissed summarily. That would, of course, not prejudice the right either of Mr Byrnes or any other member of a relevant group to commence a fresh proceeding on behalf of either the group as originally described in the statement of claim, or the group described in the amended statement of claim, or some other group. It appears that a complaint is being made about defects in the product disclosure statement. In my view, the interests of all parties, including unidentified members of any relevant group will be best served by studied and unhurried attention being given to the pleading of such claim as it is intended to be made.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 2 June 2009
Counsel for the Plaintiff: JE Rowe Solicitor for the Plaintiff: Whittens Lawyers and Consultants Counsel for the First Defendant: AJL Bannon SC with MS Henry Solicitor for the First Defendant: Corrs Chambers Westgarth Counsel for the Second and Third Defendants: J Sackar QC with C Moore Solicitor for the Second and Third Defendants: Freehills
Date of Hearing: 2 June 2009 Date of Judgment: 2 June 2009
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