Caruso v Built It Pty Ltd (in liq) - [2018] SASC 71

SUPREME COURT OF SOUTH AUSTRALIA
(Applications Under Various Acts or Rules: Civil)
CARUSO v BUILT IT PTY LTD (IN LIQUIDATION)
[2018] SASC 71
Judgment of The Honourable Justice Doyle
1 June 2018
APPEAL AND NEW TRIAL - NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS - PARTICULAR GROUNDS - FRESH EVIDENCE - OTHER MATTERS - EVIDENCE OF FRAUD OR DECEPTION
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW - WHEN ALLOWED TO BE RAISED ON APPEAL - OTHER MATTERS
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA
Application for leave under s 471B of the Corporations Act 2001 (Cth) to bring an application against a company in liquidation. The proposed application is one in the Magistrates Court to set aside a judgment obtained by the company on the basis that it was obtained by fraud.
Consideration of factors relevant to exercise of discretion to grant leave to proceed. Consideration of whether there is a solid foundation for the proposed application.
Held (per Doyle J), dismissing the application:
1. There are some considerations favouring a grant of leave, namely that the proceedings are well progressed, the proposed application is essentially defensive in character and a proof of debt is not an available alternative.
2. However, the proposed application, which requires proof of fraud, does not have a solid foundation in fact or law.
3. The application for leave to proceed under s 471B should be dismissed.
Corporations Act 2001 Cth s 471B; Magistrates Court (Civil) Rules 2013 (SA) r 104; Building Work Contractors Act 1995 (SA) s 12, s 6, s 9, referred to.
Clone Pty Ltd v Players Pty Ltd (In liq) (Receivers and Managers Appointed) 92 ALJR 399, applied.
Ong & Ors v Lottwo Pty Ltd (In liq) [2013] SASCFC 57; Commonwealth v Davis Samuel Pty Ltd (2008) 164 ACTR 1; Clone Pty Ltd v Players Pty Ltd (2018) 92 ALJR 399, discussed.
Bratovic v SBM Argentinian Bar and Grill Pty Ltd & Ors [2005] SASC 431, considered.

CARUSO v BUILT IT PTY LTD (IN LIQUIDATION)
[2018] SASC 71
Civil.
DOYLE J:

This is an application by Mr Caruso under s 471B of the Corporations Act 2001 (Cth) for leave to bring an application against Built It Pty Ltd (in liq) under r 104 of the Magistrates Court (Civil) Rules 2013 (SA).
By way of overview, in September 2017 Built It obtained a judgment in the Magistrates Court against Mr Caruso for the sum of $33,938.50 plus interest and costs for some building work it undertook between about May 2013 and March 2014. Mr Caruso commenced an appeal against that judgment in this Court. However, on 22 November 2017, and before the appeal was heard, an order was made winding up Built It. The appeal was automatically stayed by reason of the operation of s 471B, and Mr Caruso has not made any application for leave to proceed with that appeal.
Built It has…

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.

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Details

Case: [2018] SASC 71
Decision Date: 1 June 2018

CaseChat Overview and Summary

Caruso v Built It Pty Ltd (in liq) concerned an application by the appellant, Mr Caruso, for leave to proceed with a claim under section 471B of the Corporations Act. The primary dispute involved the admissibility of fresh evidence and allegations of fraud or deception in the context of a winding-up petition against the respondent company, Built It Pty Ltd, which was in liquidation. The matter was heard in the Federal Court of Australia.

The central legal issues in the case were whether the court should grant Mr Caruso's application for leave to proceed with his claim under section 471B, and if so, whether the evidence of fraud or deception was sufficient to warrant a new trial. Additionally, the court had to consider whether points and objections not taken below could be raised on appeal and the procedural requirements for such appeals in South Australia.

The court, after considering the arguments and evidence presented, concluded that the application should be dismissed on its merits. The court found that there were insufficient grounds to permit the introduction of fresh evidence or to establish the existence of fraud or deception. The decision also noted that the court had not heard full submissions on the procedural obstacles and therefore it was not necessary to express a final view on these issues. The court's reasoning focused on the inadequacy of the evidence provided by Mr Caruso to substantiate his claims.

Consequently, the court dismissed Mr Caruso's application for leave to proceed under section 471B of the Corporations Act, highlighting the necessity for robust evidence to support such claims, particularly in the context of allegations involving fraud or deception. The decision underscores the importance of adhering to procedural requirements and the thorough examination of evidence before granting leave to proceed with such claims.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

All of that said, I do not consider it necessary or desirable that I express a final view as to the existence of a procedural obstacle, or my ability to dispense with compliance with the Corporations Rules. It is not necessary to do so because I have reached the view that the application should be dismissed on its merits. And it is not desirable to do so because I have not heard full submissions on these issues.Conclusion For the reasons set out I dismiss Mr Caruso’s application for leave to proceed under s 471B of the Corporations Act.

Ratio Decidendi

Legal Principle Established

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