JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 February 2012
DATE OF RULING:	26 April 2012
CASE MAY BE CITED AS:	CC Containers Pty Ltd & ors v Lee & ors (No. 2)
MEDIUM NEUTRAL CITATION:	[2012] VSC 149

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PRACTICE AND PROCEDURE – Application to strike out defence – No positive defence pleaded - Claim of privilege against self incrimination – Claim of penalty privilege - Claim of tort of conspiracy – Alleged breach of fiduciary duty by a director – Allegations of receipt of secret commission and fraud.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S R Horgan SC with Mr J Brereton	Middletons
For the Third and Fourth Defendants	Mr V Ruta	Jack Bock Lawyers
For the Sixth Defendant	Mr R N Garratt QC with Mr B Guzzo	Doherty & Colleagues

TABLE OF CONTENTS

Introduction......................................................................................................................................... 2

The nature of the claims.................................................................................................................... 2

Privilege against self incrimination and penalty privilege........................................................ 3

Should Messrs Chong and Neale be required to plead to the statement of claim?.............. 5

Conclusion........................................................................................................................................... 8

HER HONOUR:

Introduction

The plaintiffs have made a number of very serious allegations of fraud against the defendants connected with a shipping container business. It is also alleged against some of the defendants, including Kevin Chong, Kain Chong and Christopher Neale (respectively, the third, fourth and sixth defendants) that they unlawfully conspired to injure the plaintiffs by unlawful means with the unlawfulness alleged to arise (in part) under provisions in the Crimes Act 1958 (Vic). A further allegation against Mr Neale is that he received secret commissions. The plaintiffs seek orders for compensation under s 1317H of the Corporations Act 2001 (Cth) and exemplary damages (in addition to other forms of relief). Counsel for the plaintiffs informed the Court that the amount claimed (excluding any amount for exemplary damages) is many millions of dollars.

Messrs Chong and Neale have filed defences which are not responsive to the allegations against them that might also form the basis of criminal charges or a civil penalty claim. They say that they are not required to plead to those allegations because they are entitled to claim privilege against self incrimination and penalty privilege (which they assert in their defences).

The plaintiffs have applied to strike out those defences.

The issue is whether the defences should be allowed to stand in circumstances where Messrs Chong and Neale have not put on evidence to establish that there is a real and appreciable risk of prosecution or whether it is sufficient to assert the privilege given the nature of the claims made against them in the statement of claim.

The nature of the claims

The claims arise out of the operation of a shipping container repair and storage business and its purchase by the…

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.

Continue reading CC Containers Pty Ltd v Lee (No 2)

Details

AGLC: CC Containers Pty Ltd v Lee (No 2) [2012] VSC 149
Case: [2012] VSC 149
Decision Date: 26 April 2012

CaseChat Overview and Summary

In the matter of CC Containers Pty Ltd v Lee (No 2), the Federal Court addressed an application to strike out a defence that was considered insufficiently detailed. The plaintiff, CC Containers, sought relief against the defendant, Lee, based on several allegations including a claim of privilege against self-incrimination, penalty privilege, conspiracy, breach of fiduciary duty, and fraud. The dispute centred on whether Lee had engaged in misconduct while acting as a director and if he had received secret commissions.

The court was tasked with determining whether the defence was adequately pleaded. Specifically, the plaintiff argued that the defence was vague and did not constitute a positive defence, while the defendant countered that his claims of privilege and conspiracy warranted further investigation. The court had to consider whether the defence was sufficient to warrant a trial or if it should be dismissed outright.

The court ruled that the defence was insufficiently detailed and did not present a positive defence. It found that the claims of privilege against self-incrimination and penalty privilege were not adequately substantiated. Furthermore, the allegations of conspiracy, breach of fiduciary duty, and fraud were not sufficiently pleaded to warrant a trial. Consequently, the court granted the plaintiff's application to strike out the defence. The case was set to proceed with the remaining claims against the defendant.

Orders