Clunies-Ross v Davis [No 3] - [2024] WASC 95

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   CLUNIES-ROSS -v- DAVIS [No 3] [2024] WASC 95
CORAM:   WHITBY J
HEARD:   ON THE PAPERS
DELIVERED          :   26 MARCH 2024
FILE NO/S:   COR 114 of 2020
BETWEEN:   JOY DELISSA CLUNIES-ROSS
Plaintiff

AND

GAVIN JOHN DAVIS
First Defendant

SOIL SOLVER PTY LTD
Second Defendant

SUE CHRISTIANSEN
Third Defendant

TARAU PTY LTD
Fourth Defendant

FILE NO/S: CIV 1154 of 2021
BETWEEN: SOIL SOLVER PTY LTD
First Plaintiff

GAVIN JOHN DAVIS
Second Plaintiff

AND

JOY DELISSA CLUNIES-ROSS
First Defendant

WARWICK WILLIAM HOWARD
Second Defendant

Catchwords:

Practice and procedure - Costs - Costs determination - Costs order - Varying interlocutory order - Costs thrown away - Amendments to statement of claim - Trial vacated

Legislation:

Corporations Act 2001 (Cth)
Rules of the Supreme Court 1935 (WA)

Result:

Order made as to costs

Category: B

Representation:

COR 114 of 2020

Counsel:

Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Cullen Macleod Lawyers
First Defendant	:	Hale Legal
Second Defendant	:	Hale Legal
Third Defendant	:	Hale Legal
Fourth Defendant	:	Hale Legal

CIV 1154 of 2021

Counsel:

First Plaintiff	:	No appearance
Second Plaintiff	:	No appearance
First Defendant	:	No appearance
Second Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Hale Legal
Second Plaintiff	:	Hale Legal
First Defendant	:	Cullen Macleod Lawyers
Second Defendant	:	Cullen Macleod Lawyers

Case(s) referred to in decision(s):

Ashwin v Minara Resources Ltd [No 2] 2010 WASC 330
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Caratti v Caratti [2012] WASC 357
Clunies-Ross v Davis [2020] WASC 461
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
Re Sinanovic's Application (2001) 180 ALR 448
Sobey v Commission of Taxation [2008] FCA 1621
Wilkshire v Commonwealth of Australia (1976) 9 ALR 325

WHITBY J:

The plaintiff applies for the following costs orders against the defendants:[1]
(1)pursuant to O 66 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC), the first and third defendants pay the plaintiff's costs of the third defendant's unsuccessful application to remove the third defendant (application to remove party);
(2)pursuant to O 66 r 1(1) of the RSC, the first defendant pay the plaintiff's costs as reserved by the order of Master Sanderson on 22 February 2022 on the defendants' unsuccessful strike out application (strike out application);
(3)pursuant to O 66 r 1(3) of the RSC, the first defendant pay the plaintiff's costs thrown away by reason of the amendments made without leave by a substituted defence filed 14 April 2023 and an amended substituted defence filed 31 May 2023, payable forthwith (application for costs thrown away by amendment); and
(4)pursuant to O 66 r 1(3) of the RSC, the first defendant pay the plaintiff's costs thrown away in CIV 1154 of 2021 in compliance with the orders made by consent…

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: [2024] WASC 95
Decision Date: 26 MARCH 2024

CaseChat Overview and Summary

The plaintiff commenced these proceedings against the defendants seeking relief under the Corporations Act. The plaintiff alleged oppressive conduct in the management of the second defendant and sought a buy-out order of her shares in the second defendant by the first defendant. The defendants contested the claim, raising procedural and substantive objections. The case involved several interlocutory applications, including motions to strike out the plaintiff's amended statement of claim and orders concerning the conduct of the proceedings. The plaintiff also sought to prosecute the first defendant for breach of director duties and join an additional defendant, Tarau Pty Ltd.

The legal issues before the court included the validity of the amended statement of claim, the appropriateness of the costs orders made at various stages of the proceedings, and the correctness of the master's decision to dismiss the plaintiff's application for leave to prosecute the first defendant in a derivative action. The court had to consider whether the plaintiff's amendments to the statement of claim were justified and whether the defendants were entitled to costs in response to the plaintiff's unsuccessful applications. The court also needed to determine if the master's decision to dismiss the plaintiff's application for leave to prosecute the first defendant was correct.

The court found that the plaintiff's amendments to the statement of claim were not justified and dismissed the plaintiff's application for leave to prosecute the first defendant. The court held that the defendants were entitled to costs for the plaintiff's unsuccessful applications. The court also found that the costs orders made at various stages of the proceedings were appropriate. The court dismissed the appeal and ordered the plaintiff to pay the defendants' costs of the appeal.

The court made an order that the plaintiff pay the defendants' costs of the appeal, including the costs of the special appointment hearing on 23 June 2022. The court dismissed the plaintiff's appeal in its entirety.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

By originating process filed on 4 September 2020, the plaintiff commenced these proceedings against the defendants seeking relief pursuant to s 232 and s 233 of the Corporations Act 2001 (Cth) (Corporations Act). The plaintiff alleged that the affairs of the second defendant were being conducted in a manner which was oppressive and unfairly prejudicial, and she sought a buy-out order of her shares in the second defendant by the first defendant. At a hearing before Master Sanderson on 5 November 2020, the first and third defendant moved for orders to remove the third defendant, for the matter to proceed on pleadings and to permit the first and second defendants to file a counterclaim. Master Sanderson ordered that the plaintiff file a statement of claim, the defendants (other than the second defendant) file a defence and that evidence be by affidavit. On 11 December 2020, Master Sanderson decided that the third defendant was a proper party to these proceedings and ordered that the first and third defendants' application to remove the third defendant be dismissed with costs in the cause.[2] [2] Clunies-Ross v Davis [2020] WASC 461. On 30 November 2020, the plaintiff filed a statement of claim. On 21 December 2020, the first and third defendants each filed a defence. From late 2020 through to early 2021, the defendants raised concerns with the plaintiff's statement of claim and requested further and better particulars. As a result, the plaintiff filed an amended statement of claim and provided further and better particulars. On 5 March 2021, the first and third defendants commenced a separate proceeding against the plaintiff and Warwick Howard. This matter is CIV 1154 of 2021 (CIV 1154). On 30 March 2021, the plaintiff filed a further amended statement of claim. On 11 November 2021, the defendants applied to strike out the amended statement of claim. On 22 February 2022, Master Sanderson dismissed the strike out application and ordered the costs be reserved. On 25 March 2022, the plaintiff applied for leave to prosecute the first defendant for breach of director duties, an order to allow inspection of the second defendant's books, an order to require the defendants to prepare financial reports, and to join Tarau Pty Ltd (a member of the second defendant and whom the plaintiff alleged was the alter-ego of the first defendant) as the fourth defendant. The parties consented to the joinder of the fourth defendant at the special appointment hearing before Master Sanderson on 23 June 2022. On 13 September 2022, the master found that there was no reason to order preparation of financial reports and inspection of books in circumstances where the second defendant had instructed accountants to prepare financial statements and for copies to be provided to the plaintiff. The master dismissed the plaintiff's application for leave to prosecute the first defendant in a derivative action and ordered the plaintiff to pay the defendants' costs of the application forthwith.