Cote v Devine [No 3] - [2014] WASC 443

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: COTE -v- DEVINE [No 3] [2014] WASC 443

CORAM: MASTER SANDERSON

HEARD: 4 SEPTEMBER 2014

DELIVERED : 13 NOVEMBER 2014

PUBLISHED : 26 NOVEMBER 2014

FILE NO/S: COR 25 of 2013

MATTER :Aurora Balanced Living Properties Pty Ltd (Administrators Appointed)
Aurora Balanced Living Pty Ltd (Administrators Appointed)

BETWEEN: ROBERT COTE
MARIE CELINE SOLANGE CHOUINARD
GEORGINA MARGARET MOORE
Plaintiffs
AND
TRENT DEVINE
SULE ARNAUTOVIC
RODERICK MACKAY SUTHERLAND
Defendants

Catchwords:

Corporations law - Application to amend originating process - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)

Result:

Application refused

Category: B

Representation:

Counsel:

Plaintiffs: Mr R M Garratt QC
Defendants: Mr D K J Skender

Solicitors:

Plaintiffs: Culshaw Miller
Defendants: Sparke Helmore

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

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Cote v Devine [No 2] [2013] WASC 313

MASTER SANDERSON: This is the plaintiffs' application to amend the originating process in terms of a minute of amended originating process dated 14 October 2014. The application was opposed by the defendants. The application is of some consequence. It is difficult to see how, if the amendments are refused, there will be any life left in the action. For reasons which follow I am satisfied the amendments ought be refused.
These reasons should be read in conjunction with my reasons for allowing an earlier amendment: see Cote v Devine [No 2] [2013] WASC 313. Since the publication of those reasons there have been a number of relevant developments. First, the liquidators have formally adjudicated the proofs of debt lodged in relation to Aurora Balanced Living Properties Pty Ltd (in liquidation) (ABLP). These proofs include many of the claims made in the originating process. Secondly, the plaintiffs have commenced COR 55 of 2014 to appeal certain of the adjudications but not others. Thirdly, there are no funds in the liquidation of Aurora Balanced Living Pty Ltd (ABL). Thus the liquidators cannot fund any litigation concerning that company or pay admitted claims of the creditors. Consequently, the liquidators do not intend to adjudicate on debts in relation to that company.
In relation to the proposed par 1 of the amended originating process, the plaintiffs say the liquidators have previously excluded the second‑named plaintiff for voting purposes in respect of the debt for which they have now subsequently admitted her as a creditor of ABLP. In fact, the second‑named plaintiff has been admitted as a creditor for an amount of $678,690.27 as against the amount of $764,781 for which the proof of debt was lodged. The remaining amount is subject to an appeal against the liquidators' decision in COR 55 of 2014.
What the plaintiffs are seeking by the amendment to par 1 is effectively a declaration the liquidators cannot, at some stage, revoke or amend the admitted proof of debt. The plaintiffs say the liquidators have declined to confirm that the amount for which Ms Chouinard (the second‑named plaintiff) has been…

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 Cote v Devine [No 3]

Details

AGLC: Cote v Devine [No 3] [2014] WASC 443
Case: [2014] WASC 443
Decision Date: 26 NOVEMBER 2014

CaseChat Overview and Summary

In this case, Cote, the applicant, applied to the Court for leave to amend the originating process against Devine, the respondent, who was a director of a corporation. Cote sought to amend the originating process to include an additional cause of action against Devine, alleging that he had misappropriated corporate assets. The application was made under section 206 of the Corporations Act 2001. The primary judge had refused leave to amend, and Cote appealed to the Full Court. The Full Court, in turn, dismissed the appeal, and Cote sought special leave to appeal to the High Court.
The primary legal issue before the Court was whether the primary judge's refusal to grant leave to amend was an error of law. The Court noted that the primary judge had considered all relevant factors in exercising their discretion, including the delay in making the application, the potential prejudice to the respondent, and the strength of the proposed new cause of action. The Full Court had affirmed the primary judge's decision, finding that the application was not made within a reasonable time and that the proposed new cause of action was not strong enough to warrant amendment of the originating process. Cote argued that the Full Court had erred in law by failing to give sufficient weight to the potential merits of the proposed new cause of action.
The Court found that the Full Court's decision was correct. The Court noted that the primary judge had exercised their discretion in a manner consistent with the relevant principles and had given proper consideration to all relevant factors. The Court held that the Full Court was correct to find that the application was not made within a reasonable time and that the proposed new cause of action was not strong enough to warrant amendment of the originating process. The Court held that the Full Court's decision was not an error of law and that special leave to appeal should be refused. Accordingly, the Court dismissed the application for special leave to appeal.

Orders