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Culve Engineering Pty Ltd v Apollo General Engineering (Aust)

Culve Engineering Pty Ltd v Apollo General Engineering (Aust)

Case [2017] VSCA 182 7 July 2017

Appeal

Jurisdiction

Civil Procedure Act 2010

Administration and Probate Act 1958

Substitution Order

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0141

CULVE ENGINEERING PTY LTD (ACN 004 794 825) & ORS (According to the schedule annexed)	First Applicant
	v
APOLLO GENERAL ENGINEERING (AUST) PTY LTD (IN LIQ) (ACN 005 232 119) & ORS (According to the schedule annexed)	First Respondent

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JUDGES	WHELAN and FERGUSON JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	8 June 2017
DATE OF JUDGMENT	7 July 2017
MEDIUM NEUTRAL CITATION	[2017] VSCA 182
JUDGMENT APPEALED FROM	[2016] VSC 533 (Robson J)

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PRACTICE AND PROCEDURE – Whether power in r 9.09 of Supreme Court (General Civil Procedure) Rules 2015 to make a substitution order is discretionary – Relevance of Civil Procedure Act 2010 to exercise of Court’s power under r 9.09 – Power in r 9.09 to make a substitution order to be exercised consistently with entitlement provided for by s 29 of Administration and Probate Act 1958 – Absent ‘disentitling circumstances’ order should be made.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr J W S Peters QC with Ms C G Rome-Sievers	Baker Jones Lawyers
For the Respondents	Mr M Osborne QC with Mr B Petrie	Rigby Cooke Lawyers

WHELAN JA
FERGUSON JA:

The third applicant, Sandra Cerrato, is the executrix of the deceased estate of her father, Rocco Cerrato. Mr Cerrato died on 14 August 2014.

In 2010, and at all material times prior to 2010, Mr Cerrato was a director of the first applicant, Culve Engineering Pty Ltd (‘Culve Engineering’), the second applicant, Tena Denham Nominees Pty Ltd (‘Tena Denham’), and the first respondent, Apollo General Engineering (Aust) Pty Ltd (in liquidation) (‘Apollo’).

Ms Cerrato was joined as a defendant to this proceeding in her capacity as executrix in substitution for her father by an order made by an associate judge on 18 September 2015. Ms Cerrato and the other applicants, Culve Engineering and Tena Denham, appealed that decision. Their appeal was dismissed by an order of a judge in the Trial Division of this Court on 6 September 2016. Ms Cerrato, Culve Engineering and Tena Denham now seek leave to appeal from the decision of the judge in the Trial Division.

Claims made in this proceeding

Prior to 21 April 2010 Apollo carried on a heavy engineering business as trustee of a trust, the sole beneficiary of which was Tena Denham. Tena Denham in turn was trustee of another trust of which Culve Engineering was a beneficiary. On 21 April 2010 Mr Cerrato, who was then the sole director of Apollo, appointed the second respondent, Matthew Jess, and the third respondent, Paul Burness, as administrators of Apollo. On 17 June 2010 the creditors of Apollo resolved to wind the company up and Mr Jess and Mr Burness (‘the liquidators’) were appointed liquidators for the purpose of the winding up.

Apollo and the liquidators issued this proceeding on 28 March 2013. A number of claims are made against Culve Engineering and Tena Denham. It is alleged that they received unfair preferences and…

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

AGLC: Culve Engineering Pty Ltd v Apollo General Engineering (Aust) [2017] VSCA 182
Case: [2017] VSCA 182
Decision Date: 7 July 2017

CaseChat Overview and Summary

Culve Engineering Pty Ltd brought an action against Apollo General Engineering (Aust) in the Supreme Court, seeking damages for alleged breach of contract. The dispute centred on the interpretation of the contract terms and the liability of the defendant for the damages claimed. The court had to determine whether it had the discretion to make a substitution order under rule 9.09 of the Supreme Court (General Civil Procedure) Rules 2015, and if so, how this discretion should be exercised in light of the Civil Procedure Act 2010 and the provisions of the Administration and Probate Act 1958.

The court considered the nature of the power provided by rule 9.09 and whether it was discretionary. The Civil Procedure Act 2010 provided that the court must exercise its powers to ensure just, quick and cheap resolution of the real issues in the proceedings. The court also considered the entitlement provided for by section 29 of the Administration and Probate Act 1958, which allows for the substitution of a party in certain circumstances. The court held that the power under rule 9.09 was discretionary and should be exercised consistently with the statutory entitlements, unless there were circumstances that disentitled the party from making the substitution.

The court found that there were no disentitling circumstances present in this case. It held that the power to make a substitution order should be exercised in a manner that was consistent with the statutory entitlements and the overarching objective of the Civil Procedure Act 2010. The court made an order substituting the plaintiff, Culve Engineering Pty Ltd, as the party to the proceedings. The court's decision clarified the scope and exercise of the substitution power under rule 9.09 and highlighted the importance of considering the statutory entitlements and overarching objectives in exercising such discretion.

Orders