Cyclopharm Limited v Morcos (No 2) - [2023] NSWSC 1392

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Cyclopharm Limited v Morcos (No 2) [2023] NSWSC 1392
Hearing dates: 15 November 2023
Date of orders: 17 November 2023
Decision date: 17 November 2023
Jurisdiction: Equity
Before: Elkaim AJ
Decision:
See paragraph 32

Catchwords:
CIVIL PROCEDURE — Separate determination of questions — Where plaintiff seeks the questions of liability and quantum to be heard separately — Whether questions of liability and quantum can be separated — Whether separate hearing should be ordered as to liability and quantum.
CIVIL PROCEDURE — Parties — Addition of defendant — Where existing defendants opposed amendment on the basis of long-standing complaint that they had not been given proper particulars —Where plaintiffs consented to direction to provide further particulars — Whether joinder of new defendant through amendment of the statement of claim should be ordered.

Legislation Cited:
Corporations Act 2001 (Cth)

Cases Cited:
Hexiva Pty Ltd v Lederer [2006] NSWSC 318
Landsdale Pty Ltd v Moore [2009] WASCA 176

Category: Procedural rulings
Parties: Cyclopharm Limited (First Plaintiff)
Cyclomedica Australia Pty Ltd (Second Plaintiff)
Nabil Morcos (First Defendant)
HZM Pty Ltd (Second Defendant)
Charles Francis Buttigieg (Third Defendant)
Richard Frank Gotch (Fourth Defendant)
Midhael Jian Guo (Fifth Defendant)
Bjorn Altmann (Ninth Defendant)
Almedis Altman GmbH, USt.IdNr. DE220508930 (Tenth Defendant)
Vent-Medis GmbH, USt. IdNr DE315 789 316 (Eleventh Defendant)
Venti-Sys Oz Pty Ltd in its own capacity and as trustee for the Venti-Sys Oz Trust (Proposed Twelfth Defendant)
Representation:
Counsel:
Mr S Keizer (Plaintiff)
Ms S Andrews (Plaintiff)
Mr S O’Brien (Ninth, Tenth and Eleventh Defendants)

Submitting Appearance (Second and Fifth Defendants)

Ms E Boyce (Third Defendant)
Solicitors:
Webb Henderson (First and Second Plaintiffs)
Gadens (Ninth, Tenth and Eleventh Defendants)
Bartier Perry (Third Defendant)
Toomey Pegg Lawyers (Fifth Defendant)

File Number(s): 2019/298748

JUDGMENT

There are three notices of motion before the court:

a notice of motion filed on 5 May 2023 by the plaintiffs seeking a separation of liability from quantum;

an amended notice of motion filed on 8 September 2023 by the plaintiffs seeking leave to file a further amended summons and an amended statement of claim; and

a notice of motion filed on 8 September 2023 by the ninth, tenth and eleventh defendants seeking an extension of time for the filing of expert evidence and permission to rely upon a particular expert report.

The third notice of motion can be dealt with quickly. Although consent was not forthcoming, the plaintiffs did not object to the orders sought and did not identify any prejudice should the orders be made. I will therefore make the orders and make no order as to costs.
In respect of the motion seeking amendments to the summons and statement of claim, I note:

the proceedings were commenced by a summons. However, on 5 February 2020 an order was made directing the filing of a statement of claim. There is no need to amend the summons;

the first defendant is deceased. The action in respect of this defendant must be regularised,…

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: [2023] NSWSC 1392
Decision Date: 17 November 2023

CaseChat Overview and Summary

Cyclopharm Limited brought proceedings against Morcos and others, alleging breaches of fiduciary duty and other claims. The dispute came before the court on several preliminary matters, including the determination of questions of liability and quantum, and the addition of a new defendant. The court was tasked with deciding whether the questions of liability and quantum could be separated and heard independently, as well as whether a new defendant could be added to the proceedings.

The central legal issues before the court were the separation of liability and quantum in complex litigation and the addition of a new defendant to the proceedings. The plaintiff sought a separate hearing for liability and quantum, arguing that it would be more efficient and just to do so. The defendants opposed the separate determination of liability and quantum, citing the risk of inconsistent findings. The court also had to consider whether to allow the addition of a new defendant to the proceedings, which the existing defendants opposed, claiming they had not been given proper particulars. The plaintiffs, however, consented to a direction to provide further particulars.

The court ruled that the questions of liability and quantum should not be separated in this case, as it could lead to inconsistent findings and would not necessarily save time or costs. The court also found that the addition of a new defendant should be allowed, despite the existing defendants' complaints, as the plaintiffs had consented to provide further particulars. The court considered that the interests of justice would be best served by allowing the amendment to include the new defendant.

The court ordered that the questions of liability and quantum would be determined together in a single hearing. The court also allowed the amendment to the statement of claim to include the new defendant, subject to the plaintiffs providing further particulars as directed.

Orders