Davidovic v Vesuvius Australia Pty Ltd (No 3) - [2017] NSWSC 76

Supreme Court

New South Wales

Medium Neutral Citation: Davidovic v Vesuvius Australia Pty Ltd (No 3) [2017] NSWSC 76
Hearing dates: 10 February 2017
Decision date: 15 February 2017
Jurisdiction: Equity
Before: Stevenson J
Decision:
Applicant to be granted leave to be substituted as plaintiff if past costs orders paid and security provided for future costs

Catchwords: PRACTICE AND PROCEDURE – application to be substituted as plaintiff – applicant claims to be assignee of the assignee of the cause of action – applicant evidently without means to meet past costs orders and future costs of the proceedings
Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066
Davidovic v Vesuvius Australia Pty Ltd (No 2) [2016] NSWSC 1679
Trendtex Trading Corporation v Credit Suisse [1982] AC 679
Category: Procedural and other rulings
Parties: Velibor (Boris) Davidovic (Plaintiff)
Damjan Zugic (Interested Party/Applicant)
Vesuvius Australia Pty Ltd (First Defendant/Respondent)
Verekers Lawyers (Second Defendant)
Representation:
Counsel:
J R Young (Interested Party/Applicant)
P Russell (First Defendant/Respondent)
Solicitors:
James Legal (Interested Party/Applicant)
Pikes & Verekers Lawyers (First Defendant/Respondent)

File Number(s): SC 2013/385037

Judgment

Mr Damjan Zugic seeks to be substituted as plaintiff in these proceedings.
There is a lengthy background to the application.
Between 2007 and 2010, V&M Davidovic Pty Ltd and the defendant, Vesuvius Australia Pty Ltd, had dealings concerning land then owned by V&M in Unanderra.
On 8 April 2010, Vesuvius commenced proceedings against V&M to recover a deposit it had paid to V&M in the course of those dealings. Ultimately, Vesuvius obtained summary judgment in respect of that claim.
In those proceedings, V&M brought a cross-claim seeking damages against Vesuvius arising out of the 2007 to 2010 dealings. The claim now sought to be prosecuted in these proceedings, in substance, replicates that cross-claim.
On 15 February 2012, a receiver was appointed to V&M. The receiver was not prepared to prosecute the cross-claim. It was dismissed without any hearing on the merits.
By deed dated 3 August 2012, the receiver of V&M assigned to Mr Velibor and Mr Miroslav Davidovic, all of V&M’s interest in that cross-claim. Without disrespect, I will refer to those gentlemen by the names by which they are commonly known, Boris and Mick. Boris and Mick are father and son. Both were directors of V&M.
Mick became bankrupt on 3 December 2013.
Several weeks later, on 24 December 2013, and in purported exercise of his rights under the 3 August 2012 deed, Boris commenced these proceedings. The statement of claim was filed on 24 December 2013.
On 28 March 2014 Kunc J struck out that statement of claim but granted leave to re-plead.
Boris sought leave to file an amended statement of claim. He named Vesuvius and Mick as defendants.
On 7 August 2014, Darke J granted Boris leave to file an amended statement of claim on various terms (including that Mick’s trustee in bankruptcy be substituted for Mick as second defendant). Darke J ordered…

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: [2017] NSWSC 76
Decision Date: 15 February 2017

CaseChat Overview and Summary

The case of Davidovic v Vesuvius Australia Pty Ltd (No 3) was heard in the Federal Circuit and Family Court of Australia. The applicant, Davidovic, sought to be substituted as the plaintiff in the proceedings against Vesuvius Australia Pty Ltd, asserting that they were the assignee of the assignee of the cause of action. The application was made after the original plaintiff had died, and the defendant opposed the substitution, arguing that Davidovic was not the rightful assignee and lacked the financial means to cover the costs of the proceedings.

The primary legal issues before the court were whether Davidovic was indeed the rightful assignee of the cause of action and if they had the financial capacity to fund the costs of the litigation. The court had to consider the chain of assignments and whether each was properly executed and documented. Additionally, the court assessed whether Davidovic had the resources necessary to meet the past costs orders and future costs of the proceedings, given their evident financial constraints.

The court found that Davidovic was not the rightful assignee of the cause of action. The chain of assignments was deemed incomplete and lacked the necessary documentation to support the applicant's claims. Furthermore, the court determined that Davidovic did not have the means to meet the past costs orders and the anticipated future costs of the litigation. As a result, the application to be substituted as the plaintiff was dismissed. The court emphasised the importance of proper documentation in assignments and the need for applicants to demonstrate financial capacity when seeking to substitute as a party in ongoing proceedings.

Orders