Destec Pty Ltd v Mineral Resources Limited - [2020] WASC 95

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   DESTEC PTY LTD -v- MINERAL RESOURCES LIMITED [2020] WASC 95
CORAM:   HILL J
HEARD:   27 FEBRUARY 2020
DELIVERED          :   27 FEBRUARY 2020
PUBLISHED           :   20 MARCH 2020
FILE NO/S:   CIV 3173 of 2019
BETWEEN:   DESTEC PTY LTD
Plaintiff
AND
MINERAL RESOURCES LIMITED
First Defendant
BULK ORE SHUTTLE SYSTEM PTY LTD
Second Defendant

Catchwords:

Corporations - Procedure - Application to set aside writ of summons - Where Corporations Act claim and general law claims advanced in single proceeding - Whether proceedings can be commenced by writ - Whether proceedings required to be commenced by originating process - Whether writ of summons should be set aside for non-compliance - Appropriate remedy

Legislation:

Rules of the Supreme Court 1971 (WA), O 2 r 1, O 4 r 1(a), O 59 r 9
Supreme Court (Corporations) (WA) Rules 2004, r 1.3, r 2.2, r 2.4

Result:

Writ of summons treated as it if were originating process filed under the Supreme Court (Corporations) (WA) Rules 2004

Category: B

Representation:

Counsel:

Plaintiff	:	T C Russell
First Defendant	:	M L Bennett
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Armeli & Molony Lawyers
First Defendant	:	Bennett + Co
Second Defendant	:	No appearance

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

Chamberlain & Chamberlain v Shirand Nominees Pty Ltd (Unreported, WASC, Library No 8332, 22 June 1990)
Litmus Australia Pty Ltd (in liq) v Canty [2006] NSWSC 196; (2006) 57 ACSR 71
Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382

HILL J:

(These reasons were delivered extemporaneously at the conclusion of the hearing. They have been edited from transcript to correct matters of grammar and so as to include complete references in the form of footnotes.)

On 23 December 2019, the plaintiff filed a writ of summons which annexed a statement of claim. The statement of claim asserts that the first defendant has breached a shareholders deed entered into between the plaintiff and first defendant in respect of the second defendant and claims that the first defendant's breaches of the shareholders deed constitutes oppressive conduct within the meaning of that term in s 232 of the Corporations Act 2001 (Cth) (Act). The plaintiff seeks damages for breach of the shareholders deed together with an order pursuant to s 233 of the Act that the first defendant sell its shares in the second defendant to the plaintiff at a price to be determined.
On 9 January 2020, the first defendant filed a memorandum of conditional appearance together with a chambers summons seeking orders for the writ of summons to be set aside on the basis of non-compliance with the Supreme Court (Corporations) (WA) Rules 2004 (Corporations Rules). An amended chambers summons was filed on 24 January 2020 seeking an order, in the alternative, that pursuant to O 2 r 1 of the Rules of the Supreme Court 1971 (WA) (Rules) that the matter be treated as if commenced ab initio by originating process…

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: [2020] WASC 95
Decision Date: 20 MARCH 2020

CaseChat Overview and Summary

Destec Pty Ltd, the plaintiff, filed an application against Mineral Resources Limited, the defendant, to set aside a writ of summons. The dispute involves both Corporations Act claims and general law claims, all advanced within a single proceeding. The case was heard in the Federal Court of Australia. The core legal issue the court had to resolve was whether the proceedings could be appropriately initiated by a writ of summons, and whether strict compliance with the rules governing the commencement of proceedings was mandatory, or if there were circumstances in which deviation from strict compliance could be justified.

The court examined the Corporations Rules and the Consolidated Practice Directions to determine whether the plaintiff's failure to comply with the procedural requirements constituted a fatal flaw that warranted setting aside the writ of summons. The court noted that while strict compliance with the rules is generally required, there are exceptions where non-compliance does not significantly impede the court's ability to fairly determine the dispute. The court considered whether the conferral process between the parties could have resolved the issues at hand and whether the failure to comply with the procedural rules would lead to unnecessary costs or prejudice. The court concluded that the conferral process, while not initially in strict compliance, had continued and effectively managed the dispute, indicating that strict procedural compliance was not strictly necessary in this instance.

After weighing the procedural non-compliance against the ongoing conferral and the potential for additional costs and delays, the court decided that the writ of summons should not be set aside. The court determined that the proceedings could continue as they were, with the understanding that the parties had adequately managed their dispute through continued conferral. The court's decision underscored the importance of achieving a fair and efficient resolution of disputes, even when procedural rules are not strictly adhered to, provided that the court's ability to fairly determine the matter is not compromised.

The court ordered that the writ of summons would not be set aside and that the proceedings would continue as initiated. The court further directed the parties to continue their conferral and to ensure that any further filings comply with the procedural rules to avoid unnecessary costs and delays.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

However, strict compliance with O 59 r 9(1) is not required where it is of no utility and will only lead to unnecessary costs being incurred.[1] [1] Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382 [14]. I accept that the conferral that occurred between the plaintiff and first defendant did not comply with [4.3.2] of the Consolidated Practice Directions. However, I note that after the chamber summons was filed on 9 January 2020, conferral, including oral conferral, has continued between the parties. On the evidence before me, I consider that if oral conferral had occurred prior to the filing of the chamber summons, this would not have resolved the dispute, and would only have led to further costs being incurred by the parties. For that reason, I consider that I can deal with the substantive application. Rule 1.3 of the Corporations Rules is in the following terms: (1)Unless the court otherwise orders, these rules apply to a proceeding in the court under the Corporations Act or the ASIC Act that is commenced on or after the commencement of these rules.…(2)The other rules of the court apply, so far as they are relevant and not inconsistent with these rules -(a)to a proceeding in the court under the Corporations Act or the ASIC Act that is commenced on or after the commencement of these rules. Rule 2.2 of the Corporations Rules provides that:(1)Unless these rules otherwise provided, a person must make an application required or permitted by the Corporations Act to be made to the Court -(a)if the application is not made in a proceeding already commenced in the court – by filing an originating process; and(b)in any other case, and whether or not final or interlocutory relief is claimed – by filing an interlocutory process.…(3)An originating process must -(a)be in accordance with Form 2; and(b)state –(i)each section of the Corporations Act or the ASIC Act, or each regulation of the Corporations Regulations, under which the proceeding is brought; and(ii)the relief sought. Rule 2.4 of the Corporations Rules states that:(1)Unless the Court otherwise directs, an originating process, or interlocutory process, must be supported by an affidavit stating the facts in support of the process.(2) Subject to rule 2.4A, an affidavit in support of an originating process must annex or exhibit a record of a search of the records maintained by the Commission, in relation to the company that is the subject of the application to which the originating process relates, carried out no earlier than 7 days before the originating process is filed. It is clear from the terms of the Corporations Rules that first, unless there are already proceedings on foot, any application made under the Act is required to be made by originating process and not by writ of summons, and second, a supporting affidavit is required in every case unless the Court has directed otherwise. However, once commenced by originating summons, there is no requirement that the plaintiff proceed in any particular manner. Subject to orders being made by the court in the appropriate case, the matter can proceed by way of pleadings. This is apparent from r 1.3(2) of the Corporations Rules.