Di Nella v Australian Manufacturers Corporation Pty Ltd
[2023] WASC 119
•17 APRIL 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: DI NELLA -v- AUSTRALIAN MANUFACTURERS CORPORATION PTY LTD [2023] WASC 119
CORAM: HILL J
HEARD: ON THE PAPERS
DELIVERED : 31 MARCH 2023
PUBLISHED : 17 APRIL 2023
FILE NO/S: COR 79 of 2021
BETWEEN: DAVID PETER DI NELLA
Plaintiff
AND
AUSTRALIAN MANUFACTURERS CORPORATION PTY LTD
First Defendant
DANIEL MICHAEL DI NELLA
Second Defendant
DANIEL MICHAEL DI NELLA
D.M. DINELLA PTY LTD AS TRUSTEE FOR DANIEL MICHAEL DI NELLA FAMILY TRUST (ABN 49 611 478 063)
Plaintiff by counterclaim
DAVID PETER DI NELLA
D G C (AUST) PTY LTD (ACN 127 228 157) IN ITS OWN RIGHT AND AS TRUSTEE FOR DAVID PETER DI NELLA FAMILY TRUST (ABN 48 314 108 207)
Defendant by counterclaim
Catchwords:
Practice and procedure – Joinder – Whether second plaintiff by counterclaim properly joined to proceedings – Rules of Supreme Court 1971 (WA) O 18 – Turns on own facts
Legislation:
Rules of Supreme Court 1971 (WA) O 18 r 2(1)
Supreme Court Act 1935 (WA), s 35
Result:
Second plaintiff by counterclaim not properly joined
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Plaintiff by counterclaim | : | No appearance |
| Defendant by counterclaim | : | No appearance |
Solicitors:
| Plaintiff | : | Dentons Australia |
| First Defendant | : | In Person |
| Second Defendant | : | Frichot Lawyers |
| Plaintiff by counterclaim | : | Frichot Lawyers |
| Defendant by counterclaim | : | Dentons Australia |
Cases referred to in decision:
Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202
Stumore v Campbell & Co [1892] 1 QB 314
HILL J:
The plaintiff and the second defendant are brothers. Until about May 2016, they both worked at Australian Manufacturers Corporation Pty Ltd (AMC), the first defendant. Their relationship broke down at about this time following a disagreement between them.
On 18 May 2021, the plaintiff commenced proceedings against AMC and the second defendant seeking relief under s 232 and s 233 of the Corporations Act 2001 (Cth). The plaintiff seeks orders that the second defendant sell his share in AMC to the plaintiff and that he resign as a director of AMC.
On 17 August 2021, the second defendant filed his defence to the plaintiff's claim as well as a counterclaim. The defence and counterclaim named D.M. Dinella Pty Ltd as trustee for the Daniel Michael Di Nella Family Trust (ABN 49 611 478 063) (DM Dinella) as a second plaintiff by counterclaim and joined D G C (Aust) Pty Ltd (ACN 127 228 157) in its own right and as trustee for David Peter Di Nella Family Trust (ABN 48 314 108 207) (DGC) as second defendant by counterclaim. The defence and counterclaim was amended on 1 November 2021, and re-amended on 3 February 2023.
In the counterclaim, the second defendant contends that the plaintiff's conduct has been oppressive to his interests and seeks orders for the plaintiff to sell his share in AMC to the second defendant and that the plaintiff resign as a director. In respect of the claim by DM Dinella, it is contended that the first defendant was trustee of the D.P. and D.M. Di Nella Unit Trust which traded as Park Motor Body Builders (ABN 32 846 160 902), and the first defendant breached certain provisions of the trust deed. DM Dinella contends that the plaintiff knowingly assisted the breach of trust and that both the plaintiff and DGC received trust property with actual knowledge of the breach of Trust and/or knowledge of circumstances which would indicate the breach to an honest and reasonable person.
In his amended reply and defence to counterclaim dated 8 December 2021, the plaintiff denied DM Dinella was a counterclaimant. Despite this being raised, no steps were taken by either party to resolve this until this year. At a strategic conference on 23 February 2023, the parties sought a determination of this issue. The parties were ordered to file submissions in relation to the issue, with the issue to be determined on the papers.
For the reasons that follow, it is my view that DM Dinella has not been properly joined to the proceedings.
Joinder under the Rules of the Supreme Court 1971 (WA)
A counterclaim is a cross action between the same parties which is tried at the same trial and the original action.[1] The claim and the counterclaim are independent suits which, for convenience, are tried at the same time.[2]
[1] Stumore v Campbell & Co [1892] 1 QB 314, 318 - 319.
[2] Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202, 218.
Section 24(3) and s 24(3A) of the Supreme Court Act 1935 (WA) (Act) deal with the power of the court to grant relief to a defendant in the proceedings. The power to grant relief against a plaintiff is set out in s 24(3)(a) of the Act and the power to grant relief 'against any other person' is set out in s 24(3)(b) of the Act. Before the court can grant relief under s 24(3)(b), it is necessary for the defendant to serve the person with 'notice in writing of such claim pursuant to any rule of court or any order of the Court'. Where a notice is served on a party under s 24(3)(b), pursuant to s 24(3), that party is deemed to be a party to the proceedings.
The joinder of parties by way of counterclaim is set out in O 18 r 3 of the Rules of the Supreme Court 1971 (WA) (Rules).
Relevantly, O 18 r 3(1) provides that where a defendant to an action makes a counterclaim against the plaintiff and alleges that another party is liable along with the plaintiff in respect of the subject matter of the counterclaim, the defendant can join that person as a party against whom the counterclaim is made.
Order 18 r 4 of the Rules provides that two or more persons may be joined as plaintiffs or defendant with leave of the court or where common questions of law or fact arise (O 18 r 4(1)(a)), or the rights to relief arise out of the same transaction or transactions (O 18 r 4(1)(b)).
Order 18 r 6(2) allows the court to order (either of its own motion or on application) that a party be joined as a party to the proceedings subject to the proviso that no party made be added as a plaintiff without their written consent.
Disposition
Both the Act and the Rules specifically provide for a defendant to the proceedings to bring a counterclaim against an existing party to the proceedings or to join an additional defendant by way of counterclaim where notice has been served on that party. However, nothing in the Act or the Rules entitles a defendant to join an additional party as a plaintiff to the counterclaim.
It is not in dispute that the plaintiff has not made any claim against DM Dinella and DM Dinella is not a defendant to the proceedings. In these circumstances, under the express provisions of the Act, the court does not have power to make any of the orders sought by DM Dinella or to grant the relief sought. The counterclaim of DM Dinella is not a cross action between the same parties to the proceedings.
I do not consider there was any power under the Rules or the Act for the second defendant to join DM Dinella as a second plaintiff by counterclaim to these proceedings. In my view, if the second defendant or DM Dinella wish to have this claim dealt with at the same time as the trial of the proeedings, it is necessary for the second defendant to either apply to join DM Dinella as a party under O 18 r 6 of the Rules or for DM Dinella to commence new proceedings and seek for any such proceedings to be heard and determined at the same time. To date, neither has occurred.
Orders
For these reasons, I do not consider that DM Dinella is a party to these proceedings. I will hear from the parties as to the orders that should be made to reflect these reasons and as to the costs of the application. My preliminary view is that the second defendant should pay the plaintiff's costs of the application.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
17 APRIL 2023
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