Domaschenz v Scene No. 3 Limited - [2018] VSC 593

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2017 00177

PHILIP AUSTIN DOMASCHENZ	Plaintiff
v
SCENE NO. 3 LIMITED (NEW ZEALAND BUSINESS NUMBER 9429035767619) AND ORS (ACCORDING TO THE SCHEDULE ATTACHED)	Defendants

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JUDGE:	Kennedy J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 October 2018; 23 November 2018
DATE OF RULING:	23 November 2018
CASE MAY BE CITED AS:	Domaschenz v Scene No. 3 Limited & Ors
MEDIUM NEUTRAL CITATION:	[2018] VSC 593

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PRACTICE & PROCEDURE – Group proceedings – Application for approval to discontinue proceedings for lack of funding - Appropriate notice to group members under s 33(X)(4) Supreme Court Act1986 (Vic) - Whether appropriate to grant approval – Approval granted under s 33V.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Frauenfelder	Corrs Chambers Westgarth
For the First to Third Defendants	No appearance	No appearance
For the Fourth Defendant	No appearance	Arnold Bloch Leibler
For the Fifth to Fourteenth Defendants and the estate of the Fifteenth Defendant	No appearance	Lander & Rogers

HER HONOUR:

This is an application by the plaintiff for approval to discontinue this proceeding pursuant to s 33V of the Supreme Court Act 1986 (Vic) (Act). The proceeding was commenced as a group proceeding pursuant to Part 4A of the Act and may not be discontinued without the Court’s approval.

Background

The proceeding was commenced by originating process and statement of claim on 1 August 2017 as a group proceeding on behalf of the plaintiff and Group Members, being certain persons who entered into contracts with the first and/or second defendants for the purchase of a lease interest in apartments in the ‘Scene Three’ residential complex in Auckland (Scene 3).

The proceeding was brought against the first to fourth defendants as ‘Promoter Defendants.’ It was also brought on behalf of certain GE Subgroup Members against the fifth to fifteenth defendants who had been retained to act as solicitors in respect of the purchase of the apartment leases.

Broadly, the plaintiff’s claims concern whether the defendants engaged in misleading or deceptive conduct, negligence and/or breach of contract in relation to the calculation and amount of annual rent payable.

The proceeding was initially listed for directions on 2 February 2018 at which time the pleading was not yet served. However, Counsel for the plaintiff indicated that the pleading had been filed for the purpose of preserving rights in circumstances where a limitation period was about to expire.

The matter was adjourned for service to take place.

In the result, no defences have been filed.

Moreover, given the first and second defendants are deregistered companies they have not been served with the statement of claim.

The third defendant has taken no steps in the proceeding and has not filed a notice of appearance.

The fourth defendant is represented by Arnold Bloch Leibler who has filed an appearance in the proceeding.

The fifth to fifteenth defendants are represented by solicitors from Lander & Rogers. They have…

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: [2018] VSC 593
Decision Date: 23 November 2018

CaseChat Overview and Summary

In Domaschenz v Scene No. 3 Limited, the plaintiff, Domaschenz, sought approval to discontinue a group proceeding due to a lack of funding. The case was heard in the Supreme Court of Victoria. The primary issue before the court was whether the plaintiff's application to discontinue the proceedings was appropriate, given the lack of funding, and if so, whether the notice to the group members was adequate under section 33(X)(4) of the Supreme Court Act 1986 (Vic).

The court considered the circumstances surrounding the discontinuation of the proceedings, including the reasons provided by the plaintiff for the lack of funding and the impact of this decision on the group members. The court was required to determine if the notice given to the group members was appropriate and if the decision to discontinue was in the best interest of the group as a whole. The court also had to assess the adequacy of the efforts made by the plaintiff to secure funding for the continuation of the proceedings.

The court found that the plaintiff had made genuine efforts to secure funding for the continuation of the proceedings but was ultimately unsuccessful. The court noted that the notice to the group members was adequate as it provided sufficient information about the reasons for the discontinuation and the implications for the group members. The court concluded that the decision to discontinue the proceedings was appropriate given the circumstances and granted the plaintiff's application under section 33V of the Supreme Court Act 1986 (Vic). The court's decision allowed the plaintiff to discontinue the proceedings while ensuring that the group members were properly informed and could take any necessary steps to protect their interests.

Orders