Dove v Everforex Financial Pty Ltd

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Federal Circuit and Family Court of Australia

(DIVISION 2)

Dove v Everforex Financial Pty Ltd [2022] FedCFamC2G 752

File number: SYG 2413 of 2020
Judgment of: JUDGE CAmERON
Date of judgment: 9 September 2022  
Catchwords:

PRACTICE & PROCEDURE – late amendment of pleading – relevant considerations.

PRACTICE & PROCEDURE – application for transfer of matter to the Federal Court of Australia – relevant considerations.
Legislation:

Fair Work Act 2009 (Cth) s 570

Competition and Consumer Act 2010 (Cth) sch 2 ss 18, 31

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 143, 153, 190

Corporations Act 2001 (Cth)

Federal Court of Australia Act 1976 (Cth) s 32AD

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.04, 7.01, 8.02, sch 1 item 4

Federal Court Rules 2011 (Cth) r 16.21
Cases cited:

Commonwealth v Verwayen (1990) 170 CLR 394

SZSRR v Minister for Immigration and Border Protection [2017] FCA 328

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (2008) 252 ALR 41

J & A Vaughan Super Pty Ltd (Trustee) v Becton Property Group Limited [2014] FCA 581

Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256

Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2008) 78 IPR 586

Stanley v Service to Youth Council Inc (No 3) (2014) 225 FCR 357

Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (No 2) (2015) 235 FCR 366

Carr v Empirical Works Pty Ltd & Anor [2019] FCCA 1114

Rakic v Johns Lyng Insurance Building Solutions (Victoria) Pty Ltd (Trustee) (2016) 259 IR 47
Division: Fair Work Division
Number of paragraphs: 39
Date of hearing: 18 August 2022
Place: Sydney
Counsel for the Applicant: Mr C. Lambert
Solicitors for the Applicant: Cohen & Krass
Counsel for the Respondent: Mr I. Neil SC and Mr I. Leong
Solicitors for the Respondent: SHL & Associates Lawyers

ORDERS

SYG 2413 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

CHRISTIAN CHARLES DOVE

First Applicant

GFY MARKETS PTY LTD
ACN 629 248 031
Second Applicant
AND:

EVERFOREX FINANCIAL PTY LTD (ACN 115 459 124)

Respondent
AND BETWEEN: 

EVERFOREX FINANCIAL PTY LTD (ACN 115 459 124)
Cross-Claimant

AND: 

CHRISTIAN CHARLES DOVE
First Cross Respondent

DK INTERNATIONAL PTY LTD ACN 632 006 494
Second Cross Respondent

GFY MARKETS PTY LTD ACN 629 248 031
Third Cross Respondent

order made by:

JUDGE CAMERON

DATE OF ORDER:

9 SEPTEMBER 2022

THE COURT ORDERS THAT:

1.The respondent/cross-claimant have leave to file within 14 days a further amended statement of cross claim in the form of the draft document annexed to the affidavit of Jonathan Lu affirmed 29 July 2022 and filed on 1 August 2022.

2.Following compliance with order 1, the proceeding be transferred to the Federal Court of Australia at Sydney.

3.The respondent/cross-claimant…

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Details
Case
[2022] FedCFamC2G 752
Decision Date

CaseChat Overview and Summary

Dove v Everforex Financial Pty Ltd involved a dispute between the plaintiff, Mr. Dove, and the defendant, Everforex Financial Pty Ltd. The case was before the Federal Circuit and Family Court of Australia and concerned an application for leave to file a further amended statement of cross-claim, as well as an application for a separate hearing of liability and damages. The primary legal issues that the court needed to decide were whether the defendant should be allowed to file a further amended statement of cross-claim and if the liability and damages should be heard separately.

The court considered the principles of pleadings and amendments as established in Commonwealth v Verwayen and Aon Risk Services Australia Ltd v Australian National University. The court acknowledged that amendments to pleadings may be allowed to ventilate and decide the real issues between the parties, but also noted that amendments may be struck out if they fail to disclose a reasonable case of action or lack reasonable prospects of success. The court further considered the evidence provided by Jonathan Lu, the solicitor for Everforex, who explained the circumstances surrounding the need for the further amended statement of cross-claim and the urgency of the situation. The court also considered the impact of the proposed amendments on the administration of justice, the other litigants awaiting trial dates, and the strain which litigation imposes upon litigants.

After weighing all the relevant factors, the court decided that the defendant should be granted leave to file the further amended statement of cross-claim, considering the urgency of the situation and the explanations provided for the delay. The court also decided that the application for a separate hearing of liability and damages would be considered separately.

In conclusion, the court granted the defendant's application for leave to file a further amended statement of cross-claim, while reserving the decision on the application for a separate hearing of liability and damages for further consideration. The court's decision was based on the principles of pleadings and amendments, as well as the specific circumstances of the case and the interests of the administration of justice.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

With respect to the application for leave to file a further amended statement of cross-claim, Mr Lu gave the following evidence: (a)counsel had initially been instructed to advise and to draft and settle pleadings, including the statement of cross-claim and the amended statement of cross-claim;(b)on or about 17 December 2021, counsel returned his brief because of other commitments;(c)Everforex’s evidence was served on 1 and 3 June 2022 (“June 2022 evidence”);(d)new counsel was engaged to assist Mr Lu with finalising Everforex’s evidence during which time causes of action that had not been pleaded were identified and considered; and(e)senior counsel, recently briefed in this matter, has now settled the proposed further amended statement of cross-claim, a copy of which was annexed to Mr Lu’s affidavit. Supplementary evidence Mr Lu also deposed that in light of the urgency with which the June 2022 evidence was prepared and served, Everforex sought leave to file and serve “some minor correcting or supplementary affidavits”. Application for separate hearing of liability and damages Mr Lu deposed that during Mr Dove’s employment, a significant amount of money was injected to meet a regulatory requirement that it keep its net tangible assets at $1.1 million. He deposed that those funds were additional to significant sums initially provided at the start of the business and Mr Dove’s employment. Mr Lu deposed that Everforex’s alleged total loss was estimated to be between $1.4 million - $1.8 million, and was probably about $1.7 million. His evidence was that Everforex is still ascertaining whether its primary accounting records are available and that, although Everforex has access to its bank statements and audits from 2020 and 2021, it is not yet possible to determine definitively where the initial and later funding went, how the funds were mixed and how, ultimately, they were allegedly lost. Mr Lu deposed that if such primary accounting records were available, it would take several weeks to engage a forensic accountant to “resolve the various data sources including primary accounting records bank statements and audit reports”. He deposed that if such records were not available, it would still take several weeks for a forensic accountant “to resolve the bank statements and audits”.Consideration AmendmentPrinciples Pleadings should be in a form that permits the real issues between the parties to be ventilated and decided, the rules of court having always provided that amendments to pleadings may be allowed for that purpose: Commonwealth v Verwayen (1990) 170 CLR 394 per Dawson J at 456. However, under item 14 of sch.1 to the Rules and r.16.21 of the Federal Court Rules 2011 (Cth) (“FCA Rules”), a pleading may be struck out because fails to disclose a reasonable case of action and, under s.143 of the FCFCOA Act, all or part of a pleading may be dismissed if it lacks reasonable prospects of success, so there is no point in permitting an amendment if it is deficient in either of those ways: SZSRR v Minister for Immigration and Border Protection [2017] FCA 328 at [47]-[52].

Decision

Reasons for decision

The Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”) relevantly provides:143Summary judgment …(2)The Federal Circuit and Family Court of Australia (Division 2) may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. …153Discretionary transfer of proceedings(1)If:(a) a proceeding is pending in the Federal Circuit and Family Court of Australia (Division 2); and(b) the proceeding is not a family law or child support proceeding;the Court may, by order, transfer the proceeding from the Court to the Federal Court.(2)The Federal Circuit and Family Court of Australia (Division 2) may transfer a proceeding:(a) on the application of a party to the proceeding; or(b) on its own initiative.(3)In deciding whether to transfer a proceeding to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) must have regard to:(a) any Rules of Court made for the purposes of subsection 154(2); and(b) whether proceedings in respect of an associated matter are pending in the Federal Court; and(c) whether the resources of the Federal Circuit and Family Court of Australia (Division 2) are sufficient to hear and determine the proceeding; and(d) the interests of the administration of justice.Evidence Jonathan Lu, the solicitor for Everforex, filed an affidavit affirmed on 29 July 2022 in support of the various orders sought in the application in a proceeding. Proposed amendment With respect to the application for leave to file a further amended statement of cross-claim, Mr Lu gave the following evidence: (a)counsel had initially been instructed to advise and to draft and settle pleadings, including the statement of cross-claim and the amended statement of cross-claim;(b)on or about 17 December 2021, counsel returned his brief because of other commitments;(c)Everforex’s evidence was served on 1 and 3 June 2022 (“June 2022 evidence”);(d)new counsel was engaged to assist Mr Lu with finalising Everforex’s evidence during which time causes of action that had not been pleaded were identified and considered; and(e)senior counsel, recently briefed in this matter, has now settled the proposed further amended statement of cross-claim, a copy of which was annexed to Mr Lu’s affidavit. Supplementary evidence Mr Lu also deposed that in light of the urgency with which the June 2022 evidence was prepared and served, Everforex sought leave to file and serve “some minor correcting or supplementary affidavits”. Application for separate hearing of liability and damages

Ratio Decidendi

Legal Principle Established

Mr Lu deposed that if such primary accounting records were available, it would take several weeks to engage a forensic accountant to “resolve the various data sources including primary accounting records bank statements and audit reports”. He deposed that if such records were not available, it would still take several weeks for a forensic accountant “to resolve the bank statements and audits”.Consideration AmendmentPrinciples Pleadings should be in a form that permits the real issues between the parties to be ventilated and decided, the rules of court having always provided that amendments to pleadings may be allowed for that purpose: Commonwealth v Verwayen (1990) 170 CLR 394 per Dawson J at 456. However, under item 14 of sch.1 to the Rules and r.16.21 of the Federal Court Rules 2011 (Cth) (“FCA Rules”), a pleading may be struck out because fails to disclose a reasonable case of action and, under s.143 of the FCFCOA Act, all or part of a pleading may be dismissed if it lacks reasonable prospects of success, so there is no point in permitting an amendment if it is deficient in either of those ways: SZSRR v Minister for Immigration and Border Protection [2017] FCA 328 at [47]-[52]. Principles relevant to the present interlocutory application are found in the High Court’s decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. The leading judgment is that of Gummow, Hayne, Crennan, Kiefel and Bell JJ, who highlighted a number of issues appropriate to be taken into account in situations such as the present. Their Honours made a number of points:(a)the conduct of litigation is not merely a matter for the parties but is also one for the Court. The need to avoid disruptions in the Court’s lists, with consequent inconvenience to the Court and prejudice to the interests of other litigants waiting to be heard, is a relevant matter (at 211 [93]);(b)the courts are concerned to do justice to all litigants. When considering an application for amendment, it may be just that the Court take account of other litigants, not just the parties to the litigation in question (at 212 [94]-[95]); (c)the fact that costs are not always a sufficient compensation for a late amendment should be taken into account and the Court is entitled to weigh in the balance, for instance, the strain which litigation imposes upon litigants (at 213-214 [99]-[100]);(d)much may depend upon the point the litigation has reached, relative to a trial, when the application for an amendment is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to make their case and that it is too late for a further amendment, having regard to the other party and the other litigants awaiting trial dates (at 214-215 [102]);(e)the fact that an explanation has been offered for the delay in raising the issue is relevant, as will be whatever explanation may be given (at 215 [103]); and(f)all the matters relevant to the exercise of the power should be weighed. The fact of substantial delay, wasted costs and the concerns of case management will assume importance on an application for leave to amend (at 217 [111]).