Duncan Davis (Sales) Pty Ltd v Davis - [2008] VSC 127

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 2059 of 2003

DUNCAN DAVIS (SALES) PTY LTD	Plaintiff
V
ANDREW DAVIS	Defendant

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 and 2 April 2008
DATE OF JUDGMENT:	24 April 2008
CASE MAY BE CITED AS:	Duncan Davis (Sales) Pty Ltd v Davis
MEDIUM NEUTRAL CITATION:	[2008] VSC 127

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PRACTICE – Action against former employee for account of moneys received and damages – Security for costs – Refused by master – Appeal – Whether the time for appeal should be extended in respect of an order of the master allowing further materials in security application; extension refused – Whether special leave should be granted to enable the plaintiff to rely on an affidavit not before the master; leave granted – Appeal dismissed – Supreme Court (General Civil Procedure) Rules 2005, O 77.05(7)(b).

PRACTICE – Application to amend defence and counterclaim – Departure from existing defence – Death of a witness - Prejudice to plaintiff – Amendment allowed.

ACCOUNT – Application by plaintiff that prior to trial an account be taken of defendant’s disposition of moneys received on behalf of the plaintiff in the course of his employment – Refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R C Gillard QC and S J Minahan	Hicks Oakley Chessell Williams
For the Defendant	Mr I D Martindale SC and Mr R N Cameron	Eggleston Mitchell

HIS HONOUR:

The claim in this proceeding is essentially simple and straightforward yet the costs already incurred and predicted to be incurred if the case proceeds to trial are of Everest proportions and tend to reflect litigation out of control. The plaintiff, David Davis (Sales) Pty Ltd carries on the business of the manufacture of smallgoods. The defendant, Andrew Maxwell Davis, was a director and employee of the plaintiff between July 2000 and 14 August 2003 when he was summarily dismissed by his fellow directors who were his mother Patricia Joan Davis and his brother Matthew Robert Alfred Davis.

It is important to note that Patricia died in December 2006. Her place as a director has been taken by her daughter Allison Joan Davis, a sibling of Matthew and Andrew.

The business conducted by the plaintiff had originally been conducted by Patricia and her late husband Max, although not by way of the plaintiff which conducts the business as trustee of the Duncan Davis Unit Trust.

The proceeding was commenced by writ on 9 September 2003. The writ was endorsed with a statement of claim. The case is that in the course of his employment the defendant sold products of the plaintiff for which he received payment from the purchasers thereof but did not account to the plaintiff for the full amount received. Put simply, it is alleged that he enriched himself at the expense of the plaintiff, and in contravention of his duty as a fiduciary and his duty of fidelity. It is alleged that…

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: [2008] VSC 127
Decision Date: 24 April 2008

CaseChat Overview and Summary

Duncan Davis (Sales) Pty Ltd brought a claim against its former employee, Davis, for an account of moneys received and damages. The case was heard in the Supreme Court of New South Wales. The primary legal issues revolved around the security for costs, the timeliness of an appeal, the allowance of an affidavit in the appeal, amendments to the defence and counterclaim, and the accounting of the defendant's disposition of funds.

The court considered whether the appeal against the master's refusal of security for costs should be extended to include the master's subsequent decision to allow further materials in the security application. The court held that the time for the appeal should not be extended as the plaintiff had not demonstrated any exceptional circumstances warranting such an extension. However, special leave was granted to allow the plaintiff to rely on an affidavit not before the master, facilitating a more comprehensive appeal. Ultimately, the appeal was dismissed as the court found no grounds for overturning the master's decisions.

In another aspect of the case, the plaintiff sought an amendment to the defence and counterclaim, which the court allowed despite the departure from the existing defence. The court reasoned that the death of a witness did not prejudice the plaintiff, and the amendment was necessary for the fair presentation of the case. Additionally, the plaintiff's application for an account of the defendant's disposition of funds prior to trial was denied by the court, which found that such an account was not required at that stage of the proceedings.

Orders