Earth Capital Pty Ltd v Wentworth Global Capital Finance Pty Ltd
[2016] NSWSC 1814
•09 December 2016
Supreme Court
New South Wales
Medium Neutral Citation: Earth Capital Pty Ltd v Wentworth Global Capital Finance Pty Ltd [2016] NSWSC 1814 Hearing dates: 9 December 2016 Decision date: 09 December 2016 Jurisdiction: Equity Before: Stevenson J Decision: The proceedings be transferred to the District Court of NSW pursuant to s 146 of the Civil Procedure Act 2005 (NSW)
Catchwords: PRACTICE AND PROCEDURE – where plaintiff’s claim for $200,000 – where plaintiff seeks to have proceedings transferred to the District Court – where defendants resist application by reason of other proceedings in this Court said to arise from similar facts - where defendants not prepared to give undertakings to protect plaintiff from adverse Costs implications of remaining in this court Legislation Cited: Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)Category: Procedural and other rulings Parties: Earth Capital Pty Limited (Plaintiff/Applicant)
Wentworth Global Capital Finance Pty Limited (First Defendant/Respondent)
Scott Terrence Griffin (Second Defendant/Respondent)
Ian James Gebbie (Third Defendant/Respondent)
Cashel Financial Services Pty Limited (Fourth Defendant/Respondent)
Brad Mason (Fifth Defendant/Respondent)Representation: Counsel:
Solicitors:
C P O’Neill (Plaintiff/Applicant)
A Horvath (Fourth and Fifth Defendants/Respondents)
Peterson Haines (Plaintiff/Applicant)
William James Law (First, Second and Third Defendants/Respondents)
Norton Rose Fulbright (Fourth and Fifth Defendants/Respondents)
File Number(s): SC 2016/74565
EX TEMPORE Judgment (REVISED)
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The plaintiff, Earth Capital Pty Ltd, commenced these proceedings on 9 March 2016 seeking relief relating to a loan of $200,000 it made to FHC Investment Pty Ltd.
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FHC Investment was, at the time, acting as trustee for the FHC Investment Unit Trust. The loan was advanced in connection with the acquisition by FHC of a coal mine known as "Fair Hill Coking Coal". The venture failed and FHC was wound up on 4 February 2016.
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The defendants are Wentworth Global Capital Finance Ltd as the first defendant and two of its then directors, Mr Scott Griffin, the second defendant, and Mr Ian Gebbie, the third defendant. Cashel Financial Services Pty Ltd is the fourth defendant. The fifth defendant was its then authorised representative Mr Brad Mason.
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Earth Capital claims that it cannot recover its loan from FHC and that it is entitled to damages from the defendants because:
Mr Mason and thereby Cashel made misleading or deceptive representations, including as to the circumstances of the proposed loan and FHC generally, which representations induced Earth Capital to make the loan;
Wentworth, Mr Griffin and Mr Gebbie were knowingly involved in that misleading or deceptive conduct;
Mr Mason, and thereby Cashel, owed a duty to the plaintiff to "take positive steps to avoid [it] incurring any economic loss" concerning the loan and acted in breach of that duty; and
Cashel was in breach of the corresponding contractual duty.
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By notice of motion filed on 27 July 2016, Earth Capital seeks an order that the proceedings be transferred to the District Court of New South Wales upon the basis that its claim is within that Court's jurisdiction and is for a sum very much less than is customarily litigated in this Court.
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Taken alone, the application would appear to be irresistible.
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The defendants resist the application because, in this Court, they are being sued in four other proceedings (“the Related Proceedings”) also arising out of the collapse of the FHC venture. There is a sixth defendant in those proceedings, Wentworth Global Securities Pty Ltd, which is sued in relation to a later venture. The same solicitors are acting for each of the plaintiffs in the Related Proceedings and the same solicitors act for the defendants in each of those proceedings.
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The Related Proceedings have been travelling together in the General List. So far, there has been no order that they be heard together or that evidence in one be evidence in the other. However, it seems probable, if not certain, that the cases will be heard together or at least in a closely sequential fashion.
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The allegations made by the plaintiffs in the Related Proceedings are, to some extent, similar to those made by Earth Capital in these proceedings in that they arise out of monies advanced or subscribed in relation to the FHC venture. The particular allegations made in each case are, of course, different and each case will, to some extent, turn on its own facts.
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Earth Capital contends that its case is relatively simple and is likely to take only two days. Before me there was a dispute about that contention. I do not feel that I am in any position to make any assessment as to how long Earth Capital's case will take if heard alone. But it is obvious that the time required for the hearing of Earth Capital's case, if it is to be heard in conjunction with the Related Proceedings, will be considerably more than the time that will be required if Earth Capital's case was to be heard alone.
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In those circumstances, Earth Capital is concerned about the cost consequences of it being required to run its case along with the Related Proceedings.
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Those consequences include the assessment of costs in the event that Earth Capital is unsuccessful, the cost consequences of Uniform Civil Procedure Rules 2005 (NSW) r 42.34 (as Earth Capital does not seek and seems to have no prospect of recovering damages in excess of $500,000) and the inevitability that, regardless of the outcome of the case, it will incur more irrecoverable costs in a joint hearing than in a stand-alone hearing.
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To some extent, those concerns are met by the defendants’ offer, made in correspondence in September 2016, that they would not seek to rely upon UCPR r 42.34. I accept the submission of the defendants that if Earth Capital was compelled to prosecute its proceedings along with Related Proceedings and was successful, it seems unlikely that a trial judge would refuse to make any costs orders in its favour simply because it recovered less than $500,000.
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However, in relation to the other costs concerns, I do see substance in them.
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For that reason I inquired of the defendants as to whether they were prepared to offer the Court any undertakings concerning Earth Capital's costs.
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One such undertaking could be to submit that such order as the Court thought appropriate to compensate Earth Capital for any extra costs it incurred prosecuting its claim by reason of being required to do so concurrently with the Related Proceedings. I do not mean to suggest that the defendants are under any obligation to give such an undertaking. But it occurred to me that the giving of such an undertaking, or the refraining from giving an undertaking, could be relevant to the exercise of my discretion.
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No undertakings were forthcoming. The defendants submitted that the matter should be left to the good sense of the trial judge.
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The defendants also contend that if Earth Capital's case is heard separately from the Related Proceedings there is a danger of inconsistent findings being made by this Court and the District Court. I accept there is some danger that might occur, although I am not in a position to make any confident prediction about that.
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The matter is finely balanced but the factor which persuades me that I should accede to Earth Capital's application that it prosecute its case in the court of its choosing is the fact that the defendants have not offered any undertaking of the kind I have mentioned.
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There is no advantage to Earth Capital in remaining in this Court. I see no advantage to the plaintiffs in the Related Proceedings of Earth Capital's case remaining in this Court. It is only the defendants who would benefit from Earth Capital's application being denied. If they are not prepared to offer any undertaking to protect Earth Capital's position on costs, I am not prepared to deny Earth Capital its application.
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I make the following orders:
That the proceedings be transferred to the District Court of NSW pursuant to s 146 of the Civil Procedure Act 2005 (NSW).
That costs be costs in the cause.
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Decision last updated: 14 December 2016
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