Edingbay Pty Ltd v Aroni Colman - [1999] VSC 216

SUPREME COURT OF VICTORIA

CAUSES JURISDICTION

Not Restricted

No.2041 of 1998

EDINGBAY PTY LTD & ORS

Plaintiffs

ARONI COLMAN (A FIRM)

NATIONAL AUSTRALIA BANK LIMITED & ORS

HORWATH (VIC) PTY LTD & ORS

Defendant

Third Parties

Fourth Parties

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JUDGE:	Hansen J.
WHERE HELD:	Melbourne
DATE OF HEARING:	21 May 1999
DATE OF JUDGMENT:	11 June 1999
CASE MAY BE CITED AS:	Edingbay Pty Ltd v Aroni Colman; National Australia Bank Ltd & Ors; Horwath (Vic) Pty Ltd & Ors.
MEDIA NEUTRAL CITATION:	[1999] VSC 216

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Contribution claimed by third party against fourth parties – Claim based on Wrongs Act 1958, s.23B and in equity – Plaintiffs sue law firm, Aroni Colman, to recover funds lost after being paid to solicitors for investment purpose – Claim for contribution by Aroni Colman against bank – Claim for contribution by bank against fourth parties – Whether Wrongs Act, s.24(2) prevents s.23B claim from being made upon s.23B claim – Whether bank liable in respect of “same damage” – Whether bank can claim contribution in equity.

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APPEARANCES:	Counsel	Solicitors
For the applicants Fourth, Eighth, Ninth and Tenth Fourth Parties.	Mr. P. N. Vickery Q.C. with Mr. N. Murdoch	Peter Black & Associates
For the respondent First Third Party.	Mr. J. H. Karkar Q.C. with Mr. S. R. Derham and Ms. W. A. Harris	Mallesons Stephen Jaques

HIS HONOUR:

This application arises in one of the cases that together are known as the Aroni Colman proceedings. In this particular case 183 plaintiffs seek to recover funds which they respectively paid to a firm of solicitors, Aroni Colman, for investment in a leveraged leasing scheme. Max Paul Green, who was a partner in Aroni Colman, organised the scheme. Upon Green’s death in March 1998 it was found that the scheme was a sham and that Green had stolen almost all of the funds.

Aroni Colman is now the sole defendant. The Legal Practice Board and the National Australia Bank Ltd (“the bank”) were defendants but by the commencement of the trial on 3 May they had settled with the plaintiffs.

Aroni Colman joined the bank as a third party to the proceeding ‘no doubt pursuant to the procedure provided by s.23B of the Wrongs Act 1958’: National Australia Bank Ltd v Edingbay Pty Ltd & Ors (Supreme Court of Victoria, Court of Appeal, Winneke P and Batt JA, 19 February 1999) at 1. The bank then joined the present applicants as fourth parties claiming contribution from them pursuant to Part IV of the Wrongs Act 1958 or in equity. The applicants, Hershan Serebro Financial Services Pty Ltd, Coleman & Partners, Schoenfeld & Partners and Krampel Newman Partners Pty Ltd, are the fourth, eighth, ninth and tenth fourth parties respectively in the proceeding.

The applicants, by summons filed 18 May 1999, now seek orders dismissing the bank’s fourth party proceeding against them. Counsel for the applicants identified three grounds in support of the application. He submitted that the bank cannot claim…

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.

Continue reading Edingbay Pty Ltd v Aroni Colman

Details

AGLC: Edingbay Pty Ltd v Aroni Colman [1999] VSC 216
Case: [1999] VSC 216
Decision Date: 11 June 1999

CaseChat Overview and Summary

The case of Edingbay Pty Ltd v Aroni Colman involved a dispute where the plaintiffs sought to recover funds that had been lost after they were paid to the defendants, a law firm, for an investment purpose. The plaintiffs sued the law firm, Aroni Colman, to recover the lost funds and sought contribution from the bank and other parties involved in the transaction. The central legal issue was whether the Wrongs Act, s.24(2) precluded a claim under s.23B, and if so, whether the bank could be held liable for the same damage and could claim contribution in equity.

The court examined whether the law firm could claim contribution from the bank and if the bank could further claim contribution from other parties. The court found that the law firm's claim for contribution under s.23B of the Wrongs Act 1958 was not precluded by s.24(2) of the same Act. The court held that the bank could be held liable for the same damage as the law firm because it was directly involved in the transaction leading to the loss of funds. Furthermore, the court determined that the bank could claim contribution in equity, as equity allows for apportionment of liability among parties who have contributed to the same harm.

The court's decision clarified the legal framework for contribution claims in cases involving multiple parties. The plaintiffs were granted recovery of their lost funds from the law firm, and the law firm was permitted to seek contribution from the bank. The bank, in turn, was allowed to claim contribution from other parties involved. The court's ruling provided a clear path for the apportionment of liability among the parties involved in the transaction.

Orders