Entwisle v Minken Pty Ltd - [2015] VSC 561

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S CI 2013 1111

TIMOTHY JOHN ENTWISLE & ORS	Plaintiffs
v
MINKEN PTY LTD & ORS	Defendants

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 August 2015
DATE OF RULING:	13 October 2015
CASE MAY BE CITED AS:	Entwisle & ors v Minken Pty Ltd & ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 561	First Revision 20/10/15

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CORPORATIONS – Application for leave to proceed with counterclaim against companies in liquidation – s 471B of the Corporations Act 2001 (Cth) – Whether there is a serious question to be tried – Whether there is a sufficient foundation for proposed counterclaim – Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550 – Commissioner for Consumer Protection v Unleash Solar (in liq) Pty Ltd [2001] FCA 348 – Test satisfied – Leave to proceed granted.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiffs

D V Aghion of counsel
C R Brown of counsel

Kyard Business Law

For the First to Fourth Defendants

The Fifth Defendant appeared in person

J D Barber of counsel

Russell Kennedy

HIS HONOUR:

Introduction

By interlocutory process filed on 24 April 2015 in this proceeding (‘winding up proceeding’), Dr Timothy Entwisle seeks leave to proceed with his counterclaim in proceeding S CI 2013 0330 (‘lease proceeding’) against the First to Fourth Defendants by counterclaim: Control Group Services Pty Ltd, Deer Park Holdings Pty Ltd, Minken Pty Ltd and Henton Pty Ltd.[1] As these companies are in liquidation, Dr Entwisle requires leave to proceed pursuant to s 471B of the Corporations Act 2001 (Cth) (‘Act’).
[1]Referred to individually as ‘Control Group’, ‘Deer Park’, ‘Minken’ and ‘Henton’.

In support of the application, Dr Entwisle relies on two affidavits of his solicitor, Mr Tony Caillard, sworn on 24 April 2015 and 16 June 2015 respectively, and his own affidavit, sworn 3 September 2013.

The liquidators for the First to Fourth Defendants (‘Liquidators’) oppose the application. They rely on an affidavit of their solicitor, Mr Damian Neylon, sworn on 25 June 2015.[2]
[2]Mr Ian McGoldrick, the Fifth Defendant in the winding up proceeding and the Fifth Defendant by Counterclaim in the lease proceeding, also filed an affidavit sworn 6 July 2015. In Court, Mr McGoldrick, who represented himself, stated, correctly in my view, that he thought the application ‘more of an issue between the liquidator and Entwisle’s interests.’ Accordingly, for present purposes I have confined my attention to the materials filed on behalf of Dr Entwisle and the Liquidators.

Background facts

The winding up proceeding arose as a consequence of a failed joint venture conducted, in effect, as a quasi-partnership between Mr McGoldrick and Dr Entwisle through corporate entities.

Due to a breakdown of the relationship between Mr McGoldrick and Dr Entwisle, Dr Entwisle (and his associated companies) sought to have the joint venture companies, being the First to Fourth Defendants by counterclaim in the lease proceeding (‘property development companies’), wound…

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: [2015] VSC 561
Decision Date: 13 October 2015

CaseChat Overview and Summary

In Entwisle v Minken Pty Ltd, the plaintiff, Entwisle, sought leave to proceed with a counterclaim against Minken Pty Ltd, which was in liquidation, as well as its related companies, Vagrand Pty Ltd and Vagrand Pty Ltd (in liq), following a primary proceeding. The plaintiff's request to proceed with the counterclaim was based on allegations of misleading and deceptive conduct, breach of statutory duty and unconscionable conduct under the Australian Consumer Law. The court was tasked with determining whether there was a serious question to be tried and whether there was a sufficient foundation for the proposed counterclaim.

The court reviewed the criteria for granting leave to proceed with a counterclaim under section 471B of the Corporations Act 2001 (Cth), which requires that there be a serious question to be tried and a sufficient foundation for the proposed counterclaim. The court examined the cases of Vagrand Pty Ltd (in liq) v Fielding and Commissioner for Consumer Protection v Unleash Solar (in liq) Pty Ltd to determine whether the test had been satisfied. It was noted that the plaintiff had provided a sufficient foundation for the proposed counterclaim and that there was a serious question to be tried.

Following the review of the relevant criteria and authorities, the court found that the plaintiff had met the requirements for leave to proceed with the counterclaim. The court granted leave to proceed with the counterclaim, allowing the plaintiff to pursue the allegations of misleading and deceptive conduct, breach of statutory duty and unconscionable conduct against the companies in liquidation and their related entities. The court's decision was based on the evidence provided and the applicable legal principles.

The court ordered that leave be granted to the plaintiff to proceed with the counterclaim against the companies in liquidation and their related entities. The plaintiff was permitted to pursue the claims of misleading and deceptive conduct, breach of statutory duty and unconscionable conduct as outlined in the Australian Consumer Law. The defendants were required to respond to the counterclaim within the specified timeframe, and the matter was listed for further directions.

Orders