Equititrust Limited v Tucker and Others (No 2)

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SUPREME COURT OF QUEENSLAND

CITATION:

Equititrust Limited v Tucker and Others (No 2) [2019] QSC 248

PARTIES:

EQUITITRUST LIMITED (RECEIVERS AND MANAGERS APPOINTED) ACN 061 383 944 ON ITS OWN ACCOUNT AND AS TRUSTEE OF THE EQUITITRUST PREMIUM FUND
(Plaintiff)
v
DAVID ROBERT WALKER TUCKER
(First Defendant)

TUCKERLOAN PTY LTD ACN 101 109 157 ON ITS OWN ACCOUNT AND AS TRUSTEE OF THE TUCKERLOAN TRUST
(Second Defendant)

DAVID ROBERT WALTER TUCKER and RICHARD TERRICK COWEN, CARRYING ON THE PRACTICE AS PARTNERS UNDER THE NAME TUCKER & COWEN
(Fifth Defendants)

TCS SOLICITORS PTY LTD ACN 610 321 509
(Sixth Defendant)

FILE NO/S:

BS No 7399 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

4 October 2019

DELIVERED AT:

Brisbane

HEARING DATE:

10 and 11 September 2019

JUDGE:

Bowskill J

ORDERS:

1.      The plaintiff has leave to file and serve an Amended Claim in the form annexed to the application filed on 19 June 2019.

2.      The amended application filed on 12 August 2019 by the first defendant, the second defendant and Mr Tucker named as one of the fifth defendants, is dismissed.

3.      Paragraph 1 of the amended application filed on 15 July 2019 by the sixth defendant and Mr Cowen named as one of the fifth defendants, is dismissed.

4.      The parties are to confer with one another, and conduct themselves reasonably and cooperatively, in relation to the matters the subject of Practice Direction 18 of 2018, and the future progress of this proceeding generally, and either provide agreed directions following the close of pleadings, or alternatively cause an application for directions to be made within fourteen (14) days of the close of pleadings, so that such directions can be made by the Court.

The following additional orders will be made, after hearing from the parties as to the appropriate time frames:

5.      On or before [date to be determined] the plaintiff file and serve a further amended statement of claim, addressing the matters referred to in paragraph [134] of these reasons, and any other amendments the plaintiff wishes to make.

6.      On or before [date to be determined] the defendants file and service their defences.

7.      On or before [date to be determined] the plaintiff file and serve its reply.

The matter is listed for further hearing on Wednesday, 9 October 2019 at 2.00 pm to hear from the parties as to the time frames for proposed orders 5, 6 and 7 and as to costs.  If the parties are in agreement as to the time frames, and if no party wishes to contend for costs orders contrary to those foreshadowed in paragraph [162] of these reasons, the parties may submit a draft order by email to my associate, and obviate the need for further appearance.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – GENERALLY – further applications by the defendants to summarily dismiss parts, or all, of the plaintiff’s claim, by striking out parts of the further amended statement…

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Details
Case
[2019] QSC 248
Decision Date

CaseChat Overview and Summary

The case of Equititrust Limited v Tucker and Others (No 2) involves multiple parties and a complex web of claims, primarily centred around allegations of breach of fiduciary duty and breach of statutory duty under the Corporations Act. The dispute is currently being heard in a Queensland court, with the plaintiff, Equititrust Limited, pursuing claims against various defendants, including Tucker, Cowen, and others, relating to alleged breaches of fiduciary and statutory duties. The defendants have sought to strike out parts of the plaintiff's claims, arguing deficiencies in the pleadings and, in some cases, the expiration of limitation periods. The court had to address the defendants' applications to dismiss parts of the plaintiff's claim, either by striking out certain allegations or for summary judgment, before the defendants had filed their defences. Additionally, the plaintiff sought leave to amend its claim to include a new cause of action for damages for breach of a contractual duty, which had previously been pleaded as a breach of fiduciary duty. The limitation period for this new cause of action had expired, necessitating a determination on whether the amendment constituted the addition of a new cause of action and, if so, whether the conditions for leave to add such a new cause of action post-limitation were satisfied.

The legal issues before the court involved the interpretation and application of the relevant rules under the Uniform Civil Procedure Rules 1999 (Qld), particularly rules 171, 293, 371, 376, and 377. The court had to consider whether the defendants' applications to strike out parts of the plaintiff's claim were justified, based on the principles of pleading and the inherent jurisdiction of the court. It also had to determine whether the plaintiff's proposed amendment to add a new cause of action indeed constituted the addition of a new cause of action and, if it did, whether the conditions for leave to amend after the limitation period had expired were met. The court's reasoning involved a detailed examination of the plaintiff's pleadings, the nature of the proposed amendments, and the application of relevant legal principles and precedents.

The court found that the plaintiff was granted leave to file an amended claim, which included the addition of a new cause of action for damages for breach of a contractual duty. The court held that the amendment did not constitute the addition of a new cause of action but rather was an elaboration of facts already pleaded within the existing cause of action. The court also dismissed the defendants' applications to strike out certain parts of the plaintiff's claim, finding that the allegations, while perhaps contentious, were not deficient to the extent that they warranted dismissal at this stage of the proceedings. The court further ordered that the parties confer and provide agreed directions for the future progress of the proceeding, including the filing of further amended statements of claim, defences, and replies.

The final orders of the court included granting the plaintiff leave to file an amended claim, dismissing the defendants' applications to strike out parts of the plaintiff's claim, and directing the parties to confer and provide agreed directions for the future progress of the proceeding. The matter was listed for further hearing to address the proposed time frames for the parties' remaining filings and to determine costs.

Orders

Orders of the court

1. The plaintiff has leave to file and serve an Amended Claim in the form annexed to the application filed on 19 June 2019.

2. The amended application filed on 12 August 2019 by the first defendant, the second defendant and Mr Tucker named as one of the fifth defendants, is dismissed.

3. Paragraph 1 of the amended application filed on 15 July 2019 by the sixth defendant and Mr Cowen named as one of the fifth defendants, is dismissed.

4. The parties are to confer with one another, and conduct themselves reasonably and cooperatively, in relation to the matters the subject of Practice Direction 18 of 2018, and the future progress of this proceeding generally, and either provide agreed directions following the close of pleadings, or alternatively cause an application for directions to be made within fourteen (14) days of the close of pleadings, so that such directions can be made by the Court.

The following additional orders will be made, after hearing from the parties as to the appropriate time frames:

5. On or before [date to be determined] the plaintiff file and serve a further amended statement of claim, addressing the matters referred to in paragraph [134] of these reasons, and any other amendments the plaintiff wishes to make.

6. On or before [date to be determined] the defendants file and service their defences.

7. On or before [date to be determined] the plaintiff file and serve its reply.

The matter is listed for further hearing on Wednesday, 9 October 2019 at 2.00 pm to hear from the parties as to the time frames for proposed orders 5, 6 and 7 and as to costs. If the parties are in agreement as to the time frames, and if no party wishes to contend for costs orders contrary to those foreshadowed in paragraph [162] of these reasons, the parties may submit a draft order by email to my associate, and obviate the need for further appearance.

Background

Background to the litigation

In Borsato v Campbell [2006] QSC 191 McMurdo J (as his Honour then was) said this in relation to the meaning of “cause of action” in r 376(4):“[8] The term ‘cause of action’ was defined in Cooke v Gill as being ‘every fact which is material to be proved to entitle the plaintiff to succeed’, a definition which many judgments have employed in the context of this rule or its equivalent: see eg Allonnor Pty Ltd v Doran per McPherson JA. But it has not been applied literally, for otherwise any new fact to be added to a plaintiff’s case would be treated as raising a new cause of action which required leave in the context of a rule such as r 376(4). So in Allonnor Pty Ltd v Doran for example, there is an indication of what the Court of Appeal in Thomas v State of Queensland subsequently endorsed as a ‘fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended’. The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which a plaintiff’s case is described. Some illustrative guidance is provided by Allonnor Pty Ltd v Doran; Thomas v Queensland and another judgment of the Court of Appeal, Central Sawmilling No 1 Pty Ltd v Queensland. [9] In Allonnor, the plaintiff was employed by the defendant as a delivery driver, and sued for an injury to his back and neck said to have been suffered on a certain date making a certain delivery of furniture. He sought to amend to add a claim for an injury to his shoulder, allegedly caused by another delivery made to a different address but on the same day. McPherson JA ‘doubted whether what was sought to be added by way of amendment really amounts to a new cause of action’ but in any case held that the new cause of action (if any) arose out of substantially the same facts and the amendment should be allowed. His Honour said: ‘On any view of what is pleaded, the plaintiff was, at the end of the day in question, left with physical injury to his body, which resulted from the same cause, which was lifting (whether on one or more than one occasion) in the course of the same employment with the same employer. It is not unreasonable to state it in this way, although admittedly it is to some extent a matter of the level of generality at which the proposition is expressed.’[10]In Thomas v Queensland, the Court of Appeal disallowed an amendment of a case brought by an injured motorcyclist against the State as the authority responsible for the highway on which he was injured. His case was that there was a large amount of soil on the road surface which caused his motorcycle to lose traction and collide with another vehicle. His claim was pleaded originally on the basis that the defendant had been undertaking road works at the scene which had resulted in this soil on the road. He sought to amend to claim that the soil was there because it had been washed from a nearby embankment in a way which was attributable to poor construction of the highway in the first place. The Court held that this was a new cause of action, saying in its joint judgment: ‘The essential elements in a claim for damages for negligence are the duty of care, breach of that duty and injury caused by that breach. Here, although only for one injury an incident is alleged, different duties, different breaches and different causes of injury are now alleged. In our view the effect of the amendment is to include new causes of action.’[11] In Central Sawmilling, the plaintiffs claimed damages for breach of contract, saying that the defendant, the State of Queensland, by three identified written agreements had promised to provide them with certain quantities of timber. They then sought to amend to plead another agreement made between various timber millers, including the plaintiffs, and the defendant by which they were to receive those amounts of timber. That was held to involve a new cause of action.”[126][126] Emphasis added; references omitted.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

There is also a complaint that it is not clear whether [126A] is related to the alleged breach of trust allegations. I do not understand that complaint, as the earlier paragraphs of the FASOC which are identified as the premises ([79] to [101], [105] to [109] and [112] to [112C]) are all in relation to the breach of trust allegations.Allegations of breach of duty under s 183(1) of the Corporations Act The Cowen applicants apply to strike out paragraphs [44A], [49] and [109A] (breaches of s 183 by Mr Tucker), and also [123A] to [123G] and [127F] (allegations of Mr Cowen being knowingly concerned in the breaches by Mr Tucker, and the claim of damage suffered) of the FASOC. The Tucker applicants similarly apply to strike out these paragraphs and also (in relation to the allegations of breach of s 183) the particulars to paragraph [29], and paragraphs [32], [33], [42], [43(a)], [45(b)], [127B] and [127E]. The crux of this part of the plaintiff’s claim against Mr Tucker is that in the course of, and by reason of, acting as a director of Equititrust he came to know the information set out in [44A] (the Tucker Director Information); he was subject to a duty to Equititrust as trustee of the EPF under s 183(1) of the Corporations Act not to make improper use of that information to gain advantage for himself or someone else [49]; by taking advantage of the opportunity to acquire the EPF Loan Book, and the BOSI Debt and Securities, for $2 million (through MS Asia, in which he has a beneficial interest, with Mr Kennedy and Mr Howard), from which he made a profit, he improperly used that information, for the purpose of gaining an advantage for himself, or alternatively for MS Asia, Mr Kennedy or Mr Howard; and so breached the duty owed under s 183(1) [109A]. The applicants make a number of complaints, as follows. Many of the complaints about [44A] are made also in relation to [44B] (which relates to information Mr Tucker is said to have come to know in the course of and by reason of acting as the solicitor for Equititrust). Among other things, [44A] alleges that in the course of and by reason of acting as a director of Equititrust, Mr Tucker came to know “the likely recoverable value of the EPF Loan Book as at 12 October 2011 (as pleaded in paragraph 32 above, including the names and details of the borrowers, the guarantors and the associated securities, pleaded and particularised in paragraph 29 above)” [44A(c)(i)]. At paragraph [32] it is alleged that, “[a]s at 12 October 2011, the amount which Equititrust as trustee of the EPF was likely to recover from the EPF Loan Book was: (a) a sum of up to $35 million; and (b) in any event, substantially more than $2 million”. It is also alleged, in [44A(c)(vi)], that Mr Tucker came to know that “as at 12 October 2011, the debt due to BOSI was $7.8 million (as pleaded in paragraph 43(a) above) (BOSI not having charged any Risk Fee or Overdue Rate despite its entitlement to do so)”. The applicants submit that these two matters (value of the debt owed to BOSI, and that the value of the assets was in excess of $2 million) were in the public domain; and accordingly these two sub-paragraphs should be struck out as untenable, since any confidentiality in the recoverable value had been lost.