Girgis v Poliwka [No 6]

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   GIRGIS -v- POLIWKA [No 6] [2019] WASC 230

CORAM:   VAUGHAN J

HEARD:   11 MARCH - 3 APRIL 2019

DELIVERED          :   2 JULY 2019

FILE NO/S:   CIV 2425 of 2014

BETWEEN:   SHERIF ELHAMY WADIE GIRGIS

First Plaintiff

GIRGIS NOMINEES (WA) PTY LTD

Second Plaintiff

AND

WASIL NICHOLI POLIWKA

First Defendant

POLIWKA GROUP PTY LTD

Second Defendant

FIRST WESTERN ADMINISTRATION PTY LTD

Third Defendant


Catchwords:

Trade practices - Misleading or deceptive conduct - Whether defendants engaged in misleading or deceptive conduct over course of adviser / advisee relationship - Alleged oral representations - Proof of oral representations and advice as to due diligence - Whether adequate due diligence conducted by defendants - Turns on own facts

Trade practices - Misleading or deceptive conduct - Whether conduct of first defendant was conduct engaged in on behalf of the second and third defendants - Whether conduct as representative or for second and third defendants or in the course of second and third defendants' business, affairs or activities - Turns on own facts

Tort - Negligent misstatement - Adviser / advisee relationship between first plaintiff and first defendant - Whether first defendant owed a duty of care in advising the plaintiffs in relation to the investment of money or alternatively investment of money in and managing investments of real estate - Whether known reliance or dependence or assumption of responsibility or combination - Whether first defendant breached duty to exercise reasonable care, skill and diligence in advising the plaintiffs on various investments - Whether plaintiffs contributorily negligent - Turns on own facts

Corporations law - Whether in making representations and advising the plaintiffs the defendants were carrying on a business of providing financial services in contravention of s 911A of the Corporations Act 2001 (Cth) - Whether defendants' advice financial product advice -Turns on own facts

Contract law - Written agency agreement between second plaintiff and second defendant - Concurrent duty - Whether second defendant breached express term of obligation to conduct due diligence and use best endeavours - Turns on own facts

Contract law - Contract formation - Whether oral agreement between shareholders - Whether agreement inferred from conduct - Whether parties agreed to make equal contributions to jointly owned entity - Whether term implied into shareholder agreement  - Whether breach of implied term by plaintiffs - Whether reasonable notice required to terminate agreement - Turns on own facts

Damages - Assessment of damages - Assessing diminution of plaintiffs' economic position - Advances made by plaintiffs - Turns on own facts

Legislation:

Australian Consumer Law (WA), s 18
Australian Consumer Law s 18
Australian Securities and Investments Commission Act 2001 (Cth), 12DA
Corporations Act 2001 (Cth), 911A
Fair Trading Act 1987 (WA), s10
Trade Practices Act 1974 (Cth), s 52

Result:

Plaintiffs' claim allowed in part
Counterclaim allowed in part

Category:    B

Representation:

Counsel:

First Plaintiff : D H Solomon
Second Plaintiff : D H Solomon
First Defendant : C Chenu & N van…
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Details
Case
[2019] WASC 230
Decision Date

CaseChat Overview and Summary

Girgis v Poliwka [No 6] involved a legal dispute between the plaintiffs, Girgis, and the defendants, Poliwka. The plaintiffs alleged that the defendants engaged in misleading or deceptive conduct in the course of an adviser-advisee relationship. The case covered several legal issues including whether the defendants' conduct amounted to misleading or deceptive conduct under the Trade Practices Act, whether the conduct of the first defendant was on behalf of the second and third defendants, whether the first defendant owed a duty of care to the plaintiffs, and whether the defendants breached a written agency agreement and implied terms in a shareholder agreement. The court also considered whether the defendants were carrying on a business of providing financial services in contravention of the Corporations Act and the assessment of damages.

The court addressed these issues by examining the evidence and applying relevant legal principles. It considered whether the plaintiffs had proven the alleged oral representations, whether the defendants conducted adequate due diligence, and whether the first defendant's conduct was on behalf of the second and third defendants. The court also assessed whether the first defendant owed a duty of care to the plaintiffs, whether the defendants breached their contractual obligations, and whether the plaintiffs were contributorily negligent. The court examined the statutory and common law principles relevant to each issue, including the statutory purpose of section 280(2) of the Supreme Court Act 1935 (WA) concerning special costs orders.

The court found that the plaintiffs' claim was allowed in part and the defendants' counterclaim was also allowed in part. The specific findings and orders made by the court were detailed in the judgment, addressing each of the legal issues raised by the parties.

The final orders of the court were that the plaintiffs' claim was allowed in part and the defendants' counterclaim was allowed in part, reflecting the court's findings on the various legal issues presented.

Orders

Orders of the court

Plaintiffs' claim allowed in part

Counterclaim allowed in part

Background

Background to the litigation

Full text does not contain this section.

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

In principle I see no reason why such an order cannot be made. Section 280(2) is concerned with whether the costs allowable in respect of a 'matter' is inadequate and whether the inadequacy arises because of the unusual difficulty, complexity or importance of the 'matter'. The 'matter' is the matter in respect of which legal services were provided.[1057] Consideration is given to the dispute as a whole. Whether the two integers under s 280(2) are satisfied is not determined having regard to the issues on which the party seeking a special order won or lost. All the more so it is not determined by concluding that there were issues on which a party failed that justify apportionment as to costs. If it were otherwise the power provided by s 280(2) would be unjustifiably circumscribed. Section 280(2) would not be able to fulfil its statutory purpose of facilitating the operation of the general principle that a successful party is entitled to its costs of the litigation. Neither the text nor the purpose of s 280(2) justify limiting the power to make a special costs order such that the order is excluded where a party is awarded only a proportion of its overall costs.[1057] Electricity Generation and Retail Corporation trading as Synergy v Woodside Energy Ltd [2014] WASC 469 (S) [8], [10] - [11]. In practical terms an order that the successful party only recover a portion of its costs will appropriately adjust costs entitlements as between the paying and receiving parties should a special costs order be made under s 280(2)(c) to remove limits. It should also be remembered that there is a residual discretion as to whether to make an order under s 280(2). If the qualifying conditions in s 280(2) are met the court 'may' do all or any of the things listed in sub-paragraphs (a) to (d). Accordingly, in a particular case it may be that the reasons a party is awarded only a proportion of its overall costs militate against any order under s 280(2). In the latter respect I should record that counsel for the plaintiffs submitted that once the integers under the chapeau to s 280(2) were met there was no residual discretion. According to counsel for the plaintiffs, the court must then make one of the orders under s 280(2)(a) to (d). I reject that submission. It is contrary to authority.[1058] Putting aside prior authority, the use of the word 'may',[1059] coupled with the fact that it is well-established that powers granted to a court as to costs confer a broad discretion to be exercised judicially,[1060] compel the conclusion that satisfaction of the qualifying conditions in the chapeau to s 280(2) simply enlivens a discretion as to whether or not to make one or more of the orders as specified in sub-paragraphs (a) to (d). There is a residual discretion as to whether to make a special costs order once the party seeking the order establishes the things provided for under s 280(2).[1058] Cockburn Cement Ltd v The Minister for the Environment (WA) [2011] WASC 260 (S) [60] - [61].[1059] See Interpretation Act 1984 (WA), s 56(1).[1060] See eg Strzelecki Holdings Pty Ltd v Jorgensen[48].