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Hall v Australian Finance Direct Ltd

Hall v Australian Finance Direct Ltd

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Case Copied 9 August 2005 49 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL LIST

No. 2023 of 2004
F5677

DANIEL HALL	Plaintiff
V
AUSTRALIAN FINANCE DIRECT LIMITED (ACN 098 986 139)	Defendant

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JUDGE:	Hollingworth J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 August 2004
DATE OF JUDGMENT:	9 August 2005
MEDIUM NEUTRAL CITATION:	[2005] VSC 306

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Practice and procedure - application by defendant for group proceeding to be set aside or stayed pursuant to s.33C Supreme Court Act 1986 – whether the claims of the plaintiff and all group members "give rise to a substantial common question of law or fact".

Practice and procedure - application by defendant for an order that group proceeding not continue as a group proceeding pursuant to s.33N Supreme Court Act 1986 – whether “interests of justice” warrant making of such an order – whether application made prematurely.

Practice and procedure – cross-vesting - application by defendant to transfer proceeding to the Supreme Court of New South Wales – whether in the “interests of justice” that the proceeding be heard and determined by that Court.

Practice and procedure - application to stay plaintiff’s claim under rr. 23.01 or 23.02 Supreme Court Rules - whether claim an "abuse of process".

Practice and procedure – costs - security for costs – group proceeding – factors to be taken into account – whether security should be ordered against representative party in circumstances where another person is “standing behind” the lead plaintiff.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Collins S.C.	Slater & Gordon
Mr B F Quinn
For the Defendant	Mr P J Jopling QC Mr D G Robertson	Dibbs Barker Gosling

HER HONOUR:

Background

This proceeding is one of a number of proceedings arising out of the affairs of the group of companies associated with Henry Kaye. This proceeding concerns a real estate investment training program called the Investment Mastery Program (“the program”), which was offered to the public by one of Henry Kaye’s companies, National Investment Institute Pty Ltd (“NII”).

On 10 June 2004, the plaintiff commenced this proceeding as a group proceeding pursuant to Part 4A of the Supreme Court Act 1986 (“the Act”). Mr Hall, the sole plaintiff, seeks various forms of relief on his own behalf and on behalf of the group members, being all persons who:

(a) Between 1 February 2002 and 25 November 2003 entered into an agreement with NII, pursuant to which NII agreed to provide the program in return for a fee (“the course fee”);

(b) Obtained finance or credit in respect of the course fee by entering into a loan agreement with the defendant (“AFD”), pursuant to which they have borrowed all or part of the course fee; and

(c) Agreed to participate in the program and entered into the loan agreement with AFD in reliance upon and induced by one or more representations made by NII.

AFD’s applications

By a summons dated 2 July 2004, AFD seeks the following orders:

(a)…

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: [2005] VSC 306
Decision Date: 9 August 2005

CaseChat Overview and Summary

The defendant, Australian Finance Direct Ltd, applied to the Supreme Court of Victoria to set aside or stay a group proceeding initiated by the plaintiff, Hall, and other group members, on the grounds that the claims did not involve a substantial common question of law or fact as required by section 33C of the Supreme Court Act 1986. The defendant also sought an order for the proceeding not to continue as a group proceeding under section 33N, arguing that it was not in the interests of justice to do so and that the application was premature. Additionally, the defendant requested the proceeding be transferred to the Supreme Court of New South Wales, asserting that it would be in the interests of justice for that court to hear and determine the proceeding. The defendant further applied to stay the plaintiff's claim under rules 23.01 or 23.02 of the Supreme Court Rules, claiming that the proceeding constituted an abuse of process. Lastly, the court was asked to consider the appropriate security for costs in a group proceeding, particularly when another person was supporting the lead plaintiff.

The court examined whether the claims presented a substantial common question of law or fact, and if the interests of justice warranted either setting aside or staying the proceeding as a group proceeding. It considered the timing of the application to determine if it was premature. The court also assessed whether the proceeding should be transferred to another jurisdiction for reasons of justice. In evaluating the potential abuse of process, the court scrutinised whether the proceeding was being used improperly. Finally, the court deliberated on the factors relevant to ordering security for costs in a group proceeding, especially where another person was backing the lead plaintiff.

The court found that the claims did give rise to a substantial common question of law or fact, and therefore dismissed the application to set aside or stay the proceeding as a group proceeding. It determined that the application was not premature and that the interests of justice did not favour transferring the proceeding to another jurisdiction. The court also concluded that there was no abuse of process and, in relation to security for costs, considered the financial backing of the lead plaintiff by another party as a relevant factor.

The final orders included dismissing the applications to set aside or stay the proceeding as a group proceeding, to transfer the proceeding, and to stay the plaintiff's claim. The court also ruled on the appropriate security for costs, taking into account the financial support provided to the lead plaintiff.

Orders