HEEDES -v- TELSTRA CORPORATION LTD [2001] WASC 297

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASC 297
Case No:	CIV:1458/2000	Heard:	1 NOVEMBER 2001
Coram:	MASTER SANDERSON	Delivered:	14/11/01
No of pages:	17	Judgment Part:	1 of 1
Result:	Statement of claim struck out Judgment for defendant
Category:	A
PDF Version

Parties:	ARTHUR SAMUEL HEEDES TELSTRA CORPORATION LTD (ACN 051 775 556)
Catchwords:	Practice and procedure Duty of care as between party contracting with company and shareholder Reflective loss Right of shareholder to claim independent of claim by company
Legislation:	Nil
Case References:	Brunninghausen v Glavanics (1999) 46 NSWLR 538 Christensen v Scott [1996] 1 NZLR 273 Johnson v Gore Wood & Co [2001] 2 WLR 72 Lee v Sheard [1956] 1 QB 192 Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 176 ALR 411 Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204 Gould v Vaggelas (1985) 157 CLR 215 Nestegg Holdings Pty Ltd v Smith [2001] WASC 227

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : HEEDES -v- TELSTRA CORPORATION LTD [2001] WASC 297 CORAM : MASTER SANDERSON HEARD : 1 NOVEMBER 2001 DELIVERED : 14 NOVEMBER 2001 FILE NO/S : CIV 1458 of 2000 BETWEEN : ARTHUR SAMUEL HEEDES

Plaintiff

AND

TELSTRA CORPORATION LTD (ACN 051 775 556)

Defendant

Catchwords:

Practice and procedure - Duty of care as between party contracting with company and shareholder - Reflective loss - Right of shareholder to claim independent of claim by company

Legislation:

Nil

Result:

Statement of claim struck out

Judgment for defendant

(Page 2)

Category: A

Representation:

Counsel:

Plaintiff : Mr M J McPhee

Defendant : Mr C B Edmonds SC

Solicitors:

Plaintiff : Michell Sillar McPhee

Defendant : Mallesons Stephen Jaques

Case(s) referred to in judgment(s):

Brunninghausen v Glavanics (1999) 46 NSWLR 538
Christensen v Scott [1996] 1 NZLR 273
Johnson v Gore Wood & Co [2001] 2 WLR 72
Lee v Sheard [1956] 1 QB 192
Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 176 ALR 411
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204

Case(s) also cited:

Gould v Vaggelas (1985) 157 CLR 215
Nestegg Holdings Pty Ltd v Smith [2001] WASC 227

(Page 3)

1 MASTER SANDERSON: This is the defendant's application to strike out the plaintiff's substituted statement of claim. On 23 August 2001 I dealt with an earlier strike out application brought by the defendant. That application was successful and although the defendant sought an order that the action be dismissed I was satisfied the plaintiff should be afforded the opportunity to replead. The defendant says that the substituted statement of claim contains all the faults and failings of the earlier pleading, perhaps even more so. The defendant again seeks an order not only that the substituted statement of claim be struck out but that the action be struck out and judgment be entered for the defendant.

2 The plaintiff's claim can be summarised in this…

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: [2001] WASC 297
Decision Date

CaseChat Overview and Summary

In Heedes v Telstra Corporation Ltd, the plaintiff, Arthur Samuel Heedes, sought damages against the defendant, Telstra Corporation Ltd, for alleged negligence in the installation of telephone lines at Toolwise Pty Ltd, a company of which Heedes was the sole shareholder and managing director. The Supreme Court of Western Australia was tasked with deciding whether a duty of care existed between Heedes and Telstra, and if so, whether Heedes could claim damages independent of those recoverable by Toolwise Pty Ltd. The court found that no duty of care arose between Heedes and Telstra, and that the losses claimed by Heedes were reflective of those that Toolwise Pty Ltd could have claimed. The court held that Heedes could not recover losses that were merely a reflection of the company's losses. Following the English authority, particularly the House of Lords decision in Johnson v Gore Wood & Co, the court concluded that Heedes' claim was barred as it sought to recover reflective loss, which could only be claimed by the company. The court struck out the statement of claim and entered judgment in favour of Telstra.

Orders