In the matter of Waltek Industries Pty Ltd (in liquidation)

[2020] NSWSC 444

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Waltek Industries Pty Ltd (in liquidation) [2020] NSWSC 444
Hearing dates:	Last submissions 30 March 2020
Decision date:	23 April 2020
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Leave granted to amend Statement of Claim.
Catchwords:	PROCEDURE — Application for leave to file Amended Statement of Claim — Adequacy of particulars — Whether Defendants would suffer prejudice.
Legislation Cited:	Civil Procedure Act 2005 (NSW) ss 56-58, 64
Cases Cited:	- Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296
Category:	Procedural and other rulings
Parties:	Waltek Industries Pty Ltd (in liquidation) (First Plaintiff) Jamieson Louttit (Second Plaintiff) Rade Dudurovic (First Defendant) David Nicholas Solomon (Second Defendant) L.G. Solomon Pty Ltd (Third Defendant) Sequent Corporation Pty Ltd (Fourth Defendant)
Representation:	Counsel C A Wilkins (Plaintiffs)   Solicitors: Gillis Delaney Lawyers (Plaintiffs) J Conomos (Second and Third Defendants)
File Number(s):	2018/333808

Judgment

1. By Interlocutory Process filed on 9 March 2020, the Plaintiffs, Waltek Industries Pty Ltd (in liq) (“Waltek”) and Mr Louttit seek leave to amend their Statement of Claim filed 14 November 2018 in accordance with a proposed Amended Statement of Claim annexed to an affidavit dated 9 March 2020 of their solicitor, Mr Hayter. That affidavit refers to the steps taken by the Plaintiffs to seek to obtain the Defendants’ agreement to the proposed Amended Statement of Claim and to correspondence between the parties in that respect.

2. The proposed Amended Statement of Claim includes, in the relief claimed, an amendment to seek a declaration that the First and/or Second Defendants, Messrs Dudurovic and Solomon were officers (in the alternative to as directors) of Waltek and deletes a claim for a declaration that they had breached s 184 of the Corporations Act 2001 (Cth) in respect of certain conduct. Paragraph 81 of the proposed Amended Statement of Claim includes additional particulars of certain allegations. Paragraph 82 of the proposed Amended Statement of Claim includes a reference to the obligations of a third party and of Messrs Dudurovic and Solomon as officers (in the alternative to as directors) of Waltek. Paragraph 83 of the proposed Amended Statement of Claim extends an allegation to the steps taken by those persons as officers (in the alternative to as directors) of Waltek.

3. On 16 March 2020, Gleeson J (then sitting in the Corporations List) directed the parties to file and serve written submissions in relation to the application on the basis that it would be determined on the papers.

4. By his written submissions dated 24 March 2020, Mr Wilkins, who appears for the Plaintiffs, notes that the amendment application is brought under s 64(1)(b) of the Civil Procedure Act 2005 (NSW) which relevantly provides that, at any stage of the proceedings, the court may order that leave be granted to a party to amend any document in the proceedings. The principles applicable to such an order are well established. I am required to exercise my discretion whether to grant that leave having regard to the provisions of ss 56–58 and 64 of the Civil Procedure Act. Section 58 of the Civil Procedure Act requires the court to have regard to the dictates of justice when considering an order for the amendment of a document and requires the court also to have regard to the provisions of ss 56 and 57. Section 56 of the Civil Procedure Act identifies the overriding purpose of the just, quick and cheap resolution of the real issues in the proceedings and s 57 of the Civil Procedure Act requires proceedings to be managed having regard, inter alia, to the just determination of the proceedings. Section 64(2) of the Civil Procedure Act in turn provides that, subject to s 58, all necessary amendments should be made for the purpose of determining the real questions raised by the proceedings.

5. Mr Wilkins points out that the Statement of Claim presently alleges certain conduct of Messrs Dudurovic and Solomon as de facto directors of Waltek and consequential breaches of statutory duties, and submits that it was an oversight that the Plaintiffs did not include alternative allegations that those persons also undertook that conduct and committed those breaches as officers of Waltek, as defined in s 9 of the Corporations Act. As Mr Wilkins points out, the duties set out in ss 180–182 of the Corporations Act are owed by both directors and officers of a company and, in some circumstances, there will be little utility in determining whether a person is a director or an officer of the company, where he or she will owe the same duty in either capacity: Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [49].

6. In submissions in response dated 30 March 2020, Mr Conomos, who appears for Mr Solomon and an associated entity, relies on an affidavit filed 30 March 2020 of a solicitor, Mr Robins, to which I have had regard. Mr Conomos submits that the particulars to paragraph 81 of the proposed Amended Statement of Claim amount to an “impermissible rolled up pleading”, and that those particulars offend the requirements of Part 15 of the Uniform Civil Procedure Rules 2005 (NSW) in respect of particulars, which he summarises at considerable length.

7. Mr Wilkins responds to Mr Solomon’s complaint that the alternative case is not adequately particularised by contending that that case is clear enough. Mr Wilkins also submits that the First and Second Defendants are not prejudiced by the proposed amendments, and that is plainly the case where those amendments rely on the same pleaded facts as the existing Statement of Claim and simply advance an alternative characterisation of the legal consequences of those pleaded facts.

8. It seems to me that there is no real uncertainty in the proposed pleading as to the case that the Defendants have to meet, still less any prejudice to them in the proposed amendments, where they already faced allegations that they were de facto directors of Waltek based on the same pleaded facts, and the proposed particulars do not expand the factual substratum of the case. I note that the matter is listed for further directions on 27 April 2020, although the parties may wish to relist the matter at an earlier date, having regard to the delivery of this judgment.

9. For these reasons, I make the following orders:

1.   Grant leave to the Plaintiffs to amend their Statement of Claim filed on 14 November 2018 in accordance with the document at Annexure “A” of the affidavit of Michael Kevin Hayter sworn 9 March 2020.

2.   The Plaintiffs to pay any costs thrown away by the amendment.

3.   Reserve the costs of and incidental to the motion filed on 9 March 2020.

4.   Liberty to relist the matter on 2 business days’ notice, specifying the relief sought.

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Decision last updated: 24 April 2020