Inform Numbers Australia Pty Ltd v Angelovski

[2015] VSC 591

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2013 1134

BETWEEN

INFORM NUMBERS AUSTRALIA PTY LTD (ACN 110 809 133) (formerly known as FLY PELICAN PTY LTD)	First Plaintiff
and
OTHERS ACCORDING TO THE SCHEDULE
and
LAZO ANGELOVSKI	First Defendant
and
OTHERS ACCORDING TO THE SCHEDULE

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 October 2015
DATE OF JUDGMENT:	27 October 2015
CASE MAY BE CITED AS:	Inform Numbers Australia Pty Ltd & Ors v Angelovski & Ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 591

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PRACTICE AND PROCEDURE – Remedies – Election between remedies – Application for transfer of property from companies in liquidation where earlier judgement for damages against co-defendant awarded – whether alternative or cumulative causes of action – Double recovery – Standing
CORPORATIONS – Stay of proceedings – leave to proceed – Corporations Act 2001 (Cth) s471B

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M J Hoyne	Lennon Mazzeo
For the Defendant	Mr M Biviano	Eales & Mackenzie

HIS HONOUR:

Introduction

1. On 28 October 2014 I ordered that the first defendant (Angelovski) pay the first plaintiff (Inform Numbers) damages in the sum of $1,558,784, and pay the second plaintiff (Excel) compensation in the sum of $24,220.07.  Other orders were made.  I published reasons on the same day.[1]  I will assume familiarity with the Judgment.  Defined terms in the Judgment bear the same meaning.

   [1][2014] VSC 537 (Judgment).

1. Angelovski was a director of both Inform and Excel.  The Judgment arose out of his breach of fiduciary and statutory duty to each of Inform and Excel.  In particular, it was established at trial[2] that Angelovski transferred sums from Excel’s bank account without authority or justification[3], and transferred phone words from Inform to the second and third defendants and others.[4]

   [2]Angelovski did not appear at the trial

   [3]See Judgment at [7].

   [4]See Judgment at [7].

1. The third plaintiff (Corbaleski) was given leave to sue the defendants in the name of Inform.  At the date of the hearing both Inform and Excel were in administration.  Subsequently Orders were made winding up each company.  Accordingly, the trial proceeded only against Angelovski.  As noted, damages and compensation were awarded.  Angelovski has not paid a cent.

1. The plaintiffs seek the following orders —

1.The plaintiff have leave pursuant to s 471B of the Corporations Act 2001 to continue this proceeding against the second and third defendants to the extent required for these orders.

2.Within 7 days of this order the second defendant, by its liquidator Altan Djenab is to take all steps required to transfer to the first plaintiff the phone words identified at exhibit JC42 to the affidavit of James Corbaleski sworn 8 March 2013 and filed in this proceeding (the Corbaleski affidavit).

3.Within 7 days of this order the third defendant, by its liquidator Altan Djenab is to take all steps required to transfer to the first plaintiff the phone words identified at exhibit JC43 of the Corbaleski affidavit.

4.The proceeding otherwise remains adjourned to a date to be fixed for the making of final orders in relation to the matters at paragraph 9(a) to (c) and (e) of the Orders made on 28 October 2014.

1. Although the liquidator of each of the second and third defendants did not oppose the granting of relief, and the matter was effectively a consent matter as between the parties, other than Angelovski, I indicated that I would not make orders unless all parties agreed.  Angelovski did not agree.  He opposed the making of the orders and the matter proceeded on a contested basis.

Standing

1. The first point of contention related to standing.  Angelovski argued that he was affected by the proposed orders, remained a defendant despite the Judgment and Orders, and so was entitled to be heard.

1. The plaintiffs, whilst conceding that the proposed orders affected Angelovski, contended that the application was strictly between the plaintiff and the second and third defendants.

1. I consider that in the circumstances of this case Angelovski does have standing and I permitted his counsel to make submissions.

Section 471B of Corporations Act 2001 (Cth)

1. Angelovski contended that there was no material in support of the application for leave to proceed against the second and third defendants, both of which are in liquidation.

1. The plaintiffs submitted that the context of the case, the nature of the relief sought, and the fact of the Judgment and Orders, provided a sufficient basis to make the application without any further material.  I agree.

Double Recovery and Election

1. The critical submission on the part of Angelovski was to the effect that, in the event that the proposed orders are made, the plaintiffs will have succeeded on alternative remedies.  Having made a choice at trial, it was submitted that a late alternative remedy was not permitted, particularly in light of the fact that it had not been pleaded and claimed and could result in double recovery.

1. The plaintiffs submitted that the remedy as against another party, being the second and third defendants, was cumulative and not alternative and, despite delay, was permitted as long as double recovery did not result thereafter.  The plaintiffs offered to amend their pleadings.

1. In the course of submissions the court was referred to the Privy Council’s decision in Tang Man Sit v Capacious Investments Ltd[5], as authority for the principles governing election between remedies. Lord Nicholls of Birkenhead, who delivered the judgement of their Lordships, stated the relevant pinciples as follows: 

   [5][1996] 1 A.C. 514.

The law frequently affords an injured person more than one remedy for the wrong he has suffered. Sometimes the two remedies are alternative and inconsistent. The classic example, indeed, is (1) an account of the profits made by a defendant in breach of his fiduciary obligations and (2) damages for the loss suffered by the plaintiff by reason of the same breach…

Sometimes the two remedies are cumulative. Cumulative remedies may lie against one person…[o]r there may be cumulative remedies against more than one person…

…Faced with alternative and inconsistent remedies a plaintiff must choose between them. Faced with cumulative remedies a plaintiff is not required to choose. He may have both remedies. He may pursue one remedy or the other remedy or both remedies, just as he wishes. It is a matter for him. He may obtain judgement bor both remedies and enforce both judgements…

…However, once a plaintiff has fully recouped his loss, of necessity he cannot thereafter pursue any other remedy he might have and which he might have pursued earlier… This principle of full satisfaction prevents double recovery.[6]

[6]Ibid, 521-522.

1. I agree with the plaintiffs’ submissions.  The proposed orders against other parties and based on a different cause of action is not alternative but is clearly cumulative and therefore permitted. The prospect of double recovery — which seems remote in this case — is not relevant at this stage although it may become relevant.

1. Accordingly, in my opinion it is entirely appropriate to make the proposed orders.

SCHEDULE OF PARTIES

INFORM NUMBERS AUSTRALIA PTY LTD (ACN 110 809 133) (formerly known as FLY PELICAN PTY LTD)	First Plaintiff
and
EXCEL PHONE WORDS PTY LTD (ACN 111 409 066)	Second Plaintiff
and
JAMES CORBALESKI	Third Plaintiff
and
LAZO ANGELOVSKI	First Defendant
and
TELSMART PTY LTD (ACN 150 320 951) (IN LIQUIDATION)	Second Defendant
and
FACILITY SERVICES PTY LTD (AQCN 102 988 616) (IN LIQUIDATION)	Third Defendant