Innovateq Australia Pty Ltd v Barnes - [2017] VSC 16

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
EMPLOYMENT AND INDUSTRIAL LIST

S CI 2015 06404

INNOVATEQ AUSTRALIA PTY LTD (ACN 609 748 674) ATF THE INNOVATEQ UNIT TRUST	Appellant
v
ROSS BARNES & ORS (in accordance with the attached Schedule)	Respondents

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 December 2016
DATE OF JUDGMENT:	3 February 2017
CASE MAY BE CITED AS:	Innovateq Australia Pty Ltd v Barnes & Ors
MEDIUM NEUTRAL CITATION:	[2017] VSC 16 First Revision 3 February 2017

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APPEAL – Appeal from order of Associate Justice summarily dismissing proceeding – Whether appellant had real prospect of establishing that its predecessor as trustee of unit trust entered into the contract of employment in the administration of the trust – Whether chose in action vested in appellant upon its appointment as trustee – Whether vesting order pursuant to s 51 of the Trustee Act 1958 a pre-condition to appellant having standing to sue – Application to admit further evidence on appeal – Appellant failed to establish any error in decision of Associate Justice – Appeal dismissed – Civil Procedure Act 2010 ss 62, 63 – Property Law Act 1958 s 134 – Trustee Act 1958 ss 3, 45, 51, 58 – Supreme Court (General Civil Procedure) Rules 2015 r 77.06.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr T North QC with Mr D W Laidlaw	Stenta Legal
For the Fifth to Seventh Respondents	Mr P O’Grady QC with Mr E A Gisonda	Hall & Wilcox

HIS HONOUR:

On 14 October 2016, pursuant to ss 62 and 63 of the Civil Procedure Act 2010, Ierodiaconou AsJ ordered the summary dismissal of the appellant’s claim against the fifth to seventh respondents. Her Honour also ordered that the appellant pay the respondents’ costs of the proceeding on a standard basis, to be taxed in default of agreement. The appellant filed a notice of appeal in respect of the orders on 27 October 2016. I have determined that the appeal should be dismissed.

The central issue in this appeal is whether the appellant has established that Ierodiaconou AsJ erred in concluding that the appellant had no real prospect of establishing that a contract of employment between Innovateq Pty Ltd (‘Innovateq’) and the fifth respondent, Mr Daniel Phillips:

(i) was entered into by Innovateq in its capacity as trustee of the Innovateq Unit Trust (‘IUT’);

(ii) that any right of Innovateq arising under the contract to sue Mr Phillips was trust property; and

(iii) that upon the appellant’s appointment in lieu of Innovateq as trustee of the IUT on 16 December 2015, any chose in action constituted by Innovateq’s right to sue Mr Phillips for breaches of contractual and fiduciary duties vested in the appellant.

The appellant has not established that Ierodiaconou AsJ erred in making the findings set out above. However, even if the contract of employment with Mr Phillips had been entered into by Innovateq in the administration of the…

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: [2017] VSC 16
Decision Date: 3 February 2017

CaseChat Overview and Summary

Innovateq Australia Pty Ltd brought an appeal against the decision of an Associate Justice who had summarily dismissed its proceeding. The dispute centred on whether the appellant, as the successor trustee of a unit trust, had a real prospect of establishing that its predecessor had entered into a contract of employment in the administration of the trust. Additionally, the court had to determine if the chose in action had vested in the appellant upon its appointment as trustee and if a vesting order under section 51 of the Trustee Act 1958 was a pre-condition to the appellant having standing to sue. The appellant also sought to admit further evidence on appeal, arguing it had not established any error in the decision of the Associate Justice.

The court considered whether the appellant had demonstrated a real prospect of proving that its predecessor entered into the employment contract while administering the trust. It also assessed if the chose in action had vested in the appellant upon its appointment as trustee and if a vesting order was necessary under section 51 of the Trustee Act 1958 for the appellant to have standing. The court found that the appellant had failed to establish any error in the Associate Justice's decision. The court held that the appellant did not have a real prospect of success on the merits of its claims and that the application to admit further evidence was not warranted.

The appeal was dismissed. The court concluded that the appellant had not demonstrated any error in the Associate Justice's decision and did not have a real prospect of success on its claims. The court found that the appellant had not established that a vesting order was a pre-condition to having standing to sue. The orders of the Associate Justice were affirmed, and the appeal was dismissed with costs.

Orders