Islam v Ratul

[2023] NSWSC 1625

Supreme Court

New South Wales

Medium Neutral Citation:

Islam v Ratul [2023] NSWSC 1625

Hearing dates:

25 July 2023

Date of orders:

21 December 2023

Decision date:

21 December 2023

Jurisdiction:

Common Law

Before:

Campbell J

Decision:

(1) Under rule 13.4 Uniform Civil Procedure Rules 2005 (NSW) the proceedings are summarily dismissed;

(2)      The plaintiffs are to pay the defendants costs of the proceedings;

(3)      Any application for a special order for costs is to be made within 14 days of the date of judgment by written submission not exceeding 3 pages in length supported by any necessary affidavit which may be forwarded to the chambers of Campbell J to be dealt with in chambers on the papers. The responding party is allowed a period of a further 14 days to lodge a written submission not exceeding 3 pages in length if the order is opposed.

Catchwords:

CIVIL PROCEDURE — consideration of whether proceedings are frivolous or vexatious — plaintiff unauthorised to institute proceedings on behalf of company in liquidation — abuse of process in as much as multiple proceedings have been brought to ventilate what is in substance the same asserted cause of action

Legislation Cited:

Corporations Act 2001 (Cth)

Uniform Civil Procedure Rules 2005 (NSW) rr 13.4 and 14.28

Cases Cited:

Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665

GR v Secretary, Department of Communities and Justice; GR v Public Guardian [2023] NSWSC 525

Moore v Inglis (1976) 9 ALR 509

Ratul v Islam; In the matter of Australian Real Estate Relation Pty Ltd [2023] NSWSC 78

Category:

Procedural rulings

Parties:

MD Rajibul Islam (First Plaintiff)
Mortgage Plus Australia Pty Ltd (Second Plaintiff)
Abu Ratul (First Defendant)
Expert Finance Pty ltd (Second Defendant)

Representation:

Counsel:
MD Rajibul Islam (First Plaintiff) (self-represented)
R Perla (First and Second Defendant)

Solicitors:
Mitry Lawyers

File Number(s):

2023/80544

JUDGMENT

1. This judgment should be read in conjunction with my first judgment handed down today in companion proceedings, matter number 2023/93964. The proceedings are related and the history of the related proceedings claiming substantially the same relief as set out in that judgment needs to be borne in mind.

2. These proceedings, the companion proceedings, and the body of other litigation, some of which is referred to in the companion judgment, all arise out of the breakdown of the business relationship between Mr Islam and Mr Ratul conducted through Australian Real Estate Relations Pty Ltd (“ARER”), now in liquidation, up until November 2022. The background to the breakdown of the business relationship commenced with the introduction into the business of Mr Ratul’s wife, Ms Farha Diba and her conduct of her profession as a real estate agent through her corporate vehicle, which is not a party to these proceedings, but which Mr Islam says was to his great financial and personal detriment. The second defendant in these proceedings is Mr Ratul’s company. The essence of Mr Islam’s complaint is the diversion of, on his calculation, as much as of 73.3% of total net sales commission generated in the business from ARER to Ms Diba’s company. Whereas the causes of action are put in various ways, principally in negligence, breach of fiduciary duty and of Mr Ratul’s obligations as a director of ARER under the Corporations Act 2001 (Cth), it is obvious that in substance the matters complained are the same as those dealt with, as I said in the companion judgment, by Black J on 10 February 2023 in matter number 2022/32554 ([2023] NSWSC 78). As I pointed out in my companion judgment, in substance the same claims were ventilated in proceedings in the District Court and summarily dismissed by Andronos SC DCJ.

3. By motion filed on 5 May 2023, the defendants seek summary dismissal under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 13.4, or alternatively that the statement of claim be struck out pursuant to r 14.28.

4. The grounds upon which the relief is sought were set out in the defendants’ solicitor’s letter to Mr Islam of 11 April 2023 (Annexure E; affidavit of Emma Breanne Watt affirmed 5 May 2023; CB pp 86 ff). In summary, it was put that any duties as a director, including fiduciary duties, are owed to ARER and not to Mr Islam or his company, Mortgage Plus Australia Pty Ltd, the second plaintiff. ARER is not a party to these proceedings nor could it be in as much as when Black J made an order for winding up on the just and equitable basis, Mr David Levi, the appointed liquidator took control of its property and became solely entitled to bring legal proceedings in its name and he has not consented to the bringing of these proceedings. To the extent to which the company may have suffered a loss due to a breach of duty owed to it by a director whether fiduciary in nature or, if available, in negligence, no action lies at the suit of a shareholder to make good the company’s losses, including any diminution of the value of the shareholding: Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665.

5. It is also put that there are deficiencies in the pleading in as much as there is no proper particularisation of an agreement pleaded, the nature, scope and content of the duty of care at paragraph 25 is not pleaded or particularised and there are no pleadings or particulars of the alleged negligence, assuming a duty of care was owed by Mr Ratul in his capacity as a director of ARER or by Expert Finance Pty Ltd.

6. I think each of these points is well made and indeed is unanswerable. Moreover, to these I would add that given the substantial identity of the complaints made by Mr Islam and the relief sought, comparing these proceedings to the first proceedings before Black J on the one hand, and those before Andronos SC DCJ on the other, there is an abuse of process in as much as multiple proceedings have been brought to ventilate what is in substance the same asserted cause of action contrary to the principles discussed in Moore v Inglis (1976) 9 ALR 509 at 515; GR v Secretary, Department of Communities and Justice; GR v Public Guardian [2023] NSWSC 525.

7. My Orders are:

1. Under rule 13.4 Uniform Civil Procedure Rules 2005 (NSW) the proceedings are summarily dismissed;

2. The plaintiffs are to pay the defendants costs of the proceedings;

3. Any application for a special order for costs is to be made within 14 days of the date of judgment by written submission not exceeding 3 pages in length supported by any necessary affidavit which may be forwarded to the chambers of Campbell J to be dealt with in chambers on the papers. The responding party is allowed a period of a further 14 days to lodge a written submission not exceeding 3 pages in length if the order is opposed.

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Decision last updated: 21 December 2023