Jacobs v Edwards - [2011] SASC 6

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
JACOBS & ANOR v EDWARDS & ORS
[2011] SASC 6
Reasons of Judge Lunn a Master of the Supreme Court
20 January 2011
CORPORATIONS
Originating process not supported by affidavit as required by Corporations Rule 2.4(1) - order made dispensing with compliance with R 2.4(1) conditionally upon Statement of Claim being verified by affidavits of deponents who could verify all of its contents from their own knowledge or from documents with evidentiary value - affidavits filed held not to comply with conditions of dispensation order - failure to comply with that order held not an irregularity under 6R12 which justified striking out the Statement of Claim or the affidavits.

JACOBS & ANOR v EDWARDS & ORS
[2011] SASC 6
JUDGE LUNN:
Reasons on application to strike out affidavits and Statement of Claim

On 28 June 2010 the plaintiff instituted this action seeking relief under the Commonwealth Corporations Act 2001. Rule 2.4(1) of the Corporations Rules 2003 (South Australia) (“the Corporations Rules”) provide:
2.4(1) unless the court otherwise directs, an originating process must be supported by an affidavit stating the facts in support of the process”.
Rule 2.6 of the Corporations Rules provides:
2.6An affidavit must be in a form that complies with:
(a)     the rules of the Court; or
(b)     the rules of the Supreme Court of the State (if any) or Territory (if any) where the affidavit was sworn or affirmed …
(c)     the rules of the Federal Court of Australia.
Although the affidavit mentioned below of Mr Coulter was sworn in Victoria, it was not suggested in submissions that the Rules of the Supreme Court of Victoria were relevant. It is unclear where the affidavit of Mr Jacobs was sworn, but his oath was taken by a South Australian solicitor. I proceed, in accordance with the submissions, on the basis that it is the South Australian Rules on affidavits that are relevant. The originating process was supported by an affidavit of the plaintiffs’ solicitor which merely exhibited a proposed Statement of Claim. It was not suggested that this affidavit complied with Rule 2.4(1). Subject to any contrary direction or dispensation, under Rule 2.4 a proceeding under the Corporations Act must be supported by an affidavit, and pleadings can only be used if there is an order to that effect.[1]
[1] Litmus Australia Pty Limited(in liquidation v Canty (2006) 57 ACSR 71.
At a directions hearing on 30 July 2010, but before the second and ninth defendants were before the Court, the plaintiffs sought a direction that the matter proceed on pleadings. Master Burley indicated that he was not prepared to give such a direction at that stage. However, he did give the plaintiffs permission to file and serve a Statement of Claim.
At the next directions hearing on 8 October 2010 before myself, the defendants objected to the plaintiffs not having complied with Rule 2.4 in not having filed a supporting affidavit for the originating process which complied with that…

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.

Continue reading Jacobs v Edwards

Details

AGLC: Jacobs v Edwards [2011] SASC 6
Case: [2011] SASC 6
Decision Date: 20 January 2011

CaseChat Overview and Summary

In the case of Jacobs & Anor v Edwards & Ors, the plaintiffs sought relief under the Corporations Act 2001. The defendants raised objections to the plaintiffs' non-compliance with Rule 2.4 of the Corporations Rules 2003 (SA), which mandates that an originating process must be supported by an affidavit stating the facts in support of the process. The defendants argued that the plaintiffs' affidavits did not comply with the conditions of the dispensation order granted by the court. The plaintiffs, in turn, argued that the failure to comply with the dispensation order was not an irregularity that justified striking out the Statement of Claim or the affidavits. The court was required to determine whether the non-compliance with the dispensation order constituted an irregularity under Rule 12 of the Supreme Court Rules 1936 (SA) that warranted striking out the Statement of Claim or the affidavits.

The court held that the affidavits of Mr Jacobs and Mr Coulter did not satisfy the terms of the dispensation order. The order required that the contents of the Statement of Claim be verified by deponents of their own knowledge. However, Mr Jacobs' affidavit made it clear that not all of what he had sworn to was of his own knowledge. Similarly, Mr Coulter's affidavit assumed that Mr Jacobs had verified other matters of his own knowledge. The court held that the affidavits did not comprise verification of the paragraphs of the Statement of Claim to which they referred. The court held that it was impossible to know the extent to which Mr Jacobs and Mr Coulter had deposed to matters outside their own knowledge and whether the documents to which they had had reference had evidentiary value. The court held that the conditions precedent for the dispensation from compliance with Rules 2.2 and 2.4 had not been satisfied, and, unless they had been otherwise waived, they remained applicable.

The court held that non-compliance with Rule 2.4 did not justify the striking out of the Statement of Claim. The court held that the irregularity could theoretically lead to the striking out of the Originating Process, but no defendant had sought such an order. The court held that it was open to the plaintiffs to apply for an extension of time to file affidavits which did comply with the terms of the dispensation. The court held that there was no inherent vice in the affidavits of Mr Jacobs and Mr Coulter and that they should not be struck out. The court refused the applications to strike out the Statement of Claim and the affidavits of Mr Jacobs and Mr Coulter, except for paragraph 5 of FDN23 and paragraph 4 of FDN26, which were adjourned for further consideration. Costs were reserved, and a further directions hearing was set for 11 February 2011 at 9.30am.

Orders