JD Thompson Personnel Pty Limited v Asgard Capital Management Limited
[2011] NSWSC 811
•29 July 2011
Supreme Court
New South Wales
Medium Neutral Citation: JD Thompson Personnel Pty Limited v Asgard Capital Management Limited [2011] NSWSC 811 Hearing dates: 29 July 2011 Decision date: 29 July 2011 Jurisdiction: Equity Division Before: Hallen AsJ Decision: Order that Wayne Ford be appointed to represent the interests of the persons identified in the schedules to the draft amended statement of claim ("the represented members") in the form annexed to the Plaintiff's notice of motion filed 18 July 2011
Grant leave to the Plaintiff to file an amended statement of claim in the form annexed to its notice of motion filed 18 July 2011 and that such amended statement of claim be filed within 7 days;
Order that the proceedings continue in accordance with the Rules;
Order that the proceedings not be settled, or discontinued, without the leave of the court;
Order that the Plaintiff send, within 7 days, written notice, by post, to each of the represented members, such notice to state:
(i) that the proceedings are being continued with a representative of that represented member, having been appointed to represent the interests of the represented member in the proceedings, together with the identity, and contact details, of the representative Defendant's solicitors;
(ii) the nature of the costs agreement made between the Plaintiff and the representative Defendant;
(iii) where a copy of the pleadings may be inspected and the identity of the person to be contacted to arrange such inspection;
(iv) the right of the represented member, within 28 days of the receipt of the written notice (or within such other time as the court allows), to seek to be joined as a separate party in the proceedings;
(v) that in the proceedings, the court may determine a question of law and/or of fact, make a declaration of liability, or grant any equitable, or other, relief.
(vi) that a judgment, or order, made in proceedings, will bind each of the represented members, as if he, or she, had been a party to the proceedings.
Direct the Plaintiff's solicitors to file an affidavit, in admissible form, of service by post upon each of the represented members within 28 days of the postage of the written notices referred to.
Stand the proceedings over, for further directions, before the Registrar at 9:00 a.m. on 12 August 2011.
Order that the Exhibit be returned.
Catchwords: Notice of motion seeking to amend Statement of Claim so as to join a second Defendant and seeking an order pursuant to r 7.6(1)(c) of Uniform Civil Procedure Rules Legislation Cited: Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005Cases Cited: Government Insurance Office (NSW) v Johnson [1981] 2 NSWLR 617
JD Thompson Personnel Pty Ltd v Asgard Capital Management Pty Ltd; Adam Shepard As Liquidator Of JD Thompson Personnel Pty Ltd [2011] NSWSC 60Category: Principal judgment Parties: JD Thompson Personnel Pty Limited
(Plaintiff)
Asgard Capital Management Limited
(first Defendant)
Wayne Ford
(second Defendant)Representation: Counsel:
Mr N Bender (Plaintiff)
No appearance by first Defendant
Mr A Fernon (second Defendant)
Solicitors:
Deutsch Miller (Plaintiff)
Sparke Helmore (first Defendant)
File Number(s): 2010/142332
Judgment - EX TEMPORE
HIS HONOUR: In this matter, the Plaintiff seeks, by notice of motion, filed on 18 July 2011:
(a) leave to amend its Statement of Claim so as to join Wayne Ford as the second Defendant; and
(b) an order pursuant to r 7.6(1)(c) of Uniform Civil Procedure Rules 2005 ("UCPR"), appointing Mr Ford to represent the interests of those persons referred to in the Schedules to the Proposed Amended Statement of Claim in the proceedings.
Mr Ford is a former employee of the Plaintiff. It is alleged that the Plaintiff made a mistaken payment of $330.60 to the first Defendant, on his account. He has appeared, by counsel, today, and consents to the orders sought. However, as the making of the orders affects, or may affect, the interest of others, it is necessary to deliver a short judgment.
The first Defendant did not appear.
The background to the matter is set out in reasons for judgment of Barrett J, the medium neutral citation of which is JD Thompson Personnel Pty Ltd v Asgard Capital Management Pty Ltd; Adam Shepard As Liquidator Of JD Thompson Personnel Pty Ltd [2011] NSWSC 60.
It is only necessary to repeat what was said in part of that Judgment because it is relevant to the notice of motion before me today:
"3 The proceedings were commenced by the plaintiff company, at the instigation of its liquidator, against the defendant trustee by a statement of claim filed on 7 June 2010. The relief the plaintiff seeks is a declaration that the defendant "has been unjustly enriched at the plaintiff's expense with respect to each of" certain payments; and an order that "restitution be made by the defendant to the plaintiff" of an amount equivalent to the total of" those payments. There is also a claim for interest and costs.
4 The substance of the restitutionary claim is, in concept, that part of the trust fund indisputably held by the defendant as a trustee is held not for the acknowledged beneficiaries (the superannuation fund members) but subject to an obligation to account to the plaintiff alone.
...
14 The dispute - if indeed there is to be a dispute - is one between the plaintiff and the relevant fund members, that is, those employees of the plaintiff in relation to whom what might loosely be called "double contributions" came into the trustee's hands. The plaintiff says, in effect, that it ought to have back the contributions it made after the liability to superannuation guarantee charge ultimately paid by the liquidator had arisen. If that claim succeeds, each relevant employee member of the fund will suffer a reduction in his or her account balance within the fund and therefore a reduction in the superannuation benefit ultimately received.
...
16 This case is not one in which the trustee alone can satisfactorily represent the interests of the beneficiaries. They, as persons whose claims upon the trust fund will be diminished if the plaintiff succeeds in the suit, are entitled to an opportunity to contest the grant of the relief the plaintiff seeks. The position is the same as in Personalised Transport Services Pty Ltd v AMP Superannuation Pty Ltd [2005] NSWSC 396 and, as in that case, the proceedings should not go to trial with the trustee alone as defendant.
17 As far as the particular applications before the court are concerned, the defendant, as trustee, will be advised by the court that it is justified in neither consenting to nor opposing the grant of the relief the plaintiff seeks in the proceedings and that the appropriate course will be to enter a submitting appearance except as to costs; while, so far as the liquidator of the plaintiff is concerned, there will be a direction, first, that the liquidator is not justified in allowing the proceedings to be constituted in such a way that none of the relevant employees is a party (and the sole defendant is the trustee) and, second, that the liquidator will be justified in taking steps to have the plaintiff seek an order for the joinder of a representative employee as a defendant.
18 An alternative to this second aspect would be, of course, for the liquidator to join all the employees as defendants. I would, however, prefer not to consider a direction to that effect at this stage, given the likelihood that it would involve very substantial expense which might possibly outweigh the value of the proceedings in any event. This possibility can be examined, if necessary, after the outcome of any application for joinder of a representative employee is known. "
The proposed amended statement of claim widens the bases for relief, but the fundamental facts remain the same. Unless an order is made appointing the second Defendant, the first Defendant will remain the only named defendant.
On 7 July 2011, the liquidator of the Plaintiff caused a notice to be sent to all but 17 of the 990 former employees of the Plaintiff named in the Schedules to the proposed amended statement of claim. (The liquidator was unable to obtain contact details for, or otherwise locate, the 17 people who were not notified.)
The notice informed the recipient:
"a. of the nature of the proceedings;
b. that the liquidator proposed to cause the Plaintiff to make the present application to appoint a representative defendant;
c. that, if a representative defendant were appointed, the Court may make an order or give a judgment in the proceedings that would be binding on the recipient as if he, or she, had been a party to the proceedings, which order may affect the recipient's superannuation account with the first Defendant; and
d. that, if he, or she, wished to be heard in relation to the present application, he, or she, should contact the liquidator's office."
Thirty former employees (of the 973 who were notified) contacted the office of the liquidator with questions about the proceedings, including, in several instances, to enquire of the amount of the mistaken payment alleged to have been made by the Plaintiff to the account of the individual in question. None raised any objection to the appointment of a representative defendant.
On 19 July 2011, the Plaintiff's solicitors sent a further notice to each of those former employees who had contacted the liquidator's office in response to the first notice, informing each that this application was returnable before the Court on 26 July 2011 and inviting each to apply to be heard in relation thereto, or to inform the Plaintiff's solicitor of any matters that he, or she, wished to be raised with the Court.
None of the former employees, or any person on behalf of any of the former employees, has appeared and no person has raised any objection to the making of the orders sought in the application. Nor has any person requested the liquidator of the Plaintiff to advise the Court of any particular matter in response to the second notice.
The Plaintiff's counsel, Mr N M Bender, has provided detailed written submissions, which I have found to be of great assistance, as they identify the applicable principles relating to an application such as this one. Specifically, he refers to various parts of Divisions 2 and 3 of Part 7 of the UCPR, which relates to representation of parties in proceedings and the power of the court to appoint a representative in proceedings concerning property the subject of a trust or relating to a trust. The submissions will be left with the court papers.
In this case, I am satisfied that relevant persons, have been ascertained and, apart from 17 people, have been located and informed of the application. I am also satisfied that it is expedient, for the purpose of saving expense (having regard to all of the circumstances, including the amount at stake and the degree of difficulty of the issue, or issues, to be determined), for a representative to be appointed to represent any or all of them. Expedience is the relevant test.
I also cannot forget the overriding purpose identified in s 56 of the Civil Procedure Act 2005.
Since Mr Ford, the person identified as the proposed representative defendant, has consented to being joined in that capacity, and because he has an interest in the proceedings, he is an appropriate person to be joined as a representative Defendant.
In this regard, I note that, in another context, Hutley JA, in Government Insurance Office (NSW) v Johnson [1981] 2 NSWLR 617, at 624, said, "[A] wholly uninterested party should never represent an estate against which an adverse claim is being made".
Both counsel have identified the necessity of having the proceedings case managed. Mr Bender has also identified the possibility of some or other of the represented members raising defences to the claim made (e.g. limitation defences and change of position). However, it is thought that the representative Defendant may raise, at least, those defences, since the payments made to him were made in June 2005.
Prior to making the orders that I propose, each counsel was shown a draft thereof. Each made useful suggestions, which I have incorporated in the orders that I shall now make:
(a) Being satisfied that although the persons, subsequently referred to as represented members, whose identity and whereabouts have been ascertained (with the exception of 17 people whose whereabouts have not), and that it is expedient, for the purpose of saving expense (having regard to all of the circumstances, including the amount at stake and the degree of difficulty of the issue, or issues, to be determined) for a representative to be appointed to represent them, order that Wayne Ford be appointed to represent the interests of the persons identified in the schedules to the draft amended statement of claim ("the represented members") in the form annexed to the Plaintiff's notice of motion filed 18 July 2011;
(b) Grant leave to the Plaintiff to file an amended statement of claim in the form annexed to its notice of motion filed 18 July 2011 and that such amended statement of claim be filed within 7 days;
(c) Order that the proceedings continue in accordance with the Rules;
(d) Order that the proceedings not be settled, or discontinued, without the leave of the court;
(e) Order that the Plaintiff send, within 7 days, written notice, by post, to each of the represented members, such notice to state:
(i) that the proceedings are being continued with a representative of that represented member, having been appointed to represent the interests of the represented member in the proceedings, together with the identity, and contact details, of the representative Defendant's solicitors;
(ii) the nature of the costs agreement made between the Plaintiff and the representative Defendant;
(iii) where a copy of the pleadings may be inspected and the identity of the person to be contacted to arrange such inspection;
(iv) the right of the represented member, within 28 days of the receipt of the written notice (or within such other time as the court allows), to seek to be joined as a separate party in the proceedings;
(v) that in the proceedings, the court may determine a question of law and/or of fact, make a declaration of liability, or grant any equitable, or other, relief;
(vi) that a judgment, or order, made in proceedings, will bind the represented members, as if he, or she, had been a party to the proceedings.
(f) Direct the Plaintiff's solicitors to file an affidavit, in admissible form, of service by post upon each of the represented members within 28 days of the postage of the written notices referred to;
(g) Stand the proceedings over, for further directions, before the Registrar at 9:00 a.m. on 12 August 2011;
(h) Order that the Exhibit be returned.
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Decision last updated: 04 August 2011
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