K & J Acquisitions Pty Ltd v Manauzzi - [2009] NSWSC 279

CITATION: K & J Acquisitions Pty Ltd & Anor v Manauzzi & Anor [2009] NSWSC 279

HEARING DATE(S): 7.4.09

JUDGMENT DATE :
17 April 2009

JURISDICTION: Common Law Division

JUDGMENT OF: Kirby J

DECISION: (1) The Amended Notice of Motion of 4 March 2009 by the defendants is dismissed.
(2) The defendants should pay the plaintiffs’ costs.

CATCHWORDS: CIVIL LAW - procedure - summary dismissal - claim by company and shareholder in respect of same loss - application of "Prudential principle" - COSTS - security for costs against impecunious plaintiff company where multiple plaintiffs - one plaintiff a natural person - rule of thumb.

LEGISLATION CITED: Uniform Civil Procedure Rules 2005
Trade Practices Act 1974

CATEGORY: Procedural and other rulings

CASES CITED: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Cox v Journeaux (No 2) (1935) 52 CLR 713
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204; [1982] 1 All ER 354
Gould v Vaggelas (1985) 157 CLR 215
Chen v Karandonis [2002] NSWCA 412
Thomas v D'Arcy [2005] QCA 68; [2005] 1 Qd R 666
Visnic v Sywak & Ors [2008] NSWSC 427
Ballard v Multiplex Limited [2008] NSWSC 1019
Johnson v Gore Wood & Co [2002] 2 AC 1
Harpur & Ors v Ariadne Australia Ltd & Ors (No 2) (1984) 8 ACLR 835
Maples v Hughes [2002] NSWSC 617
John Bishop (Caterers) Ltd & Anor v National Union Bank Ltd & Ors [1973] 1 All ER 707
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2002] NSWSC 609
Street & 7 Ors v Luna Park Sydney Pty Ltd & 3 Ors [2006] NSWSC 1317
Currabubula & Paola v State Bank NSW [2000] NSWSC 232
Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567
Duchman v Oakland Diary Co Ltd [1930] 4 DLR 989

TEXTS CITED: Law of Costs (2 ed, Canada Law Book Inc, 1987)

PARTIES: K & J Acquisitions Pty Limited (1st Pl)
Kevin Carter (2nd Pl)
Victor Manauzzi (1st Def)
Maurizio Zappacosta (2nd Def)

FILE NUMBER(S): SC 2007/20074

COUNSEL: P Braham/J C McDonald (Pls)
S J Philips (Defs)

SOLICITORS: Benjamin McInnes Lawyers (Pls)
Minter Ellison (Defs)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

KIRBY J

Friday 17 April 2009

2007/20074 K & J ACQUISITIONS PTY LIMITED & ANOR v Victor MANAUZZI & ANOR

JUDGMENT

1 KIRBY J: An action has been commenced in this Court by Further Amended Statement of Claim by a company (the first plaintiff) and its director (the second plaintiff). The action is against the company’s former accountants and auditors (the defendants). The defendants, by an Amended Notice of Motion filed on 4 March 2009, seek two principal orders:

Uniform Civil Procedure Rules

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: [2009] NSWSC 279
Decision Date: 17 April 2009

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, K & J Acquisitions Pty Ltd and Mr Joseph Manauzzi brought a claim against various defendants in respect of the same loss. The defendants applied for summary dismissal of the claim on the basis that the company and its shareholder were seeking to recover the same loss twice. The court was required to consider the applicability of the Prudential principle, which prevents a plaintiff from recovering twice for the same loss, as well as the appropriate approach to awarding security for costs against an impecunious plaintiff where multiple plaintiffs are involved. The court considered that the Prudential principle applied to prevent double recovery, and that the plaintiff company was impecunious. However, because one of the plaintiffs was a natural person with sufficient means, the court concluded that it was appropriate to order security for costs against that plaintiff only. The court set a "rule of thumb" figure of 20% of the estimated costs as the appropriate amount of security for costs.

The court held that the claim should be summarily dismissed on the basis of the Prudential principle, but that the natural person plaintiff should provide security for costs in the amount of 20% of the estimated costs. The court noted that the Prudential principle prevents a plaintiff from recovering twice for the same loss, and that this principle applied in this case. However, the court held that it was appropriate to order security for costs against the natural person plaintiff only, as he was not impecunious and had the means to pay costs. The court set a "rule of thumb" figure of 20% of the estimated costs as the appropriate amount of security for costs, noting that this was a reasonable figure to ensure that the defendants were not unfairly disadvantaged by the impecuniosity of the company plaintiff.

Orders