Legal Research
Cases
Leaney v Olmstead Pty Ltd

Leaney v Olmstead Pty Ltd

Case [1994] FCA 415 20 June 1994

Breach of Fiduciary Duty

Misleading and Deceptive Conduct

Contract Formation

Unconscionable Conduct

Class Actions

Jurisdiction

Corporate Law & Governance

Commercial Law

No judgment structure available for this case.

Type to search within this case.

41s 94

JUDGMENT No. ........ ........ . J ,.., ......

IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIAN DISTRICT REGISTRY ) )
1
GENERAL DIVISION

) No. SG117 of 1993
B E T W E E N :
GEOFFREY JOHN LEANEY

Applicant

- and -
OLMSTEAD PTY LTD (ACN 008 276 131) and DONZELLA PTY LTD (ACN 050 021 273) in its own capacity and in its capacity as trustee for The Bellis Unit Trust

Respondents

REASONS FOR DECISION

Coram: Branson J.
20 June 1994

The respondents in this matter have applied by notice of motion dated 15 June 1994 for an order that the consolidated statement of claim hearin be struck out on the ground that it discloses no reasonable cause or causes of action against the respondents or either of them and has a tendency to cause prejudice, embarrassment or delay in the proceedings. In the alternative the respondents seek an order that paragraphs 13, 14, 15, 19, 20(b), 21(c) and (d), 27.2(2), (3), (4), (5) and

or either of them. The application is brought pursuant to 011

( 6 ) , 28, 32.2 and 33 be struck out on the ground that they

disclose no reasonable cause of action against the respondents

Order 11 r16 gives the court a discretionary power. The power is to be exercised sparingly and only where there is a plainly

untenable case (Hunt Con t rac t ing CO P t y L td v Roebuck

Resources NL and Others (1992) 110 ALR 183 at p187). An application to strike out a statement of claim on the ground that it does not disclose a reasonable cause of action involves establishing that the case of the applicant is so

untenable that it cannot possibly succeed (General S t e e l

I n d u s t r i e s Inc v Commissioner f o r Railways (NSW) (1964) 112

CLR 125 at p130). It is to be assumed that the allegations of fact made in the statement of claim could be made out at trial

(Empire Shipping CO Inc v Owners o f t h e Ship "Shin Kove Maru"

(1991) 104 ALR 489 at p490).

Section 160 of the Cor~oration Law

The applicant has by his application and statement of claim sought to invoke s260(1)(a) of the Corporat ions Law. The tens of s260 make it plain, as is conceded by M r Lunn on the

applicant's behalf, that he may only do so if he is a member

of the company in respect of which he seeks the order.
Section 184 of the Corpora t ions Law is in the following

tens : -

"A person who agree s t o become a member o f a company
and whose name i s e n t e r e d on t h e company's r e g i s t e r
of members. "

Nowhere in the statement of claim in this matter is it pleaded…

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 Leaney v Olmstead Pty Ltd

Details

AGLC: Leaney v Olmstead Pty Ltd [1994] FCA 415
Case: [1994] FCA 415
Decision Date: 20 Jun 1994

CaseChat Overview and Summary

The case of Leaney v Olmstead Pty Ltd involved a dispute between Geoffrey John Leaney and the respondents, Olmstead Pty Ltd and Donzella Pty Ltd, the latter in its own capacity and as trustee for The Bellis Unit Trust. Leaney, the applicant, sought relief under various statutes including the Corporations Law, Trade Practices Act, and Fair Trading Act. The respondents applied to strike out Leaney's consolidated statement of claim, arguing it disclosed no reasonable cause of action and had a tendency to cause prejudice, embarrassment, or delay.

The court examined several legal issues. Firstly, whether Leaney, who claimed to have a beneficial interest in shares, could invoke Section 260 of the Corporations Law, which requires the applicant to be a member of the company. The court held that Leaney's beneficial interest alone did not make him a member, and therefore, he could not invoke Section 260. Secondly, the court reviewed Leaney's claims under the Trade Practices Act, finding that the pleadings did not sufficiently demonstrate misleading or deceptive conduct by the respondents. The court also found that Leaney failed to plead how he suffered loss or damage as a result of the alleged conduct.

Additionally, the court assessed Leaney's claims of breach of fiduciary duty by Donzella Pty Ltd. It found that the pleadings did not provide a clear basis for this allegation, particularly in relation to the giving of notices of meetings. The court concluded that Leaney's statement of claim disclosed no reasonable cause of action on several grounds and had a tendency to cause prejudice, embarrassment, and delay in the proceedings.

Ultimately, the court granted the respondents' application to strike out the consolidated statement of claim and ordered Leaney to file and serve a fresh statement of claim within one calendar month.

Orders