Mango Boulevard Pty Ltd v Spencer

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SUPREME COURT OF QUEENSLAND

CITATION:

Mango Boulevard P/L v Spencer & Ors [2008] QCA 274

PARTIES:

MANGO BOULEVARD PTY LTD ACN 101 544 601
(plaintiff/first respondent)
v
RICHARD WILLIAM SPENCER
(first defendant/not a party to the appeal)
SILVANA PEROVICH
(second defendant/not a party to the appeal)
KINSELLA HEIGHTS DEVELOPMENTS PTY LTD ACN 100 373 368
(third defendant/not a party to the appeal)
MIO ART PTY LTD ACN 121 010 875
(fourth defendant/appellant)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE AS TRUSTEES OF THE ESTATE OF RICHARD WILLIAM SPENCER
(fifth defendant/not a party to the appeal)
PAUL DESMOND SWEENEY AND TERRY GRANT VAN DER VELDE AS TRUSTEES OF THE ESTATE OF SILVANA PEROVICH
(sixth defendant/not a party to the appeal)

FILE NO/S:

Appeal No 3514 of 2008
SC No 1999 of 2006

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

12 September 2008

DELIVERED AT:

Brisbane

HEARING DATE:

1 September 2008

JUDGES:

Muir JA, Mackenzie AJA and Douglas J
Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

Appeal dismissed with costs

Orders of McMurdo P on 12 September 2008:

1. Costs order delivered set aside.

2. The parties have leave to make submissions as to costs in accordance with the Practice Direction.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – JURISDICTION AND GENERALLY – GENERALLY – where a deed provided that in the event that a shareholder “commits an act of bankruptcy, becomes bankrupt, or unable to pay its debts”, the first respondent was given the right to acquire the first and second defendants’ shares in the third defendant – where the first respondent commenced proceedings on the basis that those circumstances had arisen – where the first and second defendants argued that it was in fact they who had the right to acquire the first respondent’s shares as the first respondent failed to notify them of the appointment of a director,         Mr Thompson to the first respondent – where the appellant was added as fourth defendant upon the first defendant’s bankruptcy – where a guillotine order on 3 April 2007 struck out the appellant’s defence and gave judgment for the first respondent on the counter-claim – where there were persistent failures by the appellant to make proper disclosure as required by the guillotine order – whether the appellant’s amended defence and counter-claim amounted to an abuse of process – whether the primary judge’s findings in relation to abuse of process extended to the issue of the appointment of Mr Thompson as director of the first respondent

ESTOPPEL – FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD – FORMER ADJUDICATION – JUDGMENT INTER PARTES – RES JUDICATA – where the first respondent submitted in the alternative to the abuse of process argument, that the doctrine of res judicata prevented the appellant from pursuing its counter-claim – where the guillotine order struck out paragraphs of the appellant’s defence and…

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Details
Case
[2008] QCA 274
Decision Date

CaseChat Overview and Summary

Mango Boulevard Pty Ltd, represented by the first respondent, filed a lawsuit against Spencer, the appellant, and others, to enforce a clause in a deed that allowed the first respondent to acquire the shares of the first and second defendants if certain conditions were met. The first and second defendants argued that they should have the right to acquire the shares instead due to the first respondent's failure to notify them of the appointment of Mr. Thompson as a director. The appellant, added as the fourth defendant following the first defendant's bankruptcy, failed to comply with disclosure obligations, leading to the striking out of its defence and counter-claim by a guillotine order on April 3, 2007, and a judgment in favour of the first respondent. The appellant's amended defence and counter-claim were challenged as an abuse of process, and the first respondent argued that the doctrine of res judicata prevented the appellant from pursuing its counter-claim due to the default judgment. The Supreme Court of Queensland was tasked with determining whether the appellant's amended defence and counter-claim amounted to an abuse of process and if the primary judge's findings in relation to abuse of process extended to the issue of Mr. Thompson's appointment as director. Additionally, the court needed to decide if the judgment for the first respondent on the counter-claim gave rise to res judicata.

The court concluded that the appellant's amended defence and counter-claim did not amount to an abuse of process, as they were not vexatious or oppressive. Furthermore, the court held that the primary judge's findings in relation to abuse of process did not extend to the issue of Mr. Thompson's appointment as director, as the primary judge had not made a finding on this issue. Lastly, the court found that the default judgment did not give rise to res judicata, as the doctrine only applies when there is a final judgment on the merits of a case. The appeal was dismissed with costs.

Following the dismissal of the appeal, the orders of McMurdo P on September 12, 2008, set aside the costs order that had been delivered. The parties were granted leave to make submissions as to costs in accordance with the Practice Direction.

Orders

Orders of the court

Appeal dismissed with costs

Orders of McMurdo P on 12 September 2008:

1. Costs order delivered set aside.

2. The parties have leave to make submissions as to costs in accordance with the Practice Direction.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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