McDonald v Shone - [2010] NSWSC 467

CITATION: McDonald v Shone and Ors [2010] NSWSC 467

HEARING DATE(S): 28 April 2010

JUDGMENT DATE :
21 May 2010

JUDGMENT OF: Schmidt J

DECISION: 1. The proceedings against Horwarth be dismissed.
2. Mr Shone's motions be dismissed.
3. Mr McDonald bear Horwarth’s costs as agreed until 21 April 2010 and from that date on an indemnity basis.

CATCHWORDS: PROCEDURE - miscellaneous procedural matters - other matters - motions - plaintiff consents to orders dismissing proceedings against third defendant - question of costs - indemnity costs ordered in part - orders sought to set aside ex-parte order to extend time to serve pleadings on first defendant - orders not set aside - forum - not established that New South Wales is an inappropriate forum - whether pleaded claim is hopeless - not established - motions dismissed

LEGISLATION CITED: Australian Securities and Investments Commission Act 2001 (Cth)
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005

CATEGORY: Procedural and other rulings

CASES CITED: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Limited (in liq) [2009] NSWCA 104
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

PARTIES: Gerard McDonald - Plaintiff
Stephen John Shone - First Defendant
Steering International Business Limited - Second Defendant
Horwath Management Services Limited - Third Defendant
IBI Limited - Fourth Defendant
Interlease Limited - Fifth Defendant
Yaringa Investments Limited - Sixth Defendant

FILE NUMBER(S): SC 2008/288996

COUNSEL: Plaintiff - Mr DJ Fagan SC
First Defendant - Mr JC Giles
Third Defendant - Mr AS Bell

SOLICITORS: Plaintiff - Grace Lawyers Pty Limited
First Defendant - Deacons
Third Defendant - Minter Ellison

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SCHMIDT J

FRIDAY, 21 MAY 2010

2008288996 GERARD McDONALD v STEPHEN JOHN SHONE & ORS

JUDGMENT

1 HER HONOUR: These proceedings were commenced in December 2008 by a statement of claim in which the plaintiff, Mr McDonald, sought to recover some $462,837.82 from the first and third defendants. By amended statement of claim filed in March 2009, these damages were claimed to flow from the breach of a number of share purchase agreements and collateral agreements. Allegations of various misrepresentations were also made, as well as breaches of various legislation, including the Australian Securities and Investments Commission Act 2001 (Cth) and the Corporations Act 2001 (Cth).

2 This judgment deals with a number of notices of motion. The first was filed in October 2009 by the third defendant, Horwath Management Services Limited (‘Horwath’), a Hong Kong company. It sought orders pursuant to the Uniform Civil Procedure Rules 2005, setting aside the originating process so far as it was concerned; declarations that the Court had no jurisdiction over it; or that the Court decline to exercise jurisdiction in the proceedings; or permanently stay the proceedings; or strike them out as disclosing no reasonable cause of action.

3 When the hearing…

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 McDonald v Shone

Details

AGLC: McDonald v Shone [2010] NSWSC 467
Case: [2010] NSWSC 467
Decision Date: 21 May 2010

CaseChat Overview and Summary

The case of McDonald v Shone involved multiple defendants and raised issues concerning procedural matters and costs in the Supreme Court of New South Wales. The plaintiff, McDonald, sought to dismiss proceedings against the third defendant, to set aside an ex-parte order extending the time to serve pleadings on the first defendant, and to challenge the appropriateness of New South Wales as the forum for the proceedings. The plaintiff consented to the dismissal of proceedings against the third defendant, leaving the primary issues concerning the costs and procedural orders. The court was required to determine whether indemnity costs were appropriately ordered in part and whether the ex-parte order extending time to serve pleadings should be set aside.

The court addressed the issue of indemnity costs first, finding that the plaintiff's consent to dismiss proceedings against the third defendant did not automatically entitle them to indemnity costs. The court noted that the plaintiff had not established that the third defendant acted unreasonably in continuing with the proceedings, which is a prerequisite for ordering indemnity costs. The court then considered whether the New South Wales forum was appropriate and whether the pleaded claim was hopeless. The court found that neither the plaintiff nor the first defendant had established that New South Wales was an inappropriate forum or that the pleaded claim was hopeless. Consequently, the orders sought to set aside the ex-parte order were dismissed.

In conclusion, the court ordered that the motion to set aside the ex-parte order was dismissed and that the indemnity costs were ordered in part only. The court did not find merit in the plaintiff's contentions regarding the forum or the hopelessness of the claim. The orders were not set aside, and the proceedings against the first defendant continued in New South Wales.

Orders