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Med2 Pty Ltd v Ates and Ates

Med2 Pty Ltd v Ates and Ates

Case [2024] NSWDC 176 17 May 2024

Abuse of Process

Discovery & Disclosure

Compensatory Damages

Security for Costs

Amendment of Statement of Claim

Civil Litigation & Procedure

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District Court

New South Wales

Medium Neutral Citation: Med2 Pty Ltd v Ates and Ates [2024] NSWDC 176
Hearing dates: 11 April 2024
Date of orders: 17 May 2024
Decision date: 17 May 2024
Jurisdiction: Civil
Before: Cole DCJ
Decision:
(1)   The defendants’ application for the plaintiff’s claim to be struck out is refused.
(2)   The defendants’ application for the statement of claim to be struck out in its entirety is refused.
(3)   The plaintiff’s application for leave to amend its statement of claim is granted.
(4)   The plaintiff is to pay the defendant’s costs thrown away by reason of the amendment to the statement of claim, to be agreed or assessed.
(5)   The plaintiff is to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024.
(6)   Subject to order (7), these proceedings are stayed until the plaintiff provides security in accordance with order (5).
(7) In the event that the plaintiff fails to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024, the defendants have liberty to apply to have these proceedings dismissed under r 42.21(3) of the Uniform Civil Procedure Rules 2005.
(8)   The matter is listed for a directions hearing on 9 July 2024 at 9:30am.

Catchwords:
ESTOPPEL — Anshun estoppel — Abuse of process – Amendment of statement of claim – Security for costs

Legislation Cited:
Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33
Cleaning Doctor NSW Pty Ltd v Fonseca [2022] NSWCA 157
GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2002) 97 ALJR 857
Hana v Shad Legal Services Pty Ltd [2021] NSWSC 601
Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258
In the matter of SRD Property Pty Ltd [2023] NSWSC 441
O’Shane v Harbour Radio Pty Ltd [2013] NSWCA 315
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28
Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302
Salex NSW Pty Ltd v Congredior Pty Ltd [2021] NSWSC 732

Category: Principal judgment
Parties: Med2 Pty Ltd, (Plaintiff)
Aynur Ates, (First Defendant)
Necati Ates, (Second Defendant)
Representation:
Counsel:
Mr D Allen (Plaintiff)
Mr G Sirtes SC and Mr J Sukkar (Defendant)
Solicitors:
Kekatos Lawyers (Plaintiff)
Somerville Legal (Defendant)

File Number(s): 2023/317394
Publication restriction: Nil

JUDGMENT

This decision concerns an amended interlocutory application by the defendants, Mr Ates and Mrs Ates, filed on 26 March 2024, seeking the following:

An order pursuant to s 1335(1) of the Corporations Act 2001 (Cth) or r 42.21(1) of the Uniform Civil Procedure Rules (NSW) (“the Rules”) that the plaintiff provide security for the defendants’ costs of the proceedings.

An order pursuant to the provisions cited in (1) above that the proceedings against the defendants be stayed until the…

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 Med2 Pty Ltd v Ates and Ates

Details

AGLC: Med2 Pty Ltd v Ates and Ates [2024] NSWDC 176
Case: [2024] NSWDC 176
Decision Date: 17 May 2024

CaseChat Overview and Summary

In the case of Med2 Pty Ltd v Ates and Ates, the plaintiff, Med2, sought to amend its statement of claim to include a new cause of action based on anshun estoppel. The defendants, Ates, opposed the amendment and sought to have the claim struck out. They also argued that Med2 had abused the court process by attempting to circumvent anshun estoppel. The dispute was heard in the Supreme Court of New South Wales. The central legal issues revolved around whether Med2 could amend its statement of claim to include the new cause of action and whether such an amendment would amount to an abuse of process. The court had to consider the principles of anshun estoppel, the requirements for amending a statement of claim, and the circumstances in which a claim might be struck out due to an abuse of process.

The court found that Med2 was not precluded from amending its statement of claim to include the anshun estoppel cause of action, as it did not involve a new party or a new cause of action that was inconsistent with the original claim. The court also ruled that the amendment did not amount to an abuse of process, as Med2 had a reasonable prospect of success on the new cause of action. However, the court emphasised the need for Med2 to provide adequate security for costs to cover the defendants' potential costs if the claim was ultimately unsuccessful. The court granted Med2 leave to amend its statement of claim but required Med2 to pay the defendants' costs incurred due to the amendment and to provide security for costs before the proceedings could continue.

The court's decision also included specific orders regarding the costs and security for costs. Med2 was ordered to pay the defendants' costs incurred due to the amendment of the statement of claim, to be agreed upon or assessed. Additionally, Med2 was required to pay $215,805.70 into court as security for costs by a specified date. Failure to comply with this order would allow the defendants to apply for the proceedings to be dismissed. The matter was then stayed until Med2 provided the required security for costs, with a directions hearing scheduled to manage the progress of the case.

Orders

Orders of the court

(1) The defendants’ application for the plaintiff’s claim to be struck out is refused.

(2) The defendants’ application for the statement of claim to be struck out in its entirety is refused.

(3) The plaintiff’s application for leave to amend its statement of claim is granted.

(4) The plaintiff is to pay the defendant’s costs thrown away by reason of the amendment to the statement of claim, to be agreed or assessed.

(5) The plaintiff is to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024.

(6) Subject to order (7), these proceedings are stayed until the plaintiff provides security in accordance with order (5).

(7) In the event that the plaintiff fails to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024, the defendants have liberty to apply to have these proceedings dismissed under r 42.21(3) of the Uniform Civil Procedure Rules 2005.

(8) The matter is listed for a directions hearing on 9 July 2024 at 9:30am.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Med2 Pty Ltd v Ates and Ates [2024] NSWDC 176

Cases citing this decision · 0 of 0 shown

No citing cases yet.

Cases cited in this decision · 15 of 15 shown

Re SRD Property Pty Ltd
[2023] NSWSC 441 Para 14

…I will refer to the proceedings the subject of the judgment of Black J In the matter of SRD Property Pty Ltd [2023] NSWSC 441 as ‘the Supreme Court proceedings’, and to the judgment as ‘the Supreme Court judgment’.…
The Cleaning Doctor NSW Pty Ltd v Fonseca
[2022] NSWCA 157 Para 82

…he plaintiff, that it is unusual for security to be given for costs that the defendants have already incurred ( Cleaning Doctor NSW Pty Ltd v Fonseca [2022] NSWCA 157 at [53]. It was also submitted that the application had been made late in the proceedings. I reject these arguments. The plaintiff has, in this decis…
Hana v Shad Legal Services Pty Ltd
[2021] NSWCA 258 Para 45

…In Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258 (‘the Hana appeal decision’) the Court of Appeal upheld the decision in Hana.…
Salex NSW Pty Ltd v Congredior Pty Ltd
[2021] NSWSC 732

…Processing Pty Ltd [2015] HCA 28 Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 Salex NSW Pty Ltd v Congredior Pty Ltd [2021] NSWSC 732 Category: Principal judgment Parties: Med2 Pty Ltd, (Plaintiff) Aynur Ates, (First Defendant) Necati Ates, (Second Defendant) Representation: Counsel: Mr D Allen (Plaint…
Hana v Shad Legal Services Pty Ltd
[2021] NSWSC 601 Para 44

…In Hana v Shad Legal Services Pty Ltd [2021] NSWSC 601 (‘Hana’), Beech-Jones J said, at [33]-[35]:…
Treloar Constructions Pty Ltd v McMillan
[2016] NSWCA 302 Para 76

…ve that a plaintiff corporation will be unable to pay costs is ‘undemanding’ and ‘a low threshold’ ( Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 [11]-[13]). Where a defendant has made a reasonable request for financial documents relevant to security and that request is not responded to, the failure to…
Tomlinson v Ramsey Food Processing Pty Ltd
[2015] HCA 28 Para 37

…, in those proceedings (see Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602-603 and Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 (‘Tomlinson’)).…
Ekes v Commonwealth Bank of Australia
[2014] NSWCA 336 Para 131

…to rely upon them in that action” ( Rippon at [23]; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [131]). 32. In Redowood Pty Limited v Link Market Services Pty Limited (formerly known as ASX Perpetual Registrars Limited) [2007] NSWCA 286 at [45], Hodg…
O'Shane v Harbour Radio Pty Ltd
[2013] NSWCA 315 Para 49

…In the Hana appeal decision, the Court of Appeal referred to O’Shane v Harbour Radio Pty Ltd [2013] NSWCA 315, where Beazley P said:…
Champerslife Pty Ltd v Manojlovski
[2010] NSWCA 33 Para 41

…econd claim that could have been brought by the controlling party in the first proceedings” (relying on Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33 Allsop P at [5])…
Habib v Radio 2UE Sydney Pty Ltd
[2009] NSWCA 231

…t action that it was unreasonable for the purchasers not to rely upon them in that action” ( Rippon at [23]; Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231; Ekes v Commonwealth Bank of Australia [2014] NSWCA 336 at [131]). 32. In Redowood Pty Limited v Link Market Services Pty Limited (formerly known as ASX Perp…
Redowood Pty Ltd v Link Market Services Pty Ltd
[2007] NSWCA 286 Para 45

…014] NSWCA 336 at [131]). 32. In Redowood Pty Limited v Link Market Services Pty Limited (formerly known as ASX Perpetual Registrars Limited) [2007] NSWCA 286 at [45], Hodgson J stated that, in cases that seek to invoke Anshun where the parties to the later proceedings are not the same as the earlier proceedings, t…
Walton v Gardiner
[1993] HCA 77

…should be exercised with caution: Moore & Ors v Inglis (1976) 50 ALJR 589, at 593 and only in the most exceptional or extreme case: Walton v Gardiner [1993] HCA 77; 177 CLR 378, at 392, per Mason CJ, Deane and Dawson JJ (approving the Court of Appeal's formulation of the test in Gill v Walton (1991) 25 NSWLR 190…
Williams v Spautz
[1992] HCA 34

…nus of satisfying the court that there is an abuse of process lies upon the party alleging it and that the onus is " a heavy one ": Williams v Spautz [1992] HCA 34; 174 CLR 509, at 529, per Mason CJ, Dawson, Toohey and McHugh JJ.…
Port of Melbourne Authority v Anshun Pty Ltd
[1981] HCA 45 Para 37

…for the claim not to have been made, or for the issue not to have been raised, in those proceedings (see Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602-603 and Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 (‘Tomlinson’)).…

Legislation cited in this decision · 3

Uniform Civil Procedure Rules 2005 (NSW)
42.21(3) 2 mentions (from Para 64)
Civil Procedure Act 2005 (NSW)
1 mention
Corporations Act 2001 (Cth)
1 mention (from Para 1)

Medium Neutral Citation:	Med2 Pty Ltd v Ates and Ates [2024] NSWDC 176
Hearing dates:	11 April 2024
Date of orders:	17 May 2024
Decision date:	17 May 2024
Jurisdiction:	Civil
Before:	Cole DCJ
Decision:	(1) The defendants’ application for the plaintiff’s claim to be struck out is refused. (2) The defendants’ application for the statement of claim to be struck out in its entirety is refused. (3) The plaintiff’s application for leave to amend its statement of claim is granted. (4) The plaintiff is to pay the defendant’s costs thrown away by reason of the amendment to the statement of claim, to be agreed or assessed. (5) The plaintiff is to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024. (6) Subject to order (7), these proceedings are stayed until the plaintiff provides security in accordance with order (5). (7) In the event that the plaintiff fails to pay into court the sum of $215,805.70 on account of security for costs on or before 28 June 2024, the defendants have liberty to apply to have these proceedings dismissed under r 42.21(3) of the Uniform Civil Procedure Rules 2005. (8) The matter is listed for a directions hearing on 9 July 2024 at 9:30am.
Catchwords:	ESTOPPEL — Anshun estoppel — Abuse of process – Amendment of statement of claim – Security for costs
Legislation Cited:	Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Champerslife Pty Ltd v Manojlovski & Anor [2010] NSWCA 33 Cleaning Doctor NSW Pty Ltd v Fonseca [2022] NSWCA 157 GLJ v Trustees of Roman Catholic Church for Diocese of Lismore (2002) 97 ALJR 857 Hana v Shad Legal Services Pty Ltd [2021] NSWSC 601 Hana v Shad Legal Services Pty Ltd [2021] NSWCA 258 In the matter of SRD Property Pty Ltd [2023] NSWSC 441 O’Shane v Harbour Radio Pty Ltd [2013] NSWCA 315 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 Treloar Constructions Pty Ltd v McMillan [2016] NSWCA 302 Salex NSW Pty Ltd v Congredior Pty Ltd [2021] NSWSC 732
Category:	Principal judgment
Parties:	Med2 Pty Ltd, (Plaintiff) Aynur Ates, (First Defendant) Necati Ates, (Second Defendant)
Representation:	Counsel: Mr D Allen (Plaintiff) Mr G Sirtes SC and Mr J Sukkar (Defendant) Solicitors: Kekatos Lawyers (Plaintiff) Somerville Legal (Defendant)
File Number(s):	2023/317394
Publication restriction:	Nil