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Morony v Reschke

Morony v Reschke

Case [2015] NSWSC 860 1 July 2015

Jurisdiction

Discovery & Disclosure

Costs

Joinder

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Morony & Ors v Reschke & Ors [2015] NSWSC 860
Hearing dates: 29 May 2015, 19 June 2015
Decision date: 01 July 2015
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Grant leave to the Fourth Defendant to file Amended Statement of Cross-Claim in the form proposed on 29 May 2015. Order that the Fourth Defendant provide security for costs as specified. Grant leave to the Third Defendant to file Cross-Claim in the form proposed on 29 May 2015. Order that Third Defendant provide security for costs as specified. Parties to bring in Short Minutes of Order.

Catchwords:
PROCEDURE – applications by Third and Fourth Defendants for leave to file a new cross-claim and amended cross-claim – where cross-defendants opposed applications and sought better particulars – whether leave to file a new cross-claim and amended cross-claim

PROCEDURE – costs – application by cross-defendants for security for costs against Third and Fourth Defendants – where security for costs application contingent on granting leave to file a new cross-claim and amended cross-claim – where claims not defensive in nature – where Third and Fourth Defendants are trustee companies and do not trade – whether to grant security for costs
PROCEDURE – joinder – where Third and Fourth Defendants seek leave to join Plaintiffs’ solicitor as cross-defendant when proceedings substantially advanced toward hearing – where solicitor is investor in impugned project – where joinder would require the solicitor to withdraw under the Solicitor’s Rules – whether application to join inconsistent with overriding purpose under s 56 of the Civil Procedure Act 2005 (NSW)
Legislation Cited: - Australian Securities and Investments Commission Act 2001 (Cth) s 12DI
- Civil Procedure Act 2005 (NSW) s 22, 56, 57, 58, 64, 64(2)
- Corporations Act 2001 (Cth) ss 601FS, 601FT, 728, 1335
- Freedom of Information Act 1982 (Cth)
- New South Wales Professional Conduct and Practice Rules (Solicitors’ Rules) 2013 r 27.2
- Uniform Civil Procedure Rules 2005 (NSW) r 19.3, 42.21(1), 42.21(1A)
Cases Cited: - ACN 105 921 962 Pty Ltd v Wiggett [2012] NSWSC 1526
- Aon Risk Services Australia Ltd v Australia National University [2009] HCA 27; (2009) 239 CLR 175
- Bank of Western Australia v Daleport Pty Ltd [2010] NSWSC 1207
- Beach Petroleum NL v Johnson (1992) 7 ACSR 203
- Bi v Mourad [2010] NSWCA 17
- Cement Australia Pty Ltd v Australian Competition & Consumer Commission [2010] FCAFC 101
- Deangrove Pty Ltd v Buckby [2002] FCA 1544
- DFD Rhodes Pty Ltd v Hancock Prospecting Pty Ltd [2015] WASC 105
- Dubow v Fitness First Australia Pty Ltd (No 2) [2012] NSWSC 961
- Dunnet Properties Pty Ltd v Cussen [2009] NSWSC 961
- Hans Pet Constructions Pty Limited v Cassar [2009] NSWCA 230
- Interwest Ltd v Tricontinental Corporation Ltd (1991) 5 ACSR 621
- Liberty Industrial Pty Ltd v Donald McCarthy Trading Australia Pty Ltd [2013] NSWSC 279
- Livingspring Pty Ltd v…

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 Morony v Reschke

Details

AGLC: Morony v Reschke [2015] NSWSC 860
Case: [2015] NSWSC 860
Decision Date: 01 July 2015

CaseChat Overview and Summary

In Morony v Reschke, the applicants sought leave to file a new cross-claim and an amended cross-claim, which the cross-defendants opposed. The cross-defendants also sought better particulars and requested security for costs, contingent on the granting of the cross-claims. The applicants, the Third and Fourth Defendants, were trustee companies involved in an investment project. They were not trading entities and sought to file the cross-claims as part of their defence. The First and Second Defendants, who were the primary defendants, argued that the cross-claims were not defensive in nature and that the cross-defendants' application to join the plaintiffs' solicitor as a cross-defendant was inconsistent with the overriding purpose under s 56 of the Civil Procedure Act 2005 (NSW).

The court had to determine whether to grant the applicants leave to file the new and amended cross-claims, and whether to grant security for costs. The applicants argued that their cross-claims were defensive in nature and necessary for the resolution of the dispute. The cross-defendants contended that the claims were not defensive and that the applicants were attempting to raise new issues at a late stage in the proceedings. The court also had to consider whether the application to join the plaintiffs' solicitor as a cross-defendant was consistent with the overriding purpose under s 56 of the Civil Procedure Act.

The court held that the applicants were not entitled to file the new and amended cross-claims. The court found that the cross-claims were not defensive in nature and that they sought to raise new issues that were not relevant to the resolution of the dispute. The court also held that the application to join the plaintiffs' solicitor as a cross-defendant was inconsistent with the overriding purpose under s 56 of the Civil Procedure Act. The court found that the joinder would require the solicitor to withdraw, which was not in the interests of justice. Finally, the court held that the cross-defendants were not entitled to security for costs as the applicants were not trading entities and the cross-claims were not defensive in nature.

The court dismissed the applicants' applications for leave to file the new and amended cross-claims, for security for costs, and to join the plaintiffs' solicitor as a cross-defendant. The court did not make any orders as to costs.

Orders