JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	24, 25 October 2013
DATE OF JUDGMENT:	22 November 2013
CASE MAY BE CITED AS:	Oswal v Carson & Ors
MEDIUM NEUTRAL CITATION:	[2013] VSC 615

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PRACTICE AND PROCEDURE – Application to join additional defendants and further amend Statement of Claim – Whether cause of action disclosed – No cause of action disclosed - Otherwise inappropriate and inconvenient to join proposed defendants.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Newlinds SC with Mr J Ross	Kliger Partners
For the First to Fourth Defendants	Mr M Connock SC with Mr J Graham	Herbert Smith Freehills
For the proposed Sixth, Seventh and Eighth Defendants	Mr D O’Callaghan SC with Mr G Hams	K & L Gates
For the proposed Ninth Defendant	Mr J Sheahan SC with Mr R Douglas	Clayton Utz
For the Plaintiff in proceeding S CI 2011 04653	Mr P Durack SC	Jones Day

HIS HONOUR:

A. Introduction

The plaintiff, Pankaj Oswal, was the owner of about 30 percent of the shares (‘the Shares’) in Yara Pilbara Holdings Limited (‘YPHL’). Acting under a Share Mortgage Deed, and on 16 December 2010, the fourth defendant, Australia and New Zealand Banking Group Ltd (‘ANZ’) appointed the first, second and third defendants (‘the Receivers’) as receivers of the Shares.

In late January 2012, the Receivers sold the Shares for about $250 million to Apache Fertilisers Pty Ltd (‘Apache Fertilisers’) and Yara Australia Pty Ltd (‘Yara’) (together ‘the Purchasers’).

The plaintiff claims that the Receivers did not obtain a proper price for the Shares and thereby failed to act in good faith. He alleges further that by selling the Shares to the Purchasers, the Receivers put themselves in a position of conflict of interest and that they preferred their own interests to those of the plaintiff. Finally, it is alleged that the Receivers wilfully or recklessly sacrificed the plaintiff’s interests, acted in a manner unfairly prejudicial to the plaintiff and failed to exercise all reasonable care.

As against ANZ, the plaintiff alleges that ANZ controlled the sale process and that the Receivers acted in accordance with the instructions of ANZ.

Similar claims (and further and additional claims) are made by the plaintiff’s wife, Radhika Oswal, in a related proceeding. Mrs Oswal was the owner of 35% of the shares in YPHL.

At present the claim is confined to the Receivers and ANZ.

By summons filed 17 September 2013 the plaintiff makes application pursuant to r 9.06 or r 9.02 of the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’) to join the following parties as additional defendants to the proceeding and to amend the Statement of Claim accordingly. The proposed added parties are:

•Apache Corporation.
•Apache Northwest Pty Ltd (‘Apache Northwest’).
•Apache Energy Ltd (‘Apache Energy’).
•Apache Fertilisers
•Yara
•YPHL.

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 Oswal v Carson & Ors

Details

AGLC: Oswal v Carson & Ors [2013] VSC 615
Case: [2013] VSC 615
Decision Date: 22 November 2013

CaseChat Overview and Summary

The court dealt with an application by the plaintiff to join additional defendants and further amend the statement of claim in Oswal v Carson & Ors. The plaintiff sought to join the application in the context of a claim for damages arising from alleged breaches of fiduciary duties and other causes of action. The application was brought before the Supreme Court of New South Wales.

The central legal issue before the court was whether the plaintiff had disclosed a cause of action against the proposed additional defendants, and if joining them would be appropriate and convenient. The court considered whether the plaintiff's claims against the new defendants were adequately substantiated and if permitting the amendment at that stage would be just and equitable.

The court found that the plaintiff had not demonstrated a cause of action against the proposed defendants, as the additional claims were speculative and insufficiently substantiated. The court also held that joining the additional defendants would be inappropriate and inconvenient, given the significant delay and potential prejudice to the existing defendants. The court emphasised that the plaintiff's application was not in the interests of justice, and therefore dismissed the application.

No further orders were made by the court, and the plaintiff's application to join additional defendants and further amend the statement of claim was dismissed.

Orders