Palatium Pty Ltd v Koren Holdings Pty Ltd [No 2]
[2015] WASC 311
•20 AUGUST 2015
PALATIUM PTY LTD -v- KOREN HOLDINGS PTY LTD [No 2] [2015] WASC 311
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 311 | |
| Case No: | COR:37/2012 | 30 JULY 2015 | |
| Coram: | MASTER SANDERSON | 20/08/15 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Leave to amend granted | ||
| A | |||
| PDF Version |
| Parties: | PALATIUM PTY LTD ANITA ENGLISH KOREN HOLDINGS PTY LTD GEMMA KOREN RICHARDSON NATALIE RANGSIMA ARMITAGE JAMES AUSTIN DE BAUGHN MARY ELIZABETH HEALEY SIMON JEREMY FITZGERALD |
Catchwords: | Practice and procedure Whether action commenced under Corporations Act 2001 (Cth) can be continued when no relief claim under Corporations Act after amendment |
Legislation: | Corporations Act 2001 (Cth) Rules of the Supreme Court 1971 (WA) Supreme Court (Corporation) Rules 2004 (WA) Supreme Court Act 1935 (WA) |
Case References: | Metroinvest Anstalt v Commercial Union Insurance Co PLC [1985] 2 All ER 318 Palatium Pty Ltd v Koren Holdings Pty Ltd [2012] WASC 414 Re Pritchard (Dec) [1963] Ch 502 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : PALATIUM PTY LTD -v- KOREN HOLDINGS PTY LTD [No 2] [2015] WASC 311 CORAM : MASTER SANDERSON HEARD : 30 JULY 2015 DELIVERED : 20 AUGUST 2015 FILE NO/S : COR 37 of 2012 BETWEEN : PALATIUM PTY LTD
- First Plaintiff
ANITA ENGLISH
Second Plaintiff
AND
KOREN HOLDINGS PTY LTD
First Defendant
GEMMA KOREN RICHARDSON
Second Defendant
NATALIE RANGSIMA ARMITAGE
Third Defendant
JAMES AUSTIN DE BAUGHN
Fourth Defendant
MARY ELIZABETH HEALEY
Fifth Defendant
SIMON JEREMY FITZGERALD
Sixth Defendant
Catchwords:
Practice and procedure - Whether action commenced under Corporations Act 2001 (Cth) can be continued when no relief claim under Corporations Act after amendment
Legislation:
Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)
Supreme Court (Corporation) Rules 2004 (WA)
Supreme Court Act 1935 (WA)
Result:
Leave to amend granted
Category: A
Representation:
Counsel:
First Plaintiff : Dr P R MacMillan
Second Plaintiff : Dr P R MacMillan
First Defendant : Mr S J Lemonis
Second Defendant : Mr S J Lemonis
Third Defendant : Mr S J Lemonis
Fourth Defendant : Mr S J Lemonis
Fifth Defendant : Mr S J Lemonis
Sixth Defendant : Mr S J Lemonis
Solicitors:
First Plaintiff : Peel Legal
Second Plaintiff : Peel Legal
First Defendant : Lemonis/Tantiprasut Lawyers
Second Defendant : Lemonis/Tantiprasut Lawyers
Third Defendant : Lemonis/Tantiprasut Lawyers
Fourth Defendant : Lemonis/Tantiprasut Lawyers
Fifth Defendant : Lemonis/Tantiprasut Lawyers
Sixth Defendant : Lemonis/Tantiprasut Lawyers
Case(s) referred to in judgment(s):
Metroinvest Anstalt v Commercial Union Insurance Co PLC [1985] 2 All ER 318
Palatium Pty Ltd v Koren Holdings Pty Ltd [2012] WASC 414
Re Pritchard (Dec) [1963] Ch 502
1 MASTER SANDERSON: The plaintiffs commenced these proceedings on 16 March 2012. They were commenced by originating process under the Corporations Act 2001 (Cth). Without going into specifics, the plaintiffs alleged oppressive conduct in relation to the affairs of Koren Holdings Pty Ltd.
2 The matter was first returned in chambers on 3 April 2012. At that time I ordered, by consent, the plaintiffs file and serve a statement of claim by 20 April 2012. A statement of claim was duly filed and the matter proceeded in fits and starts with variations to the timetable from time to time. At one point a dispute between the parties over a proposed statement of claim was heard at a special appointment: See Palatium Pty Ltd v Koren Holdings Pty Ltd [2012] WASC 414. It is fair to say, I think, the matter has not progressed to any great extent in the three years since proceedings were issued.
3 On 20 May 2015 the plaintiffs filed a minute of substituted statement of claim. By amended chamber summons filed 23 June 2015 the defendants sought to have the proceedings dismissed. As a consequential order they sought the costs of the proceedings including the reserved costs be paid by the plaintiffs on a solicitor and own client basis. At the hearing of that application the plaintiffs moved for an order that the statement of claim be amended in terms of the substituted statement of claim which had been filed.
4 The main issue raised by the defendants' application is whether the plaintiffs can amend what are presently Corporations Act proceedings so as to bring a general civil claim unrelated to the Corporations Act. Without going to the proposed substituted statement of claim in detail, it is sufficient if I say claims raised under the Corporations Act have now been abandoned. If leave is given to amend in terms of the substituted statement of claim the action will for all intents and purposes be a claim which would, in the normal course, be initiated by writ. It was the defendants' position there was no power under either the Corporations Rules or the Rules of the Supreme Court 1971 (WA) to convert a Corporations Act proceedings into general civil proceedings that make no claims under the Corporations Act.
5 The plaintiffs answered the defendants' submissions by referring first to O 4 r 1 which is in the following terms:
Commencing civil proceedings
Subject to the provisions of any Act and of these rules -
(a) every action in the Court must be commenced by writ;
(b) civil proceedings between parties to be heard in chambers must be commenced by originating summons;
(c) all other civil proceedings must be commenced by originating motion.
6 Order 2 rule 1(1) and (2) are in the following terms:
Effect of non-compliance
1. Non-compliance with rules
(1) Where in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
(2) Subject to subrule (3) the Court may, on the ground that there has been such a failure as is mentioned in subrule (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings, or any document, judgment or order therein or exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit.
2. Term used: case management direction
(1) A case management direction is any procedural direction that in the Court’s opinion it is just to make in a case to facilitate the attainment of the objects referred to in Order 1 rule 4B(1).
…
5. Court may review a case at any time
(1) The case manager for a CMC List case or, in any other case, a judge, master or registrar -
(a) at any time in the case, on his or her own initiative after notifying the parties; or
(b) when hearing a summons for directions or any other application in the case,
may review the progress of the case and may do any or all of the following -
(c) make any interlocutory order the Court considers just;
(d) make any case management direction the Court considers just;
(e) make any enforcement order the Court considers just.
The Court, in the exercise of the jurisdiction vested in it by this Act, in every cause or matter pending before it, shall have power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as shall seem just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal or equitable claim properly brought forward by them in such cause or matter; so that, as far as possible, all matters so in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided.
9 The plaintiffs referred to the decision in Re Pritchard (Dec) [1963] Ch 502 where the Court of Appeal with Lord Denning MR in dissent, held that a proceeding commenced in the wrong registry of the High Court was a nullity. The relevant rule of court in England was amended in 1964 to get over the Court of Appeal decision: See Metroinvest Anstalt v Commercial Union Insurance Co PLC [1985] 2 All ER 318, 322.
10 It is the plaintiffs' submission O 2 r 1(1) when taken together with the other orders and rules mentioned above and bearing in mind the thrust of s 24(7) the nullity/irregularity distinction is abolished. In a matter such as the present there is at worst an irregularity which does not render the proceedings a nullity. Furthermore, O 4A r 5(1)(d) empowers the court to make such case management directions as the court considers just. Holding the proceedings here to be a nullity would, in the plaintiffs' submission, serve no useful purpose.
11 In response the defendants say the Rules of the Supreme Court do not apply to this case because they are inconsistent with the Corporations Rules. That argument was advanced in this way. The defendants say the current proceedings are proceedings brought pursuant to the Corporations Act 2001. Accordingly, in these proceedings the Supreme Court is exercising jurisdiction conferred on it by the Corporations Act. The Supreme Court is not exercising the jurisdiction vested in it pursuant to the Supreme Court Act as the Corporations Rules apply to these proceedings and as r 1.3 provides they apply to proceedings under the Corporations Act there was no warrant for applying the Rules of the Supreme Court.
12 The defendants summarise their position in this way. They say there is no current irregularity in respect of the proceedings. These proceedings are proceedings brought under the Corporations Act using the Corporations Rules. What the plaintiffs seek to do is create an irregularity by allowing Corporations Act proceedings to be converted into general commercial proceedings.
13 On balance, I am satisfied the plaintiffs' argument should be accepted. There are in fact numerous ways proceedings can be commenced in this court. Apart from the issue of a writ there is the originating summons procedure, notice of motion and perhaps one or two other ways to commence an action. There is also the use of an originating process under the Corporations Act. If proceedings are issued under the Corporations Act then a 'COR' number is allocated. That stands in contrast to a 'CIV' number which is allocated to most, but not all, other proceedings which are issued. But the fact is all matters are in reality treated the same. Internally there is a distinction. Matters commenced by originating process under the Corporations Act are given a return date when they are issued and at first instance they are listed in master's chambers. The same is true of proceedings commenced by originating summons and notice of motion. On the other hand, when a writ is issued nothing happens until an appearance is filed at which time the matter is allocated to a registrar to be case managed unless it goes into the CMC list. But all these are internal procedures. The fact is once proceedings are commenced it really is neither here nor there as to how they were commenced.
14 In my view, the rules of the court taken together with s 27(7) of the Supreme Court Act make it clear the court is not to rule proceedings as a nullity simply because they have not been commenced in the appropriate way. To hold otherwise would create a level of uncertainty and serve no useful purpose. In this case for instance, it is not suggested if the plaintiffs' action was struck out, the plaintiffs could not commence fresh proceedings. There is no limitation issue. So the consequence would be the same action would be commenced in a different guise with all the costs and delay associated with that course of action. That is a result to be avoided.
15 Accordingly, I would not strike out the action as a whole on the basis put by the defendants. However, it is clear from a reading of the amended statement of claim that no action is brought against the third to sixth defendants. On that basis the claims against them ought be dismissed.
16 That leaves the question of whether the statement of claim ought be amended in terms of the minute. The remaining defendants did identify some minor difficulties with the statement of claim and counsel for the plaintiffs indicated during the course of his submissions the defendants' complaints would be taken on board and further consideration would be given to the form of the minute. On that basis then leave should be given to amend substantially in terms of the minute of substituted statement of claim.
17 I will hear the parties as to the precise form of orders and as to costs.
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