Parbery v QNI Metals Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION:  Parbery & Ors v QNI Metals Pty Ltd & Ors [2018] QSC 240

PARTIES: 

STEPHEN JAMES PARBERY AND MICHAEL ANDREW OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD

(IN LIQ) ACN 009 842 068
(first plaintiffs)
QUEENSLAND NICKEL PTY LTD (IN LIQ)
ACN 009 842 068
(second plaintiff)
JOHN RICHARD PARK, KELLY-ANNE LAVINA
TRENFIELD & QUENTIN JAMES OLDE AS
LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD
(IN LIQ) ACN 009 842 068
(third plaintiffs)
v
QNI METALS PTY LTD ACN 066 656 175
(first defendant)
QNI RESOURCES PTY LTD ACN 054 117 921
(second defendant)
QUEENSLAND NICKEL SALES PTY LTD
ACN 009 872 566
(third defendant)
CLIVE FREDERICK PALMER
(fourth defendant)
CLIVE THEODORE MENSINK
(fifth defendant)
IAN MAURICE FERGUSON
(sixth defendant)
MINERALOGY PTY LTD ACN 010 582 680
(seventh defendant)
PALMER LEISURE AUSTRALIA PTY LTD
ACN 152 386 617
(eighth defendant)
PALMER LEISURE COOLUM PTY LTD
ACN 146 828 122
(ninth defendant)
FAIRWAY COAL PTY LTD ACN 127 220 642
(tenth defendant)
CART PROVIDER PTY LTD ACN 119 455 837
(eleventh defendant)
COEUR DE LION INVESTMENTS PTY LTD ACN 006
334 872
(twelfth defendant)
COEUR DE LION HOLDINGS PTY LTD ACN 003 209
934
(thirteenth defendant)
CLOSERIDGE PTY LTD ACN 010 560 157
(fourteenth defendant)
WARATAH COAL PTY LTD ACN 114 165 669
(fifteenth defendant)
CHINA FIRST PTY LTD ACN 135 588 411
(sixteenth defendant)
COLD MOUNTAIN STUD PTY LTD ACN 119 455 248
(seventeenth defendant)
EVGENIA BEDNOVA
(eighteenth defendant)
ALEXANDAR GUEORGUIEV SOKOLOV
(nineteenth defendant)
ZHENGHONG ZHANG
(twentieth defendant)
SCI LE COEUR DE L’OCEAN
(twenty-first defendant)
DOMENIC MARTINO
(twenty-second defendant)
and
MARCUS WILLIAM AYRES
(first defendant added by counterclaim)
STEFAN DOPKING
(second defendant added by counterclaim)
FILE NO:  SC 6593 of 2017
DIVISION:  Trial Division
PROCEEDING:  Applications filed by defendants on 12 July 2018 (CFI 302)
and 3 October 2018 (CFI 358)

Applications filed by plaintiffs on 18 June 2018 (CFI 287) and 11 July 2018 (CFI 300)

DELIVERED ON:  22 October 2018
DELIVERED AT:  Brisbane
HEARING DATE:  8 and 9 October 2018
JUDGE:  Jackson J
ORDER:  The order of the court is that:

1. 

The application for leave to proceed filed on 3 October 2018 is dismissed, except for the counterclaim not struck through on the draft pleading that is the Annexure to these reasons

2. 

The defence and counterclaim filed 12 April 2018 is struck out with leave to the defendants other than the fourth, twentieth and twenty-first defendants to file an amended consolidated defence and counterclaim in accordance with the draft pleading that is the Annexure to these reasons.

3. 

As to the consolidated statement of claim filed 6 August 2018:

(a) the words “and were subject to the equitable liens

pleaded in paragraphs 112 and 113” are struck out

of paragraphs 182, 187, 194, 203, 208, 214, 220,
226, 232, 238, 244, 250, 256, 263, 271, 278, 290, 309,
318, 329, 337, 345, 353, 359, 365 and 372;

(b) paragraph 313 is struck out; and

(c) paragraphs 378 and…

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Details
Case
[2018] QSC 240
Decision Date

CaseChat Overview and Summary

Parbery v QNI Metals Pty Ltd involved a dispute over leave to proceed with proceedings against QNI Metals Pty Ltd and other parties. The case was heard over two days with detailed submissions exchanged beforehand. The court was required to decide whether to grant leave to proceed with the proceedings and whether to strike out certain parts of the defence and counterclaims.

The legal issues focused on the requirements for leave to proceed under sections 471B and 500 of the Corporations Act and the principles of prima facie case and sufficient merit in the context of winding up proceedings. The court considered the detailed submissions from both parties, which included references to previous cases such as Agar v Hyde, Dey v Victorian Railways Commissioners, and General Steel Industries Inc v Commissioner for Railways (NSW). The court found that most of the application for leave to proceed against QNI must be refused, leading to the striking out of most of the counterclaim. Parts of the defence that attempted to set up claims by the Joint Venturers against QNI for damages or equitable compensation were also struck out. Additionally, some parts of the statement of claim were struck out.

The court concluded that the application for leave to proceed against QNI must be refused, except in some specific instances, and as a result, most of the counterclaim must be struck out. Parts of the defence and the statement of claim were also struck out based on the principles of prima facie case and sufficient merit. The court's decision was based on the detailed submissions and the relevant legal principles applied to the specific context of winding up proceedings under the Corporations Act.

The final orders of the court were that the application for leave to proceed against QNI must be refused in most instances, with corresponding parts of the counterclaim, defence, and statement of claim being struck out. The specific details of the orders were outlined in the court's judgment.

Orders

Orders of the court

The order of the court is that:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Detailed written submissions were exchanged in the days before the hearing of the applications and the oral hearing extended over two days. Because of the need for expedition, and having regard to the views I have reached on some of the different issues, I propose to deal with the applications by considering the application for leave first, and the cross applications to strike out second. Summary of conclusions First, in my view, with some exceptions, the application for leave must be refused. It follows that most of the counterclaim must be struck out. Second, the parts of the defence that set up the same claims by the Joint Venturers against QNI for damages or equitable compensation by way of set-off of must also be struck out. Third, other parts of the defence must be struck out. Fourth, some parts of the statement of claim must be struck out. Leave to proceed The parties made detailed submissions in writing as to the law and principles to be applied in considering whether to grant leave to proceed against QNI, captured in summary by the requirement of a “serious question to be tried” or a “solid foundation [that] gives rise to a serious dispute”.[5] One difference between the present application [5] Commonwealth v Davis Samuel Pty Ltd (No 5) (2008) 164 ACTR 1, 7 [24]-[29]. and the first leave application is that QNI is now ordered to be wound up in insolvency, so the application against it is now brought under s 471B, not s 500, of the CA. That does not change matters in any significant way. The principles to be applied on the application for leave against QNI were also stated in the reasons for judgment on the first leave application[6] and referred to in the reasons for judgment on the appeal.[7] In the circumstances, it is unnecessary to set out more about them in these reasons. [6] QNI Resources Pty Ltd & Ors v Park & Ors (2016) 116 ACSR 321, 330-332 [44]-[51]. [7] QNI Resources Pty Ltd & Ors v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167, [26]. On the application for leave against the GPLs, the parties also made detailed submissions in writing as to the law and principles to be applied, if leave to proceed is required, summarised as whether the court is “satisfied that there is a prima facie case” considering the “sufficiency of the evidence adduced as to the prospects of success” and whether the claim has “sufficient merit”.[8] There was no significant [8] Eighty Second Agenda Pty Ltd v Handberg [2014] VSC 665, [32], [33] and [34]. difference between the parties’ submissions as to the law to be applied, except that the Joint Venturers submit that leave to proceed is not required against a liquidator in a creditors’ voluntary winding up. The only point I would add to those made by the parties as to the law to be applied on either of the aspects of the application for leave to proceed is to refer to Agar v Hyde.[9] That case concerned the correct approach to be taken on an application for leave to proceed by a plaintiff who brings a proceeding against a defendant resident outside [9] (2000) 201 CLR 552. the jurisdiction, under what is sometimes called the “exorbitant” jurisdiction. That context is different. But there are two points of present interest that emerge from the reasons of the plurality. First, as will appear later in these reasons in relation to the applications to strike out under UCPR r 171 based on abuse of process, the plurality re-emphasised the point that a court whose jurisdiction is regularly invoked should not decide the issues raised in the proceeding in a summary way except in the clearest of cases, relying on Dey v Victorian Railways Commissioners[10] and General Steel Industries Inc v Commissioner for Railways (NSW).[11] Second, the plurality held that the question whether leave should not be granted in that context because of the [10] (1949) 78 CLR 62, 91. [11] (1964) 112 CLR 125, 130. plaintiff’s poor prospects of success should be the same test “as is applied in an application for summary judgment by a defendant”.[12] [12] (2000) 201 CLR 552, 576.

Ratio Decidendi

Legal Principle Established

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