Postorino v Encryption Technologies Corporation Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

POSTORINO v ENCRYPTION TECHNOLOGIES CORPORATION PTY LTD & ORS [2015] FCCA 1634
Catchwords:
CONSUMER LAW – Application commenced under the Trade Practices and Australian Securities and Investments Commission Act 2001 (Cth) claiming misleading or deceptive conduct in relation to the purchase of shares in respondent company – whether Court has implicit or accrued jurisdiction – whether federal claim “colourable” or bound to fail – whether to assume jurisdiction – application dismissed.

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth), ss.12BAA, 12BAB, 12BA(2), 12DA, 12GF, 12GJ
Corporations Act 2001 (Cth), ss.761A, 764(1)(a), 1041H, 1041I
Evidence Act 1995 (Cth), s.136
Fair Trading Act 1987 (NSW), ss.41, 42, 43, 68
Federal Circuit Court of Australia Act 1999 (Cth), ss.10, 14, 18
Federal Court of Australia Act 1976 (Cth), ss.22, 23, 32
Trade Practices Act 1974 (Cth), ss.51, 51AB, 51AC, 51AF, 52
Federal Circuit Court Rules 2001 (Cth), rr.13.03B(2)(c), 16.05(2)(a)

ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1
Ahmed v Harbour Radio Pty Ltd (2009) 180 FCR 313
Allied Mills Industries Pty Ltd v Trade Practices Commission (No.1) (1981) 34 ALR 105
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682
Australian Competition and Consumer Commission v Jones (No.5) [2011] FCA 49
Australian Competition and Consumer Commission v MSY Technology Pty Ltd & Ors (No.2) (2011) 279 ALR 609
Australian Competition and Consumer Commission v Shell Company of Australia Ltd (1997) 72 FCR 386
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640
Australian Securities and Investments Commission v Edensor Nominees Pty Ltd & Ors (2001) 204 CLR 559
Beck & Anor v Spalla & Anor (2005) 142 FCR 555
Burgundy Royale Investments Pty Ltd & Ors v Westpac Banking Corporation & Ors (1987) 18 FCR 212
Butcher & Anor v Lachlan Elder Reality Pty Ltd (2004) 218 CLR 592
Cambridge Gulf Investments Pty Ltd (in liq.) & Anor v Dandoe Pty Ltd & Ors (1999) 91 FCR 146
Campbell & Anor v Backoffice Investments Pty Ltd & Anor (2009) 238 CLR 304
Campomar Sociedad, Limitada v Nike International (2000) 202 CLR 45
Commercial Banking Co of Sydney Ltd v RH Brown & Co (1972) 126 CLR 337
Cook v Pasminco Ltd (2000) 99 FCR 548
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2009] NSWSC 1370
Dennis v Australian Broadcasting Corporation [2008] NSWCA 37
Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (No.2) (1987) 16 FCR 410
Fencott v Muller (1983) 152 CLR 570
Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445
General Newspapers Pty Limited & Ors v Telstra Corporation (1993) 45 FCR 164
George v Rockett & Anor (1990) 170 CLR 104
Gould & Anor v Vaggelas & Ors (1985) 157 CLR 215
Henville v Walker (2001) 206 CLR 459
Houghton & Anor v Arms (2006) 225 CLR 553
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Details
Case
[2015] FCCA 1634
Decision Date

CaseChat Overview and Summary

In *Postorino v Encryption Technologies Corporation Pty Ltd*, the applicant, Ms Sandrina Postorino, commenced proceedings in the Federal Circuit Court of Australia against Encryption Technologies Corporation Pty Ltd (ETC) and Robert Graeme Pritchard, alleging breaches of the *Trade Practices Act 1974* (Cth) and the *Australian Securities and Investment Commission Act 2001* (Cth). Anthony Colin Coombs was later joined as a third respondent. Pritchard was a director and chairman, and Coombs was a director of ETC at the relevant time in 2008. ETC did not defend the proceedings, and its director, Mr Steven Wollstein, gave evidence. ETC was struck off the register by ASIC prior to judgment.

The primary legal issue before the Court was the applicant's claim against the respondents under the *Trade Practices Act* and the *ASIC Act*. Given that ETC had been struck off the register, the Court also needed to consider the implications of this for the ongoing proceedings against the company.

Lloyd-Jones J noted that as ETC had been struck off the register, there was no power to proceed against the company. However, the pleadings against ETC were not abandoned. The Court ordered that the name of the first respondent be amended to "Encryption Technologies Corporation ACN 104 040 299". The application filed on 27 January 2009 was dismissed, and there were no orders as to costs.

Orders

Orders of the court

1.

The name of the first respondent be amended to “Encryption Technologies Corporation ACN 104 040 299”.

2.

The Application filed 27 January 2009 be dismissed.

3.

There be no order as to costs.

FEDERAL CIRCUIT COURT

OF AUSTRALIA

AT SYDNEY

SYG 187 of 2009

SANDRINA POSTORINO

Applicant

And

ENCRYPTION TECHNOLOGIES CORPORATION PTY LTD

(ACN 104 040 299)

First Respondent

ROBERT GRAEME PRITCHARD

Second Respondent

ANTHONY COLIN COOMBS

Third Respondent

REASONS FOR JUDGMENT

Introduction

1.

On 27 January 2009, the applicant, Ms Sandrina Postorino (“Postorino”) commenced proceedings in this Court against the First Respondent, Track ‘N’ Find Pty Ltd, ANC 104 040 299 (now known as Encryption Technologies Corporation Pty Ltd) (“ETC”) and the Second Respondent, Robert Graeme Pritchard (“Pritchard”) under the provisions of the Trade Practices Act 1974 (Cth) (the “TP Act”) and Australian Securities and Investment Commission Act 2001 (Cth) (the “ASIC Act”). On 1 November 2012, the solicitors for Postorino filed an application for a joinder of a third respondent to the proceedings, being Anthony Colin Coombs (“Coombs”). At a hearing on 13 December 2012 orders were made that Coombs be joined as a third respondent to the proceedings. Pritchard was a director and the chairman, while Coombs was a director of ETC at the time of the events relevant to these proceedings in 2008.

2.

At the final hearing, the Court was advised that ETC was not defending these proceedings. Its Director, Mr Steven Wollstein (“Wollstein”) gave evidence in Postorino’s case, as did another former director, Mr Devlin Stuart Miotti (“Miotti”). ETC was struck off the register by ASIC on 30 July 2014. As the company has been struck off the register before judgment, there is no need (or power) to proceed against the company; however the pleadings against ETC are not abandoned.

3.

In accordance with normal practice adopted by the Court, the matter was referred to a Registrar for mediation pursuant to Part 27 of the

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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