Procter v Kalivis

Case [2009] FCA 795

FEDERAL COURT OF AUSTRALIA

Procter v Kalivis [2009] FCA 795

CORRIGENDUM

EVE LYNNE PROCTER and BRENDA MAUREEN PROCTER v EVANGELO KALIVIS, ACN 088 370 996 PTY LTD, PATRICIA ANNE DABROWSKI, TIMOTHY JOHN DABROWSKI and BERRI DEVELOPMENTS PTY LTD (ACN 126 373 939)

SAD 210 of 2008

BESANKO J
31 JULY 2009 (CORRIGENDUM 28 SEPTEMBER 2009)
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

SAD 210 of 2008
BETWEEN:

EVE LYNNE PROCTER
First Applicant

BRENDA MAUREEN PROCTER
Second Applicant
AND:

EVANGELO KALIVIS
First Respondent

ACN 088 370 996 PTY LTD
Second Respondent

PATRICIA ANNE DABROWSKI
Third Respondent

TIMOTHY JOHN DABROWSKI
Fourth Respondent

BERRI DEVELOPMENTS PTY LTD (ACN 126 373 939)
Fifth Respondent

JUDGE:

BESANKO J

DATE OF ORDER:

31 JULY 2009 (CORRIGENDUM 28 SEPTEMBER 2009)

WHERE MADE:

ADELAIDE

CORRIGENDUM

1.In the last sentence, second last line, of paragraph 44, and the first sentence, second line, of paragraph 45, delete “necessary facts” and insert “necessary particulars”.

I certify that the preceding paragraph is a true copy of the Corrigendum to the Reasons for Judgment of the Honourable Justice Besanko.

Associate:

Dated:  28 September 2009

FEDERAL COURT OF AUSTRALIA

Procter v Kalivis [2009] FCA 795

DISCOVERY – application to strike out provisions of statement of claim – application for further particulars – application for discovery before particulars – whether provisions of statement of claim should be struck out because they have tendency to cause embarrassment or do not disclose reasonable cause of action or do not contain sufficient particulars or do not plead material facts or plead evidence instead of material facts – whether further particulars can be ordered where defence not filed – whether discovery before particulars can be ordered where allegations of breach of fiduciary duty

Held: provisions of statement of claim struck out for insufficient particularity – order for discovery before particulars

Corporations Act 2001 (Cth) s 9
Federal Court Rules O 11, rr 2, 16, O 12, rr 1, 2, 3, 4, 5, O 15 r 5,
Land Agents Act 1994 (SA)

Bartlett v Swan Television and Radio Broadcasters Pty Ltd (1995) ATPR 41-434 cited
Beach Petroleum NL v Johnson (1991) 105 ALR 456 discussed
Bruce v Oldhams Press Ltd [1936] 1 KB 697 discussed
Computershare Limited v Perpetual Registrars Limited (2000) 1 VR 626 cited
Edelston v Russell (1888) 57 LT 927 cited
Mayor, & c., City of London v Horner (1914) 111 LT 512 discussed
Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 7 FLR 135 discussed
Millar v Harper (1888) 38 Ch D 110 cited
Trade Practices Commission v CC (New South Wales) Pty Limited (1995) 58 FCR 426 discussed
WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 discussed

EVE LYNNE PROCTER and BRENDA MAUREEN PROCTER v EVANGELO KALIVIS, ACN 088 370 996 PTY LTD, PATRICIA ANNE DABROWSKI, TIMOTHY JOHN DABROWSKI and BERRI DEVELOPMENTS PTY LTD (ACN 126 373 939)

SAD 210 of 2008

BESANKO J
31 JULY 2009
ADELAIDE VIA VIDEOLINK WITH SYDNEY


IN THE FEDERAL COURT…

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AGLC
Procter v Kalivis [2009] FCA 795
Case
[2009] FCA 795
Decision Date

CaseChat Overview and Summary

In the matter of Procter v Kalivis, the applicants sought discovery of certain documents and an order for the first respondent to account for the use and application of funds derived from BankSA and Challenger Bank borrowings. The case was heard before the Federal Court of Australia. The primary legal issue was whether the applicants were entitled to an order for discovery of documents and an accounting from the first respondent before they had to provide particulars of their claims. The court also considered whether certain paragraphs in the statement of claim should be struck out as tending to cause embarrassment or failing to disclose a reasonable cause of action.

The court determined that the applicants were entitled to an order for discovery of documents before particularising their claims. This was because the applicants needed to ascertain the use and application of the funds in question, and the evidence suggested that the first respondent had acted as the applicants' agent and controlled the relevant funds. The court found that the applicants' need for information outweighed the respondents' concerns about potential embarrassment or ambiguity in the statement of claim. The court ruled that certain challenged paragraphs in the affidavits were admissible, following concessions made by the applicants. The court also decided that the paragraphs in the statement of claim challenged by the respondents did not warrant striking out, as they did not tend to cause embarrassment or fail to disclose a reasonable cause of action.

The court ordered that the respondents were to make discovery in terms of the applicants' amended notice of motion, the applicants were to have leave to file an amended statement of claim, and the respondents were to file a defence. The parties were given leave to make submissions regarding the final orders to be made in light of these reasons.

Orders

Orders of the court

1. The parties have leave to make submissions as to the orders which should be made in light of these reasons.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

The applicants have asked the first respondent to account to them for the use and application of the proceeds of the BankSA and the Challenger Bank borrowings but he has so far refused or failed to properly do so.The evidence on the applications It is convenient at this point to outline the evidence put forward on the two applications. On the respondents’ application, the affidavit of Mr Denis Fitzpatrick, solicitor, sworn on 2 March 2009 was tendered, without objection. Mr Fitzpatrick is the respondents’ solicitor. On the applicants’ application, the following affidavit evidence was tendered without objection:1.Affidavit of Mr Stephen Dickinson, solicitor, sworn on 13 March 2009 (Mr Dickinson is the applicants’ solicitor);2.Affidavit of Ms Eve Procter sworn on 31 March 2009.3.Affidavit of Mr Fitzpatrick sworn on 23 March 2009. The respondent objected to a number of paragraphs in the following affidavits tendered by the applicants:1.Affidavit of Mr Stephen Dickinson, solicitor sworn on 2 March 2009;2.Affidavit of Ms Eve Procter sworn on 2 March 2009. The respondents’ counsel prepared a table showing their objections to these two affidavits and the grounds of objection. I said that I would consider the objections and rule on them as part of my ruling on the substantive application. The applicants filed a document responding to the objections. In that document, which is on the Court file, they make a number of concessions. I have considered the respondents’ objections and I have decided to rule in terms of the applicants’ response. In other words, I rule that the challenged paragraphs are admissible, save to the extent that a concession is made by the applicants. The significance of the evidence is this. For the purposes of the applications before me, I do not think it can be doubted that, for at least certain purposes, the first respondent (and perhaps other respondents) was the applicants’ agent and owed them fiduciary duties. He gave them advice and carried out certain actions on their behalf. In addition, he had control of funds belonging to them.The objections to the statement of claim In opening his submissions, counsel for the respondents said that the paragraphs in the statement of claim which he challenged had a tendency to cause embarrassment and should be struck out on that ground (O 11 r 16(b) of the Federal Court Rules (“the Rules”)). As he developed his submissions, it became apparent that he relied on another ground as well, namely, that certain pleas did not disclose a reasonable cause of action. A plea will have a tendency to cause embarrassment if it is ambiguous or irrelevant, or if it is inconsistent with another plea. The latter case is to be distinguished from a plea which is clearly put in the alternative to another plea which is permissible. For present purposes, it is sufficient to refer to Mayor, &c., of City of London v Horner (1914) 111 LT 512 at 514 per Pickford LJ and Bartlett v Swan Television and Radio Broadcasters Pty Ltd (1995) ATPR 41-434 at 40,889 per Carr J.

Decision

Reasons for decision

BESANKO J
Both counsel took me through a number of financial and other documents relating to the transactions referred to in the statement of claim. The purpose of the exercise from the respondents’ point of view was to establish that all moneys had been used for the applicants’ benefit, or in accordance with their instructions, and that they had been provided with all the information to which they were entitled, or, which they had requested. The difficulties in engaging in such an exercise at this early stage are obvious. There are a number of transactions and they are complex transactions. I am not satisfied on the evidence before me that the respondents have established a sufficiently clear case of the type they advanced to overcome those reasons for making an order for discovery before particulars and, in my opinion, it is appropriate to make such an order.Conclusion I will hear the parties as to the orders to be made, but, in my opinion, the proper sequence of orders is as follows:1.The respondents are to make discovery in terms of paragraph 1 of the applicants’ amended notice of motion.2.The applicants are to have leave to file an amended statement of claim.3.The respondents are to file a defence.

Ratio Decidendi

Legal Principle Established

Established by: BESANKO J

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