Re Allmine Group Ltd (in liq) - [2021] VSC 125

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2018 02986

BETWEEN:

MICHAEL CHARLES HIRD IN HIS CAPACITY AS LIQUIDATOR OF ALLMINE GROUP LTD (IN LIQUIDATION) (ACN 128 806 271)	First Plaintiff
ALLMINE GROUP PTY LTD (IN LIQUIDATION) (ACN 128 806 271)	Second Plaintiff
-and-
SCOTT ALEXANDER WALKEM (and others according to the Schedule)	Defendants

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JUDGE:	Connock J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 March 2021
DATE OF JUDGMENT:	16 March 2021 (Ex tempore); Revised 17 March 2021
CASE MAY BE CITED AS:	Re Allmine Group Ltd (in liq)
MEDIUM NEUTRAL CITATION:	[2021] VSC 125

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PRACTICE AND PROCEDURE — Application for amendment under r 36.01(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Application of r 36.01(6) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Application of r 36.04(1)(a) and r 36.04(2) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Amendment application general principles — Whether leave to amend required — Breach of director’s duty — Section 180 of the Corporations Act 2001 (Cth) — Circumstances of the corporation.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Mackay	Aptum Legal Pty Ltd
For the First Defendant	Ms S Gory	Colin Biggers & Paisley
For the Second Defendant	Ms N Papaleo	Keypoint Law
For the Third Defendant	Mr M Crommelin (solicitor)	Murfett Legal
For the Fourth Defendant	Ms E Bennett	DLA Piper Australia

HIS HONOUR:

Introduction and Summary

The first plaintiff is the liquidator of the second plaintiff (Allmine Group) which was an ASX listed mining services company.[1] All current defendants are alleged to have been directors of Allmine Group at various times.
[1]It was placed in administration on 20 June 2013, receivers were appointed the following day, and a liquidator was appointed on 18 October 2013.

By their amended summons the plaintiffs seek to join Cloud Holdings Pty Ltd (Cloud Holdings) as the fifth defendant, seek leave to file and serve a further amended writ, and seek leave to file and serve an amended statement of claim.[2]
[2]To the extent that such leave is required, which is discussed further below.

The proceeding was commenced by a generally indorsed writ filed in December 2018, which was not served on the defendants until late 2019 and early 2020, with public examinations of the former directors and others taking place in the meantime.[3] The original statement of claim was filed on 11 December 2019 and all defendants filed appearances by March 2020.
[3]Orders were made extending the period of the validity of the writ for service and substituted service orders were made against the fourth defendant, Mr Kreppold.

During 2020 there were extended communications between the parties regarding alleged deficiencies with the statement of claim and related matters, which the court requested the parties to seek to resolve or narrow as between themselves. This ultimately resulted in the form of the proposed amended statement of claim now under consideration…

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.

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Details

Case: [2021] VSC 125
Decision Date: 16 March 2021 (Ex tempore); Revised 17 March 2021

CaseChat Overview and Summary

In the matter of Allmine Group Ltd (in liquidation), the liquidator sought to amend the statement of claim to add additional allegations of breaches of director's duty under section 180 of the Corporations Act 2001 (Cth). The application was made to the Supreme Court of Victoria. The primary issue before the Court was whether the liquidator was required to obtain leave to amend the statement of claim, and if so, whether such leave should be granted.

The Court considered the relevant provisions of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), specifically rules 36.01(6), 36.04(1)(a) and 36.04(2). The Court noted that the application of these rules required a balance between the need for flexibility in the conduct of proceedings and the need to avoid unjust surprise or prejudice to the opposing party. The Court found that the liquidator was required to obtain leave to amend the statement of claim, but that such leave should be granted in this case.

The Court found that the amendment would not cause any prejudice to the defendants, as the additional allegations related to the same subject matter as the existing claims and were based on the same set of facts. The Court also noted that the amendment was not being sought at a late stage in the proceedings and that the defendants had had ample opportunity to investigate the matters alleged in the proposed amended statement of claim. The Court further found that the amendment would not substantially alter the case or require additional evidence to be adduced.

Accordingly, the Court granted leave for the statement of claim to be amended as proposed by the liquidator.

Orders