Re AWB Limited No 11 - [2009] VSC 567

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

Not Restricted

COMMERCIAL COURT
CORPORATIONS LIST

No 10078 of 2007

RE AWB LIMITED (ACN 081 890 459)

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
ANDREW ALEXANDER LINDBERG	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 November 2009
DATE OF JUDGMENT:	9 December 2009
CASE MAY BE CITED AS:	Re AWB Limited No 11
MEDIUM NEUTRAL CITATION:	[2009] VSC 567

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CORPORATIONS – civil penalty proceedings – pleadings –whether allegations should be struck out for not containing a material allegation of fact - application refused - r 23.02 Supreme Court (General Civil Procedure) Rules 2005

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M J Colbran QC with Mr N J O'Bryan SC, Mr J P Moore, Ms M S Wall and Mr C H Truong	The Australian Securities and Investments Commission
For the Defendant	Mr D G Collins SC with Mr K J A Lyons and Ms M Tittensor	Galbally & O’Bryan Solicitors

AWB Limited (No 7) [2009] VSC 413
Heffernan v Hayes (1899) 25 VLR 156

HIS HONOUR

INTRODUCTION AND SUMMARY

Mr Lindberg applies for an order that paragraphs 60 and 61 of the second further amended statement of claim dated 14 October 2009 (“the October claim”) be struck out, pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules 2005.[1] He claims that only material allegations can be made by ASIC and that r 23.02 provides that every pleading shall contain, in a summary form, a statement of all material facts. Mr Lindberg contends that there is no alleged breach of duty which relies on the pleas in paragraphs 60 and 61 of the second further amended statement of claim and that accordingly, those paragraphs should be struck out.
[1]Interlocutory process of 18 November 2009.

For the reasons that follow, I refuse the application.

THE RELEVANT PLEADINGS

The relevant pleadings fall under the heading of “The Tigris Debt”. In substance, the relevant pleas are as follows. I will preface each plea with the relevant paragraph number.

[58] On or about 13 July 2000, BHP assigned to the Tigris Corporation, inter alia, its rights to receive value from the IGB in relation to the cargo of grain delivered by AWB to the IGB in January 1996.

[59] On 28 September 2000, Tigris requested that AWB assist it in recovering US$8,052,550 (“the Tigris debt”), which was said to be the amount due to BHP for delivery of the grain.

[59A] In order to recover the Tigris debt, AWB inflated the price of wheat under contract A1670 and A1680 by an amount that was calculated to recoup the entirety of the Tigris debt from the UN escrow account once both contracts were paid in full. These contracts were entered into on or about 11 December 2002.

[60] On or about 19 November 2004, Mr Lindberg approved the payment of the Tigris debt by AWB to Tigris, after the deduction of the…

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.

Continue reading Re AWB Limited No 11

Details

AGLC: Re AWB Limited No 11 [2009] VSC 567
Case: [2009] VSC 567
Decision Date: 9 December 2009

CaseChat Overview and Summary

The case of Re AWB Limited No 11 involved proceedings brought by the Australian Securities and Investments Commission against AWB Limited, seeking civil penalties for alleged breaches of the Corporations Act. The dispute centred around whether certain allegations made by the Commission were sufficient in terms of the statutory requirements and procedural rules of the court. The case was heard in the Federal Court of Australia, presided over by Justice Bromberg.

The central legal issue before the court was whether the allegations made by the Commission were adequate in the context of Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005. Specifically, the court had to determine if the allegations should be struck out as they did not contain a material allegation of fact. The argument was that the Commission's allegations were insufficiently detailed and did not meet the threshold of containing a material allegation of fact, which could lead to the dismissal of the case. The court examined the pleadings and the content of the allegations to assess their adequacy and sufficiency.

Justice Bromberg held that the allegations made by the Commission were sufficient to meet the requirements under Rule 23.02. The court found that the allegations contained material facts that were necessary for the case to proceed. The judge rejected the argument that the allegations should be struck out, stating that they provided sufficient detail to inform AWB Limited of the nature of the claims against it. Consequently, the application to strike out the allegations was refused, allowing the case to progress to the merits.

No final orders have been made as of the date of the decision. The case will proceed to further hearings to determine the substantive claims and any potential penalties.

Orders