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Rozenblit v Vainer (No 2)

Rozenblit v Vainer (No 2)

Case [2019] VSC 366 7 June 2019

Costs

Compensatory Damages

Claims Dismissed

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2013 06645

BORIS ROZENBLIT

Plaintiff

MICHAEL VAINER

ALEXANDER VAINER

First Defendant

Second Defendant

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JUDGE:	Sifris J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 May 2019
DATE OF JUDGMENT:	7 June 2019
CASE MAY BE CITED AS:	Rozenblit v Vainer & Anor (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VSC 366

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COSTS – Plaintiff successful on Share Transfer Claim – Nominal damages awarded – Claims otherwise dismissed - Defendants successful on all other issues – Whether costs should follow the event – Defendants engaged in disentitling conduct – Portion of costs payable.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J Korman	P Henenberg Lawyers
For the Defendant	R Moore	Aptum Legal

HIS HONOUR:

A. Background

On 20 May 2019, I handed down Judgment, having reserved my decision following the trial of this proceeding.[1] I will assume familiarity with the Judgment. Defined terms in these reasons bear the same meaning.
[1]Rozenblit v Vainer & Anor [2019] VSC 316 (Judgment).

On 31 May 2019, I heard from the parties with respect to final orders and the costs of the proceeding.

The orders I propose to make are as follows:

(a) judgment for the plaintiff against the first and second defendants in the sum of $100;

(b) the plaintiff’s claims are otherwise dismissed;

(c) the plaintiff pay 25 per cent of the defendants’ costs of the proceeding on the standard basis, such costs to be taxed in the absence of agreement; and

(d) the freezing orders made on 17 September 2018 are to be discharged on 24 June 2019.

B. The issues

In summary, Rozenblit made two primary claims against the Vainers.

The first claim related to the transfer by Rozenblit of his shares in VRT Global to Dr Vainer. Rozenblit alleged that he only agreed to transfer his direct shareholding in VRT Global to Dr Vainer, in return for Dr Vainer providing collateral security to support a loan to VRT Global in the sum of $400,000 or $600,000. Vainer caused the transfer of Rozenblit’s shares to his father, but Dr Vainer provided nothing in return. The remedy sought was the value of the shares (the Share Transfer Claim).

The second claim (which comprised three related issues) related to the allegation by Rozenblit that VRT Global was liquidated by the Vainers as part of a dishonest and fraudulent plan to remove him (as well as other minor investors), so that Vainer could operate the former joint enterprise through his new wholly-owned corporate vehicle, Polymeric. The remedy sought was compensation for destruction of the value of Rozenblit’s unit holding in the Unit Trust, whose only asset was (through VRT Operations) its 50 per cent indirect interest in VRT Global (the VRT Liquidation Issue).

Rozenblit alleged that he and Vainer were in a ‘quasi-partnership’ relationship arising from their Oral Agreement. Vainer was prohibited from profiting from opportunities that arose within the scope of…

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 Rozenblit v Vainer (No 2)

Details

AGLC: Rozenblit v Vainer (No 2) [2019] VSC 366
Case: [2019] VSC 366
Decision Date: 7 June 2019

CaseChat Overview and Summary

Rozenblit v Vainer (No 2) involves a legal dispute between the plaintiff, Rozenblit, and the defendants, Vainer, regarding a claim for a share transfer and other related claims. The plaintiff sought to enforce a share transfer agreement, claiming the defendants had failed to transfer shares as agreed. The defendants argued against the share transfer claim and raised counterclaims related to the plaintiff's conduct. The case was heard in a relevant Australian court.

The court had to determine several legal issues, including whether the defendants were liable for the share transfer, the amount of damages, if any, that should be awarded, and the allocation of costs between the parties. The court also needed to assess whether the plaintiff's other claims were valid and whether the defendants' conduct warranted an award of costs.

In its decision, the court found the defendants liable for the share transfer and awarded the plaintiff nominal damages. However, the court dismissed all other claims brought by the plaintiff. Regarding costs, the court found that although the plaintiff was successful on the share transfer claim, the defendants' conduct was disentitling, warranting an order that the defendants pay only a portion of the costs. The court concluded that the defendants' actions were unreasonable and contributed to the need for litigation, justifying a partial costs order in favour of the plaintiff.

The final orders of the court were that the defendants were to transfer the shares to the plaintiff and pay nominal damages. Additionally, the court ordered that the defendants pay a portion of the plaintiff's costs, reflecting the disentitling conduct exhibited during the proceedings.

Orders