RSD Chartered Accountants v Bolitho - [2014] VSCA 186

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2014 0057

RSD CHARTERED ACCOUNTANTS
	Applicant
v
LAURENCE JOHN BOLITHO	Respondent

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JUDGES:	NETTLE, ASHLEY and HANSEN JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	21 August 2014
DATE OF JUDGMENT:	21 August 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 186
JUDGMENT APPEALED FROM:	[2014] VSC 184 (Ferguson J)

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Appeal – Leave – Amendment to statement of claim – No defence yet filed – Facts and context not yet known – Disputed issue of construction of s 729(1) Corporations Act 2001 (Cth) – Group proceeding – Managed by judge – Leave refused.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr AJ Kelly QC with Mr EA Gisonda	Moray & Agnew
For the Respondent	Mr NJ O’Bryan SC with Mr JA Castelan	Mark Elliott

NETTLE JA:

I will invite Hansen JA to deliver the first judgment.

HANSEN JA:

The applicant, RSD Chartered Accountants, seeks leave to appeal from the order of a judge in the Commercial & Equity Division which granted leave to the respondent, Laurence John Bolitho, to file a further amended statement of claim.[1] The amendments were contained in a proposed further amended statement of claim upon which her Honour heard argument from affected parties and subsequently, on 30 April 2014, delivered judgment. The judgment also dealt with amendments which concerned another defendant to the proceeding, The Trust Company (Nominees) Ltd; no appeal is sought to be brought in respect of her Honour’s disposition of that part of the proposed amendments.
[1]Bolitho v Banksia Securities Ltd and ors (No. 2) [2014] VSC 184.

The proceeding is a group proceeding. It arises out of the collapse of Banksia Securities Ltd, and is brought by Mr Bolitho on behalf of himself and all persons who held debentures issued by Banksia on 25 October 2012 and who suffered loss and damage as a result of the conduct of the defendants. There are 16,000 group members. Her Honour has had the management of the proceeding since its inception in December 2012.

On 4 February 2014, her Honour had refused an earlier application to amend the statement of claim;[2] on that occasion too her Honour delivered written reasons for her decision. Each judgment reflects a careful and thorough appreciation of the relevant considerations. This, on an application to amend, not on a strike out application following amendment and a clarifying defence.[3]

[2]Bolitho v Banksia Securities Ltd and ors [2014] VSC 8.

[3]See Commonwealth of Australia v Verwayen (1990) 170 CLR 394, 456, Dawson J.

The statement of claim alleges that between 6 October 2009 and 25 October 2012, Banksia, by certain Product Disclosure Statements and Supplementary Statements, invited members of the public to deposit moneys with it on the security of debentures, and members of the public did so deposit moneys for fixed terms and at call and which, on maturity, would automatically roll over. There were three prospectuses, No 16, 17 and 18. In essence, it is alleged that group…

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: [2014] VSCA 186
Decision Date: 21 August 2014

CaseChat Overview and Summary

The case of RSD Chartered Accountants v Bolitho involved an application for leave to appeal from the respondent, Bolitho, against a decision made in a proceeding that had been consolidated and grouped under the management of a single judge. The original dispute related to claims made by the plaintiff, RSD Chartered Accountants, against the respondent, Bolitho, among other defendants, in relation to alleged breaches of fiduciary duty and negligence in the context of professional services provided. The application for leave to appeal was made before any defence had been filed by the respondent, and the facts and context of the dispute were not yet fully known. The central legal issue before the court was the interpretation and application of section 729(1) of the Corporations Act 2001 (Cth), which pertains to the amendment of pleadings and the procedural steps required in such cases.

The court considered the nature of the application, which was made under a section of the Act that allows for an appeal on a question of law. The respondent's application for leave to appeal was focused on the construction of section 729(1) and its implications for the amendment of the statement of claim. The court acknowledged the importance of the issue but also noted that the application was premature given that no defence had been filed, and the full facts of the dispute were not yet established. The court concluded that the application did not meet the criteria for granting leave to appeal as it was not appropriate to determine the question of law in the absence of a fully developed factual context and a response from the respondent.

In light of the above, the court refused the application for leave to appeal. The reasoning was that the question of law raised by the respondent was not suitable for determination at that stage of the proceedings, given the procedural context and the lack of a developed factual matrix. The court emphasised that the appropriate time for addressing such issues would be after the respondent had filed a defence and the full facts of the case had been presented. The court's decision was thus that the application for leave to appeal was not to be granted at that juncture in the proceedings.

Orders