Saaksjarvi v Holt Norman Ashman Pty Ltd
[2001] VSC 79
•28 March 2001
| SUPREME COURT OF VICTORIA | |
| PRACTICE COURT | Not Restricted |
No. 4383 of 2001
| ILLKA SAAKSJARVI | Plaintiff |
| v. | |
| HOLT NORMAN ASHMAN PTY. LTD. | Defendant |
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JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 22 MARCH 2001 | |
DATE OF JUDGMENT: | 28 MARCH 2001 | |
CASE MAY BE CITED AS: | SAAKSJARVI v. HOLT NORMAN ASHMAN PTY. LTD. | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 79 | |
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CATCHWORDS: Practice and Procedure – Amending pleadings - Proposed amendments too vague.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr. A. Flower | Fernandez Canda Gerkens |
| For the Defendant | Mr. M. Lapirou | Davies Moloney |
HIS HONOUR:
This is a group proceeding brought by Illka Saaksjarvi against Holt Norman Ashman Pty. Ltd. pursuant to the provisions of Part 4A of the Supreme Court Act 1986.
By his statement of claim the plaintiff pleads that the defendant which carries on business as an accountant and financial adviser was given the sum of $50,000 by him in around 1988, such sum to be invested by the defendant in a company called Express Financial Services Pty. Ltd. (Express).
The money was handed by the plaintiff to Peter Holt a director of the defendant. It is pleaded that Holt was also a director of Express and "had a personal interest" in Express.
The plaintiff claims that in order to induce him to make the investment Holt represented to him that any loans advanced by Express would be secured by first or second mortgage over real estate, that the plaintiff would be allotted shares in Express and that the plaintiff would obtain 13½% interest on the funds together with a 3% dividend from Express' profits.
In an affidavit sworn by the plaintiff on 20 March 2001 the plaintiff has deposed to the fact that he regularly received interest payments until approximately 1995, thereafter they were routinely late and that the last interest payment he received was on 1 January 2000.
He has also sworn that he has received no dividend payments since 1995.
By order of this Court made on 11 February 2000 Express was placed into liquidation.
The plaintiff has been unable to recover the $50,000 or any portion of it and now seeks damages from the defendant for misrepresentation and breach of duty.
There are some 30 other investors who are similarly affected hence the group proceeding.
On 9 February 2001 the plaintiff filed an appropriate summons for directions in the Court returnable on 15 March.
On 13 March 2001 the defendant filed and delivered its defence. By the defence it pleads that the defendant was incorporated on 11 October 1999 and that Peter Holt has been a director of it since its incorporation.
When the matter came before me on 15 March counsel for the defendant submitted that the proceeding should be dismissed on the ground that the plaintiff had sued the wrong defendant.
There was at that time no appropriate application before the Court in that regard and I declined to entertain the contention. I did, however, adjourn the plaintiff's summons for directions for one week to allow counsel for the plaintiff an opportunity to consider the mater.
By the time the matter came before me on 22 March the parties had filed two further summonses in the proceeding – one by the defendant seeking that the proceeding be dismissed, one by the plaintiff seeking leave to join Holt Norman & Associates (a firm) as a defendant and leave to amend the statement of claim in the manner set out in Exhibit "IS-1" to the affidavit of the plaintiff sworn 20 March 2001.
In the circumstances that is that the plaintiff was seeking leave to add the firm as a co-defendant and seeking leave to amend his statement of claim, counsel for the defendant did not persist with his application for an order that the proceeding be dismissed. In due course therefore, I shall dismiss that summons.
However, counsel for the defendant opposed the application to amend the statement of claim in the manner proposed on the ground that the amended statement of claim is quite unsatisfactory.
In my view that contention is correct. Without attempting to be exhaustive in the matter I point to the following aspects of the proposed amended statement of claim:
Para. 3(b) – This is a plea that on 11 October 1999 the company took over the operation of the business (of providing accounting services) from the second defendant.
Nowhere is it pleaded that the company assumed responsibility for the negligent behaviour of the firm prior to 11 October 1999 or the responsibility for any misrepresentations made by Holt prior to that date. If that is to be the plaintiff's case such matters must be pleaded.
Para 4 – This paragraph alleges that "at all relevant times the plaintiff retained the defendants as his accountants and financial advisers".
In my opinion the paragraph is too vague. The plaintiff should state over what periods of time he retained each defendant to act as his accountant and adviser. It could be that he did not retain the company after it was incorporated. One does not know from the pleading. If he did, when did he do so?
Para. 5 – This paragraph alleges that "in or around 1988 Mr. Peter Holt, a partner in the second defendant and a director of the first defendant etc"
Holt was not a director of the company in 1988 for the simple reason that it did not exist at that time.
Para. 7 – Again the plaintiff pleads that "at all relevant times the defendants owed to the plaintiff a duty of care etc."
The relevant times should be stated with reference to the company on the one hand and the firm on the other.
Sub-para. (c) of the paragraph alleges that the defendants owed to the plaintiff a duty of care to ensure that the plaintiff's funds were not advanced for speculative purposes or on an unsecured basis.
If the funds were advanced to third parties prior to 11 October 1999 such a claim cannot be made against the company. Again that aspect of the matter must be clarified in sufficient detail to enable the company to know what allegations are being made against it in that regard.
Similar complaints to the ones I have made can be made in relation to some of the later paragraphs in the statement of claim.
In the circumstances I make the following orders in the matter:
(1) I dismiss the defendant's summons filed 16 March 2001.
(2)I give leave to the plaintiff to join Holt Norman & Associates (a firm) as a defendant to the proceeding.
(3) I give leave to the plaintiff to amend the title to the proceeding.
(4)I adjourn the further hearing of the summons for directions and the plaintiff's summons filed 20 March 2001 to a date to be fixed to enable the plaintiff to prepare an appropriate amended statement of claim
The plaintiff may bring his two summonses back before the Court not earlier than 7 days after he has served on the solicitors for the company his proposed amended statement of claim
(5)In my opinion it is appropriate that the plaintiff pay the company costs of its appearance before the Court on 15 March and 22 March and I so order. A company search of the defendant company made prior to the institution of the proceeding as it should have been, would have revealed that the company was not incorporated until 11 October 1999. Had that occurred a lot of the present problems would not have arisen.
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