SDS Corp Ltd v Pasdonnay Pty Ltd
[2004] WASC 26 (S)
•5 APRIL 2004
SDS CORPORATION LTD -v- PASDONNAY PTY LTD & ANOR [2004] WASC 26 (S)
| Link to Appeal : | [2005] WASCA 9 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 26 (S) | |
| 05/04/2004 | |||
| Case No: | CIV:2435/2002 | 4-6, 10-11 NOVEMBER 2003 & 17 FEBRUARY 2004 | |
| Coram: | ROBERTS-SMITH J | 27/02/04 | |
| 17/02/04 | |||
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | SDS CORPORATION LTD (ABN 73 007 980 645) PASDONNAY PTY LTD (ABN 86 009 131 622) IAN GRAEME REAR |
Catchwords: | Practice and procedure Civil trial Chamber summons for leave to reopen trial Application to reopen after completion of evidence and addresses but before judgment |
Legislation: | Nil |
Case References: | SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor [2004] WASC 26 Smith v New South Wales Bar Association (1992) 176 CLR 256 Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 17 FEBRUARY 2004 FILE NO/S : CIV 2435 of 2002 BETWEEN : SDS CORPORATION LTD (ABN 73 007 980 645)
- Plaintiff
AND
PASDONNAY PTY LTD (ABN 86 009 131 622)
First Defendant
IAN GRAEME REAR
Second Defendant
Catchwords:
Practice and procedure - Civil trial - Chamber summons for leave to reopen trial - Application to reopen after completion of evidence and addresses but before judgment
(Page 2)
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr D R Kilpatrick
First Defendant : Mr D H Solomon
Second Defendant : Mr D H Solomon
Solicitors:
Plaintiff : Williams & Hughes
First Defendant : Solomon Brothers
Second Defendant : Solomon Brothers
Case(s) referred to in judgment(s):
SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor [2004] WASC 26
Smith v New South Wales Bar Association (1992) 176 CLR 256
Urban Transport Authority v Nweiser (1992) 28 NSWLR 471
Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88
Case(s) also cited:
Nil
(Page 3)
1 ROBERTS-SMITH J: The trial of this action was held in November 2003. Judgment was reserved.
2 On 10 February 2004, whilst judgment was still pending, the plaintiff filed a chamber summons by which it sought orders that the trial be re-opened and the plaintiff have leave to adduce further evidence.
3 The chamber summons was supported by the affidavit of Mr Ken Vincent Benson sworn and filed on 9 February 2004 and that of Laura Anne Del Fuoco sworn and filed on 10 February 2004. the defendants filed an affidavit of Ian Kenneth Bellamy sworn and filed 11 February 2004 in opposition.
4 The chamber summons came on for hearing on 17 February 2004. Judgment was for the plaintiff.
5 Having heard the submissions of counsel, I refused the plaintiff's application, with costs.
6 Judgment in the action proper was delivered on 27 February 2004.
7 When dismissing the plaintiff's application to re-open on 17 February 2004, I did not give reasons and indicated I would not do so unless requested by the parties.
8 Counsel for the plaintiff at that time requested that I publish reasons.
9 These are those reasons.
10 I shall not set out the details of the action nor the evidence. They are set out in my judgment delivered 27 February 2004 (SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor [2004] WASC 26). These reasons should be read with that.
11 In his affidavit Mr Benson deposes that SDS sought to lead evidence of capital raising it had undertaken. He considers that the capital which SDS had raised is relevant to the question of SDS's ability to perform its obligations pursuant to the Business Assets Sale Agreement ("the Agreement") which it entered into with the defendants.
12 He deposes that the prospect of capital raising and placement was first raised in a meeting on 19 November 2003 with the representatives of Bell Potter Securities in Adelaide. In December 2003 SDS secured commitments from investors to contribute the sum of $16.5 million by way of the issue of 30,000,000 fully paid ordinary shares in SDS at an
(Page 4)
- issue price of 55 cents. The commitments from the investors were expressed to be subject to SDS obtaining shareholder approval for the capital raising at an extra-ordinary general meeting of SDS which was scheduled for 23 January 2004. The resolution for placement of the new shares to the investors was passed at that meeting. An announcement to that effect was subsequently made to the ASX on 27 January 2004.
13 According to Benson, on 28 January 2004 SDS received $16,046,250 representing the proceeds of the issue of 13,000,000 fully paid ordinary shares in SDS less costs associated with the capital raising. On 28 January 2004, SDS issued 30,000,000 full paid ordinary shares.
14 He deposes that the sum of $1,500,000 has been set aside and is held on deposit by SDS as part of a larger sum that SDS has held on deposit. With it SDS is able to satisfy its obligations under the Agreement in the event the court makes an order for specific performance.
15 Benson further deposes that SDS seeks to lead evidence in relation to the movement in its share price on the ASX since judgment was reserved on 11 November 2003. He attaches a schedule disclosing SDS's share price for the period 11 November 2003 to 4 February 2004, and states that SDS's then current share price was 69 cents. Finally, he deposes to his belief that SDS's share price is relevant to the question whether the defendants are likely to suffer loss as a consequence of reliance on the alleged representations pleaded in the defence and in particular whether the discretion to grant relief has been enlivened.
16 The purpose of Ms Del Fuoco's and Mr Bellamy's affidavits was simply to annex copies of correspondence between the solicitors for the parties, as to the plaintiff's intention to seek an order re-opening the trial, the evidence sought to be led and the reasons for the defendants' opposition to that.
17 However, it is from that correspondence that the evidentiary issues sought to be raised by the plaintiff and the defendants' response to them, may be discerned.
18 For the plaintiff it is said that SDS has recently raised $16.5 million by way of share issue and that is relevant to its ability to settle pursuant to the Agreement. Further, it is said the then current (February 2004) share price is 75 cents and it has been at similar levels for three months or so. That is relevant to the question whether the respondents suffered or are likely to suffer any loss as a consequence of the representations pleaded in the defence and in particular whether the relief sought should be granted.
(Page 5)
19 For the defendants it is said that evidence concerning the share issue and its impact on the share price is not fresh evidence. That position is argued because it is contended the plaintiff must have taken steps or developed a strategy concerning that before the trial ended and that was the time for the issue to have been litigated. It is further argued that evidence concerning the recent share price is no answer to the defendants' claim of loss. That was said to be because recent trading at a particular price is not evidence of the volume of shares traded each day in the relevant period, and the parties who traded (and in particular whether any buyer or seller had any connection with Mr Moir) or whether the defendants would be able to sell the shares to be granted to them, at particular prices, at all, or without collapsing the market.
20 The arguments of the solicitors for the parties descended to greater particularity than this, but what I have already said is sufficient for the purposes of this application.
21 There are no affidavits from deponents who would give the further evidence the plaintiff is seeking leave to adduce. For that reason, Mr Kilpatrick, who appeared for the plaintiff, applies to have the chamber summons adjourned to a special appointment so that witness statements can be filed and discovery given. The programming directions suggested by the plaintiff mean the trial could not be re-listed until early March 2004. I am listed to be on circuit that month and otherwise listed, committed or out of the jurisdiction until the end of September 2004. Then there would be the time taken for the further actual hearing.
22 Mr Kilpatrick submits that notwithstanding the listing difficulties, the proper time for determining the application would be when all the witness statements were before the court and the position could not properly be assessed until then.
23 Alternatively, Mr Kilpatrick submits that if the application were to be dealt with today, it would have to be on the basis the plaintiff's evidentiary case was taken at its highest.
24 In the further alternative, he submits that I could hand down "preliminary reasons" and if the outcome turned on either a lack of liquidity or the representations regarding the share price pleaded in the defence, then at that stage I could consider whether to allow the plaintiff to re-open, on the basis the application to do so had been made at the first available opportunity.
(Page 6)
25 Mr Solomon points out the action has been tried in the Expedited List, the defendants are under continuing serious interlocutory restraint of their business and there is the very serious health issue of the second defendant. He submits that any delay would be extremely prejudicial to the defendants. There are likely to be evidentiary issues which would need to be canvassed and they could take some time. Further discovery might be required and there may be a need for the defendants to issue third party subpoenas.
26 The relevant principle in determining an application for leave to re-open is "whether the interests of justice are better served by allowing or rejecting the application" (Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 at 478, per Clarke JA (with whom Mahony and Maher JJA agreed).
27 Different considerations may apply depending upon whether the case is simply one in which the hearing is complete (Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88) or one in which reasons for judgment have already been delivered. In the former situation (which is this case) the primary consideration is that of the embarrassment or prejudice to the other side (Smith v New South Wales Bar Association (1992) 176 CLR 256 per Brennan, Dawson, Toohey and Gaurdron JJ at 267).
28 To my mind, the circumstances referred to by Mr Solomon carry substantial weight. They demonstrate very real prejudice to the defendants should the application be granted. In the circumstances, and even taking the proposed evidence for the plaintiff at its highest, the interests of justice are in my view clearly better served by rejecting the application.
29 The plaintiff's chamber summons will be dismissed.
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