Shaw Building Group Pty Ltd v Narayan (No 2)

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FEDERAL COURT OF AUSTRALIA

Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585

Citation: Shaw Building Group Pty Ltd v Narayan (No 2) [2015] FCA 585
Parties: SHAW BUILDING GROUP PTY LTD (ACN 096 942 077; ABN 54 096 942 077) (FORMERLY G.E. SHAW & ASSOCIATES (ACT) PTY LTD) v ADI NARAYAN
File number: ACD 75 of 2012
Judge: FOSTER J
Date of judgment: 12 June 2015
Catchwords: RESTITUTION – discussion of principles for quantifying the applicant’s claim for money had and received against the person who stole those moneys in circumstances where both the thief and his accomplices made repayments over time to the applicant – whether the applicant is entitled to the total amount stolen less amounts repaid by the thief or that amount less also the quantum of the repayments made by the thief’s accomplices
Legislation: Civil Law (Wrongs) Act 2002 (ACT), Ch 7A, s 107B
Corporations Act 2001 (Cth)
Federal Court of Australia Act 1976 (Cth), s 51A
Federal Court Rules 2011, r 12.01, r 26.01(1)(e)
Cases cited: G.E. Shaw & Associates (ACT) Pty Ltd v Narayan [2014] FCA 435
Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341
Black v S Freedman & Co (1910) 12 CLR 105
EMCL Pty Ltd v Esanda Finance Corp Ltd [1999] FCA 978
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55
Lipkin Gorman (A Firm) v Karpnale Ltd [1991] 2 AC 548
Date of hearing: 4 July 2014, 1 August 2014, 10 October 2014 and thereafter on the papers
Place: Sydney (via video link to Canberra)
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 54
Counsel for the Applicant: Mr R Vivekananda and Mr J Harris (solicitor)
Solicitor for the Applicant: O’Connor Harris
Counsel for the Respondent: The First Respondent submitted but nonetheless sought leave to be heard

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

GENERAL DIVISION

ACD 75 of 2012
BETWEEN:

SHAW BUILDING GROUP PTY LTD (ACN 096 942 077; ABN 54 096 942 077) (FORMERLY G.E. SHAW & ASSOCIATES (ACT) PTY LTD)
Applicant
AND:

ADI NARAYAN
First Respondent

JUDGE:

FOSTER J

DATE OF ORDER:

12 JUNE 2015

WHERE MADE:

SYDNEY (VIA VIDEO LINK TO CANBERRA)

THE COURT ORDERS THAT:

1.There be judgment in favour of the applicant against the first respondent in the amount of $880,936.78. 

2.The first respondent pay the costs of the applicant incurred by the applicant in commencing and thereafter prosecuting its case against the first respondent in this proceeding.

THE COURT NOTES THAT:

3.In the period between 24 January 2013 and 15 November 2013, the second to eighth respondents made payments to the applicant totalling $504,879.39 as set out in Exhibit 1. 

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

GENERAL DIVISION

ACD 75 of 2012
BETWEEN:

SHAW BUILDING GROUP PTY LTD…

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Details
Case
[2015] FCA 585
Decision Date

CaseChat Overview and Summary

The matter of Shaw Building Group Pty Ltd v Narayan (No 2) involved a dispute between Shaw Building Group Pty Ltd, the applicant, and Narayan, the first respondent. The applicant sought judgment for the total amount of $987,001.08, which was stolen by Narayan, less any repayments made by Narayan and his accomplices to the applicant. The Federal Court was tasked with determining the appropriate quantum of restitution the applicant was entitled to, considering the repayments made by both Narayan and his accomplices.

The central legal issue before the court was whether the applicant was entitled to the full amount stolen by Narayan, less the repayments made by Narayan, or if it should also deduct the repayments made by Narayan's accomplices. The court needed to assess the principles of restitution and the effect of the Submitting Notice filed by Narayan, which indicated his intention not to contest the applicant's claim.

The court found that the applicant was entitled to the full amount stolen by Narayan, less the repayments made by him. The court reasoned that the Submitting Notice filed by Narayan did not alter the fundamental nature of the applicant's claim for restitution. The court further held that the repayments made by Narayan's accomplices were not relevant to the applicant's claim against Narayan, as the applicant's right to restitution was against Narayan, who was the primary wrongdoer. Therefore, the court entered judgment for the full amount stolen by Narayan, less the $6,000 repaid by him, plus interest, amounting to $880,936.78. Additionally, the court ordered that Narayan pay the costs incurred by the applicant in pursuing the case.

Orders

Orders of the court

1. There be judgment in favour of the applicant against the first respondent in the amount of $880,936.78.

2. The first respondent pay the costs of the applicant incurred by the applicant in commencing and thereafter prosecuting its case against the first respondent in this proceeding.

THE COURT NOTES THAT:

3. In the period between 24 January 2013 and 15 November 2013, the second to eighth respondents made payments to the applicant totalling $504,879.39 as set out in Exhibit 1.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The applicant grounded its application for judgment in r 26.01(1)(e) of the Federal Court Rules 2011 (FCR) which provides:26.01 Summary judgment(1)A party may apply to the Court for an order that judgment be given against another party because:…(e)the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. The applicant also relied upon the fact that Mr Narayan had filed a Submitting Notice on 21 January 2013 (as to which, see Pt 12 FCR). There was no dispute between the applicant and Mr Narayan as to the total sum stolen by Mr Narayan from the applicant. The figure of $987,005.08 was accepted as correct by Mr Narayan. Nor was there any issue as to the amounts which the applicant had received from time to time from the respondent parties as compensation for its losses. Mr Narayan had repaid $6,000 by way of two instalments made in May and July 2012 respectively and, as at 31 October 2014, the other respondents had paid in total the sum of $504,879.39. The details of these payments are found in a table forwarded to my Associate under cover of an email from the solicitors for the applicant sent at 3.33 pm on 31 October 2014. I shall now mark that table as Exhibit 1 in the applicant’s judgment application. Mr Narayan had ample opportunity to draw the Court’s attention to any inaccuracies in that table. He did not contend that that table was inaccurate in any respect. Initially, the applicant requested that I enter judgment against Mr Narayan for the full amount misappropriated by him (viz $987,005.08) plus interest and that I do so by order made in Chambers. I declined to deal with the matter in Chambers. Notwithstanding that Mr Narayan had filed a Submitting Notice in early 2013, I took the view that the applicant should file and serve upon him a formal application for judgment supported by affidavit evidence. The applicant duly complied with my request and the matter came before the Court on three separate occasions (4 July 2014, 1 August 2014 and 10 October 2014). At the first two of these listings, I raised with Counsel for the applicant the question of whether the applicant was entitled to judgment for the full amount misappropriated by Mr Narayan or whether it was only entitled to judgment for the net amount of its losses as at each of those dates. On both occasions, Counsel requested a further opportunity to file and serve additional evidence and to make further submissions. I acceded to those requests. The applicant’s application for judgment against Mr Narayan last came before the Court on 10 October 2014 at which time, subject to the applicant providing certain additional material, judgment was reserved. A table was provided by the applicant to the Court on 13 October 2014 and then revised in a communication sent on 15 October 2014. That table was again revised on 31 October 2014. This last revision simply reasserted the accuracy of the table which had been provided on 13 October 2014. This table has now become Exhibit 1.

Ratio Decidendi

Legal Principle Established

Mr Harris, who appeared for the applicant on 10 October 2014, submitted that I should enter judgment for the full amount misappropriated by Mr Narayan less the $6,000 repaid by him plus interest. He submitted that such a course reflected the correct principle at common law and was the only way that the respondents could have their rights inter se appropriately protected. Against the possibility that I might decide to enter judgment for only the net amount of the applicant’s losses, Mr Harris agreed to provide a table showing all payments made by or on behalf of the respondents to the applicant in discharge of the respondents’ liability to the applicant as a result of Mr Narayan’s misappropriations. That table was to be based upon the evidence contained in the affidavit of Mr Poels filed on 18 August 2014. Ultimately, a table was provided in which the requested figures were set out (Exhibit 1). CONSIDERATION By filing his Submitting Notice on 21 January 2013, Mr Narayan communicated both to the applicant and to the Court that he did not want to contest the relief sought by the applicant in its Originating Application. That is the effect of r 12.01 FCR. In the present case, however, Mr Narayan went further: He submitted to any order that the Court might make in the proceeding and went on to state specifically that he did not wish to be heard on the question of costs. At the time when he filed his Submitting Notice, Mr Narayan was represented by a solicitor. It was that solicitor who filed the Submitting Notice. The Submitting Notice was filed in response to the service of the applicant’s Statement of Claim which had been filed on 23 November 2012 and served soon thereafter. Mr Narayan must be taken to have been aware of the contents of the Statement of Claim and to have understood that, by filing his Submitting Notice, he was communicating to all concerned that he did not intend to defend the applicant’s claim. In its Statement of Claim, the applicant claimed against Mr Narayan judgment in the amount of $981,005.08 together with interest thereon under s 51A of the FCA Act, costs and other ancillary relief. The figure of $981,005.08 was obviously arrived at by the applicant by deducting from its gross claim of $987,005.08, the amount of $6,000 which had, by November 2012, been repaid by Mr Narayan to the applicant. In addition, in 2013, Mr Narayan pleaded guilty to obtaining money by deception in respect of the theft of some of the funds from the applicant which are the subject of its present claim in this proceeding. He was convicted and sentenced to serve a full time prison sentence. Mr Narayan has never contested the proposition that he stole $987,005.08 from the applicant by orchestrating the payments listed by the applicant in the schedules to its Statement of Claim and has never contested that judgment should be entered against him for an appropriate amount which he accepts must include an amount for pre-judgment interest. Indeed, as I have been at pains to point out, Mr Narayan has never sought to withdraw his Submitting Notice nor has he endeavoured to file a substantive Defence to the claim made against him.