Shot One Pty Ltd v Richard Day - [2015] VSC 139

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2014 00390

SHOT ONE PTY LTD (In Liquidation)
(ACN 096 104 808)

and

ANDREW REGINALD YEO (in his capacity as liquidator of Shot One Pty Ltd) (in liquidation) (ACN 096 104 808)

First Plaintiff

Second Plaintiff

RICHARD LEONARD DAY

and

RISING ROCKET PTY LTD (ACN 102 373 633)

First Defendant

Second Defendant

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JUDGE:	Efthim AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	17 December 2014
DATE OF JUDGMENT:	17 April 2015
CASE MAY BE CITED AS:	Shot One Pty Ltd and Anor v Richard Day and Anor
MEDIUM NEUTRAL CITATION:	[2015] VSC 139

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M. Osborn QC Mr J. Kohn	Frenkel Partners
For the Defendants	Mr D. Williams QC	Piper Alderman

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

The Plaintiffs’ Amended Statement of Claim............................................................................... 1

Variation of the solicitors’ undertaking......................................................................................... 8

HIS HONOUR:

Introduction

There are two applications before the Court. The first is for the plaintiff to file and serve an amended statement of claim. The second application is to approve further release of fees to the defendants’ solicitors Piper Alderman to enable them to act on behalf of the defendants.

The Plaintiffs’ Amended Statement of Claim

The plaintiffs’ amended statement of claim alleges that Richard Leonard Day (‘Richard Day’) and his brother Nicholas Robert John Day (‘Nicholas Day’) were co-directors and shareholders of the first plaintiff Shot One Pty Ltd (‘Shot One’). Between 5 September 2001 and 21 January 2006 Nicholas Day was declared bankrupt. Richard Day then became the sole director and sole shareholder of Shot One.

Between 7 October 1983 and 1 July 2009, Nicholas Day was a director of Conniemoon Pty Ltd (‘Conniemoon’). Between October 2003 and August 2010, Richard Day and Nicholas Day gave effect to a scheme referred to as the Conniemoon Scheme. Pursuant to the Scheme, Conniemoon would create a false tax invoice which would be paid by Shot One and Conniemoon would use the funds so paid to pay Nicholas Day’s personal expenses and to avoid issues arising as to his bankruptcy.

Between April 2004 and June 2007, Shot One transferred a total sum of $1,066,946.94 to Richard Day when he was the sole director of Shot One. Shot One also made payments between 22 July 2004 and 30 September 2012 of $1,172,778.84 to Rising Rocket Pty Ltd, the second defendant, (of which Richard Day was the sole director and shareholder since 1 October 2002), regarding a property known as the Rocklea Road Property.

Between March 2006 and October 2012, Shot One also transferred the total sum of $2,145,794.08 to Nicholas Day. Nicholas Day was a director from 11 February 2009 onwards and payments to Nicholas Day of $1,127,087.30 were made for the purchase of a property known as the Dunravel Road Property.

Shot One commenced proceedings against Rising Rocket and Richard Day seeking relief with respect to the Rocklea Road property in which Nicholas Day was living. It…

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: [2015] VSC 139
Decision Date: 17 April 2015

CaseChat Overview and Summary

In the Supreme Court of Victoria, the case of Shot One Pty Ltd and Anor v Richard Day and Anor involved a dispute concerning the validity of a settlement deed executed by the parties. The plaintiffs, Shot One Pty Ltd and its liquidator, sought to set aside a Deed of Settlement, which had been executed between the original parties to the litigation, on the basis that it was an uncommercial transaction under the Corporations Act 2001 (Cth). The defendants argued that the plaintiffs' amended statement of claim contained irrelevant matters and privileged information that should not be pleaded.

The primary legal issue before the court was whether the plaintiffs could rely on comments made during a mediation to set aside the Deed of Settlement. The defendants argued that such comments were privileged and could not be pleaded under section 131(1) of the Evidence Act 2008 (Vic), which generally prohibits the adducing of evidence of communications made in connection with a settlement negotiation. The plaintiffs contended that certain exceptions under section 131(2) of the Evidence Act 2008 (Vic) applied, specifically that the communication affected a right of a person.

The court found that the exceptions under section 131(2) of the Evidence Act 2008 (Vic) did not apply in this case. The court held that the comment made during mediation did not affect any rights of the parties and did not fall within the scope of the exceptions. The court therefore ruled that the plaintiffs could not rely on the comment to set aside the Deed of Settlement. Consequently, paragraphs 41I to 41Q of the amended statement of claim were struck out, and the plaintiffs were required to replead and seek leave to file a further amended statement of claim.

In a related matter, the court also considered an application to vary the defendants' solicitors' undertaking to allow for further legal fees to be paid from the proceeds of a property sale. After reviewing the affidavits and the reasonableness of the claimed fees, the court increased the undertaking to $185,000.00 to cover the defendants' legal costs.

Orders