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Sims v RM Capital Pty Ltd & Anor

Sims v RM Capital Pty Ltd & Anor

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Case Copied 22 December 2014 49 min read

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FEDERAL CIRCUIT COURT OF AUSTRALIA

SIMS v RM CAPITAL PTY LTD & ANOR

[2014] FCCA 2977

Catchwords:
PRACTICE AND PROCEDURE – Interim application for summary dismissal of substantive application – whether no reasonable prospect of success – whether frivolous, vexatious or abuse of process.

CONSUMER LAW – Allegation of breach of obligation and dishonest act – share transfer – various alleged breaches of legislation.

CORPORATIONS – Duties and responsibilities of directors – whether duties owed – whether duties breached.

CORPORATIONS – Whether Federal Circuit Court of Australia has jurisdiction under Corporations Act 2001 (Cth) – in civil proceedings – in criminal proceedings.

CRIMINAL LAW – Alleged offences – dishonesty – fraudulent misappropriation.

CRIMINAL LAW – Whether Federal Circuit Court of Australia has jurisdiction in criminal proceedings.

COSTS – Indemnity costs – factors to be considered – whether indemnity costs payable.

Legislation:

Competition and Consumer Act 2010 (Cth)
Corporations Act 2001 (Cth), ss.9, 180, 181, 182, 184, 764A, 766A, 911A, 1315, 1317E, 1317DA, 1317H, 1317HA, 1317J, 1337B, 1337C, 1337E, 1338B

Crimes Act 1900 (NSW), s.124
Crimes Act 1914 (Cth)
Criminal Code 1913 (WA), s.8
Director of Public Prosecutions Act 1983 (Cth), s.9
Federal Circuit Court of Australia Act 1999 (Cth), ss.10, 13, 17, 17A, 53, 79(2) and (3)
Federal Circuit Court Rules 2001 (Cth), r.13.10
Federal Court of Australia Act 1976 (Cth), s.32AB
Federal Court Rules 2011 (Cth), r.16.01
Trade Practices Act 1974 (Cth), ss.5, 6, 51, 52, 82

Alfaro v Crown Commercial Cleaning Pty Ltd & Anor [2012] FMCA 478
Australian Securities and Investments Commission v Neolido Holdings Pty Ltd & Ors [2006] QCA 266

Cass v Kingston Capital Ltd [2010] FMCA 762

Boral Besser Masonry Limited v Australian Competition and Consumer Commission (2003) 215 CLR 374; [2003] HCA 5
Butorac v Win Corporation Pty Ltd [2009] FCA 1503

Colgate-Palmolive Company & Anor v Cussons Pty Limited (1993) 46 FCR 225

Ejueyitsi v Bond University [2012] FMCA 872

Fortron Automotive Treatments Pty Ltd v Jones (No.2) [2006] FCA 1401
Fortron Automotive Treatments Pty Ltd v Jones & Ors (No.3) [2011] FMCA 467

Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1988) 81 ALR 397

Genovese v BGC Construction Pty Ltd (No.2) [2007] FMCA 601
Gerakiteys v The Queen (1984) 153 CLR 317

Miller v Commonwealth Director of Public Prosecutions (2005) 142 FCR 394; [2005] FCA 482
Nirta & Ors v R (1983) 51 ALR 53
R v Drainer & Ors; Ex parte Pullen (unreported, Supreme Court of the Australian Capital Territory, SC 82 of 1988, 19 February 1988)
Rowe v Emmanuel College [2013] FCA 939

Roy Galvin & Co Pty Ltd v Ives [2013] FCCA 1645
Silbermann & Ors v CGU Insurance Ltd [2003] NSWSC 795
Sims v Jooste QC [2013] WASCA 245

Spencer v The Commonwealthof Australia (2010) 241 CLR 118; [2010] HCA 28
Suda Ltd v Sims [2013] FCCA 1833
Suda Ltd v Sims (No.3) [2014] FCCA 2127
Welsh v Allblend Holdings Pty Ltd [2010] FMCA 281

Applicant:

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] FCCA 2977
Decision Date: 22 December 2014

CaseChat Overview and Summary

The applicant, Sims, brought proceedings against RM Capital Pty Ltd and another party (the respondents). The dispute concerned allegations of breaches of consumer law and corporations law, including dishonest acts related to share transfers and alleged breaches of directors' duties. Sims also alleged criminal offences of dishonesty and fraudulent misappropriation. The matter came before Judge Antoni Lucev in the Federal Circuit Court of Australia.

The primary legal issues before the Court were whether the substantive application had no reasonable prospect of success, and whether it constituted a frivolous, vexatious, or abusive process, warranting summary dismissal. Further, the Court was required to determine whether it possessed jurisdiction to hear the civil and criminal proceedings brought under the *Corporations Act 2001* (Cth). The question of whether indemnity costs should be awarded was also a consideration.

Judge Lucev found that the applicant had failed to establish the necessary jurisdictional basis for the Federal Circuit Court to hear the criminal proceedings. Furthermore, the Court determined that the applicant had not demonstrated a reasonable prospect of success in the civil proceedings, nor had they established the alleged breaches of directors' duties or consumer law obligations. The Court concluded that the proceedings were frivolous, vexatious, and an abuse of process.

Consequently, the Court ordered the summary dismissal of the substantive application. The respondents were awarded indemnity costs on the basis that the proceedings were frivolous, vexatious, and an abuse of process.

Orders