Slea Pty Ltd v Connective Services Pty Ltd - [2018] VSC 542

IN THE SUPREME COURT OF VICTORIA

Not Restricted

COMMERCIAL COURT
AT MELBOURNE

S CI 2011 04332

SLEA PTY LTD	Plaintiff
v
CONNECTIVE SERVICES PTY LTD & ORS (according to the attached schedule)	Defendants

S ECI 2018 00073

CONNECTIVE SERVICES PTY LTD & ORS (according to the attached schedule)	Plaintiffs
v
GLENN ANDREW LEES & ORS (according to the attached schedule)	Defendants

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 September 2018
DATE OF JUDGMENT:	19 September 2018
CASE MAY BE CITED AS:	Slea Pty Ltd v Connective Services Pty Ltd
MEDIUM NEUTRAL CITATION:	[2018] VSC 542

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PRACTICE AND PROCEDURE – Application that two proceedings be heard and determined together – Whether common questions of fact or law – Whether risk of inconsistent findings – Whether premature to determine the applications – Evidence Act 2008 s 124 – Application granted – Supreme Court (General Civil Procedure) Rules 2015, rule 9.12.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs in the First and Second Proceedings, and the Eleventh Defendant in the Second Proceeding	Mr M. O’Bryan QC with Mr G. Kozminsky
For the First, Second, and Fourth to Ninth Defendants in the First Proceeding, and the Fifth to Tenth Defendants in the Second Proceeding	Mr P. Solomon QC with Mr D. Guidolin
For the Third Defendant in the First Proceeding, and the Twelfth Defendant in the Second Proceeding	Mr J. Kramersh
For the First to Third Defendants in the Second Proceeding	Mr M. Borsky QC with Ms G. Crafti
For the Fourth Defendant in the Second Proceeding	Mr C. Young

HIS HONOUR:

Slea Pty Ltd (Slea) is the plaintiff in proceeding number SCI 2011 4332, in which Slea seeks relief, among other things, for alleged oppression, breach of pre-emptive rights provisions in the constitutions of Connective Services Pty Ltd (Connective Services) and Connective OSN Pty Ltd (Connective OSN), and misleading or deceptive conduct (Oppression Proceeding).

Connective Services and Connective OSN (together, Connective Plaintiffs) are the plaintiffs in proceeding number S ECI 2018 00073, in which they allege, among other things, that the First and Second Defendants, Mr Glenn Lees and Mr Mark Haron, desired to remove Slea as a shareholder in both the Connective Plaintiffs, and caused the Connective Plaintiffs to enter into various transactions for improper purposes in breach of their duties as directors (Derivative Proceeding).[1]
[1]Slea was granted leave to commence the Derivative Proceeding against the company’s directors, shareholders and other parties, including Macquarie Bank Ltd by Robson J (Slea Pty Ltd v Connective Services Pty Ltd [2017] VSC 609). The Court of Appeal granted leave to appeal and dismissed the appeal (Connective Services Pty Ltd v Slea Pty Ltd [2018] VSCA 229 (Ferguson CJ, Whelan and McLeish JJA)). For an elaboration of the background, refer to [4]-[30] of the reasons of the Court of Appeal.

By summonses dated 17 July 2018 filed in each proceeding, Slea and the Connective Plaintiffs seek…

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: [2018] VSC 542
Decision Date: 19 September 2018

CaseChat Overview and Summary

Slea Pty Ltd applied to the court to have two separate proceedings heard and determined together. Connective Services Pty Ltd opposed the application, arguing that there were no common questions of fact or law and that there was a risk of inconsistent findings. The court was required to decide whether the two proceedings could be consolidated, whether there were common questions of fact or law, and whether there was a risk of inconsistent findings. The court also needed to consider whether it was premature to determine the applications, given that discovery was yet to be completed.

The court found that there were common questions of fact and law between the two proceedings, and that there was a significant overlap in the evidence that would be adduced in both proceedings. The court considered that the applications were not premature, as the parties had conducted limited discovery and had a good understanding of the issues in dispute. The court noted that the Evidence Act 2008 provided for the admission of evidence from one proceeding in the other, and that rule 9.12 of the Supreme Court (General Civil Procedure) Rules 2015 permitted the consolidation of proceedings where appropriate. The court concluded that consolidating the proceedings would promote efficiency and avoid the risk of inconsistent findings.

The court granted the application and ordered that the two proceedings be heard and determined together. The court noted that the consolidation would not prevent either party from making any submissions or arguments that they considered necessary, and that the parties would have an opportunity to address any concerns about the consolidation during the course of the proceedings. The court also made orders regarding the conduct of the consolidated proceedings, including the exchange of evidence and the scheduling of hearings.

Orders