Slea Pty Ltd v Connective Services Pty Ltd - [2014] VSC 684

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

S CI 2011 4332

SLEA PTY LTD (ACN 081 276 811)	Plaintiff
v
CONNECTIVE SERVICES PTY LTD (ACN 107 366 496)	First Defendant
- and -
CONNECTIVE OSN PTY LTD (ACN 106 761 326)	Second Defendant

---

JUDGE:	Efthim AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 January 2014
DATE OF JUDGMENT:	14 March 2014
CASE MAY BE CITED AS:	Slea Pty Ltd v Connective Services Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2014] VSC 684

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Moshinsky SC	Arnold Bloch Leibler
For the Defendants	Mr AJ Myers QC and Mr DG Guidolin	Maddocks
For Millsave Holdings Pty Ltd, Mssrs Haron, Lees and Maloney	Mr CM Scerri QC and Mr S Hay	Macpherson + Kelley Lawyers
Macquarie Bank Ltd	Mr JWS Peters SC and Mr H Redd	Henry Davis York

HIS HONOUR:

The plaintiff Slea Pty Ltd has made application by summons seeking that:

(a) pursuant to rule 9.02(5) of the Supreme Court (General Civil Procedure) Rules 2005, Millsave Holdings Pty Ltd, Macquarie Bank Limited and Messrs Glenn Lees, Mark Haron and Graham Maloney be joined as defendants to this proceeding; and

(b) pursuant to rule 36.04(1)(b) of the Supreme Court (General Civil Procedure) Rules 2005, the plaintiff be granted leave to file and serve an amended statement of claim in the form exhibited to the affidavit of Justin Taede Vaatstra sworn 6 December 2013.

Background

Mr Sofianos Tsialtas, the sole director of the plaintiff, together with Mr Glenn Lees and his brother Mr Murray Lees founded a mortgage aggregation business in Australia by the name Connective. The business, until recently, was carried on by the first and second defendants, Connective Services Pty Ltd and Connective OSN Pty Ltd (the “Connective Companies”).

The current directors of the Connective Companies are Mr Glenn Lees, Mr Mark Haron and Mr Graham Maloney. Mr Tsialtas was previously but is no longer director of the Connective Companies. He says that he was forced to resign by Glenn and Murray Lees in approximately May 2008.

The plaintiff holds a one third interest (being 600 shares) in the share capital of each of the Connective Companies. That interest is held by the plaintiff as trustee of the Tsialtas Family Trust. Until recently, the balance of the shares (being 200 shares) was held entirely by Millsave Holdings Pty Ltd. Mr Glenn Lees is the sole director of Millsave Holdings Pty Ltd and Mr Glenn Lees and his wife are the sole shareholders.

On or about 29 October 2013, Millsave transferred 300 of its shares in each of the Connective Companies to Mr Haron. That transfer took place following settlement of legal proceedings issued by Mr Haron in this court.

Mr Maloney does not hold any shares in either of the Connective Companies. However, he is described as an independent director and chairman on the Connective Companies website.

In 2006, Mr Haron entered…

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] VSC 684
Decision Date: 14 March 2014

CaseChat Overview and Summary

The plaintiff, Slea Pty Ltd, sought leave to amend its statement of claim to include claims against Millsave Holdings Pty Ltd, Macquarie Bank Limited, and certain individuals. Slea Pty Ltd alleged that the conduct of the Connective Companies, including the sale of shares to Macquarie Bank Limited, was oppressive, unfairly prejudicial, and discriminatory against Slea Pty Ltd. Slea Pty Ltd sought to join Millsave Holdings Pty Ltd, Macquarie Bank Limited, and certain individuals as defendants and amend its statement of claim to include claims for breach of fiduciary duty, statutory duty, and oppression.

The court had to decide whether Slea Pty Ltd could bring claims in its own name or if it needed leave under s 237 of the Corporations Act 2001 (Cth) to bring proceedings on behalf of the Connective Companies. The court had to consider whether the proposed amended statement of claim was properly pleaded and if the proposed defendants should be joined as defendants.

The court found that Slea Pty Ltd could not bring claims in its own name without leave under s 237 of the Corporations Act 2001 (Cth). The court found that the proposed amended statement of claim was not properly pleaded and that the plaintiff had not provided proper particulars to support its claims against Macquarie Bank Limited. The court found that the proposed defendants should not be joined as defendants until a new pleading was provided. The court ordered that the plaintiff remove the claim for damages from the prayer for relief.

The court dismissed the application and ordered that the plaintiff provide a new pleading before the question of whether other parties should be joined as defendants could be considered.

Orders