Smith v J Z Interiors Pty Ltd - [2015] VSCA 203

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0038

BRENDON ASHLEY SMITH	First Applicant
DONAMIS CONSULTANTS (VIC) PTY LTD (ACN 125 343 268)	Second Applicant
v
J Z LEE INTERIORS PTY LTD (ACN 075 815 093)	Respondent

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JUDGES:	WEINBERG and TATE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 July 2015
DATE OF JUDGMENT:	16 July 2015
MEDIUM NEUTRAL CITATION:	[2015] VSCA 203
JUDGMENT APPEALED FROM:	J Z Lee Interiors Pty Ltd v Smith & Anor (Unreported, County Court of Victoria, Judge Kennedy, 16 April 2015)

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PRACTICE AND PROCEDURE – Pleadings – Application for leave to appeal against ruling that respondent be granted leave to file amended statement of claim – Both original and amended statement of claim contained claims under Corporations Act 2001 which County Court had no jurisdiction to hear – Application for transfer of proceedings to Supreme Court under Courts (Case Transfer) Act 1991 presently on foot – Appropriate that questions regarding pleadings be determined by judge before whom proceeding is to be heard if transfer application successful – Leave to appeal granted – Appeal allowed in part.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Ms M B Loughnan QC with Mr S Dyrenfurth	Altus Lawyers
For the Respondent	Mr I W Upjohn QC with Mr S L Freire	Webb Korfiatis Commercial

WEINBERG JA
TATE JA:

There are two applications presently before this Court, both of which arise out of a proceeding brought by the respondent, JZ Lee Interiors Pty Ltd (‘Lee’) against the applicants, Brendon Smith and Donamis Consultants (Vic) Pty Ltd (‘Donamis’) in the County Court. That proceeding involves a number of disparate claims, in relation to which Lee seeks substantial damages against Smith and Donamis.

The first, and what may be regarded as principal, matter before this Court is an application for leave to appeal against orders made by Judge Kennedy, on 16 April 2015, granting Lee leave to file a greatly widened amended statement of claim.

The second matter is a more recent application by Smith and Donamis for a stay of the trial of the proceeding. That trial is presently scheduled to commence on 21 September 2015. In that second application, Smith and Donamis seek, inter alia, to have this Court vacate the current trial date. They do so principally on the basis that, having regard to Lee’s decision to greatly expand its case against them, they will not be in a position, adequately, to prepare for and conduct their defence.

Background

For some 19 years between 1994 and 2013 Mr Smith had a business relationship with a Mr Josip Vrapcenjak. Mr Smith was, and continues to be, the sole director and shareholder of Donamis. Mr Vrapcenjak was, and also continues to be, the sole director of Lee. Lee has one shareholder, a company called J & Z Vrapcenjak Pty Ltd. That company holds its shares as a trustee for the Josip Vrapcenjak Trust.

For many years up until 2013, Mr Smith managed the business of Lee. Although…

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] VSCA 203
Decision Date: 16 July 2015

CaseChat Overview and Summary

In Smith v J Z Interiors Pty Ltd, the dispute revolved around the application for leave to appeal a ruling that granted the respondent leave to file an amended statement of claim. The County Court had determined that both the original and amended statements of claim contained claims under the Corporations Act 2001, which it did not have jurisdiction to hear. The plaintiff, Smith, sought leave to appeal this decision on the basis that the questions regarding the pleadings should be determined by the judge before whom the proceeding would be heard if the transfer application was successful. The appeal was lodged with the Supreme Court, which needed to decide whether to grant leave to appeal and, if so, whether the appeal should be allowed in part.

The court's primary task was to determine whether the County Court judge was correct in granting the respondent leave to file an amended statement of claim, considering that the claims involved matters under the Corporations Act 2001. The court also had to consider whether the questions concerning the pleadings should be determined by the Supreme Court judge if the transfer application was successful. The court acknowledged the complexity of the legal issues and the need for a coherent and comprehensive determination of the pleadings before the proceedings were transferred.

In deciding the appeal, the court found that it was indeed appropriate for the questions regarding the pleadings to be determined by the judge before whom the proceeding was to be heard if the transfer application was successful. This was because the issues concerning the pleadings were integral to the overall jurisdiction and management of the case. Consequently, the court granted leave to appeal and allowed the appeal in part, directing that the questions regarding the pleadings be determined by the Supreme Court judge if the transfer application was successful.

The final orders of the court were that leave to appeal was granted and the appeal was allowed in part. The County Court was directed to determine the questions regarding the pleadings before the proceeding was transferred to the Supreme Court. This decision ensured that the legal issues concerning the jurisdiction and the pleadings were addressed in an orderly and appropriate manner, facilitating a more efficient and effective resolution of the case.

Orders