Thomas v D'Arcy

Case [2004] QSC 260

SUPREME COURT OF QUEENSLAND

CITATION:

Thomas v D’Arcy & Ors [2004] QSC 260

PARTIES:

GRAHAM ARNOLD PRANCE THOMAS
(plaintiff)
v
IAN KENNETH D’ARCY
(first defendant)
&
ALEXANDER MACGILLIVRAY, CRAIG DOUGLAS GREEN, LYNDEN ELIZABETH STONE, JACQUELINE KNOWLMAN
(second defendants)

FILE NO/S:

S740 of 1995

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

18 August 2004

DELIVERED AT:

Brisbane

HEARING DATE:

26 July 2004

JUDGE:

Douglas J

ORDER:

1.That pursuant to rule 171 of the Uniform Civil Procedure Rules 1999, the following parts of the plaintiff’s amended statement of claim be struck out: 

Subparagraphs 8(f)(i) and (ii);(a)        

Subparagraph 30(b);(b)       

The following words in subparagraph 44(a):(c)        

“The Plaintiff’s shareholding and/or”;(i)         

“(b) and”;(ii)       

“$1,300,000”;(iii)      

The following words in the first prayer for relief:(d)       

“Namely his shareholding and Movado and Meadowbury”.(i)         

2.That, pursuant to rule 223 of the Uniform Civil Procedure Rules 1999, the plaintiff file and serve on the defendant an affidavit stating: 

(a)the circumstances in which the documents from file 15054 that have not been disclosed (including, without limitation, the memorandum of advice from Mr Cooper of counsel dated on or about 28 or 29 November 1990) ceased to exist or passed out of the plaintiff’s possession or control; 
(b)either:    

(i)that files 12416, 13636, 15436 and 11512 never existed; or          

that files 12416, 13636, 15436 and 11512 were never in the plaintiff’s possession or control; or(ii)       

the circumstances in which files 12416, 13636, 15436 and 11512 ceased to exist or passed out of the plaintiff’s possession or control.(iii)      

Further submissions invited as to costs and any ancillary orders.

CATCHWORDS:

CORPORATIONS – SHAREHOLDERS – RIGHTS –Shareholder’s claim for the loss of value of his shareholding – Whether personal action maintainable in circumstances where the loss claimed is not separate and distinct from the loss suffered by the company, notwithstanding an alleged breach of duty independently owed to the shareholder

PROCEDURE - SUPREME COURT PROCEDURE – QUEENSLAND - PRACTICE UNDER RULES OF COURT – PLEADING – GENERALLY – STRIKING OUT – Application to strike out under rule 171 of the Uniform Civil Procedure Rules – Where the loss claimed cannot be recovered under Australian law

PROCEDURE - SUPREME COURT PROCEDURE – QUEENSLAND - PRACTICE UNDER RULES OF COURT – OTHER MATTERS BEFORE TRIAL – DISCLOSURE OF DOCUMENTS – Application pursuant to rule 223(2) of the Uniform Civil Procedure Rules – Where the plaintiff is required to swear an affidavit stating the circumstances in which documents ceased to exist or passed out of his possession or control

Uniform Civil Procedure Rules 1999 (Qld), rules 171 & 223

Gould v Vaggelas (1985) 157 CLR 215, referred
Prudential Assurance Co Ltd v Newman Industries Pty Ltd [1982] 1 Ch 204, followed
Johnson v Gore Wood & Co [2002] 2 AC 1, followed
Christensen v Scott [1996] 1 NZLR 273, not followed
Harris v Milfull (2002) 43 ACSR 542, distinguished

COUNSEL:

R G Bain QC with him R J Anderson for the…

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Details
AGLC
Thomas v D'Arcy [2004] QSC 260
Case
[2004] QSC 260
Decision Date

CaseChat Overview and Summary

The case of Thomas v D'Arcy involved a shareholder's claim against a company for the loss of value of his shareholding. The plaintiff, Mr. Thomas, sought to recover the loss of value of his shares in the company, asserting that this loss was distinct from the loss suffered by the company itself, despite an alleged breach of duty owed to the shareholder. The matter was heard in the Supreme Court of Queensland, where the defendants sought to strike out parts of the plaintiff's amended statement of claim and to obtain further disclosure of documents. The central legal issue in the case was whether the plaintiff's claim for loss of value of his shareholding could be maintained as a personal action, separate from the company's claims, given the nature of the loss claimed.

The court examined the plaintiff's claim in light of existing legal principles, particularly focusing on the distinction between direct harm to the shareholder and harm to the company. The court held that the loss of value of a shareholder's shareholding, where the harm is not separate and distinct from the harm suffered by the company, cannot be recovered under Australian law. Consequently, the court struck out certain parts of the plaintiff's amended statement of claim that did not properly distinguish the shareholder's loss from the company's loss. Additionally, the court required the plaintiff to file an affidavit detailing the circumstances under which certain documents had ceased to exist or passed out of his possession, in line with the Uniform Civil Procedure Rules.

The court's decision was grounded in the principle that a shareholder's loss of value in their shareholding, when not separable from the company's loss, does not constitute a distinct personal injury actionable by the shareholder. The court's ruling underscored the importance of maintaining a clear distinction between personal claims and those of the company in shareholder litigation. The orders issued mandated the plaintiff to strike out specific parts of his claim and to provide detailed information about undisclosed documents. Further submissions were invited regarding costs and any ancillary orders.

Orders

Orders of the court

1.That pursuant to rule 171 of the Uniform Civil Procedure Rules 1999, the following parts of the plaintiff’s amended statement of claim be struck out:

Subparagraphs 8(f)(i) and (ii);(a)

Subparagraph 30(b);(b)

The following words in subparagraph 44(a):(c)

“The Plaintiff’s shareholding and/or”;(i)

“(b) and”;(ii)

“$1,300,000”;(iii)

The following words in the first prayer for relief:(d)

“Namely his shareholding and Movado and Meadowbury”.(i)

2.That, pursuant to rule 223 of the Uniform Civil Procedure Rules 1999, the plaintiff file and serve on the defendant an affidavit stating:

(a)the circumstances in which the documents from file 15054 that have not been disclosed (including, without limitation, the memorandum of advice from Mr Cooper of counsel dated on or about 28 or 29 November 1990) ceased to exist or passed out of the plaintiff’s possession or control;

(b)either:

(i)that files 12416, 13636, 15436 and 11512 never existed; or

that files 12416, 13636, 15436 and 11512 were never in the plaintiff’s possession or control; or(ii)

the circumstances in which files 12416, 13636, 15436 and 11512 ceased to exist or passed out of the plaintiff’s possession or control.(iii)

Further submissions invited as to costs and any ancillary orders.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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