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Transocean Capital Pty Ltd v AFSIG Pty Ltd

Transocean Capital Pty Ltd v AFSIG Pty Ltd

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Case Copied 11 August 2006 24 min read

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Reported Decision:
202 FLR 270

New South Wales

Supreme Court

CITATION: Transocean Capital Pty Ltd v AFSIG Pty Ltd [2006] NSWSC 806

HEARING DATE(S): 31/07/06

JUDGMENT DATE :
11 August 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Paragraphs of statement of claim struck out. Security for costs ordered.

CATCHWORDS: PROCEDURE - striking out parts of statement of claim - whether reasonable cause of action shown - CONTRACT - condition precedent - where condition described as "condition precedent" and consequences of non-fulfilment stated - whether claim that non-fulfilment resulted in contract being void ab initio maintainable - CORPORATIONS - subscription for shares - subscription moneys paid and shares allotted - whether alleged common intention as to application of proceeds by company may cause proceeds of allotment to be held on trust for subscriber - PROCEDURE - security for costs - plaintiff has minimal paid up capital and is a trustee - no evidence of right of indemnity or extent of trust assets - PROCEDURE - undertaking to court - application for release - whether relevant change in circumstances

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.256B(1), 256D(3). 1041E, 1041F, 1335(1)
Uniform Civil Procedure Rules 2005, rule 14.28(1)(a)

CASES CITED: Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497
Houldsworth v The City of Glasgow Bank (1880) 5 App Cas 317
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189
Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150
Laundry Coin-Wash Nominees Pty Ltd v Dunlop Olympic Ltd (1985) 7 ATPR 40-584
Moseley v Cressey’s Co (1865) LR 1 Eq 405
Re Associated Securities Ltd [1981] 1 NSWLR 742
Re Fada (Australia) Ltd [1927] SASR 590
Re Nanwa Gold Mines Ltd [1955] 1 WLR 1080
Salvo v New Tel Ltd [2005] NSWCA 281
Sandra Invesments Pty Ltd v Booth (1983) 153 CLR 153
Second Lenbourne Pty Ltd v Beagle Management Pty Ltd [1999] FCA 486
Stewart v Austin (1866) LR 3 Eq 299
Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689
Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15

PARTIES: Transocean Capital Pty Limited - Plaintiff
Afsig Pty Limited - First Defendant
David Mann - Second Defendant

FILE NUMBER(S): SC 3460/06

COUNSEL: Mr D.R. Stack - Plaintiff
Mr J.C. Giles - Defendants

SOLICITORS: Deacons - Plaintiff
Levitt Robinson Solicitors - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 11 AUGUST 2006

3460/06 TRANSOCEAN CAPITAL PTY LIMITED v AFSIG PTY LIMITED & ANOR

JUDGMENT

1 I am dealing with the claims in paragraphs 2, 4 and 5 of a notice of motion filed by the defendants on 27 July 2006. Paragraph 2 seeks an order that certain paragraphs of the statement of claim be struck out. Paragraph 4 seeks an order that the plaintiff provide security for costs. By paragraph 5,…

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: [2006] NSWSC 806
Decision Date: 11 August 2006

CaseChat Overview and Summary

Transocean Capital Pty Ltd brought an action against AFSIG Pty Ltd, seeking various remedies in relation to a contract and the application of funds received. The dispute came before the court on several procedural and substantive legal issues. The court was required to decide whether certain parts of the plaintiff's statement of claim should be struck out, whether a reasonable cause of action was shown, and whether the plaintiff could maintain a claim that a non-fulfilment of a condition precedent resulted in the contract being void ab initio. Additionally, the court considered whether an alleged common intention as to the application of proceeds by the company could cause the proceeds of allotment to be held on trust for the subscriber, and whether the plaintiff could obtain security for costs given their financial circumstances.

The court found that the plaintiff's claims regarding the condition precedent and the trust arrangement were speculative and did not demonstrate a reasonable cause of action. The court noted that the condition precedent was clearly described in the contract, and the consequences of non-fulfilment were also stated. The court held that the plaintiff could not maintain a claim that the non-fulfilment resulted in the contract being void ab initio. Regarding the trust claim, the court found that the plaintiff had not provided sufficient evidence to support the allegation of a common intention as to the application of the proceeds by the company. The court also considered the plaintiff's application for security for costs and found that the plaintiff had not provided sufficient evidence to support the application. The court granted an application for release from an earlier undertaking to the court, finding that there had been a relevant change in circumstances.

The court ordered that certain parts of the plaintiff's statement of claim be struck out, and that the plaintiff pay the defendant's costs of the application. The court also released the plaintiff from the earlier undertaking to the court, and noted that the defendant was entitled to further costs in relation to the application for security for costs.

Orders