Ugrinovski v Naumovski - [2018] VSC 437

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL DIVISION

S ECI 2014 00189

ROBERT UGRINOVSKI	Plaintiff
v
VLADO NAUMOVSKI & ORS	Defendants

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 March 2018
DATE OF JUDGMENT:	8 August 2018
CASE MAY BE CITED AS:	Ugrinovski v Naumovski
MEDIUM NEUTRAL CITATION:	[2018] VSC 437

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JURISDICTION – Whether proceeding still on foot – Whether proceeding brought to an end by July 2015 Orders – Effect of Settlement Implementation Deed – Court’s jurisdiction to hear and determine Summons – Whether Court clearly satisfied that justice can be done – Roberts v Gippsland Agricultural Earthmoving Contracting Co Pty Ltd [1956] VLR 555 applied – Seachange Management Pty Ltd v Pital Business Pty Ltd (2009) 23 VR 396.

EXPERT DETERMINATION – Expert determination final and binding in the absence of manifest error – Whether manifest error – Commercial contracts – Objective approach to contractual interpretation – Ordinary commercial meaning – Reasonable business person – Language used by the parties – Context – Commercial purpose or object to be secured – Australian Broadcasting Commission v Australian Performing Rights Association (1973) 129 CLR 99 considered and applied – Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 considered and applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Evans with Mr D Mason	Aptum Legal
For the First Defendant	Mr P Gray QC with Mr I Hristovski	Frenkel Partners

HIS HONOUR:

Background

Mr Robert Ugrinovski (Ugrinovski) and Mr Vlado Naumovski (Naumovski) owned and controlled corporate entities through which they conducted the business of property development.

In September 2014 Naumovski and others commenced a Supreme Court proceeding (S ECI 2014 00088) (Naumovski Proceeding) against Ugrinovski and others pursuant to ss 233 and 461 of the Corporations Act 2001 (Cth) seeking the winding up of various corporate entities, alternatively an order that one of them acquire the other’s shares in the relevant entities.

In October 2014, Ugrinovski commenced this proceeding against Naumovski and other corporate entities claiming relief from oppression which included seeking orders pursuant to s 233 of the Corporations Act 2001 (Cth).[1]
[1]Affidavit of Mr B Lambros sworn 8 March 2018 (Lambros Affidavit), [4]-[7].

In June 2015 the parties resolved the respective claims in each proceeding and entered into binding Heads of Agreement (HOA). On 24 July 2015, orders were made by consent in this proceeding giving effect to the HOA (July 2015 Orders).[2] By the July 2015 Orders, the parties were required to implement the terms of the HOA. Paragraphs 1, 2 and 3 of the July 2015 Orders replicate clauses 14, 15 and 16 of the HOA.[3]
[2]Lambros Affidavit, [8].
[3]Save for inconsequential formal differences.

The HOA provided for the appointment by the Court of a special referee in the event that certain steps required under the terms of the HOA had not occurred by a specified…

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 437
Decision Date: 8 August 2018

CaseChat Overview and Summary

The case of Ugrinovski v Naumovski involved a dispute between the plaintiffs, Ugrinovski, and the defendants, Naumovski. The plaintiffs sought clarification and enforcement of an expert determination made under a contract. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was whether the proceeding was still active and whether the court had jurisdiction to hear and determine the summons, given the existence of a Settlement Implementation Deed.

The court had to determine if the proceeding was effectively brought to an end by the July 2015 Orders and the Settlement Implementation Deed. It also needed to consider whether there was manifest error in the expert determination, which was alleged to be final and binding unless such error existed. The interpretation of the contractual language and its ordinary commercial meaning was pivotal, requiring an objective approach. The court applied principles from Roberts v Gippsland Agricultural Earthmoving Contracting Co Pty Ltd and Seachange Management Pty Ltd v Pital Business Pty Ltd to assess the effect of the Settlement Implementation Deed on the proceeding's status and the court's jurisdiction.

The court found that the proceeding was still active and that it retained jurisdiction to hear and determine the summons. The Settlement Implementation Deed did not conclusively end the proceeding, and the court was satisfied that justice could be done. The expert determination was held to be final and binding, with no manifest error found in its interpretation. The language of the contract was considered in its commercial context, and the court applied a reasonable business person standard to interpret the contractual terms. The principles from Australian Broadcasting Commission v Australian Performing Rights Association and Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd were instrumental in the court's reasoning.

The court ordered that the expert determination was final and binding, and no manifest error was present. It further directed that the proceeding remain active, and the court retained jurisdiction to hear and determine the summons. The defendants were required to comply with the terms of the expert determination as per the contract.

Orders