Virgtel Ltd v Zabusky - [2008] QSC 213

SUPREME COURT OF QUEENSLAND

CITATION:

Virgtel Ltd & Anor v Zabusky & Ors [2008] QSC 213

PARTIES:

VIRGTEL LIMITED
(first applicant)
and
VIRGTEL GLOBAL NETWORKS NV
(second applicant)
HARVEY ZABUSKY
(first respondent)
and
AMALIA ZABUSKY
(second respondent)
and
EREZ ZABUSKY
(third respondent)
and
COMMSLOGIC PTY LTD (ACN 109 057 543)
(fourth respondent)
and
SOFTQUEST SOLUTIONS PTY LTD (ACN 057 679 599)
(fifth respondent)
and
VIRGIN TECHNOLOGIES LIMITED
(sixth respondent)

FILE NO:

6547 of 2005

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

10 September 2008

DELIVERED AT:

Brisbane

HEARING DATE:

20 March 2008

JUDGE:

Daubney J

ORDER:

1.That paragraphs 85, 86, 87, 88 and 89 of the Further Amended Statement of claim filed
15 January 2008 be struck out

2.That the Applicants, Virgtel Ltd and Virgtel Global Netwrks NV, have leave to replead by filing and serving a further amended Statement of Claim by
1 October 2008

3.That the application to strike out paragraphs 66, 67, 68, 69, 71, 72, 73, 73A, 90, 91 and 92 of the Further Amended Statement of Claim filed 15 January 2008 be refused

4.That the striking out application otherwise be adjourned to a date to be fixed

5.Costs reserved

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – Pleading – Generally – where principal proceedings involve allegations of improper diversion of company funds by director – where numerous complaints made about Further Amended Statement of Claim (“FASOC”) – whether certain paragraphs of FASOC should be struck out

Uniform Civil Procedure Rules 1999 (Qld)

Adsteam v Queensland Cement [1985] 1 Qd.R 127
Banque Commerciale SA, enLiquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Farah Constructions v Say-Dee Ltd (2007) 230 CLR 89
Ferrari Investment (Townswille) Pty Ltd (in Liq) v Ferrari [2000] 2 Qd R 359
Fosket v McKeown [2001] 1 AC 102
R v The Judges of the District Court Holden at Brisbane, ex parte Kruger Enterprises (1982) Qd R 623
Virgtel Ltd & Anor v Zabusky & Ors [2006] 2 Qd R 81
Westdeutsche Bank v Islington L.B.C. [1996] AC 669

COUNSEL:

D R Cooper SC for the applicant first, second, third and fifth respondents
G C Newton SC with S S Monks for the respondent first and second applicants

SOLICITORS:

Tucker & Cowen for the applicant first, second, third and fifth respondents
Boyd Legal for the respondent first and second applicants

The First, Second, Third and Fifth Respondents in the principal proceeding have applied to strike out certain paragraphs of the Further Amended Statement of Claim (‘FASOC’). (Despite their appellations in the principal proceeding, it is convenient for present purposes to refer to them as ‘the applicants’).

Virgtel Ltd and Virgtel Global Networks NV (the First Applicant and the Second Applicant in the principal proceeding, but the ‘respondents’ for the purposes of the present application) have brought the principal proceeding to vindicate claims they make against the applicants on behalf of Virgin Technologies Ltd (‘VTL’), which is named as…

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: [2008] QSC 213
Decision Date: 10 September 2008

CaseChat Overview and Summary

The matter of Virgtel Ltd v Zabusky involved the principal proceedings which related to allegations of improper diversion of company funds by a director. The dispute reached the court where the respondents, Virgtel Ltd and Virgtel Global Networks NV, sought an order to strike out certain paragraphs from the Further Amended Statement of Claim filed by the applicants on 15 January 2008. This application was made on the grounds that these paragraphs contained numerous complaints and were irrelevant to the issues at hand. The court was required to determine whether these specific paragraphs should be struck out and if the applicants should be granted leave to replead.

The legal issues before the court centred on the procedural rules governing pleadings in Queensland Supreme Court. The applicants argued that the paragraphs in question were extraneous and should be excluded from the Further Amended Statement of Claim. They contended that these paragraphs did not pertain to the allegations of improper diversion of company funds and were therefore irrelevant. The respondents, however, opposed the application, arguing that the paragraphs were necessary to establish the context and background of the alleged improper conduct. The court had to balance the need for procedural fairness and the relevance of the pleaded material against the potential for unnecessary complexity and delay.

In its reasoning, the court found that certain paragraphs were indeed extraneous and did not directly relate to the core allegations. The court held that paragraphs 85, 86, 87, 88, and 89 should be struck out as they contained complaints that did not pertain to the central issues of the case. However, the court ruled that other paragraphs, which the applicants sought to have struck out, were relevant and should remain in the Further Amended Statement of Claim. The court also granted the applicants leave to replead by filing and serving a further amended Statement of Claim by 1 October 2008. The application to strike out certain other paragraphs was refused, and the striking out application was adjourned to a later date to be fixed. The costs of the application were reserved for determination.

The court's final orders included the striking out of specified paragraphs, granting leave to replead, and reserving costs. This decision underscored the importance of ensuring that pleadings are directly relevant to the issues at hand, while also allowing for the necessary context to be presented to the court.

Orders

Orders of the court

1.That paragraphs 85, 86, 87, 88 and 89 of the Further Amended Statement of claim filed

15 January 2008 be struck out

2.That the Applicants, Virgtel Ltd and Virgtel Global Netwrks NV, have leave to replead by filing and serving a further amended Statement of Claim by

1 October 2008

3.That the application to strike out paragraphs 66, 67, 68, 69, 71, 72, 73, 73A, 90, 91 and 92 of the Further Amended Statement of Claim filed 15 January 2008 be refused

4.That the striking out application otherwise be adjourned to a date to be fixed

5.Costs reserved

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Virgtel Ltd & Anor v Zabusky & Ors [2008] QSC 213
PARTIES:	VIRGTEL LIMITED (first applicant) and VIRGTEL GLOBAL NETWORKS NV (second applicant) HARVEY ZABUSKY (first respondent) and AMALIA ZABUSKY (second respondent) and EREZ ZABUSKY (third respondent) and COMMSLOGIC PTY LTD (ACN 109 057 543) (fourth respondent) and SOFTQUEST SOLUTIONS PTY LTD (ACN 057 679 599) (fifth respondent) and VIRGIN TECHNOLOGIES LIMITED (sixth respondent)
FILE NO:	6547 of 2005
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	10 September 2008
DELIVERED AT:	Brisbane
HEARING DATE:	20 March 2008
JUDGE:	Daubney J
ORDER:	1.That paragraphs 85, 86, 87, 88 and 89 of the Further Amended Statement of claim filed 15 January 2008 be struck out 2.That the Applicants, Virgtel Ltd and Virgtel Global Netwrks NV, have leave to replead by filing and serving a further amended Statement of Claim by 1 October 2008 3.That the application to strike out paragraphs 66, 67, 68, 69, 71, 72, 73, 73A, 90, 91 and 92 of the Further Amended Statement of Claim filed 15 January 2008 be refused 4.That the striking out application otherwise be adjourned to a date to be fixed 5.Costs reserved
CATCHWORDS:	PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – Pleading – Generally – where principal proceedings involve allegations of improper diversion of company funds by director – where numerous complaints made about Further Amended Statement of Claim (“FASOC”) – whether certain paragraphs of FASOC should be struck out Uniform Civil Procedure Rules 1999 (Qld) Adsteam v Queensland Cement [1985] 1 Qd.R 127 Banque Commerciale SA, enLiquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Farah Constructions v Say-Dee Ltd (2007) 230 CLR 89 Ferrari Investment (Townswille) Pty Ltd (in Liq) v Ferrari [2000] 2 Qd R 359 Fosket v McKeown [2001] 1 AC 102 R v The Judges of the District Court Holden at Brisbane, ex parte Kruger Enterprises (1982) Qd R 623 Virgtel Ltd & Anor v Zabusky & Ors [2006] 2 Qd R 81 Westdeutsche Bank v Islington L.B.C. [1996] AC 669
COUNSEL:	D R Cooper SC for the applicant first, second, third and fifth respondents G C Newton SC with S S Monks for the respondent first and second applicants
SOLICITORS:	Tucker & Cowen for the applicant first, second, third and fifth respondents Boyd Legal for the respondent first and second applicants