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Webster v Super Smart Strategies Pty Ltd

Webster v Super Smart Strategies Pty Ltd

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Case Copied 4 May 2017 46 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Webster v Super Smart Strategies Pty Ltd;; Courtney v Super Smart Strategies Pty Ltd [2017] NSWSC 531
Hearing dates: 26, 28 April 2017
Date of orders: 26 April 2017
Decision date: 04 May 2017
Jurisdiction: Common Law
Before: Adamson J
Decision:
See paragraphs [96]-[99].

Catchwords:
PRACTICE AND PROCEDURE – defendants’/ cross-claimants’ persistent default in compliance with court directions – failure to engage in court-ordered mediation – inference that they have abandoned proceedings – appropriate to strike out defence to plaintiffs’ claim and enter default judgment and dismiss cross-claim – prejudice to parties – dismissal proportionate to defendants’ default – order that no proceedings be commenced without leave on same or similar facts until cross-defendants’ costs paid – order to prevent further abuse by defendants of court processes

CORPORATIONS – liquidation – effect of statutory stay pursuant to s 471B of the Corporations Act 2001 (Cth) – purpose is to protect net assets of a company in liquidation – summary dismissal for want of prosecution not a proceeding against a company under s 471B

DAMAGES – breach of contract and misrepresentations – assessment of damages
COSTS – gross sum costs order made rather than assessed costs pursuant to s 98 (4)(c) of the Civil Procedure Act 2005 (NSW)
Legislation Cited: Acts Interpretation Act 1901 (Cth), s15AA
Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth))
Civil Procedure Act 2005 (NSW), Part 6, ss 61, 67, 98, 98(4), 98(4)(c)
Contracts Review Act 1980 (NSW)
Corporations Act 2001 (Cth), ss 471B, 491(1), 1335
Fair Trading Act 1987 (NSW)
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5(1)(c)
Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005 (NSW), rr 12.7, 12.10, 16.2(1)(c), 16.3(1)(a), 16.10, 18.4, 42.20, 42.20(2)
Cases Cited: BPM Pty Ltd v HPM Pty Ltd (1996) 14 ACLC 857
Citigroup Pty Limited v Middling (No. 4) [2015] NSWSC 221
Dealquip Australia Pty Ltd v 33 Electra Pty Ltd (No. 2) [2013] NSWSC 1382
DSG Holdings Australia Pty Ltd and Another v Helenic Pty Ltd (2014) 86 NSWLR 293; [2014] NSWCA 96
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Ghosh v NineMSN Pty Ltd (2015) 90 NSWLR 595; [2015] NSWCA 334
Hession v Century 21 South Pacific Ltd (in liquidation) (1992) 28 NSWLR 120
Maureen Courtney and Brett Courtney as trustee for the Courtney Superannuation Fund v Super Smart Strategies Pty Limited [2017] NSWSC 242
Re AJ Benjamin Ltd (in liq) and the Companies Act (1969) 90 WN (Pt 1) (NSW) 107
Singh v Singh [2017] NSWCA 15
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514
Young v Roads and Maritime Services [2016] NSWCA 238
Category: Principal judgment
Parties:
Proceedings 2013/78666
Richard Webster (First Plaintiff)
Loris Webster (Second Plaintiff)
Webster Superannuation Fund (Third Plaintiff)
Super Smart Strategies Pty Ltd ACN 098 688 085 (now ACN 098 688 085 Pty Ltd (in liq))(First Defendant)
Rick Frank Alfred Manietta (Second Defendant)
Rick…

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: [2017] NSWSC 531
Decision Date: 04 May 2017

CaseChat Overview and Summary

In the matter of Webster v Super Smart Strategies Pty Ltd, the plaintiffs sought damages for breach of contract and misrepresentations against the defendants. The case was heard in the Supreme Court of New South Wales. The defendants, who were in liquidation, had persistently defaulted in complying with court directions, including failing to engage in court-ordered mediation. This led to the plaintiffs applying for the defendants' defence to be struck out and for a default judgment to be entered, as well as for their cross-claim to be dismissed. The court was tasked with determining whether the defendants' default warranted such measures and whether the imposition of a stay on further proceedings was justified.

The court considered the defendants' repeated failures to comply with court directions and their abandonment of the proceedings, which caused significant prejudice to the plaintiffs. The court held that the defendants' default was severe enough to justify striking out their defence and entering a default judgment. Additionally, the court dismissed the cross-claim, noting that the defendants' conduct warranted this outcome. The court also addressed the issue of costs, making a gross sum costs order rather than assessed costs, and imposed a stay on further proceedings unless and until the cross-defendants' costs were paid, to prevent any further abuse of court processes.

The court's decision underscored the importance of compliance with court directions and the consequences of persistent default. The court found that the defendants' actions warranted the striking out of their defence, the entry of a default judgment, and the dismissal of their cross-claim. The court also ordered that no further proceedings be commenced without leave on the same or similar facts until the cross-defendants' costs were paid. This decision serves as a reminder of the need for parties to adhere to court processes and the potential consequences of failing to do so.

The court ordered that judgment be entered in favour of the plaintiffs, Webster, against Super Smart Strategies Pty Ltd in the sum of $2,500,000 plus interest and costs. The court also ordered that no further proceedings be commenced without leave on the same or similar facts until the cross-defendants' costs were paid. This decision highlighted the importance of compliance with court processes and the consequences of persistent default.

Orders