Woodcroft-Brown v Timbercorp Securities Ltd - [2010] VSC 68

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

No. 9807 of 2009

ALLEN RODNEY WOODCROFT-BROWN	Plaintiff
v
TIMBERCORP SECURITIES LIMITED (ACN 092 311 469) (IN LIQUIDATION) & ORS (according to the schedule attached)	Defendants

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 March 2010
DATE OF JUDGMENT:	12 March 2010
CASE MAY BE CITED AS:	Woodcroft-Brown v Timbercorp Securities Ltd
MEDIUM NEUTRAL CITATION:	[2010] VSC 68

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CORPORATIONS - Group proceeding – Application for leave to proceed against company in liquidation - Whether claims are in respect of ‘related circumstances’ – Distinction between claims the group members have and relief to which individual group members may be entitled – Common issues of law and fact - Supreme Court Act 1986 (Vic), s 33C(1)(b) – Corporations Act 2001 (Cth), s 500(2).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr NJ O’Bryan SC with Mr PG Crennan and Mr CH Truong	Macpherson & Kelley
For the Firstnamed Defendant	Dr O Bigos	Arnold Bloch Leibler
For the Second, Third and Fourthnamed Defendants	Mr AJ McClelland	Brian Ward & Partners
For the Fifthnamed Defendant	Mr JBR Beach QC with Mr HNG Austin	Freehills

HIS HONOUR:

On 28 October 2009 Allen Rodney Woodcroft-Brown commenced a proceeding against Timbercorp Securities Ltd (in liquidation) (‘Timbercorp Securities’) and its former directors: Gary William Ladel, Robert James Hance, Sol Charles Rabinowicz and Timbercorp Finance Pty Ltd (in liquidation) (‘Timbercorp Finance’). The proceeding was brought as a group proceeding pursuant to Part 4A of the Supreme Court Act 1986 (Vic). The plaintiff made application for leave to proceed against Timbercorp Securities and Timbercorp Finance pursuant to s 500(2) of the Corporations Act 2001 (Cth). The plaintiff’s summons is dated 28 October 2009 and was made returnable before the court on 30 October 2009. On that day directions were made for the filing and service of affidavits and for submissions. The application was fixed for hearing on 15 December 2009.

By the day fixed for hearing, the plaintiff had filed affidavits of Robert Hamilton Downing, sworn 27 October 2009 and 9 November 2009, together with an affidavit of Ronald Gerard Williamson, sworn 11 December 2009. Timbercorp Finance had filed and served an affidavit of Kenneth Alexander Adams, sworn 4 December 2009, in opposition to the application. The plaintiff had filed an outline of submissions, as did Timbercorp Securities and Timbercorp Finance.

On 15 December 2009 Timbercorp Securities did not oppose the grant of leave but drew attention to ‘difficulties’ with the statement of claim which it submitted cast doubt on the existence of serious questions to be tried. It submitted that if leave were to be granted it ought to be made subject to three conditions. These were: (1) leave should be limited to issues of liability alone; (2) the claimant shall not be entitled to enforce a judgment without the leave of the court; and (3) liberty should be reserved to Timbercorp Securities to apply for the revocation of…

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: [2010] VSC 68
Decision Date: 12 March 2010

CaseChat Overview and Summary

The case of Woodcroft-Brown v Timbercorp Securities Ltd involved a group of shareholders seeking to bring a proceeding against a company that was in liquidation. The shareholders argued that their claims were in respect of related circumstances and sought leave to proceed with a group proceeding. The court was required to determine whether the claims were sufficiently related to justify the use of a group proceeding, and if so, whether the relief sought by the individual group members could be granted in such a proceeding.

The legal issues that the court had to decide included the distinction between the claims that the group members had against the company and the relief to which individual group members may be entitled. The court also had to consider the relevance of common issues of law and fact in determining whether a group proceeding was appropriate. The relevant statutory provisions were section 33C(1)(b) of the Supreme Court Act 1986 (Vic) and section 500(2) of the Corporations Act 2001 (Cth). The court needed to determine whether the claims met the criteria set out in these provisions to allow a group proceeding.

The court found that the claims were sufficiently related to justify the use of a group proceeding, as they all arose from the same set of circumstances and involved common issues of law and fact. However, the court noted that the relief sought by the individual group members could only be granted if it was appropriate in the circumstances of the case. The court held that the individual group members were entitled to seek relief in the group proceeding, but the extent of that relief would depend on the specific circumstances of each member. The court granted the application for leave to proceed with a group proceeding, subject to certain conditions.

The final orders of the court included the grant of leave for the group proceeding, subject to the conditions that the individual group members could only seek relief if it was appropriate in their specific circumstances, and that the court would determine the extent of any relief on a case-by-case basis. The court also ordered that the company in liquidation be served with the writ and statement of claim, and that the proceeding be listed for a case management conference.

Orders