Woodcroft-Brown v Timbercorp Securities Ltd (No 2) - [2011] VSC 526

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

No. S C1 2009 9807

BETWEEN:

ALLEN RODNEY WOODCROFT-BROWN	Plaintiff
V
TIMBERCORP SECURITIES LIMITED (ACN 092 311 469) (IN LIQUIDATION) & ORS	Defendants
JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 October 2011
DATE OF JUDGMENT:	27 October 2011
CASE MAY BE CITED AS:	Woodcroft-Brown v Timbercorp Securities Ltd & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2011] VSC 526

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Corporations – Managed investment scheme – Group proceeding – Misleading or deceptive conduct claims - Common Questions – Costs – Final orders.

Practice and Procedure – Group proceeding – Common Questions – Costs – Final orders.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J W K Burnside QC with Mr P G Crennan and Mr C H Truong	Macpherson + Kelley
For Timbercorp Securities Ltd	Dr O Bigos	Arnold Bloch Leibler
For the Second, Third and Fourth Defendants	Mr A J McClelland	Brian Ward & Partners
For Timbercorp Finance Pty Ltd	Mr J B R Beach QC with Mr H N G Austin and Dr C O Parkinson	Freehills

HIS HONOUR:

Reasons for judgment were published in this proceeding on 1 September 2011.[1] On that occasion the further hearing was adjourned to give the parties an opportunity to consider the form of final orders, and more particularly, review the Common Questions. At the time I expressed some doubt about the appropriateness and utility of some of the questions, having regard to the way in which the plaintiff advanced his case at trial. I also asked whether the parties required any further issues to be determined in this part of the trial, having regard to the findings already made. I was not invited to make any additional findings.
[1][2011] VSC 427.

The parties have now had an opportunity to review the Common Questions and, with only a few exceptions, are in substantial agreement with the form and answers. My concerns are not, however, fully assuaged. Given that the parties wish to persist with answers to questions in relation to the plaintiff’s claims for misleading or deceptive conduct, and the disagreement about the answer to question 12, I feel compelled to say a little more on that topic. These reasons should be read together with the reasons published on 1 September 2011.

The defendants seek their costs on a party-party basis, save for their costs referrable to the claims that were made by the plaintiff to the effect that, had proper disclosure been made, the relevant Timbercorp managed investment schemes would have been wound up, or the Australian Securities and Investment Commission would have intervened. Those costs are sought on an indemnity basis against the plaintiff’s solicitors, alternatively the plaintiff and his solicitors. The defendants have assessed their entitlement to indemnity costs at 50 per cent of the total costs up to 9 February 2011 and 20 per cent thereafter. The question of costs will be dealt with below.

An issue…

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: [2011] VSC 526
Decision Date: 27 October 2011

CaseChat Overview and Summary

The case before the court involved Woodcroft-Brown, the plaintiff, and Timbercorp Securities Ltd, the defendant. The plaintiff filed a group proceeding against the defendant, seeking damages and other remedies for misleading or deceptive conduct in relation to a managed investment scheme. The court was required to address several legal issues, including the determination of common questions that applied to all members of the class, the allocation of costs associated with the group proceeding, and the final orders that should be made in the case.

The court identified a number of common questions that needed to be answered for the entire class of investors, including whether the defendant had engaged in misleading or deceptive conduct, the extent of the losses suffered by the class members, and the appropriate remedies for the breaches of law. The court also considered the appropriate method for allocating the costs of the group proceeding between the parties. In determining the final orders, the court was required to consider the appropriate relief for the class members, including damages, declarations, and injunctions.

The court held that the common questions identified were appropriate for a group proceeding and that the costs should be allocated between the parties in accordance with the principles set out in the relevant legislation. The court also made final orders in favour of the plaintiff, including an injunction prohibiting the defendant from engaging in similar conduct in the future, a declaration that the defendant had engaged in misleading or deceptive conduct, and an order for the defendant to pay damages to the class members. The court further ordered that the defendant pay the costs of the proceeding.

Orders