Yunghanns v Candoora No 19 Pty Ltd (No 4)

[2000] VSC 438

SUPREME COURT OF VICTORIA
COMMERCIAL AND EQUITY DIVISION	Not Restricted

COMMERCIAL LIST

No. 2093 of 1999

WILLIAM YUNGHANNS, a minor, by Peter Nicholas Yunghanns, his litigation guardian	Plaintiff
v
CANDOORA NO.19 PTY LTD (ACN 055 346 622)	Defendant

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 October 2000
DATE OF JUDGMENT:	27 October 2000
CASE MAY BE CITED AS:	Yunghanns v Candoora No 19 Pty Ltd (No.4)
MEDIUM NEUTRAL CITATION:	[2000] VSC 438

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Practice and Procedure – joint trial – whether one proceeding should be heard before joint trial – whether just and convenient.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr C.L. Pannan QC with Mr A. Young	Schetzer Brott & Appel
For the Defendant	Mr G.A.A. Nettle QC with Mr D.G. Collins	B2B Lawyers
For the Defendants in No. 2053 of 1999 and for the Plaintiffs in No. 2034 of 1998	Mr R. I. Rosenberg	Strongman & Crouch

HIS HONOUR:

1. By order made on 7 April 2000 Warren J ordered that this, the Candoora proceeding, be heard at the same time as proceeding no. 2034 of 1998, the Rentiers proceeding, and proceeding no. 2053 of 1999, the Merim proceeding.  Subsequently, a fourth proceeding, no. 6693 of 2000, the Family Court proceeding, was added to this list of proceedings to be heard together at the Yunghanns joint trial which is to start on 29 January 2001.  On 7 April 2000 her Honour had the benefit of argument by counsel for both the plaintiff, William Yunghanns and the defendant, Candoora.  Orders to the same effect were also made in the Rentiers proceeding and the Merim proceeding.  Again, all parties to those proceedings were represented.  The pleadings in the Candoora proceeding at that time comprised a further amended statement of claim filed on 6 April 2000 and an amended defence filed on 6 April 2000 in response to an earlier statement of claim.  Further amendments to these pleadings have been made.

1. The application now before the court, made on behalf of William Yunghanns, is that the Candoora proceeding be tried separately and before the joint trial of the other proceedings.  It is opposed by Candoora.  Of the parties to the other proceedings, counsel for Peter Yunghanns and those companies associated with him stated that his clients did not oppose the application.

1. It was put by counsel on behalf of William Yunghanns that a separate and early trial would be appropriate and convenient on a number of grounds which are set out in their outline of argument filed on 12 October 2000 and which they summarised under five general headings.

§  William Yunghanns is not a party to or involved in the other proceedings.

§  The supposed point of contact between the Candoora proceeding and the other proceedings disappears when the issue raised in paragraph 24 of the defence in the Candoora proceeding is isolated.  It is not the rights and wrongs of the conduct of David Yunghanns and Sarah Mahon, the directors of Candoora, but the mere existence of their alleged conduct and its threat to exclude William Yunghanns as a beneficiary which render Candoora unfit to be trustee of the Yunghanns Children Trust.  When asked whether, in these circumstances, William Yunghanns would be prepared to admit these allegations for the purpose only of that proceeding, counsel said that they could almost do so, but that “there are a few words that trouble us, are a bit colourful”.

§  The evidence in the Candoora proceeding is likely to be relatively short so that that trial alone is not likely to exceed three days.  Counsel said that there was no issue that the trust was set up in accordance with the trust deed nor that William Yunghanns is a specified beneficiary.  It should not take long to deal with the suggestion put on behalf of Candoora that a trustee which wishes to disinherit a beneficiary in favour of its own directors might be permitted to do so. 

§  When the Candoora proceeding is determined, the existing receivership over the trust will terminate.  The order sought would therefore save the parties and the trust the substantial cost and inconvenience of prolonging this receivership. 

§  The fundamental issue in the Candoora proceeding is a straightforward one.  It is whether the beneficiary of a trust is entitled to insist that the trustee be independent, in fact and in appearance. 

1. Having heard what was said against the application, I refused it.  I have been requested to provide reasons. 

1. I refused the application because I was not satisfied that the order sought would be likely to achieve the objectives of the order of 7 April 2000 or to be productive of any substantial saving in cost or inconvenience for the parties.  The making of the order sought would be likely to require some of the parties to divert to the Candoora trial resources which they are presently applying to the preparation of the joint trial.  I am not satisfied, notwithstanding the submission to the contrary put by counsel for William Yunghanns, that the Candoora trial can be confined as they suggest.  The making of the order sought would involve the litigation on two occasions before, it may be, a different judge, of many important common issues in circumstances where no estoppel would arise. 

1. Whether it is correct to say, as did counsel then appearing for Peter Yunghanns and his associated companies on 7 April 2000, that the allegations in the Candoora proceeding are the “mirror image” of those in the Merim proceeding, it is clear that similar issues, similar evidence and the same significant witnesses will be involved in the two proceedings.  The amendments to the pleadings in the Candoora proceeding since April have complicated, rather than simplified, the issues;  they have tended to increase the overlap of issues rather than diminish it.  In all the circumstances, the same considerations which led the plaintiff in April to support the joint trial has led me in October to the conclusion that the justice and convenience of the case requires that I should refuse his application to sever part of it.

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