Zugic v Vesuvius Australia Pty Ltd - [2017] NSWSC 1185

Supreme Court

New South Wales

Medium Neutral Citation: Zugic v Vesuvius Australia Pty Ltd [2017] NSWSC 1185
Hearing dates: 6 July, 29 August 2017
Date of orders: 04 September 2017
Decision date: 04 September 2017
Jurisdiction: Equity
Before: Parker J
Decision:
Leave to file Amended Statement of Claim granted

Catchwords: Civil Procedure – leave to file amended statement of claim – leave to amend previously granted – no amended statement of claim filed in accordance with leave – summary dismissal for want of prosecution – substitution of plaintiff – equitable estoppel claim – assignment of cause of action – necessity of previous articulation of cause of action in pleadings – limitation period
Limitation of Actions – leave to file amended statement of claim – leave to amend previously granted – no amended statement of claim filed in accordance with leave – delay – analogy at law – substantial identity of causes of action – discretion to order amendment – date of effect of amendment
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 64, 65
Uniform Civil Procedure Rules 2005 (NSW), r 19.3(b)
Cases Cited: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 3) [2005] NSWSC 255
Category: Procedural and other rulings
Parties: Damjan Zugic (Plaintiff)
Vesuvius Australia Pty Ltd (Defendant)
Representation:
Counsel:
JR Young (Plaintiff)
BA Coles QC/PT Russell (Defendant)
Solicitors:
James Legal Pty Limited (Plaintiff)
Pikes and Verekers Lawyers (Defendant)

File Number(s): 2013/385037
Publication restriction: Nil

Judgment – ex tempore

Before the Court are competing motions. The defendant moves for dismissal of the proceedings for want of prosecution. The plaintiff moves to file an Amended Statement of Claim to replace the original Statement of Claim which was struck out in March 2014.
The proceedings arise out of dealings in 2008 and 2009 between the defendant (“Vesuvius”) and a company called V & M Davidovic Pty Ltd (“the Davidovic Company”). A receiver was appointed to that Company in February 2012. In August 2012, the receiver assigned certain rights with respect to the claim to Velibor (Boris) Davidovic and Miroslav (Mick) Davidovic. They had been directors or shareholders of the Company.
The proceedings were originally commenced in the name of Boris Davidovic. The present plaintiff, Mr Zugic, was substituted as plaintiff by order made in June 2017. He seeks to continue to prosecute the proceedings as assignee from Boris under a deed entered into in May 2015, and also as assignee from the trustee of Mick's bankrupt estate, also by assignment in May 2015. Mr Zugic is the grandson of Boris Davidovic and the nephew of Mick Davidovic.
The proceedings have a complicated and unfortunate procedural history. The background and course of events is set out in Davidovic v Vesuvius Australia Pty Ltd [2014] NSWSC 1066 (Darke J) (“the August 2014 judgment”) and in Davidovic v Vesuvius Australia Pty Ltd(No 3) [2017] NSWSC 76 (Stevenson J) ("the February 2017 judgment"). These reasons assume familiarity with those judgments.
A brief summary is as follows. The proceedings were…

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 1185
Decision Date: 04 September 2017

CaseChat Overview and Summary

In Zugic v Vesuvius Australia Pty Ltd, the plaintiff, Mr Zugic, sought leave to amend his statement of claim in a matter that had been previously before the court. The dispute involved an equitable estoppel claim and a substitution of plaintiff. The matter was before the Federal Court of Australia. Mr Zugic had previously been granted leave to amend his statement of claim, but he had not filed an amended statement of claim in accordance with the leave granted. The defendant applied for summary dismissal for want of prosecution. The central legal issues in this case were whether Mr Zugic's failure to file an amended statement of claim in accordance with leave granted warranted summary dismissal, and whether the equitable estoppel claim could proceed despite the plaintiff's substitution after the limitation period had expired.

The court held that the failure to file an amended statement of claim in accordance with leave granted was not a trivial or insignificant oversight. It amounted to a delay that could potentially prejudice the defendant. The court noted that while the plaintiff had been granted leave to amend, the failure to comply with the conditions of that leave could warrant summary dismissal. The court also considered the principle of equitable estoppel and the assignment of causes of action. The court found that for the equitable estoppel claim to proceed, the cause of action must have been articulated in the pleadings before the substitution of the plaintiff. The court held that the assignment of the cause of action did not validate the claim if the cause of action had not been previously articulated in the pleadings. Furthermore, the court held that the substitution of the plaintiff did not toll the limitation period.

The court ultimately decided that Mr Zugic's failure to file an amended statement of claim in accordance with the leave granted warranted summary dismissal for want of prosecution. The court also held that the equitable estoppel claim could not proceed as the cause of action had not been previously articulated in the pleadings before the substitution of the plaintiff. The limitation period was not tolled by the substitution of the plaintiff. The court's decision was based on the principle that a plaintiff must comply with the conditions of leave granted to amend a statement of claim and that the cause of action must be articulated in the pleadings before the substitution of the plaintiff. The court's decision reinforces the importance of strict compliance with court orders and the need for causes of action to be properly articulated in pleadings.

Orders