Solicitors:
Solari Law (Plaintiffs)
Finn Roache Lawyers (Defendants)
File Number(s): SC 2016/287887
[2]
EX TEMPORE Judgment (REVISED)
By statement of claim filed on 12 September 2016 in proceedings 2016/273107, Mr Daniel Savo, seeks declarations to the effect that, in equity, he is the owner of half of the "transport business carried on by" and the shares in the first defendant, Quantum Transport Solutions Pty Limited. The second defendant is Ms Deborah Roberts who, according to the records of ASIC and, I infer, the books and records of Quantum, is recorded therein as the sole director and shareholder of Quantum. Mr Savo relies upon an agreement allegedly made between his father, Mr Dominic Savo, and Ms Roberts in May or June 2010.
For convenience, and without intending any disrespect, I will refer to those three parties by their given names.
The 2010 agreement is said to be partly oral and partly in writing. To the extent that it is oral, it is said to have arisen from a conversation between Deborah and Dominic who were then in a domestic relationship of some sort. So far as it is in writing, it is said to be comprised in a handwritten document signed by Deborah and Dominic which, I am informed the evidence will reveal, was then handed by Dominic to Deborah without any copy being retained by Dominic.
The claim is, at the moment, not well-articulated in the pleadings. In substance, I apprehend that Daniel's case will be that Deborah holds one half of her shareholding in Quantum on trust for him.
By a summons filed in these proceedings on 26 September 2016, Daniel, and a company of which he is the sole shareholder and director, DST Transport Pty Limited, seek orders that two proceedings currently fixed for hearing in the Local Court on 25 and 28 November 2016 and 2 December 2016 be removed to this Court and, I infer, be heard concurrently or at least at the same time as the proceedings that Daniel has recently commenced.
In the first of those proceedings in the Local Court ("the 2015 proceedings"), DST seeks to recover a $50,000 loan from Deborah. Deborah admits she received the loan but claims it was from Daniel personally, and not from DST, and that, in any event, she is not obliged to repay it for the reasons which emerge from the second of the two proceedings.
In the second of the two proceedings ("the 2016 proceedings"), Quantum alleges that by an oral agreement made between Dominic (on behalf of Daniel) and Deborah (on behalf of Quantum), Quantum agreed to sell to Daniel a Mercedes-Benz recreational vehicle ("RV") in consideration of Daniel, (a) paying Quantum $85,000, (b) agreeing that the $50,000 referred to in the 2015 proceedings was owing to him and not to DST and, (c) in effect forgiving that loan.
There is no question that the Local Court has jurisdiction to deal with both of those claims.
Daniel is concerned that a finding adverse to him in the 2016 proceedings might affect his prospects in the proceedings in this Court. That is because a finding that he was prepared to allow Dominic to negotiate on his behalf a settlement of DST's claim against Deborah in exchange for a transfer from Quantum to him of the RV might be seen to be inconsistent with his claim in the proceedings recently initiated in this Court that in equity he is a half owner of Quantum and thus, in effect, of its assets, including the RV.
Daniel may be right to have that apprehension.
However, in my opinion, it is too late for him to seek to have the 2016 proceedings (and with them the 2015 proceedings) removed.
The 2016 proceedings were commenced on 25 January 2016. Daniel filed a defence on 22 February 2016. Since then, the case has been the subject of close case management by the Local Court. Several directions for affidavits have been made. Dominic and Daniel have sworn two affidavits. Those sworn by Daniel are brief. Dominic, however, has sworn two substantial affidavits, including one in reply to Deborah's very lengthy affidavit of 12 July 2016 sworn in support of Quantum's claim.
Neither Dominic nor Daniel have made any reference in their affidavits to the alleged 2010 agreement.
The 2016 proceedings have, twice, been allocated a hearing date. On 26 April 2016, the hearing date was fixed for 18 and 19 October 2016. On 27 September 2016, the current dates were, by consent, fixed (after Daniel had commenced the proceedings in this Court and the day after the summons was filed in these proceedings for removal).
There is no adequate explanation for that delay.
Mr Bruckner, who appeared on behalf of Daniel, pointed to a Deed of Assignment that Dominic executed on 21 April 2016 with his former trustee in bankruptcy pursuant to which the trustee assigned to him such causes of action that Dominic, prior to his bankruptcy, had against Deborah and Quantum.
It may be that the process that led to the creation of that document provides an explanation for proceedings having not been commenced in this Court before September 2016; although, as I have mentioned, Daniel and not Dominic is the plaintiff in those proceedings.
Those circumstances provide no explanation at all as to what has happened since then, despite the fact that Daniel has actively participated in the 2016 proceedings as they progressed towards hearing dates during the course of this year.
In the meantime, nothing at all was said by Daniel or Dominic in their evidence in the 2016 proceedings to foreshadow that Daniel might contend that the alleged circumstances of the alleged 2010 agreement had any bearing on the claim made by Quantum concerning the RV and related matters.
Mr Bruckner informed me that, as presently advised, Daniel may seek now to introduce into the 2016 proceedings, whether by way of evidence or cross-examination, the circumstances of the alleged 2010 agreement.
Any evidence would, it seems to me, have to be from Dominic as he is allegedly the party to the oral agreement.
It will, of course, be a matter for the Local Court whether, at this very late stage, it would permit that evidence to be adduced.
Even if the Local Court were to allow that evidence to be adduced, and to consider it in the context of the claims made by Quantum in the 2016 proceedings, the Local Court could not, of course, decide what consequences might flow from whether or not the 2010 agreement was made out.
However, as Mr Bruckner pointed out, there may be findings made in the 2016 proceedings which would be binding on the parties and which may have an effect, possibly a decisive effect, on the outcome of the proceedings commenced in this Court.
That may prove to be a problem for Daniel. But that is entirely a product of the manner in which the proceedings have been conducted on his behalf.
The question for me is whether there is a "sufficient reason" for the purposes of s 140(4) of the Civil Procedure Act 2005 (NSW) to transfer the proceedings from the Local Court to this Court.
The test has been described by Bryson J in Sanderson Motors Pty Ltd v Kirby [2000] NSWSC 924 as follows at [4]:
"No limits or restrictions on the discretion are established by authority. When asked to exercise this power the Court should, in my opinion, appraise the facts and circumstances of the case before it and consider whether the applicant has shown something which, within the framework of the purposes for which the power exists, is a sound ground or a good reason why an order ought now to be made. The subject does not admit of more particular exposition."
It is also true, as his Honour pointed out at [7] of that judgment, that there is a public interest in having all matters in controversy arising out of related facts determined at one time.
Here, although the circumstances of the alleged 2010 agreement may have some bearing on the probability of the 2014 agreement, both arise out of different circumstances.
Further, as White J observed in a similar context in Getex Pty Ltd v National Association of Testing Authorities Australia Limited [2011] NSWSC 1580 at [18]:
"If [the finding of the Local Court] creates an issue estoppel, then so be it. The very purpose of the doctrine of issue estoppel is to prevent re-litigation of the facts once they have been subject to judicial determination."
In those circumstances, the conclusion to which I have come is that the summons should be dismissed with costs.
[3]
Amendments
26 October 2016 - Quote formatted at [30]
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Decision last updated: 26 October 2016