Ultimate Media Group Pty Ltd v Adframe Australia Pty Ltd [2005] NSWSC 538 | Case summary

3629/04 ULTIMATE MEDIA GROUP PTY LTD (formerly Ultimate Outdoor Pty Ltd) v ADFRAME AUSTRALIA PTY LTD & ANOR JUDGMENT - On Dismissal of Interlocutory Process 1 HIS HONOUR: This is the third day of a three day fixture which was made for the trial of proceedings 3629 of 2004. The trial has not commenced before me, so that I am not part heard in it. 2 The time up till now has been taken up with wrangling between the parties on procedural matters. Mr Mark Cohen, of counsel for the defendants, in the course of various of these arguments referred to Part 1 r 3 of the Supreme Court Rules 1970 ("the SCR"), the overriding purpose rule. That rule requires parties to participate in the processes of the Court so as to facilitate the just, quick and cheap resolution of the real issues between the parties. It does seem to me that the defendants have not been proceeding in the spirit of that rule. 3 Here the plaintiff has paid to the defendants, or as they direct, $140,000 for shares in a company and has to date received no shares, as it says it should have. It seems clear in those circumstances that there are real issues between the parties as to the contract between them, the payment of those moneys and the shares which it is said ought have been transferred pursuant to the contract. Various courses have been suggested to permit the agitation of those substantive issues, but none has to date been agreed on. The plaintiff has now filed a fresh summons, being in effect a summons in commercial list form, with what may stand as a statement of claim attached to it, which raises those issues. It has filed that process in separate proceedings because the original proceedings fixed for trial are bedevilled by various submissions put on behalf of the defendants. 4 I am not saying that those submissions ought not have been put in the first instance. But it is my view that the defendants, pursuant to Part 1 r 3, ought now be cooperating in achieving a regime in which the real issues between the parties can be addressed. Instead of that, it appears to me that they are attempting to conduct the matter in a way which will defeat the original proceedings and defeat them in a fashion which they will then assert prevents the plaintiff agitating its claims in any proceedings. In particular, it has been made quite plain that, if I dismiss the first proceedings, which may have certain very genuine problems, as submitted by the defendants, the defendants will seek to raise that dismissal as a defence to other proceedings brought by the plaintiff upon the claim under the principle in Port of Melbourne Authority v Anshun (1981) 147 CLR 581. Certainly the defendants have declined an invitation issued by me to assist the matter by giving an undertaking to the Court that they would not use such a dismissal in that way. That is despite the fact that I have indicated that I am well aware that there is an argument that there should be costs consequences against the plaintiff for its deficiencies in the conduct of this matter, to which I have not yet turned and to which I shall turn in due course. I have indicated that those complaints as to costs should in due course be dealt with on their merits, whatever form the future course of the proceedings takes. 5 Having said what I have said about the defendants, I turn to the plaintiff. The plaintiff's conduct of the proceedings has been inconsistent and changeable. These proceedings were commenced by an originating process said to be brought under ss 233 and 461 of the Corporations Act 2001 (Cth) ("the CA"). The originating process did seem to seek some relief that did not arise under those sections, but to which the plaintiff would be entitled under the general law. One of the arguments which the defendants put is that these proceedings in their commencement invoked the exercise by this Court of federal jurisdiction only; that the relevant general law relief was not within any jurisdiction of the Court appendant to such exercise of federal jurisdiction; and that that general law jurisdiction could not be exercised in these proceedings. 6 The plaintiff readily conceded that it faced a considerable difficulty in these proceedings, that is, because proceedings can be brought under s 233 (relevantly) by a member of a company and the plaintiff's very complaint is that it has not become a member of the company. Section 461 is a little wider. The plaintiff has before me claimed that it has standing to apply under that section, either because it is a contingent creditor of the company or, perhaps, because it is a contributory of the company within the definition of "contributory" in s 9 of the CA. 7 The plaintiff's inconsistencies started when, before the Registrar on 18 October 2004, it announced that it did not seek to proceed under s 461 but did seek to proceed under s 233, apparently not then having realised its dilemma under the latter section. Before me it reversed its course; conceded that it did not have standing to bring an application under s 233; and sought to support the proceedings under s 461. This the defendant says it cannot do, because, within the principles laid down in the Commonwealth of Australia v Verwayen (1990) 170 CLR 394, it has either waived its right to pursue a claim under s 461 or elected not to do so. 8 It should be said that before the Registrar on 18 October 2004 the defendants applied for, but the plaintiff resisted, pleadings and the Registrar refused to order them. When the matter came before me for pretrial directions, I ordered that the proceedings continue on pleadings and that a statement of claim be brought in at the commencement of the trial. It was, and that was the commencement of the wrangling. The reason that the plaintiff has commenced separate proceedings and sought to have them brought before me is that it wishes to pursue the real dispute between the parties in proceedings which are not subject to arguments as to the jurisdiction of the Court and as to waiver and election, which the defendants insist on maintaining. The plaintiff's course appears to me appropriate and within the spirit of Part 1 r 3. In my view, complaints about the multiplicity of proceedings, contrary to the spirit of s 63 of the Supreme Court Act 1970, Part 31 of the SCR and other procedural provisions, lie ill in the mouths of the defendants, whose insistence on maintaining particular lines of defence has led the plaintiff to seek to embody the dispute in proceedings not bedevilled by arguments unprofitable to the parties and inimical to the efficient and productive use of Court time. As I say, in due course, so far as appropriate, losses caused by the plaintiff's changes of course can be visited on it by such costs orders as are appropriate. 9 It is against that background that I turn to the interlocutory process currently before me, which seeks the summary termination of proceedings 3629 of 2004. 10 It should be borne in mind that, although at the moment the order for the continuation of these proceedings on pleadings still stands, no statement of claim has been filed and adversion may be made only to the originating process. It seems to me that the nub of the argument is as to whether or not the proceedings should be dismissed as, in effect, hopeless under the provisions of Part 13 r 5 of the SCR, which applies in proceedings brought under the Supreme Court (Corporations) Rules 1999 ("the CLR") by virtue of CLR 1.3. 11 The test as to whether or not proceedings should be summarily dismissed remains that laid down by the High Court in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. For proceedings to be dismissed under provisions such as this, the lack of a cause of action must be demonstrably clear. In the words of Barwick CJ at 130, the case of the plaintiff must be "so clearly untenable that it cannot possibly succeed". So far as the proceedings are brought under s 233 of the CA, it is, I think, conceded that that is so. However, the proceedings are sought to be maintained otherwise. In so far as they depend upon the plaintiff's general law claims, I am not able to form any view as to what the result either way of those claims is likely to be. So far as they depend upon s 461 of the CA, whilst Mr Cohen has produced strong arguments against the plaintiff's standing to bring s 461 claims, arguments have been put to the contrary. The long and short of the matter is, that leaving aside the s 233 claim, there is in my view not a sufficiently clear demonstration of the invalidity of the proceedings to found a dismissal of them under Part 13 r 5. 12 Mr Cohen also put an argument that depended upon Part 11 r 8(1)(a) of the SCR and also I think Part 11 r 8(1)(h) of the SCR. Rule 8(1) is the rule which enables the Court to set aside originating process or to declare that the Court has no jurisdiction over the defendant in respect of the subject matter of the proceedings. However, that application fails in essence upon the same ground as the application under Part 13 r 5: I do not think Mr Cohen's arguments about jurisdiction are self evidently correct. The arguments about jurisdiction, both as to the general law claim and as to the claim under s 461 of the CA, should not be acceded to and, it seems to me fail at this stage, but, in so far as is necessary, should be argued at the hearing of the proceedings. 13 A further submission was made by Mr Cohen that there should be a dismissal under Part 5 r 8(b) of the SCR, which in general terms empowers the Court on the first or any later day of hearing to make such order or give such judgment as the nature of the case requires. In my view, that rule is quite inapposite for use in the present circumstances and an application under that rule cannot succeed. 14 This interlocutory process was originally brought forward two days ago when it was not clear whether the plaintiff would file its summons incorporating a statement of claim in these proceedings, or file it as the commencement of separate proceedings. It has subsequently adopted the latter course. At the earlier stage, a prayer was included in the interlocutory process that the statement of claim be struck out pursuant to Part 15 r 26 of the SCR. Now there are two sets of proceedings. This interlocutory process is filed only in 3629 of 2004. No statement of claim is on the file in that matter. It is inappropriate that the Part 15 r 26 application be pursued upon this interlocutory process. 15 That, of course, does not mean that it cannot be pursued upon an appropriate application in the later proceedings, 3286 of 2005. Indeed, if time remains today, I shall be prepared to entertain such an application. If sufficient time does not remain, such an application may, of course, be pursued before another Judge or Master. The validity of the formulation of the plaintiff's claim in those proceedings is not in any way the subject of the application at present before me. 16 The interlocutory process will be dismissed. **********

Ultimate Media Group Pty Ltd v Adframe Australia Pty Ltd

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (11 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (3)

Cited By (1)