BioOne Pty Ltd v Australian Biodiesel Group Ltd [2008] FCA 709

FEDERAL COURT OF AUSTRALIA

BioOne Pty Ltd v Australian Biodiesel Group Ltd [2008] FCA 709

BIOONE PTY LTD (ACN 116 949 332) v AUSTRALIAN BIODIESEL GROUP LTD (ACN 096 687 839)

NSD 2266 OF 2007

LINDGREN J

21 may 2008

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2266 OF 2007

BETWEEN: BIOONE PTY LTD (ACN 116 949 332)

Applicant

AND: AUSTRALIAN BIODIESEL GROUP LTD (ACN 096 687 839)

Respondent

JUDGE: LINDGREN J DATE OF ORDER: 21 may 2008

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The applicant's motion brought by notice of motion filed on 10 March 2008 be dismissed. 2. The applicant pay the respondent's costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2266 OF 2007

BETWEEN: BIOONE PTY LTD (ACN 116 949 332)

Applicant

AND: AUSTRALIAN BIODIESEL GROUP LTD (ACN 096 687 839)

Respondent

JUDGE: LINDGREN J

DATE: 21 may 2008

PLACE: SYDNEY

REASONS FOR JUDGMENT

Introduction 1 The applicant, BioOne Pty Ltd (BioOne) sues the respondent, Australian Biodiesel Group Ltd (ABG) arising out of BioOne's purchase of a used biodiesel batch processing plant (Plant) and associated trailer. Apparently the total price, including GST, was $165,000. 2 BioOne complains that it was induced to make the purchase by misrepresentations made by George Arthur Robert Muirhead (Mr Muirhead). 3 BioOne moves for an order under O 11 r 16 of the Federal Court Rules (Cth) (the Rules)striking out certain paragraphs of ABG's defence. Taking into account what counsel for BioOne said on the hearing, BioOne seeks to have the following paragraphs of ABG's defence struck out: Paragraphs 5(a), (c) 6(b), (d) 9(a), (b) 10(b), (d) 12(b), (c) 13(b)(ii) 14(b) – (e) 15(d) 23(a), (e) 24(a)(i) 24(b) 26(b) 4 Order 11 r 16 of the Rules provides: Where a pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; (b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or (c) is otherwise an abuse of the process of the Court; the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out. 5 There will be an issue as to whether Mr Muirhead, when making the alleged representations, was representing ABG or another company, Dellbury Pty Ltd (Dellbury). Apparently: · Mr Muirhead was a director of ABG from 3 May 2001 to 13 January 2006 and was chairman of the board of directors of ABG until 22 December 2005; · Mr Muirhead was, from 30 December 1997, a director of Dellbury; and · Mr Muirhead's wife, Stephanie Susan Muirhead, was a director of Dellbury from 20 June 1999 and the secretary of ABG from 9 February 2003 to 13 January 2006. 6 BioOne alleges that Mr Muirhead made representations in the period late September to late October 2005 concerning the capability and capacity of the Plant. Since BioOne was not incorporated until 2 November 2005, they could not have been made to BioOne, although circumstances (not pleaded) following the incorporation of BioOne may show that BioOne has a cause of action because of them. In its defence, ABG pleads that Mr Muirhead dealt with Norman Witherow (Mr Witherow) representing a company called Transport Solutions Pty Ltd (Transport Solutions) prior to the sale of the Plant. 7 In summary, ABG pleads that the negotiations were between Mr Muirhead as representing Dellbury and Mr Witherow as representing Transport Solutions, whereas, according to BioOne, they were between Mr Muirhead as representing ABG and Mr Witherow as representing BioOne.