Ingot Capital Investments and Others v Macquarie Equity Capital Markets and Others [2002] NSWSC 853

New South Wales Supreme Court

CITATION : Ingot Capital Investments and Others v Macquarie Equity Capital Markets and Others [2002] NSWSC 853 FILE NUMBER(S) : SC 50169/02 HEARING DATE(S) : 11/09/02 JUDGMENT DATE : 18 September 2002

PARTIES : Ingot Capital Investments Pty Ltd and Others - Plaintiffs Andrew Mutton and the Persons in New South wales listed in Schedule "A" to the Summons - 14th Defendant JUDGMENT OF : Gzell J

COUNSEL : Mr F M Douglas QC with Mr D Sibtain for the Plaintiffs Mr J T Gleeson SC with Mr R A Dick for the 14th Defendants SOLICITORS : Deacons Lawyers - Plaintiffs Freehills Solicitors - Defendants CATCHWORDS : PROCEDURE - Pleadings - Leave to file Second Further Amended Summons - Opposition treated as application to strike out or dismiss summarily - PARTNERSHIP - Actions by and against partners - Vicarious liability - Partnership Act 1892, s 10 - Ordinary course of business of solicitors' firm - Partners acting as directors of bodies corporate - Authority of co-partners LEGISLATION CITED : Partnership Act 1892 partnership Amendment Bill 1998 Walker v European Electronic Pty Ltd (in liq) (1990) 23 NSWLR 1 CASES CITED : Clough v Frog (1974) 48 ALJR 481 at 482 Cropper v Smith (1884) 26 Ch D 700 at 710-711 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-129 DECISION : Leave granted to file pleading

- IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

GZELL J

WEDNESDAY 18 SEPTEMBER 2002

50169/01 Ingot Capital Investments Pty Ltd and Others v Macquarie Equity Capital Markets Ltd and Others JUDGMENT 1 Before the Court is an application by the plaintiffs for leave to file a Second Further Amended Summons against the fourteenth defendants who, with William Peck, the ninth defendant, constitute the New South Wales partners of the solicitors' firm, Phillips Fox. 2 Mr Peck was a director of New Cap Reinsurance Corporations Holdings Ltd ("NCRH") and it is alleged that the plaintiffs suffered losses as a result of his conduct. 3 Paragraph 36 of the Further Amended Summons read: "At all material times Peck acted as a director of NCRH during the ordinary course of the business of Phillips Fox, or alternatively, with the authority of the partners of Phillips Fox." 4 By paragraph 10 of their Points of Defence filed on 21 June 2002, the fourteenth defendants pleaded: "In answer to the matters alleged in paragraph 36 of the Summons the Fourteenth defendants: (a) say that paragraph 36 discloses no reasonable cause of action against the Fourteenth defendants; (b) say that paragraph 36 is embarrassing; (c) say that in the premises paragraph 36 should be struck out; (d) without derogating from (a) - (c), deny that William Peck acted as a director of NCRH during the ordinary course of the business of Phillip Fox; (e) without derogating from (a) – (c), deny that William Peck acted as a director of NCRH with the authority of the partners of Philips Fox." 5 The fourteenth defendants have not brought an application to strike out par 36 of the Further Amended Summons or to have those proceedings summarily dismissed as against them. Instead, they resist the plaintiffs' application to amend par 36 and to add pars 167A, 171A and 176A to the pleading against them. 6 I have had the advantage of detailed written submissions and oral addresses by counsel for which I am most grateful. The plaintiffs have reacted to criticisms of their proposed amendments in the written submissions and now propose the following substitution for par 36 and the following additions to the pleading: "36 At all material times, the ordinary course of the business of the Phillips Fox Firm included, without limitation: