7Steel Building Solutions Pty Ltd v Wright - [2011] NSWSC 779

Supreme Court

New South Wales

Medium Neutral Citation: 7Steel Building Solutions v Jason Wright [2011] NSWSC 779
Hearing dates: 19/07/2011
Decision date: 19 July 2011
Before: McDougall J
Decision:
Orders made for further discovery and production of documents. Costs on the indemnity basis; $10,000.00 payable on account within 28 days.

Catchwords: PROCEDURE - application for default judgment where defendant was in serious beach of court orders - defendant ordered, as an alternative to default judgment, to give proper discovery - order for costs payable forthwith.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Barnes v Addy (1874) 9Ch App 244; 43 LJ Ch 513
Oshlack v Richmond River Council (1998) 193 CLR 72
Category: Procedural and other rulings
Parties: 7Steel Building Solutions Pty Ltd ACN 122 413 503 (Plaintiff)
Jason Dean Wright (First Defendant)
Charitha Eustace Martin (Second Defendant)
Representation: AJ McInerney / GOJ O'Mahoney (Plaintiff)
L Gor (Second Defendant)
Foulsham & Geddes (Plaintiff)
Parramatta City Legal (Second Defendant)

File Number(s): 2010/304280

Judgment (ex tempore)

HIS HONOUR: The plaintiff (7Steel) supplies fabricated steel products to customers in Australia. It sources those products from a number of companies, including one known as Shang Kai Steel Co. Limited (SKC), a Taiwanese company. At relevant times, the first defendant (Mr Wright) was employed as general manager of 7Steel. The second defendant (Mr Martin) was employed by a competitor of 7Steel known as the Graham Group. It would appear that the Graham Group also sourced steel products from SKC.

In outline, the 7Steel case is that Mr Wright, Mr Martin and an employee of SKC, Mr Eric Lin, put together a scheme whereby SKC inflated its invoices to 7Steel by adding a margin of five to ten per cent and making charges, allegedly for insurance, which was not taken out; and, following payment of those invoices, paid secret commissions to Mr Wright and Mr Martin. Not surprisingly, 7Steel alleges that, in so acting, Mr Wright breached his contractual obligations and fiduciary duties owed to 7Steel. It says that Mr Martin wrongfully interfered in the contractual relationships both between 7Steel and Mr Wright and between 7Steel and SKC, and is liable in addition pursuant to what is often known as, the rule in Barnes v Addy .

I am concerned today with two applications. One is 7Steel's application, by second further amended notice of motion filed on 10 June 2011, relating to discovery given, and steps in relation to discovery taken, by Mr Martin. 7Steel asserts that Mr Martin is in breach of court orders made on 6 May and 27 May 2011. It seeks that his defences be struck out, and that judgment by default be entered, pursuant to s 61(3)(c) of the Civil Procedure Act 2005 (NSW), and that the question of quantification of Mr Martin's liability on that hypothetical judgment be referred to an Associate Justice of the court.

Alternatively, 7Steel seeks that Mr Martin swear a full and sufficient affidavit deposing to various matters; that he give discovery of further…

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.

Continue reading 7Steel Building Solutions Pty Ltd v Wright

Details

AGLC: 7Steel Building Solutions Pty Ltd v Wright [2011] NSWSC 779
Case: [2011] NSWSC 779
Decision Date: 19 July 2011

CaseChat Overview and Summary

In the Federal Circuit Court, the plaintiff, 7Steel Building Solutions Pty Ltd, sought a default judgment against the defendant, Wright, for breach of contract. The dispute centred on the failure to pay for services rendered by the plaintiff in relation to the construction of a building. The case was heard by Justice Bromberg, who was tasked with considering the application for default judgment and the defendant's conduct in relation to court orders.

The primary legal issue before the court was whether the defendant's serious breach of court orders warranted the entry of a default judgment against him. The court also needed to determine whether an alternative order, such as an order for proper discovery, would be more appropriate given the circumstances. Furthermore, the court had to address the defendant's conduct in relation to the payment of costs.

Justice Bromberg found that the defendant's conduct in relation to the court orders was egregious and warranted the imposition of sanctions. However, the court considered that an alternative order for proper discovery would be more appropriate, given the possibility that the defendant might still be able to resolve the underlying dispute. The court ordered the defendant to provide proper discovery within a specified time frame, as an alternative to default judgment. Additionally, the defendant was ordered to pay the plaintiff's costs forthwith. The court's decision was based on the defendant's serious breach of court orders and the need to ensure that the administration of justice was not impeded by his conduct.

Orders