Brighten Pty Ltd v Lombe - [2011] NSWSC 817

Supreme Court

New South Wales

Medium Neutral Citation: Brighten Pty Ltd v Lombe [2011] NSWSC 817
Hearing dates: 20/07/2011
Decision date: 20 July 2011
Jurisdiction: Equity Division - Commercial List
Before: McDougall J
Decision:
Summons dismissed with costs.

Catchwords: PRACTICE - Application for preliminary discovery - whether plaintiff could show that it may be entitled to make a claim for relief against the defendants - summons dismissed with costs.
Legislation Cited: Evidence Act 1995 (NSW)
Cases Cited: Hatfield v TCN Channel Nine Pty Ltd [2010] NSWCA 69
Lewis v Nortex Pty Ltd (in liq) [2002] NSWSC 1083
Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 984
R v Rondo [2001] NSWCCA 540
Vitali v Stachnik [2001] NSWSC 303
Category: Procedural and other rulings
Parties: Brighten Pty Ltd ACN 122 082 393 (Receivers and Managers Appointed) (Plaintiff)
David John Frank Lombe (First Defendant)
Simon John Cathro (Second Defendant)
Representation: Counsel:
C L Lonergan (Plaintiff)
R I Bellamy (Defendants)
Solicitors:
Jackson Lalic Lawyers (Plaintiff)
Gadens Lawyers (Defendants)

File Number(s): 2011/132741

Judgment (ex tempore)

HIS HONOUR: This is an application for preliminary discovery pursuant to UCPR r 5.3. It arises out of the following circumstances.

The plaintiff was the proprietor and operator of the Fairmont Resort at Leura. Its purchase of the Resort was completed on 18 December 2006. Of the substantial purchase price, some $32,150,000 was provided by the Bank of Western Australia (the Bank). The Bank took security including by way of mortgage over the Resort, fixed and floating charge over all the assets of the plaintiff and a guarantee from the plaintiff's sole director and shareholder, Mr Kwok.

For reasons that it is presently unnecessary to canvass, the Bank formed the view by October 2009 that the plaintiff was in breach of the terms of the loan facility. The plaintiff commenced proceedings seeking in effect a declaration that it was not in default and seeking to restrain the Bank from appointing a receiver. On 11 December 2009, the court ordered that the first defendant be appointed as receiver, but with relatively limited powers. In particular, the court ordered that the day to day operation, control, management and administration of the Resort should remain with the plaintiff, subject to conditions as to the supply of information to the first defendant.

On 26 February 2010, following a further dispute in court, which it is unnecessary to summarise, the Bank appointed the present defendants as receivers on an unrestricted basis.

Thereafter, the then solicitor for the plaintiff corresponded with the defendants and their then solicitors setting out concerns that Mr Kwok asserted he had with respect to the defendants' conduct of the Resort since their appointment. The defendants, through their solicitors, responded in some detail to those assertions but, undeterred by that, the plaintiff, through its solicitor, pressed its claims of maladministration.

On 21 May 2010, the plaintiff's then solicitor appointed a valuer, Mr Greg Preston, to inquire into and report upon the current market value of the Resort,…

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 Brighten Pty Ltd v Lombe

Details

AGLC: Brighten Pty Ltd v Lombe [2011] NSWSC 817
Case: [2011] NSWSC 817
Decision Date: 20 July 2011

CaseChat Overview and Summary

The parties involved in the case of Brighten Pty Ltd v Lombe were Brighten Pty Ltd, the plaintiff, and Lombe, the defendant. The plaintiff sought a preliminary discovery order against the defendant, seeking information regarding the defendant's involvement in a potential claim for relief. The matter was heard in the Federal Circuit Court of Australia. The primary legal issue before the court was whether Brighten Pty Ltd could demonstrate that it may be entitled to make a claim for relief against Lombe, which would warrant the grant of preliminary discovery. The court needed to determine if the plaintiff's application met the criteria set out in the relevant legal framework for obtaining such an order.

The court examined the evidence provided by Brighten Pty Ltd to assess if they could show a potential claim for relief. In reaching its decision, the court considered the plaintiff's ability to demonstrate a reasonable cause of action and the necessity of the information sought for the proper conduct of the proceedings. Ultimately, the court found that Brighten Pty Ltd had not satisfied the required threshold for the grant of preliminary discovery, as they could not adequately establish a potential claim for relief against Lombe. Consequently, the court dismissed the summons and ordered Brighten Pty Ltd to pay costs to Lombe.

In dismissing the summons, the court concluded that Brighten Pty Ltd's application did not meet the necessary criteria for the grant of preliminary discovery. The court found that the plaintiff had not provided sufficient evidence to support a reasonable cause of action or demonstrate the need for the information sought in the application. As a result, the summons was dismissed, and Brighten Pty Ltd was ordered to pay costs to Lombe, reflecting the court's decision.

Orders