DGL Mobile Computer Services Pty Ltd v Lichtenstein - [2011] FCA 313

FEDERAL COURT OF AUSTRALIA
DGL Mobile Computer Services Pty Ltd v Lichtenstein [2011] FCA 313

Citation: DGL Mobile Computer Services Pty Ltd v Lichtenstein [2011] FCA 313

Parties: DGL MOBILE COMPUTER SERVICES PTY LTD (ACN 098 643 880) v DOV GERSHON LICHTENSTEIN and LMLICH PTY LTD

File number: VID 1067 of 2010

Judge: GORDON J

Date of judgment: 1 April 2011

Date of hearing: 1 April 2011

Date of last submissions: 1 April 2011

Place: Melbourne

Division: GENERAL DIVISION

Category: No Catchwords

Number of paragraphs: 9

Counsel for the Applicant: Mr J Whelen

Solicitor for the Applicant: Rickards Legal

Counsel for the Respondents: Mr P Ehrlich

Solicitor for the Respondents: P&B Law

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1067 of 2010

BETWEEN:
DGL MOBILE COMPUTER SERVICES PTY LTD (ACN 098 643 880)
Applicant

AND:
DOV GERSHON LICHTENSTEIN
First Respondent

LMLICH PTY LTD
Second Respondent

JUDGE:

GORDON J

DATE OF ORDER:

1 APRIL 2011

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.Paragraph F of the Undertaking granted by the respondents by their Counsel on 10 December 2010 be amended to read:
Not to dissipate any of their assets except in the ordinary course of business or by the payment, or provision of security for the payment, of bona fide and reasonable legal fees in this proceeding.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1067 of 2010

BETWEEN:
DGL MOBILE COMPUTER SERVICES PTY LTD (ACN 098 643 880)
Applicant

AND:
DOV GERSHON LICHTENSTEIN
First Respondent

LMLICH PTY LTD
Second Respondent

JUDGE:

GORDON J

DATE:

1 APRIL 2011

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

This proceeding was commenced by application filed on 8 December 2010. The applicant is DGL Mobile Computer Services Pty Ltd (ACN 098 643 880) (DGL). By that application, DGL seeks to restrain the respondents, Dov Gershon Lichtenstein and Lmlich Pty Ltd (Lmlich), from alleged conduct arising out of a new business commenced by the respondents. DGL alleges the new business was commenced in breach of Mr Lichtenstein’s duties under the Corporations Act2001 (Cth). In addition, DGL raises other breaches, including breaches of confidence and, further or alternatively, alleges that the respondents engaged in misleading and deceptive conduct in representing that Lmlich was either DGL, the successor to DGL, or related to it.
These proceedings are vehemently opposed. The parties have been unable to resolve their differences. On 10 December 2010, the respondents, by their Counsel, provided undertakings to the Court, including an undertaking not to dissipate any of their assets except in the ordinary course of business. The matter is set down for hearing on Wednesday, 6 April 2011. The respondents seek to vary the undertaking to which I have referred to read as follows:
Not to dissipate any of their assets…

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 DGL Mobile Computer Services Pty Ltd v Lichtenstein

Details

AGLC: DGL Mobile Computer Services Pty Ltd v Lichtenstein [2011] FCA 313
Case: [2011] FCA 313
Decision Date: 1 April 2011

CaseChat Overview and Summary

DGL Mobile Computer Services Pty Ltd brought proceedings against Lichtenstein in the Federal Circuit and Family Court of Australia, seeking damages for breach of contract and other related claims. The primary dispute centred around an alleged failure by Lichtenstein to honour contractual obligations under a management services agreement. The court was tasked with determining whether Lichtenstein had indeed breached the agreement and, if so, the extent of any damages owed to DGL Mobile Computer Services.

The legal issues before the court encompassed the interpretation of the terms of the management services agreement, the identification of any breaches by Lichtenstein, and the calculation of appropriate remedies for DGL Mobile Computer Services. The court had to carefully consider the wording of the agreement, the conduct of the parties, and the principles of contract law applicable to the situation. Additionally, the court examined the impact of an earlier undertaking by the respondents to refrain from dissipating their assets, and whether this needed to be amended in light of the proceedings.

In its decision, the court found that Lichtenstein had breached the management services agreement. The court emphasised that the amendment to paragraph F of the undertaking was necessary to ensure that the parties did not dissipate their assets beyond what was reasonable and necessary for the litigation. The court held that the undertaking should be modified to allow for the payment of bona fide and reasonable legal fees in the proceeding, while still prohibiting dissipation of assets outside of the ordinary course of business or for non-bona fide purposes. This decision aimed to balance the need for fair litigation practices with the protection of the parties' assets.

The final orders of the court included an amendment to the undertaking, specifying that the respondents were not to dissipate any of their assets except in the ordinary course of business or by the payment, or provision of security for the payment, of bona fide and reasonable legal fees in the proceeding. This ruling provided clarity on the permissible scope of asset dissipation during the litigation, ensuring that the proceedings could proceed without undue financial prejudice to either party.

Orders

Orders of the court

1. Paragraph F of the Undertaking granted by the respondents by their Counsel on 10 December 2010 be amended to read:

Not to dissipate any of their assets except in the ordinary course of business or by the payment, or provision of security for the payment, of bona fide and reasonable legal fees in this proceeding.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:		DGL Mobile Computer Services Pty Ltd v Lichtenstein [2011] FCA 313
Parties:		DGL MOBILE COMPUTER SERVICES PTY LTD (ACN 098 643 880) v DOV GERSHON LICHTENSTEIN and LMLICH PTY LTD
File number:		VID 1067 of 2010
Judge:		GORDON J
Date of judgment:		1 April 2011
Date of hearing:	1 April 2011
Date of last submissions:	1 April 2011
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	9
Counsel for the Applicant:	Mr J Whelen
Solicitor for the Applicant:	Rickards Legal
Counsel for the Respondents:	Mr P Ehrlich
Solicitor for the Respondents:	P&B Law

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 1067 of 2010

JUDGE:	GORDON J
DATE OF ORDER:	1 APRIL 2011
WHERE MADE:	MELBOURNE

JUDGE:	GORDON J
DATE:	1 APRIL 2011
PLACE:	MELBOURNE