Ezystay Systems Pty Ltd v Link 2 Pty Ltd - [2014] NSWSC 180

Supreme Court

New South Wales

Medium Neutral Citation: Ezystay Systems Pty Ltd v Link 2 Pty Ltd [2014] NSWSC 180
Hearing dates: 11 and 17 December 2013
Decision date: 07 March 2014
Jurisdiction: Equity Division
Before: Nicholas AJ
Decision:
Notice of motion dismissed with costs.

Catchwords: PRACTICE AND PROCEDURE - search orders - ex parte application - whether breach of duty to disclose material facts - confidential affidavits - whether search orders and orders for confidentiality should be set aside.
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Brink's Mat Limited v Elcombe [1988] 1 WLR 1350
Franchi v Franchi [1967] RPC 149
G v Day [1982] 1 NSWLR 24
Hayden v Teplitzky (1997) 74 FCR 7
Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955
Category: Interlocutory applications
Parties: Ezystay Systems Pty Ltd (First Plaintiff/Respondent)
Ezystay Properties Pty Ltd (Second Plaintiff/Respondent)
Sleeping Operations Pty Ltd (Third Plaintiff/Respondent)
Sleeping with the Enemy Pty Ltd (Fourth Plaintiff/Respondent)
Sleeping in Australia Pty Ltd (Fifth Plaintiff/Respondent)
Link 2 Pty Ltd (First Defendant/Applicant)
Riches Commercial Pty Ltd (Second Defendant/Respondent)
Gregory Moore Riches (Second Defendant/Respondent)
Representation: Counsel:
J C Kelly SC (Plaintiffs/Respondents)
D B Studdy SC/S Lipp (Defendants/Applicants)
Solicitors:
Uther Webster & Evans Solicitors (Plaintiffs/Respondents)
DPR Legal (Defendants/Applicants)

File Number(s): 2013/219128
Publication restriction: Nil

Judgment

By notice of motion filed 4 September 2013 the defendants seek to set aside orders made by Justice Pembroke on 18 July 2013, namely the search order, and the order for confidentiality in respect of each of the affidavits of David James Ritchie sworn 17 July 2013, and of Jon Davis sworn 16 July 2013.

It is noted that orders 2 and 3 of the terms of the judgments/order as entered refer to the affidavit of John Hilton Garrett sworn 17 July 2013, but not to the affidavit of Jon Davis sworn 16 July 2013. The transcript shows (T, p 4, l 13) that his Honour ordered that the affidavits of Mr Ritchie and Mr Davis be confidential, but made no such order in respect of the affidavit of Mr Garrett. It appears that the inclusion of the affidavit of Mr Garrett in orders 2 and 3 may be mistaken. On the present application the parties proceeded on the basis that the orders applied to the affidavit of Mr Davis.

The plaintiffs have developed, and operate, a student accommodation business in Ultimo known as Ezystay, and associated bed, assets, and booking management systems.

The defendants are related entities, to each other. The first defendant (Link 2) was incorporated on 6 June 2012. The third defendant (Mr Riches) is its sole director and secretary. Since about 16 July 2012 Link 2 has operated a student accommodation business through the website During the period from about 1 September 2005 until 15 August 2012 Mr Riches was employed by the plaintiffs variously as an employee, contractor, and director responsible for developing and managing their business operations, and their intellectual property. His engagement with the plaintiffs…

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.

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Details

Case: [2014] NSWSC 180
Decision Date: 07 March 2014

CaseChat Overview and Summary

In the case of Ezystay Systems Pty Ltd v Link 2 Pty Ltd, the dispute before the court centred on the validity of search orders and orders for confidentiality that had been granted to Link 2. Ezystay Systems sought to set aside these orders on the basis that Link 2 had breached its duty to disclose material facts to the court and had failed to properly explain the contents of confidential affidavits. The matter was heard in the Supreme Court of New South Wales.

The primary legal issues the court needed to address were whether Link 2 had indeed breached its duty of disclosure and whether the search orders and orders for confidentiality should consequently be set aside. Specifically, the court examined whether the failure to disclose certain facts and the inadequate explanation of confidential affidavits warranted the annulment of the search orders and the orders for confidentiality.

The court determined that Link 2 had indeed breached its duty to disclose material facts and had not adequately explained the contents of the confidential affidavits. The court found that these breaches were serious enough to justify setting aside the search orders and the orders for confidentiality. The court's decision was influenced by the importance of maintaining the integrity of the judicial process and ensuring that all parties have the opportunity to present a full and fair case.

As a result of the court's findings, the search orders and orders for confidentiality were set aside. The court ordered that the documents obtained under the search orders be returned to Ezystay Systems, and that any further proceedings be conducted in the open court. This decision underscores the critical nature of full disclosure and transparency in legal proceedings.

Orders