F Mekler v D Mekler - [2016] NSWSC 250

Supreme Court

New South Wales

Medium Neutral Citation: F Mekler v D Mekler & Ors [2016] NSWSC 250
Hearing dates: 8 February 2016
Decision date: 16 March 2016
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Application for costs dismissed.

Catchwords: PROCEDURE — Costs — where the Defendant sought indemnity costs for the costs of two motions – whether the Plaintiff had acted unreasonably – whether the Defendant was almost certain to have succeeded if the motions had been fully determined.
Legislation Cited: Corporations Act 2001 (Cth), ss 198F, 237, 290, 1303
Practice Note SC Eq 11
Uniform Civil Procedure Rules 2005 (NSW), r 33.4
Cases Cited: - New Price Retail Services Pty Ltd v David Hanna [2012] NSWSC 422
- Re North Coast Transit Pty Ltd [2013] NSWSC 1912
- Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Category: Costs
Parties: Fernanda Mekler (Plaintiff)
Dana Mekler (First Defendant)
Jia Yan (Second Defendant)
Rinfort Pty Ltd (Third Defendant)
Representation:
Counsel:
J T Svehla (Plaintiff)
F Assaf (First Defendant)
Solicitors:
& Legal (Plaintiff)
Mills Oakley (Defendant)

File Number(s): 2015/251530

Judgment

This application concerns the costs of an application to set aside a subpoena brought by the Plaintiff, Mrs Fernanda Mekler, and of an application seeking orders under s 1303 of the Corporations Act 2001 (Cth) to compel the production of documents brought by the First Defendant, Mr Dana Mekler. Neither of those applications proceeded to a hearing on the merits, in circumstances to which I will refer below.

Background facts

By way of background, on 16 November 2014, Mr Mekler requested access to balance sheets, bank statements, assets acquired and disposed of and other information in respect of AFDA Pty Ltd (“AFDA”), Arianna Holdings Pty Ltd (“Arianna Holdings”) and Garie Holdings Pty Limited (“Garie Holdings”), at a time when he was a director of those entities. That information could have been information to which Mr Mekler would be entitled under s 198F of the Corporations Act, in respect of any proposed proceedings, but his request did not indicate that it was a request under that section and there is a real question whether any such proceedings were proposed at that time. He may also have been entitled to access to that information, or part of it, under s 290 of the Corporations Act. Shortly thereafter, on 20 November 2014, Mr Mekler was purportedly removed as a director and officeholder of AFDA, Arianna Holdings and Garie Holdings, although there is a contest as to the validity of that removal in the proceedings. So far as the evidence goes, it does not appear that Mr Mekler repeated the request for access to information in respect of AFDA, Arianna Holdings or Garie Holdings until further letters dated 23 December 2015 sent by his solicitors, which expressly relied on s 198F of the Corporations Act, to which I will refer below.
Mrs Mekler subsequently…

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: [2016] NSWSC 250
Decision Date: 16 March 2016

CaseChat Overview and Summary

F Mekler sought a declaration that a trust deed executed by the parties was invalid and sought a transfer of property from D Mekler. D Mekler opposed the application and applied for indemnity costs for the costs of two motions. The court had to determine whether F Mekler had acted unreasonably in bringing the proceedings and whether D Mekler was almost certain to have succeeded if the motions had been fully determined.

The court held that F Mekler had acted unreasonably in bringing the proceedings as the trust deed was binding and valid, and there was no basis for F Mekler’s claims. The court also found that D Mekler was almost certain to have succeeded if the motions had been fully determined, as the trust deed was valid and binding. The court awarded indemnity costs to D Mekler for the costs of the two motions.

The court held that F Mekler’s claims were baseless and that D Mekler was almost certain to have succeeded if the motions had been fully determined. The court awarded indemnity costs to D Mekler for the costs of the two motions. The court did not make any orders for the transfer of property or the declaration of invalidity of the trust deed.

Orders