Harris v Harris

The appeal concerned an application to vacate a hearing in proceedings brought by the appellants on behalf of a company to recover management fees. The appellants had admitted the outstanding loan balances but later sought access to records held by a provisional liquidator, ostensibly to support an application to withdraw those admissions. The primary judge had refused to vacate the hearing, finding that the appellants had had access to the relevant documents and had delayed in seeking and reviewing them. The appeal therefore raised questions as to whether the appellants were deprived of an opportunity to review the documents and whether the primary judge had erred in the exercise of discretion by refusing to vacate the hearing.

The court was also required to consider whether the appellants had adequately put the respondents on notice of the case they had to meet. The derivative proceedings alleged that certain management fees were "excessive," while the defence asserted an entitlement to reasonable remuneration. Both parties had served lay and expert evidence on the issue of reasonable remuneration, and the respondents' written opening submissions had raised the question of whether the remuneration was reasonable.

The court found no error in the primary judge's discretionary decision to refuse to vacate the hearing, concluding that the appellants had not been deprived of an opportunity to review the relevant documents. Furthermore, the court held that the appellants had been sufficiently put on notice of the case they had to meet regarding the reasonableness of the management fees. Accordingly, the appeal was dismissed, and the appellants were ordered to pay the first and second respondents’ costs.