In the matter of Festival Corp Pty Ltd

[2020] NSWSC 701

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of Festival Corp Pty Ltd [2020] NSWSC 701
Hearing dates:	On the papers
Date of orders:	05 June 2020
Decision date:	05 June 2020
Jurisdiction:	Equity
Before:	Emmett AJA
Decision:	1. Grant leave for the plaintiffs to serve on NR Pendle Pty Ltd and Centro Holdings Pty Ltd notices to produce requiring production to the Court, in accordance with the Rules, of electronic versions of the documents described in the drafts dated 25 May 2020.  2. Reserve to the hearing of the amended interlocutory process the question of the plaintiffs’ access to the documents produced.
Catchwords:	CIVIL PROCEDURE — Notices to produce — Before hearing — Where documents also being sought to be produced in interlocutory proceedings — Sufficient knowledge of plaintiff about documents to raise merits at interlocutory hearing — Production of documents to Court prior to hearing — Reservation of plaintiffs’ access until hearing.
Legislation Cited:	Corporations Act 2001 (Cth)
Category:	Procedural and other rulings
Parties:	Festival Corp Pty Ltd (First Plaintiff) Joseph Khattar (Second Plaintiff) Chahida Khattar (Third Plaintiff) CC Khattar Pty Ltd (Fourth Plaintiff) BNB 88 Pty Ltd (and 36 others) (Defendants)
Representation:	Counsel: M Condon SC with S Clemmett (Plaintiffs) A P Coleman SC with S Hartford Davis (Second to Sixth Defendants) A Hourigan (Thirty-second Defendant)   Solicitors: Sage Solicitors (Plaintiffs) K&L Gates (Second to Sixth Defendants) O’Shannassy Lawyers (Thirty-second Defendant)
File Number(s):	2020/104424

judgment

1. In these proceedings, the plaintiffs have sued 37 defendants. Thirty-two of the defendants are companies. The other five defendants are individuals. The plaintiffs seek leave to issue notices to produce to two of the company defendants.

2. In their statement of claim, the plaintiffs allege that, from 5 November 1987, when the third defendant, Dyldam Development Pty Ltd (Dyldam), was incorporated, Dyldam and various other companies served as vehicles for pursuing the business activities of the Khattar family and the Fayad family for their mutual benefit (the family business arrangement). The Khattar Family relevantly comprises Mr Joseph Khattar and Mrs Chahida Khattar. The Fayad family relevantly comprises Mr Sam Fayed, Mrs Maria Fayed, Mr Fayad Lee Fayad and Mr Remon Fayad.

3. The family business arrangement involved the acquisition of properties for development. The Fayad family and the Khattar family used their shareholdings in special purpose corporate vehicles as their means of investment in the various development projects.

4. Differences have now arisen between the Khattar family and the Fayad family. The statement of claim contains a total of 217 prayers for relief in relation to various of the defendant companies. By the statement of claim, the plaintiffs seek an order that Dyldam be wound up and orders under s 237 of the Corporations Act2001 (Cth) giving leave to commence proceedings on behalf of Dyldam against Sam Fayed and Maria Fayed. The statement of claim seeks much the same relief in respect of most of the defendant companies other than Dyldam, hence the multiplicity of claims.

5. By an amended interlocutory process, the plaintiffs seek injunctions restraining the individual defendants from acting as directors of various corporate defendants as well as interlocutory relief against the company defendants. The amended interlocutory process contains 60 prayers for relief. For the most part the claims for relief duplicate the orders sought in relation to each of the company defendants, being orders that various of the plaintiffs be given access to books and records of the companies and orders restraining any activity on the part of the company defendants otherwise than in the ordinary course of business or upon giving five days’ notice to the plaintiffs’ solicitors.

6. NR Pendle Pty Ltd (NR Pendle) and Centro Holdings Pty Ltd (Centro) are two of the defendants. NR Pendle owns a property at Civic Avenue, Pendle Hill and Centro owns a property in Samantha Drive, Kellyville. The plaintiffs allege that Centro and NR Pendle borrowed very substantial sums of money which were applied for purposes other than the purposes of those companies.

7. By notices to produce, the plaintiffs seek the production by NR Pendle of documents evidencing arrangements between NR Pendle and Win Senior No 234 Pty Ltd (Win) and between NR Pendle and Kingland Holdings Pty Ltd (Kingland) concerning secured loans made by Win or Kingland, as the case may be, to NR Pendle. They also seek production by Centro of documents evidencing arrangements between Centro and Balmain Fund Administration Limited (Balmain) relating to secured loans made by Balmain to Centro. They assert that the arrangements referred to in the notices to produce were made by directors of Centro and NR Pendle without the knowledge of the Khattar family.

8. The plaintiffs seek the documents in aid of the relief sought in the amended interlocutory process by way of restraining Centro and NR Pendle from dealing with assets otherwise than in the ordinary course of business. Neither Centro nor NR Pendle opposes the notices to produce. However, Dyldam and four of the individual defendants resist the giving of leave for the production of the documents in question on the basis that access to the documents is one of the prayers for relief in the amended interlocutory process.

9. The allegations made in the plaintiffs’ submissions indicate that the plaintiffs have sufficient knowledge of the transactions in question to be able to raise those matters in support of their amended interlocutory process. It is difficult, therefore, to see why it is necessary for the plaintiffs to have access to the documents in question for the purpose of conducting the interlocutory application.

10. In the circumstances, where access to the documents is one of the questions in issue in the amended interlocutory process, I propose to give leave for the notices to produce to be served requiring production to the Court of electronic versions of the documents. However, I shall reserve the question of the plaintiffs’ access to the documents for the hearing of the interlocutory process. The 2nd to 6th Defendants’ submit that the notices to produce not only duplicate, but exceed the scope of the amended interlocutory process. That may be the case, but I propose to determine whether such documents relate to the plaintiff’s principal claim on the hearing of the amended interlocutory process before permitting access.

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Decision last updated: 05 June 2020