KGL Health Pty Ltd v Mechtler

In KGL Health Pty Ltd v Mechtler, the applicants sought an asset preservation order against the respondents to prevent them from disposing of or removing assets that might otherwise satisfy a prospective judgment debt. The applicants, KGL Health and Peninsula Hospital Management, alleged that the respondents, who were former directors and shareholders of Peninsula, breached their duties and engaged in misleading and deceptive conduct. The applicants claimed that these actions led to the cessation of the hospital business and the termination of a lease agreement.

The court had to decide if there was a prima facie cause of action, if there was a risk of the respondents disposing of assets, and if the discretionary factors favoured granting the order. The court found that the applicants had not provided sufficient evidence to establish a prima facie case. The applicants' claims were based on allegations and assertions rather than solid evidence. The court highlighted the lack of proof regarding the authorisation of the works, compliance with safety regulations, and causation of damages. The certificate of the applicants' solicitor under the Legal Profession Act did not provide the necessary evidence either, as it was based on the clients' instructions and did not verify the factual basis of the allegations.

Accordingly, the court dismissed the application for an asset preservation order, finding that the applicants had not met the threshold for establishing a prima facie case. The court also noted that the order would significantly interfere with the respondents' property rights, which underscored the need for strong evidence to support the application. The applicants' application was dismissed with costs.