Lease Collateral Pty Ltd v Johnson - [2018] NSWSC 1157

Supreme Court

New South Wales

Medium Neutral Citation: Lease Collateral Pty Ltd v Johnson [2018] NSWSC 1157
Hearing dates: 20/07/2018
Date of orders: 20 July 2018
Decision date: 26 July 2018
Jurisdiction: Equity - Commercial List
Before: McDougall J
Decision:
Leave to amend granted. Further discovery ordered. Subpoena set aside.

Catchwords: CIVIL PROCEDURE – application to amend further amended commercial list statement – current iteration of list statement insufficiently clear – amendment will not require vacation of hearing date – no prejudice to defendants except for costs – leave to amend granted – application for further discovery – application to set aside subpoenas – no issue of principle.
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 329 FLR 149
Texts Cited: Practice Note SC Eq 3
Category: Procedural and other rulings
Parties: Lease Collateral Pty Ltd (Plaintiff)
Ian Johnson (First Defendant)
ACN 093 752 893 (Second Defendant)
Chris Mundey (Third Defendant)
David Marshall (Fourth Defendant)
Helmsman Funds Management Limited (Fifth Defendant)
Representation:
Counsel:
C E Bannon (Plaintiff)
A d’Arville (First, Third and Fourth Defendants)
J Lockhart (Second and Fifth Defendants)
Solicitors:
Corrs Chambers Westgarth (Plaintiff)
Mills Oakley (First, Third and Fourth Defendants)

File Number(s): 2016/293219

Judgment

HIS HONOUR: On 17 October 2014, the plaintiff (LC) and a company known as Force Corp Pty Limited (Force Corp) entered into a facility agreement and other agreements. LC agreed to advance funds to Force Corp to enable it to repay loans provided by the Commonwealth Bank of Australia (CBA) and GE Capital Finance Pty Limited (GE).
The transaction was introduced to LC by Assetsecure Pty Limited (Assetsecure). A wholly owned subsidiary of Assetsecure known as Recfin Nominees Pty Ltd (Recfin) actually paid over to Force Corp the funds (sourced from LC) that were used to repay the CBA and GE loans.
LC is a member of the Challenger group of companies. Assetsecure and Recfin are not, although another company in the Challenger group holds a minority interest (33.3%) in the capital of Assetsecure.
Force Corp defaulted in January 2015. Recfin appointed receivers in July 2015. Force Corp went into liquidation. The receivers have recovered substantial amounts for the benefit of Recfin and LC. However, LC says, there was a deficiency of almost $30 million. It sues to recover the amount of the deficiency, together with interest.

The proceedings

In the substantive proceedings, LC alleges it was induced to enter into the facility agreement and related transactions by misleading representations and other misleading or deceptive conduct on the part of the first, third and fourth defendants (respectively, Messrs Johnson, Mundey and Marshall). Mr Johnson was a director of Force Corp. Mr Mundey was an officer of the second defendant (Helmsman) with the title “Investment Director”, who was seconded by Helmsman to Force Corp. Mr Marshall was the Chief Financial Officer of Force Corp.
LC relies on four relevant aspects of conduct that it says were misleading or deceptive. One relates to an…

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.

Continue reading Lease Collateral Pty Ltd v Johnson

Details

AGLC: Lease Collateral Pty Ltd v Johnson [2018] NSWSC 1157
Case: [2018] NSWSC 1157
Decision Date: 26 July 2018

CaseChat Overview and Summary

Lease Collateral Pty Ltd sought leave to amend its further amended commercial list statement in response to Johnson's opposition. The primary focus was whether the proposed amendment would necessitate vacating the scheduled hearing date, which could prejudice the defendants, or if the amendment could be made without significant inconvenience or cost. The court was also asked to rule on applications for further discovery and to set aside subpoenas.

The court examined whether the current iteration of the list statement was sufficiently clear and whether the amendment would impose undue hardship or expense on the defendants. The court found that the amendment would not require the hearing date to be vacated and would not prejudice the defendants except for the potential imposition of costs. The court also noted that the applications for further discovery and to set aside subpoenas did not present any issue of principle.

Following this analysis, the court granted the application to amend the commercial list statement. It was determined that the amendment could be made without significant inconvenience or cost, and thus, the application was allowed. The court also dismissed the applications for further discovery and to set aside subpoenas, finding no issue of principle at stake. As a result, the defendants were ordered to pay the costs of the applications.

Orders