Morcom v Murone Holdings Pty Ltd - [2019] VSC 426

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2018 00552

BETWEEN:

PAUL MORCOM	Applicant
v
MURONE HOLDINGS PTY LTD and VINCENT MURONE	Respondents

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	29 November 2018, 11 April 2019
DATE OF JUDGMENT:	26 June 2019
CASE MAY BE CITED AS:	Morcom v Murone Holdings Pty Ltd
MEDIUM NEUTRAL CITATION:	[2019] VSC 426

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DISCOVERY ― Preliminary discovery ― Discovery from prospective defendant ― Supporting affidavit sworn by applicant’s solicitor on instructions ― Whether applicant personally in a better and informed position to prove facts and grounds for a belief that he may have a right to obtain relief ― Extent of enquiries made by applicant personally ― Whether supporting affidavit discreditable ― No opposing affidavit material ― Existence of documents as sought not denied ― Application granted ― Supreme Court (General Civil Procedure Rules) 2015, r 32.05

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr D G Guidolin	Wisewould Mahoney
For the Respondents	Mr V A Morfuni QC	Dominic Esposito Solicitors

HIS HONOUR:

This has been an ardently opposed application, over two days, for pre‑action discovery of documents from prospective respondents under the Court’s civil procedural rule 32.05. Under that popular rule, the Court has the power to order the production of documents if the applicant has reason to believe that (in this case) he ‘has or may have the right to obtain relief in the Court’ from the respondents; and ‘after making all reasonable enquiries’ he does not have sufficient information to enable him to decide whether to commence a proceeding. He must also show there is reasonable cause to believe that the respondents have documents on the question whether he has the right to obtain relief; and inspection of those documents would assist him to decide whether to sue.

No respondent likes handing over documents to assist a threatening party to decide whether to sue. But the benevolence of the rule is better seen as serving the administration of justice by preventing speculative suits.

The origins of the prospective legal action here is a share dealing in July 2014 in a private company named George Turner Customs Pty Ltd (‘George Turner Customs’). The applicant Paul Morcom was a minority shareholder in that company. The first respondent, a corporation, was the majority shareholder. The second respondent Vince Murone was the sole director and shareholder of the first respondent. He was also the sole director of George Turner Customs.

George Turner Customs owned two businesses trading from premises in West Melbourne: a customs broker business and a customs importing agency. The applicant says that he was induced to sell his shares in George Turner Customs to the first respondent for $250,000 being the amount that Mr Murone told him the shares were worth, having regard to a proposed sale of the two businesses to Kawasaki Australia (or associated entities) being negotiated by Mr Murone. It seems the applicant accepted Mr Murone’s statement.…

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 Morcom v Murone Holdings Pty Ltd

Details

AGLC: Morcom v Murone Holdings Pty Ltd [2019] VSC 426
Case: [2019] VSC 426
Decision Date: 26 June 2019

CaseChat Overview and Summary

The case of Morcom v Murone Holdings Pty Ltd involved an application for discovery from a prospective defendant. The applicant sought to obtain documents from the defendant that were believed to be relevant to the applicant's claim. The application was heard and determined in the Supreme Court. The applicant's solicitor swore a supporting affidavit on instructions, which led to questions about the applicant's personal knowledge and the extent of their own enquiries.

The central legal issue was whether the applicant was in a better and informed position to prove the facts and grounds for their belief that they might have a right to obtain relief. Additionally, the court had to consider whether the supporting affidavit was discreditable, given that there was no opposing affidavit and the existence of the documents was not denied. The court's task was to balance the need for the applicant to obtain necessary evidence against any potential discredit to the applicant's case due to the affidavit.

In ruling on the application, the court found that the applicant was indeed in a better and informed position to prove the necessary facts, despite the affidavit being sworn by the solicitor. The court also noted that there was no material in the opposing affidavit that would discredit the applicant's affidavit. Given the absence of denial from the defendant regarding the existence of the documents, the court granted the application for discovery. The court emphasised the importance of the applicant's personal knowledge and the extent of their enquiries, ultimately allowing the discovery as requested.

The final orders of the court included granting the applicant's application for discovery, directing the defendant to provide the specified documents within a stipulated timeframe. The court's decision underscored the need for applicants to demonstrate their personal involvement and understanding of the case while also recognising the procedural rules that facilitate the discovery process.

Orders