MWP Transport Pty Limited v Michael Thomas Kent - [2018] NSWSC 1119

Supreme Court

New South Wales

Medium Neutral Citation: MWP Transport Pty Limited v Michael Thomas Kent [2018] NSWSC 1119
Hearing dates: 13/07/2018
Date of orders: 13 July 2018
Decision date: 13 July 2018
Before: McDougall J
Decision:
Make orders for verified disclosure of sources of moneys used to pay legal fees and mortgage repayments.

Catchwords: CIVIL PROCEDURE – application for disclosure orders ancillary to freezing orders already made – plaintiffs seek to ascertain source of funds used for legal payments – making orders will allow plaintiffs to elicit “information relating to assets relevant to the freezing order” – consistent with the just, quick and cheap resolution of the dispute – application granted.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Cardile v LED Builders Pty Limited (1999) 198 CLR 380
Frigo v Culhaci [1998] NSWCA 88
MWP Transport v Kent [2018] NSWSC 300
MWP Transport v Kent [2018] NSWSC 524
Category: Procedural and other rulings
Parties: MWP Transport Pty Ltd (First Plaintiff)
MWP Australia Pty Ltd (Second Plaintiff)
FRHP Holdings Pty Ltd (Third Plaintiff)
Michael Thomas Kent (First Defendant)
Christine Poynton-Kent (Second Defendant)
Deduce Financials Pty Ltd (Third Defendant)
Kent Investment Holdings Pty Ltd (Fourth Defendant)
MCKRF Pty Ltd (Fifth Defendant)
Deduce Superannuation Pty Ltd (Sixth Defendant)
TTA Investment Holdings Pty Ltd (Seventh Defendant)
Buzzcard Pty Ltd (Eighth Defendant)
Sounds Real Pty Ltd (Ninth Defendant)
Mantis Design Pty Ltd (Tenth Defendant)
Representation:
Counsel:
J Hynes (Plaintiffs)
M Condon SC (First, Third, Fourth and Sixth Defendants)
A Petrie (Second and Fifth Defendants)
Solicitors:
William James Law Pty Ltd (Plaintiff)
R E Barros & Company (First, Third, Fourth and Sixth Defendants)
JAS Legal (Second and Fifth Defendants)

File Number(s): 2018/71774

Judgment (ex tempore – revised 13 july 2018)

HIS HONOUR: The plaintiffs have obtained freezing orders against the defendants. The orders relate to what are alleged to be very substantial defalcations committed by the first defendant, over a period of perhaps 11 years, in the course of his employment as chief financial officer of the Pace group of companies of which the plaintiffs form part. The factual background is set out in the reasons of Ball J (who granted the freezing orders) given on 13 March 2018. [1] There is some additional background in reasons that I gave, in considering the first defendant's application for a stay, on 20 April 2018. [2] I shall not repeat that background.
1. MWP Transport v Kent [2018] NSWSC 300.
2. MWP Transport v Kent [2018] NSWSC 524.
I am concerned today with the plaintiffs' notice of motion seeking orders pursuant to UCPR rule 25.12 that the first, third, fourth, fifth and sixth defendants make affidavits disclosing, in substance, amounts paid by them for legal expenses (and to be paid in the future) and the sources of those payments. Rule 25.12 reads as follows:

Ancillary order
25.12 ANCILLARY ORDER
(cf Federal Court Rules Order 25A, rule 3)
(1) The court may make…

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.

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Details

Case: [2018] NSWSC 1119
Decision Date: 13 July 2018

CaseChat Overview and Summary

The plaintiffs, MWP Transport Pty Limited, filed an application in the Federal Court of Australia against the defendant, Michael Thomas Kent. The dispute centres on the need for further disclosure to ascertain the source of funds used by the defendant for legal payments. This application for disclosure orders is ancillary to the freezing orders that have already been granted. The plaintiffs seek to uncover information relating to assets relevant to the freezing order, which they argue is necessary to achieve a just, quick, and cheap resolution of the dispute.

The primary legal issues before the court were whether the plaintiffs' application for additional disclosure was warranted and if making such orders would align with the principles of achieving a just, quick, and cheap resolution of the dispute. The court had to consider the balance between the plaintiffs' need for information and the defendant's right to privacy and protection from unnecessary intrusion.

In granting the application, the court determined that the plaintiffs' need to ascertain the source of funds used by the defendant for legal payments was justified. The court reasoned that this information was essential to understand the assets relevant to the freezing order. The disclosure sought was narrowly tailored to serve the purposes of the freezing orders, and the benefits of achieving a just, quick, and cheap resolution of the dispute outweighed any potential prejudice to the defendant. The court concluded that making the orders would facilitate the effective administration of justice.

The court ordered that the defendant provide the requested disclosure to the plaintiffs. This decision underscores the importance of ensuring that the processes ancillary to freezing orders are carefully balanced to maintain fairness and efficiency in litigation.

Orders