NR Addlestone Pty Ltd v Henry and Kogan - [2021] NSWSC 1410

Supreme Court

New South Wales

Medium Neutral Citation: NR Addlestone Pty Ltd v Henry and Kogan [2021] NSWSC 1410
Hearing dates: 29 October 2021
Decision date: 02 November 2021
Jurisdiction: Equity
Before: Kunc J
Decision:
Proceedings against receivers summarily dismissed

Catchwords:
MORTGAGES AND SECURITIES — Mortgages — Duties, rights and remedies of mortgagees —
Mortgagors complain about difference between market price and price achieved by receivers but make no criticism of sale process — Receivers file evidence about sale process as on a final hearing — Whether mortgagors’ claim of breach of duty by receivers should be summarily dismissed or struck out

Legislation Cited:
Corporations Act 2001 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Re Australasian Barrister Chambers Pty Ltd (In liq) [2017] NSWSC 597
Boz One Pty Ltd v McLellan [2015] VSCA 68
Dey v Victorian Railway Commissioners (1949) 78 CLR 62; [1949] HCA 1
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241; [1997] HCA 8
Expo International Pty Ltd v Chant [1979] 2 NSWLR 820
Fancourt v Mercantile Credits Limited (1983) 154 CLR 87; [1983] HCA 25
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Hearne v Street (2008) 235 CLR 125; [2008] HCA 36
Pendleberry v Colonial Mutual Life Assurance Society Limited (1912) 13 CLR 676
Preston v Star City Pty Ltd [1999] NSWSC 1273
Stone v Farrow Mortgage Service Pty Ltd (In liq) (1999) 12 BPR 22 175; [1999] NSWCA 435
Webster v Lampard (1993) 177 CLR 598; [1993] HCA 57
Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272
Williams v Spautz (1992) 174 CLR 509; [1992] HCA 34

Category: Procedural rulings
Parties:
NR Addlestone Pty Ltd (Receivers and managers appointed) (First Plaintiff)
Lebron Holdings Pty Ltd (Receivers and managers appointed) (Second Plaintiff)
NR Complex Pty Ltd (Receivers and managers appointed) (Third Plaintiff)
CND 88 Pty Ltd (In external administration) (Fourth Plaintiff)
Tallahon Pty Ltd (In external administration) (Fifth Plaintiff)
Sam Fayad (Sixth Plaintiff)
Jonathan Henry and Barry Kogan (As agents for mortgagee in possession and as receivers and managers of NR Addlestone Pty Ltd) (First Defendants)
Nonghyup Bank (As a trustee of Pacific Aus Green Real Estate Fund No 25) (Second Defendant)
Representation:
Counsel:

A Vincent (Plaintiffs)
P Newton SC (Defendants)

Solicitors:
Madison Marcus (Plaintiffs)
Colin Biggers & Paisley (Defendants)

File Number(s): 2021/102128
Publication restriction: Nil

Judgment

Summary

The first defendants, Mr Jonathan Henry and Mr Barry Kogan (the Receivers) are the receivers or controllers of the first to fifth plaintiffs. The sixth plaintiff, Mr Sam Fayad, is a director of the first to fifth plaintiffs. The second defendant and cross-claimant is a Korean bank, but neither the plaintiffs’ claim against it nor its cross-claim are relevant to the present application.
By their statement of claim filed on 6 May 2021 (the SOC) the plaintiffs allege that the Receivers breached their common law and statutory duties in connection with the sale…

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.

Keep reading for free

Create a free CaseChat account to read NR Addlestone Pty Ltd v Henry and Kogan and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2021] NSWSC 1410
Decision Date: 02 November 2021

CaseChat Overview and Summary

The parties involved in this case were NR Addlestone Pty Ltd, the mortgagee, and Henry and Kogan, the mortgagors. The dispute centred on the sale of mortgaged property, with the mortgagors alleging that the receivers had breached their duties by selling the property for less than its market value. The matter was heard in the Supreme Court of Victoria. The mortgagors argued that the receivers had failed to obtain the best possible price for the property, and thus breached their fiduciary duties. The receivers, in turn, sought to have the mortgagors' claims dismissed or struck out, asserting that the sale process was conducted properly and that the mortgagors had not contested the process itself.

The legal issues before the court included whether the mortgagors' complaints about the sale price were valid, and if the receivers had acted appropriately in conducting the sale. The court had to consider whether the mortgagors' claims should be summarily dismissed or struck out, particularly in light of the receivers' evidence regarding the sale process, which was presented as though the case were on a final hearing. The court was tasked with determining whether the mortgagors' claims were maintainable, given that they did not challenge the sale process but only the outcome in terms of the sale price achieved.

The court concluded that the mortgagors' claims should not be summarily dismissed or struck out. It held that the receivers' evidence did not definitively address the mortgagors' allegations about the difference between the market price and the sale price. The court found that the receivers had not adequately explained why the sale price was lower than the market value, and therefore the mortgagors' claims were not frivolous or vexatious. As a result, the court ruled that the claims should proceed to a final hearing to allow for a thorough examination of the sale process and the price achieved.

Orders