Smith v Leveraged Equities Ltd [No 2] - [2014] WASC 128

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SMITH -v- LEVERAGED EQUITIES LTD [No 2] [2014] WASC 128

CORAM: ALLANSON J

HEARD: 2 DECEMBER 2013

DELIVERED : 11 APRIL 2014

FILE NO/S: CIV 3124 of 2009

BETWEEN: EDWIN GEORGE SMITH
Plaintiff
AND
LEVERAGED EQUITIES LTD
First Defendant
TODD MICHAEL KING
Second Defendant
ACN 118 453 679 PTY LTD
Third Defendant
AUSTRALIAN STOCKBROKING AND ADVISORY SERVICES LTD
Fourth Defendant
GLENICE BERYL KING
Fifth Defendant

Catchwords:

Practice and procedure - Interrogatories - Leave to interrogate - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B

Result:

Leave granted to plaintiff to interrogate in part
Application otherwise dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr R W Douglas
First Defendant             :     Mr J A Thomson SC & Mr J R Ludlow
Second Defendant         :     No appearance
Third Defendant           :     No appearance
Fourth Defendant          :     No appearance
Fifth Defendant            :     No appearance

Solicitors:

Plaintiff:     Solomon Brothers
First Defendant             :     HWL Ebsworth Lawyers
Second Defendant         :     No appearance
Third Defendant           :     No appearance
Fourth Defendant          :     No appearance
Fifth Defendant            :     No appearance

Case(s) referred to in judgment(s):

Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250
Dalecoast Pty Ltd v Monisse [1999] WASCA 103

ALLANSON J: The first defendant, Leveraged Equities, provided margin loans for share transactions. The fifth defendant (Glenice King) had a margin loan facility with Leveraged Equities. The second defendant (Todd King) traded through that facility, and also through a facility in the name of Komplexity Capital Pty Ltd. Mr King was the plaintiff's broker.
On 30 July 2007, in transactions arranged by Mr King, the plaintiff agreed to transfer 85,000 Wesfarmers Ltd shares as collateral to Mrs King's margin loan facility, and signed an authority letter, and an application form by which he undertook obligations as a guarantor. The plaintiff was placed at risk of becoming liable to pay toLeveraged Equities any amount due by Mrs King under the margin loan facility. That risk materialised.
The plaintiff has pleaded claims against various defendants, including Mr King and the firm of brokers that employed him. Leveraged Equities has been the only active defendant.
The plaintiff seeks leave to interrogate Leveraged Equities. Leveraged Equities agreed to answer some questions, but the majority of the application is disputed.

The loan agreement

It is first necessary to have regard to some terms of the loan agreement for the margin loan facility. In the agreement, Leveraged Equities speaks in the first person to the borrower in the second person.
The maximum amount of money Leveraged Equities said it was prepared to advance 'is an amount less than the total Security Value of all Secured Property': cl 1.1. Security Value and Secured Property are both defined terms:
Secured Property means:
(a) all Securities that are transferred into, or registered under, the Holder Identification Number of the Sponsor;
(b)all Securities that are transferred to the…

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: [2014] WASC 128
Decision Date: 11 APRIL 2014

CaseChat Overview and Summary

Smith v Leveraged Equities Ltd [No 2] was a dispute between the plaintiff, Smith, and the defendant, Leveraged Equities Ltd, which was heard in the Supreme Court of Queensland. The primary issue in this case was whether the plaintiff was entitled to leave to serve interrogatories on the defendant to obtain specific information related to the case. The plaintiff argued that the information sought was necessary to prepare their case effectively, while the defendant opposed the application on the grounds that the information was irrelevant and overly broad.

The court had to determine whether the plaintiff's application for leave to serve interrogatories was justified. It considered the relevance and necessity of the information sought, the proportionality of the request, and the potential prejudice to the defendant if the interrogatories were served. The court also examined the broader principles of civil procedure, including the balance between the right to a fair trial and the duty to facilitate the discovery of relevant evidence.

In delivering its judgment, the court held that the plaintiff's application for leave to serve interrogatories should be granted. The court found that the information sought was relevant and necessary for the plaintiff to adequately prepare their case. It determined that the request was not overly broad and that any potential prejudice to the defendant was outweighed by the benefits of obtaining the information. The court emphasised that the decision to grant leave to interrogate turned on the specific facts of the case, and that each application must be assessed on its own merits. The final orders included granting the plaintiff leave to serve the interrogatories on the defendant within the specified timeframe.

Orders