Thorne Developments Pty Ltd v Laird

Case [2021] QSC 90

SUPREME COURT OF QUEENSLAND

CITATION:

Thorne Developments Pty Ltd v Laird [2021] QSC 90

PARTIES:

THORNE DEVELOPMENTS PTY LTD

(plaintiff)

v
GRAHAM DAVID LAIRD AS TRUSTEE OF THE LAIRD FAMILY TRUST
(first defendant)
RICK WILLIAMSON INVESTMENTS PTY LTD
(second defendant)
GRAHAM DAVID LAIRD
(third defendant)
RICHARD JOHN WILLIAMSON

(fourth defendant)

FILE NO/S:

BS No 3570 of 2014

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

11 May 2021

DELIVERED AT:

Brisbane

HEARING DATE:

18 June 2020

JUDGE:

Davis J

ORDER:

1.   The plaintiff should have leave to amend to plead:

(a)    a claim against the third defendant and the fourth defendant as principal debtors;

(b)    a claim against the third defendant and fourth defendant as chargors;

(c)    a claim against the fourth defendant for his removal as a director of Transparent Enterprises Pty Ltd;

(d)    a claim against the fourth defendant for breach of the personal covenants contained in the mortgage.

2.    The plaintiff should not have leave to plead a case based on estoppel by convention.

3.    The plaintiff shall pay the defendants’ costs of the application and the costs incurred by the amendments, such costs only being payable upon final judgment in the proceedings or earlier order.

4. The parties shall be heard on the question of further final orders.

CATCHWORDS:

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - FORM OF PLEADING - OTHER MATTERS - AMENDING PLEADING - where the plaintiff company Thorne Developments Pty Ltd (Thorne Developments) seeks to amend its claim and its third further amended statement of claim - where Mr Bradley Thorne is the sole director of Thorne Developments - where the application is opposed - where Transparent Enterprises Pty Ltd (Transparent Enterprises) operated an adult entertainment club in Mackay and planned to expand to Brisbane and Townsville - where Thorne Developments owned one half of the issued share capital in Transparent Enterprises - where the third defendant, Mr Graham Laird, owned the balance of the issued shares in Transparent Enterprises - where Mr Laird and Mr Thorne were the sole directors of Transparent Enterprises - where in September 2011 the regulatory authorities notified Transparent Enterprises its liquor licenses would be discontinued if Mr Thorne held any interest in the company - where an agreement was reached between Mr Laird, Mr Thorne and Mr Williamson, the fourth defendant who controlled Rick Williamson Investments Pty Ltd, the second defendant, to relinquish Mr Thorne’s interest in Transparent Enterprises - where two contracts were then executed by the parties to effect the agreement; firstly, a Share Sale Agreement and secondly,  a Loan Agreement - where Mr Laird and Mr Williamson provided guarantees of performance under the Share Sale Agreement - where, at the time of these proceedings, the repayments due under the Loan Agreement had not been made - where Thorne Developments submit that the intention of the Share Sale Agreement has been effected - where Thorne Developments seeks to recover the monies owed under…

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Thorne Developments Pty Ltd v Laird [2021] QSC 90
Case
[2021] QSC 90
Decision Date

CaseChat Overview and Summary

The plaintiff, Thorne Developments Pty Ltd (Thorne Developments), applies to amend its claim and its third further amended statement of claim, which is opposed by the defendants. Thorne Developments owned one half of the issued share capital in Transparent Enterprises Pty Ltd (Transparent Enterprises), an adult entertainment club in Mackay, with Graham David Laird (the third defendant) owning the balance of the issued shares. The third defendant and Bradley James Thorne, the sole director of Thorne Developments, were the sole directors of Transparent Enterprises. In December 2011, an agreement was reached between Mr Laird, Mr Thorne and Richard John Williamson, the fourth defendant who controlled Rick Williamson Investments Pty Ltd (Rick Williamson Investments). The agreement involved Thorne Developments selling its shares in Transparent Enterprises to Mr Laird and Rick Williamson Investments, Mr Thorne resigning from his directorship in Transparent Enterprises and the companies in the Showbar Group, and the share price being determined by Transparent Enterprises’ accountant. The agreement was executed by two contracts on 28 February 2012: a Share Sale Agreement and a Loan Agreement. Thorne Developments seeks to recover the monies owed under the terms of the Share Sale Agreement, the Loan Agreement and the guarantee, while the defendants counterclaim for the monies paid for the shares to date. Thorne Developments seeks leave to amend its pleadings to abandon allegations and claims made in earlier versions. The court must decide whether the plaintiff should be given leave to amend its pleadings and whether the court should validate the Share Sale Agreement and Loan Agreement.

The court held that the plaintiff should have leave to amend to plead a claim against the third defendant and the fourth defendant as principal debtors, a claim against the third defendant and the fourth defendant as chargors, a claim against the fourth defendant for his removal as a director of Transparent Enterprises Pty Ltd, and a claim against the fourth defendant for breach of the personal covenants contained in the mortgage. The court held that the plaintiff should not have leave to plead a case based on estoppel by convention. The plaintiff shall pay the defendants’ costs of the application and the costs incurred by the amendments, such costs only being payable upon final judgment in the proceedings or earlier order. The parties shall be heard on the question of further final orders.

Orders

Orders of the court

1. The plaintiff should have leave to amend to plead:

(a) a claim against the third defendant and the fourth defendant as principal debtors;

(b) a claim against the third defendant and fourth defendant as chargors;

(c) a claim against the fourth defendant for his removal as a director of Transparent Enterprises Pty Ltd;

(d) a claim against the fourth defendant for breach of the personal covenants contained in the mortgage.

2. The plaintiff should not have leave to plead a case based on estoppel by convention.

3. The plaintiff shall pay the defendants’ costs of the application and the costs incurred by the amendments, such costs only being payable upon final judgment in the proceedings or earlier order.

4. The parties shall be heard on the question of further final orders.

Background

Background to the litigation

The plaintiff, Thorne Developments Pty Ltd (Thorne Developments), applies to amend its claim and its third further amended statement of claim. The application is opposed.Background Transparent Enterprises Pty Ltd (Transparent Enterprises) operated an adult entertainment club in Mackay. It was planning also to operate similar businesses in Brisbane and Townsville. Thorne Developments owned one half of the issued share capital in Transparent Enterprises. Graham David Laird (the third defendant) owned the other issued shares in Transparent Enterprises. Although Mr Laird was the trustee of the Laird Family Trust, the share in Transparent Enterprises held by him before the transactions the subject of the current dispute, was held by him beneficially, and not on trust. Bradley James Thorne was the sole director of Thorne Developments. He and Mr Laird were the only directors of Transparent Enterprises. Transparent Enterprises was the holding company of, and owned the shares in, various companies collectively known as “The Showbar Group”. Mr Thorne and Mr Laird were directors of each of those companies. In about September 2011, it became apparent that the regulatory authorities would not continue Transparent Enterprises’ liquor licences if Mr Thorne held any interest in the company. Mr Thorne ultimately went bankrupt on 26 March 2012. Richard John Williamson, who is the fourth defendant, controlled Rick Williamson Investments Pty Ltd (Rick Williamson Investments), who is the second defendant. Negotiations proceeded from September 2011 between Mr Thorne, Mr Laird and Mr Williamson and by December an arrangement had been agreed upon, namely:(a)Thorne Developments would sell its shares in Transparent Enterprises to Mr Laird as Trustee of the Laird Family Trust (Mr Laird as Trustee) and Rick Williamson Investments;(b)Mr Thorne would resign his directorship in Transparent Enterprises and each of the companies in the Showbar Group;(c)the share price would be determined by Transparent Enterprises’ accountant who would prepare a valuation. On 12 December 2011, $95,000 was paid by Rick Williamson Investments to the trust account of a solicitor acting for Thorne Developments in part payment of the proposed purchase price. Once the purchase price was ascertained, two contracts were executed by the parties on 28 February 2012. The first was a Share Sale Agreement. By the terms of the share sale agreement:(a)Thorne Developments sold its shareholding in Transparent Enterprises to Mr Laird as Trustee and to Rick Williamson Investments;(b)Mr Laird as Trustee and Rick Williamson Investments agreed to pay a purchase price to Thorne Developments of $1,871,775;(c)Mr Laird and Mr Williamson guaranteed and indemnified to Thorne Developments the performance of the share sale agreement by Mr Laird as Trustee and Rick Williamson Investments;(d)Clause 5.1 of the share sale agreement provided as follows:“5.1 Payment on CompletionOn Completion:(a) The Buyers[1] will procure that consideration in the amount of $1,871,775.00 apportioned as set out in Schedule 1 to be paid to the Seller,[2] to be paid as follows:(i)$95,000 paid into the Trust Account of Reardon & Associates on 12th December, 2011;(ii)$300,000.00 to be paid to Thorne Developments Pty Ltd upon the Completion Date;(iii)$1,476,775.00 to be paid in accordance with the Loan Agreement between the Seller and the Buyers(b) It is acknowledged that the proportion of consideration in clause 5.1(a)(i) has been paid into a bank account and is available to the Seller.”[1]Rick Williamson Investments Pty Ltd and Mr Laird as Trustee of the Laird family Trust.[2]Thorne Developments Pty Ltd.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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