Thorne Developments Pty Ltd v Laird

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.