Nationwide v Franklins [2001] NSWSC 1120

Procedural Posture

Application in Equity Division Proceedings Seeking Provisional Liquidation Or, Alternatively, Mareva Relief; Notice to Produce Dispute / Interlocutory Hearing on Whether Defendant Was Required to Answer Notice to Produce

Legal Issues

1. 1 ['Whether the plaintiff had standing as a creditor, contingent creditor or prospective creditor to seek appointment of a provisional liquidator to the defendant.' 'Whether an untried Federal Court claim for unliquidated damages could make the plaintiff a contingent or prospective creditor of the defendant.' "Whether tender of the agreed costs amount and payment into court answered the plaintiff's debt claim under the costs order." 'Whether the defendant should be relieved under Pt36 r16(1) of the Supreme Court Rules from producing documents sought by the notice to produce.' 'Whether the notice to produce was an illegitimate fishing expedition or abuse of process.']

Ratio Decidendi

The defendant was not required to produce the documents because the notice to produce sought extensive access to the defendant's internal accounting records in order to discover whether an insolvency case could be constructed, rather than to support an independently shown indication of insolvency. The plaintiff's claimed creditor status was doubtful or gone: its untried Federal Court claim for unliquidated damages did not make it a creditor, and the agreed costs amount had been tendered and paid into court as an answer to the debt. The application appeared substantially driven by pressure in relation to the Federal Court proceedings, making the notice to produce an illegitimate use of the...

Court Disposition

Defendant not required to answer notice to produce.

Orders

• ['Pursuant to Pt36 r16(1), the defendant is not required to produce documents to the plaintiff in response to the notice to produce, exhibit C.']