Clarke v Sandhurst Trustees Limited [2014] FCA 580

Clarke v Sandhurst Trustees Limited [2014] FCA 580

The Court was satisfied that the applicants, having made reasonable inquiries but lacking sufficient information to decide whether to commence proceedings, reasonably believed Sandhurst may have breached statutory and trust duties regarding diligence and investigation in relation to the property and conduct of Wickham. Discovery was ordered as the requirements of r 7.23 were met and production would assist in the applicants' decision whether to proceed.

Parties
Prospective Applicants: Graeme Clarke and Marion Clarke; Prospective Respondent: Sandhurst Trustees Limited (ABN 16 004 030 737)
Jurisdiction
Australia
Judgment Date
05 June 2014
Procedural Posture
Application for Discovery Prior to Principal Proceedings / Judgment on Application for Preliminary Discovery Under R 7.23 of the Federal Court Rules 2011
Outcome
Application for preliminary discovery granted; discovery orders made.
Legal Topics
Trustee's Duties in Relation to Debenture Holders, Preliminary Discovery, Statutory Construction of Trustee Liability, Fiduciary Duties of Trustees Under Ch 2 L of the Corporations Act 2001 (cth)
Corporations Law Equity and Trusts Civil Procedure Trustee's Duties in Relation to Debenture Holders Preliminary Discovery Statutory Construction of Trustee Liability Fiduciary Duties of Trustees Under Ch 2 L of the Corporations Act 2001 (cth)

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Parties

Graeme Clarke and Marion Clarke

Prospective Applicants

Sandhurst Trustees Limited (ABN 16 004 030 737)

Prospective Respondent

Procedural Posture

Application for Discovery Prior to Principal Proceedings / Judgment on Application for Preliminary Discovery Under R 7.23 of the Federal Court Rules 2011

Legal Issues

  1. 1 Whether applicants reasonably believe they may have a right to obtain relief against the trustee under Trust Deed and Corporations Act 2001 (Cth), s 283DA
  2. 2 Whether the applicants made reasonable inquiries and lack sufficient information to decide to commence proceedings
  3. 3 Whether the trustee is likely to have documents directly relevant to the right to obtain relief and if inspection would assist the applicant's decision

Ratio Decidendi

The Court was satisfied that the applicants, having made reasonable inquiries but lacking sufficient information to decide whether to commence proceedings, reasonably believed Sandhurst may have breached statutory and trust duties regarding diligence and investigation in relation to the property and conduct of Wickham. Discovery was ordered as the requirements of r 7.23 were met and production would assist in the applicants' decision whether to proceed.

Court Disposition

Application for preliminary discovery granted; discovery orders made.

Orders

  • Within 21 days, Sandhurst to give discovery to the applicants, as trustees of the G & M Clarke Superannuation Fund, of hard copy documents in approximately 11 lever-arch folders and documents in a specific electronic folder ('Wickham'), limited to documents listed in Schedule 1 and coming into possession between 1...
  • Discovery may be by electronic copies or inspection by applicant's solicitor.