Hill v RBG Holdings Group Pty Ltd

1. [1]

   The plaintiff, Mr Derry Hill, alleges that on or about 30 May 2011 he and Mr Geoff Reed entered into an agreement whereby a number of the corporate defendants (referred to in the Commercial List Statement as "the Indemnifying Entities") agreed to indemnify Mr Hill from any claims made against Mr Hill by reason of him granting a guarantee and supporting mortgage to Westpac Banking Corporation, then known as St George Bank.

2. [2]

   By that guarantee and mortgage, Mr Hill guaranteed to Westpac the obligations owed to Westpac by Reed Constructions Australia Pty Ltd (in liquidation) under a $7 million loan facility, referred to in the List Statement as the "Loan Facility".

3. [3]

   In the List Statement Mr Hill alleges that his agreement with Mr Reed was comprised by a letter and conversations he had with Mr Reed.

4. [4]

   The letter is dated 30 May 2011 and is headed "Funding - Reed Group Loan from DBH" (that is, I assume, Mr Hill). The letter is in the following form:

5. [5]

   In the List Statement Mr Hill alleges that the conversations took place "in about May 2011" and that their "substance and effect" comprise:

6. [6]

   Mr Hill has sworn an affidavit dated 26 March 2018.

7. [7]

   In par 3 of that affidavit Mr Hill says:

8. [8]

   In pars 52 to 58 of the affidavit, Mr Hill gives this account of the conversations said to have given rise to the agreement for which he contends:

9. [9]

   Despite what is stated in par 3 of the affidavit, Mr Hill does not suggest in any of these paragraphs that his account of what transpired between him and Mr Reed is not complete or that there were any further conversations relevant to his contentions concerning the alleged indemnity.

10. [10]

    The first to third defendants by their Commercial List Response agree that there was an agreement between Mr Hill and Mr Reed on or about 30 May 2011 and that it was comprised of the 30 May 2011 letter, to which I have referred, and conversations that took place around then between Mr Hill and Mr Reed.

11. [11]

    The first to third defendants deny that the indemnity that thereby resulted had the scope for which Mr Hill contends.

12. [12]

    As I understand it, that is in substance what divides the parties in these proceedings.

13. [13]

    The defendants have not yet been ordered to serve their evidence. Thus, it is not yet known whether Mr Reed will give evidence in reply to that of Mr Hill and, if he does, to what extent he will dispute Mr Hill's account of what was said.

14. [14]

    Against that background Mr Hill, by Notice of Motion filed on 23 March 2018, seeks disclosure of documents from the defendants and leave to serve subpoenas on third parties to produce seven categories of documents.

15. [15]

    As the evidence has not yet closed, Mr Cornish, who appears for Mr Hill, accepted before me that Mr Hill must show "exceptional circumstances" to justify either the proposed disclosure or leave to serve the defendants.

16. [16]

    In my opinion he has failed to do so.

17. [17]

    As I mentioned, disclosure is sought in respect of seven categories of documents.

Category 1

1. [18]

   The documents sought in Category 1 are:

2. [19]

   It appears that Mr Hill's application is actually directed to email correspondence that he recalls having had with Mr Reed at the time.

3. [20]

   Thus Mr Hill's solicitor, Mr Ke, has deposed:

4. [21]

   Mr Cornish submitted:

5. [22]

   Mr Hill's case is that the agreement for which he contends was comprised in the 30 May 2011 letter and the conversations to which he has deposed. He does not suggest in his affidavit that his account of what was said was incomplete. Nor does he suggest that any emails passing between he and Mr Reed at the time comprised any part of the agreement; or that some representation or other communication took place in emails which might be relevant to the cause of action for which he contends.

6. [23]

   In those circumstances I see no exceptional circumstances justifying production of the materials sought at this stage.

Categories 2 and 3

1. [24]

   It is common ground on the pleadings that on 23 December 2014 Mr Hill entered into a Deed of Settlement with Westpac pursuant to which he agreed to pay Westpac $6.25 million on account of his obligations to Westpac under the guarantee and mortgage concerning Reed Constructions to which I have referred.

2. [25]

   By that Deed of Settlement, Mr Hill also agreed to pay Westpac an amount, estimated in the List Statement to be $2.65 million, in relation to an unrelated obligation that he, personally, had to Westpac.

3. [26]

   Mr Hill accepts that the indemnity for which he contends would not respond to that part of the $6.25 million as relates to Mr Hill's personal obligations to Westpac. I understand this to be common ground.

4. [27]

   In those circumstances Mr Hill seeks disclosure of:

5. [28]

   Mr Cornish submitted that these documents are relevant to the question of what proportion of the $6.25 million for which Mr Hill was liable to Westpac would enliven the indemnity which Mr Hill contends.

6. [29]

   Mr Cornish submitted:

7. [30]

   Mr Hill will have to prove, in due course, exactly what proportion of the $6.25 million due to Westpac related to his personal obligations to Westpac. Presumably an enquiry made by him to his then banker, Westpac, should elicit that information. However, I do not see the fact that Mr Hill cannot presently pinpoint the precise figure constitutes exceptional circumstances such as to justify the disclosure in the subpoena now sought.

8. [31]

   If Mr Hill proves that he cannot obtain this information from Westpac it may be that he will be given leave to issue a more focussed subpoena to Westpac than is currently proposed.

9. [32]

   But not now.

Categories 4 to 7

1. [33]

   In circumstances not necessary to recount here, Mr Hill's obligations to Westpac were ultimately discharged by a company called Kirkoswald Investments Pty Ltd using funds it borrowed from another company, Manassen Holdings Pty Ltd.

2. [34]

   In due course Manassen assigned its rights under that loan contract to another company, Verekers Administration Pty Ltd.

3. [35]

   Mr Hill executed documents by which, in effect, he guaranteed repayment of that loan.

4. [36]

   On 16 January 2017 Mr Hill discharged that loan (then an amount of $8,742,867.16) using the proceeds of sale of his home. He has proved those matters in his affidavit.

5. [37]

   It is this payment, or a part of it, that is the foundation of Mr Hill's claim under the alleged indemnity.

6. [38]

   As I understand it, Mr Hill claims that the indemnity for which he contends responds to that portion of the amount he paid Verekers that represents that portion of the $6.25 million he agreed to pay Westpac as represents the "Reed Portion" as referred to in the List Statement; that is the debt to Westpac of Reed Constructions that Mr Hill guaranteed; as opposed to the amount that Mr Hill himself owed Westpac at the time.

7. [39]

   In those somewhat complex circumstances, Mr Hill seeks disclosure of the following categories of documents:

8. [40]

   Mr Hill will need to prove in due course to what portion, if any, of the amount he paid Verekers the indemnity for which he contends responds.

9. [41]

   I do not see how that justifies calling for disclosure at this stage, of the broad range of documents now sought. It most certainly does not constitute exceptional circumstances to justify production of any document at this stage.

10. [42]

    Further Mr Gee, who appeared for the defendants, pointed out that Mr Hill has annexed to his affidavit every document alleged in the List Statement with the exception only of the documents for which he guaranteed Kirkoswald's obligation to Verekers.

11. [43]

    Mr Gee informed me, and I accept, that none of the defendants have a copy of that document.

12. [44]

    In all those circumstances, my conclusion is that the application for disclosure is brought prematurely and should be dismissed.

13. [45]

    The order I make is that the plaintiff's Notice of Motion of 23 March 2018 is dismissed with costs.