THN Capital Funding Pty Ltd v Leffler

This matter comes before me today for the purposes of hearing a motion filed by the first defendant on 22 August 2025 seeking various orders, including that leave be granted to file an amended defence, that discovery be given in respect of certain categories of documents, and that the first and second plaintiffs be restrained from taking any further step in these proceedings without the consent of the Australian Financial Complaints Authority (AFCA).

Mr Oakes of counsel appears for the plaintiffs. Mr Lovejoy appears by AVL (albeit absent vision) for the first defendant. Mr Lovejoy is a solicitor practising in South Australia. There was no appearance by the second defendant. He is not legally represented. I was informed that he had been made aware of the hearing today.

On the commencement of the hearing, Mr Lovejoy informed me that the first defendant had recently experienced some personal difficulties involving the illness of a child (I will not say anything more about that in this judgment) and thus was seeking an adjournment of the motion. Mr Oakes did not oppose the adjournment, albeit he wanted to get on with the matter and asked that the matter be listed for hearing.

The plaintiffs are seeking payment from the defendants of the sum of approximately $16 million. That amount is said to be owing under the terms of a guarantee signed by both defendants. The document, which is said to constitute the guarantee, is headed “Irrevocable Authority”. There are issues between the parties as to the circumstances in which the irrevocable authority was signed as well as the construction of the document.

Mr Lovejoy says that his client will be seeking to join the directors of one or other of the plaintiffs, or a related company on the basis that they were guilty of misleading and deceptive conduct. Mr Lovejoy says that, on the first defendant’s case, at the time that the defendants entered into the irrevocable authority, those directors knew that the principal debtor had no capacity to pay the amount. Indeed, as I understand it, the principal debtor was placed into liquidation and the liquidator reported that the company had been insolvent for three years, that is, for a considerable period prior to the irrevocable authority being signed.

Mr Lovejoy also says that his client wishes to join his former solicitor. Although there was some indication that he also wanted to join the solicitor for the plaintiff, Mr Lovejoy said that would not be occurring.

Bearing in mind that this matter was commenced in 2023 and there has been some delay (on the part of both parties), the question arises as to how to advance the matter.

The plaintiffs are keen to proceed to a hearing and obtain a judgment. The first defendant seeks time to amend its defence, so that the defence properly reflects the issues between the parties and also file cross‑claims against the directors and the solicitor.

Mr Lovejoy submits it would be in the plaintiff’s interest that those parties be joined. I assume he means that, as he considers his client has a good case against the directors and the solicitor, there may be some scope for resolution at the proceedings, as Mr Lovejoy suggests his client seemingly does not have the funds to pay the amount of the claim.

I am conscious that this matter has already taken too long. I am concerned that the matter not be simply adjourned until some time next year for determination of the motion. I am also concerned that, as stated to Mr Lovejoy (leaving aside the issues relating to the directors and the solicitor), the primary defence is a matter of construction only.

This issue could be dealt with quickly and efficiently. The plaintiffs have served all their evidence. Assuming that the issue is really one of construction, there will need to be limited evidence on such a hearing.

In all these circumstances, I consider that I should accede to the request of the plaintiffs to list the matter for hearing and I have listed the matter for hearing for three days commencing 20 July 2026.

That date is sufficiently far away for the first defendant to take such steps as he wishes. If the first defendant wishes to pursue his motion and leave is ultimately granted to file cross‑claims, further consideration can be given to whether that hearing date should be maintained, whether there will be a separate hearing, or whether it is necessary to vacate the hearing date to enable the Court to consider all issues at the same time. In any event, that can await determination at a later time.

In the circumstances, I make the following orders: