Gippsreal Limited v ACN 106 693 565 Pty Ltd (formerly MJ Leonard Pty Ltd trading as Leonard Legal) [2017] FCA 1414

FEDERAL COURT OF AUSTRALIA

Gippsreal Limited v ACN 106 693 565 Pty Ltd (formerly MJ Leonard Pty Ltd trading as Leonard Legal) [2017] FCA 1414 File number: VID 268 of 2016

Judge: NORTH J

Date of judgment: 13 November 2017

Date of hearing: 13 November 2017

Registry: Victoria

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Regulator and Consumer Protection

Category: No Catchwords

Number of paragraphs: 18

Counsel for the Applicant: Mr J L Evans QC

Solicitor for the Applicant: Oakleys Legal

Counsel for the Respondent: Mr P Jopling AM QC with Ms J Collins

Solicitor for the Respondent: K & L Gates

ORDERS VID 268 of 2016

BETWEEN: GIPPSREAL LIMITED Applicant

AND: ACN 106 693 565 PTY LTD (FORMERLY MJ LEONARD PTY LTD TRADING AS LEONARD LEGAL) Respondent

JUDGE: NORTH J DATE OF ORDER: 13 NOVEMBER 2017

THE COURT ORDERS THAT:

1. Oakleys Legal are restrained from continuing to act for Gippsreal. 2. By 8 December 2017, Gippsreal must give discovery by list of documents verified by affidavit of the documents directly relevant to the issues raised by the pleadings which have not already been discovered, including the following categories: (a) Gippsreal's financial accounts and notes for the financial years ended 30 June 2007 to 30 June 2008. (b) Documents recording Gippsreal's conflict management arrangements, as contemplated by section 11.6.1 of Gippsreal's Compliance Plan. (c) Internal monitoring records recording compliance with Gippsreal's conflict management obligations, and disclosures to the Individual Investors about conflicts of interest, as contemplated by section 11.6.1 of the Compliance Plan. (d) Gippsreal's register of licence breaches as contemplated by section 2 of Gippsreal's Compliance Manual. (e) Any notice of breach prepared by Gippsreal's personnel in relation to the Loans as contemplated by section 2.9 of Gippsreal's Compliance Manual. (f) Any board papers or board minutes referring to a breach by Gippsreal in relation to the Loans as contemplated by section 2.9 of the Compliance Manual. (g) Any report to ASIC in respect of a breach of Gippsreal's obligations in connection with the Loans as contemplated by section 2.11 of the Compliance Manual. (h) Any incident report and any breach report prepared in connection with the Loans to Strategic the subject of Proceeding as contemplated by section 2.11 of the Compliance Manual. (i) Gippsreal's internal monitoring records of the extent of Gippsreal's compliance with its Compliance Plan, and the reports to Gippsreal's board, contemplated by section 2.11 of the Compliance Manual, in the period 1 June 2008 to present. (j) Documents that identify Gippsreal's Responsible Officer, Investment Manager and Loan Manager in the period from 1 July 2006 to present. (k) All records of communications between Gippsreal and Individual Investors (including file notes of telephone calls to investors and correspondence with them) in connection with Strategic's defaults under the Loans. (l) All retainers between Gippsreal and Oakleys pursuant to which Oakleys rendered invoices to Gippsreal for work in connection with the Loans. (m) Any request for legal advice sought by Gippsreal, and any legal advice provided to Gippsreal, in the period from 1 July 2008 to present, about the extent of compliance by Gippsreal or its related entities with their obligations under the Compliance Plan or the Corporations Act 2001(Cth) in connection with the lending practices they adopted at the time of the Loans. where: (i) "Loans" means all or any of the five loans to Strategic Projects Pty Ltd that are the subject of this proceeding, defined in Gippsreal's amended statement of claim as the "First Bega Loan", the "First Glen Innes Loan", the "First Temora Loan", the "Second Bega Loan", and the "Glen Innes & Temora Loan". (ii) "Individual Investors" means all or any of the persons who invested in the loans, being the persons referred to at paragraphs 12(14), 26(11), 40(11), 54(14) and 68(12) of the amended statement of claim. 3. Gippsreal has leave to file, by 16 November 2017, a further amended statement of claim in the form served on Leonard Legal on 23 October 2017. 4. Leonard Legal has leave to file, by 23 November 2017, a defence to Gippsreal's further amended statement of claim incorporating amendments substantially in the form served on Gippsreal on 3 November 2017. 5. Gippsreal pay the costs of and incidental to the application. 6. Leonard Legal pay any costs of Gippsreal thrown away as a result of the amendments to the defence referred to in [4] which results from the amended interlocutory application filed on 14 September 2017. 7. A case management hearing is fixed for 10.15 am on 1 February 2018. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.