ZW 2 Pty Limited v Kennerley [2022] NSWSC 314

Supreme Court New South Wales

Medium Neutral Citation: ZW 2 Pty Limited v Kennerley [2022] NSWSC 314 Hearing dates: 17 March 2022 Date of orders: 22 March 2022 Decision date: 22 March 2022 Jurisdiction: Common Law Before: Lonergan J Decision: (1) The defendants' notice of motion filed on 25 February 2022 is dismissed. (2) The defendants are to pay the plaintiff's costs of the defendants' notice of motion. (3) The defendants are to pay the plaintiff's costs of the plaintiff's notice of motion filed on 25 February 2022. Catchwords: PROCEDURE – discovery – must be relevant to a fact in issue – no question of principle Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Commonwealth of Australia v Northern Land Council (1991) 30 FCR 1; 103 ALR 267 Lees v Kennerley [2020] NSWSC 630 Texts Cited: J.W. Carter, Carter's Breach of Contract (2nd ed, 218, LexisNexis Butterworths) Category: Procedural rulings Parties: ZW 2 Pty Limited (Plaintiff) Gillian Kennerley (Defendant) Representation: Counsel: R Carey (Plaintiff) S Brennan (Defendant)

Solicitors: Allens Solicitors (Plaintiff) Christopher M Edwards Solicitors (Defendant) File Number(s): 2021/00224886 Publication restriction: Nil

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Judgment 1. In these proceedings the plaintiff seeks possession of land at Grose River Road, Grose Wold, (the Property), judgment in a sum of money over $2 million plus interest, costs and interest on costs, as well as various declarations as to the meaning and effect of documents signed by the parties relating to the property. 2. The statement of claim dated 6 August 2021 alleged that there was an Event of Default under the Acknowledgement of Debt and Guarantee and Indemnity (the Acknowledgment) and related Mortgage Terms Deed (the Deed), so the sum is due and failure to pay it is a breach of the Deed. An alternative claim is made for overdue interest payments in the amount $94,843.74. 3. The defendants do not admit there was any Event of Default, and say that even if there was, it was of such a minor character and consequence that when determining the contractual positions of the parties, in accordance with the doctrine of de minimus, it should be disregarded. In the alternative it is pleaded that the parties are obliged by the Acknowledgement and the Deed to act in good faith and the plaintiff in commencing these proceedings has not acted in good faith. 4. The plaintiff joins issue with the defendants' assertions in its Amended Reply. 5. The first defendant and a Ms Belinda Lees, a former officeholder of the plaintiff, were formerly registered proprietors of the property as tenants in common. The property had been purchased to pursue equestrian activities together, but after disagreements, their business relationship came to an end. 6. There was litigation about that in the Equity Division of this Court in 2019. Judgment was given and orders made in May 2020: Lees v Kennerley [2020] NSWSC 630. The proceedings were not without complexity and related to an option agreement and collateral deed created to settle a dispute over the property. 7. These current proceedings arise out of a series of agreements entered into following the delivery of the judgment. 8. The issues before for me for determination on 17 March 2022 comprised: 1. Costs of the plaintiff's (resolved) notice of motion for discovery. 2. The defendants' notice of motion for discovery.