Pages Property Investments Pty Ltd v Boros [2018] NSWSC 986

Supreme Court New South Wales

Medium Neutral Citation: Pages Property Investments Pty Ltd v Boros [2018] NSWSC 986 Hearing dates: 23 March, 10 May and 22 June 2018 Date of orders: 29 June 2018 Decision date: 29 June 2018 Jurisdiction: Equity - Applications List Before: Lindsay J Decision: Orders made for a grant of leave to the plaintiff to amend its statement of claim, and for dismissal of the defendant's application for summary disposal of the proceedings. Catchwords: CIVIL PROCEDURE – Pleadings – Striking out – Allegations of breach of duty – Whether the statement of claim articulates the basis on which relief is sought – Where amendment would cure defects – Amendment allowed

CIVIL PROCEDURE – Summary disposal – Dismissal of proceedings – Abuse of process – Improper purpose – Relief sought against defendant to induce another party to surrender lease – Reformulation of claim including joinder of additional party – No ongoing abuse of process Legislation Cited: Corporations Act 2001 Cth Cases Cited: Walker v Wimborne (1976) 137 CLR 1 Texts Cited: - Category: Procedural and other rulings Parties: Plaintiff: Pages Property Investments Pty Ltd ACN 085 072 591 Defendant: Attila Boros Representation: Counsel: Plaintiff:MS White SC (on 22 June 2018) and R Gration Defendant: A Tokley SC and (on 23 March and 22 June 2018) A Segal

Solicitors: Plaintiff: WMD Law Defendant: Rigby Cooke File Number(s): 2016/00357782

Judgment

INTRODUCTION 1. In substance, and at a high level of abstraction, these proceedings concern conflict between the Page and Boros families encountered, following the death of Mr Greg Page, in disengagement of the respective interests of the three families (namely, those of the late Mr Page; the defendant, Mr Attila Boros; and Mr Stephen Thatcher) involved in the conduct of an events hire business, from premises at Punchbowl, through corporate and trust structures. Looking beyond corporate forms, the business was conducted as a "partnership" between the three families. The Page family had an effective interest of 50% in the business, and each of the Boros and Thatcher families had 25%. 2. The corporate structure of the "partnership" (loosely described as "the Page Group") is set out in a "tree diagram" marked for identification as "MFI P1". For present purposes, it is sufficient to note that the plaintiff is the registered proprietor of the Punchbowl property, presently subject to an unregistered, long term lease in favour of a related company (Pages Equipment Holdings Pty Ltd or "PEH") which the defendant caused to be executed on or about 15 June 2016 at a time when, following the death of Mr Page in 2003, he was: (a) the sole director and secretary of the plaintiff; and (b) a director and the secretary of the lessee. The plaintiff, under the control of Mr Page's widow as its sole shareholder, alleges that the defendant, in his own interests, caused the lease to be entered for a below-market rental. 3. The indebtedness of the Page Group of corporations the ANZ Bank is cross-collateralised. Under the defendant's management of the business, during 2016 the liability of the plaintiff to the Bank was increased by about $1.65 million, and changed from that of one of several sureties to that of a principal debtor. The plaintiff alleges that the defendant, in his own interests, changed the nature and amount of the plaintiff's liability to the Bank by using money of the plaintiff to discharge PEH's indebtedness to the Bank. 4. The Bank is pressing for the debt of the Page Group owed to it to be paid out. That is a sum in excess of $7 million. 5. With a view to meeting demands of the Bank, the plaintiff contracted to sell the Punchbowl property to a third party. The contract provides for a sale with vacant possession, with a right of rescission if vacant possession was not available by 16 June 2018. Anticipating an exercise of that right, the purchaser recently commenced separate proceedings against the plaintiff and PEH to restrain any purported exercise of the plaintiff's ostensible right of rescission; to compel PEH to vacate the Punchbowl property; and to enforce the contract for sale. 6. The defendant (and Mr Thatcher) have a competing aspiration to purchase the property. 7. For the plaintiff, if not all persons interested in the Page Group, importance attaches to whether (as the plaintiff alleges) the disputed lease can be displaced and whether (as it alleges) the defendant is accountable to the plaintiff, as a fiduciary or otherwise, for the decisions he made subjecting the plaintiff to a long-term lease at an undervalue rental and an increased bank liability. 8. The proceedings were commenced by a summons filed, on 29 November 2016, on an application by the plaintiff to the duty judge for orders that the defendant deliver up property of the plaintiff and provide information about the conduct of the business under his management. A recurrent theme in the plaintiff's conduct of the proceedings remains a complaint that the defendant has failed to produce books and records of the business necessary to permit his conduct of the business to be audited or sufficient to allow the plaintiff's forensic accountant to prepare an expert report. The state of the defendant's record keeping remains a live issue as he endeavours to contain the plaintiff's case at an interlocutory stage. 9. An order for pleadings having been made on 16 February 2017, the plaintiff filed a statement of claim on 4 April 2017, to which the defendant responded with a defence filed on 21 April 2017. Since that time progress towards a final hearing has stalled.