AMV Australia Pty Ltd v Premier Compensation Lawyers Pty Ltd

Supreme Court of NSW|2020-03-11|Before: Davies J

Background

The plaintiff is a company which carries on the business of providing solicitors with the service of arranging consultations with health practitioners for the solicitors' clients, arranging the attendance of interpreters if required, facilitating the delivery of medico-legal reports from those health practitioners, and paying the health practitioners and interpreters for those consultations and reports.
From 5 February 2014 the defendant has carried on the business of a legal practice trading as Premier Compensation Lawyers (PCL).
On or about 3 March 2014 the plaintiff and the principal of the defendant, Jason Di Michiel on behalf of the defendant, entered into oral agreement for the defendant to use the medico-legal report services provided by the plaintiff. On 30 June 2014 the parties entered into a written agreement to similar effect. Thereafter from 30 June 2014 until about January 2018 the defendant gave instructions to the plaintiff to provide its services for the clients of the defendant.
Under the agreement the amounts payable to the plaintiff were payable two years from the date of delivery of the medico-legal reports. The plaintiff alleges that the defendant paid fees for some, but not all, of the clients.
The plaintiff filed a statement of claim on 21 March 2019. At that time, the plaintiff was seeking the sum of $848,791.16 from the defendant. The plaintiff also sought a declaration that various other amounts totalling about $200,000 would become due and payable at various dates between 1 May 2019 and 1 August 2020.
The real dispute between the parties in relation to those claims by the plaintiff appeared to be the extent of the premium which the defendant was obliged to pay on top of whatever the plaintiff was charged by the doctors it engaged for the obtaining of the medico-legal reports.

The application before the Registrar

When the request for such documents was refused the plaintiff filed a notice of motion on 31 October 2019 seeking discovery of the nine categories of documents. The notice of motion named as respondents Premier Lawyers Pty Ltd (formerly known as Premier Compensation Lawyers Pty Ltd) ACN 167 884 773 and Premier Compensation Lawyers (WA) Pty Ltd ACN 617 268 827 (WA) Pty Ltd. The first named respondent was identical to the defendant; it had simply changed its name on 23 March 2019. The second named respondent was the company now asserted to be trading as PCL. The second named respondent is hereinafter referred to as PCLWA. This judgment distinguishes the defendant as sued from the respondents to the motions.
To the extent that PCL is a business name, it is not registered. A search at the Law Society disclosed only that "Premier Lawyers" was an incorporated legal practice, with a website www.premiercompensationlawyers.com.au.
The categories of documents sought were these: (a) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which Premier Compensation Lawyers Pty Ltd (PCL) ceased to trade or reduced its trade in the legal firm known as Premier Compensation Lawyers (the "Firm") and Premier Compensation Lawyers (PCLWA) Ry Ltd commenced trading as the Firm; (b) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which PCLWA assumed the goodwill in the Firm or any other assets of PCL; (c) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which PCLWA assumed control of files previously conducted by PCL in the Firm; (d) All documents recording, referring to or evidencing the current status of the files that are the subject of annexure to this Motion marked Annexure "A" to the Statement of Claim filed herein, including trust account records and any settlements and monies received by PCL and/or PCLWA in respect of such files; (e) The Financial Statements, including profit and loss statements and balance sheets for PCL since 1 July 2013 to date and PCLWA since 1 July 2016 to date; (f) All asset registers of PCL since 1 July 2013 and of PCLWA since 1 July 2016; (g) All tax returns (including any drafts) for PCL since 1 July 2013 and for PCLWA since 1 July 2016; (h) All management accounts for PCL since 1 July 2013 and for PCLWA since 1 July 2016; (i) All applications for any finance facility in the name of PCL provided or made available since 1 July 2013 and/or in the name of PCLWA provided or made available since 1 July 2016, together with documents recording communications in respect of such facilities and their management.
The motion was heard by the Registrar on 2 December 2019. The first matter determined was whether the 19 September letter was admissible. The plaintiff appeared to accept that if privilege attached to the 19 September letter because no exception under the Act was made out, the motion for preliminary discovery could not be pursued.
In her judgment of the same day, the Registrar noted the agreement between the parties that the 19 September letter fell within s 131(1)(a) of the Evidence Act. She then went on to consider whether the letter fell within the exception contained in s 131(2)(j). The Registrar said this: Submissions have then been made that it falls within the exception to s 131A (scil. 131(1)(a)), and the exception being s 131(2)(j) that the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence. In respect of that, submissions have been made by Mr Harding that there is no evidence to say that the communication was made in furtherance of the commission of the fraud; I accept those submissions that it does not fall within that exception, being that there is no evidence to establish that the communication was made in furtherance of the commission of the fraud. I have been referred to various cases, including cases such as Van der Lee & Ors v State of New South Wales [2012] NSWCA 286, and referring to para 61 where fraud requires actual dishonesty; I have also been taken to other cases, such as Kaye v Woods & Another [2016] ACTSC 87 at para 38 that if a document is prepared as part of the process or scheme of the fraud, then it is within the scope of that. I do not accept that there is any evidence to establish that the sending of this letter, with the information in relation to the defendant no longer being the principal trading entity of the firm, was a letter that was prepared in furtherance of the commission of the fraud. On that basis, I find that the evidence is not to be adduced pursuant to s 131A (sic) of the Evidence Act, and that it does not fall within the exception of s 131(2)(j).
The result was that the plaintiff did not pursue the motion for preliminary discovery.
On 6 December 2019, the plaintiff filed a notice of motion to review the Registrar's decision.
As a result of the way the plaintiff's motion was dealt with before the Registrar, this judgment deals, first, with a review of the Registrar's decision that the 19 September letter was privileged and, secondly, with the right of the plaintiff to obtain preliminary discovery.

Review of a Registrar's decision

The power to review a Registrar's decision is contained in r 49.19 Uniform Civil Procedure Rules 2005 (NSW) which relevantly provides: 49.19 Review of registrar's directions, certificates, orders, decisions and other acts (1) Subject to subrule (2), if in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit.
The proper approach to exercising the review power contained in that rule is set out in Tomko v Palasty (No. 2) [2007] NSWCA 369, where Basten JA (Ipp JA agreeing and Hodgson JA agreeing with additional reasons) said: [43] The term "review" may be said to have "a quite amorphous meaning" as noted by Burchett J in Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 63-64. The meaning will often depend upon the statutory context. In Re Greenhill; Ex parte Pook (1988) 83 ALR 295, Gummow J thought that the term had been deliberately used in the Bankruptcy Act 1966 (Cth) rather than the term appeal "with an eye to the complex history that has attended the question of the exercise of the judicial power of the Commonwealth other than by judges": at 296(50) referring to Commonwealth v Hospital Contribution Fund of Australia (1982) 150 CLR 49 at 63-64, to which may now be added reference to Harris v Calladine (1991) 172 CLR 84. In federal jurisdiction, a review is taken to mean a re-examination of a matter afresh, not limited to reconsideration of the material before the primary decision-maker: see Re Brindle; Ex parte FB & FA McMahon Pty Ltd (1992) 35 FCR 506 at 509 (Hill J). It may be found to have a similar meaning in an administrative context: see, eg, SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24; (2005) 228 CLR 294 at [199] (Hayne J). [44] In Comalco Aluminium Ltd v Ohtsu Tyre & Rubber Co (Aust) Pty Ltd (1983) 8 ACLR 330, McLelland J held that a review of a registrar's decision to dismiss a summons for the winding up of a company, could be by way of a hearing de novo, on evidence a substantial part of which had not been before the registrar. McLelland J referred to his earlier decision of 12 September 1983 (unreported) in which he considered the principles on which an application to review the decision of a registrar should be approached. However, that decision was largely limited to the question whether the review was a form of appeal subject to s 75A of the Supreme Court Act, or whether it should be treated as a de novo hearing, not subject to such constraints. His Honour considered that a review under Part 61, r 3 was not an "appeal" and therefore approached the matter in the way described in the reported judgment. [45] A similar approach has been generally adopted in the Divisions in this Court: see particularly the judgment of Hall J in Lawteal Pty Ltd v Ofo [2006] NSWSC 365 at [57]-[60]. The views expressed in a number of the unreported decisions referred to by his Honour are succinctly summarised by Santow JA in Wentworth v Graham (2002) 55 NSWLR 638 at [9] stating, after referring to his own earlier decision in Westpac Banking Corporation v Abemond Pty Ltd (NSWSC, 3 November 1994, unrep): "… [T]he consideration that the registrar's decision involves a matter of practice and procedure remains a relevant consideration in the exercise of the power of review. Accordingly, it is proper for the court to exhibit a natural inhibition against the unrestrained substitution of the reviewing court's views in a matter of practice and procedure for those of the original tribunal." [46] That a "review" of the decision of the registrar pursuant to r 49.19 is not an appeal means that principles of restraint expressly adopted in relation to appeals do not, in terms, apply: c.f. Wentworth v Wentworth at [41] above. Further, the requirement to demonstrate error, which is an essential part of the appellate process, is also not applicable: see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [14] and CDJ v VAJ (1998) 197 CLR 172 at [111]. To introduce those constraints as applicable in the case of a procedure identified expressly as a "review" would be to impose constraints inconsistent with the language of the rule. [47] Nevertheless, the policy identified by Jordan CJ in In Re the Will of FB Gilbert (dec'd) (1946) 46 SR (NSW) 318 at 323 has force. In referring to appeals in respect of points of practice or procedure, his Honour stated: "… [I]f a tight reign were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal." [48] That is no doubt a factor which may be taken into account on a review, but it must bear a good deal less weight than on an appeal if the process of review is not to be subverted. Even in relation to an appeal, as Jordan CJ noted in Gilbert, a distinction should be drawn between "an exercise of so-called discretion which is determinative of legal rights" and a simple matter of practice and procedure, a distinction approved in Ellis v Leeder (1951) 82 CLR 645 at 653 (Dixon, Williams and Kitto JJ).
Justice Hodgson (with whose additional remarks Ipp JA agreed) said: [5] I agree that the view expressed by Basten JA in Pioneer Park Pty. Limited (In Liquidation) v. Australia & New Zealand Banking Group Limited [2007] NSWCA 344, on the basis of limited argument, that the review of a registrar's decision with respect to an order for security for costs is constrained by the principles stated in House v. The King (1936) 55 CLR 499, is not strictly correct. [6] I agree that a review of a decision of a registrar is not an appeal, subject to s.75A of the Supreme Court Act; and that in such a review a court must exercise its own discretion. [7] In my opinion, this discretion extends to a discretion as to whether, and if so how, to intervene; and in my opinion, there is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so. [8] In the case of a decision on practice or procedure, this will normally require at least demonstration of an error of law, or a House v. The King error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one. [9] In the case of a decision which finally determines a party's rights, or which (albeit one of practice or procedure) has a decisive impact on those rights, a court may be more willing to intervene. It may permit further evidence to be led which does not satisfy the strict requirements for fresh evidence, if it is satisfied that the interests of justice require this. It may decide to substitute its own discretionary decision for that of the registrar, even though no House v. The King error is shown, again if it is satisfied that the interests of justice require this. To that extent, the review may be considered a de novo hearing. [10] In my opinion, this approach is consistent with the position that such reviews are not appeals and involve the exercise of discretion by the reviewing body; and with the policy considerations referred to by Jordan CJ in In Re the Will of Gilbert (1946) 46 SR (NSW) 318 at 323. It is also consistent with the general principles concerning interlocutory applications: they do not finally decide matters, and successive applications can be brought for the same orders; but generally, a later application for orders that have previously been refused will be summarily dismissed unless a change of circumstances is shown or there is evidence satisfying the strict requirements for fresh evidence.

Legislative provisions

Section 131 relevantly provides: 131 Exclusion of evidence of settlement negotiations (1) Evidence is not to be adduced of - (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute, or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. (2) Subsection (1) does not apply if - … (j) the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty, or … (3) For the purposes of subsection (2) (j), if commission of the fraud, offence or act is a fact in issue and there are reasonable grounds for finding that - (a) the fraud, offence or act was committed, and (b) a communication was made or document prepared in furtherance of the commission of the fraud, offence or act, the court may find that the communication was so made or the document so prepared.
Section 37A(1) of the Conveyancing Act provides: 37A Voluntary alienation to defraud creditors voidable (1) Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act 1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced.
Rule 5.3 UCPR relevantly provides: 5.3 Discovery of documents from prospective defendant (cf Federal Court Rules, Order 15A, rules 6, 7 and 9) (1) If it appears to the court that - (a) the applicant may be entitled to make a claim for relief from the court against a person (the prospective defendant) but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant, and (b) the prospective defendant may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and (c) inspection of such a document would assist the applicant to make the decision concerned, the court may order that the prospective defendant must give discovery to the applicant of all documents that are or have been in the person's possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief. … (4) This rule applies, with any necessary modification, where the applicant, being a party to proceedings, wishes to decide whether or not to claim or cross-claim against a person who is not a party to the proceedings.
The first issue to determine is whether the italicised words in the 19 September letter (at [12] above), and the content of the letter of 1 October 2019 (at [16] above) fall within the exception provided for in s 131(2)(j) of the Evidence Act.

Does the exception in s 131(2)(j) apply?

Mr Fernon of counsel for the plaintiff submitted that the Registrar was wrong to hold that the exception in s 131(2)(j) did not apply. Mr Fernon relied on what was said by Hamilton J in Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 1245. He submitted that the effect of cloaking the contents of the letter by applying "without prejudice" to it protected the alienation of assets.
Mr Harding of counsel for the respondents submitted that the two letters were sent more than two years after the alleged fraud was said to have occurred and was not made in furtherance of the commission of a fraud. He submitted that the fact that the communication was the subject of a claim for "without prejudice" privilege was incapable of informing the question whether that communication itself was made in furtherance of the commission of a fraud.
The important words in s 131(2)(j) are "in furtherance of the commission of a fraud". In the first place, it must be determined what "in furtherance of" means. Secondly, it must be determined if "fraud" embraces the alienation of property as referred to in s 37A(1).

(a) "in furtherance"

In Lewis v Nortex the question was whether a document prepared in connection with a formal mediation between the parties was admissible in evidence because it fell within s 131(2)(j) of the Evidence Act. The fraud was the promulgation by Mr Lewis of accounts for Nortex that were untrue in that the closing stock was understated. The document in respect of which privilege was claimed was written by Mr Lewis in response to challenges to those accounts made by another party. It was said that Mr Lewis was perpetuating the fraud by defending those accounts in the "without prejudice" document.
In relation to the meaning of the word "furtherance", Hamilton J said at [7]: [7] Despite this, there is little authority on the meaning of "furtherance" in this context. Its meaning is probably best provided in the circumstances by recourse to the dictionary. In the Oxford English Dictionary "furtherance" is relevantly defined as: "The fact or state of being furthered or helped forward; the action of helping forward; advancement, aid, assistance." The essential notion as applicable in this context is the notion of the action of helping the fraud forward or advancing it. … [16] Mr Motbey, of counsel for Lamru, submitted that, whilst it may be that simple omission to reveal a fraud that one has committed may not be able to be characterised as being in furtherance of the fraud, if one takes active steps to conceal the fraud then those steps can be said to be in furtherance of the fraud, whether or not all other acts at that time necessary to perpetrate the fraud have been done. He said that even if the fraudulent acts are complete, the fraud is furthered by being kept concealed, since it will be defeated by revelation, which will cause it to be thwarted or undone. [17] In my view, there is substance in this submission. It is not clear whether all acts to carry out the fraud (if it were carried out) had been done by the time that the Lewis document was brought forward in May 1997. However, in my view the fraud is advanced or helped forward if active steps are taken to conceal it or maintain its concealment.
In Amcor Limited v Barnes [2011] VSC 341 Kyrou J said: [57] There have been suggestions in some of the authorities that the expression, 'in furtherance of the commission of a fraud ... offence ... or act' does not include conduct occurring after the fraud, offence or act is completed. On this basis, acts committed for the purpose of concealing a fraud are said not to be 'in furtherance of the commission' of the fraud. [58] In my opinion, there is no absolute rule that conduct occurring after a fraud, an offence or an act is completed cannot be held to be 'in furtherance of the commission' of the fraud, offence or act. Whether such conduct satisfies the expression, 'in furtherance of the commission' in s 125 will depend on the nature and purpose of the conduct. [59] The Shorter Oxford English Dictionary defines 'furtherance' as 'the fact of being helped forward; the action of helping forward; advancement, aid, assistance'. In my opinion, this definition provides a useful indication of conduct that may be held to be 'in furtherance of the commission' of a fraud, offence or act. [60] The usual consequence of a fraud is to deprive the victim of his or her money or other property. That deprivation occurs at the time that the fraudster obtains control of the property. The victim has a legal right to recover the property. Any positive steps taken by the fraudster to conceal information about the fraud or to place the property beyond the legal reach of the victim once the fraud is discovered can be in furtherance of the fraud in so far as they continue its efficacy. [61] As discussed at [44] above, the rationale of legal advice privilege is to enable clients to obtain advice from their lawyers to facilitate the organisation of their affairs within the law. Legal advice that is sought for the purpose of committing a fraud falls outside this rationale. In my opinion, so does legal advice that is sought about what positive steps can be taken to give continuing efficacy to the fraud, such as advice on positive steps to conceal the fraud or positive steps to place the relevant property beyond the reach of any court order that the victim may obtain. Advice about the taking of such steps can be described as advice prepared in furtherance of the commission of a fraud. [62] I accept that advice on the legal consequences of a past fraud, the legal remedies that may be invoked by the victim of the fraud and any legal defences that may be available in respect of any claim by the victim would not be in furtherance of the commission of the fraud. [63] The above analysis is supported by the decisions of the New South Wales Supreme Court in Watson v McLernon and Carbotech-Australia Pty Ltd v Yates. In the latter decision, Brereton J stated: if the client is obtaining legal advice in the context of an ongoing dishonest or fraudulent undertaking, so that the advice will or may impact upon or inform the client in the course of that undertaking, it will be regarded as being in furtherance of the improper purpose. (emphasis added)
In Kaye v Woods [2016] ACTSC 87; (2016) 309 FLR 200, Mossop AsJ, having made reference to what Kyrou J said in Amcor at [58]-[59], said at [38]: In my view, the requirement that the document or communication be "in furtherance of" the fraud etc requires more than the document or communication be relevant to it. Rather it must be connected to the fraud etc in the sense of helping it, advancing it or assisting it. If the document is prepared as part of the process or scheme of the fraud etc then it is within the scope of s 125.
In my opinion what was said by Hamilton J in Lewis v Nortex at [16] and what was said by Kyrou J in Amcor v Barnes at [60] shows that a concealment of a fraud can be in furtherance of the fraud.
The Registrar makes no mention of Lewis v Nortex. Her focus was only on whether the document was prepared as part of the process or scheme of the fraud as referred to in Kaye v Woods. The Registrar was bound by Lewis v Nortex and Hamilton J's determination that active steps to conceal the fraud or maintain concealment are sufficient for the purposes of s 131(2)(j). In any event, Mossop AsJ accepted that a sufficient connection with the fraud would be helping it or advancing it.
In the present case even if it is accepted that the relevant fraud in the present matter occurred in 2017, the disclosure only in "without prejudice" correspondence in 2019 must be an attempt at concealment of that fraud. Further, the inclusion of that information in the 19 September letter was an attempt, otherwise legitimate, to pressure the plaintiff into accepting the settlement put forward. It is only by viewing the italicised words as part of the attempt to persuade the plaintiff to accept the settlement proposal, that the information comes within s 131(1)(a) in the first instance. The parties accept that the information is within s 131(1)(a). Using the information in that way is, as counsel for the plaintiff put it, "seeking to take advantage of the fraud that has been committed". In that way there is a furtherance of the fraud.
The Registrar's decision was not merely a decision on practice and procedure. It affected substantive rights. If the letter were held to be privileged, the plaintiff would likely be deprived of any claim under s 37A. In those circumstances, the Registrar's decision should be set aside.

(b) S 37A and fraud

In Kang v Kwan & 2 Ors [2001] NSWSC 698, Santow J (as his Honour then was) was considering the issue under s 125(1)(a). Section 125 deals with loss of client legal privilege in relation to fraud and deliberate abuse of a power. The principles that apply in relation to s 125(1)(a) are relevantly the same as those that apply in relation to s 131(2)(j).
His Honour said at [40]: I then conclude that there are reasonable grounds for finding that fraud in the sense of alienation of property with intent to defraud creditors did occur by reason of the disposition of the Castlecrag property and the associated mortgage, within the meaning of s37A of the Conveyancing Act 1919, where fraud is used in a sense that connotes dishonesty. If anything, the circumstances are stronger than in Barclays Bank plc v Eustice [1995] 1 WLR 1238. There a client of the Bank effected transactions at an undervalue with the purpose of prejudicing a creditor's interests. Schiemann LJ writing the leading judgment in the Court of Appeal characterised this as "sharp practice" or conduct which was "iniquitous". He did so under the common law of legal professional privilege. However, the circumstances of that case may well constitute the kind of sharp practice as is dishonest and thus fraud within s125. (emphasis added)
That view is supported by the High Court's analysis of s 37A in Marcolongo v Chen (2011) 242 CLR 546. The plurality, having held at [19] that "defraud" was designed to reproduce the meaning of the expression "delay, hinder or defraud" in the Elizabethan Statute whence s 37A is derived, went on to say: [28] …the operation of s 37A of the Conveyancing Act was not qualified by a notion of constructive fraud. However, the reasoning of the Court of Appeal in the present case appears to proceed otherwise. It appears to have been assumed that in order to repel an interpretation of s 37A that would extend its scope to cases of equitable or constructive fraud, it was appropriate to fortify the requirement of an intention to defraud by some notion of dishonesty involving a desire to "cheat" or "swindle" those prejudiced. … [32] Mrs Marcolongo correctly relies upon a statement by Blanchard and Wilson JJ when considering the comparable New Zealand legislation in Regal Castings Ltd v Lightbody [2009] 2 NZLR 433 at [48]-[55]66. Their Honours said that it was unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss: it was necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly. (emphasis added)
Justice Heydon, in his judgment agreeing in the outcome of the case, said at [86] and [87] that an intent to hinder or delay was capable of being a dishonest intent.
The respondents had relied on what was said by Hodgson JA in Van Der Lee & Ors v State of New South Wales & Ors [2002] NSWCA 286 at [61], that he was inclined to adhere to his earlier expressed view in Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 222, that "fraud" in s 131(2)(j) requires actual dishonesty. That view was not accepted by Santow JA who at [68] maintained the view he had expressed in Kang v Kwan. It is not entirely clear from what Mason P said at [24] which of those views his Honour supported.
In my opinion, Hodgson JA's view must now be seen in the light of the High Court's determination that an intention to delay, hinder or defraud involves the debtor acting dishonestly, as Santow J had earlier held in Kang v Kwan.

It must next be determined if there are reasonable grounds under s 131(3) for finding that fraud was committed by an alienation of property within the meaning of s 37A, so that the evidence can be adduced.
In Bhagat v Global Custodians Limited [2002] NSWCA 160, Spigelman CJ (with whom Ipp and Brownie AJJA agreed) said at [31]: For the purpose of deciding whether or not evidence may be adduced, it is not necessary for a court to determine whether or not the offence was in fact committed or whether a person was in fact liable to a civil penalty. By reason of s131(3) it is sufficient if the court deciding the issue of admissibility finds that there are reasonable grounds for the requisite finding.
The respondents submitted on the present application that the evidence does not support any reasonably based belief that there has or may have occurred an alienation of property that was made with intent to defraud creditors. The respondents pointed to the statement in the letter of 1 October that "there has been no transfer of assets from PC to PCWA". They submitted that the statement that there has been an alienation of property with intent to defraud creditors is nothing more than fanciful suspicion and conjecture. Counsel submitted that the "possibility" that those things may have occurred is not sufficient. Reliance in that regard was placed on the Court of Appeal's decision in Hatfield v TCN Channel Nine Pty Ltd (2010) 77 NSWLR 506; [2010] NSWCA 69 at [49].
The respondents submitted that the evidence does not establish reasonable grounds to believe that the plaintiff may have a right of action against either respondent. They submitted that the evidence rises no higher than the following matters: (a) PCL is no longer the principal trading entity of the firm; (b) From 8 February 2017, Premier Compensation Lawyers WA Pty Ltd commenced trading as the firm; (c) PCLWA had been taking on new clients and matters since that time; and (d) The defendant's practice has been winding down since that time.
In Hatfield v TCN Channel Nine Pty Ltd McColl JA summarised the key principles in relation to an application for preliminary discovery. The principles are these: [47] First, "[i]n order for it to 'appear' to the Court that the applicant 'may be entitled' to make a claim for relief, it is not necessary for the applicant to show a prima facie or pleadable case": Morton v Nylex (at [25]). [48] Secondly, while "the mere assertion of a case is insufficient…[i]t will be sufficient if there is reasonable cause to believe that the applicant may have a right of action against the respondent resting on some recognised legal ground": Morton v Nylex (at [25]). [49] Thirdly, "belief requires more than mere assertion and more than suspicion or conjecture. [It] is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action": St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 (at 26) per Hely J, referring in turn to John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 (at [13], [14], [17] and [73]) per Emmett J. The use of the word "may" indicates the court does not have to reach "a firm view that there is a right to relief": Telstra Corp Ltd v Minister for Broadband, Communications and the Digital Economy [2008] FCAFC 7; (2008) 166 FCR 64 (at [58]). [50] Fourthly, the requirement that the matters set out in UCPR 5.3 "appear[s]" to the court to establish an entitlement to an order under the rule may be wider than the requirement in the Federal Court Order 15A r 6 that there "is reasonable cause to believe": see Panasonic Australia Pty Ltd v Ngage Pty Ltd [2006] NSWSC 399; (2006) 69 IPR 595 (at [22]) per Young CJ in Eq; Papaconstuntinos v Holmes à Court [2006] NSWSC 945 (at [17] per Simpson J; Hornsby Shire Council v Valuer General of NSW [2008] NSWSC 1179 (at [33]) per Adams J. Nevertheless Hely J's statement in St George Bank Ltd (at 26) remains apposite, namely that "whilst uncertainty as to only one element of a cause of action might be compatible with the 'reasonable cause to believe' required by subparagraph (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe". [51] Fifthly, "the question posed by [UCPR 5.3(1)(a)] … is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent [but]… whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences": St George Bank Ltd (at 26) (emphasis in original); see also Morton v Nylex (at [33]). Thus application of the rule will not be precluded by the fact that the applicant already has available evidence establishing a prima facie case for the granting of relief, as there might be matters of defence which could defeat a prima facie case: Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 1500 (at [41]) per Lindgren J; referred to with approval by the Full Federal Court (French, Weinberg and Greenwood JJ ) in Telstra Corp Ltd (at [60]). [52] Sixthly, as Hely J said in St George Bank Ltd (at 26), "the Rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case".
In O'Connor v O'Connor [2018] NSWCA 214, Simpson AJA (with whom McColl and Macfarlan JJA agreed), having set out UCPR r 5.3(1) and definition of "claim for relief" in s 3 of the Civil Procedure Act 2005 (NSW) said: [21] As can be seen from the terms of the Rule, an order may be made against a prospective defendant where certain things appear to the court. Those things are: (i) that the applicant may be entitled to make a claim for relief against the prospective defendant; (ii) that the applicant has made reasonable enquiries to obtain sufficient information to decide whether or not to commence proceedings; (iii) that, having made those enquiries, the applicant is unable to obtain sufficient information to make that decision; (iv) that the prospective defendant may have or have had possession of a document or thing that could assist in determining whether the applicant is entitled to make a claim for relief; (vi) that inspection of such a document would assist the applicant to make the decision (that is, the decision whether or not to commence proceedings). [22] If it appears to the court that all of those circumstances exist, the court may order the prospective defendant to give discovery to the applicant of all documents that are or have been in his, her, or its possession and that relate to the question of the entitlement of the applicant to make a claim for relief. [23] As was explicitly accepted on behalf of the respondents, the threshold set by the Rule is low: it must appear to the court that an applicant may be entitled to make a claim for relief, and that a prospective defendant may have or have had possession of relevant documents or things, and that inspection would assist the applicant to decide whether to commence proceedings. [24] The scope of Rule 5.3 has been considered on a number of occasions. In St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360, in respect of its former Federal Court counterpart Order 15A, r 6 (which is not identical) Hely J stated a series of propositions as follows: "26. … (a) the Rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case … (b) each of the elements proscribed in subparagraphs (a), (b) and (c) of the Rule must be established …; (c) …; (d) …; (e) … (f) the question posed by subparagraph (b) of the Rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. … Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent's breach and the likely quantum of any damages award …; (g) whether an applicant has 'sufficient information' for the purposes of subparagraph (b) also requires an objective assessment to be made … The subparagraph contemplates that the applicant is lacking a piece (or pieces) of information reasonably necessary to decide whether to commence proceedings; (h) it is no answer to an application under the Rule to say that the proceeding is in the nature of a 'fishing expedition' … Indeed [the Rule] 'expressly contemplates' what once might have been castigated as 'fishing' … " (bold in original; internal citations omitted) [25] I have omitted propositions (c), (d) and (e) as these deal with one of the differences between the Federal Court Rule and Rule 5.3. The Federal Court Rule then provided that an order may be made where: "(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief … (b) … (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document … " (italics added for emphasis) [26] Notwithstanding those differences, in Steffen v ANZ Banking Group [2009] NSWSC 666, McDougall J considered the propositions to be "equally applicable" to Rule 5.3. [27] [Her Honour then extracted the principles from Hatfield v TCN Channel 9 Pty Ltd which I have earlier set out, and continued:] I have again omitted references to authorities concerning those parts of the Federal Court Rule that impose a test of "reasonable cause to believe" as distinct from the presently applicable "it appears to the court" test. There is, in Rule 5.3, no requirement of "reasonable cause to believe" either that the applicant has or may have a cause of action, nor that the prospective defendant has or is likely to have or have had relevant documents. [28] All that is required by Rule 5.3 is that it appears to the Court that the applicant may be entitled to make a claim for relief and that the prospective defendant may have or have had in possession relevant documents. To that extent, Rule 5.3 imposes a lower threshold test than the Federal Court counterpart. [29] With that reservation, the principles stated by Hely J and McColl JA are uncontroversial. [30] It may be emphasised that there is no requirement that an applicant for preliminary discovery establish even a prima facie case for relief; nor is it necessary that an applicant specify with precision the cause of action proposed, although it will be necessary, in order to make it "appear to the court" the applicant "may be entitled to make a claim for relief" that the applicant provide some particularisation of the nature of the relief in contemplation. That is so, not only to enable the court to form a view about whether the applicant may be entitled to make a claim for relief, but also to enable the prospective defendant, if an order is made, to determine which, if any, documents in possession are to be discovered.
In my opinion, the matters identified at [54] above give rise to reasonable grounds for finding that an alienation of property has occurred contrary to s 37A(1). The finding is strengthened when account is taken of what appears in the letter of 1 October 2019.
Although the defendant's solicitors denied, in that letter, that there had been a transfer of assets, the information disclosed was that a new company, PCLWA, was now trading as the firm PCL. PCL can be taken to having goodwill. PCLWA has taken over "about 20 matters" to complete those matters. New instructions from clients are being accepted by PCLWA. PCL is continuing to operate from the same business premises, and has the same director. It is a reasonable inference in those circumstances that some goodwill has effectively passed to PCLWA. It seems likely also that other assets, such as equipment, would effectively be transferred so that tax deductions would be available to the new company for those items.
In those circumstances, I am satisfied that the information in the 19 September letter and the 1 October letter falls within s 131(2)(j) of the Evidence Act. The evidence may be adduced on the present application for preliminary discovery.

Should preliminary discovery be ordered?

Although the defendants initially argued that the present application was incompetent because it was brought in existing proceedings by notice of motion, and because it sought preliminary discovery against the existing defendant, that position was ultimately abandoned. The application was brought by notice of motion in the present proceedings by agreement. Further, as counsel for the plaintiff made clear, the discovery being sought related not to the existing claim for debt but in relation to what was said to be a claim, however formulated, arising out of the apparent alienation of the defendant's property contrary to s 37A. Subrule (4) of r 5.3 tends to support the view that an application may be made against an existing party for a different claim for relief, or against another party for a claim for relief, in existing proceedings.
The respondents raised a number of bases upon which, it was said, precluded the plaintiff from succeeding on the present application. First, the respondent submitted that r 5.3 does not permit discovery for the purpose of enabling a plaintiff to decide whether to sue third parties. Reliance was placed on what was said in Glencore International AG v Selwyn Mines Limited [2005] FCA 801; (2005) 223 ALR 238 at [11], and Morton v Nylex Ltd [2007] NSWSC 562 at [27].
Secondly, the respondent submitted that r 5.3 does not permit discovery for the purpose of assessing the capacity of the proposed defendant to satisfy a judgment: Aus Steel Pty Ltd v Marco Properties Pty Ltd [2014] NSWSC 550 at [29].
Thirdly, the respondent submitted that the plaintiff does not show that it does not have sufficient information to decide whether or not to commence the proceedings.
Finally, the respondent submitted that there was no evidence that the documents in respect of which preliminary discovery is sought would assist the plaintiff to make the decision concerned. Associated with that submission was the further matter that the categories of documents sought to be discovered are too wide for the relevant purpose.

No third party discovery

In Glencore, Lindgren J was considering the relevantly equivalent Federal Court Rule, Order 15A r 6, which provided: 6. Where - (a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the court from a person whose description has been ascertained; (b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision - the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).
Justice Lindgren said: [9] It is convenient to make the following observations about this provision at the outset. [10] First, para (a) clearly poses an objective test (Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1 at [39]): the opening words have the meaning 'there exists reasonable cause to believe'. [11] Secondly, the person against whom the concluding words empower the Court to make an order, is the person referred to in paras (a) and (c), and, by the expression 'that relief', implicitly, in para (b) as well. That is to say, the provision does not allow for third party discovery: discovery may be ordered only against the person from whom there is reasonable cause to believe that the applicant is or may be entitled to obtain relief (cf Hooper v Kirella Pty Ltd, above, at [36]). [12] Third, a document relating only to the question whether a judgment against a person is likely to be enforceable, is not: 'a document relating to the question whether the applicant [for preliminary discovery] has the right to obtain ... relief.' within par (c) of O 15A r 6, and such a document is therefore not discoverable. If the only reason why an applicant has not sufficient information to enable a decision to be made whether to commence a proceeding is that the applicant lacks sufficient information as to the respondent's capacity to satisfy a judgment, preliminary discovery will not be available.
Similarly, in Morton v Nylex White J (as his Honour then was) said at [27]: Rule 5.3 does not authorise the making of an order for preliminary discovery to enable a plaintiff to decide whether to sue third parties. The order can only be made against a prospective defendant where it appears that the applicant may be entitled to make a claim against that person.
It does not seem to me that the principle against third party discovery is offended in the present case. As in Hatfield, the plaintiff was there seeking preliminary discovery against three respondents to determine whether she had a claim in defamation against any of those respondents (see at [1]). In the present case, the application is sought against both the present defendant and PCLWA in contemplation of a potential claim under s 37A. Both respondents would necessarily be defendants to such a claim because the interests of both would be affected by an order under that section. In that way, no third party discovery is involved.

Assessing proposed defendants' capacity to satisfy a judgment

It may be accepted that preliminary discovery is not available only to determine if a party would be able to meet any judgment that the plaintiff obtains: Glencore at [12]; Aus Steel at [29]. The matter is not quite so simple where the prospective claim for relief relates to an improper alienation of property under s 37A. That is because the alienation of the property is closely bound up with the issue of whether, and to what extent by reason of that alienation, the prospective defendant could meet any claim.
Nevertheless, it is important to keep separate the existing claim the plaintiff brings against the defendant and the prospective claim or claims for relief against that defendant and the other respondent, PCLWA. Any claim for relief under s 37A will not be a claim for damages. Rather, it would in the first instance involve the obtaining of a declaration that the alienation of the property was voidable at the instance of the plaintiff. Consequential orders may be made which would result in the property being restored to the defendant, but that would not result in an order for damages in favour of the plaintiff.
It may incidentally become apparent from the provision of any documents ordered to be discovered under r 5.3, or when the proceedings under s 37A are commenced or concluded, whether the defendant has the wherewithal to pay the amount sought in the present proceedings. That, however, arises only because of the nature of the claim under s 37A. I do not consider that preliminary discovery is being sought for that purpose.

Sufficient evidence available to plaintiff

In Morton v Nylex, White J said at [33]: The onus is on the plaintiffs to make it appear to the Court that, having made reasonable inquiries, they are unable to obtain sufficient information to decide whether or not to commence proceedings against Nylex. The third requirement of r 5.3(1)(a) requires an objective assessment of the information already possessed by the plaintiffs to determine whether that information is sufficient for such a decision to be made. The question is whether the applicant has insufficient information to be able to decide whether to institute proceedings; not merely to establish a cause of action. Hence, an applicant may be entitled to preliminary discovery of documents relevant to available defences, or the extent of apprehended breaches, or the likely quantum of damages, as well as of documents which may establish whether there is a cause of action. However, unless the applicant is lacking something reasonably necessary to make a decision whether to institute proceedings, he or she is not entitled to preliminary discovery. An applicant must disclose what information he or she already has relevant to making such a decision, and identify what information is lacking. Preliminary discovery cannot be used to build up a case which an applicant has already decided, or could decide, to bring (Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (Lindgren J, Federal Court of Australia, 24 May 1996, unreported); St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 at 154 [26]; Glencore International AG v Selwyn Mines Ltd (recs and mgrs apptd) (2005) 223 ALR 238 at 241 [15]; Matrix Film Investment One Pty Ltd v Alameda Films LLC [2006] FCA 591 at [15]-[19], [25]).
The respondents pointed to what was said in two letters from the plaintiff's solicitors to submit that a decision had been made that a fraud had been committed. In that regard, the respondents pointed to the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 r 21.4 where it is said that a solicitor must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the solicitor believes on reasonable grounds that available material by which the allegation could be supported provides a proper basis for it.
In the letter of 25 September 2019 from the plaintiff's solicitors to the defendant's solicitors the following was said: 16. ...it is now apparent that Premier Compensation Lawyers practice has been or is in the process of being transferred from PC to PCWA. Such action is tantamount to a disposal of assets for the purpose of defeating creditors. i.e. AMV.
In a letter of 10 October 2019, the plaintiff's solicitors said this: The concept of fraud includes transactions that can be the subject of s. 37A of the Conveyancing Act 1919..., namely transfers of assets with the intent of defeating creditors. The 19 September 2019 letter is in furtherance of the fraud to defeat our client's claim against Premier Compensation Lawyers Pty Ltd (now Premier Lawyers Pty Ltd) (PC). Whilst your 1 October 2019 letter denies the commencement and operation of Premier Compensation Lawyers (WA) Pty Ltd (PCWA) in place of PC involved a phoenix operation or a transfer of assets, that denial is rejected.
What those letters establish is that the plaintiff's solicitors had formed a view that a cause of action existed against the respondents. They did so on the basis of what had been said in the letters from the defendant's solicitors of 19 September and 1 October. I do not consider that in writing the letters of 25 September and 10 October, the plaintiff's solicitors breached r 21.4. The letters provided a basis for the assertion made.
The distinction made by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 and approved in O'Connor at [24] and Hatfield at [51] is important. Justice Hely said at 26: The question posed by sub-paragraph (b) of the Rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. … Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent's breach and the likely quantum of any damages award.
There is a considerable difference between deciding if a cause of action is available and a decision whether to commence proceedings based on that cause of action. One very obvious reason for that difference might be whether pursuing such a cause of action was worthwhile in the light, for example, of any damages that might be awarded. Although in the present case an action under s 37A of the Conveyancing Act would not result in an order for damages, there is likely to be a question about the extent of any alienation of property which would need to be known before a decision could properly be made whether to commence proceedings in reliance on that section.
The matter may be contrasted with the position in Contour Building and Construction Pty Ltd v Kerr [2008] NSWSC 883. In that case the solicitors for the plaintiff wrote to the other parties saying that they had advised that their client was entitled to commence proceedings against the prospective defendants. Justice Barrett said at [12]: The solicitors' letter to the first defendant then says explicitly that the solicitors have advised the plaintiff that it "is entitled to commence proceedings against you for damages for breach of contract and other causes of action". The plaintiff is not in the position contemplated by rule 5.3(1), that is, the position where it is "unable to obtain sufficient information to decide whether or not to commence proceedings against" the first defendant. On the contrary, the plaintiff's solicitors have themselves indicated unequivocally that, on their assessment, the plaintiff "is entitled to commence" proceedings against the first defendant - from which one must infer that the plaintiff has (and has given to its solicitors) information which, upon a proper assessment by the solicitors, is sufficient to support a decision to commence proceedings.
If, on the other hand, Barrett J was aligning an entitlement to commence proceedings (that is, having a cause of action) with having sufficient information to do so (and I do not think his Honour was), that view would be inconsistent with the distinction made by the Court of Appeal in both Hatfield and O'Connor.
The respondents submitted that the affidavit from the plaintiff's solicitor, Ms O'Neill, has little to say about why the evidence the plaintiff seeks is required. The respondents submitted that Ms O'Neill makes no attempt to identify or set out the evidentiary foundation for the requirement that the plaintiff does not have sufficient information to commence any new proceedings. The respondents pointed, in that regard, to what was said in Morton v Nylex at [34]-[35].
What Ms O'Neill does in her affidavit is to annex searches she has undertaken in relation to the firm PCL and the associated companies. She also annexed correspondence including the letter she wrote to the defendant's solicitors dated 25 September 2019 and 10 October 2019.
It is apparent from the searches carried out and the concerns expressed in the correspondence by Ms O'Neill that the plaintiff had limited information about the changed arrangements, and was seeking to find out more by the questions asked. There was no need for her to set out in her affidavit all that she had written in her letters. I reject the submission that there is no evidentiary foundation for the making of an order under r 5.3.
It is significant also that the opening words of the rule are, "If it appears to the court…". Provided there is some evidence, which I have found that there is, of a lack of information on the part of the plaintiff to make a decision about whether to commence proceedings, the test is largely an objective one: Morton v Nylex at [35]; St George Bank v Rabo at [26(g)], approved in O'Connor at [24], and see O'Connor also at [28] and [30].
The plaintiff has limited information about what has occurred in order to see whether it ought to commence proceedings in reliance on s 37A. In the 19 September letter it was given only the most general information with regard to the companies and the firm. In the letter of 1 October 2019, although some further information was provided, it threw little light on the extent to which there had been an alienation of property, whether by an express or implied transfer of assets, or otherwise. Although, as I have said, an inference is available that there has been a transfer of goodwill as a result of what was disclosed, whether there has been any formal transfer of assets can only be speculation at the present time without more information.
In that regard, I am satisfied from the terms of the letter from the plaintiff's solicitors of 10 October 2019, that reasonable enquiries have been made and, as a result of the refusal of the respondent's solicitors to provide any of that information, that the plaintiff has been unable to obtain sufficient information to decide whether or not to commence the proceedings under s 37A. I am further satisfied that the respondents may have or have had possession of documents that could assist in determining whether the plaintiff is entitled to make such a claim for relief and that inspection of those documents would assist the plaintiff to make the decision concerned. As Simpson AJA pointed out in O'Connor at [21] that decision is whether or not to commence the proceedings.

Whether the documents would assist

The respondents submitted in their written submissions that it was neither explained nor apparent how the categories of documents sought would assist the plaintiff to make a decision whether to commence proceedings. Two matters were expressly relied upon. The first was the matter considered in the previous section of the judgment, that is, that the plaintiff had already decided that there had been an alienation of the property. The second matter was said to be that the discovery was directed to assessing the defendant's capacity to pay any judgement in the present proceedings. I have earlier dealt with both of those matters adversely to the respondents.
In oral submissions, Mr Harding pointed to the width of some of the categories to submit that it was not apparent how the documents would relevantly assist the plaintiff. Subject to a limitation in respect of the date ranges in the categories, I consider that the documents in categories (a), (b), (c), (e), (f), (g) and (h) should be discovered. They are likely to provide direct evidence of whether, and to what extent, there has been an alienation of property.
However, the date ranges specified are unreasonably wide. On the information disclosed, the defendant traded as PCL until 8 February 2017. The taking on of new clients and the winding down of the defendant only commenced from that time. It will be sufficient, in respect of the defendant, if there is disclosure of accounts, financial statements, tax returns and asset registers of the defendant for the financial year from 1 July 2015 to 30 June 2016, and thereafter. The enquiry is, as Mr Fernon asserts, a comparison between the assets of the defendant before 8 February 2017 with its assets and that of PCLWA after that time. Taking the enquiry back to the time the plaintiff commenced dealing with the defendant in the June 2014 tax year extends back beyond what is necessary for present purposes.
It seems to me that documents relating to the status of files identified in Annexure "A" to the statement of claim (paragraph (d) in the present motion) concern matters more particularly related to the issues in the present proceedings, and not to the issue raised by the disclosure giving rise to this present motion. The documents referred to in paragraph (i) seem to me to be too peripherally relevant to be able to assist in determining whether the plaintiff is entitled to make a claim under s 37A.
Although I have cut down to a small extent the documents which must be discovered, the plaintiff has otherwise been successful in obtaining the orders it sought in both the notice of motion filed 31 October 2019 and the notice of motion filed 6 December 2019. The respondents should pay the plaintiff's costs of those motions.

Conclusion

Accordingly, I make the following orders: 1. Set aside the decision of the Registrar given on 2 December 2019 dismissing the plaintiff's notice of motion filed 31 October 2019. 2. Order that the respondents give discovery in accordance with Rule 5.3 of the Uniform Civil Procedure Rules 2005 (NSW) of the following documents: (a) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which, Premier Compensation Lawyers Pty Ltd (PCL) ceased to trade or reduced its trade in the legal firm known as Premier Compensation Lawyers (the "Firm") and Premier Compensation Lawyers (PCLWA) Pty Ltd commenced trading as the Firm; (b) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which PCLWA assumed the goodwill in the Firm or any other assets of PCL; (c) Any document recording, referring to or evidencing the agreement or arrangement pursuant to which PCLWA assumed control of files previously conducted by PCL in the Firm; (d) The Financial Statements, including profit and loss statements and balance sheets for PCL since 1 July 2015 to date and PCLWA since 1 July 2016 to date; (e) All asset registers of PCL since 1 July 2015 and of PCLWA since 1 July 2016; (f) All tax returns (including any drafts) for PCL since 1 July 2015 and for PCLWA since 1 July 2016; (g) All management accounts for PCL since 1 July 2015 and for PCLWA since 1 July 2016. 1. The respondents are to pay the plaintiff's costs of the notices of motion filed 31 October 2019 and 6 December 2019.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 April 2020

Hatfield v TCN Channel Nine Pty Ltd (2010) 77 NSWLR 506; [2010] NSWCA 69 Idoport Pty Limited v National Australia Bank Limited [2001] NSWSC 222 Kang v Kwan & 2 Ors [2001] NSWSC 698 Kaye v Woods [2016] ACTSC 87; (2016) 309 FLR 200 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2002] NSWSC 1245 Marcolongo v Chen (2011) 242 CLR 546 Morton v Nylex Ltd [2007] NSWSC 562 O'Connor v O'Connor [2018] NSWCA 214 St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 Tomko v Palasty (No. 2) [2007] NSWCA 369 Van Der Lee & Ors v State of New South Wales & Ors [2002] NSWCA 286 Texts Cited: Nil Category: Procedural and other rulings Parties: AMV Australia Pty Ltd (Plaintiff) Premier Lawyers Pty Ltd (Formerly known as Premier Compensation Lawyers Pty Ltd) (First Defendant/First Respondent) Premier Compensation Lawyers (WA) Pty Ltd (Second Respondent) Representation: Counsel: A Fernon (Plaintiff) A Harding (First Defendant/First Respondent & Second Respondent)

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