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[2026] NSWSC 674
Supreme Court of NSW
2026-06-05
Brereton J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Lanmar Pty Ltd [2026] NSWSC 674
Hearing dates: 4 June 2026, 5 June 2026
Date of orders: 5 June 2026
Decision date: 05 June 2026
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision: The claim for privilege is upheld
Catchwords: PRACTICE AND PROCEDURE – application by defendants to re-open proceedings – where opposition on grounds of without prejudice privilege to mediation communications under s 131 of the Evidence Act 1995 (NSW) – whether evidence contradicts or qualifies admitted evidence – whether Court is likely to be misled – where plaintiff has withdrawn submissions – without prejudice privilege upheld
Legislation Cited: Evidence Act 1995 (NSW)
Cases Cited: O'Neill v Phillips [1999] 1 WLR 1092; [1999] UKHL 24
Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; 84 ACSR 121
Texts Cited: N.A.
Category: Procedural rulings
Parties: WLLHLL Holdings Pty Limited (plaintiff)
Martin Drebber (first defendant)
Peter Charles Kevin O’Connor (second defendant)
MDTI Holdings Pty Limited (third defendant)
PCKOC Holdings Pty limited (fourth defendant)
Lanmar Pty Limited (fifth defendant)
Representation: Counsel:
D A Hughes SC / S Odgers (plaintiff)
P W Gray SC / P Farrell (first to fourth defendants)
Solicitors:
Davidson. Legal, Consulting, Advisory (plaintiff)
Clyde & Co Australia (first to fourth defendants)
File Number(s): 2025/184570
Publication restriction: N.A.
Black J has nearly finished hearing these proceedings. They concern alleged oppressive conduct.
An application has been made by the defendants to re‑open their case for the limited purpose of adducing an affidavit of Mr Jaswinder Sekhon, including six annexures.
The plaintiff opposes the application.
Among other grounds for the opposition, the plaintiff contends:
the evidence cannot be adduced by reason of s 131(1) of the Evidence Act 1995 (NSW); and
the evidence cannot be adduced because it would offend the terms of a mediation agreement.
The application was referred to me to deal with the claim of without prejudice privilege, including any exception to that privilege. I am not asked to rule more generally on the application to re‑open.
The documents that are the subject of the claim were tendered in the application before me. The documents comprise communications between the parties at or in connection with the mediation conducted by Mr Peter Jacobson KC on 11 June 2025.
Section 131(1) of the Evidence Act provides as follows:
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.
There is no dispute that the communications and documents in question fall within either or both (a) and (b).
Section 131(2) of the Evidence Act relevantly provides:
(2) Subsection (1) does not apply if…
(e) the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute, or…
(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence…
The defendants contend that both (e) and (g) are engaged.
In order to determine whether (e) or (g) is engaged, it is necessary to understand some background.
The plaintiff's amended points of claim alleges oppression as follows:
[33] The conduct of the first to fourth defendants pleaded at paragraphs [16] to [32J] hereof was conduct that is oppressive to, unfairly prejudicial to, or unfairly discriminatory against WLLHLL within the meaning of section 232 and 233 of the Corporations Act 2001 (Cth) (Corps Act).
The particulars to that paragraph include the following:
In circumstances where the members of Lanmar, and those standing behind them, have entered into association upon the understanding that each of them who has ventured his capital will also participate in the management of the company, it is unjust, inequitable and unfair for the first to fourth defendants, constituting a majority, to use their voting power as directors and members to exclude WLLHLL and Mr Landes from participation in the management of the company without giving WLLHLL the opportunity to remove its capital upon reasonable terms.
That language reflects observations made by Lord Hoffman in O'Neill v Phillips [1999] 1 WLR 1092; [1999] UKHL 24 at 1102.
At [17]-[20] of the amended points of claim, the plaintiff alleges that there was an offer by Mr Landes, the sole director of the plaintiff, to sell his shares to the first and fourth defendant on 30 April 2025, and the offer was rejected.
The defendants denied [33] of the amended points of claim. However, the defendants did not allege by their further amended points of defence, or their evidence, that they had made any reasonable offers to the plaintiff.
During the course of closing address at the trial, on 13 May 2026, senior counsel for the plaintiff made the following submission:
There is no evidence before your Honour of any counter offer from the defendants or any proposal from them of any kind to Mr Landes to allow him to remove his capital on reasonable terms.
On the back of that submission, on the following day, on what was to be the final day of the hearing, counsel for the defendants made an application to re‑open the defendants' case. The application was for leave to tender four offers of settlement made by the defendants between 12 December 2025 and 14 May 2026. The plaintiff opposed the application. The offers were all made without prejudice. However, the plaintiff did not assert that the documents could not be adduced by reason of any without prejudice privilege.
Black J granted the application to re‑open and the four documents were admitted into evidence. The documents do not refer to the earlier mediation.
His Honour's reasons for granting the application included the following remarks:
Mr Hughes also submits that the making of the offers would not advance the determination of the proceedings. I do not accept that proposition, where it is plain enough that the fact of these offers displaces an inference that there was exclusion without any offer to acquire the relevant shares, and requires the Court to determine a different question, whether there was exclusion without a reasonable offer to acquire the shares…
Here, however, it seems to me that the relevance and probative value of the evidence is critical. The evidence is very significant, so far as the Court would otherwise be at risk of proceeding on a basis that is simply false, namely that no offers had been made, or no reasonable offers were made, because the offers were not in evidence. It is, from my perspective, antithetical to the just resolution of the issues in dispute for a Court to determine a matter on a false basis, because relevant evidence is excluded.
HIS HONOUR: So ultimately you have to grasp the nettle: if you accept that you say there has been exclusion, but not exclusion without a reasonable offer, then I can decide the case on that basis. If you say there has been exclusion without a reasonable offer then that is the case that I have to address, and until a moment ago that is the Court case that I thought I was addressing.
HUGHES: It is, your Honour. I say there’s been exclusion without a reasonable offer.
HIS HONOUR: Then you invite me to infer that there has been no reasonable offer--
HUGHES: I do, your Honour.
HIS HONOUR: --that’s part of your case.
HUGHES: I do…
HIS HONOUR: Yes. Well, can I raise two matters with you, for the purposes of procedural fairness, Mr Hughes. The first is that, obviously enough, the particulars to para 33 and what you have put this morning make clear that your client puts in issue the question whether there was exclusion from participation without the opportunity to remove capital upon reasonable terms.
HUGHES: Yes, your Honour.
HIS HONOUR: In those circumstances, it is an essential element of that claim that there was not an offer to remove the capital upon reasonable terms.
HUGHES: Yes, your Honour.
Dealing first with MFI 5, which is the earliest of the documents, it’s dated 12 December 2025. It therefore comes long after the full pattern of oppressive conduct: this is not a case where some offer was made early in May, or in June that might have been reasonable at the time, it’s come after the close of evidence: the only remaining evidentiary step, I think, being my expert’s reply valuation evidence. But lay evidence had closed, and there were guillotine orders in place, so one wouldn’t ordinarily expect having received a guillotine orders in place, so one wouldn’t ordinarily expect having received a without prejudice offer that my client would have to go back into evidence in-chief to explain why this without prejudice offer was not reasonable.
The submissions made by senior counsel during the course of re‑opening appear to have been the catalyst for the second application to re‑open. During the course of a further directions hearing on 21 May 2026, a second application to re‑open was foreshadowed. Senior counsel for the plaintiff submitted that the plaintiff does not contend that the offers made in December 2025 were the first offers.
The defendant served some submissions on the application to re‑open on 22 May 2026.
On 27 May 2026, counsel for the plaintiff sent a document to the chambers of Black J concerning the plaintiff's position. By that document, the plaintiff indicated that it withdrew the submission that is in bold text from transcript p 562 that I have emboldened at [18] above.
The plaintiff referred to the following passage from Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; 84 ACSR 121 at [235] (Campbell JA; MacFarlan and Young JJA agreeing):
…it is not as though "exclusion from management" and "absence of a reasonable offer" are elements of a cause of action, so that a plaintiff in an Oppression suit (or, perhaps, in the sub-species of Oppression suits in which exclusion from management is a prime element in the Oppression alleged) has the onus of proving absence of a reasonable offer. Rather, the making of a reasonable offer is merely one factor that, in some (but not all) types of situations where Oppression is alleged can be relevant to whether Oppression is made out. A party who wished to assert that a reasonable offer had been made would bear an onus of adducing evidence of the making of an offer, and an onus of persuading the court that it was reasonable, and that because it had been made there was no Oppression.
Counsel informed Black J that the plaintiff's case is that the defendants have not satisfied such an onus or run such an argument in the proceedings.
The plaintiff does not otherwise contend for, or invite, the Court to draw any inferences from the absence of evidence that offers were or were not made by the Defendants. Submissions to the effect that the Court should draw an affirmative conclusion, from the absence of evidence, that the Defendants failed to make a reasonable offer are withdrawn. In respect of the Defendants’ offers that are already in evidence, the plaintiff will submit (for reasons that will be explained when the matter is re-listed for further closing submissions) that the Court ought to find that those offers did not have the requisite character of an opportunity to withdraw plaintiffs capital on reasonable terms.
Whether or not the plaintiff is permitted to withdraw contentions or submissions at this stage is properly a matter for the trial judge. Issues may arise, for instance, about whether the plaintiff should be permitted to withdraw the submissions after Black J delivered his reasons on the first re‑opening application and offers were admitted into evidence. The defendants also complained about some lack of clarity in what was being withdrawn.
For the purpose of this application, I propose to proceed on the hypothesis that the trial judge will permit the plaintiff to withdraw the contentions and submissions.
If that hypothesis is incorrect, a different outcome may ensue.
As I understand the position, it is as follows.
It is not part of the case advanced by the plaintiff that the Court should infer from the fact that offers are not in evidence that there were no reasonable offers. As I understand it, the plaintiff would accept that if it bears a positive onus to prove that there were no reasonable offers, that onus is not discharged. However, the plaintiff contends that it does not bear such an onus. The plaintiff is not asking the Court to conclude that no reasonable offers were made. It takes that position because it contends that it does not have to persuade the Court of that conclusion. As I understand the plaintiff's case, it contends that the defendants have not adduced evidence that they made reasonable offers. The submissions that it wishes to make about the offers that are in evidence are by way of rebuttal given that those documents were tendered at the hearing by the defendants. It wishes merely to say that the offers that the defendants have tendered were not reasonable. The plaintiff does not go further and ask the Court to infer that there were no other offers. The plaintiff's position is the Court cannot infer one way or the other about whether there were other offers.
Section 131(2)(e) and (g) operate in different ways and use different language. However, both concern evidence that is adduced to "contradict or qualify" other evidence. In my view, the evidence that the defendants wish to tender can only be said to contradict or qualify the evidence that has already been adduced if the Court is invited to infer that the offers in evidence were the only offers made by the defendants. The Court is not being asked to draw that inference. Once the plaintiff abandons any submission that the Court should infer from the absence of evidence that there were no reasonable offers, assuming abandonment is permitted, I do not accept that the material the defendants seek to tender tends to contradict or qualify evidence that has already been admitted, or that the Court is likely to be misled unless the material is adduced to contradict or qualify evidence that has already been admitted.
As I have already noted, in the reasons for allowing the first application to re‑open, Black J observed that the evidence of the offers was very significant because there was a risk of the Court proceeding on the false basis that no reasonable offers were made and it would be proceeding on that basis because offers were not in evidence. The risk that his Honour was rightly concerned about is eliminated once the plaintiff positively asserts to the Court that the Court should not proceed on the basis that no reasonable offers were made because offers are not in evidence. The Court will know that there was a mediation and will understand that evidence of offers made at the mediation, if any, cannot be adduced. The Court is not asked by the plaintiff to infer that there were no reasonable offers made by the defendant. That position is consistent with the plaintiff retaining the opportunity to argue that the defendants have not discharged an onus of establishing that reasonable offers were made.
On the plaintiff's case, there is simply a lacuna in the evidence. Section 131 of the Evidence Act recognises that evidence that is otherwise admissible (and therefore relevant) will not be admitted into evidence. There are obvious public policy reasons for that. Significantly, the plaintiff does not contend that inferences may be drawn by reason of the lacuna. It wishes to contend that the lacuna is a problem for the defendants. I expect the defendants will say the opposite. The outcome of that debate is a matter for the trial judge.
For these reasons, I am not satisfied that either s 131(2)(e) or (g) is engaged.
I do not need to consider whether disclosure is precluded by the mediation agreement, even if s 131(2) is engaged. I note that the fact that there was a mediation is not confidential. It does not appear that the terms of the mediation agreement are confidential.
I make the following brief observations on this part of the argument. In my view, the plaintiff would not be free to enforce the terms of the mediation agreement as to confidentiality if it were doing so in order to facilitate misleading contentions or submissions. If that were so, the plaintiff would not have clean hands. It could not use the mediation agreement as a cloak to facilitate misleading the Court.
However, once the plaintiff abandons any contention that the absence of evidence of offers means that the Court can and should infer that no reasonable offers were made, the prospect of the Court being misled falls away.
Accordingly, I make the following orders:
On the defendants' application, in respect of the claim to without prejudice privilege and any exception to that privilege, the plaintiff’s privilege claim is upheld.
Order that the exhibit and confidential affidavit on this application be returned.
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