Bent v Gough
[1992] FCA 267
•14 Apr 1992
JUDGMENT NO&..?.. /. (?X
| IN THE FEDERAL COURT OF AUSTRALIA | ) |
| HOBART DISTRICT REGISTRY | Nos TG 3002 of 1991 |
) and TG 3001 of 1992
| CORPORATIONS DIVISIOB | ) |
BETWEEN: KOLYA MANAGEMENT PTY LTD
(Applicants )
AND : MIDLAND MINING N.L. & ORS
Ryan J
14 April 1992
Hobart FEDERAL COURT OF AUSTRALIA PRINCIPAL
EX TEMPORE REASONS FOR JUDGMENT RSGIGTRV
| Rvan J: | There are two related actions pending |
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The first, numbered 3002 of 1991, was commenced by Kolya Xanagement Pty Limited, ("Kolya"), against Midland Kining KO Liability, ("Midland"), and three directors of that company, David Bay, Peter Muhlberg and Norman Marshal1 Ewart. By an amended prayer for relief, filed on 22 August 1991, in TG 3002 of 1991, Kolya claims:
| "1. | That | t h e meeting | of | t h e 1 2 t h Apr r l | be | dec l a r ed | i n v a l i d . |
| 2. | That | t h e | t h r e e | r e s o l u t i o n s | passed | i n | gene ra l | meetrng | of | t h e | F i r s t |
Respondent he ld on t h e 1 2 t h Aprr l 1991 ( " t h e 12 A p r i l Meeting") a t
i ts r e g i s t e r e d o f f i c e , P e r t h , Western Aus t r a l i an , namely:
( a ) That t h e a u t h o r i s e d c a p i t a l of t h e company be rnc r ea sed t o
$200,000,000 d iv ided i n t o 80,000,000 sha r e s o f $2.50 each, by
t h e c r e a t i o n of an a d d r t r o n a l 56,000,000 s h a r e s a t $2.50 each;
( b ) That t h e d r r e c t o r s be empowered f o r a pe r i od of up t o t h r e e
months fo l lowing t h e d a t e o f t h e meeting t o a l l o t up t o
10,000,000 o rd ina ry s h a r e s of $2.50 each f u l l y p a l d a t a p r r c e
no t less t h a n 80% o f market p r i c e a t t h e trme of placement t o
r a i s e workrng c a p r t a l ;
( c ) That t h e d i r e c t o r s be empowered f o r a pe r i od of up t o t h r e e
months fol lowrng t h e d a t e of t h e meeting t o a l l o t up t o
10,000,000 op t i ons ove r o rd ina ry sha r e s o f $2.50 each f u l l y
pard a t a p r i c e o f one c e n t p e r op t ion .
be d e c l a r e d n u l l and vold.
That all votes cast in respect of shares allotted subsequent to the 28th February 1991 be declared rnvalid and vold.
4. That the Second, Thlrd and Fourth Respondents resrgn immediately as directors of the First Respondent and that the Second, Thrrd and Fourth Respondents be prohibrted from managing a corporation for such perrod as the Court deems fit.
5. That the Applrcant be authorrsed to rnstrtute and prosecute the Second, Thrrd and Fourth Respondents or other partres as the Court may deem necessary in the name of and on behalf of the First Respondent for breach of therr frducrary duty to the Frrst Respondent.
6. That the company be substituted for the Applicant in these proceedrngs.
7 . That the Second, Third and Fourth Respondents reimburse the First Respondent for any damages suffered as a consequence of the actions alleged.
Any other orders that the Court deems fit.
9. That the Second, Thrrd and Fourth Respondents pay the costs of and incidental to this applicatron.
Application TG 3002 offf1991 has been provisionally compromised as between Kolya, Midland and Messrs Bay and Muhlberg. An order giving effect to that compromise was made by Heerey J, on 18 February 1992 in these terms:
"1. With respect to the Notice of Motion of the Applicants dated 3 February 1992 and the Orders made pursuant thereto on 4 February 1992 it is now ordered that Order 2 thereof be vacated and the following order substrtuted:
"That the frrst named Respondent pay into the Applicant's solicitor's trust account the sum of Twentv Thousand Dollars ($120,000.00) on or before 4.00pm on Wednesday 12 February 1992, (the receipt whereof is hereby acknowledged) which amount is non-refundable whether rn whole or in part." 2. The injunctions granted by thrs Court on a Notice of Motion dated 31 January 1992 be discharged. 3. The frrst respondent immediately following the makrng of this Order (rf it has not already done so) apply for its shareholders' approval: (L) to pay to the Applicant's solrcitor the further sum of Twentv Thousand Dollars ($20,000.00) as part payment of settlement of these proceedmgs, payment to be made withrn seven (7) days of the date of approval; (ii) to pay to the Applicant's solicitor withrn three (3) working days of the relrstrng of Midland Mining N.L. on the Australian stock exchange the sum of Fortv Thousand Dollars ($40,000.00). (irr) to authorise the first Respondent to enter into an agency agreement wrth the Applrcant in the terms of the Deed of Agency f~led herein rnrtralled by me and dated 18 February 1992 and placed wrth the papers. 4. Pending shareholder approval of the agency agreement referred to in paragraph 3(ii~) above Kolya has leave to act as the Frrst Respondent's agent and is granted and has reserved to rt all rights and powers in the terms of the deed filed herein. 5. Following shareholder approval aforesaid, the first Respondent is to act in accordance with that approval and if the first Respondent defaults then any amount been paid prior to such default shall be retained by the Applicant and be regarded as a genurne pre-estrmate of the Applicant's damage. 6. Upon enterrng into of the agency agreement and receipt of all money payable pursuant to the Orders herein the proceedings herern so far as they pertarn to the first second and third named kespondents (only) are d~scontinued. 7. Liberty to apply to this Court on short notice is granted to all parties. 8. The matter be adjourned to the next available date at the convenrence of the Court for directrons. 9 . There be no orders as to costs."
The agency agreement referred to in that order has been executed and approved by the shareholders of Midland. The operative parts of the deed embodying that agreement include the following paragraphs:
"1. GRANT OF AGENCY
Midland as from 6 February 1992 (inclus~ve) GRANTS to Kolya the right:
.l to take action or to institute proceedrngs on Midland's behalf to recover all or any money paid by Midland for or to secure Midlands [sic] interest or interest m: (i) the mining project in the United States of America known as "the Clementine"; (ir) the mining project in the United States of America known
as "the Lower Olinghouse", or(iii) both. - 2 to prosecute Midlands [sic] former directors or officers or both (except Bay and Muhlberg) for breaches of the Companies Code, the Corporations Act or breaches of the Common Law in respect of their duties as directors or officers or both. . 3 to take any action aforesaid either by way of court proceedings, arbitration, settlement or otherwise as it in its absolute discretion considers necessary erther in Australia, the United States of America or elsewhere ("the Proceedrngs").
2. MIDLAND'S OBLIGATIONS
Midland agrees with Kolya that throughout the term of t h ~ s deed: .l neither Midland nor any other agent lawfully actlng for Mldland
w ~ l l take the Proceedings without the prror wr~tten consent of Kolya. AND FURTHER AGREES
.2 to support Kolya rn the Proceedings and in particular and wrthout limrtrng the general~ty thereof, Mrdland wrll - (i) grve Kolya access to all documents that are in Mrdlands
[src] custody power or possessron which are relevant or
pertarnrng to the Proceedings; and
(ii) co-operate fully in the prov~sion of ~nformatlon as to rndividuals who may be able to asszst Kolya and use ~ t s best efforts to ensure that such individuals co-operate wrth Kolya.
3. TITLE OF PROCEEDINGS
Kolya is hereby aranted the right, in the Proceedrngs to sue in the name of Mrdland HOWEVER Kolya wrll not describe itself as agent or representative of Midland save as provrded in this deed.
4. PAYMENT FOR KOLYA'S AGENCY
It is herebv mutuallv aareed between the ~arties that Kolva shall be
- -
entitled as-follows:
.l For the purposes of the follow~ng any amount recovered shall be calculated in the currency denomination of the place of recovery and any amount recovere44 or as expended as and by way of costs or disbursements or both in the Proceedings shall be paid to Kolya and not taken into account in the calculation of the distribution as set out below.
.2 The first One Hundred and Fiftv Thousand Dollars ($150,000.00) of all money, including the value of any Lnterest or interests whatsoever recovered in the Proceedings;
and thereafter;
.3 Sixty per cent (60%) of the balance of money includ~ng the value of any interest or interests whatsoever recovered by the Proceedrngs or ln any settlement ("the Distrrbutlon").
. 4 Any balance amount in cash as calculated hereunder, will be paid to Midland within seven (7) days of receipt.
.5 All money payable to thrs deed 1s to be pard lnto the trust account of Xolya's solrcitor ....
5. COURT PROCEEDINGS
Kolya agrees following the re-listmg of Midland and the payment of all money by Mrdland to Kolya pursuant to consent orders made before Mr Justrce Lockhart of the Federal Court of Australia on 7 February 1992 Kolya will take no actron against Midland, Bay or Muhlberg (only) in terms of the present Federal Court proceedings No. TG 3002 of 1991 or otherwise and that this deed may be pleaded as a bar to such action.
6. REINSTATEMENT OF INJUNCTIONS
.l If prror to the flnal payment of Fortv Thousand dollars ($40,000.00) thrs deed comes to an end due to a breach or breaches by Midland Kolya shall be free to apply to the Federal Court for an injunction as ordered by the Federal Court in action No. TG 3002 of 1991, and Mldland irrevocably agrees to consent to the maklng of an order in identrcal terms.
.2 Prror to the srgning of this deed Midland wrll lodge wrth
Messrs. Wilson and Rogers its consent to the reinstatement of the injunctron rn the Federal Court Proceedrngs should such reinstatement be requrred pursuant to clause 6.1 above.
.3 1f it is necessary to have the ~n]unction reinstated pursuant
to clause 6.1 above then Midland agrees to pay Kolya's costs of the Notrce of Motion to be made to the Federal Court and all attendances pursuant thereto on a solrcitor client basis."
The deed concludes with ancillary provisions relating to confidentiality, the giving of notice and the like. Pursuant to the agency agreement Kolya caused the second action, numbered TG 3001 of 1992, to be instituted in the name of Midland, as applicant, against Mr Ewart and five other respondents, Cameron Glover, David Dickson, William Keys, Bernadette Kerrigan and Tony Wicks. A so-called statement of claim has been filed ilf TG 3001 of 1992 which consists only of assertions that each respondent has been an officer of Midland and in that capacity has committed breaches of statutory duty. The following particulars have been given of those alleged breaches of duty:
.l farled to comply wrth Sectron 229(1) of the Companies Code in
that he has farled to act honestly in the exercise of his powers and
the discharge of the duties of his office;
.2 failed to comply wrth Section 232(2) of the Corporatrons Law m that he or she has failed to act honestly rn the exercise of his or
her powers and the drscharge of the duties of his or her office;
.3 failed to comply with Section 229(2) of the Companies Code in
that he has farled to exercise a reasonable degree of care and diligence in the exercise of hrs powers and the drscharge of his duties;
. 4 farled to comply with Section 232(4) of the Corporatrons Law in that he or she has failed to exercise a reasonable degree of care and diligence in the exercise of hrs or her powers and the discharge of his or her duties;
. S failed to comply with Section 229(3) of the Companies Code rn that he has made improper use of informatron acquired by vrrtue of hrs position as an offrcer of Mrdland to gain, drrectly or indirectly, an advantage for himself or for other person(s) or to cause detriment; to Midland.
. 6 failed to comply with Section 232(5) of the Corporations Law in that he or she has made rmproper use of informatron acqurred by virtue of hrs or her positron as an offrcer of Mrdland to garn, directly or indrrectly, an advantage for hrmself or herself or for other person(s) or to cause detriment to Mrdland;
.7 failed to comply wrth Section 229(4) of the Companres Code rn that he has made Improper use of his posrtron as an officer of Mrdland to garn, directly or indirectly, an advantage for hrmself or for other person(s) or to cause detrrment to Mrdland;
.8 farled to comply with Sectron 232(6) of the Corporatrons Law in
that he or she has made improper use of his or her posrtron as an offlcer of Mrdland to garn, drrectly or indrrectly, an advantage for hrmself or herself or for other person(s) or to cause detriment to Midland;
.9 failed to comply with Sectron 228 of the Companres Code in that he has failed to declare the nature of his rnterest at a meeting of directors rn New Gold Inc or the Lower Olinghouee Gold Project or both;
.l0 failed to comply with Section 231 of the Corporations Law in that he or she has failed to declare the nature of his or her interest at a meeting of directors in New Gold Inc or the Lower Olrnghouse Gold Project or both;
.l1 failed to comply with Sectron 232 of the Companies Code in that he has failed to grve notrce to Midland of the matters requrred therern;
It
.l2 failed to comply with Section 236 of the Corporations Law in that he or she failed to give notrce to Midland of the matters requrred therein;
.l3 failed to comply with Section 560 of the Companres Code in that he has concealed destroyed mutilated or falsified securities of or belonging to Midland or any books affecting or relating to the affarrs of Midland;
.l4 failed to comply wrth Section 1307 of the Corporatrons Law in that he or she has concealed destroyed mutrlated or falsrfied securities of or belonging to Midland or any books affecting or relatrng to the affairs of Mrdland;
.l5 falled to comply wrth Sectron 564 of the Companies Code ln that he has made avarlable or furnished rnformation to a director,
Ltd or an officer of such exchange leakrng rnformation knowing rt to auditor, member, debenture holder or the Australran Stock Exchange be false or mrsleadrng m a material partrcular or has om~tted from it a matter or thing the omrssion of which renders the informatron mrsleadrng in a material aspect;
.l6 failed to comply with Section 1309 of the Corporations Law in that he or she has made avarlable or furnished informatron to a
director, auditor, member, debenture holder or the Australian Stock Exchange Ltd or an offrcer of such exchange berng informatron knowrng it to be false or mrsleadrng in a materral particular or has omltted from it 'a matter or thing the omission of which renders the information misleading in a materral aspect;
.l7 erther or all of the above.
It is then alleged that as a result of those breaches, Midland
has suffered damage. The particulars of damage have not been supplied. It is conceded by Mr Boland, who appears as solicitor for the applicant in each matter, that the so-called statement of claim in TG 3001 of 1992 is defective, being more in the nature of a general endorsement. Moreover, Northrop J in his reasons for judgment pronounced on 26 March 1992 in earlier interlocutory proceedings in TG 3001 of 1992 observed at page 7 of those reasons:
"The statement of clarm was filed on 11 March 1992 and is in a form which, on its face, qu~te clearly does not comply wrth the Federal
Court Rules. It is embarrassing and normally would be struck out."
Although Heerey J, on 17 March 1992, gave the applicant leave to file and serve a fresh statement of claim, that has not so far been done, and I have been informed that the applicant requires until 1 May 1992 to have a fresh statement of claim settled. By motion on notlce dated 9 April 1992 in TG 3001 of 1992, the first and fifth respondents, Mr Ewart and MS Kerrigan, have sought orders that paragraphs 13 to 16 of the application be struck out as disclosing no reasonable cause of
action. Those paragraphs of the application make claims for;
".l3 a declaration that the first, second, third, fourth, frfth and sixth respondent or either of them breached Section 560 of the
Compan~es Code while an officer or former officer of the Applicant; .l4 a declaration that the first, second, third, fourth, flfth and sixth respondent or either of them breached Section 1307 of the Corporations Law while an officer or former officer of the Applicant;
.l5 a declaration that the first, second, third, fourth, fifth and sixth respondent or either of them breached Section 564 of the Companies Code while an officer of the Applicant;
.l6 a declaration that the first, second, third, fourth, fifth and sixth respondent or either of them breached Section 1309 of the Corporations Law while an offlcer of the Applicant"
I entertain real doubts as to whether lt is open to seek a declaration in a civil action that a ~espondent has been guilty of a criminal offence. Northrop J obviously shared these doubts, as he observed at page 6 of the reasons for judgment of 26 March 1992, to which I have already referred;
"By way of aside, questions are raised immediately whether declarations can or should be made m civil proceedings in relation to a criminal offence."
However, see Sankev v Whitlarn (1978) 142 CLR 1, and the discussion in Young on Declaratorv Orders 2nd Edition p.151 et seq. Because of the complex exercise of discretion involved in the grant of a declaration and because causes of action said to justify that *form of relief will concededly not be disclosed or fully articulated until the fresh statement of claim has been filed, I consider it inappropriate now to dispose of the first and fifth respondents' motion on notice dated 9 April 1992. I shall grant leave to those respondents to bring that motlon on for hearing, if so advised, after the filing and service of a fresh statement of claim. The costs
| day insofar as they are referrable to that motion are | of the applicant and the first and fifth respondent of this | |
| reserved. | ||
| I turn now to deal with the application for change of venue. | ||
| The first respondent, M r Ewart, also seeks by motion on notice dated 23 March 1992 an order that application TG 3001 of 1992 be transferred to the New South Wales District Registry of this court. Midland is incorporated in New South Wales, and | ||
| has its registered office in Leederville, a suburb of Perth in Western Australia. Kolya, which, as I have said, is pursuing these proceedings in the name of Midland, is incorporated m Tasmania and has its registered office in Hobart. The chairman of Kolya's board of directors and the person effectively giving instructions on behalf of the applicant is Dr Petrovski, who, I am told, is Director of Endocrinology at the Royal Hobart Hospital. His medical commitments, I infer, make it difficult for him to leave Hobart for any substantial period, although I am also told that he is presently in the United States of America in connection with the cognate litigation in that country. At least one of the other present | ||
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| The first, fourth and fifth respondents are residents of New South Wales, and have retained Western Australian counsel, and, largely, for reasons of convenience, have arranged for him to be instructed by Hobart solicitors. The remaining second, third and sixth respondents were each served with the | ||
| April 1992. That service was effected by leaving the | ||
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| documents at the office of American Resources Inc in Mill Valley, California, in the United States of America. That mode of service was authorised by an order for substituted service made' by Heerey J on 17 March 1992. By the same order his Honour granted leave for service out of the jurisdiction. None of the second, third or sixth respondents has so far entered an appearance. | ||
| The approach to be taken by the court on an application for change of venue has been authoritatively indicated by a Full Court in National Mutual Holdinqs Ptv Llmited Sentry | ||
| CorDoratlon (1988) 83 ALR 434, where it was observed at 441 : |
"The power conferred on the court or a judge by s.48 is in terms wholly unfettered. It should be exercrsed flexibly hav~ng regard to the circumstances of the partrcular case. It would be regrettable and unwise if the court were to circumscrrbe the general power conferred by 8.48 with rnflexible rules or impose rnelastic constraints upon its exercise. As the power may be exercised subject to conditions, the court or a judge is m a positron to mould orders under the section to take account of the many and varred circumstances that arise in particular cases.
The power conferred by 8.48 recognrses the natronal character of this court. The factors which the court is entitled to take into account in consrdering whether one crty is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The court must wergh those factors in each case. Residence of parties and of wrtnesses, expense to parties, the place where the cause of action arose and the convenlence of the court rtself are some of the factors that may be relevant rn particular crrcumstances.
The balance of cbnvenrence will generally be a relevant consrderatron, but not necessarily determinative of each case. A party commences a proceeding by filing an application in a particular regrstry of the court. If that party or another party w~shes to have the proceeding conducted or contrnued in another place he may apply to the court for an order under s.48 or 0.10, r.l(Z)(f) or 0.30, r.6 as the case may be. There is no onus of proof in the strrct sense to be discharged by the party seeking to conduct or contrnue the proceedrngs elsewhere. It should be noted that the court may exercrse its powers under 0.30, r.6 either on the applicatron of a party or of its own mot~on. The court must, however, be satrsfied, after considerrng all relevant matters, that there is sound reason to direct that the proceedrng be conducted or continued elsewhere. Its startrng point IS that the proceedrng has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place caprrcrously the court would be justifred in grvlng no weight to the choice of place.
At the other end of the scale, a proceedrng may have continued for
some time at the place of commencement w ~ t h many steps having been
taken there, for example, filrng of pleadings and affidavrts, drscovery and inspectron. Due weight would be given by the court to such matters before directing that the proceeding should continue at
a d~fferent place. The balance of convenrence is important, but its weight must vary from case to case. Ultimately the test 1s: where can the case be conducted or continued most suitably, bearrng in mind the Interests of all the partzes, the ends of lustice in the determrnation of the issues between them, and the most efficient administration of the court? It cannot and should not, in our opinion, be def~ned more closely or precisely."
The efficient administration of the court and the effective
management of this apparently complex litigation through its interlocutory stages argues very strongly for its transfer to a registry where Judges are permanently based and where it can be glven attention as required at short notice and preferably by the same Judge. The fact that at least three of the respondents are resident in New South Wales and none live in Tasmania gives some numerical support for the view that the balance of convenience favours New South Wales. However, that is counteracted by the consideration that the action has been commenced in Tasmania and that both Dr Petrovski, the controlling mind of the applicant for the purposes of the litigation, and his legal representatives, being a Hobart solicitor who, I am told, has retained counsel based in
t'
Devonport, all tend ko indicate the Tasmanian registry as appropriate.
Nevertheless, the convenience of the applicant and its representatives can largely be accommodated and expense to them minimised by conducting telephone directions hearings and receiving written submissions in future interlocutory
| contests. Accordingly, I have concluded that the efficient | administration of the court and the effective conduct of this | |
| litigation must prevail and that an order should be made for transfer to another registry. Since the applicant has not indicated that New South Wales is inappropriate if the venue has to be transferred from Tasmania, I shall order that the proceedings be transferred to the New South Wales District Registry of the court and that future directions hearings and other interlocutory proceedings be heard as far as practicable before the same Judge of the court. | ||
| That is not to say that the trial of the action should take place entirely or even partly in Sydney. The venue for the trial will be a matter to be resolved by the Judge having the supervision of the matter in its interlocutory stages and having regard to the convenience of the main witnesses who may be required for cross-examination and of the parties and their legal representatives. The costs of the application for change of venue will be costs in the cause. | ||
| I turn now to the queg,tion of security for costs. The first respondent further seeks by his motion on notice dated 23 March 1992 that the applicant give security for the costs of this action in the sum of $60,000 and that all future action be stayed pending the provision of such security. | ||
| It has been frankly conceded by M r Sanderson, counsel for the first respondent, that the evidence permitting the court to | ||
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| so, is "thin". However, Mr Sanderson invokes s.56 of the Federal Court of Australia Act which confers a wide discretion not limited by 0.28. See, for example, Bell Wholesale CO Ltd v Gates ExDort Cor~oration (1984) 2 FCR 1. | ||
| It is true that the present action, having regard to the terms of the agency agreement, is brought by Midland only partly for its own benefit, the other beneficiary being Kolya. That feature makes applicable the observation of Smithers J, in | ||
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| where his Honour said, at 214: |
"The srtuatron is that unless securrty for costs is provrded Citicorp has the prrvilege of suing on its rnitiative and responsibilrty, for its benefit, on terms that if it loses it has no responsibrlrty for costs. From the pornt of vrew of the justrce of the situatron this is far removed from a case where a plaintrff or applicant is the party instituting and conducting the lltrgation. The receiver and manager was appointed on 28 October 1982. The action was commenced on 27 June 1983. The commencement and control of the proceedings brought in the name of Jet Corporation may be regarded therefore as having resided in the recerver and manager. There rs no suggestion from Jet Corporation that an order for security for costs wrll cause the action to be discontrnued. The inference to be drawn from this circumstance and the evidence is that there are funds avarlable for the marntenance of these proceedings whether or not an order for security for costs rs made agarnst Jet Corporation.
Once it appears, not only that there is a secured cred~tor in respect of whose claims agarnst an insolvent company the proceedings are of special interest, but that the proceedings have been rnitiated by, and are controlled by the receiver and manager appointed by that secured credrtor whose primary purpose 1s the recovery of hrs own debt, and there is appeasonable rnference that that secured credrtor is supportrng the lltigatron financially, the injustrce of that secured creditor pursuing hls own interest in an action against the appellant parties wrth no rrsk to rtself should the appellant parties succeed in their defence assumes a special signlfrcance on the questron of the justice of grantrng or refusing an order for securrty for costs. It is a werghty consideration that the decision whether to sue or not to sue is that of Citicorp acting through the receiver and manager."
Nevertheless, the circumstance to which I have just referred is, as Smithers J indicated, only one of the factors to be
| taken into account on an application for security. Another | factor which may be relevant in this case is the ability of | ||
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| exchange listing. It would also be appropriate to have regard to the apparent strength of the applicant's case, the extent to which the respondents are alleged to have brought about Midland's impecuniosity, if in fact it be impecunious after making the payments totalling $80,000 contemplated by the consent order of 18 February 1992. | |||
| Other considerations relevant to the question of security may | |||
| include the extent to which the application is brought bona | |||
| fide for the purpose of obtaining relief against the | |||
| respondents in Australia and not for ulterior purposes by the | |||
| deed of agency. The question may also arise as to whether or | |||
| not there is any public interest in the determination of the | |||
| alleged liability of the respondents as former directors or | |||
| officers of Midland. Because, as I have already noted, the | |||
| statement of claim is concededly incomplete and uninformative |
i'f
and because no defences have yet been filed, it is premature and inappropriate to attempt to evaluate all these factors and possible others at this stage.
I shall therefore order that the application for security for costs be adjourned to a date to be fixed on application by the respondents, or any of them, by the Judge having the
| transfer to the New South Wales District Registry pursuant to | supervision of this application TG 3001 of 1992 after its | ||
| the order which I have earlier foreshadowed. | |||
| I deal finally with the application for a stay of proceedings | |||
| in matter TG 3002 of 1991. It has been pointed out that the effect of the compromise between Kolya and the respondents other than Mr Ewart, if consummated, will leave as the only live issue raised by the amended orders sought in this earlier actlon, the question of whether Mr Ewart should be prohibited from managing a corporation for such period as the court deems fit. That arises partly from the fact, which seems to be common ground, that Mr Ewart is no longer a director of Midland. It may be that whether he should be prohibited from managing a corporation will be raised by the fresh statement of claim which is to be delivered in TG 3001 of 1992. However, Mr Boland has indicated that Kolya desires to keep the earlier application on foot to preserve an opportunity to pursue relief against M r Ewart for his part in what is said to be the "oppression" of Kolya as a minority shareholder in Midland. For my part, I find it difficult to see how any liability to Kolya coup attach to Mr Ewart for: what he did as a director of Midland which is different from the liability of Midland itself. | |||
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| District Registry and that there be no further interlocutory step taken in it until after the filing and service of a fresh statement of 'claim in TG 3001 of 1992. | |||
| I shall reserve liberty to the applicant to apply if so | |||
| advised after that time, on not less than seven days notice in writing to Mr Ewart and any other respondent against whom relief is then sought, for directions for the filing and service of a statement of claim and such further or other directions as may be necessary to make the application ready for trial concurrently with or immediately before or after the trial of TG 3001 of 1992. My order will specify that any directions hearing or other interlocutory proceeding in TG 3002 of 1991 should be heard as far as practicable by the Judge having the supervision of TG 3001 of 1992 after its transfer to the New South Wales District Registry. The costs of yesterday and today insofar as they are referable to TG 3002 of 1991 will be reserved. |
I certify that this and the
preceding fifteen (15) pages are a true copy of the Ex Tempore Reasons for Judgment of his Honour Mr Justice Ryan
Associate: v Date: I%\+\ d
| Counsel for Applicant on motion | Mr C W Sanderson |
Solicitor for Applicant on motion Simmons Wolfhagen
Counsel for Respondent on motion Mr C Boland Solicitor for Respondent on motion Mr C Boland
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