Bettaway Financial Group Pty Limited v Rocco Massaria

[2011] NSWSC 886

Supreme Court

New South Wales

Medium Neutral Citation:	Bettaway Financial Group Pty Limited & Ors -v- Rocco Massaria & Ors [2011] NSWSC 886
Hearing dates:	3 August 2011
Decision date:	03 August 2011
Jurisdiction:	Equity Division - Corporations List
Before:	Hammerschlag J
Decision:	Leave for the fourth plaintiff to bring a derivative action on behalf of the first and second plaintiffs
Catchwords:	CORPORATIONS - s 237 Corporations Act 2001 (Cth) - application for leave to bring derivative action - leave refused where evidence discloses no possible claim - leave granted where requirements of s 237 Corporations Act 2001 (Cth) satisfied
Legislation Cited:	Corporations Act 2001 (Cth)
Cases Cited:	Vicad Pty Ltd re Pottie v Dunkley [2011] NSWSC 166; (2011) 82 ACSR
Category:	Principal judgment
Parties:	Tracy Lee Pollard - Fourth Plaintiff Rocco Massaria - First Defendant Elizabeth Massaria - Second Defendant Your Manager Pty Ltd - Third Defendant William Buck Wealth Advisors (NSW) Pty Ltd - Fourth Defendant R & E M Pty Ltd - Fifth Defendant Bricktop Holdings Pty Ltd - Sixth Defendant Antonietta Splendora Carrabs - Seventh Defendant
Representation:	Counsel: J.T. Johnson - Fourth Plaintiff D. Ash - First, Second, Third and Fifth Defendants J. Taylor - Fourth and Seventh Defendants M. Henry - Sixth Defendant Solicitors: MCW Lawyers - Fourth Plaintiff Lenehan & Co - First, Second, Third and Fifth Defendants Nicholas G Pappas & Company - Fourth and Seventh Defendants Arnold Bloch Leibler - Sixth Defendant
File Number(s):	2011/151214

EX TEMPORE Judgment

1. HIS HONOUR: The fourth plaintiff seeks leave under s 237 of the Corporations Act 2001 (Cth) to bring proceedings on behalf of the first plaintiff, second plaintiff and third plaintiff against a number of defendants.

1. Leave to bring proceedings on behalf of the second plaintiff must be refused because the evidence discloses no possible claim which that plaintiff may have against any of the defendants. So too must leave be refused for the first and third plaintiffs to bring proceedings against the sixth defendant because the evidence discloses no possible claim which those plaintiffs may have against that defendant.

1. The first defendant, second defendant, third defendant and fifth defendant do not wish to be heard on the question of the grant of leave and have put submissions in relation to appropriate conditions that should be imposed upon the grant of leave in relation to costs.

1. Mr J T Johnson of counsel who appears for the fourth plaintiff, does not wish to be heard with respect to the appropriateness of the conditions which have been articulated in general terms. They will need to be precisely formulated and will involve the fourth plaintiff indemnifying or guaranteeing the first and third plaintiffs in respect of costs in the event that the proceedings fail against any of the defendants, as well as a guarantee by her in relation to that matter, which may amount to much the same thing.

1. The following affidavit material is read on the application: Tracy Lee Pollard, fourth defendant, 3 May 2011; Jonathon Prowse, 27 June 2011; Jacqueline Panos, 4 July 2011. Documents were also tendered.

1. I was taken to the recent decision of Ward J in the matter of Vicad Pty Ltd re Pottie v Dunkley (2011) 82 ACSR 561 at para 33 and onwards where her Honour deals with the requirements of the section. Whether those requirements are met has been the subject of debate with counsel and I have indicated that I am satisfied that each of them has been met.

1. Ms J Taylor, counsel for the fourth and seventh defendants, has sensibly taken the position that no reasons beyond this are required.

1. In those circumstances there will be leave for the fourth plaintiff to bring a derivative action on behalf of the first and second plaintiffs.

1. The proceedings are to proceed by way of pleadings.

1. The parties are to bring in Short Minutes.

1. The sixth defendant seeks an order for costs on an indemnity basis. Mr Henry of counsel puts, on its behalf, that assertions were made in correspondence against the sixth defendant which were unsustainable and clearly so, and that this should have been obvious. The jurisdiction to award indemnity costs is an extraordinary one. The present case is finely balanced. However, having regard to the interrelationship between the defendants in respect of whom leave has been given and the sixth defendant, whilst there is not sufficient to warrant the grant of leave against the sixth defendant, I do not think the case falls into that category where the Court should mark its disapproval by the imposition of costs on the indemnity basis. The plaintiffs are to pay the sixth defendant's costs on the ordinary basis.

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Decision last updated: 16 August 2011