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Blakeney v Blakeney

Blakeney v Blakeney

Case [2015] WASC 73 3 March 2015

Jurisdiction

Legal Privilege

Implied Terms

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BLAKENEY -v- BLAKENEY [2015] WASC 73

CORAM: MASTER SANDERSON

HEARD: 16 & 19 FEBRUARY 2015

DELIVERED : 3 MARCH 2015

FILE NO/S: COR 227 of 2014

MATTER :GERALDTON MOTOR BODY BUILDERS & FABRICATORS PTY LTD

BETWEEN: WILLIAM LESLIE BLAKENEY
Plaintiff
AND
TIMOTHY CHARLES BLAKENEY
First Defendant
BLAKENEY'S TRANSPORT EARTHMOVING & CRANE HIRE PTY LTD
Second Defendant

Catchwords:

Corporations law - Application for leave to bring action on behalf of company - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Supreme Court Act 1935 (WA)

Result:

Leave granted

Category: B

Representation:

Counsel:

Plaintiff:     Mr G H Lawton
First Defendant             :     Mr D Vilensky
Second Defendant         :     Mr D Vilensky

Solicitors:

Plaintiff:     Lawton Lawyers
First Defendant             :     Bowen Buchbinder Vilensky
Second Defendant         :     Bowen Buchbinder Vilensky

Case(s) referred to in judgment(s):

Cooper v Myrtace Consulting Pty Ltd [2014] FCA 480
MG Corrosion Consultants Pty Ltd v Vinciguerra (2011) 82 ACSR 367
Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313

MASTER SANDERSON: This is the plaintiff's application for leave to bring an action in the name of Geraldton Motor Body Builders & Fabricators Pty Ltd (GMBB) against the first and second defendants. The application is brought under s 237(1) of the Corporations Act 2001 (Cth) . The applicant must satisfy the criteria for leave which are found in s 237(2) of the Act. That section reads as follows:
(2)The Court must grant the application if it is satisfied that:
(a)it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them; and
(b)the applicant is acting in good faith; and
(c)it is in the best interests of the company that the applicant be granted leave; and
(d)if the applicant is applying for leave to bring proceedings there is a serious question to be tried; and
(e)either:
(i)at least 14 days before making the application, the applicant gave written notice to the company of the intention to apply for leave and of the reasons for applying; or
(ii)it is appropriate to grant leave even though subparagraph (i) is not satisfied.
For the purpose of this action the background facts are relatively simple. The plaintiff and the first defendant are brothers. They are the only two shareholders and directors of GMBB. GMBB is the trustee of the T&B Investment Trust. The primary beneficiaries of the T&B Investment Trust are the plaintiff and the first defendant. The T&B Investment Trust was established to own plant, equipment, trailers, vehicles, spare parts and cranes which were utilised by a company known as Geraldton Cranes & Haulage Pty Ltd which for many years owned and conducted a crane hire and truck haulage business known as Geraldton Cranes & Haulage from premises in Boyd Street, Geraldton.
The plaintiff and the first defendant have fallen out. The reasons for the fracturing of the relationship are not relevant. The result is GMBB is deadlocked.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Blakeney v Blakeney

Details

AGLC: Blakeney v Blakeney [2015] WASC 73
Case: [2015] WASC 73
Decision Date: 3 MARCH 2015

CaseChat Overview and Summary

Blakeney v Blakeney is a decision of the Federal Court of Australia which concerns the application for leave to bring an action on behalf of a company. The applicant, Blakeney, sought leave to sue the respondent, also Blakeney, in their capacity as director of the company. The dispute revolves around allegations of breaches of directors' duties and mismanagement of the company's affairs. The court was tasked with determining whether the applicant had demonstrated sufficient grounds to warrant the granting of leave to sue.

The primary legal issue before the court was whether the applicant had made out a case which was arguable, in order to meet the threshold for leave to sue. The applicant needed to show that the proceedings had a real prospect of success and that there were compelling reasons why the proceedings should be brought in the applicant's name rather than in the name of the company. The court had to consider the merits of the case, including the nature of the alleged breaches and the circumstances under which the applicant sought to bring the action.

The court found that the applicant had demonstrated a prima facie case which was arguable. The applicant's claims involved serious allegations of misconduct by the respondent in their capacity as a director, and the applicant had provided sufficient evidence to support the claims. The court determined that there were compelling reasons for the applicant to bring the proceedings in their own name, particularly due to the potential conflict of interest if the company were to sue its own director. The court concluded that the applicant had met the necessary criteria for leave to be granted, and it was in the interests of justice for the proceedings to proceed.

The court granted the applicant leave to bring the action on behalf of the company. This decision allows the applicant to pursue the claims against the respondent director, ensuring that the company's interests are protected and that potential breaches of directors' duties are addressed. The court's decision underscores the importance of careful consideration of the circumstances in which leave to sue on behalf of a company is appropriate, particularly in cases involving internal corporate disputes.

Orders