Boylan v Collingwood-Smith - [2010] NSWSC 651

CITATION: Boylan v Collingwood-Smith [2010] NSWSC 651

HEARING DATE(S): 10 June 2010

JURISDICTION: Equity Division

JUDGMENT OF: Lindgren AJ

EX TEMPORE JUDGMENT DATE: 11 June 2010

DECISION: No order as to costs to the intent that the parties bear their own respective costs of the proceeding including the cross-claim.

LEGISLATION CITED: Civil Procedure Act 2005, s 98(1)
Corporations Act 2001 (Cth) ss 198F, 247A, 290, 467(4)

CASES CITED: Coffs Ex-Services Memorial & Sporting Club Ltd v Coffs Harbour Catholic Recreation & Sporting Club Ltd [2010] NSWSC 605
One-Tel Ltd v Deputy Commissioner of Taxation (2000) 171 ALR 227
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622

PARTIES: Lindy Ann Boylan (P)
John Collingwood-Smith (D1)
Harrow Productions Pty Ltd (D2)

FILE NUMBER(S): SC 2008/280885

COUNSEL: N Cotman SC (P)
M Ashhurst SC and S O'Brien (D)

SOLICITORS: Binetter Vale Lawyers (P)
Gye Associates Lawyers (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

LINDGREN AJ

Friday 11 June 2010

2008/280885 – BOYLAN v COLLINGWOOD-SMITH

JUDGMENT

1 HIS HONOUR: By orders that I made by consent yesterday, the proceeding, including the cross-claim, was disposed of, save as to costs, which were reserved. These reasons relate to costs.

2 By her amended summons the plaintiff claims, in para 1, an order that the first defendant, who is her former husband, and the second defendant, a company of which they are both directors (the Company), make available for inspection by the plaintiff and her appointed representatives, books and financial records of the Company. She seeks in para 2 an order that the documents be delivered to the offices of her solicitor.

3 Next, in para 3 of the amended summons, the plaintiff seeks an order that the first defendant provide a written account of all dealings with the Company in relation to all payments made by the Company, whether by way of loan or otherwise, to or at the direction of the first defendant and/or any company of which he was a director or shareholder at the relevant time.

4 By para 4 of the amended summons the plaintiff seeks an order that there be a referral pursuant to Rule 20.14 of the Uniform Civil Procedure Rules to an appropriately qualified person for the purpose of enquiring into the outstanding loans due to the Company and preparing a financial report and, in particular, a set of proper accounts in respect of the Company.

5 It is convenient to consider orders 1 and 2 as going together and relating to production of documents for inspection, and orders 3 and 4 as going together and relating to a taking of accounts, or at least a preparation of a report by a referee as to accounts.

6 The orders sought in paras 5 and 6 of the amended summons need not be discussed in detail. By para 6 the plaintiff sought a deferral of the operation of order 17 made by the Family Court of Australia on 14…

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 Boylan v Collingwood-Smith

Details

AGLC: Boylan v Collingwood-Smith [2010] NSWSC 651
Case: [2010] NSWSC 651
Decision Date: 11 June 2010

CaseChat Overview and Summary

Lindy Ann Boylan sought an inspection of financial records and an accounting from her former husband, John Collingwood-Smith, and Harrow Productions Pty Ltd, a company of which they are both directors. Boylan also sought a referral to a qualified person for a financial report and set of proper accounts. Collingwood-Smith argued he had no further books or records to disclose. The court considered whether Boylan's claims were reasonable and whether Collingwood-Smith acted unreasonably by not disclosing an Australian Taxation Office letter estimating significant tax liabilities for the company. The court concluded that neither party acted unreasonably in bringing or maintaining the proceeding, and both parties should bear their own costs.

The legal issues revolved around the rights of directors under the Corporations Act 2001, whether Boylan was entitled to inspect books and obtain an accounting, and whether the court should grant her requests. The court also considered the effect of the ATO letter on the proceedings and whether it should order costs in favour of either party. The court determined that Boylan's claims had not been resolved on the merits and that the proceeding did not clearly favour either party, making it inappropriate to order costs in favour of one party.

The court found that the proceeding was disposed of without a hearing on the merits, and both parties had valid reasons for bringing and maintaining the proceeding. The court noted that Collingwood-Smith should have disclosed the ATO letter, but this did not necessarily lead to an order for costs in Boylan's favour. The court concluded that the appropriate order was that each party bear their own costs of the proceeding, including the cross-claim. This approach avoided a mini trial over costs and recognised the complexities and uncertainties in the case.

The final order was that there should be no order as to costs, and the parties were to bear their own respective costs of the proceeding, including the cross-claim. This outcome reflected the court's view that neither party acted unreasonably and that the proceeding did not clearly favour either party. The court's decision avoided an extended costs dispute and recognised the lack of clear resolution on the merits.

Orders