Cahill v Cahill
[2001] VSC 144
•7 May 2001
| SUPREME COURT OF VICTORIA | |
| PRACTICE COURT | Not Restricted |
No. 7865 of 2000
| JULIEENE MARIA CAHILL | Plaintiff |
| v. | |
| DENIS CAHILL AND OTHERS | Defendants |
---
JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 7 MAY 2001 | |
DATE OF JUDGMENT: | 7 MAY 2001 | |
CASE MAY BE CITED AS: | CAHILL v CAHILL & ORS. | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 144 | |
---
CATCHWORDS: Pleadings – Application to strike out statement of claim – Claim not hopeless – Application refused.
---
APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr. P.C. Cawthorn | T.F. Grundy & Co. |
| For the Defendants | Mr. T.C. Simpson | Oakley Thompson & Co. |
HIS HONOUR:
The applications presently before me are part of the ongoing dispute between Julieene Maria Cahill, Dennis Cahill, Michael Cahill and Bernard Cahill who are the children of Dennis Cahill, deceased, and Mary Cahill, deceased. Spendthrift Nominees Pty Ltd is the trustee of the Cahill family trust. The beneficiaries of the trust are the four Cahill children. There are two fully paid shares in spendthrift. Originally one share was owned by Dennis Cahill and one by his wife, Mary Cahill; until the death of Dennis Cahill, Dennis and Mary Cahill were also the directors of the company.
Upon the death of Dennis Cahill in 1985, his daughter, Julieene Maria Cahill, became the holder of one share in the company whilst her mother remained the holder of her original one share. Julieene Cahill also became a director of the company.
In February 1998 Michael Cahill and Dennis Cahill were appointed directors of the company. Those appointments were clearly irregular as neither Michael nor Dennis held shares in the company. See Article 84 of the Articles of Association of the company in that regard.
That fact did not become apparent to Julieene Cahill until recently. By her will, Mrs Cahill left her one share in the company to her four children as tenants in common. As yet no application has been made for probate of her estate by her executors, Julieene Cahill and Bernard Cahill.
For some time now there have been serious disputes amongst the Cahill children concerning the administration of the trust. On 29 November 2000 an urgent ex parte application was made to me in the Practice Court by counsel for Julieene Cahill seeking an injunction restraining Dennis Cahill and Michael Cahill conducting any meetings of directors or shareholders of Spendthrift Nominees or making distribution of the company's funds to shareholders, directors or other persons.
That day I made the following orders in respect of the matter:
"1.That until further order the defendants, Dennis Cahill and Michael Cahill, whether by themselves or through their servants or agents, be restrained from
(a)conducting any meetings of directors or shareholders in respect of Spendthrift Nominees Pty Ltd (ACN 005131199), (the company).
(b)making distributions of the company's funds to shareholders, directors or any other persons.
2.The plaintiff file and serve a writ and summons claiming an injunction restraining the defendants from performing the acts in described in paragraph 1 hereof, and a motion for the winding up of the company and a summons for the appointment of a provisional liquidator by 4.00 p.m. On 4 December 2000."
I then adjourned the further hearing of the matter to 7 December 2000.
On 4 December 2000 Julieene Cahill filed an originating motion in the court naming as defendants Dennis, Michael and Bernard and Spendthrift Nominees. The originating motion sought an order pursuant to the provisions of s.48 of the Trustee Act 1958 that John Spark of Ferrier Hodgson, Accountants, be appointed trustee of the Cahill family trust in substitution for Spendthrift Nominees.
The matter came before me again in the Practice Court on 7 December 2000. On that occasion Dennis Cahill and Michael Cahill were represented by counsel and Bernard Cahill by his solicitor. There was no appearance on behalf of Spendthrift Nominees.
Having heard argument in relation to the matter I then made the following orders:
"1.That until further order the defendants Dennis Cahill and Michael Cahill, whether by themselves or through their servants or agents be restrained from:
(a)conducting any meetings of directors orshareholders in respect of Spendthrift Nominees Pty Ltd ACN 005131199 (the company) for the purpose of removing any director or altering the capital of the fourth defendant.
(b)making distributions of the company's funds to shareholders or directors.
2.That until further order the fourth defendant by its servants or agents be restrained from making any distribution of moneys from the company's funds to the plaintiff, the first, second or third defendants.
3.That any distributions of moneys from the company's funds be authorized in writing and upon the signature of three directors of the company."
I then gave directions as to the further interlocutory steps to be undertaken by the parties designed to ensure that the proceeding came for trial as speedily as possible.
On 2 March 2001, the plaintiff, Julieene Cahill, filed her statement of claim in the proceeding.
On 20 March the first and second defendants, Dennis and Michael Cahill, filed a summons in the court returnable on 6 April 2001 whereby they sought judgment in their favour, alternatively an order striking out a number of paragraphs in the plaintiff's statement of claim.
In my opinion, the statement of claim, which I hasten to add was not drawn by counsel who appeared before me on behalf of the plaintiffs in relation to the present applications, was clearly defective. It was not surprising, therefore, that following receipt of the first and second defendants' summons, the plaintiff proceeded to file an amended statement of claim.
In the light of receipt of the amended statement of claim, the first and second defendants did not proceed with their summons of 20 March. However, on 1 May 2001 those defendants filed a further summons in the court seeking similar relief to that sought by the earlier summons. That summons is presently before me.
On 24 April 12001 the solicitors for the first and second defendants forwarded to the solicitors for the plaintiff a notice convening a meeting of the directors of Spendthrift Nominees for Tuesday next, 8 May. That notice states that the matters for consideration at the directors meeting shall include resolutions relating to:
"1.The commencement by the company as trustee of the Cahill Family Trust of such legal proceedings for the recovery of assets belonging to it against such persons and on such terms as may be advised.
2.The undertaking of a defence by the company of proceedings commenced against it and others by the Managing Director of the company Julieene Maria Cahill, in the Supreme Court of Victoria at Melbourne in proceeding number 7865 of 2000 on such terms as the company may be advised.
3.The authorization to apply funds held by the company in accounts with the ANZ Banking Group Limited, Melbourne, for the purpose of funding a defence of the aforesaid legal proceedings in the Supreme Court of Victoria at Melbourne and prosecuting other such legal proceedings as may be advised.
4. Such other business as the directors may consider appropriate."
On 3 May 2001 the plaintiff filed a summons in the court whereby she now seeks the following orders:
"1.The first and second defendants be restrained from conducting any meeting or any other business of Spendthrift Nominees Pty Ltd regarding the commencement and defence of legal proceedings or the application of funds for those purposes until the hearing and determination of the proceeding to remove the trustee of the Cahill Family Trust or until further order.
2. That directions be made.
3. The matter be afforded urgency in the listings.
4. The matter be referred to mediation."
That summons is also before me.
I shall deal first with the first and second defendants' summons relating to the plaintiff's statement of claim.
It is trite law that the court will not enter summary judgment in favour of a defendant unless it is clear that the plaintiff's claim is obviously frivolous, vexatious or hopeless. See Day v. The Victorian Railways Commissioners (1949) 78 CLR 62.
It was not suggested by counsel for the first and second defendants that the plaintiff's claim fell into any of those categories as clearly it does not. That aspect of the matter therefore can be put to one side.
I turn then to the application to strike out a number of paragraphs in the plaintiff's amended statement of claim. In that regard I am reminded of the observations of Kirby, P., as he then was, in Wickstead v. Browne (1992) 30 NSWLR 1. At page 5 His Honour said:
"Common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Testimony gives colour and content to the application and development of legal principle. That is why leave is usually required for an appeal from interlocutory orders. Appellate courts, including this court, will usually require evidence to be adduced and a trial concluded before considering the application of the law to that evidence. Out of the detail of the evidence ultimately proved, affecting the relationship of the respondent and the appellant, may arise a finding of a duty of care which the common law of negligence would uphold."
I have considered the content of the plaintiff's amended statement of claim. I am not persuaded that any of the paragraphs in it objected to by counsel for the first and second named defendants should be struck out. Whilst on the face of it certain factual matters relied upon by counsel for the first and second defendants would tend to support the view that the plaintiff may have difficulty in establishing some of the facts upon which she relies, for example, that since 27 February 1998 the first and second defendants have invalidly purported to act as directors of Spendthrift Nominees, once one hears the evidence called on behalf of the plaintiff in support of that contention, that may not prove to be the situation. At all events I do not consider that her case in that regard can be said to be hopeless.
I turn then to the application for injunctive relief. At this stage the four beneficiaries of the trust are parties to the proceeding. In my opinion, until such time as the application to remove Spendthrift Nominees as the trustee of the trust has been heard and determined, there is no need for it to be separately represented. To do so can only have the effect of unnecessarily incurring legal costs in the matter. Nor do I consider that it is appropriate that Spendthrift Nominees expend moneys on pursuing legal proceedings for the recovery of assets.
The clear inference to be drawn in this case, in my opinion, is that certain of those legal proceedings may well be brought against the plaintiff. Surely if that be the situation then the first and second defendants have a conflict of interest in the matter. On the one hand they are two of the four beneficiaries of the trust; on the other, they maintain that they are validly appointed directors of the company which is the trustee of the trust.
As to what legal proceedings should be taken on behalf of the trust and in respect of its assets should surely be the decision of some person independent of the beneficiaries.
Mr Cawthorn, do you renew the undertaking as to damages given on behalf of the plaintiff.
MR CAWTHORN: Yes, Your Honour.
HIS HONOUR: In the circumstances I make the following orders in the matter:
1.Until further order the defendants Dennis Cahill and Michael Cahill, whether by themselves or through their servants or agents, be restrained from conducting any meetings or engaging in any other business of Spendthrift Nominees Pty Ltd with a view to the commencement and/or defence of legal proceedings and the application of funds of the Cahill Family Trust for the purpose of prosecution and/or defence of such proceedings.
2.The summonses of the first and second defendants dated 20 March 2001 and 1 May 2001 be dismissed.
3.That the first, second and third defendants file and serve their points of defence to the plaintiff's amended statement of claim by 4.00 p.m. On 11 May 2001.
4.The first, second and third defendants file and serve affidavits of documents by 15 May 2001.
5.The proceeding by originating motion for removal of the trustee of the Cahill Family Trust be referred to the Listing Master for fixing for trial and be afforded such priority as she is able to give it having regard to other matters pending in the court.
6. The proceeding be referred to mediation.
7.The mediation be conducted on or before 15 May 2001. 8. In the first instance the costs of the mediation be shared equally between each party and otherwise such costs be costs in the cause.
9.In the event that the parties cannot agree on the identity of a mediator then the matter shall be referred to the listing master for her to choose a mediator.
10.The first and second defendants pay the plaintiff's costs of the summons of 1 May 2001. The plaintiff pay the first and second defendants' costs of the summons of 20 March 2001. The costs of the plaintiff's summons filed 3 May 2001 are reserved.
I direct that within 7 days this order be prepared by the solicitors for the plaintiff and brought to me for authentication. I reserve to the parties liberty to apply.
(Discussion ensued.)
HIS HONOUR: I do not propose to vary the costs orders that I have pronounced in the matter.
---
0