Cassegrain v Cassegrain - [2006] NSWCA 39

Reported Decision: 56 ACSR 711

Court of Appeal

CITATION: CASSEGRAIN v CASSEGRAIN [2006] NSWCA 39

HEARING DATE(S): 21 February 2006
22 February 2006

JUDGMENT DATE:
22 February 2006

JUDGMENT OF: Mason P at 1; Ipp JA at 40

EX TEMPORE JUDGMENT DATE: 02/22/2006

DECISION: Summons dismissed with costs

CATCHWORDS: COSTS – CORPORATIONS – Members’ remedies – Oppression – Where director caused company to oppose winding up despite legal advice that it was inevitable – Court may make order requiring person to do a specified act under s 233(1)(j) Corporations Act 2001 – More comprehensive than normal costs under s 76 Supreme Court Act 1970 – Costs order made requiring director to indemnify company – Appeal against – Whether appeal lies as of right – Application of s 101(2)(c) Supreme Court Act requiring leave where appeal is as to costs only – Held not to apply to costs indemnity orders made under Corporations Act s 232.

LEGISLATION CITED: Corporations Act 2001 ss233(1)(j), 461(1)(e), (f), (g), (k)
Supreme Court Act s101(2)(c), s76

CASES CITED: Australian Securities Commission v Austhome Investments Limited (1993) 44 FCR 194
Cassegrain and Anor v CTK Engineering Pty Limited and Anor [2005] NSWSC 495
Gallo v Dawson (1990) 64 ALJR 58
Jackomarra v Krakouer (1998) 195 CLR 516
Michael v Freehill Hollingdale and Page (1990) 3 WAR 233
Re Minister for Immigration and Ethnic Affairs; Ex parte Li Qin (1997) 186 CLR 622

PARTIES: Claude George CASSEGRAIN
Thomas Jean Roger CASSEGRAIN & 2 Ors

FILE NUMBER(S): CA 40513/2005

COUNSEL: Claimant: C J Bevan
1 & 2: Opponents: R Beech-Jones
3 O: T Tarlakovski

SOLICITORS: Claimant: Evan Patakas & Associates
1&2 Opponents: Thompson Eslick
3 Opponent: Norton White

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT JUDICIAL OFFICER: White J

CA 40513/05

MASON P
IPP JA
Wednesday 22 February 2006

Claude George Rene CASSEGRAIN v Thomas Jean Roger CASSEGRAIN & 2 Ors

JUDGMENT

1 MASON P: The claimant effectively controlled CTK Engineering Pty Limited through being the holder of an A class share and the sole director of the company at the relevant time. The first and second opponents were B class shareholders who were effectively excluded from any management or other participatory role by virtue of the rights attaching to their shares. The third opponent, Mr Lord, is the liquidator of the company, and he has adopted a submitting stance in this Court. Hereafter references to the opponents is a reference to the two shareholders.

2 On 2 August 2004 the opponents filed process in the Supreme Court seeking an order that the company be wound up pursuant to s233(1)(a) or s461(1)(e), (f), (g) or (k) of the Corporations Act 2001, that is, the opponents sought an order that the company be wound up on either or both grounds, that its affairs were being conducted in a manner which was oppressive to, or unfairly prejudicial to, or unfairly discriminatory against the opponents as members, or contrary to the interests of the members as a whole; or that it was…

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 Cassegrain v Cassegrain

Details

AGLC: Cassegrain v Cassegrain [2006] NSWCA 39
Case: [2006] NSWCA 39
Decision Date: 22 February 2006

CaseChat Overview and Summary

The New South Wales Court of Appeal considered an appeal by Mr. Cassegrain against a costs order made by the primary judge. The dispute arose from proceedings brought by Mrs. Cassegrain against Mr. Cassegrain and a company, in which she alleged oppressive conduct by Mr. Cassegrain as a director. The primary judge had made an order requiring Mr. Cassegrain to indemnify the company for costs incurred in opposing a winding-up application, which the primary judge found Mr. Cassegrain had caused the company to oppose despite legal advice that it was inevitable.

The central legal issue before the Court of Appeal was whether an appeal lay as of right against the costs indemnity order made under section 233(1)(j) of the *Corporations Act 2001* (Cth), or if leave to appeal was required under section 101(2)(c) of the *Supreme Court Act 1970* (NSW), which generally mandates leave for appeals solely on costs. The court had to determine if the indemnity order was a "costs only" matter for the purposes of section 101(2)(c).

The Court of Appeal held that the indemnity order made under section 233(1)(j) of the *Corporations Act* was not an order as to costs in the ordinary sense, but rather a substantive remedy designed to compensate the company for losses or expenses incurred due to oppressive conduct. Consequently, section 101(2)(c) of the *Supreme Court Act* did not apply, and an appeal lay as of right. However, the court ultimately dismissed the summons, meaning the appeal was unsuccessful.

Orders

Orders of the court

Summons dismissed with costs

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	CASSEGRAIN v CASSEGRAIN [2006] NSWCA 39
HEARING DATE(S):	21 February 2006 22 February 2006
JUDGMENT DATE:	22 February 2006
JUDGMENT OF:	Mason P at 1; Ipp JA at 40
EX TEMPORE JUDGMENT DATE:	02/22/2006
DECISION:	Summons dismissed with costs
CATCHWORDS:	COSTS – CORPORATIONS – Members’ remedies – Oppression – Where director caused company to oppose winding up despite legal advice that it was inevitable – Court may make order requiring person to do a specified act under s 233(1)(j) Corporations Act 2001 – More comprehensive than normal costs under s 76 Supreme Court Act 1970 – Costs order made requiring director to indemnify company – Appeal against – Whether appeal lies as of right – Application of s 101(2)(c) Supreme Court Act requiring leave where appeal is as to costs only – Held not to apply to costs indemnity orders made under Corporations Act s 232.
LEGISLATION CITED:	Corporations Act 2001 ss233(1)(j), 461(1)(e), (f), (g), (k) Supreme Court Act s101(2)(c), s76
CASES CITED:	Australian Securities Commission v Austhome Investments Limited (1993) 44 FCR 194 Cassegrain and Anor v CTK Engineering Pty Limited and Anor [2005] NSWSC 495 Gallo v Dawson (1990) 64 ALJR 58 Jackomarra v Krakouer (1998) 195 CLR 516 Michael v Freehill Hollingdale and Page (1990) 3 WAR 233 Re Minister for Immigration and Ethnic Affairs; Ex parte Li Qin (1997) 186 CLR 622
PARTIES:	Claude George CASSEGRAIN Thomas Jean Roger CASSEGRAIN & 2 Ors
FILE NUMBER(S):	CA 40513/2005
COUNSEL:	Claimant: C J Bevan 1 & 2: Opponents: R Beech-Jones 3 O: T Tarlakovski
SOLICITORS:	Claimant: Evan Patakas & Associates 1&2 Opponents: Thompson Eslick 3 Opponent: Norton White
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT JUDICIAL OFFICER:	White J