Cemcon, In the matter of Hall Concrete Constructions (Vic) Pty Ltd (ACN 111 087 382)

Cemcon, In the matter of Hall Concrete Constructions (Vic) Pty Ltd (ACN 111 087 382) involves a dispute between Cemcon, trustee of the Steven Fitzgerald Family Trust, and J. Hall Concrete Constructions Pty Ltd, trustee of the Hall Investment Trust. Both entities are equal shareholders of Hall Concrete Constructions (HCC), which provides concreting services to the construction industry in Victoria. The central issue revolves around the management of HCC since about 2007, and the allegedly unauthorised use of HCC's assets by and disposition of HCC's assets to another company, HCG, of which Mr Hall is a director. The dispute questions whether Mr Hall's actions in transferring or subsuming HCC's assets to HCG were authorised and appropriate.

The primary legal issues before the court were whether Cemcon, as a shareholder of HCC, was entitled to bring a derivative action against Mr Hall and HCG, and whether the actions taken by Mr Hall were authorised by the shareholders of HCC. The court had to determine whether the actions of Mr Hall in transferring or subsuming HCC's assets to HCG were appropriate and authorised, and whether there was a sufficient basis to proceed with the derivative action. The court also had to consider whether Cemcon should be granted leave to issue proceedings in the name of HCC against Mr Hall and HCG.

The court found that the actions taken by Mr Hall were not authorised by the shareholders of HCC, and that the transfer of assets to HCG was not appropriate. The court determined that Cemcon was entitled to bring a derivative action on behalf of HCC, and that there was sufficient evidence to warrant the proceeding. The court concluded that the authorisation criterion was satisfied and granted leave to Cemcon to issue proceedings in the name of HCC against Mr Hall and HCG, subject to Cemcon indemnifying HCC in respect of the legal costs incurred by HCC in prosecuting the Derivative Proceeding and any legal costs which HCC is ordered to pay to other parties in the Derivative Proceeding.

Accordingly, the court ordered that Cemcon Constructions Pty Ltd (ACN 101 699 352) have leave to issue proceedings in the name of Hall Concrete Constructions (Vic) Pty Ltd (ACN 111 087 382) against James Leonard Hall and Hall Construction Group Pty Ltd (ACN 121 475 107), and that the costs of the application for leave be costs in the cause of the Derivative Proceeding.