CIP Group Pty Ltd v So

The present case involves an application by the Clancy interests for leave nunc pro tunc to bring derivative claims on behalf of operating companies against Mr So and Ultimate. The companies involved in the proceedings are property developers who have undertaken various developments over the years, including the Carver’s Reach Estate project. The relationship between Mr Clancy and Mr So was characterised as a quasi-partnership, with each party taking on specific roles within the companies. The application for leave seeks to bring the derivative claims in the context of an existing oppression action, a matter that requires consideration of the scope and application of the decision in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd.

The central legal issue before the court was whether the proposed derivative claims could be agitated in the oppression action and, if so, what the scope of the decision in Fexuto should be in this context. The applicants argued that it was in the best interests of the companies for the derivative claims to be brought in the oppression action, while the respondents opposed the application, asserting that the derivative claims should be brought separately. The court had to determine whether the derivative claims could be considered concurrently with the oppression action and whether the decision in Fexuto applied to this situation.

The court found that the applicants had established that it was in the best interests of the companies for the derivative claims to be brought in the oppression action. The court noted that the decision in Fexuto provided guidance on the circumstances in which derivative claims may be brought concurrently with oppression proceedings, and concluded that those principles were applicable to the present case. The court allowed the application for leave, emphasising that the respondents had vigorously opposed the application and that there was no sustainable reason for adopting any other course. The court ordered that the respondents should pay the applicants’ costs of the application, though the question of the costs of the application was deferred to a later date.

The final orders of the court granted the applicants leave to bring the derivative claims on behalf of the companies against Mr So and Ultimate, subject to certain undertakings including the indemnification of the companies against any costs orders made against them in the proceeding. The applicants were also granted leave to amend their originating process to incorporate the claims for which leave had been granted. Further, the court directed that written submissions with respect to costs be filed by specified dates and that the matter be listed for a case management hearing and a hearing on the question of costs.