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Coope v LCM Litigation Fund Pty Ltd

Coope v LCM Litigation Fund Pty Ltd

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Case Copied 8 June 2016 50 min read

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Court of Appeal

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37
Hearing dates: 19 April and 20 April 2016
Decision date: 08 June 2016
Before: Gleeson JA at [1];
Leeming JA at [2];
Payne JA at [7].
Decision:
(1) Appeal dismissed;

(2) The appellant is to pay the costs of the respondent of the appeal on a party–party basis as agreed or assessed, save for those costs referable to order 4;

(3) The respondent’s Notice of Motion dated 26 February 2016 is dismissed;

(4) The respondent to pay the appellant’s costs of the Notice of Motion on a party–party basis as agreed or assessed;

(5) In relation to the cross-appeal:

(a) the cross-appellant’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 15 June 2016 and served on the cross-respondent at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought;

(b) the cross-respondent’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 22 June 2016 and served on the cross-appellant at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought;

(c) the cross-appellant to provide any written submissions in reply of no more than two pages to be forwarded by email to Gleeson JA’s associate by 5pm, 24 June 2016 and served on the cross-respondent at the same time;
(d) liberty to apply to this Court on three days written notice.
Catchwords: CORPORATIONS – employment as managing director – whether director engaged in serious misconduct; EQUITY – fiduciary duties – conflict of duty and interest – whether disclosure necessary to avoid conflict; CORPORATIONS – construction of s 200F of the Corporations Act 2001 (Cth)
Legislation Cited: Corporations Act 2001 (Cth) ss 200AB, 200B, 200C, 200D, 200F
Criminal Code Act 1995 (Cth) ss 6.1, 9.2
Supreme Court Act 1970 (NSW) s 75A
Cases Cited: Adler v Australian Securities and Investments Commission [2003] NSWCA 131; 46 ACSR 504
Balston Ltd v Headline Filters Ltd [1990] FSR 385
Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; 191 FCR 1
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66
Boardman v Phipps [1967] 2 AC 46
Breen v Williams (1996) 186 CLR 71
Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425
Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29
Chan v Zacharia (1984) 154 CLR 178
Concut Pty Ltd v Worrell [2000] HCA 64; 176 ALR 693
Fexuto Pty Limited v Bosnjak Holdings Pty Limited [2001] NSWCA 97; 37 ACSR 672
Fox v GIO Australia Limited (2002) 56 NSWLR 512; [2002] NSWIRComm 318
Friend v Brooker [2009] HCA…

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.

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Details

Case: [2016] NSWCA 37
Decision Date: 08 June 2016

CaseChat Overview and Summary

In *Coope v LCM Litigation Fund Pty Ltd*, the Court of Appeal of New South Wales considered an appeal and a cross-appeal concerning allegations of serious misconduct by a managing director and breaches of fiduciary duties. The primary dispute involved whether the director's conduct constituted serious misconduct and whether he had breached his fiduciary duties by failing to disclose a conflict between his duty and his interest. The court also had to consider the construction of section 200F of the *Corporations Act 2001* (Cth).

The legal issues before the court included whether the managing director's actions amounted to serious misconduct as defined in the relevant employment context, and whether his failure to disclose a potential conflict of interest to the company constituted a breach of his fiduciary obligations. Furthermore, the court was required to interpret and apply section 200F of the *Corporations Act 2001* (Cth) in relation to the circumstances of the case.

The Court of Appeal dismissed the appeal, finding that the director's conduct did not meet the threshold for serious misconduct and that his disclosures were sufficient to avoid a breach of his fiduciary duties. The court applied established principles of corporate law regarding fiduciary duties, emphasizing the importance of disclosure in managing conflicts of interest. The court also provided directions regarding the ongoing consideration of the cross-appeal, including the submission of written arguments by the parties.

Orders

Orders of the court

(1) Appeal dismissed;

(2) The appellant is to pay the costs of the respondent of the appeal on a party–party basis as agreed or assessed, save for those costs referable to order 4;

(3) The respondent’s Notice of Motion dated 26 February 2016 is dismissed;

(4) The respondent to pay the appellant’s costs of the Notice of Motion on a party–party basis as agreed or assessed;

(5) In relation to the cross-appeal:

(a) the cross-appellant’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 15 June 2016 and served on the cross-respondent at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought;

(b) the cross-respondent’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 22 June 2016 and served on the cross-appellant at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought;

(c) the cross-appellant to provide any written submissions in reply of no more than two pages to be forwarded by email to Gleeson JA’s associate by 5pm, 24 June 2016 and served on the cross-respondent at the same time;

(d) liberty to apply to this Court on three days written notice.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37
Hearing dates:	19 April and 20 April 2016
Decision date:	08 June 2016
Before:	Gleeson JA at [1]; Leeming JA at [2]; Payne JA at [7].
Decision:	(1) Appeal dismissed; (2) The appellant is to pay the costs of the respondent of the appeal on a party–party basis as agreed or assessed, save for those costs referable to order 4; (3) The respondent’s Notice of Motion dated 26 February 2016 is dismissed; (4) The respondent to pay the appellant’s costs of the Notice of Motion on a party–party basis as agreed or assessed; (5) In relation to the cross-appeal: (a) the cross-appellant’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 15 June 2016 and served on the cross-respondent at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought; (b) the cross-respondent’s written submissions of no more than five pages containing such orders (including costs) it submits should be made on the cross-appeal to be forwarded by email to Gleeson JA’s associate by 5pm, 22 June 2016 and served on the cross-appellant at the same time. Those submissions should address whether the opportunity to make any further oral submissions is sought; (c) the cross-appellant to provide any written submissions in reply of no more than two pages to be forwarded by email to Gleeson JA’s associate by 5pm, 24 June 2016 and served on the cross-respondent at the same time; (d) liberty to apply to this Court on three days written notice.
Catchwords:	CORPORATIONS – employment as managing director – whether director engaged in serious misconduct; EQUITY – fiduciary duties – conflict of duty and interest – whether disclosure necessary to avoid conflict; CORPORATIONS – construction of s 200F of the Corporations Act 2001 (Cth)
Legislation Cited:	Corporations Act 2001 (Cth) ss 200AB, 200B, 200C, 200D, 200F Criminal Code Act 1995 (Cth) ss 6.1, 9.2 Supreme Court Act 1970 (NSW) s 75A
Cases Cited:	Adler v Australian Securities and Investments Commission [2003] NSWCA 131; 46 ACSR 504 Balston Ltd v Headline Filters Ltd [1990] FSR 385 Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; 191 FCR 1 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 Boardman v Phipps [1967] 2 AC 46 Breen v Williams (1996) 186 CLR 71 Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2012] WASC 425 Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 Chan v Zacharia (1984) 154 CLR 178 Concut Pty Ltd v Worrell [2000] HCA 64; 176 ALR 693 Fexuto Pty Limited v Bosnjak Holdings Pty Limited [2001] NSWCA 97; 37 ACSR 672 Fox v GIO Australia Limited (2002) 56 NSWLR 512; [2002] NSWIRComm 318 Friend v Brooker [2009] HCA…