Gillespie v Gillespie

Case [2025] NSWCA 24

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Gillespie v Gillespie [2025] NSWCA 24
Hearing dates: 10 February 2025
Date of orders: 27 February 2025
Decision date: 27 February 2025
Before: Gleeson JA; Mitchelmore JA; Ball JA
Decision:

(1)   Grant leave to appeal.

(2)   Appellant to file a notice of appeal in the form contained in the White Book within 7 days.

(3)   Appeal dismissed.

(4)   Appellant to pay the respondents’ costs in this Court.

Catchwords:

CORPORATIONS – statutory derivative action – Corporations Act 2001 (Cth), s 237 – application to bring proceedings on behalf of company – where company is corporate trustee – leave sought by former director of company who is a discretionary object of trust – nature of good faith requirement – whether applies to application for leave and to the desire to bring the underlying proceedings – where impugned transaction occurred 11 years after applicant ceased to be a director and 19 years before applicant sought leave under s 237 – where unexplained delay

APPEALS – nature of appeal – application for leave to bring statutory derivative action – standard of appellate review – correctness standard applies

Legislation Cited:

Corporations Act 2001 (Cth), ss 236, 237

Corporate Law Economic Reform Program Act 1999 (Cth)

Real Property Act 1900 (NSW), s 42

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Alexander v Perpetual Trustees WA Ltd (2004) 216 CLR 109; [2004] HCA 7

Cemcon Re Hall Constructions Pty Ltd [2009] FCA 696

Chahwan v Euphoric Pty Ltd t/as Clay & Michel [2008] NSWCA 52; 227 FLR 43.

Connective Services Pty Ltd (ACN 107 366 496) v Slea Pty Ltd (ACN 106 752 434) [2018] VSCA 229; 130 ACSR 321

Foss v Harbottle (1843) 2 Hare 461; 67 ER 189

Gillespie v Gillespies Cranes Nominees Pty Ltd [2022] NSWSC 1184; 162 ACSR 24

GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; 97 ALJR 857

Huang v Wang [2016] NSWCA 164; 114 ACSR 586

Mount Gilead Pty Ltd v Macarthur -Stanham (as executor of Estate of Late Lee Macarthur-Onslow) [2023] NSWCA 37; 168 ACSR 32

Oates v Consolidated Capital Services Pty Ltd (2009) 76 NSWLR 69; [2009] NSWCA 183

Re Gillespies Crane Nominees Pty Ltd [2024] NSWSC 1136

Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; 42 ACSR 313

Vlahos v Vlahos [2016] VSC 824

Texts Cited:

Austin & Black's Annotations to the Corporations Act

Corporate Law Economic Reform Program Bill 1998

Category:Principal judgment
Parties: Robert Gillespie (Appellant)
Peter Timothy Gillespie (First Respondent)
Helen Ann Gillespie (as personal representative of the Estate of the Late John William Gillespie) (Second Respondent)
JPD Equipment Pty Limited (Third Respondent)
Ainley Pty Limited (Fourth Respondent)
Gillespies Cranes Nominees Pty Ltd (Fifth Respondent)
Representation:

Counsel:

CD Wood SC (Appellant)
JC Hewitt SC with A B Emmerson (First to Fourth Respondents)

Solicitors:

Hugh & Associates (Applicant)
Pitcher Partners…

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AGLC
Gillespie v Gillespie [2025] NSWCA 24
Case
[2025] NSWCA 24
Decision Date

CaseChat Overview and Summary

Gleeson, Mitchelmore and Ball JJA of the Court of Appeal of the Supreme Court of New South Wales considered an application for leave to bring a statutory derivative action under section 237 of the Corporations Act 2001 (Cth). The applicant, a former director of a corporate trustee and a discretionary object of the trust administered by that company, sought to bring proceedings on behalf of the company. The dispute concerned an impugned transaction that occurred many years prior to the application, and the applicant had ceased to be a director of the company long before the transaction.

The primary legal issues before the Court were whether the applicant satisfied the requirements of section 237 of the Corporations Act, particularly the "good faith" requirement, and whether this requirement applied to both the application for leave and the desire to bring the underlying proceedings. The Court also considered the nature of the appellate review of the primary judge's decision, determining that the correctness standard applied. The significant delay between the impugned transaction and the application for leave, which remained unexplained, was a crucial factor.

The Court reasoned that the good faith requirement in section 237 necessitates an honest belief that the proposed proceedings are in the best interests of the company. In this instance, the Court found that the applicant had not demonstrated that bringing the proceedings was in the company's best interests, especially given the substantial and unexplained delay. The Court also noted that the applicant's personal interests as a discretionary object of the trust were not necessarily aligned with the company's interests. Consequently, the Court concluded that the primary judge had correctly refused leave.

The Court of Appeal granted leave to appeal, ordered the appellant to file a notice of appeal, but ultimately dismissed the appeal. The appellant was ordered to pay the respondents' costs in the Court of Appeal.

Orders

Orders of the court

(1) Grant leave to appeal.

(2) Appellant to file a notice of appeal in the form contained in the White Book within 7 days.

(3) Appeal dismissed.

(4) Appellant to pay the respondents’ costs in this Court.

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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