Legal Research
Cases
Hannon v Doyle

Hannon v Doyle

Case [2011] NSWSC 10 3 February 2011

Statutory Derivative Action

Breach of Duty

Oppressive Conduct

Good Faith

Corporate Law & Governance

Type to search within this case.

Supreme Court

New South Wales

Medium Neutral Citation: Hannon v Doyle [2011] NSWSC 10
Hearing dates: 18, 19, 24, 31 May; 1 December 2010
Decision date: 03 February 2011
Before: Barrett J
Decision:
Short minutes to be brought in

Catchwords: CORPORATIONS - statutory derivative action - application by qualified person to bring proceedings on behalf of each of two companies - allegations of breaches of duty by directors of each company - allegations of oppressive and like conduct in affairs of one company of which the other a member - whether serious question to be tried - whether in best interests of company that applicant be granted leave - whether applicant acting in good faith - leave to be granted
Legislation Cited: Corporations Act 2001 (Cth), Chapter 2E, ss 229 232, 236(1)(a)(i), (ii), 237, 260B
Cases Cited: Aberdeen Railway Co v Blaikie (1854) 1 Macq HL 461
Doyle v Australian Securities and Investments Commission [2005] HCA 78; (2005) 227 CLR 18
Ehsman v Nutectime International Pty Ltd [2006] NSWSC 887; (2006) 58 ACSR 705
Ferrari v Ferrari Investments (Townsville) Pty Ltd [1999] QCA 230; [2000] 2 Qd R 359
Fitzpatrick v Cheal [2010] NSWSC 717
F W V Stanke Holdings Pty Ltd v O'Meara [2007] SASC 413
George A Bond & Co Ltd v Bond (1929) 30 SR(NSW) 15
Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859
Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353
Swansson v R A Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313
Vinciguerra v MG Corrosion Consultants Pty Ltd [2010] FCA 763; (2010) 79 ACSR 293
Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459
Winthrop Investments Ltd v Winns Ltd [1975] 2 NSWLR 666
Woolworths Ltd v Kelly (1991) 22 NSWLR 189
Category: Principal judgment
Parties: David Ross Hannon (Plaintiff)
Alan David Doyle (First Plaintiff)
Stephen John Turner (Second Plaintiff)
PSG International Financial Engineers Limited (Third Defendant)
Afro Pacific Holdings Pty Limited (Fourth Defendant)
Derek William Satterthwaite (Fifth Defendant)
Africa Pacific Capital Pty Limited (Sixth Defendant)
Representation: Counsel:
Mr M R Speakman/Mr A P Spencer (Plaintiff)
Ms E A Collins (1, 2, 4, 6, 7 Defendants)
Solicitors:
Arnold Bloch Leibler (Plaintiff)
Corrs Chambers Westgarth (1, 2, 4, 6, 7 Defendants)

File Number(s): 2009/290715

Judgment

Introduction

Mr David Hannon makes application under s 237 of the Corporations Act 2001 (Cth) for leave to bring proceedings on behalf of each of two "companies" within the meaning of that Act, being Afro Pacific Holdings Pty Ltd ("Holdings") and Afro Pacific Capital Ltd ("Afro Pacific"), a subsidiary of Holdings by which some 88% of the issued shares are held.

Mr Hannon's qualification under s 237(1) to obtain such leave arises, in the case of Holdings, from his being a member of Holdings (s 236(1)(a)(i)) and a former officer of Holdings (s 236(1)(a)(ii)) and, in the case of Afro Capital, from his being a member…

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 Hannon v Doyle

Details

AGLC: Hannon v Doyle [2011] NSWSC 10
Case: [2011] NSWSC 10
Decision Date: 03 February 2011

CaseChat Overview and Summary

In the matter of Hannon v Doyle, the applicant sought leave to bring a statutory derivative action on behalf of two companies against their directors. The applicant alleged breaches of directors' duties and oppressive conduct in the affairs of one of the companies, of which the other was a member. The application was made in the Supreme Court of Queensland. The primary legal issues that the court needed to determine were whether there was a serious question to be tried and whether it was in the best interests of the companies for the applicant to be granted leave to proceed with the action. Additionally, the court had to consider whether the applicant was acting in good faith.

The court found that there was a serious question to be tried based on the applicant's evidence. The allegations, if proven, were sufficient to warrant the court granting leave for the proceedings to go ahead. Furthermore, the court concluded that it was in the best interests of the companies for the applicant to be granted leave to bring the action, as the claims, if substantiated, would have significant implications for the companies and their shareholders. The court also found that the applicant was acting in good faith, as they had a genuine concern for the welfare of the companies and their members. As a result, the court granted the applicant leave to bring the statutory derivative action on behalf of the companies.

Orders