In the matter of Graziers Pastoral Pty Ltd (No 2)

In the Supreme Court of New South Wales, Graziers Pastoral Pty Ltd (No 2) was the subject of an oppression suit brought by a shareholder against the company's directors. The dispute arose after the parties, who had entered into a Deed of Mandate to appoint new directors to manage the company's affairs and sell its assets due to a breakdown in trust, found themselves at odds. The plaintiff alleged that the new directors were engaging in oppressive conduct in conjunction with another shareholder. The plaintiff sought an interlocutory injunction to prevent the directors from being indemnified from the company's funds for their legal expenses.

The court was required to decide whether there was a sufficient basis for the plaintiff to seek an interlocutory injunction, particularly in light of the uncertainty surrounding the existence, source, and nature of any potential indemnity. Additionally, the court needed to consider whether it was appropriate to resolve the dispute regarding the indemnity at the interlocutory stage, or if the matter should be left for the final hearing. The court was also tasked with determining whether injunctive relief was necessary, given that there were ample company assets available.

The court held that there was no basis for the plaintiff to seek an interlocutory injunction at that stage, as there was no clear evidence of the existence, source, or nature of the indemnity in question. The court found it undesirable to resolve the dispute regarding the indemnity in the interlocutory application, as it would be more appropriate to address this issue during the final hearing. Furthermore, the court determined that there was no necessity to grant injunctive relief, as there were ample company assets available to cover any potential legal expenses. The court made orders directing the new directors to provide the plaintiff with a monthly account of any legal fees they had paid in defending the litigation. This decision followed the principles outlined in In the matter of Therma Truck Pty Ltd [2016] NSWSC 266.