LEAHY -v- AUDRY [2013] WASC 134

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2013] WASC 134
Case No:	COR:175/2011	Heard:	2 APRIL 2013
Coram:	MASTER SANDERSON	Delivered:	18/04/13
No of pages:	13	Judgment Part:	1 of 1
Result:	Application adjourned pending determination of winding up application
Category:	B
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Parties:	MICHAEL LEAHY NORMA LEAHY KENNETH JAMES SMITH KENNETH JOHN SMITH MICHEL CHARLES LOUIS AUDRY KATHLEEN ANNE AUDRY
Catchwords:	Corporations law Application to bring action in name of company Turns on own facts
Legislation:	Nil
Case References:	Adams v Meridian Mining Ltd [2009] WASC 176 Charlton v Baber [2003] NSWSC 745 Gerard Cassegrain & Co Pty Ltd v Cassegrain [2010] NSWSC 91 Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : LEAHY -v- AUDRY [2013] WASC 134 CORAM : MASTER SANDERSON HEARD : 2 APRIL 2013 DELIVERED : 18 APRIL 2013 FILE NO/S : COR 175 of 2011 BETWEEN : MICHAEL LEAHY

NORMA LEAHY

KENNETH JAMES SMITH

KENNETH JOHN SMITH

Plaintiffs

AND

MICHEL CHARLES LOUIS AUDRY

KATHLEEN ANNE AUDRY

Defendants

Catchwords:

Corporations law - Application to bring action in name of company - Turns on own facts

Legislation:

Nil

Result:

Application adjourned pending determination of winding up application

(Page 2)

Category: B

Representation:

Counsel:

Plaintiffs : Mr M F Holler

Defendants : Mr C P Shanahan SC

Solicitors:

Plaintiffs : Morgan Alteruthemeyer

Defendants : Butcher Paull & Calder

Case(s) referred to in judgment(s):

Adams v Meridian Mining Ltd [2009] WASC 176
Charlton v Baber [2003] NSWSC 745
Gerard Cassegrain & Co Pty Ltd v Cassegrain [2010] NSWSC 91
Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313

(Page 3)

1 MASTER SANDERSON: By originating process filed 25 October 2011 the plaintiffs sought a variety of orders against the defendants. First they make claims (presumably for declaration) the defendants have not discharged their duties as directors in a proper fashion under s 180, s 181, s 182 and s 183 of the Corporations Act 2001 (Cth). Second they bring an oppression action based upon s 232 and s 233 of the Corporations Act. Thirdly they seek an order they be granted leave to bring proceedings in the name of a company against the defendants. They rely upon s 236, s 237 and s 242 of the Corporations Act.

2 The plaintiffs brought an application for directions and by consent it was ordered the application for leave to bring proceedings in the name of a company be dealt with first. The parties filed their evidence and submissions directed only at this issue.

3 Section 236, s 237 and s 242 of the Corporations Act are in the following terms:

236 Bringing, or intervening in, proceedings on behalf of a company

(1) A person may bring proceedings on behalf of a company, or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the…

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 Leahy v Audry

Details

AGLC: Leahy v Audry [2013] WASC 134
Case: [2013] WASC 134
Decision Date

CaseChat Overview and Summary

The plaintiffs, Michael Leahy, Norma Leahy, Kenneth James Smith and Kenneth John Smith, applied for leave to bring an action in the name of the company, Raylane Holdings Pty Ltd, against the defendants, Michel Charles Louis Audry and Kathleen Anne Audry, on the basis that the defendants had misused their positions as directors of the company. The plaintiffs sought leave to bring the action pursuant to sections 236, 237 and 242 of the Corporations Act 2001 (Cth). The defendants conceded the plaintiffs were acting in good faith but argued that it was not in the best interests of the company for the plaintiffs to be granted leave and that there was no serious question to be tried. The court found there was a serious question to be tried on the basis of the defendants' failure to disclose their own commercial interests and the use of the company's assets. The court also found the plaintiffs were acting in good faith. However, the court found it was not in the best interests of the company to grant leave to bring the action. The court considered that if the company was to be wound up then the liquidator would be better placed to bring any proceedings against the defendants. The court therefore adjourned the application for leave to bring the action pending the outcome of a winding up application.

Orders