Lu v Fu

Case [2025] NSWSC 1014 5 September 2025

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Lu v Fu [2025] NSWSC 1014
Hearing dates: 15 May 2025
Date of orders: 05 September 2025
Decision date: 05 September 2025
Jurisdiction: Equity
Before: Richmond J
Decision:
His Honour, Richmond J, makes the following order:
1. Order the parties to bring in short minutes of order to give effect to this judgment, including as to costs, within 14 days by email to the Associate of Richmond J, or if the parties are unable to reach agreement on the form of orders, each party is to send their respective draft short minutes of order and short submissions as to the differences between them.

Catchwords:
CORPORATIONS — Statutory derivative action — Application to bring proceedings on behalf of company — Where leave sought by member or former member of company — General principles to be applied under ss 236 and 237 Corporations Act 2001 (Cth)
CORPORATIONS — Statutory derivative action — Application to bring proceedings on behalf of company — Where leave sought by member or former member of company — Reflective loss —Whether loss claimed was reflective of a loss that could have been claimed by company
CORPORATIONS — Directors and officers — Fiduciary duties — To whom duties owed — Whether director owed a fiduciary duty to shareholders — Relevance of special circumstances
CIVIL PROCEDURE — Originating process — Amendment — Principles to be applied

Legislation Cited:
Corporations Act 2001 (Cth)
Civil Procedure Act 2005 (NSW)

Cases Cited:
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Aurizon Holdings Ltd v Commissioner of Taxation [2022] FCA 368
Barnes v Addy (1874) LR 9 Ch App 244
Blakeney v Blakeney [2016] WASCA 76; (2016) 113 ACSR 398
Botanical Water Technologies IP Ltd v Driver [2025] NSWCA 162
Bowman v Secular Society Ltd [1917] AC 406
Cassegrain v Gerard Cassegrain & Co Pty Ltd [2008] NSWSC 976; (2008) 68 ACSR 132
Cassegrain v Gerard Cassegrain & Co Pty Ltd [2008] NSWSC 1159
Chahwanv Euphoric Pty Ltd [2008] NSWCA 52; (2008) 245 ALR 780
Crawley v Short [2009] NSWCA 410
Eastone Mining Pty Ltd v Eastone Holding Pty Ltd [2019] NSWSC 1850; (2019) 142 ACSR 38
Ehsman v Nutectime International Pty Ltd [2006] NSWSC 887; (2006) 58 ACSR 705
Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 732; (2005) 53 ACSR 732
Gillespie v Gillespie [2025] NSWCA 24; (2025) 422 ALR 224
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75
Harris v Milfull [2002] FCAFC 442; (2002) 43 ACSR 542
Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252
Huang v Wang [2016] NSWCA 164; (2016) 114 ACSR 586
K&J Acquisitions Pty Ltd v Manauzzi [2009] NSWSC 279
Karpik v Carnival plc (Ruby Princess) (Amendment Application) [2022] FCA 1232
Marex Financial Ltd v Sevilleja [2021] AC 39; [2020] UKSC 31
Macaura v Northern Assurance Co…

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 Lu v Fu

Details

AGLC: Lu v Fu [2025] NSWSC 1014
Case: [2025] NSWSC 1014
Decision Date: 05 September 2025

CaseChat Overview and Summary

In the case of Lu v Fu, the plaintiff, a former member of a company, sought leave to bring a statutory derivative action on behalf of the company against its directors, including the defendant. The plaintiff argued that the directors had breached their fiduciary duties and caused losses to the company. The dispute was heard in the Federal Court of Australia.

The court was required to determine whether the plaintiff was eligible to bring the action under sections 236 and 237 of the Corporations Act 2001, and if the loss claimed was reflective of a loss that could have been claimed by the company. The court also needed to assess whether the directors owed a fiduciary duty to the shareholders and if special circumstances applied.

The court found that the plaintiff had established a prima facie case for leave to bring the proceedings, as the allegations of breaches of fiduciary duty were serious and the loss claimed was not reflective of a loss that could have been claimed by the company. The court also determined that the directors owed a fiduciary duty to the shareholders and that special circumstances did not apply. Consequently, the court granted the plaintiff leave to bring the statutory derivative action on behalf of the company.

The court ordered that the plaintiff be granted leave to bring the statutory derivative action on behalf of the company against the directors. The court further directed that the proceedings be stayed pending the outcome of a related proceeding.

Orders