NESTEGG HOLDINGS PTY LTD -v- SMITH & ORS [2001] WASC 227

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASC 227
Case No:	CIV:1505/2000	Heard:	30 JULY 2001
Coram:	MASTER SANDERSON	Delivered:	27/08/01
No of pages:	25	Judgment Part:	1 of 1
Result:	Summary judgment for defendants
Category:	A
PDF Version

Parties:	NESTEGG HOLDINGS PTY LTD (ACN 009 450 159) CAMPBELL DRUMMOND SMITH GOCOM PTY LTD (ACN 061 277 478) BRYAN PETER PAUL GIVERNY HOLDINGS PTY LTD (ACN 009 407 729) pieNETWORKS LTD (ACN 078 661 444) ROSS LAYMAN CAMMILLERI CRAIG FREDERICK CAMMILLERI PETER ERIC BAILEY CHANTRY HAULAGE PTY LTD (ACN 060 090 753) ROBERT JOHN MCBRIER CERISE BAY PTY LTD (ACN 063 284 202) PATRICK JOSEPH D'CRUZE pieNETWORKS PTY LTD (ACN 078 661 444)
Catchwords:	Corporations Law Action by shareholder to enforce rights of company Fiduciary duty as between directors and shareholders Security for costs Turns on own facts
Legislation:	Corporations Law, s 237, s 1335
Case References:	Breen v Williams (1996) 186 CLR 71 Brunninghausen v Glavanics (1999) 17 ACLC 1247 Christensen v Scott (1996) 1 NZLR 273 Johnson v Gore Wood [2001] 2 WLR 72 Percival v Wright (1902) 2 Ch 421 Wik Peoples v Queensland (1996) 187 CLR 1 Anderson v Effexsven (1999) 10 ANZ Ins Cas 61-424 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 Barings v Coopers & Lybrand [1997] 1 BCLC 427 Beach Petroleum NL v Johnson (1992) 7 ACSR 203 Bell Wholesale Co Pty Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 Brunninghausen v Glavanics (1999) 32 ASCR 222 Buckley v Bennell Design and Constructions Pty Ltd (1974) ACLR 301 Chequepoint Securities Ltd v Claremont Petroleum NL (1986) 11 ACLR 94 DCT v Austin (1998) 28 ACSR 565 Engel Pty Ltd (In Liq) v Leeds, unreported; FCt SCt of WA; Library No 940403; 20 July 1994 FFE Minerals Australia Pty Ltd v Mining Australia Pty Ltd (2000) 22 WAR 241 Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd (1992) 10 ACLC 1394 Gerber Garment Technology Inc v Lectra Systems Ltd [1996] RPC 443 Glandon Pty Ltd v Strata Consolidated Pty Ltd (1993) 11 ACLC 895 Glavanics v Brunninghausen (1996) 19 ACSR 204 Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284 Harpur v Ariadne Australia Ltd [1984] QdR 523 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 HPM Pty Ltd v BPM Pty Ltd, unreported; SCt of WA; Library No 950243; 19 May 1995 Kingstream Steel Ltd v Stemcor UK Ltd [2001] WASCA 138 L Modic Contractors Pty Ltd v Savage, unreported; SCt of WA; Library No 7810; 20 August 1989 Mesenberg v Cord Industrial Recruiters Pty Ltd (Nos 1 & 2) 19 ACSR 483 Morris v A1 Pools Pty Ltd [2000] WASCA 335 Pearson v Naydler [1977] 1 WLR 899 Prudential Assurance Co Ltd v Newman Industries Ltd [1982] 1 Ch 204 RPT…

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.

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Details

Case: [2001] WASC 227
Decision Date

CaseChat Overview and Summary

The plaintiff, Nestegg Holdings Pty Ltd, a shareholder of Auschess Pty Ltd, filed a claim against the directors and shareholders of Auschess, alleging breaches of fiduciary duty and misleading and deceptive conduct. The defendants sought summary judgment, arguing that the plaintiff's claim was not viable and that any right of action lay with Auschess, not the plaintiff. The court found that the plaintiff's claim was based on pleaded facts that did not give rise to a fiduciary duty between the directors and the shareholder. The court held that in the circumstances, the proper plaintiff was Auschess, and the plaintiff had no independent right of action. The court also granted security for costs, ordering the plaintiff to provide $50,000 as security. Finally, the court dismissed the defendants' application for costs under s 237 of the Corporations Law, finding that the plaintiff had acted reasonably despite the lack of notice and resolution.

Orders