Netbush Pty Ltd v Fascine Developments Pty Ltd

Netbush Pty Ltd brought an action against several defendants, seeking declarations that issues and allotments of shares were invalid and for relief by way of winding up the companies. The plaintiff sought relief on the basis of oppression of minority shareholders by the majority directors of the companies, and because of a course of dealings between the companies and a person, the fourth defendant, in respect of whom the companies had acted for his benefit, but not for the benefit of the plaintiff. The plaintiff's application was successful in part. It secured declarations that certain issues and allotments of shares were invalid and obtained a permanent injunction preventing the fifth defendant from exercising any rights in relation to the shares. The plaintiff's application for winding up orders was unsuccessful. The plaintiff sought its costs against three of the five defendants. The court exercised its discretion under O 66 of the Rules of the Supreme Court 1971 (WA) and ordered the three defendants to pay 60 per cent of the plaintiff's costs. The court declined to order any costs against the other two defendants, one of whom was a company which had not been properly managed by its directors. The court also declined to order any costs against a director who had not been party to the family dispute. The court considered it appropriate to make a single costs order for the plaintiff against the three defendants because the plaintiff's case was primarily concerned with the improper management of the companies by the directors who voted for the improper issues and allotments of shares. The court considered it appropriate to reduce the plaintiff's entitlement to costs because it had not succeeded in showing all of the forms of unfair conduct it had relied upon, nor in securing both of the major forms of relief it had sought. The court made no order as to the costs of the argument as to costs.