Pal v Perth Technical College Pty Ltd - [2020] WASC 78

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   PAL -v- PERTH TECHNICAL COLLEGE PTY LTD [2020] WASC 78
CORAM:   HILL J
HEARD:   18 FEBRUARY 2020
DELIVERED          :   18 FEBRUARY 2020
PUBLISHED           :   11 MARCH 2020
FILE NO/S:   COR 190 of 2019
BETWEEN:   SIMLA DEVI PAL
First Plaintiff

YASH PAL
Second Plaintiff

AND

PERTH TECHNICAL COLLEGE PTY LTD
First Defendant

GURJANT SINGH SANGHA
Second Defendant

ASIF ALI
Third Defendant

Catchwords:

Practice and Procedure - Application for interim mandatory injunctions - Mandatory interim injunction sought for reinstatement of director - Serious question to be tried - Delay in bringing proceedings - Requirement for an undertaking as to damages - Injunction granted in part

Legislation:

Corporations Act 2001 (Cth), s 1324

Result:

Interim injunction granted in part

Category: B

Representation:

Counsel:

First Plaintiff	:	S K Shepherd
Second Plaintiff	:	S K Shepherd
First Defendant	:	A J Aristei
Second Defendant	:	A J Aristei
Third Defendant	:	A J Aristei

Solicitors:

First Plaintiff	:	Law Mantra Lawyers
Second Plaintiff	:	Law Mantra Lawyers
First Defendant	:	Delta Legal
Second Defendant	:	Delta Legal
Third Defendant	:	Delta Legal

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

Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd [2002] NSWSC 741; (2002) 42 ACSR 605
Australian Securities and Investments Commission v Parkes [2001] NSWSC 377; (2001) 38 ACSR 355
Australian Securities and Investments Commission v Pegasus Leverage Options Group Pty Ltd [2002] NSWSC 310; (2002) 41 ACSR 561
Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114
Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105
Westpac Banking Corporation v Official Liquidator of Bell Group Ltd [2017] WASC 77

HILL J:

(These reasons were delivered extemporaneously at the conclusion of the hearing. They have been edited from transcript to correct matters of grammar and so as to include complete references in the form of footnotes.)

By originating process dated 14 October 2019, the plaintiffs seek an interim injunction pursuant to s 1324(4) of the Corporations Act 2001 (Cth) (Act).
Specifically, the plaintiffs seek an injunction to:
(a)reinstate the second plaintiff as a director of the first defendant;
(b)require the second and third defendants to make the books and records of the first defendant available for inspection by the plaintiffs;
(c)provide the plaintiffs with electronic access to the bank accounts of the first defendant;
(d)require the written consent of one of the plaintiffs to any payment made from the accounts of the first defendant; and
(e)require an extraordinary general meeting of the first defendant to be called within 28 days at which meeting the shares of the third defendant shall not be counted and the second plaintiff shall, to the extent necessary, be reinstated as a director of the first defendant.
In submissions before me this morning, the plaintiffs did not press the order in terms of the fifth matter.
In support of their application, the plaintiffs rely upon two affidavits of the second plaintiff; one sworn on 14 October 2019 and…

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 Pal v Perth Technical College Pty Ltd

Details

AGLC: Pal v Perth Technical College Pty Ltd [2020] WASC 78
Case: [2020] WASC 78
Decision Date: 11 MARCH 2020

CaseChat Overview and Summary

The case of Pal v Perth Technical College Pty Ltd involves the plaintiffs seeking interim mandatory injunctions for the reinstatement of one of their directors. The case was heard in the Supreme Court of Western Australia. The plaintiffs, who are directors of the first defendant, a company, sought relief against the second plaintiff, who is also a director of the first defendant, as well as the second and third defendants, who are other directors of the company. The dispute revolves around the alleged breach of directors' duties and the transfer and issue of shares, along with payments made from the company's accounts.

The court was required to determine whether an interim mandatory injunction should be granted to reinstate the director in question, considering the failure of the plaintiffs to provide an undertaking as to damages. The plaintiffs argued that there is a serious question to be tried regarding the alleged breaches of directors' duties by the second, second, and third defendants. The court had to balance the interests of justice with the general requirement for an undertaking as to damages, as stipulated in paragraph 4.3.4 of the Consolidated Practice Directions.

The court acknowledged that there is a significant factual dispute between the parties, primarily concerning the transfer and issue of shares and payments made from the company's accounts. The judge noted that the outcome of the case would depend on the evidence presented at trial. Despite concerns about the conduct of all parties involved, the judge decided that there should be no departure from the usual requirement for an undertaking as to damages. However, given the serious nature of the allegations and the evidence presented, the court granted the application for an interlocutory mandatory injunction in part, subject to the plaintiffs providing an undertaking as to damages.

The final orders of the court included the granting of an interlocutory mandatory injunction to reinstate the director in question, subject to the provision of an undertaking as to damages in the usual terms. This decision ensures that the plaintiffs' application is partially successful, but with the condition that they meet the requirement of providing an undertaking as to damages.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It was not in dispute that the plaintiffs have not filed an undertaking as to damages. Paragraph 4.3.4 of the Consolidated Practice Directions of this court makes plain that generally it is a requirement for a party to obtain the benefit of a restraint that they provide an undertaking to pay damages to any party the subject of the restraint. As was noted by Pritchard J in Westpac Banking Corporation v Official Liquidator of Bell Group Ltd,[5] the undertaking is an attempt to ensure that a defendant will receive compensation for any loss suffered by reason of the grant of the injunction if, ultimately, it is shown that the plaintiffs were not entitled to obtain the injunction. [5] Westpac Banking Corporation v Official Liquidator of Bell Group Ltd [2017] WASC 77 [30]. In considering whether or not to grant the injunction, I have taken into account the failure of the plaintiffs to provide an undertaking as to damages in considering where the interests of justice lie and whether it is desirable to grant the injunction. In my view, there is a serious question to be tried as to whether each of the second plaintiff, the second defendant and the third defendant have breached their duties as directors of the first defendant. On the evidence before the court, there is a significant factual contest between the parties, particularly in respect of the transfer and issue of shares and payments made out of the accounts of the first defendant. Whether the plaintiffs ultimately succeed in their claim will depend on whose evidence is accepted at any trial of the matter. In my view, despite my concerns about the conduct of each of the parties, I do not consider that there should be any departure from the usual requirement that an order for the plaintiffs to receive the benefit of any restraint from the court they should provide the usual undertaking as to damages. This view is strengthened by the absence of any explanation from the plaintiffs as to why they have delayed in bringing any application before the court. For these reasons, subject to the provision of an undertaking as to damages in the usual terms, I will grant the plaintiffs' application for an interlocutory mandatory injunction in part.