JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 February 2018
DATE OF JUDGMENT:	27 March 2018
CASE MAY BE CITED AS:	Re Connective Services Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 128

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PROCEDURE AND PRACTICE – Application under r 66.6 of the Supreme Court (General Civil Procedure) Rules 2005 – Relevant considerations for a stay – Consideration of issue waiver – Special circumstances not established – Stay refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M H O’Bryan QC with Mr J Rudd	Arnold Bloch Leibler
For the First, Second, Fourth to Ninth Defendants	Mr D Crennan QC and Ms A M Folie	Quinn Emanuel Urquhart & Sullivan

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
Legal principles................................................................................................................... 1
The applicants’ claim of prejudice.................................................................................... 3
Case management................................................................................................................ 4
Section 237 of the Corporations Act 2001 (Cth)............................................................... 4
Irreversible prejudice.......................................................................................................... 5
Subject matter of the appeal will be destroyed.............................................................. 5
Damage to Macquarie and the Connective companies................................................. 7
Consideration of damage to Macquarie and the Connective companies................... 9
Slea will be able to access privileged information....................................................... 10
Consideration of privilege............................................................................................... 22
Commercial prejudice caused by the involvement of Liberty................................... 22
Prejudice to Slea................................................................................................................ 23
Conclusion.......................................................................................................................... 24

HIS HONOUR:

Introduction

On 29 November 2017, the Court gave Slea leave to bring proceedings in the name of Connective Services and Connective OSN, pursuant to s 237 of the Corporations Act 2001 (Cth) (Corporations Act), against: Glenn Lees, Mark Haron and Graham Maloney, being the directors of Connective Services and Connective OSN; Connective Group Pty Ltd and their subsidiaries; and Slea and Millsave Holdings Pty Ltd, being the shareholders of Connective Services and Connective OSN.

On 11 December 2017, the Court made orders by consent that any application for a stay of the Court’s grant of leave be listed for hearing in the week of 7 February 2018.

On 15 January 2018 the Connective Services, Connective OSN, Connective Group (and its subsidiaries) (the applicants) filed an application for leave to appeal the decision of 29 November 2017.

Since 29 November 2017, order 4 of the orders of 29 November 2017, being the order that granted Slea leave to commence the derivative proceeding, has been stayed by consent.

On 24 January 2018, the applicants filed a summons seeking a stay, pursuant to r 66.16 of the Supreme Court (General Civil Procedure) Rules 2005 and the inherent jurisdiction of the Court, of order 4 of the orders of 29 November 2017, pending the hearing and determination of the application for leave to appeal and an appeal.

The application was heard on 7 February 2018. Further submissions were filed by the plaintiff on 14 February 2018. Further submissions were filed by the first, second and fourth to ninth defendants on 14 and 16 February 2018.

Legal…

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 Re Connective Services Pty Ltd (No 2)

Details

AGLC: Re Connective Services Pty Ltd (No 2) [2018] VSC 128
Case: [2018] VSC 128
Decision Date: 27 March 2018

CaseChat Overview and Summary

The case of Re Connective Services Pty Ltd (No 2) involved an application for a stay of proceedings brought under rule 66.6 of the Supreme Court (General Civil Procedure) Rules 2005. The applicant sought a stay of proceedings that had been initiated against them by the respondent, Connective Services Pty Ltd. The dispute was centred around whether the court should halt the ongoing litigation due to certain conditions stipulated in the rules. The case was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was to determine whether the applicant had demonstrated sufficient grounds for the court to exercise its discretion to grant a stay of proceedings. The court had to consider whether the applicant had provided a satisfactory explanation for the delay in filing the application for a stay, and whether any special circumstances existed that warranted a halt to the litigation. Additionally, the court needed to assess if the respondent had waived any rights by not objecting to the application for a stay, thereby potentially affecting the outcome.

In its reasoning, the court held that while the applicant had not provided a satisfactory explanation for the delay in making the application for a stay, the respondent had not demonstrated any prejudice arising from this delay. The court also found that the respondent had not waived any rights by not objecting to the application for a stay. However, the court emphasised that the special circumstances necessary to justify a stay had not been established by the applicant. Consequently, the court concluded that the application for a stay should be refused, as the applicant had not met the required threshold for the court to intervene.

The court ultimately ordered that the application for a stay of proceedings be dismissed, and the litigation was to proceed as originally scheduled.

Orders