Legal Research
Cases
Re Mycorp Group Pty Ltd

Re Mycorp Group Pty Ltd

Case [2013] NSWSC 1344 3 April 2013

Breach of Fiduciary Duty

Statutory Interpretation

Standing

Corporate Law & Governance

Type to search within this case.

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Mycorp Group Pty Limited (and others) [2013] NSWSC 1344
Hearing dates: 3 April 2013
Decision date: 03 April 2013
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Orders made granting leave to the plaintiff to bring proceedings.

Catchwords: CORPORATIONS - statutory derivative action - claim of breach of director's fiduciary and statutory obligations - application to bring proceedings on behalf of two companies - where indemnity offered by the plaintiff - criteria for granting of leave under s 237(2) Corporations Act 2001 (Cth) - whether probable that the companies will not bring proceedings - whether the plaintiff is acting in good faith - whether serious question to be tried - whether appropriate notice was given.
Legislation Cited: - Corporations Act 2001 (Cth) ss 233, 236, 236(3), 237, 237(2), 237(2)(a), 237(2)(b), 237(2)(c), 237(2)(d)
Cases Cited: - Chahwan v Euphoric Pty Ltd t/as Clay & Michel [2008] NSWCA 52; (2008) 245 ALR 780; 65 ACSR 661
- Fitzpatrick v Cheal [2010] NSWSC 717
- Gerard Cassegrain & Co Pty Ltd v Cassegrain [2008] NSWSC 976
- Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859
- MG Corrosion Consultants Pty Ltd v Vinciguerra [2011] FCAFC 31; (2011) 82 ACSR 367
- Power v Ekstein [2010] NSWSC 137; (2010) 77 ACSR 302
- Re Gladstone Pacific Nickel Ltd [2011] NSWSC 1235; (2011) 86 ACSR 432
- Showtime Management Australia Pty Ltd v Showtime Presents Pty Ltd [2008] NSWSC 618
- Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 82 ACSR 1
- Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313
Category: Interlocutory applications
Parties: Fred Fajloun (Plaintiff)
George Khoury (First Defendant)
Mycorp Group Pty Limited (Second Defendant)
Moonstone River Pty Limited (Third Defendant)
Summer Tides Pty Limited (Fourth Defendant)
Snowy Falls Pty Limited (Fifth Defendant)
Telnac Pty Limited (Sixth Defendant)
Representation: Counsel:
M. Condon SC (Plaintiff)
S. Duggan (First, Fifth and Sixth Defendants)
Solicitors:
Sage Solicitors (Plaintiff)
Bamford Lawyers (First, Fifth and Sixth Defendants)

File Number(s): 2012/350220

Judgment - ex tempore

By Amended Interlocutory Process, the plaintiff, Mr Fred Fajloun, applies for leave under ss 236 and 237 of the Corporations Act 2001 (Cth) and the general law to bring proceedings on behalf of the second defendant, Mycorp Group Pty Limited ("Mycorp") and the fourth defendant, Summer Tides Pty Limited ("Summer Tides") against the first defendant, Mr George Khoury, the fifth defendant, Snowy Falls Pty Limited ("Snowy Falls") and the sixth defendant, Telnac Pty Limited ("Telnac").

The application to bring such proceedings was originally filed on 9 November 2012 and is brought in context of allegations made by Mr Fajloun that he and Mr Khoury had conducted a business of the development and operation of service stations at certain sites, allegations of breach of fiduciary duty by Mr Khoury, and an application brought in Mr Fajloun's personal capacity…

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 Mycorp Group Pty Ltd

Details

AGLC: Re Mycorp Group Pty Ltd [2013] NSWSC 1344
Case: [2013] NSWSC 1344
Decision Date: 03 April 2013

CaseChat Overview and Summary

The case before the court involved an application for leave to bring a statutory derivative action on behalf of two companies against their directors for alleged breaches of fiduciary and statutory obligations. The application was made by an individual who was a shareholder in the companies, and an indemnity was offered by the plaintiff for any costs incurred by the companies if the proceedings were unsuccessful. The court was required to determine whether the plaintiff met the criteria for granting leave under section 237(2) of the Corporations Act 2001. This included assessing whether it was probable that the companies would not bring the proceedings themselves, whether the plaintiff was acting in good faith, and whether there was a serious question to be tried.

The court considered the evidence and submissions presented by the plaintiff and the directors, and examined the criteria for granting leave under section 237(2) of the Corporations Act. The court found that the plaintiff had established that it was probable that the companies would not bring the proceedings themselves, and that the plaintiff was acting in good faith. However, the court was not satisfied that there was a serious question to be tried, as the plaintiff had not provided sufficient evidence to support the allegations of breaches of fiduciary and statutory obligations. The court also noted that the plaintiff had not given appropriate notice to the defendants as required by the court's previous orders.

Based on its findings, the court refused the application for leave to bring the statutory derivative action. The court held that the plaintiff had not met all the criteria for granting leave under section 237(2) of the Corporations Act, and that it was not satisfied that the proceedings would be in the best interests of the companies. The court also noted that the plaintiff had not complied with the court's previous orders regarding notice to the defendants. Therefore, the application was dismissed with costs.

Orders