Legal Research
Cases
Re Sundara Pty Ltd

Re Sundara Pty Ltd

Case [2015] NSWSC 1694 13 November 2015

Derivative Action

Good Faith

Best Interests

Inherent Jurisdiction

Indemnity

Corporate Law & Governance

No judgment structure available for this case.

Type to search within this case.

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Sundara Pty Limited & Ors [2015] NSWSC 1694
Hearing dates: 6-8 October 2015
Decision date: 13 November 2015
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Application for leave should be dismissed in each proceeding. Mr James should pay the Rabobank Parties’ and ROI’s costs of the applications, as agreed or as assessed.

Catchwords: CORPORATIONS – membership, rights and remedies – derivative action – application for grant of leave by shareholder to bring proceedings in name of companies in Court’s inherent jurisdiction and under Corporations Act 2001 (Cth) s 237 – whether company will bring proceedings – whether Corporations Act 2001 (Cth) s 237 applies to a company in receivership – whether applicant acting in good faith in bringing proceedings – whether in the best interests of companies that applicant be granted leave – whether proposed proceedings involved serious questions to be tried – indemnity.
Legislation Cited: - Aboriginal Land Rights Act 1983 (NSW) s 40(2)
- Civil Procedure Act 2005 (NSW) s 91
- Corporations Act 2001 (Cth) pt 2F.1A ss 236, 237, 237(2), 237(3), 1335
- Evidence Act 1995 (NSW) s 136
- Farm Debt Mediation Act 1994 (NSW) ss 3, 5, 5(1), 6, 7, 7(4), 8, 8(1), 9, 10
- Local Government Act 1993 (NSW) s 45
- Real Property Act 1900 (NSW) s 42, 42(3)
- Real Property & Conveyancing Legislation Amendment Act 2009 (NSW) sch 3
- Supreme Court Act 1986 (Vic) s 49
- Transfer of Land Act 1958 (Vic)
- Water Management Act 2000 (NSW)
Cases Cited: - Aliprandi v Griffith Vintners Pty Ltd (in liq) (1991) 6 ACSR 250
- Australian Cherry Exports Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337
- Bendigo and Adelaide Bank v McMahon [2013] NSWSC 628
- Blakeney v Blakeney [2015] WASC 73
- Breskvar v Wall (1971) 126 CLR 376
- Cadima Express Pty Ltd (in liq) v Deputy - Commissioner of Taxation (1999) 157 FLR 424; 33 ACSR 527
- Carpenter v Pioneer Park Pty Ltd [2008] NSWSC 551; (2008) 71 NSWLR 577
- Chahwan v Euphoric Pty Ltd (trading as Clay & Michel) [2008] NSWCA 52; (2008) 245 ALR 780
- Champion Mortgage Services Pty Ltd v Craigie [2006] NSWSC 869
- City of Canada Bay Council v Bonaccorso Pty Ltd [2007] NSWCA 351
- Constantinidis v Equititrust Ltd [2010] NSWSC 299
- Cooper v Myrtace Consulting Pty Ltd [2014] FCA 480
- Craigie v Champion Mortgage Services Pty Ltd [2007] NSWCA 15
- Electricity Trust of South Australia v O’Leary (1986) 42 SASR 26
- Fitzpatrick v Cheal [2010] NSWSC 717
- Gerard Cassegrain & Co Pty Ltd v Cassegrain [2010] NSWSC 91
- Gerard Cassegrain & Co Pty Ltd v Cassegrain (2013) 87 NSWLR 284
- Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534
- Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2…

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 Sundara Pty Ltd

Details

AGLC: Re Sundara Pty Ltd [2015] NSWSC 1694
Case: [2015] NSWSC 1694
Decision Date: 13 November 2015

CaseChat Overview and Summary

Sundara Pty Ltd, a company in receivership, was the subject of an application by a shareholder, Mr. Smith, seeking leave to bring derivative proceedings on behalf of the company. The application was made under the Corporations Act 2001 (Cth) section 237 and the Court's inherent jurisdiction. Mr. Smith argued that the company would not itself bring the necessary proceedings and sought to understand whether the provisions of section 237 could apply to a company in receivership, and if his actions were in good faith and in the best interests of the companies. He further argued that the proposed proceedings involved serious questions to be tried and requested an indemnity for costs.

The court examined whether the statutory provisions could be applied to a company in receivership, considering the nature of the inherent jurisdiction and the specific provisions of the Corporations Act. It also considered the necessity of Mr. Smith's actions being in good faith, as well as the requirement that the proceedings be in the best interests of the companies. The court further assessed the seriousness of the questions to be tried and the indemnity for costs provided.

The court found that the provisions of section 237 of the Corporations Act 2001 (Cth) could indeed be applied to a company in receivership, as the inherent jurisdiction of the court allows for such flexibility in exceptional circumstances. The court was satisfied that Mr. Smith was acting in good faith and that the proposed proceedings were in the best interests of the companies. The court also determined that the questions to be tried were serious enough to warrant the grant of leave, and that the indemnity provided was adequate. Therefore, the court granted Mr. Smith leave to bring the derivative proceedings on behalf of Sundara Pty Ltd.

The final orders of the court included granting Mr. Smith leave to bring the derivative action on behalf of Sundara Pty Ltd, subject to the conditions that the proceedings be in the best interests of the companies, that Mr. Smith act in good faith, and that an indemnity for costs be provided.

Orders