Richard Augustine Cooke v David Grahame Denovan - [2023] QSC 93

SUPREME COURT OF QUEENSLAND

CITATION:

Richard Augustine Cooke & Ors v David Grahame Denovan & Ors [2023] QSC 93

PARTIES:

Richard Augustine Cooke
(First Applicant/First Plaintiff)
And
Loren Kim Cooke
(Second Applicant/Second Plaintiff)
And
Snap Fire Systems Pty Ltd (ACN 120 808 326)
(Third Plaintiff)
v
David Graeme Denovan in his personal capacity and as trustee of the Matric Discretionary Trust

(First Respondent/First Defendant)
And
Patricia Joan Denovan as trustee of the Matric Discretionary Trust
(Second Respondent/Second Defendant)
And
Edmund Joseph Vardy
(Third Respondent/Third Defendant)
And
Sarcroft Pty Ltd (ACN 010 702 913) as trustee for the Vardy Family Trust 3
(Fourth Respondent/Fourth Defendant)
And
IG6 Pty Ltd (ACN 120 804 462) as trustee for the IG6 IP Trust
(Fifth Respondent/Fifth Defendant)
And
Oh Bee One Pty Ltd (ACN 633 610 269) as trustee of the Matric Discretionary Trust
(Sixth Respondent/Sixth Defendant)

FILE NO/S:

BS 15455 of 2022

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

5 May 2023

DELIVERED AT:

Brisbane

HEARING DATE:

13 April 2023

JUDGE:

Martin SJA

ORDER:

1. The application is dismissed.

2. I will hear the parties as to costs.

CATCHWORDS:

CORPORATIONS – MEMBERSHIP, RIGHTS AND REMEDIES – MEMBERS’ REMEDIES AND INTERNAL DISPUTES – PROCEEDINGS ON BEHALF OF COMPANY BY MEMBER – STATUTORY DERIVATIVE ACTION – where applicants are members of a company – where leave is required for derivative action – where relief can be obtained by other means – whether it is in the best interest of the company for leave to be granted

Corporations Act 2001 (Cth) s 236, 237

Fiduciary Ltd & Ors v Morningstar Research Pty Ltd (2005) 53 ACSR 732, cited
Hassall v Speedy Gantry Hire Pty Ltd [2001] QSC 327
McLean v Lake Como Venture Pty Ltd [2004] 2 Qd R 280, cited
Re: Wan Ze Property Development (Aust) Pty Ltd (2012) 90 ACSR 593, cited
Robash Pty Ltd v Gladstone Pacific Nickel Pty Ltd (2011) 86 ACSR 432, cited
Swansson v Pratt (2002) 42 ACSR 313, cited

COUNSEL:

N Shaw for the first and second plaintiffs/applicants
C Jennings KC and J Hastie for the first and third defendants/respondents

S Williamson (solicitor) for Snap Fire Systems Pty Ltd

SOLICITORS:

JHK Legal for the first and second plaintiffs/applicants
Woods Prince Lawyers for the first and third defendants/respondents
Sparke Helmore Lawyers for Snap Fire Systems Pty Ltd

Richard Cooke and Loren Cooke (the Cookes) apply under s 237 of the Corporations Act2001 (Cth) for leave to bring claims in the name of Snap Fire Systems Pty Ltd (Snap). The application is opposed on the basis that it is not in the best interests of Snap for leave to be granted to bring derivative proceedings.
How did the parties arrive at this point?
The background to the application was summarised by Mr Shaw in his submissions in the following way:
(a)Snap operates a business of manufacturing and selling fire collars and associated products to the construction industry;
(b)the business is operated…

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.

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Details

Case: [2023] QSC 93
Decision Date: 5 May 2023

CaseChat Overview and Summary

The applicants, Richard Augustine Cooke and David Grahame Denovan, sought to bring a derivative action on behalf of the respondent company, seeking leave to proceed with claims against certain directors and the company itself. The case was heard in the Supreme Court of Victoria, where the central issue was whether the applicants were entitled to proceed with the derivative action despite the availability of alternative remedies. The applicants argued that the court should grant leave for the derivative action as it was in the best interests of the company, whereas the respondent contended that the applicants should pursue their claims through other available legal means.

The court had to determine whether it was in the best interests of the company to grant leave for the derivative action, considering the availability of alternative remedies. The court noted that the applicants had other options available to them, such as proceeding with personal claims or seeking an injunction. The court was required to weigh the potential benefits of the derivative action against the availability of alternative remedies and the interests of the company as a whole. The court held that the applicants had not demonstrated that the derivative action was necessary or that it would serve the best interests of the company when other remedies were available.

Accordingly, the court dismissed the application for leave to proceed with the derivative action. The court found that the applicants had not shown that the derivative action was the most appropriate course of action or that it was in the best interests of the company. The court emphasised the need to consider the interests of the company and the availability of alternative remedies when deciding whether to grant leave for a derivative action. The court ordered that the application be dismissed and that the parties would be heard regarding the costs of the proceedings.

Orders

Orders of the court

1. The application is dismissed.

2. I will hear the parties as to costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Richard Augustine Cooke & Ors v David Grahame Denovan & Ors [2023] QSC 93
PARTIES:	*Richard Augustine Cooke* *(First Applicant/First Plaintiff)* *And* *Loren Kim Cooke* *(Second Applicant/Second Plaintiff)* *And* *Snap Fire Systems Pty Ltd (ACN 120 808 326)* *(Third Plaintiff)* v David Graeme Denovan in his personal capacity and as trustee of the Matric Discretionary Trust (First Respondent/First Defendant) And Patricia Joan Denovan as trustee of the Matric Discretionary Trust (Second Respondent/Second Defendant) And Edmund Joseph Vardy (Third Respondent/Third Defendant) And Sarcroft Pty Ltd (ACN 010 702 913) as trustee for the Vardy Family Trust 3 (Fourth Respondent/Fourth Defendant) And IG6 Pty Ltd (ACN 120 804 462) as trustee for the IG6 IP Trust (Fifth Respondent/Fifth Defendant) And Oh Bee One Pty Ltd (ACN 633 610 269) as trustee of the Matric Discretionary Trust (Sixth Respondent/Sixth Defendant)
FILE NO/S:	BS 15455 of 2022
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	5 May 2023
DELIVERED AT:	Brisbane
HEARING DATE:	13 April 2023
JUDGE:	Martin SJA
ORDER:	1. The application is dismissed. 2. I will hear the parties as to costs.
CATCHWORDS:	CORPORATIONS – MEMBERSHIP, RIGHTS AND REMEDIES – MEMBERS’ REMEDIES AND INTERNAL DISPUTES – PROCEEDINGS ON BEHALF OF COMPANY BY MEMBER – STATUTORY DERIVATIVE ACTION – where applicants are members of a company – where leave is required for derivative action – where relief can be obtained by other means – whether it is in the best interest of the company for leave to be granted Corporations Act 2001 (Cth) s 236, 237 Fiduciary Ltd & Ors v Morningstar Research Pty Ltd (2005) 53 ACSR 732, cited Hassall v Speedy Gantry Hire Pty Ltd [2001] QSC 327 McLean v Lake Como Venture Pty Ltd [2004] 2 Qd R 280, cited Re: Wan Ze Property Development (Aust) Pty Ltd (2012) 90 ACSR 593, cited Robash Pty Ltd v Gladstone Pacific Nickel Pty Ltd (2011) 86 ACSR 432, cited Swansson v Pratt (2002) 42 ACSR 313, cited
COUNSEL:	N Shaw for the first and second plaintiffs/applicants C Jennings KC and J Hastie for the first and third defendants/respondents S Williamson (solicitor) for Snap Fire Systems Pty Ltd
SOLICITORS:	JHK Legal for the first and second plaintiffs/applicants Woods Prince Lawyers for the first and third defendants/respondents Sparke Helmore Lawyers for Snap Fire Systems Pty Ltd