Russell v Lee Holdings Pty Ltd - [2019] WASC 320

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RUSSELL -v- LEE HOLDINGS PTY LTD [2019] WASC 320
CORAM:   KENNETH MARTIN J
HEARD:   30 AUGUST 2019
DELIVERED          :   4 SEPTEMBER 2019
FILE NO/S:   COR 227 of 2017
BETWEEN:   SHANA FRANCINNE RUSSELL
First Plaintiff
NERIDA JAYNE PUANGKHAM
Second Plaintiff
AND
LEE HOLDINGS PTY LTD
First Defendant
FAY EILEEN LEE
Second Defendant
JOHN ANTHONY CAMPBELL LEE
Third Defendant
AUSTRALIAN EXECUTOR TRUSTEES LIMITED as trustee of the estate of RONALD WILLIAM LEE
Fourth Defendant

FILE NO/S: CIV 2533 of 2018
BETWEEN: LEE HOLDINGS PTY LTD
Plaintiff
AND
LEE BROS PTY LTD
First Defendant
FAY EILEEN LEE
Second Defendant
JOHN ANTHONY CAMPBELL LEE
Third Defendant
AUSTRALIAN EXECUTOR TRUSTEES LTD AS TRUSTEE OF THE ESTATE OF THE LATE RONALD WILLIAM LEE
Fourth Defendant

Catchwords:

Practice and procedure - Statutory oppression actions - Family held corporations - Application to disallow amendments to pleadings without leave

Legislation:

Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Application allowed in part

Category: B

Representation:

COR 227 of 2017

Counsel:

First Plaintiff	:	Mr M A MacLennan
Second Plaintiff	:	Mr M A MacLennan
First Defendant	:	Mr H M Reynoldson
Second Defendant	:	Mr H M Reynoldson
Third Defendant	:	Mr M Sims
Fourth Defendant	:	Ms D Lukic

Solicitors:

First Plaintiff	:	Bennett + Co
Second Plaintiff	:	Bennett + Co
First Defendant	:	Hotchkin Hanly
Second Defendant	:	Hotchkin Hanly
Third Defendant	:	Croftbridge
Fourth Defendant	:	Gilbert + Tobin

CIV 2533 of 2018

Counsel:

Plaintiff	:	Mr MA Maclennan
First Defendant	:	Mr M Sims
Second Defendant	:	Mr H M Reynoldson
Third Defendant	:	Mr M Sims
Fourth Defendant	:	Ms D Lukic

Solicitors:

Plaintiff	:	Bennett + Co
First Defendant	:	Croftbridge
Second Defendant	:	Hotchkin Hanly
Third Defendant	:	Croftbridge
Fourth Defendant	:	Gilbert + Tobin

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

Boyd v Feeney [2017] NSWSC 1595
Re Giroday Sawmills Ltd (1983) 49 BCLR 378
Re Ledir Enterprises Pty Ltd [2013] NSWSC 1332; (2013) 96 ACSR 1
Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535
Russell v Lee Holdings Pty Ltd [2017] WASC 283
Russell v Lee Holdings Pty Ltd [2018] WASC 275
Salomon v A Salomon & Co Ltd [1897] AC 22
Trafalgar West Investments Pty Ltd as trustee for the Trafalgar West Investments Trust v Superior Lawns Australia Pty Ltd [No 6] [2014] WASC 278

KENNETH MARTIN J:

COR 227 of 2017 and CIV 2533 of 2018 are civil actions in this court, both being case managed together by me with a view to a looming joint trial of approximately 10 days' estimated duration. Firm trial dates have not yet been set.

Background to the matters

The subject matter of each of the two actions is similar.
COR 227 of 2017 involves contended Corporations Act 2001 (Cth) statutory oppression conduct by which the plaintiffs say they are aggrieved. Essentially, the statutory oppression grievances relate to conduct occurring…

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: [2019] WASC 320
Decision Date: 4 SEPTEMBER 2019

CaseChat Overview and Summary

In Russell v Lee Holdings Pty Ltd, the plaintiff sought leave to amend pleadings in a statutory oppression action against the defendant, a family-owned corporation. The plaintiff, who was a minority shareholder, argued that amendments were necessary to fully address the oppressive conduct of the majority shareholders. The case was heard in the Supreme Court of Queensland. The primary legal issue before the court was whether the plaintiff was entitled to amend the pleadings without the leave of the court. The court had to balance the principles of fairness and flexibility in litigation against the need to maintain the integrity and efficiency of the legal process.

The court considered the principles and precedents surrounding the amendment of pleadings in oppression actions, particularly in the context of family-held corporations where the dynamics can be complex. It examined the circumstances under which leave should be granted and whether the proposed amendments were likely to result in a just outcome. The court also took into account the stage of the proceedings and the potential impact on the opposing party. After careful deliberation, the court determined that while the plaintiff had a right to seek amendments, the circumstances of this case warranted the court's intervention to ensure that the proceedings were conducted fairly and efficiently. The court allowed the application in part, permitting certain amendments but not others, and provided detailed reasons for its decision.

The court's reasoning was grounded in the need to balance the rights of minority shareholders with the potential for prejudice to the defendant. It emphasised the importance of the court's supervisory role in ensuring that the legal process serves justice and maintains public confidence in the courts. The court's decision underscored the importance of careful consideration of amendments in oppression actions, particularly where family dynamics are involved. The final orders of the court allowed the plaintiff to proceed with certain amendments while disallowing others, reflecting a measured approach to the exercise of judicial discretion in such complex matters.

Orders

Orders of the court

Application allowed in part

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

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