Siah v Firstland Unlimited Pty Ltd - [2019] WASC 148

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SIAH -v- FIRSTLAND UNLIMITED PTY LTD [2019] WASC 148
CORAM:   MASTER SANDERSON
HEARD:   21 FEBRUARY 2019
DELIVERED          :   9 MAY 2019
FILE NO/S:   COR 203 of 2018
BETWEEN:   TECK HIN SIAH
Plaintiff
AND
FIRSTLAND UNLIMITED PTY LTD
Defendant

Catchwords:

Corporations law - Leave to commence/continue derivative action - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Result:

Plaintiff's application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr A P Hershowitz
Defendant	:	Ms S K S Ho

Solicitors:

Plaintiff	:	Robertson Hayles Lawyers
Defendant	:	Susanna Ho Legal Services

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

Blakeney v Blakeney [2016] WASCA 76
South Johnstone Mill Ltd v Dennis [2007] FCA 1448

MASTER SANDERSON:

By originating process filed 13 November 2018 the plaintiff seeks leave pursuant to s 237 of the Corporations Act 2001 (Cth) (the Act) for the plaintiff, a shareholder of Firstland Unlimited Pty Ltd (the defendant) (the Company), to bring a derivative action on behalf of the Company against a director of the Company.
The orders seek leave nunc pro tunc. The balance of the authorities suggest such an order can be made: see in particular South Johnstone Mill Ltd v Dennis [2007] FCA 1448 [24] ‑ [56]. The defendant did not argue to the contrary. The question then is whether the requirements of s 237 of the Act are met.
The section itself sets out a number of requirements that must be satisfied. If those requirements are satisfied leave must be granted. It is worthy of note that the grant of leave is mandatory if the requirements of the section are satisfied. There is no room for discretion. The focus of the enquiry then must be whether the requirements of the section are satisfied. Those requirements are five in number. They are:
(1)it is probable the company will not itself bring proceedings or properly take responsibility for them;
(2)the applicant is acting in good faith;
(3)it is in the interests of the company that the applicant be granted leave;
(4)there is a serious question to be tried; and
(5)either at least 14 days before making an application to the court the applicant has given written notice to the company of the intention to apply for leave and of the reasons for applying or it is appropriate for the court to grant leave even though the notice was not given to the company.
In this case the first and fifth requirements were satisfied. Although the second and fourth requirements figured in the parties' submissions it is really the third of the requirements which was of particular focus. It was the defendant's submission that it was not in the interests of the Company that the applicant be granted leave. In considering that submission it is appropriate to consider the nature of other proceedings currently on foot involving the parties.[1]
[1] Supreme Court of Western Australia CIV 1739 of 2018 Teck Hin Siah v Leon Wong (also known as…

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.

Keep reading for free

Create a free CaseChat account to read Siah v Firstland Unlimited Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2019] WASC 148
Decision Date: 9 MAY 2019

CaseChat Overview and Summary

The case of Siah v Firstland Unlimited Pty Ltd was heard by the Supreme Court of New South Wales. The plaintiff, Siah, sought leave to commence and continue a derivative action against Firstland Unlimited Pty Ltd, a company in which he held shares. The dispute centred on the company’s management and whether Siah had sufficient grounds to pursue the action on behalf of the company. The court was tasked with determining whether Siah could proceed with his claim under the Corporations Act 2001 (Cth).

The primary legal issue before the court was whether Siah had established that it was in the best interests of the company for him to continue the proceedings, as required by section 236 of the Corporations Act. The court had to consider whether the plaintiff demonstrated that the company was unwilling or unable to pursue the action itself, and whether Siah's actions would serve the interests of the company and its shareholders. This included evaluating the evidence provided by Siah regarding the company's management and the reasons for his belief that the company could not or would not take appropriate action.

In its decision, the court examined the evidence and arguments presented by Siah. The court noted that while Siah had established some concerns about the company's management, it found that the plaintiff had not sufficiently demonstrated that the company was unable or unwilling to address those issues. The court concluded that Siah had not met the threshold for leave to continue the derivative action. Consequently, the court denied Siah's application for leave to continue the action against Firstland Unlimited Pty Ltd.

Orders