Slea Pty Ltd v Connective Services Pty Ltd

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL COURT

CORPORATIONS LIST

S CI 2011 04332

IN THE MATTER OF CONNECTIVE SERVICES PTY LTD

BETWEEN:

SLEA PTY LTD	Plaintiff
v
CONNECTIVE SERVICES PTY LTD & ORS	Defendants

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	14, 16, 17, 18 August, 10 October and 13 November 2017
DATE OF JUDGMENT:	29 November 2017
CASE MAY BE CITED AS:	Re Connective Services Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 609	First revision:  11 December 2017

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CORPORATIONS – Derivative leave application – Section 237 Corporations Act 2001 (Cth) – Consideration of delay – Whether grant of leave is in the best interests of the company – Whether application is brought bona fides – Whether serious question to be tried – Relevance of relief sought – Prima facie use of directors’ power for improper purpose.

PRACTICE AND PROCEDURE – Application for adjournment of hearing of summons to re-open hearing of application for derivative leave after judgment has been reserved – Application to adjourn hand-down of judgment sine die – Adjournment granted.

PRACTICE AND PROCEDURE – Application to re-open the hearing on the grounds of ‘fresh evidence’ – Civil Procedure Act 2010 s 49 – Whether there is the possibility of ‘fresh evidence’ being adduced – Whether such evidence is relevantly ‘fresh evidence’ – Whether such evidence is probative and could materially affect the outcome – Whether in the interests of justice to re-open the hearing – Whether evidence of a third party’s interest in the proceeding ‘taints’ the interests of the plaintiff – Application refused.

PRACTICE AND PROCEDURE – Objection to subpoenas – Supreme Court (General Civil Procedure) Rules 2015 – Whether defendants expressly and precisely identify the legitimate forensic purpose for which access to the subpoenaed documents is sought – Whether the subpoenaed documents could assist in the defendants’ application to re-open the hearing of the derivative leave application – Whether the relevant subpoenas should be set aside pursuant to r 42.04 of the Supreme Court (General Civil Procedure) Rules 2015.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M H O’Bryan QC with Mr G D Dalton QC, Ms K E Foley and Mr J Rudd	Arnold Bloch Leibler
For the First, Second, Fourth to Ninth Defendants	Mr A J Myers AC QC with Mr B F Quinn QC, Mr D G Guidolin and Ms A M Folie	Quinn Emanuel Urquhart & Sullivan
For the Third Defendant	Mr S D Hay	HWL Ebsworth

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1

The relevant facts................................................................................................................. 3

Part 1................................................................................................................................................... 12

Derivative leave application............................................................................................ 12

The Murray Lees statement............................................................................................. 21

The restructure documents.............................................................................................. 24

The Connective companies will not bring the action................................................... 27

Good faith........................................................................................................................... 27

Best interests of the company.......................................................................................... 36

Abuse of power.................................................................................................................. 44

Delay.................................................................................................................................... 50

Serious question to be tried............................................................................................. 52

Notice............................................................................................................................................ 55

Conclusion.......................................................................................................................... 56

Part 2................................................................................................................................................... 57

Application to re-open - Introduction............................................................................ 57

Fresh evidence................................................................................................................... 57

Third and tenth defendants’ submissions..................................................................... 60

Slea’s submissions............................................................................................................. 60

13 November hearing........................................................................................................ 61