Stanisis v Tracc Pty Ltd - [2022] WASC 281

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
CITATION:   STANISIS -v- TRACC PTY LTD [2022] WASC 281
CORAM:   MASTER SANDERSON
HEARD:   26 MAY 2022
DELIVERED          :   29 AUGUST 2022
PUBLISHED           :   29 AUGUST 2022
FILE NO/S:   COR 30 of 2022
BETWEEN:   NICK STANISIS
Plaintiff
AND
TRACC PTY LTD
STEVEN MITCHELL CARULLI
First Defendants
RAYMOND MARSHALL BECHARD
Second Defendant

FILE NO/S: COR 37 of 2022
BETWEEN: NICK STANISIS
Plaintiff
AND
TRACC PTY LTD
First Defendant
RAYMOND MARSHALL BECHARD
Second Defendant
STEVEN MITCHELL CARULLI
Third Defendant
CIR8 PTY LTD
Fourth Defendant

Catchwords:

Corporations Law - Application for leave to bring derivative action - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)
Limitation Act 2005 (WA)

Result:

Conditional leave to bring action granted

Category: B

Representation:

COR 30 of 2022

Counsel:

Plaintiff	:	M Sims
First Defendants	:	S Standing
Second Defendant	:	S Standing

Solicitors:

Plaintiff	:	DLA Piper
First Defendants	:	WSR Law
Second Defendant	:	WSR Law

COR 37 of 2022

Counsel:

Plaintiff	:	M Sims
First Defendant	:	S Standing
Second Defendant	:	S Standing
Third Defendant	:	S Standing
Fourth Defendant	:	S Standing

Solicitors:

Plaintiff	:	DLA Piper
First Defendant	:	WSR Law
Second Defendant	:	WSR Law
Third Defendant	:	WSR Law
Fourth Defendant	:	WSR Law

Cases referred to in decision:

Blakeney v Blakeney [2016] WASCA 76
Peter Parker v James Auswild [2022] VSCA 8
Taxa Australia v G Wang [2018] NSWSC 1412

MASTER SANDERSON:

On 18 February 2022, the plaintiff filed an originating process seeking, relevantly, the following orders:
1.The plaintiff have leave to bring proceedings on behalf of Tracc Pty Ltd (ACN 096 246 338), in accordance with section 236 of the Act, against Raymond Marshall Bechard, Steven Mitchell Carulli, and CIR8 Pty Ltd (ACN 610 625 173), in the terms set out in the Minute of Proposed Writ of Summons included at Annexure 'NS6' of the Affidavit ("Proposed Writ").
2.Alternatively, the plaintiff have leave to file the Proposed Writ, but may take no further step in the proceedings so instituted without leave of the Court.
The application was supported by the affidavit of the plaintiff sworn 17 February 2022 and another sworn 23 February 2022. For reasons which will become apparent, the matter was dealt with urgently, and on 25 February 2022 I made the following orders:
Interim leave to file Writ of Summons
1.Pending hearing and determination, on a final basis, of the plaintiff's application for leave under s237 of the Corporations Act (Leave Application), the plaintiff have leave, on an interim basis under ss 237 and 241(1)(a) of the Corporations Act, to file a writ of summons in the terms set out in the Minute of Proposed Writ of Summons included at annexure NS6 of the affidavit of the plaintiff filed on 18 February 2022, but may take no further step in the proceedings so instituted without leave of the Court.
Joinder of defendants
2.Steven Mitchell Carulli and Raymond Marshall Bechard be joined as the second defendants in these…

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 Stanisis v Tracc Pty Ltd

Details

AGLC: Stanisis v Tracc Pty Ltd [2022] WASC 281
Case: [2022] WASC 281
Decision Date

CaseChat Overview and Summary

In the Supreme Court of Western Australia, the plaintiff, Nick Stanisis, sought leave to bring a derivative action on behalf of Tracc Pty Ltd against the second and third defendants, Raymond Marshall Bechard, Steven Mitchell Carulli, and CIR8 Pty Ltd, for breaches of statutory and fiduciary duties. The plaintiff alleged that the second and third defendants caused the first defendant to transfer its intellectual property rights for an undervalued price, which was deemed to be the book value of those rights. The plaintiff sought to recover the intellectual property rights and compensation for the loss suffered while deprived of them. The legal issues in this case were whether the plaintiff was acting in good faith, whether it was in the best interests of the company to grant leave, and whether there was a serious question to be tried. The court held that the plaintiff satisfied the requirements of subsection (a), (c), and (d) of section 237(2) of the Corporations Act 2001 (Cth). The court found that it was in the best interests of the company to grant leave to bring the derivative action. The court reasoned that the company's separate and independent welfare was the focus of the enquiry, not the benefit to the directors, shareholders, or the wider community. The court considered several factors, including the character and scale of the company, the nature of the company's business, the ability of the defendants to meet any judgment or at least a substantial part of it, the prospects of success of the proposed action, the likely costs and consequences if the proposed action was not successful, the nature of any indemnity offered to the company, and the likelihood of the company recovering under an indemnity. The court concluded that the plaintiff had demonstrated that he had the financial capacity to support the indemnity and that the grant of leave was in the best interests of the company. The court granted conditional leave to bring the action and stayed the derivative action pending further order of the court. The costs of these proceedings were to be costs in the cause of the derivative action.

Orders