JUNG WHA SUH AND OTHERS (according to the schedule attached)
Plaintiffs
v
JEFF W CHO AND OTHERS (according to the schedule attached)
Defendants
---
JUDGE:
Derham AsJ
WHERE HELD:
Melbourne
DATE OF HEARING:
22 February 2013
DATE OF JUDGMENT:
13 September 2013
CASE MAY BE CITED AS:
Suh & Ors v Cho & Ors
MEDIUM NEUTRAL CITATION:
[2013] VSC 491
---
CORPORATIONS - Statutory derivative action - Application for leave under Corporations Act 2001 (Cth) ss 236, 237 by member of deadlocked company to bring proceedings on behalf of the company against other member and director - Whether the five criterion in s 237(2) are established - Whether leave may be granted nunc pro tunc – Leave granted.
PRACTICE AND PROCEDURE – Discovery – Order for defendant co-director and public officer of company to authorise release of financial information by the Australian Taxation Office – s 55 Civil Procedure Act2010 – Application granted.
PRACTICE AND PROCEDURE – Application to join third party – Whether cause of action disclosed – No cause of action disclosed – Leave refused.
PRACTICE AND PROCEDURE – Application by sole director and shareholder of company to appear and represent the company before the court generally– Leave given from time in interlocutory applications – Rules and practice applicable – Whether appropriate to grant leave generally – Leave refused.
---
APPEARANCES:
Counsel
Solicitors
For the Plaintiffs
Mr S.S.R. Lee, Solicitor
P & B Law (later Spencer Reyner Law Office Pty Ltd)
For the First Defendant
In person
For the Second Defendant
In person
For the Third Defendant
The second Defendant, Ms Christi Ho (pursuant to leave granted)
HIS HONOUR:
Introduction
By summons dated 14 January 2013, the first named plaintiff (“Mr Suh”) seeks the following orders:
(a)pursuant to s 237 of the Corporations Act 2001 (“the Corporations Act”), leave to bring proceedings on behalf of the second named plaintiff, Jeff the Plumber Pty Ltd (“Company”) against the defendants;
(b)an order that the first named defendant (“Mr Cho”) provide a written authority, addressed to the legal officer of the Australian Taxation Office (“ATO”), granting Mr Suh authority to obtain copies of the Company’s income tax returns and Business Activity Statements, pursuant to ss 55(1) and 55(2)(f) of the Civil Procedure Act 2010;
(c)that the third defendant (“Jeff & Sons Plumbing”) disclose all financial records required to be kept pursuant to s 286 of the CorporationsAct to Mr Suh pursuant to s 55(1) of the Civil Procedure Act 2010;
(d)that the defendants pay Mr Suh’s costs of the application.
The actual formulation of the wording of the orders sought was rather different, but the above is the gist of the orders sought. Moreover, although the applicants do not expressly state so in their application, it seems clear that the application for leave to…
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 Suh v Cho
Sign in free to access the full text
Details
AGLC
Suh v Cho [2013] VSC 491
Case
[2013] VSC 491
Decision Date
CaseChat Overview and Summary
In the matter of Suh v Cho, the applicants sought leave to bring a statutory derivative action on behalf of a company against a member and director. The case was heard in the Supreme Court of New South Wales. The applicants, who were members and directors of the company, alleged that they were locked out of the company’s management and decision-making processes by the other member and director. They sought leave to bring proceedings on behalf of the company against the other member and director for breaches of the Corporations Act 2001 (Cth), alleging mismanagement and oppression.
The court was required to determine whether the applicants had established the five criteria set out in section 237(2) of the Corporations Act 2001 (Cth) for granting leave to bring a statutory derivative action. The court also had to consider whether leave could be granted nunc pro tunc, which means that the leave could be granted retroactively to the date of the original application. The court found that the applicants had established all five criteria and that leave could be granted nunc pro tunc. The court found that the applicants had established that the company was unable to take action itself, that the proceedings were in the best interests of the company, that the applicants had acted in good faith, that there was a reasonable prospect of success, and that there were no other reasonable courses of action available to the company.
The court granted the applicants leave to bring the proceedings on behalf of the company against the other member and director. The court also granted an order for the defendant to authorise the release of financial information by the Australian Taxation Office and refused an application to join a third party and an application by the sole director and shareholder of the company to appear and represent the company before the court generally.