TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (administrators appointed); Nakali Pty Ltd v SurfStitch Group Ltd (administrators appointed)

The case involved two shareholder open class actions against SurfStitch Group Ltd, a company in administration, and in one case also against a former officer of the company. TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund and Nakali Pty Ltd brought separate actions against the corporate defendant and in one case against the former officer. The group members in each proceeding were almost identical, and the claims made in both proceedings were substantially the same. The case was heard in the Federal Court of Australia.

The central legal issue was whether a common fund order should be made in one proceeding before the matters were resolved and before a decision was made as to how in the best interests of the group members the two cases were to proceed. The court needed to determine if it was appropriate to make a common fund order in one proceeding before the issues of overlapping shareholder actions and the administration of the corporate defendant were resolved.

The court held that it was not appropriate to make a common fund order in one proceeding before the issues of overlapping shareholder actions and the administration of the corporate defendant were resolved. The court reasoned that it was necessary to await the resolution of these issues before determining the best interests of the group members and how the two cases should proceed. The court also noted that the administrators were exploring means to deal with the claims of the group members within the external administration. The court stayed the proceedings against the corporate defendant due to its administration and no application had been made in either proceeding for leave to proceed.

No final orders were made by the court in this decision, as it was awaiting the resolution of the issues of overlapping shareholder actions and the administration of the corporate defendant before making a decision on the best interests of the group members and how the two cases should proceed.