Coffee and a Case Note

“I want indemnity costs for the whole thing because your claim was so bad!” ___ In a case we have previously discussed (Cao v Zhu [2020] NSWSC 321) P enjoyed complete success over D. P made a settlement offer that was rejected. (Interestingly) The parties agreed that P should have its costs on an indemnity basis from the date of that offer: [2] The P said (i) the D ought to have known its defences...

“You’re too poor to stand in their shoes!” ___ A shareholder sought leave to bring derivative proceedings; to “stand in the shoes” of 4 companies and litigate on their behalf: [1] The shareholder said that each Co was a “farmer” and enforcement action was taken against them in breach of the Farm Debt Mediation Act 1994 (NSW): [2] The shareholder said that meant the lender’s actions were void, allo...

“Can we get permission to appeal?” ___ A Co was placed into liquidation. A member was granted leave to commence a derivative action: [1] He did, and the Co lost: [4] He then purported to cause the Co to appeal: [5] He sought a declaration that the original leave extended to running the appeal; or, alternatively, that fresh leave should be granted: [6] A company in liq can’t rely on the Corporation...

“So are we in partnership, or not?” ___ A claimed to own property and was in financial trouble. It agreed with R that A would sell the properties to R and A would help develop them and share profits: [3], [4], [143] This arrangement fell apart because A didn’t own the properties: [6] R did buy the properties from the mortgagee in possession and – speaking broadly – discussions progressed further o...

“So we’re dissolving the partnership. What next?”  ___ One group. 6 pharmacies. 3 are run by partnerships between 3 pharmacists. The 4th is run by a partnership between those 3 pharmacists, and one other. The 5th and 6th are run by companies owned by companies controlled by the 3 pharmacists. The parties were unable to work together: [18]   Negotiations with a view to an exit lead n...

"The liquidator personally, or the company?" ___ Judgment was handed down confirming Co A was a secured creditor of Co B (in liq): [1]  The next question was: who pays Co A’s legal costs? Co A sought to have Co B’s liquidator, in his personal capacity, pay.  A liquidator will be personally liable for costs in “exceptional circumstances” due to unreasonable conduct: [8]  The Court co...

"Stop that! Or I'll get the Court to stop you."  ___  The granting of an interlocutory injunction - a binding Court order that *immediately* stops a party doing something - is often complex. Speaking broadly and loosely, to get an interlocutory injunction you have to (i) convince the Court your claim is strong; (ii) convince the Court an injunction is more appropriate than an order for t...

“Sue a liquidator? First, get through us.”  ___  The liquidators of 2 Cos entered into a deed with a 3rd party. The deed assigned trade marks the liquidators thought the Cos owned: [38], [39] The Ps said the liquidated Cos did not own the marks, having previously abandoned them: [64] Common law rights in the abandoned marks arose, meaning other parties owned them: [74] The Ps sued the li...

“Yeah, I promise to pay. Unconditionally!” ___ P was a property developer. D was a real estate agent. D’s connect was developing a property. D was to be the selling agent. D angled for P to invest in his connect’s development. As an incentive, he offered to pay P $500K if he did. That amount was calculated based on D’s speculation on what commissions he might expect to receive, and what an appropr...

“My offer is: you lose.” ___ Parties in a legal dispute often exchange settlement offers. Speaking loosely, many of those offers might be characterised as: “I am claiming $X + Y, but I’ll go away if you pay me $X.” Sometimes an offer is made that could be described as: “Let’s agree that you lose, but I won’t chase you for my legal costs. We will each pay our own.” Generally, when a party “loses” i...

“You’re excluding me from the company, competing with the company, and taking money from the company?” ___ 3 brothers started an enterprise building houses on vacant land and selling them. 2 brothers, P and D, might be thought of as “active” taking a large stake; for our purposes Brother 3 was silent. D removed P from the enterprise: appointing a general manager over P’s objection, excluding the P...

P and D agreed to cause a Co (“I Need A Massage Pty Limited”) to purchase a massage business. P and D made equal contributions to the Co for expenses. P and D’s relationship broke down. D excluded P from the business. D removed P as a director without P’s consent or proper authority: [39], [43]. D altered P’s shareholding on the share register – reducing it to nil – without P’s consent or proper a...

“You’re not even saying I did anything wrong!”   Ps brought claims against various Ds for corporate oppression and breach of directors duties.  The second defendant, D2 (a former spouse of D1), was mentioned only twice in the Ps’ evidence; once by mistake: [3]   The Ps’ proposed Statement of Claim repeated the mistaken reference: [6]   The Ps asserted 2D was involved in th...

On Saturday 7 March 2020 I spoke at the Young Lawyers Property 1 Day Property CPD event.   I was lucky enough to be able to chat about s66G of the Conveyancing Act and the appointment of trustees for sale pursuant to that section and s36A.   I tried to do a bit of nifty time management, too, to make sure we all enjoyed a full lunch!   The discussion covers:  1. The law relating...

“OK, so we’re beneficiaries, but how much do we get? " ___  Two former lovers jointly owned a piece of land.   The relationship ended with one co-owner moving away. After a time the other co-owner did too, though not voluntarily. (He was imprisoned.)  The co-owner who left first applied for s66G orders appointing trustees to sell the property and divide the proceeds between the co-o...

“Forget assessment. Just pay me a fixed amount of costs!”   ___   The plaintiff was trustee of a bankrupt estate that included a co-ownership interest in some land: [6]   After some back and forth about selling it, the plaintiff commenced s66G proceedings and got the Court to appoint trustees for sale: [14]   The orders made included an order that the other co-owner pay the leg...

DadCo sold its rent roll to P. P got to work collecting rent, employing DadCo’s former property manager, PM.   P later made PM redundant. PM planned to take up employment with another estate agent, CousCo, 1.8km away performing the same role: [59]   To add spice: PM’s dad was a director of DadCo and PM’s cousin was the sole director of CousCo. The relevant family name carried weight: [11...

"Transfer the shares so we can solve this the Chinese way!" ___  Without telling the rest of the board, and without payment beforehand, 2 of a Co’s directors transferred some of the Co’s shares to an entity owned by an influential person in China.   The idea was to allow the Co to solve its problems “the Chinese way”: [96]    The transfer gave the "optics" that the influential...

Mum died and relationships between her children eroded.   Some (but not all) children were executors. Some (but not all) were directors of a Co, the shares in which were the chief asset of the estate.   The Co had a substantial landholding which was being subdivided. Disputes arose.  The plaintiffs commenced oppression proceedings seeking new directors.    They failed enti...

Heading out the door on holidays, team. But don’t worry! Apart from the one further episode I have scheduled to come out in a few days, there’ll be a bit of a break and then more to come from then.

“It’s not certain I would have lost in the end, so I shouldn’t have to pay costs!”   ___ Often, if a piece of litigation gets to final hearing ‘costs follow the event’: UCPR r42.1. Put another way: at the end, the loser pays the legal costs incurred by the winner.   But what if a matter finishes before a final hearing?   ___   A party sought orders including replacing an admini...

“Are we partners or are our companies partners? 😬😬😬" Various Cos entered into a partnership deed. Each was the corporate vehicle of a natural person (“Principal”).  The deed was signed by the Principals on behalf of their Cos.  The firm operated an accounting business, holding the Principals out as partners.   One Principal was appointed to the board of one of the firm’s big clie...

“If you’re making me buy the shares, tell me how much they’re worth!”   In a recent judgment, s232 commercial unfairness was made out.  The proceedings concerned a company with a significant value.   HH put it best: “large payments (were) made by (the defendant) without consultation, unsupported by contemporaneous records and at odds with basic accounting principles or, on occasion,...

“Hey! You were meant to give me 10 days before terminating the contract!”   Two property owners entered into a contract with a builder to construct two duplex buildings.  The builder moved slower than the owners hoped.  They ended up terminating the contract because the builder didn’t  complete the work, rectify defects, or get a construction certificate in time.   Nor did...

“I wanted YOU to do that cleaning!”   Two parties entered into a contract: a cleaner and a client. The job was to clean a number of large retail stores.   The cleaner agreed not to subcontract or assign its cleaning duties to anyone else without the client’s permission. If it did, the client had a right to immediately terminate and did not have to pay for any unauthorised subcontract wor...