Coffee and a Case Note

On 31 October 2022 I gave a lecture at Macquarie Uni for Dr Madeline Taylor's commercial law course.  We traversed some practical issues that were commercial, but not corporate (and you might recognise a few of them)!   If you would like a copy of the paper, please reach out to me and I can provide it to you.  Jd'A  #auslaw  @Macquarie University  #commerciallaw

"Stop competing with the business you sold me!" ___ In 2018, P bought a business from the Ds by buying all shares in the Co, ObjectCo, that operated the business from D1 and D2 for $9.5m: [1], [10] P is a local subsidiary of a multi-national group that sells and installs business software: [2], [3] ObjectCo sold and installed similar but more complex, pricier software: [4] ObjectCo’s business was...

A was the national body responsible for go-karting in Australia and trustee of a related trust: [12] R was responsible for go-karting in NSW and the ACT, and a member of A: [14] A’s constitution obliged its members to pay on the fees they collected from go-kart drivers in races A approved: [15], [16] A was Tee of a fund for the construction of new go-kart tracks: [17] The trust deed empowered A to...

In September 2022 I had an opportunity to appear on the excellent Zeiler Floyd Zadkovich podcast, Case by Case.  Luke, Calum and I dicussed Gillespie v Gillespies Cranes Nominees Pty Ltd [2022] NSWSC 1184 and the possibility of a derivative action being brought by the beneficiary of a trust.   You can also enjoy the chat to its fullest on the Case by Case YouTube channel: https://www.you...

“A trust law derivative action, or a common law one?” ___ In the early 80s, a trust was established. Its assets came to be worth around $55m: [5] A parent established the trust for the principal benefit of their spouse and 4 children, with TCo as trustee: [6], [10] TCo’s shareholders were 2 of the kids - the Ds: [7] The trust deed gave TCo a wide discretion to make resolutions on the distribution...

“Freeze those assets. You’ll need them to pay me when I win!” ___ D1, D2, P2 - all natural persons - agreed to incorporate a company to sell aluminium-framed glazing products, PCo, and did in fact do so with D2 and P2 holding equal shareholdings: [5] P2, the active plaintiff, wanted interlocutory freezing orders ahead of final s232 relief and s236 leave to pursue D2 for a breach of their DDs: [7]...

"You made the company pay too much money for that boat!" ___ R owned 55% and A owned 45% of shares in a Co that operated a leisure boat business on Sydney Harbour: [2] R was the “bank”, contributing funds to the venture. A was to contribute sweat equity, earning a wage while running the Co’s business: [3] A caused the Co to buy a boat from an entity related to A’s spouse for $315K “as is” with no...

“Get us out, and get a prov liq in!” ___ P, A director and 70% shareholder of a Co sought to have it wound up and a provisional liquidator appointed: [1] - [3] P brought this application shortly after D1 (P’s former spouse, a Dir, and a 20% shareholder) commenced family law litigation: [20] D2, D1’s sibling who owned the remaining 10% of the Co’s issued shares, commenced their own shareholder oppr...

“The new deal you all made breaches the old deal we made!” ___ In 2001, some Cos came together to incorporate a new Co. NewCo was incorporated to contract with a big client. The client’s work would then be shared between the shareholders: [3] NewCo would invoice the big client, and each shareholder would then invoice NewCo such that NewCo never made a profit: [39], [68] A dispute arose: did that 2...

“Oi! Let me manage the company I said I didn’t want to manage!” ___ One brother, P, tried to wind up a Co, Tee, he owned with his elderly mum and two other brothers. Tee was trustee of a family trust whose ~$5.8m corpus included some real estate related to a family auto repair business formerly operated by Tee: [8], [12] (There was also a s66G issue that we will ignore.) P had left the auto repair...

“I submit to orders that I have to repay Dad. Or do I…?” ___ Mum and dad - elderly and unwell - sued two of their kids, and their son-in-law. First, the fascinating procedural issues. One child and the son-in-law filed submitting appearances. Another child (who we won’t discuss further here) resisted Mum and Dad’s claim and made a cross claim: [1] During the final hearing, the submitting daughter...

"Can we charge a fee for administering the trust?" ___ A trustee sought judicial advice from the Court that it would be justified in amending a super fund trust deed. The proposed change would allow it to charge a fee to be paid from the fund: [38], [44], [67] (The T’ee sought and was granted non-publication orders in respect of some of its commercial evidence because if it became public it could...

“Does the trustee really own the farm, or it still in mum’s estate?” ___ In the 1970s, Dad - a farm owner - planned to transfer his farm into a trust with TCo as trustee and his family as beneficiaries.  If it worked, his wife and 4 kids could take the benefit of the farm without paying death duties: [78] At this time, rural families often faced death duties at “confiscatory levels” when farm...

"That money's for the business, not for you!" ___ If you'd like to contact me my please look for James d'Apice or Coffee and a Case Note on your favourite social media spot - I should pop up right away! ___ Ps claimed they paid $160K cash to D in connection with an online payment business: [3] D said the $110K was appropriately spent on business expenses and D’s salary, and the $50K was for some u...

5 partners - 3 Ps and 2 Ds - from the same extended family carried on a partnership. There was no written agreement: [1], [2] D2 was married to D1: [3] The partnership business was owning rental property (shops and units) and collecting rent. D1 took a leading role and was a paid a management fee. All partners were paid drawings, controlled by D1: [4] - [6] Drawings were paid 1/4 to each P, a...

I so enjoyed this interview with Nicole Davidson, a gun mediator and host of the Negotiation in Real Life podcast. Please check it out here: https://podcasts.apple.com/gb/podcast/negotiation-in-real-life/id1590259533

(A couple of goofs in my delivery of this one this week - apologies!)   R and 7 As were in partnership operating various diagnostic medical imaging businesses pursuant to a partnership agreement. R and 5 of the As were “full” partners each entitled to 1/7; 2 As were “half” partners entitled to 1/14 each: [3], [31]   The As entered into an agreement with a purchaser to sell the partnershi...

(I don’t know why these short lost trust deed cases appeal to me so much. Perhaps it is the intersection of the capital “L” Law with all its tradition and solemnity, with the very human problem of losing a few old pieces of paper.) ___ A trustee administered a trust in accordance with an unexecuted (or unsigned) trust deed. When the original was needed, no one could find it. The trustee sought the...

“Hey that money belongs to the partnership. Give it back!” ___ C and S, verbally agreed to (i) try to buy some adjoining properties, (ii) sell them at a profit, (iii) share the costs and expenses of doing so equally, and (iv) share the profit equally: [9] Speaking broadly, S took responsibility for financing and buying the properties, while C looked for purchasers: [14], [55] S argued the agreemen...

P, a school, bought a bus from D. It was old stock sold at a substantial discount. The Court found D had engaged in misleading and deceptive conduct by silence (as to the build year of the bus) when selling the bus to P. But - crucially - the Court found P did not rely on that misrepresentation: [13] That meant P lost its claim, despite D’s conduct: [1] This left open the question of legal costs....

“The deal’s off. Now give me back my $6m!” ____ P, a Chinese frozen meat company, and D, an Australian feedlot and abattoir company, found themselves in dispute.   A 2015 contractual arrangement required P to pay a $6m “advance payment” to D to acquire 45% of the shares in D: [7] P made that payment. The 45% stake was valued ~$140m: [17] The deal between D and P included unusual conditional t...

If you'd like to contact me my please look for James d'Apice or Coffee and a Case Note on your favourite social media spot - I should pop up right away! (TikTok is one of my strongest suits these days!) ___ Two partners P2 and D4 - both companies - were in partnership from 1996 to 2003.  The Ps said that D1 had been paid partnership money and sought an order for the taking of partnership acco...

“Victory with no word from the misbehaving NZ director? No problem.” ___ Ps, liquidators of a holding Co whose subsidiaries provided cloud-based SMSF software and support, sued three of the Co’s directors, and settled the claims against two of them: [2] They pursued the remaining director, D. D was served with the originating process (the document that kicked off the litigation) in NZ, but did not...

“We’re liquidating the trustee Co, but we also need to be made receivers of the trust assets!” ___ A Co was incorporated to be a trustee and, in that capacity, developed an apartment complex in Lindfield: [12] The trust deed provided that the Co was to be indemnified for all liabilities incurred in its capacity as trustee, and that it would cease to be trustee upon its liquidation: [11] Following...

Earlier this year I had the chance to chat with David Turner of Hearsay: The Legal Podcast. It was (honestly) one of the most enjoyable chats I have ever had about technical legal practice. You can find other episodes on the fabulous Hearsay podcast here: https://htlp.com.au