I had a great time having an expansive chat with Grant Williams about all things podcasting (and life!) for his new podcast Not Just Another Podcast launched January 2021!
“Tell ‘em about the legal fees!” ___ A joint venture kicked off by two natural persons, P and D, and involving a number of Cos, fell apart. A deed was entered into to deal with the wind down. The deed was between the natural persons and the relevant Cos. It dealt with the appointment of new independent directors to take an arm’s length approach to realising the JV’s assets. The deed included a provision apparently granting the new directors an indemnity for their costs, paid from the venture’s f...
“Can I just pay the Australian beneficiaries?” ___ In 1973 a trust was settled. The corpus included residential property: [3] Changes to the Land Tax Act and Duties Act mean surcharge tax won’t be charged if a trust whose corpus includes residential property has no potential or existing foreign beneficiaries: [7] - [9] i.e. Foreign beneficiaries mean a bigger tax bill. The trustee asked the Court for judicial advice (s63) and for orders (s81) releasing it from having to pay foreign benefs. There...
“I should’ve accepted that offer…” ___ P sued 4 Ds for money, and for possession of some land. He failed. But before P’s failure, D3 and D4 had made an offer to settle. P having “lost” in his claim, was in a worse position than he would have been had he accepted the offer: [11] The Court said P had to pay D3’s and D4’s legal costs up to the date of the offer on the “ordinary” basis. The Court then considered whether P should have to pay D3’s and D4’s costs on the more generous “indemnity” basis ...
“I don’t have to do what the deed I signed says. It’s unjust!” ___ An accountant resigned after suffering bullying and harassment: [14] A dispute arose after the former employer made an aggressive threat about the accountant’s conduct, including threatening criminal prosecution: [23] The parties settled their dispute in a wide-ranging deed. At the time the deed was signed the accountant said he was “completely worn out, stressed and distressed by” the former employer’s behaviour: [26] He did not...
"Are we partners, or what?" ___ P and D were former friends who worked together on software they used to place bets on horse-racing. They shared the profits, in the form of gambling returns, in various proportions over time. The relationship broke down. P sought to recover from D $870K he said he was entitled to as a partner. A partnership is relevantly defined as a relationship between "persons carrying on a business in common with a view of profit”: [105] Noting the venture relied on "chance… ...
“Let me get the company its share of the money!” ___ ~$100m was paid following the sale of a site in Sydney. The Co stood to receive some of the proceeds. P - a former director of the Co - had the benefit of a “side deed” which might see a related entity of his take a benefit if the Co received a greater share of the proceeds. It was contemplated that some of the sale proceeds would be distributed in a manner that concerned P. P brought a derivative action - tried to “stand in the company’s shoe...
"It’s not clear that I have to pay your fees – and you drafted the contract!" ___ A client appointed an investment banker to advise on takeovers and mergers. The contract was formed by an engagement letter from the banker being accepted by the client: [3] The engagement letter entitled the banker to various fees based on different events, offers and payments. Following a "bidding war" the client became a wholly owned subsidiary of a purchaser: [24] The banker issued an invoice for $50m. The clie...
"I'll repay the funds you invested. Trust me?!" ___ Two Ps invested money with D1. D1 didn’t repay it. The Ps said D1 held the funds on trust. The Ds didn’t go to the hearing but the Court found it was OK to go ahead in their absence: [12] D1 made representations about an investment being “100% safe and secure”: [24] The Ps then made a number of investments with D1. As they did, D1 would send a document titled “Declaration of Trust” for the relevant P to sign: [27], [31] The Ps invested around $...
“Worth the ‘powder and shot’?” ___ P sued D1 and D2 claiming statements made in a meeting were defamatory. P succeeded against D1 and failed against D2. Damages against D1 were modest - the sum of $11K: [6] Thought P raised the issue of delay, the Court found P should pay D2’s costs, costs following the event: [15] The P’s failure to accept an offer made jointly on behalf of D1 and D2 did not elevate D2’s costs order to costs on the indemnity basis: [17] Having been successful against D1, P pres...
OK! The final one of these Instagram Live sessions. This one was a little loose with a lot of questions, but hopefully a lot of value too. It's basically my approach to marketing online as a lawyer, and some suggestions for you. Hope it brings you value! And if you could sling this pod a review, I'd be really grateful. Cheers!
Another great session of legal rigour and tonal lightheartedness. Please join in this fun and informative chat about ss232 and 233 of the Corporations Act. And please consider heading to instagram.com/coffeeandacasenote if you'd be so kind.
"Stop telling everyone you own my patents!" ___ Some Ps asked the Court for an interlocutory injunction – an immediate stop – preventing some Ds from saying they owned, or had a licence to use, some patents. The Ds accepted they didn’t own them: [37] But the Ds' website said they had an exclusive licence to use them and that one of the Ds owned or exclusively controlled them: [108], [111] The Ps said this was misleading and deceptive, and that an interlocutory injunction should be granted: [31],...
The latest in my series of Wednesday night Instagram CLE sessions. Please join me next Wednesday 8.00pm (Sydney time) for the next. This week we talked trustees for sale and, while it got a little messy, we had some good times too. Hope it brings you value!
In another edition of the tonally loose and legally rigorous Instagram Live series we discussed ss236 and 237 of the Corporations Act 2001 (Cth) as well as the Court's inherent jurisdiction. The comments were great, and I managed to stumble in my pronunciation of "derivative" a few times, so perhaps not cask strength whisk(e)y next time... Nonetheless, I hope this episode brings you value! Please join use next Wednesday at 8.00pm (Sydney time) at www.instagram.com/coffeeandacasenote...
"That person doesn't speak for the company!" ___ In 2012, Landlord Co and Tenant Co entered into a 5 year lease with a renewal option. Following a flood, a dispute arose about whether a new lease had been struck. In 2016 TCo's CEO told its solicitors to accept LCo's offer of a new lease. The first instance judge found the CEO didn't have authority to do that. So: no new lease. LCo appealed. LCo accepted that the CEO didn't have actual authority: [62] LCo said the CEO had implied actual authority...
Each Wednesday at 8.00pm (Sydney time) for the next few weeks I will "Go live" on my Instagram account to deliver a CLE. The account is: www.instagram.com/coffeeandacasenote I'd love it if you could follow me there and join the future sessions! In this talk, we discussed: 1. The "why" of exclusion clauses 2. The law of exclusion clauses 3. Some litigated examples of what happens when exclusion clauses come to court 4. Practical suggestions 5. An aside about warning signs The tone was light and t...
"Should we wind it up, or nah?" ___ A Co ran a chiropractic business in Melbourne: [1] The P owned half the Co’s shares. One of the P's directors was a director of the Co. One the Ds owned the other half of the Co’s shares. Another of the Ds was the Co’s other director, D Dir: [2] The Dirs fell into a wide-ranging dispute. D Dir accused the P Dir of operating a competing business. P Dir accused D Dir of directing P Dir’s clients away: [6] The Ps sought orders for the Ds to buy their shares. In t...
Please join me for a recorded discussion conducted for CLE provider TVED at 1.00pm on 10 August 2020. In this talk I cover: 1. The law of partnership 2. Some litigated examples of partnership disputes 3. Some practical suggestions for approaches you can take in practice I hope it brings you value!
“Stop the company paying a dividend. Right now!” An alleged shareholder, P, sought an immediate injunction to stop a Co declaring a dividend or reducing its share capital: [1] P’s alleged status a shareholder, P said, gave rise to an entitlement to $700K in dividends. Failure to pay those dividends was a breach of the Co’s constitution – which was, P said, a breach of duty and oppressive: [2] In the substantive claim, P was seeking orders requiring the Ds to purchase P’s shares: [3] The Court wa...
Two shareholders, P and D, sued each other; both trying to get the Court’s help to buy the other’s shares. Both failed: [2] P also sought to wind the Co up. That failed too, leaving the parties in their existing relationship: [3] Normally, as we know, costs follow the event – broadly, the “loser” in a piece of litigation pays (some of) the “winner’s” legal costs. But what was the appropriate cost order in this case, when no one got what they were after? D pressed for costs. P’s position was each...
“We’ve lost the trust deed!” ___ A trust was settled in 1972 with 3 trustees, all brothers. The trustees’ dad was settlor: [4] – [6] The trust was dormant until 2007 when, after the sale of a business, it was reactivated: [7] Around this time each brother was replaced by a separate Co as trustee, leaving 3 corporate trustees: [8] The trust assets were substantial and generated significant income: [10] The trust had been administered based on a photocopy. No one knew where the original was! A ban...
“Let me make the company chase the directors!” ___ P, a minority shareholder in a tantalum producing Co, sought the Court’s leave to sue the Co’s directors for breach of duties. P said that in 2016 the Co’s directors sold an asset of the Co’s for $60m when it was worth somewhere between $245m and $900m: [4] P asserted that the Co’s directors made the decision without enough info and without carefully thinking about it: [6] In 2018, some of the assets the Co sold in 2016 were sold by that 2016 pu...
"The directors aren't paying any rent!" ___ P, a shareholder, applied to the Court for leave to sue a Co’s directors on behalf of the Co – a “derivative suit”. The Co was the owner of farming property, and this dispute was one limb of a broader estate and succession dispute within a family: [3] P said the directors were occupying the Co’s land without paying rent, and so benefiting themselves at the Co’s expense: [12], [23] In relation to each of the s237 criteria “derivative suit” criteria: (i)...
“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 were hopeless and untenable, (ii) that a certain defence and cross-claim that led to a transfer to ...
“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, allowing the Cos to recover some $50m: [6] 3 of the Cos were in liquidation. All were in receivership. T...
“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 Corporations Act for a derivative action. It must rely on the Court’s inherent jurisdiction: [9] The Court foun...
“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 on the basis A would still play a role: [8], [43] The parties couldn’t agree on how to proceed and re...
“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 nowhere: [19] Further, the threat of the financier – who had become aware of the disputes – calling in its loans loomed...
"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 considered the facts to form a view about reasonableness. Early in the liquidation, the liquidator behaved as if Co A wa...
