“That’s my warehouse, or at least half of it is…” ___ From its purchase in 2010 P and D were registered as 50-50 TiC co-owners of a warehouse. P was D’s parent. P had borrowed the money to buy the property. D operated a business from the property until 2012 when it become non-viable: [4] From 2017 the property was leased with all rental proceeds being paid to D: [7] P commenced proceedings (not by tutor, but following some earlier litigation about P being able to represent P due to P’s Alzheimer...
Jul 17, 2023•8 min
“But you’re who’s stopping the Co from bringing the claim!?” ___ The Ps (a parent and their child) were the dirs and only shareholders of the D. The D was trustee of an SMSF and the Ps were beneficiaries: [1], [2] The Ps, proceeding without legal advice, sought leave to cause D to sue for some alleged trust property: shares. The Ps said FormerTCo, a former Tee of the SMSF, owned shares in OtherCo, that FormerTCo became deregistered, and the shares (which the Ps said were trust property) were unl...
Jul 09, 2023•9 min
"This motel ain't big enough for the both of us!" ___ Two families operated a motel together until their relationship deteriorated. 2XD owned the land the motel was operated on and leased it to 1XD, a Co co-owned by 2XD: [2] 2XC had assisted 2XD over the years, and came to assist with the motel: [13] - [17] The arrangements (for 2XC to help at the motel, and to eventually purchase it from 2XD having paid a deposit) were informal and legally unclear - an arrangement defined by “uncertainty, if no...
Jul 02, 2023•9 min
“Those unjust terms are void, but not the whole contract.” ___ A Co borrowed money. The Co’s dir and that dir’s spouse (together, “the Ps”) guaranteed the Co’s borrowing including by mortgage: [4] The Ps said the contract was unjust pursuant to the Contracts Review Act 1980 (NSW): [6] The Co borrowed ~$9m from the D on a 15 month term with ~$1m immediately payable to the D: [7] On default a higher interest rate would be payable, even after the default was remedied: [15], [16] A “hefty fee” - 5% ...
Jun 14, 2023•7 min
“You can’t bring your derivative suit; an oppression claim does that job!” ___ Ps, shareholders in a Co that produced fire collars and similar products for the building industry, sought leave to bring derivative proceedings on behalf of the Co. The relevant IP for the Co was held in a unit trust with TCo as trustee. Each of the Ps and the Ds were shareholders in Co and TCo, and unitholders in the trust: [2] The Ds were directors of Co and TCo. The relationship between the parties began to deteri...
Jun 06, 2023•7 min
“You can have their shares, even though they’re worth nothing!” ___ P commenced oppression proceedings seeking buyout orders, or a windup. Co1 was owned 50-50 between P and D2, and bought a site for $4.6m: [4] Co2 was owned 50-50 between P and D2, and bought a site for $2.9m: [5] P said they contributed $1.3m to finance and D1 and D2 ~$700K between themselves: [6] Further funds were also contributed to all Cos by both. Co3 was owned 50-50 between P and D2, and agreed to buy a site for $6.1m in f...
May 16, 2023•7 min
“Is the whole group a partnership, and can we dissolve it?” ___ In the 1950s 3 brothers started a business which became successful. It was run as a group of Cos and trusts that grew in value and complexity. The group was run informally by the 3 brothers (and later their kids) and structured pursuant to tax advice: [20] In 2018 P sued seeking to divide the business into 3 equal parts; each part passing to each brother’s family or estate. The Court accepted the relationships broke down for “unclea...
May 09, 2023•11 min
“It’s not unreasonable that I rejected your offer!” ___ A dispute arose about how much tax a Co should have to pay. The dispute related to P’s alleged status as an employment agent: [22], [24] As the matter progressed P made a partial payment in respect of the claimed tax debt and litigation was commenced. In January 2021 D made a Calderbank offer (and not a UCPR offer) to accept about $3.4m for its claim (when it alleged $5.2m was owed): [9] The matter did not settle. In the end, in February 20...
May 05, 2023•8 min
“Money down; then you can sue me!” ___ P sued the Ds for $4m claiming it was an unpaid builders margin: [1] The Ds sought security for their costs: [2] In 2018 P worked on 2 projects for some Ds, with the Ds’ Dir expressing interest in buying shares in P despite a dropping margin: [7] Later in 2018 some of the Ds entered into the shareholders deed. One of the Ds became a 50% shareholder in P and P was entitled to charge an 8% margin on costs for construction work done for the Ds: [8] - [10] In 2...
Apr 25, 2023•9 min
“Nope! The injunction stays and you’re still restrained.” ___ P was a member of an international group of leasing businesses. D was a former employee of P’s. Commencing in 2016, over time D had been promoted, signing a number of new employment agreements: [4] The most recent contract included a 3 month notice period and an extended restraint. D gave evidence they did not read the agreement before signing, instead relying on emails exchanged at the time: [7], [8] In Feb 2023, D resigned purportin...
Apr 06, 2023•8 min
“But our relationship hasn’t broken down!” ___ C1 and C2 did development work together. Two natural persons, P and D, were inter alia (i) equal shareholders in C1 and C2, and (ii) dirs of C2. D was the sole dir of C1: [1] P brought an application pursuant to s233 and s461 to wind up C1 and C2: [2] Originally, D had borrowed money from P’s parent for the venture. P’s parent only agreed so P could learn the property development business in a quasi-partnership venture, built on trust: [4], [54] Var...
Mar 24, 2023•7 min
James had the chance to sit down with the wonderful Rose Inglis for her Rose Tinted Law podcast the other week! James (me - I am just writing this and pretending we are a big team) probably revealed more personal stuff, and more TikTok beef stuff, here than ever before. Enjoy! And catch Rose here: https://rosetintedlaw.com.au/rtl-the-podcast
Mar 21, 2023•49 min
“Nope. You can’t stand in the company’s shoes.” ___ In a family dispute, P wanted the Court’s leave to pursue a $10m claim on behalf of Co. P said the $10m was owed by D1, trustee of a family trust, as a loan to be repaid: [2], [17] P also sought leave to proceed against D2 and D3 for breaching their duties to Co: [3] P said the loans were made where D1 had doubtful capacity to repay, and where interest was not charged: [4], [5] At a 2021 meeting, the Co’s dirs (including an independent dir) con...
Mar 13, 2023•10 min
"Cancel the meeting you've set to remove me!" ___ An association relating to the education of First Nations people, D, planned to convene a meeting to consider removing its president, P. P applied to the Court on an urgent basis to restrain D from doing so: [1] The meeting was set for a Sunday, P having been provided with very little notice. P approached the Court for an urgent hearing on the Friday beforehand, and the Court made the orders sought: [2] The president said (i) the meeting was not ...
Mar 04, 2023•8 min
A partnership dispute (that I have previously summarised part of) was litigated in large part, then settled: [2] Before final orders were made, deeds were signed that saw the D pay a sum, surrender their partnership assets, and the proceedings dismissed: [4] P, a former partner of the partnership then sued D for the same breach: [5] D said P (1) was bound by the deeds; (2) was estopped due to res judicata; and (3) was bringing a claim which was an abuse of process: [7] The earlier litigation rel...
Feb 22, 2023•12 min
“Sell the land I own 1/56th of!” ___ From the early 1980s a property was owned as tenants in common. Ownership was divided in sevenths: [6] P owned one 40th of the 5/7th intersect - a 1/56th interest in the land. P sought the appointment of trustees to sell the property pursuant to s66G of the Conveyancing Act 1919 (NSW) Each co-owner had “spheres of influence”. Some constructed residences: [9] The use was contrary to zoning and no DAs were obtained: [11] A 5 page “policy” document purported to ...
Feb 08, 2023•12 min
James is sometimes invited to give presentations and talks for external legal training providers. Please enjoy this talk James gives on the distinctions between corporate oppression and derivative actions. And please don't forget to follow James and Coffee and a Case Note on your favourite platforms!
Jan 25, 2023•42 min
“You said our companies wouldn’t have to pay back those loans!” ___ A group of entities controlled by P (“P”) was in business with a group of entities controlled by D (“D”). P and D did property development work together via various operating Cos (“OpCos”): [3] P commenced oppression proceedings (s232) saying that D breached their duty to OpCos, and the ACL: [4] P sought the Court’s leave to bring those derivative claims on behalf of OpCos (s236): [5] P and D conducted their projects in quasi-pa...
Jan 23, 2023•10 min
P lodged a caveat on a property owned by D in Darling Point, Sydney. D sought its removal. P was the deceased’s son by an earlier marriage. After P’s birth, the deceased married D and they had another child together: [4] - [7] The deceased operated a cattle and macadamia business on land owned by an entity the deceased and D themselves owned and controlled: [9], [10] In 2011 the deceased made a will and a Memorandum of Wishes. D counter-signed the latter: [12] - [15] By the Will the deceased beq...
Jan 16, 2023•7 min
“We amended the contract, now give me my bonus!” ___ P agreed to sell their shares in SubjectCo to D for: cash, shares in D, and (if further earnout conditions were met) further shares in D: [1] P sued D for those shares and unpaid dividends, saying the conditions were met: [2] SubjectCo made hazardous area electrical equipment for mining machinery: [11] D was a listed business whose strategy included buying smaller mining equipment firms: [17] D bought SubjectCo to complement its existing holdi...
Dec 31, 2022•11 min
"The vesting date is too early. Rectify the deed!" ___ In 1976 a trust was established: [2] P and P’s parent signed the deed for Tee: [3] The trust assets included land in SW Sydney; likely “substantially” exceeding $100m: [5], [20] The trust vested on the earlier of: a date in 2032, the date of death of a royal family member (“royal lives” clause), or a date determined by the Tee: [7] The trust’s land might take years to develop, perhaps until 2046: [9], [54] The deed was amended by Tee various...
Dec 24, 2022•10 min
“I’m a director.” “No you aren’t.” “Yes, I am!” ___ Two people, and their Cos, founded a Co to develop property on the NSW coast: [1] P was a director. PCo and DCo were equal shareholders: [37] Their records could “fairly be described as a mess” with “gaping holes” in the evidence: [3], [11] The parties agreed that they would share the profits, but disagreed on sharing investment: [175] The Court found that there was a 50 / 50 agreement, where the party whose “50” required the Co to take a bank ...
Dec 15, 2022•10 min
"Investigation isn't legal advice. You waived privilege!" ___ D discovered ~29K documents in a piece of litigation, and claimed ~9K were privileged: [1] The Court considered 27 representative docs. The docs included docs about an ASIC investigation re “fees for no service” claims: [2] D had to prove the docs were privileged. If privileged, P had to prove privilege had been waived: [6] D had self-reported the “fees for no service” issue, engaged various large law firms, and itself had a big in-ho...
Nov 22, 2022•9 min
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
Oct 31, 2022•1 hr 14 min
"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 therefore complimentary to, not competitive with, P’s business: [5], [69] D1 was ObjectCo’s controll...
Oct 26, 2022•9 min
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 distribute trust capital and income to benefs, who were its members: [24], [25] A, as trustee, woul...
Oct 13, 2022•8 min
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.youtube.com/channel/UCvVvoTu3CZlLPE24ovBREkw You can check out ZFZ here: https://www.zeilerfloydzad.com #coffeeandac...
Oct 09, 2022•40 min
“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 of income. If there was no resolution, the income was to go to the principal beneficiaries. From 200...
Sep 23, 2022•8 min
“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] Let’s discuss the freezing orders. The Ps issued substantial NTPs for PCo’s records. The Ds produced...
Sep 17, 2022•9 min
"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 warranties and no commercial configuration: [4] A also caused $220K to be transferred out of a Co’s ...
Sep 09, 2022•8 min
