Episodes

  • “Hey! Stop trying to work for our competitor!”

    D was a consultant who, in 2022, left one large firm and joined another. D’s expertise was defence work: [2], [3]

    The 2022 role included a 2 year restraint: [4]

    The 2022 employer underwent a restructure following a scandal and D was then employed by P, or an entity related to it: [6], [9]

    D’s contract with P included a 3 month notice period with a right for P to force D to take that time as “gardening leave” [11] and cascading restraints commencing at 12 months and Australia-wide: [12], [14]

    In November 2023 D resigned indicating they planned to work at another firm.

    Shortly afterwards P sent D a letter directing D to take gardening leave for 3 months and asserting the restraints: [16], [17]

    D acknowledged gardening leave but resisted the restraints: [18]

    By the end of D’s gardening leave, neither party had shifted from their position and P commenced proceedings seeking an urgent injunction: [19] - [24]

    P had to show there was a “legitimate commercial interest” in enforcing the restraint and that it went no further than necessary to protect it: [28]

    P said the restraint would protect P’s legitimate interest in (i) the relationships with P’s clients, or (ii) the confidentiality of P’s confidential information e.g. pricing: [32]

    The Court spent some time considering the work done with P and the work to be done at the new entity (noting the evidence was “bedevilled with management jargon” [44]) concluding that the question was one of contractual construction to be set aside for final hearing: [47]

    The Court accepted there was a prima facie case in respect of the information D had access to: [48], [49]

    The Court noted D had previously accepted a 2 year restraint and so there was a prima facie case for a one year restraint: [51]

    Generally, the Court considered P had a prima facie case and turned to the balance of convenience question: [52]

    The Court noted D was well paid, had no evidence to show their asset position, had tax liability suggesting significant income in the past, and had their “eyes wide open” when accepting the restraints and then resigning: [53] - [64]

    This weighed against D in a balance of convenience argument.

    However, P’s delay was pivotal.P only brought the application at the conclusion of D’s gardening leave in February 2024 despite having first raised issues in November, and after various exchanges with D and D’s lawyers during leave: [65]

    Delay can be a complete answer to an interlocutory application: [67]

    The Court found it would be unreasonable now to restrain D from joining their new employer simply because P “has now belatedly discovered the urgency of the case” without P’s delay having been adequately explained: [80], [81]

    This delay tipped “the scale the other way”. P’s application failed. Costs followed the event: [81]

  • “It’s my wind-up application, so surely I should get my choice of liquidator...?”
    ___
    The Ps brought an application to windup various entities on the s461(1)(k) just and equitable basis, and to appoint receivers to the assets of the associated trusts: [1], [2], [6]
    The various entities were variously incorporated and settled to develop a marina. That development did not progress as hoped: [3], [13]
    The relationship between Dir1 and Dir2, the 50-50 controlling minds and shareholders of the relevant entities, irrevocably broke down: [1], [4], [5]
    The Court found it was just and equitable that the various companies be placed into liquidation on the just and equitable basis, and receivers appointed to the associated trusts: [10]
    The sole area of dispute was the identity of the liquidator(s) to be appointed: [14]
    Generally, a Court will appoint a plaintiff’s choice of liquidator, though will bear in mind partiality, fitness, qualification, cost, perceived independence etc. It is for a defendant to argue for a departure from that course: [15] - [18]
    The different hourly rates of the parties proposed IPs were found to be likely to lead to significantly different cost outcomes: [19]
    An argument that one IP had previous experience with marinas was “very thin” - especially noting that this venture did not proceed and that the Court was not provided with evidence of how this previous experience might assist: [20]
    The difference in the price of flights from Sydney or from Brisbane (to the venture’s Bundaberg location) was a “minor consideration”, especially noting the Sydney IPs had offices in Brisbane staffed by employees who could assist: [21]
    The Court was troubled by the perception (*perception* only - no finding or criticism was made) of possible conflict where the Ds’ proposed IP would likely use the advisory services of a firm who was the major shareholder in a proposed purchaser of the marina: [22]
    The Cos were wound up on the J and E basis, and relevant trust assets placed in receivership, with the Ps’ preferred IPs appointed: [24], [25]

    ___


    #auslaw #coffeeandacasenote #gravamen

    Please follow James d'Apice, Coffee and a Case Note, and James' firm Gravamen wherever you can!www.gravamen.com.au

  • Missing episodes?

    Click here to refresh the feed.

  • “We put all our shit in mum’s name
”
    ___


    P was the deceased’s spouse, and administrator and sole benef of the decd’s estate: [1]
    The Ds were the decd’s parent, D1; sibling, D2; and some related entities: [2]
    The decd and D2 - members of a motorcycle club and charged with drug offences years ago - used various entities to engage in business: [4], [5]
    In 2002 the decd and D2 transferred substantial assets to D1: [7]
    P said the arrangement was that D1 would hold those assets, and the income they generated, on trust in equal shares for the decd and D2. P said this scheme was to protect the assets from confiscation pursuant to the Proceeds of Crime Act: [8], [118] - [132], [248]
    D2’s evidence that they had no such concerns was rejected, as was the Ds’ evidence that evidence that D1 had a role in the businesses beyond book-keeping: [117], [138]
    The Court formed an unfavourable view of much of the Ds’ evidence, as “unsupported
 and inherently unlikely”: [38]
    In 2002 steps were taken to put the “asset protection” regime in place including incorporating a corporate trustee of which D1 was director and shareholder; settling a trust with D1, D2 and the decd as beneficiaries; and causing D2’s and the decd’s assets to be transferred without consideration constituting the corpus of that trust: [142] - [152]
    The decd had described the arrangements as “we put all our shit in mum’s name”: [151]
    After the transfer D2 took some role in various business ventures and property developments for the trust, as did D2 and the decd: [154] - [212]
    Contemporaneous notes suggest the decd understood that their entitlement to 50% of the trust assets would pass to P (as their sole beneficiary) on death: [218]
    P made various submissions in support of their asset protection or “warehousing” characterisation of the arrangement between the parties. P also said the Ds’ arguments (such as they were) failed to take into account the Proceeds of Crime Act protections that the decd and D2 were pursuing: [260] - [263]
    The Ds said P’s characterisation was “Kafkaesque” and the assumptions underlying it unfounded: [269]
    The Court accepted P’s characterisation: [271], [287] - [289]
    That was because: (i) the Ds’ lack of evidence and explanation about how any debt arose to D1 or the “implausible” suggestion that the parties were unconcerned about the Crime Commission ([272] - [276]), and (ii) the P’s case was supported by contemporaneous evidence: [277] - [286]
    The Court found the parties intended to create a trust relationship, including because of language used by the parties to characterise it: [306] - [309]
    The relief P sought could be granted against the TCo (i.e. not just D1) on basis that the TCo would not have its discretion fettered but that it would be prevented from exercising power in respect of 50% of its assets: [387]
    Costs followed the event: [459]

  • “We can’t order a share sale. Decide yourselves, or it’s getting wound up!”

    ___

    A number of plaintiffs applied for relief in relation to a shareholder dispute.

    Through the litigation the issues in dispute narrowed.Both the plaintiffs and defendants preferred for the Ds to buy out the Ps. A winding up order was all parties’ second preference: [1] - [6], [19]

    Commencing in 2014, the Ps and Ds incorporated Co1 and Co2 to (i) operate a GF bakery and (ii) own the land the bakery was situated on: [8] - [10]

    Evidentiary wrinkles included one of the Ds seeking a higher salary, one of the Ps resisting, the Ds causing the salary to be paid, the P then causing the same amount to be paid to their entity, and the Ds causing *that* payment to be recorded as a loan: [11]

    The Court exercised caution in relation to a winding up, noting the Cos likely had more value as a going concern, than as assets sold via liquidation: [25]

    All parties accepted that the relationship between themselves had failed such that an order winding up the Cos on the just and equitable basis would be appropriate: [29]

    The Court accepted that it would be appropriate for the Cos to be wound up on the just and equitable ground (and the appointment of a receiver to the Cos’ property held on trust: [30]) unless (noting s467) the Court was satisfied a buyout order could be made instead: [29]

    s467(1) grants the Court the power to make various orders on the hearing of a winding up application.

    The Court considered at length whether this power was broad enough to impose a forced share sale on litigants, eventually finding “with a degree of hesitation” it was not sufficiently broad: [37] - [51]

    The Ds sought a buyout order on the s233 “oppression” basis: [52]

    The Ds argued the Ps’ failure to agree to Co1 entering into a formal lease with Co2 was oppressive. Noting a lease had not previously been required, with no formal advice and with the risk of a conflict of interest arising, the Ds were not able to show a failure to enter into a lease was oppressive: [62], [63]

    Taken together: whether pursuant to s467 or s233 there was no basis for the Court to make a buyout order.

    Though not strictly necessary (as no buyout order was made) the Court considered the expert evidence placed before it in relation to the value of both Cos - the trading entity and the property owning entity: [64] - [78]

    The Court ordered that the Cos be wound up, but stayed the order for 14 days to allow possible negotiation of a share sale: [80]

    ___

    #auslaw #coffeeandacasenote #gravamen

    Please follow James d'Apice, Coffee and a Case Note, and James' firm Gravamen wherever you can!

    www.gravamen.com.au

  • In January 2024 James got to sit down and chew the fat with BB head honcho, Mike Bromley!

    They spoke about the founding of Gravamen, the dreaded work / life balance, and why James finds TikTok boring.

    You can find BB here: https://www.beyondbillables.com/blog

  • In December 2023 James caught up with Lara Quie from the Legal Genie Podcast to discuss social media, marketing, legal practice, horror films, battle rap, and everything inbetween!

    You can find the Legal Genie podcast here: https://thelegalgeniepodcast.buzzsprout.com

  • “Yep! You can sue the author to get the company’s IP from them.”
    ___
    A Co’s Dir, P, sought to bring derivative proceedings against a Co’s majority shareholder, D.
    P wanted declarations that the Co (and not D, who was also the book’s author) was the owner of all intellectual property rights in relation to a book: [1], [6]
    P said that after D wrote the book, D and the Co entered into an agreement for the Co to acquire the IP in the book: [7]
    Alternatively, P said D was estopped from asserting they owned the IP. Both D and the Co conducted themselves (including by the Co’s accounting and the collection of fees) as if D had assigned the IP. Indeed, in their capacity as co-director, D signed the relevant accounts reflecting this: [8], [10], [12]
    Evidence showed D received a real financial benefit in their corporate loan account on the basis of the transfer of IP having been made: [24]
    Evidence showed there had been negotiated of a written IP assignment agreement but that D had not signed it: [9]
    P attempted to commercialise the IP with one childcare provider. Conflict arose as D tried to do something similar with a competing childcare provider: [11]
    D did not lead evidence but said that, if leave was granted, they would defend the claim: [17]
    The Co being solvent, the Court then turned its attention to the five criteria regarding whether leave to bring derivative proceedings ought to be granted pursuant to the Corporations Act.
    (i) It was clear (from the deadlocked board and D’s refusal) that the Co was not going to bring the proceedings: [19]
    (ii) The Court accepted P was coming in good faith, bringing a claim P believed was well-founded, with reasonable prospects, and likely to bring value to shareholders if successful: [20]
    (iv) The Court accepted, on the basis of the material before it, that there was a serious question to be tried: [21]
    (v) Notice of the application was given to D: [31]
    This left the remaining criterion (iii) - whether it was in the best interests of the company for P to be granted leave to bring the application on behalf of the Co.
    The Court noted it appeared the Co paid for but had not obtained the value of the IP. The inference arose that the IP might be put to productive use in future; an inference reinforced by the fact that the IP is at the core of the Co’s business purpose and - without it - it was not clear how the Co could pursue its business purposes: [25]
    D’s suggestion that it was not in the Co’s best interests to be in dispute with its majority shareholder was acceptable on its face, but did not take the D’s argument very far noting this approach would serve only D’s interests, and not the Co’s: [26], [27]
    The Court considered the Co was better off pursuing the IP rights it paid for than going without them: [30]
    Noting the indemnity provided by the P for the Co’s costs (an indemnity obtained in part from a related trustee), leave was granted to P to bring the derivative suit: [32], [34]

    ___

    Please follow James d'Apice, Coffee and a Case Note, and James' new firm Gravamen on all your favourite platforms!

  • “Let’s appoint an IP to chase the group’s debts!”
    ___
    The Ps were 48% shareholders of a group of Cos that owned luxury car dealerships. The Ds were directors representing 52% of shareholders.
    The 52% majority owed a judgment debt to the group. The Ps proposed a course for recovering the debt. The Ds used their votes at board level (including a casting vote) to vote down the Ps’ course and vote up their own: [2]
    There was deep “anger” and “animosity” between the Ps and Ds and “very bitter and distrustful” feelings [58], [69]
    The Ps argued the Ds had a conflict of interest. The Ds said the Ps did too: [3]
    In previous litigation the Court found the Ds breached their duties to the group, pursuing litigation on the group’s behalf that benefitted them personally as part of a coordinated strategy to defeat the Ps: [12]
    This led to the Ds’ $19.8m judgment debt, plus costs incurred by the group: [13]
    To recover the debt the group needed to resolve: what were the group’s costs and how should they be pursued?: [14]
    The Ds suggested an insolvency practitioner (IP) be appointed to by the group to recover the debt: [30]
    The Ps proposed that they form a sub-committee to recover the debt: [31]
    The Ds resisted on the basis the Ps were also conflicted: [32]
    The Ds were critical of the Ps’ conduct in their dealings with the luxury car head franchisor, including providing them with Court documents and apparently paving the way for the Ps to take over the group’s operation of the dealerships: [44] - [48]
    A reduced franchise term followed - from the usual 5 years to 1 year, apparently as a result of the Ps’ conduct: [48]
    Despite the Ps’ conduct being “unwise” the Court found it was engaged in in an attempt to find a reasonable separation from the Ds. It was not found to be malicious: [49]
    The franchisor later threatened perhaps reducing the term to 3 months or 6 months: [51]
    The Ps accepted that if they were in charge of pursuing the judgment debt then negotiating that debt could be intermingled with negotiating the share price they wanted to pay for the Ds’ shares: [56], [57]
    The Court had regard to the “ongoing bitterness, conflict, and lack of trust” as reasons not to appoint the Ps to pursue the debt: [64], [65]
    The Court accepted the Ds’ submissions RE the appointment of an independent IP: [71]
    The Ps’ oppression claim failed with the Court noting that more than disappointment in the minds of minority shareholders is required to show a company’s conduct is unfairly prejudicial: [77]
    The Court dismissed the Ps’ claim and (noting the Ds were the majority and held the casting vote) was confident that the Ds’ resolution to appoint an insolvency practitioner would pass: [83]

    ___

    Please follow James d'Apice, Coffee and a Case Note and Gravamen on your favourite platform!

    www.gravamen.com.au

  • On 3 November 2023 James gave a speech on marketing and branding for lawyers similar to one he had given a number of time before.However, this time, he gave the speech with a live case study: the lauch of his own law firm, Gravamen!Many thanks to Clarissa Rayward and the whole Happy Lawyer Happy Life and Retreat team for making this happen! https://www.happylawyerhappylife.com/___Please support James' new firm, Gravamen, on your favourite platforms.www.gravamen.com.au#auslaw #gravamen #auslaw #coffeeandacasenote

  • In November 2023 James d'Apice sat down to chat with Alex Nielsen of The Australian Law Student Podcast about his approach to practice, overcoming "fuck ups" including bad marks on exams, and the future of James' law firm Gravamen.

    You can find the Australian Law Student here: https://www.theauslawstudent.com

  • “Your share of the sale proceeds gets reduced for us dealing with your complaints!”

    ___

    3 siblings co-owned real property. They disagreed on what use it ought to have been put to. 2 siblings, the Ps, applied to appoint s66G Tees, successfully.The Tees sold the land and distributed the Ps’ shares of the sale proceeds. The remaining sibling - the defendant, D - contested the Tees’ fees and criticised their management of the sale: [1] - [4]

    The Tees applied to be paid further remuneration from the D’s share (based on those costs arising from the D’s conduct) and to retire as trustees: [5]

    The Tees took the view that they should have distributed the net proceeds (after paying themselves 2/3 of their fees) proportionally to the Ps, and that the costs of any dispute with the D be borne solely from D’s share. The Court endorsed this approach: [11]

    The Tees retained the D’s 1/3 share, and an amount on account of 1/3 of the remuneration they were entitled to: [12]

    The D made various criticisms of the Tees' conduct of the sale including in lengthy correspondence, and then refused to attend meetings or provide bank details in order to accept a payment: [13] - [15]

    The Tees instructed lawyers, and then so did the D. The D later withdrew his lawyers’ instructions, and then said they would accept the figure first offered by the Tees without deduction: [16] - [18]

    The Tees reiterated they intended to make deductions and the D reiterated their claims. The Tees delayed approaching the Court and tried to negotiate, but eventually brought this application: [19]

    The Court noted trustees for sale are entitled to be indemnified for their costs in the normal course, and that where litigation is threatened those costs may be higher than usual: [22]

    The Tees’ claim for their own further remuneration was reasonable and “could even be characterised as modest” noting they did not claim for their time trying to negotiate with the D: [26]

    The Tees claimed further costs for their engagement with solicitors and in bringing the relevant motion: [27]

    The Court considered once the D raised their complaints the Tees needed legal advice on whether to negotiate with the D, or to consider making an application to the Court: [28]

    Broadly D complained about the Tees time entries and professional conduct: [30] - [32]

    After extensive consideration the Court found the Tees discharged their duties reasonably, diligently, and honestly: [33]

    The Court found it appropriate, and permitted, that the D’s share of the sale proceeds bear the Tees' further remuneration and costs: [34] - [36]

    The Tees originally attempted to pay $235K to the D as their share. The Court accepted the Tees costs and remuneration substantially exceeded $65K but accepted that figure as a compromise of the Tees’ remuneration and the fees to be charged by the Tees’ legal team: [40] - [42]

    Having failed to accept payment of $235K, the Court ordered the D was to receive ~$172K: [45]

    ___

    And please follow James d'Apice, Coffee and a Case Note, and James' new firm Gravamen on all your favourite platforms!

  • “Those notes aren’t privileged! Hand them over.”
    ___
    P sued D in relation to personal injuries P alleged at around the time they were giving birth. D, to oversimplify, was the hospital’s insurer: [7], [9]
    D instructed an expert who produced a report.
    P filed a NoM seeking access to a document produced by the expert in response to a subpoena, but over which D asserted legal professional privilege: [1], [9]
    P said the document was not privileged or, if it was, privilege was waived: [6]
    D had briefed the expert and invited the expert to initially provide a verbal opinion on 6 Qs. The expert gave evidence that during that conversation “(they) referred to.. 2 pages of handwritten notes (they) had prepared. (They) used them as the basis for expressing (their) verbal opinion to (D’s lawyer)”: [10] - [14]
    These 2 pages constituted the document P sought and D asserted was privileged.
    Privilege attaches to a *communication* not a document. D asserted the document was a communication: [20], [21]
    Documents generated unilaterally by an expert in the course of forming an opinion do not attract privilege: [22]
    Despite there being a “grey area”, privilege may be claimed in communication between the expert and solicitor if made for the confidential use in the litigation: [24]
    A draft report, for example, is not a communication: [25]
    It is for the party asserting privilege to prove privilege attaches to a document: [32]
    Despite having prepared an affidavit on the topic there was no evidence that the document was intended to be a means of communication between expert and lawyer: [34]
    Having so found, the Court did not need to consider the question of waiver. However - noting that disclosure of an expert’s report is an implied waiver of the instructions underpinning that report, and that there was no suggestion the document did not cover material that eventually formed part of the final report - the Court would have concluded privilege was waived: [34] - [37]
    P was granted access to, and permitted to inspect, the document: [38]

    ___

    Please send a follow to James d'Apice, Coffee and a Case Note, and Gravamen on all your favourite platforms!

  • In November 2023 James gave a presentation for prominent CPD provider TEN about a developing area of trust law.

    In this CLE, James explores:

    1. The corporate derivative action

    2. Some litigated examples of it

    3. The Court's decision in Gillespie v Gillespies Cranes Nominees Pty Ltd [2022] NSWSC 1184

    4. Practical suggestions for dealing with corporate derivative actions

    5. Practical suggestions for the evolving landscape arising from Gillespie

    A link to TEN's website is here: http://www.tved.net.au

    #auslaw

    #coffeeandacasenote

  • On 30 October 2023 James was lucky enough to accept an invitation from Dr Madeline Taylor to give a lecture in Dr Taylor's commercial law course at Macquarie University.During this talk James discusses the "gap" between the theory learned at university and what happens when the rubber hits the road, in legal practice.In the discussion, James refers to cases including:Carpenter v Morris [2021] NSWSC 1700Campbell v Campbell [2022] NSWSC 554 SSC Super Pty Limited [2022] NSWSC 686Gillespie Cranes Nominees [2022] NSWSC 1184Australian Karting Association Ltd [2022] NSWCA 188M & L Richardson Pty Limited [2021] NSWSC 105#auslaw #coffeeandacasenote #macquarieuniversity

  • James was a guest of the Lawyers Weekly podcast hosted by the legendary Jerome Doraisamy in October 2023. The two discussed the process of finding your specialty, and the the importance (or otherwise!) of niches.

    You can find a link to the Lawyers Weekly version of the podcast here: https://www.lawyersweekly.com.au/podcast/38383-choosing-your-niche-and-communicating-it-to-the-market

  • “You stole the Co’s koala client base! That’s not good faith.”
    ___
    P, one of 3 equal shareholders in a Co operating a vet surgery, sought to bring a derivative action on the Co’s behalf.
    The other 2 shareholders were the Co’s Dirs. D1 was a vet, and P’s former spouse. D2 was an E’ee of the vet clinic.
    The Co offered traditional vet services as well as “rehabilitation” services; chiropractic and acupuncture: [6]
    In 2019 P and D1’s marriage deteriorated. In 2021, P sought family law property orders. In 2022 the marriage was dissolved: [7]
    As part of the family law litigation, all parties contemplated P selling their shares to D1 and D2: [8], [9]
    In 2021, P’s was dismissed by the Co for alleged serious misconduct. No payment was made for annual leave (the Co saying it had all been used) or in lieu of notice (due to the alleged serious misconduct): [12] - [14]
    One of the Co’s leading clients was a local koala hospital. P sought to siphon off this koala work (to the detriment of the Co) while still a Dir of the Co. (P was indeed later employed by the koala hospital, with the Co losing that work): [16] - [34]
    D1 and D2 incorporated a new company and diverted the Co’s “rehabilitation” services away to it: [48] - [59]
    The Court found it was likely the family law proceedings would lead to orders that P sell his shares in the Co to D1 and D2: [63]
    P threatened bringing a derivative suit regarding the new “rehabilitation” company being a breach of the Ds’ directors duties if his claimed employment entitlements were not paid. They remained unpaid. The proceedings were brought. The Court accepted the derivative suit was brought by P to apply pressure to seek his unpaid claimed employment entitlements: [73] - [76]
    The Court (with respect, quickly) concluded leave to bring the derivative suit should not be granted: [77]
    The Court accepted the Co would not bring the claim, that there was a serious question as to whether the Ds breached their duties, and that notice had been given: [78]
    The Court found the derivative suit would not be in the best interests fo the Co and was not brought in good faith: [79]
    The Court found the derivative suit unnecessary and “pointless” as the issues relation to the Co’s value and the new “rehabilitation” business were to be litigated in the family law proceedings: [84], [86]
    A “parallel” between family law proceedings and a derivative suit will not always stand in the way of the latter succeeding: [84]
    Regarding best interests, granting leave would distract D1 and D2 from continuing to build the Co: [87]
    Regarding good faith, P did not come in good faith because the claim was pointless and unnecessary, and because it was brought to secure employment entitlements - an abuse of process: [88]
    Leave was not granted.


    send


    #gravamen

  • “Your Honour, would it be OK if I entered into this deed?”
    ___
    Long-running litigation was on foot relating to, among other things, land with a value of around $40m.
    By NoM, a receiver appointed by the Court to the relevant Ds in the litigation sought the Court’s advice about whether they would be justified entering into a Deed settling all the pieces of litigation: [12], [15]
    The receiver relied on evidence, including confidential advice from counsel on the nature of the settlement: [17]
    Some earlier claims, being a portion of the matters in dispute, were settled in a deed 2019: [23]
    Some orders in the proceedings were made in May 2023. The Ps filed a Notice of Appeal in respect of them: [30]
    Various negotiations followed by correspondence leading to a proposed draft Deed: [31] - [36]
    That was the question before the Court in this matter: whether the receiver would be justified in settling the dispute on the proposed terms.
    There is settled law that a Court can give advice and direction to a Court-appointed receiver in a manner analogous to judicial advice given to a trustee: [37]
    The law relating to judicial advice to trustees was relevant with the question of whether a claim can be settled on certain terms being a well-recognised area for the giving of advice: [41]
    The Court noted the complexity of the dispute: originating in 1948, proceedings commenced in 2013, 4 years of mediation leading to only partial settlement in 2019, a valuable underlying asset: [43]
    The Court said the giving of its advice required a comparison of the position if the deed was entered into versus the position if it was not: [47]
    The draft Deed contemplated that all proceedings would be dismissed, mutual releases provided, and all parties bearing their own costs - a “walk away”: [48]
    The 2019 deed included releases for costs related to the litigation, but not "additional costs": [49]
    Considerable attention was paid to the implication of the releases if the draft Deed was entered into including a claim the “additional costs” outside the bounds of the 2019 Deed: [50] - [58]
    The draft Deed would also see the receiver releasing any rights to enforce a damages undertaking made by the Ps in relation to a 2013 interoloctory injunction: [60] - [63]
    Ultimately, providing releases of the “additional costs” claim and the damages undertaking were commercial considerations for the receiver: [59], [64]
    If the Deed was rejected outstanding risks would remain, including the outcome of the impending appeal, and the difficulty recovering costs in the face of the 2019 Deed: [65] - [68]
    The Court considered it would be reasonable for the receiver to enter into the Deed, giving the judicial advice sought: [69], [70]

    ___

    Please look out for James d'Apice and Coffee and a Case Note on your favourite platform!

  • In July and August 2023 James d'Apice gave a series of one hour CLEs "live" on Facebook, Instagram, Linkedin and YouTube.

    This one concerns s461(1)(k) of the Corporations Act 2001 (Cth) - the just and equitable winding up remedy - and has the following structure:

    1. The law

    2. Litigated examples

    3. Practical suggestions

    Please give James and Coffee and a Case Note a follow on your favourite platform!

  • In July and August 2023 James d'Apice gave a series of one hour CLEs "live" on Facebook, Instagram, Linkedin and YouTube.

    This one concerns s66G of the Conveyancing Act 1919 (NSW) and has the following structure:

    1. The law

    2. Litigated examples

    3. Practical suggestions

    Please give James and Coffee and a Case Note a follow on your favourite platform!

  • “Hey! That was the Co’s opportunity to sell baby formula!”
    ___
    A Co that made infant formula had two shareholders: P as to 51%, DCo as to 49%: [1], [2]
    DCo was controlled by a married couple – D1 and D2 – who had roles including as the Co’s former director and former CEO: [3]
    P alleged D1 and D2 breached their duties to the Co: [4]
    P said D1 and D2 caused an opportunity for the Co to promote and distribute a certain brand of infant formula to be diverted away from the Co, and toward entities related to D1, D2 and members of their family: [5] – [10]
    P said D1 and D2 caused the Co to transfer ownership of its trademarks to entities related to them: [11] – [15]
    P said D1 and D2 caused the Co to make payments to entities related to them based on fraudulent invoices and otherwise improperly: [16]
    P said the entities related to the Ds were aware of these breaches and knowingly took the benefit: [18], [19]
    P sought leave to bring a derivative suit to agitate these claims, and also alleged s232 corporate oppression: [23], [24]
    Interim freezing orders were made pending the outcome of this application: [24]
    The Court considered the five s237(2) criteria in relation to the proposed derivative suit.
    The 1st (the Co probably not commencing the proceedings), 2nd (the P coming in good faith on the basis that increasing the Co’s value would increase their shares’ value), 4th (the P showing there was a serious question to be tried) and 5th (the Ds had notice of the claim) were all met: [32] – [37]
    This left the question of whether the granting of leave would be in the best interests of the Co.
    P submitted that the nature of the claim, and its prospects, were so compelling in the context of the Co’s affairs that a grant of leave would be in the Co’s best interests even if supported by only a limited indemnity from P: [41], [42]
    The proceedings were likely to be factually and legally complex with claims against multiple defendants and an estimated 16 days needed for the final hearing: [45]
    The Court found that any grant of leave to P ought to include an indemnity from P to the Co for any adverse costs orders, but not to the extent pressed for by the Ds: [46]
    Many of the relevant Ds were based in China. The cost of enforcing the judgment in China was uncertain (as were the prospects – with expert evidence suggesting no judgment of an Australian Court had been registered and enforced by a Chinese Court). The Court found it would only be in the best interests of the Co for leave to be granted if P indemnified the Co in respect of this cost: [47]
    Leave was granted to P to bring the derivative suit, conditional upon the indemnities being provided: [78]

    ___

    Please follow James d'Apice and Coffee and a Case Note on your favourite platform!