Coffee and a Case Note

By James d'ApiceEducation

Coffee and a Case Note episodes

September 02, 2020 Instagram CLE - "Let's Get Someone Else to Sell It!" s66G Trustees talk 2 September 2020
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!
1 hr 3 min
August 26, 2020 Instagram CLE - "Standing in the Company's Shoes" Derivative Actions Talk 26 August 2020
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
1 hr
August 23, 2020 Left Bank Investments v Ngunya Jarjum [2020] NSWCA 144
"That person doesn't speak for the company!"

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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, as (i) TCo agreed to a new lease, and (ii) TCo gave the CEO authority to communicate that: [68]

LCo said TCo had agreed to the new lease as it (i) had done some building works, (ii) published material on its website, (iii) paid a lower rate of rent consistent with the 2016 emails, and (iv) made an "admission" recorded in board minutes: [71]

Each of those was rejected, TCo never having agreed to a new lease. As such, it never gave authority to the CEO to communicate that: [87], [88]

In relation to the estoppel-flavoured question of ostensible authority, the Court found that the CEO (despite a 2012 goof signing the 1st lease as a director when she was not) was not held out as a director and so did not have ostensible authority: [109]

LCo's appeal failed. Costs followed.
8 min
August 19, 2020 Instagram CLE - "You're Outta Here!" Exclusion Clause Talk 19 August 2020
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 the law was heavy. Hope it brings you value!
-Jd'A
#coffeeandacasenote
1 hr 1 min
August 13, 2020 Docklands Chiropractic [2020] VSC 364
"Should we wind it up, or nah?"
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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 the alternative, they sought a windup: [7]

The Court noted the disharmony between the parties and considered whether it would be just and equitable to wind the Co up: [11]

The Ps pressed for a windup. The Ds resisted: [12]

P Dir was no longer participating in the Co’s business, instead focusing on a competing business: [33]

D Dir continued to work and derive and income from the Co meaning a windup would weigh heavier on the D Dir: [42] There was doubt as to whether the P Dir came to Court with “clean hands”: [51]

The Court did not wind up the Co on the “just and equitable” basis: [64] Further noting that any “other remedy” may well stand in the way: [66]

The parties were directed to propose a timetable for progressing the oppression proceedings on an expedited basis: [74]
8 min
August 10, 2020 TVED CLE - Howdy! A discussion about partnership disputes
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!
49 min
July 26, 2020 Barjeba v Bogg [2020] WASC 195
“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 was satisfied there was a serious question (whether P was indeed a shareholder in the Co) to be tried: [6], [7]

However, The Court rejected P’s argument that damages would not be adequate compensation, a necessary step to get an interlocutory injunction.

In the substantive claim, P was seeking was a declaration that it owned shares and an order that the Ds buy those shares i.e. P wanted money. Clearly P considered the payment of money to be adequate: [8]

The Court characterised the relief as a “freezing order” in essence. As the planned dividend would not see the Co divesting itself of a unique, irrecoverable asset the balance of convenience did not favour the making of an injunction: [11]

P’s application failed. Costs followed: [13]
6 min
July 22, 2020 Bicher & Son Pty Ltd [2020] NSWSC 878
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 party should pay its own.

D successfully resisted P’s wind up application because of a change in the facts after proceedings were commenced: [16] Without that change, P would have got its wind up.

Further, while D’s cross-claim for a share sale was on a defensive basis [17] that XC failed on its own (lack of) merits, rather than the fact P’s claim that it was defending against failed: [18]

D made a settlement offer but the outcome P enjoyed was no less favourable than what D offered, meaning there was no special costs order: [22], [24]

No order as to costs was made, leaving both P and D to pay their own: [26]
6 min
July 17, 2020 Sutton v NRS(J) Pty Ltd [2020] NSWSC 826
“We’ve lost the trust deed!”

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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 bank used by the trust required production of the original deed as part of its “know your customer” program (the interpretation of which the Court left as an open question): [11], [12]

Searches were conducted for the original deed, including of the records of the father’s solicitor. Only a photocopy, identical to the photocopy that was already being relied on, was found: [14], [15]

One of the brothers sought a declaration that the photocopy was a true copy of the original. However, the Court found that a declaration like this was not appropriate: [20] – [22]

Instead, the Court provided s63 judicial advice to the trustees that they would be justified in continuing to administer the trust on the basis of the photocopy: [25]

As the trustees might agree: phew!
5 min
July 07, 2020 Global Advanced Metals [2019] NSWSC 1804
“Let me make the company chase the directors!”

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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 purchaser for $1.15B.

P tried to rely on this but the Court considered this suggestion had a “hindsight problem” - how could a 2018 sale shed light on a 2016 valuation?: [55]

In considering whether to allow the derivative action, the Court found (i) the Co was not likely to bring the claim [98], (ii) the application was in good faith because P, as a shareholder, would benefit from any success the Co enjoyed: [105], and (iii) there was a serious question to be tried: [117].

However, crucially, the Court found it would not be in the Co’s best interests to grant leave [146] including because of the distraction to the management of the Co, the likely increase in D and O insurance premiums, and the availability of external finance: [121] – [144]

Leave was not granted.
9 min

About Coffee and a Case Note

From the publisher's feed

I’m Australian lawyer, James d’Apice. Coffee and a Case Note began as a video series where I sip a coffee and chat about recent legal cases. This is the audio version! I hope it brings you value.