In the matter of Zoe Corporation Pty Limited [2020] NSWSC 1431

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Zoe Corporation Pty Limited [2020] NSWSC 1431 Hearing dates: 25 September 2020 Date of orders: 25 September 2020 Decision date: 25 September 2020 Jurisdiction: Equity - Corporations List Before: Rees J Decision: Refuse leave to bring derivative suit; dismiss application to restrain receivers and managers pending determination of application and derivative suit. Catchwords: CORPORATIONS – company owns 50% of land – company buys other 50% for $10M using vendor finance – loan in default – receivers appointed – application by director to bring derivative suit – vendor finance said to be induced by sham offer to buy property for $20M – director yet to provide books and records – director yet to provide report on company activities and property (ROCAP) – director reported to ASIC – receivers concerned rent misappropriated to company related to director – director declines to provide indemnity. CORPORATIONS – leave under ss 236 and 237 Corporations Act 2001 (Cth) – whether applicant acting in good faith – importance of indemnity – whether derivate suit for collateral purposes – whether in best interests of company – whether applicant suitable to bring derivative suit – whether derivative suit meritorious – applicant fails to establish requirements of s 237. Legislation Cited: Corporations Act 2001 (Cth), ss 236, 237, 237(2)(a), 237(2)(b), 429(2)(b) Cases Cited: Blakeney v Blakeney (2016) 113 ACSR 398; [2016] WASCA 76 Chahwan v Euphoric Pty Ltd (t/as Clay & Michel) [2008] NSWCA 52; (2008) 245 ALR 780 Charlton v Baber (2003) 47 ACSR 31 Cooper v Myrtace Consulting Pty Ltd [2014] FCA 480 Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 442 Fitzpatrick v Cheal [2010] NSWSC 717 Gerard Cassegrain & Co Pty Ltd v Cassegrain [2010] NSWSC 91 Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 Ragless v IPA Holdings Pty Ltd (in liq) (2008) 65 ACSR 700 Re Gladstone Pacific Nickel Limited (2011) 86 ACSR 432; [2011] NSWSC 1235 Roach v Winnote Pty Ltd [2006] NSWSC 231 South Johnstone Mill Ltd v Dennis and Scales (2007) 163 FCR 343; [2007] FCA 1448 Spies v R (2000) 201 CLR 603; 173 ALR 529; 35 ACSR 500 Sundara Pty Limited [2015] NSWSC 1694 Swansson [2002] NSWSC 583; (2002) 42 ACSR 313 Walker v Wimborne (1976) 137 CLR 1; 3 ACLR 529 Wood v Golf Links Tasmania (No 2) [2013] FCA 143 Texts Cited: Corporate Law Economic Reform Program Bill 1998 Category: Principal judgment Parties: Emade Semaan (Plaintiff) Said Jahani (First Defendant) Philip Campbell-Wilson (Second Defendant) Representation: Counsel: Mr A Rogers (Plaintiff) Mr M Rose (First and Second Defendants)