Cope v Home [2002] NSWSC 777

New South Wales Supreme Court

CITATION : Cope v Home [2002] NSWSC 777 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4153/02 HEARING DATE(S) : 23/08/02 JUDGMENT DATE : 27 August 2002

Narelle Louise Cope - First Plaintiff Anne Louise Mount - Second Plaintiff PARTIES : Andrew Stewart Home - First Defendant Paul Charles Stewart - Second Defendant Dean Fullbrook - Third Defendant JUDGMENT OF : Barrett J

COUNSEL : Mr G A Seib - Plaintiffs Mr D R Stack - Defendants SOLICITORS : Somerville & Co - Plaintiffs Deacons - Defendants CATCHWORDS : EQUITY - interlocutory injunction - balance of convenience where company in voluntary administration - CORPORATIONS - voluntary administration - moratorium on legal proceedings and assertion of property rights LEGISLATION CITED : Corporations Act 2001 (Cth) CASES CITED : Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460 Foxcraft v The Ink Group Pty Ltd (1994) 15 ACSR 203 DECISION : Orders not continued

- 9 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

TUESDAY 27 AUGUST 2002

4153/02 - NARELLE LOUISE COPE & ANOR v ANDREW STEWART HOME & 4 ORS

JUDGMENT

1 Two companies with some commonality of ownership, Surface to Air (Franchising) Pty Ltd (or "STAF") and Surface to Air (Central Coast) Pty Ltd (or "STACC"), conduct bus operations serving airports in Sydney and Newcastle. They do so under a common banner, being "Surface to Air", and with a common 1800 telephone number through which passenger bookings reach whichever of the two companies is the more appropriate geographically to service the needs of a particular passenger requiring transport to or from an airport. 2 STACC is in administration, Mr Home and Mr Stewart having been appointed administrators under Pt 5.3A of the Corporations Act 2001 (Cth) on 12 July 2002. 3 The administrators have formed an intention of selling the business of STACC to a purchaser introduced by or associated with Euro Equities Pty Ltd. This proposal has developed since the second meeting of creditors began on 8 August. That meeting was adjourned to 22 August to enable Mr Fullbrook, a substantial shareholder, to pursue the possibility of a deed of company arrangement and also with a view to exploring further potential for the sale of the business. Because of interlocutory orders made by Windeyer J ex parte in these proceedings on 21 August 2002, the adjourned meeting, which resumed on 22 August, was further adjourned. The interlocutory orders also restrained sale of the business of STACC by the administrators. Those orders were directed to the administrators, rather than STACC and, as extended by me on 23 August, are in force until 5 pm today. 4 The plaintiffs contend that sale of the business of STACC, to the extent that it includes certain items described generally as intellectual property and being, in essence, assets associated with the Surface to Air operating system, will entail an invasion of the plaintiffs' legal or equitable rights. 5 The status of the plaintiffs, Mrs Cope and Mrs Mount, is slightly uncertain since, although they claim to be shareholders of STAF, the particulars recorded at ASIC suggest that it is their husbands who are the shareholders rather than them. Mr Fullbrook apparently owns 50 per cent of the shares in STAF, while either Mr or Mrs Cope owns 25 per cent and either Mr or Mrs Mount owns 25 per cent. 6 The rights the plaintiffs assert are said to arise from an agreement dated 22 November 2001. The parties to the agreement are Mrs Cope, Mrs Mount, STACC and Mr Fullbrook. The recitals refer to a proposal under which STAF is to be formed by the parties - apparently all of them - as a franchisor pursuant to a scheme under which individual bus owners will, as franchisees, carry persons between individually serviced areas and airports, with STACC operating a call centre and playing a coordinating role. 7 Then follows recital E: "STACC is currently in the possession of know how and intellectual property which it will transfer to STAF in order to enable STAF to establish and conduct the said franchising business."