Cassegrain & 1 Or v CTK Engineering Pty Ltd & 1 Or [2005] NSWSC 495

Reported Decision : 54 ACSR 249

New South Wales Supreme Court

CITATION : Cassegrain & 1 Or v CTK Engineering Pty Ltd & 1 Or [2005] NSWSC 495

HEARING DATE(S) : 14-16/02/05

JUDGMENT DATE : 26 May 2005

JUDGMENT OF : White J

DECISION : 1. The first defendant pay the plaintiffs' costs of the proceedings, including reserved costs, up to and including 12 November 2004; 2. The second defendant pay the plaintiffs' costs of the proceedings, including reserved costs; 3. The second defendant indemnify the first defendant against the costs payable by the first defendant to the plaintiffs, and in respect of costs and expenses incurred by the first defendant in defending the proceedings; 4. The exhibits may be returned after 28 days.

CATCHWORDS : CORPORATIONS - Winding up - Oppression - Just and equitable ground - Plaintiffs are class B shareholders with no voting rights - Defendant company and director - Director manages company - Company entered into transactions benefiting defendant director - Proceeds of sale of land lent to related parties of director - Undisclosed loans to related parties - Related party transactions concealed from shareholders - Concealment of new and hazardous business venture controlled by defendant- Accounts not audited - New constitution removing requirements for annual general meetings and auditing of accounts - Director caused company to oppose winding up order despite legal advice that it was inevitable - Whether company affairs conducted in a manner oppressive or prejudicial to, or contrary to the interests of class B shareholders - Winding up by consent - S 233(1)(a), s461(1)(k) of Corporations Act - Held that winding up would have been ordered and the plaintiffs had been successful in the proceedings - Held that plaintiffs are entitled to costs. - PRACTICE AND PROCEDURE - Costs - Whether director should indemnify company for costs incurred in defending proceedings - Whether company funds had been improperly expended - Discretionary power as to costs - S233(1)(j) of Corporations Act - S 76 Supreme Court Act - Held that defendant director acted unreasonably in causing company to defend winding-up application - Held that defendant company liable for costs up to appointment of provisional liquidator - Director defendant liable for costs up to and including this hearing - Director defendant to indemnify company for its liability to the plaintiffs and for costs and expenses incurred in defending proceedings up to appointment of provisional liquidator.