New South Wales Supreme Court CITATION : Access Courier Systems Pty Ltd v Hunsat Pty Ltd [2009] NSWSC 507 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 6 May 2009 JURISDICTION : Equity Division Corporations List JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 6 May 2009 CATCHWORDS : CORPORATIONS – Statutory derivative action – who should bear costs of prosecuting action in first instance LEGISLATION CITED : Corporations Act s 237, s 471B CATEGORY : Procedural and other rulings Access Courier Systems Pty Ltd (plaintiff) Hunsat Pty ltd (first defendant) PARTIES : Christopher McNaughton (second defendant) Palmer Bruyn Pty Ltd (in liq) (third defendant) Palmer Bruyn 1 Pty Ltd (fourth defendant) Jatsona Pty Ltd (fifth defendant) FILE NUMBER(S) : SC 4991/08 Mr Stowe (plaintiff) COUNSEL : Mr Docker (defendants) Ms S Furlonger (sol) (liquidator, third defendant) Mason Lawyers Limited (plaintiff) SOLICITORS : McDonald Johnson Lawyers (defendants) Yeates Beaggi Lawyers (liquidator, third defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BRERETON J Wednesday 6 May 2009 4991/08 Access Courier Systems Pty Ltd v Hunsat Pty Ltd JUDGMENT (ex tempore) 1 HIS HONOUR: I grant leave to plaintiff to amend its statement of claim by filing an amended statement of claim in the form initialled by me, dated this day and placed with the papers, such leave to expire on 13 May 2009. 2 The only issue argued today was the question of who should be responsible in the first instance for the costs of prosecuting the derivative proceedings. That is finely balanced, and much may be said for some of the submissions made by Mr Stowe in that behalf. Ultimately, however, the factors I have found to carry greater weight are, first, that the proceedings are, in substance, a dispute between Access Courier Systems and its principals on the one part, and Jatsona Pty Ltd and it principals, in particular Mr McNaughton, on the other; secondly, that the derivative claims form a part of a larger dispute, which includes claims brought by Access Courier Systems in its own right and not as derivative claims; thirdly, that given the current financial status of Access Couriers Systems, so far as it appears from the evidence, there would be a very substantial risk that any costs for which it might ultimately be found liable would not be recovered if paid in the meantime; and fourthly, that as Access Courier Systems is the party that seeks to bring these proceedings for the benefit of its shareholders as well as for the benefit of the other shareholders of Hunsat, given its condition of impecuniosity its own shareholders ought to be prepared to make themselves responsible for any adverse costs order – by analogy with the rule that applies in security for costs applications. 3 I make the following orders: 1. Order pursuant to Corporations Act, s 237, that Access Courier Systems Pty Ltd be granted leave to bring and conduct on behalf of Hunsat Pty Ltd proceedings in respect of the causes of action pleaded in paragraphs 25-33 and 51-62 of the Amended Statement of Claim, and claims for relief in paragraph 1-10 and 15-26 therein. 2. Order that Hunsat Pty Ltd be removed as first defendant and joined as second plaintiff. 3. Order that Access Courier Systems Pty Ltd pay, bear and indemnify Hunsat Pty Ltd from and against all costs, charges and expenses of and incidental to the bringing of these proceedings on its behalf except insofar as the Court may in the future otherwise direct or allow. 4. These orders are made on condition that Janett Ryan file with the court by 13 May 2009 an undertaking to the court in writing that she will be responsible for payment of any adverse costs order made against Hunsat Pty Ltd in the proceedings. 5. Grant leave pursuant to Corporations Act, s 471B, to Access Courier Systems Pty Ltd to bring and conduct proceedings against Palmer Bruyn Pty Ltd (in liquidation) in respect of the claims pleaded and the relief sought against it in the Amended Statement of Claim, provided that no judgment obtained against the company in liquidation is to be executed or otherwise enforced without the further leave of the Court. 4 I direct that costs of the present application (being the Notice of Motion filed 7 January 2009) be costs in the proceedings. I have reached that conclusion weighing on the one hand the plaintiff's success in obtaining the substantive relief claimed, against the defendant's success on the issues which were argued today. 5 I adjourn the proceedings to Monday 18 May 2009 before the Corporations List Judge for further directions, on which date any application for security for costs may be made returnable. ********** 06/07/2009 - Corrections - Paragraph(s) Catchwords & paragraphs 2 and 3(1) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.