Chung-Yi Pty Limited v Justin Chih-Yang Chang (No 2) [2018] NSWSC 1112

Supreme Court New South Wales

Medium Neutral Citation: Chung-Yi Pty Limited v Justin Chih-Yang Chang (No 2) [2018] NSWSC 1112 Hearing dates: 30 April 2018, 1 to 4, 7 to 11, 14 to 18 and 21 to 25 May 2018 Decision date: 20 July 2018 Jurisdiction: Equity - Commercial List Before: Ball J Decision: See paragraphs 175 to 178 Catchwords: CORPORATIONS – Directors and officers – Directors' duties – Duty of care and diligence – Business judgment rule – Relief from liability under ss 1317S, 1318, 1322(4) of the Corporations Act 2001 (Cth) CORPORATIONS – Directors and officers – Directors' duties – Duty to act in good faith in the best interests of company and for proper purpose – Relief from liability under ss 1317S, 1318, 1322(4) of the Corporations Act 2001 (Cth) CORPORATIONS – Directors and officers – Directors' duties – Duty not to use position as director or officer improperly – Relief from liability under ss 1317S, 1318, 1322(4) of the Corporations Act 2001 (Cth) EQUITY – Fiduciary duties – Unauthorised profit – Informed consent EQUITY – Defences – Unclean hands – Nexus between claim and claimant's disentitling conduct EQUITY – General principles and maxims – Those who seek equity must do equity – Nexus between claim and claimant's purported failure to do equity CORPORATIONS – Members' rights and remedies – Oppression – Whether conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member EQUITY – Defences – Statutes of limitation – Application by analogy – Application by analogy of exception for fraud and deceit pursuant to s 55 of the Limitation Act 1969 (NSW) EQUITY – Defences – Laches and acquiescence – Where a substantial part of the plaintiffs' delay is justified or attributable to the defendant's conduct – Whether the disadvantage or prejudice was caused by the plaintiffs' delay EQUITY – Trusts and trustees – Breaches of trust – Misappropriation of trust property – Whether money held on trust for family members EQUITY – Fiduciary duties – Unauthorised profit – Remedial trust construed in favour of beneficiaries of fiduciary duties CORPORATIONS – Winding up – Grounds for winding up – Whether it would be just and equitable to wind up company under s 461(1)(k) of the Corporations Act 2001 (Cth) Legislation Cited: Corporations Act 2001 (Cth) Limitation Act 1969 (NSW) Cases Cited: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256; [2006] HCA 27 Blatch v Archer (1774) 98 ER 969 Brady v Stapleton (1952) 88 CLR 332 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610 Cassegrain v Gerard Cassegrain & Co Pty Limited (2013) 305 ALR 648; [2013] NSWCA 454 Chase Corporation (Australia) Pty Ltd v North Sydney Brick & Tile Co Ltd (1994) 35 NSWLR 1 Chung-Yi Pty Limited v Justin Chih-Yang Chang [2018] NSWSC 410 Corbett v Corbett Court Pty Ltd [2015] FCA 1176 Crawley v Short [2009] NSWCA 410 Frith v Cartland (1865) 2 Hem & M 417 Gerace v Auzhair Supplies Pty Ltd (In Liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 Gibson v Goldsmid (1854) 5 De GM & G 757; [1854] 43 ER 1064 Henderson v Queensland (2014) 255 CLR 1 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 In the Matter of Auzhair Supplies Pty Ltd (in liq) (2013) 272 FLR 304; [2013] NSWSC 1 Langman v Handover (1929) 43 CLR 334 Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 O'Neill v Phillips [1999] 1 WLR 1092 Re Ledir Enterprises Pty Limited [2013] NSWSC 1332 Swain v Waverley Municipal Council (2005) 220 CLR 517; [2005] HCA 4 Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104 Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; (1985) 61 ALR 225 Category: Principal judgment Parties: Chung-Yi Pty Limited (ACN 003 775 764) (First Plaintiff) Chih-Shih Cheng (Second Plaintiff) Chih-Chung Cheng (Third Plaintiff) Chang Ling-Ling Wang (Fourth Plaintiff) Ching-Ching Cheng (Fifth Plaintiff) Shirley Chen Hsui-Ju Cheng (Sixth Plaintiff) Chen Tsui-Miao Cheng (Seventh Plaintiff) Chao-Ching Wang (Eighth Plaintiff) Justin Chih-Yang Chang (Defendant) Representation: Counsel: A Leopold SC with C Bova and B Ng (Plaintiffs) LV Gyles SC with C McMeniman (Defendant)