Krupace Holdings Pty Limited v China Hotel Investments Pty Limited & Ors [2018] NSWSC 862

Supreme Court New South Wales

Medium Neutral Citation: Krupace Holdings Pty Limited v China Hotel Investments Pty Limited & Ors [2018] NSWSC 862 Hearing dates: 27-29 March 2018 Date of orders: 05 June 2018 Decision date: 23 May 2018 Jurisdiction: Equity Before: Rein J Decision: See [24], [94], [97], [99] – [103], [106] Catchwords: CONTRACT – Shareholders Deed – Construction of contractual notices – Plaintiff shareholder in First Defendant company – Russian Roulette Notice ("the Notice") issued by another shareholder to the Plaintiff – Issue of validity of the Notice – Question of construction as to the validity of an amendment to the shareholders deed with respect to the time within which the Plaintiff could respond to the Notice; HELD: Notice invalid due to curtailment of time within which the Plaintiff could respond or, alternatively, due to ambiguity.

EQUITY – fiduciary duties – Plaintiff claimed that directors of the First Defendant company breached fiduciary duties owed to the First Defendant – claims that directors owed fiduciary duties to Plaintiff – Issues of conflict of interest and adequacy of disclosure by the directors; Issue of disclosure of matters known to all directors – Consideration of remedy available where no party sought to set aside the transaction said to give rise to the benefit to the directors; HELD: No breach of fiduciary duty owed to First Defendant and no separate duty owed to the Plaintiff.

CORPORATIONS ACT – Directors' duties – Claim of statutory breaches by the directors of the First Defendant under ss 181 and 182 of the Corporations Act 2001 (Cth); HELD: No breach established. Legislation Cited: Companies Act 1961 (NSW) Corporations Act 2001 (Cth) Cases Cited: Aura Enterprises Pty Limited v Frontline Retail Pty Ltd [2006] NSWSC 902 Australian Securities & Investments Commission v Maxwell & Ors (2006) 59 ACSR 373; [2006] NSWSC 1052 Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35; [2007] FCA 963 Barnes v Addy (1874) LR 9 Ch App 244 Boardman and Anor v Phipps [1967] 2 AC 46; [1966] 3 All ER 721 Brunninghausen v Glavanics (1999) 46 NSWLR 538; (1999) 32 ACSR 294 Delta Vale Properties Ltd v Mills [1990] 1 WLR 445 Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18; [2005] HCA 78 Furs Limited v Tomkies and Ors (1936) 54 CLR 583 Gray v New Augarita Porcupine Mines Ltd [1952] 3 DLR 1 Guinness Plc v Saunders & Anor [1990] 2 AC 663; [1990] 1 All ER 652 Hodgson v Amcor Limited; Amcor Limited and Ors v Barnes (2012) 264 FLR 1 In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 Krupace Holdings Pty Limited v China Hotel Investments Pty Ltd [2018] NSWSC 276 Manildra Laboratories v Campbell [2009] NSWSC 987 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 MLW Technology Pty Ltd and Anor v May [2005] VSCA 29 Our Lady's Mount Pty Ltd (as trustee) v Magnificat Meal Movement International Inc (1999) 33 ACSR 163 Re Abbott and Australian Prudential Regulation Authority (2008) 108 ALD 420; [2008] AATA 641 Regal (Hastings) Ltd v Gulliver and Ors [1967] 2 AC 134; [1942] 1 All ER 378 Salta Constructions Pty Ltd v St George Bank (a division of Westpac Banking Corp Ltd) (2014) 45 VR 245; [2014] VSCA 289 SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079 Short v Crawley (No. 30) [2007] NSWSC 1322 Simmons v New South Wales Trustee and Guardian (2014) 17 BPR 33, 717; [2014] NSWCA 405 VPlus Holdings Pty Ltd v Bank of Western Australia Ltd (2012) 91 ACSR 545; [2012] NSWSC 1327 Woolworths Ltd v Kelly (1991) 22 NSWLR 189; (1991) 9 ACLC 539 Texts Cited: Butterworths Australian Legal Dictionary (Nygh and Butt (eds), Butterworths, 1997) Ford, Austin and Ramsay's Principles of Corporations Law (Austin & Ramsay, LexisNexis Butterworths, 16th ed, 2015) Category: Principal judgment Parties: Krupace Holdings Pty Limited (Plaintiff) China Hotel Investments Pty Limited (First Defendant) Staywell Hospitality Management Pty Ltd (Second Defendant) Six Star Capital Pty Limited (Third Defendant) Kadina Real Estate Inc (Fourth Defendant) Richard Robert MacFie Doyle (Fifth Defendant) Simon Che Hing Wan (Sixth Defendant) Balbinder Sohal (Seventh Defendant) Leisure Inn Hospitality Management Pty Limited (Eighth Defendant) Representation: Counsel: Mr J. Giles SC and Mr A. Hochroth (Plaintiff) Mr R. Scruby SC (Second – Eighth Defendants)