Cunnington Investments Pty Ltd, in the matter of Deep Creek Marina Hotel Pty Ltd v Matheson [2009] FCA 1529

Cunnington Investments Pty Ltd, in the matter of Deep Creek Marina Hotel Pty Ltd v Matheson [2009] FCA 1529

While there is a serious question to be tried regarding alleged breaches of directors' duties and oppression, interlocutory injunction is refused because the balance of convenience favours preserving the status quo, with potential harm to business outweighing plaintiffs' complaints, which can be remedied by undertakings and damages. Interim protection for plaintiffs is achieved by defendants' undertakings to provide financial information, allow inspection, and properly account for business finances pending trial.

Parties
First Plaintiff: Cunnington Investments Pty Ltd as Trustee for the Terry Cunnington Family Trust; Second Plaintiff: Lee Ramon Cunnington as Trustee for the Lee Cunnington Family Trust; Third Plaintiff: Broderick Christopher Fenlon as Trustee for the B&J Fenlon Family Trust; Fourth Plaintiff: Janette Maree Fenlon as Trustee for the B&J Fenlon Family Trust; Fifth Plaintiff: Walter Ingemare Ortner as Trustee for the W&C Ortner Family Trust; Sixth Plaintiff: Cristina Rosalia Ortner as Trustee for the W&C Ortner Family Trust; Seventh Plaintiff: Daniel Edward Sheean as Trustee for the D&A Sheean Family Trust; Eighth Plaintiff: Andrea Renee Sheean as Trustee for the D&A Sheean Family Trust; First Defendant: Ian Rohan Matheson; Second Defendant: Matheson Property Investments Pty Ltd as Trustee for the Matheson Investment Trust; Third Defendant: IC Hire Pty Ltd; Fourth Defendant: Deep Creek Marina Hotel Pty Ltd; Fourth Defendant: Deep Creek Supermarket Pty Ltd
Jurisdiction
Australia
Judgment Date
18 December 2009
Procedural Posture
Interlocutory Application / Application for Interlocutory Injunction Pending Trial
Outcome
Interlocutory injunctions refused, proceedings adjourned on undertakings
Legal Topics
Interlocutory Injunctions, Director's Duties, Oppression Remedy, Stakeholder Agreements
Corporations Law Equity Interlocutory Injunctions Director's Duties Oppression Remedy Stakeholder Agreements

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Parties

Cunnington Investments Pty Ltd as Trustee for the Terry Cunnington Family Trust

First Plaintiff

Lee Ramon Cunnington as Trustee for the Lee Cunnington Family Trust

Second Plaintiff

Broderick Christopher Fenlon as Trustee for the B&J Fenlon Family Trust

Third Plaintiff

Janette Maree Fenlon as Trustee for the B&J Fenlon Family Trust

Fourth Plaintiff

Walter Ingemare Ortner as Trustee for the W&C Ortner Family Trust

Fifth Plaintiff

Cristina Rosalia Ortner as Trustee for the W&C Ortner Family Trust

Sixth Plaintiff

Daniel Edward Sheean as Trustee for the D&A Sheean Family Trust

Seventh Plaintiff

Andrea Renee Sheean as Trustee for the D&A Sheean Family Trust

Eighth Plaintiff

Ian Rohan Matheson

First Defendant

Matheson Property Investments Pty Ltd as Trustee for the Matheson Investment Trust

Second Defendant

IC Hire Pty Ltd

Third Defendant

Deep Creek Marina Hotel Pty Ltd

Fourth Defendant

Deep Creek Supermarket Pty Ltd

Fourth Defendant

Procedural Posture

Interlocutory Application / Application for Interlocutory Injunction Pending Trial

Legal Issues

  1. 1 Whether there is a serious question to be tried regarding breach of directors' duties and misappropriation
  2. 2 Whether interlocutory injunction should be granted or undertakings from defendants suffice
  3. 3 Whether balance of convenience favours preserving status quo or granting relief to plaintiffs

Ratio Decidendi

While there is a serious question to be tried regarding alleged breaches of directors' duties and oppression, interlocutory injunction is refused because the balance of convenience favours preserving the status quo, with potential harm to business outweighing plaintiffs' complaints, which can be remedied by undertakings and damages. Interim protection for plaintiffs is achieved by defendants' undertakings to provide financial information, allow inspection, and properly account for business finances pending trial.

Court Disposition

Interlocutory injunctions refused, proceedings adjourned on undertakings

Orders

  • Defendants to provide plaintiffs with financial accounts and records for the businesses from 2 April 2009 to 30 November 2009 within 21 days and ongoing weekly financials from 1 December 2009 onwards, starting 15 January 2010.
  • Defendants to allow plaintiffs and directors of each plaintiff company access to the property and businesses for inspection and monitoring at all times.