Maher v Honeysett and Maher Electrical Contractors Pty Ltd [2009] NSWSC 445

Maher v Honeysett and Maher Electrical Contractors Pty Ltd [2009] NSWSC 445

Because HME recovered only $28,500 while the unrecovered costs burden was $45,972.23, full enforcement of the undertaking would inequitably allow Mr Maher to share in HME's recovery while Mr Honeysett bore all unrecovered costs, but full release would inequitably impose unrecoverable costs on HME and indirectly on Mr Maher. The equitable adjustment was to relieve Mr Honeysett only to the extent of $28,500, leaving HME with neither profit nor loss from the derivative recovery and leaving Mr Honeysett liable for the remaining $17,472.23.

Jurisdiction
Australia
Judgment Date
26 May 2009
Procedural Posture
Consequential Orders in Statutory Derivative Action / Post Judgment Application Concerning Release From Undertaking After Derivative Proceedings Concluded
Outcome
Order releasing undertaking to a limited extent.
Legal Topics
['statutory Derivative Action' 'leave Under S 237' 'undertaking to Indemnify Company for Litigation Costs' 'equitable Compensation' 'consequential Orders']
['corporations' 'equity' 'costs'] ['statutory Derivative Action' 'leave Under S 237' 'undertaking to Indemnify Company for Litigation Costs' 'equitable Compensation' 'consequential Orders']

Case Brief

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Procedural Posture

Consequential Orders in Statutory Derivative Action / Post Judgment Application Concerning Release From Undertaking After Derivative Proceedings Concluded

Legal Issues

  1. 1 ['Whether Mark William Honeysett should be released from an undertaking given as a condition of leave under s 237 to indemnify Honeysett and Maher Electrical Contractors Pty Ltd against the costs, charges and expenses of the derivative proceedings.' 'What equitable adjustment should be made where the derivative proceeding obtained only modest equitable compensation and the unrecovered litigation costs exceeded that recovery.']

Ratio Decidendi

Because HME recovered only $28,500 while the unrecovered costs burden was $45,972.23, full enforcement of the undertaking would inequitably allow Mr Maher to share in HME's recovery while Mr Honeysett bore all unrecovered costs, but full release would inequitably impose unrecoverable costs on HME and indirectly on Mr Maher. The equitable adjustment was to relieve Mr Honeysett only to the extent of $28,500, leaving HME with neither profit nor loss from the derivative recovery and leaving Mr Honeysett liable for the remaining $17,472.23.

Court Disposition

Order releasing undertaking to a limited extent.

Orders

  • ['Order that Mark William Honeysett be relieved of the undertaking given by him to the court on 25 August 2005 to the extent that he is not required to pay, bear or indemnify Honeysett & Maher Electrical Contractors Pty Ltd against $28,500 of the costs charges and expenses the subject of that undertaking.']