In the matter of Australian International Yacht Club Pty Limited [2021] NSWSC 636

In the matter of Australian International Yacht Club Pty Limited [2021] NSWSC 636

The Plaintiffs' offer was not an effective offer under UCPR r 20.26 because it required the issue of Mr Zong's shares to be treated as void ab initio, a result not capable of being achieved by agreement between the parties. For the same reason, and because the monetary amount did not involve any significant discount reflecting litigation risk, it was not unreasonable for Mr Zong not to accept it as a Calderbank offer. The appropriate costs order remained that the First, Second and Third Defendants pay 50% of the Plaintiffs' costs on the ordinary basis, particularly because the Plaintiffs failed on significant additional claims that substantially lengthened the hearing. No stay was ordered...

Jurisdiction
Australia
Judgment Date
04 June 2021
Procedural Posture
Derivative Proceedings; Costs and Stay Issues After Primary Judgment / Post Judgment Orders as to Relief, Costs and Proposed Stay Pending Appeal
Outcome
Judgment for the Fourth Defendant against the First, Second and Third Defendants; Mr Zong removed as director and ordered to transfer shares to Ms Lin; First, Second and Third Defendants ordered to pay 50% of the Plaintiffs' costs; no stay ordered.
Legal Topics
['stay of Proceedings Pending Appeal' 'offers of Compromise' 'calderbank Offers' 'indemnity Costs' 'derivative Proceedings' "directors' Duties" 'oppression']
['civil Procedure' 'costs' 'corporations'] ['stay of Proceedings Pending Appeal' 'offers of Compromise' 'calderbank Offers' 'indemnity Costs' 'derivative Proceedings' "directors' Duties" 'oppression']

Case Brief

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Procedural Posture

Derivative Proceedings; Costs and Stay Issues After Primary Judgment / Post Judgment Orders as to Relief, Costs and Proposed Stay Pending Appeal

Legal Issues

  1. 1 ["Whether the Plaintiffs' 16 March 2021 offer justified an order that Mr Zong pay all of the Plaintiffs' costs on an indemnity basis from that date under UCPR r 42.14." 'Whether the offer should alternatively be treated as a Calderbank offer and whether it was unreasonable for Mr Zong not to accept it.' "Whether the First, Second and Third Defendants should pay 50% of the Plaintiffs' costs on the ordinary basis." 'Whether a stay of the orders should be granted to allow preparation and lodgement of an appeal.']

Ratio Decidendi

The Plaintiffs' offer was not an effective offer under UCPR r 20.26 because it required the issue of Mr Zong's shares to be treated as void ab initio, a result not capable of being achieved by agreement between the parties. For the same reason, and because the monetary amount did not involve any significant discount reflecting litigation risk, it was not unreasonable for Mr Zong not to accept it as a Calderbank offer. The appropriate costs order remained that the First, Second and Third Defendants pay 50% of the Plaintiffs' costs on the ordinary basis, particularly because the Plaintiffs failed on significant additional claims that substantially lengthened the hearing. No stay was ordered...

Court Disposition

Judgment for the Fourth Defendant against the First, Second and Third Defendants; Mr Zong removed as director and ordered to transfer shares to Ms Lin; First, Second and Third Defendants ordered to pay 50% of the Plaintiffs' costs; no stay ordered.

Orders

  • ['Judgment for the Fourth Defendant against the First, Second and Third Defendants jointly and severally in the sum of $254,535.' 'Further judgment for the Fourth Defendant against the First Defendant in the sum of $55,000.' 'Order that the First Defendant be removed as a director of the Fourth Defendant.' 'Order...