Noun v Pavey [2012] NSWSC 1644

Noun v Pavey [2012] NSWSC 1644

The cross-claim was in substance a derivative proceeding on behalf of MS Cognosis because the relevant presentations and legal expenses concerned the company's intellectual property and interests, and Mr Kennedy was acting on behalf of the company when incurring the legal costs. Leave under Corporations Act 2001 (Cth), ss 236 and 237 was therefore required, but s 237(2)(a) could not be satisfied because Mr Kennedy controlled the company and the company could sue. The cross-claim disclosed no reasonable cause of action and should be dismissed without leave to replead.

Jurisdiction
Australia
Judgment Date
12 December 2012
Procedural Posture
Appeal From Refusal Summarily to Terminate a Cross Claim / Appeal From Decision of Macready as J
Outcome
Appeal allowed; decision of Macready AsJ on 7 August 2012 set aside; cross-claim dismissed with costs below and of appeal.
Legal Topics
['summary Termination of Cross Claim' 'derivative Proceedings' 'leave Under Corporations Act 2001 (cth), Ss 236 and 237' 'misleading or Deceptive Conduct' 'standing to Sue for Company Loss']
['civil Procedure' 'corporations Law' 'consumer Law'] ['summary Termination of Cross Claim' 'derivative Proceedings' 'leave Under Corporations Act 2001 (cth), Ss 236 and 237' 'misleading or Deceptive Conduct' 'standing to Sue for Company Loss']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Appeal From Refusal Summarily to Terminate a Cross Claim / Appeal From Decision of Macready as J

Legal Issues

  1. 1 ['Whether the claim was that of Mr Kennedy personally or that of MS Cognosis Pty Ltd such that leave was required under Corporations Act 2001 (Cth), ss 236 and 237.' "Whether legal fees incurred after discovery of the falsity of Mr Noun's representations were caused by the misrepresentations and recoverable under s 18 of the Australian Consumer Law."]

Ratio Decidendi

The cross-claim was in substance a derivative proceeding on behalf of MS Cognosis because the relevant presentations and legal expenses concerned the company's intellectual property and interests, and Mr Kennedy was acting on behalf of the company when incurring the legal costs. Leave under Corporations Act 2001 (Cth), ss 236 and 237 was therefore required, but s 237(2)(a) could not be satisfied because Mr Kennedy controlled the company and the company could sue. The cross-claim disclosed no reasonable cause of action and should be dismissed without leave to replead.

Court Disposition

Appeal allowed; decision of Macready AsJ on 7 August 2012 set aside; cross-claim dismissed with costs below and of appeal.

Orders

  • ['The appeal is allowed.' 'The decision of Macready AsJ given on 7 August 2012 is set aside.' 'The cross-claim is dismissed.' "Mr Kennedy is to pay Mr Noun's costs of the notice of motion filed on 25 June 2012 and the costs of the appeal."]