In the matter of Graziers Pastoral Pty Ltd (No 2) [2020] NSWSC 1812

In the matter of Graziers Pastoral Pty Ltd (No 2) [2020] NSWSC 1812

It is unnecessary and undesirable to determine the entitlement to indemnity for legal expenses at the interlocutory stage. Ample company assets and transparency through monthly accounting of legal fees reduce the necessity for injunctive relief. Disclosure regime as per Therma Truck ensures the parties' interests are balanced.

Parties
1st Plaintiff: John Parilo; 2nd Plaintiff: WD Capital Pty Ltd ACN 146 628 837; 3rd Plaintiff: Parilo Holdings Pty Ltd ACN 605 816 297; 1st Defendant: Graziers Pastoral Pty Ltd ACN 162 960 634; 2nd Defendant: Windsor Livestock Holdings Pty Ltd ACN 605 816 304; 3rd Defendant: Windsor Livestock Pty Ltd ACN 169 917 793; 4th Defendant: Suelen McCallum; 5th Defendant: Riad Tayeh; 6th Defendant: Alan Gordon Taylor; 7th Defendant: Free Flight Australia Pty Ltd ACN 162 958 563; 8th Defendant: Redglint Pty Ltd ACN 003 922 638
Jurisdiction
Australia
Judgment Date
14 December 2020
Procedural Posture
Oppression Suit / Interlocutory Application
Outcome
Injunction refused; regime of monthly accounting of legal fees ordered.
Legal Topics
Oppression Remedy, Director Indemnity, Shareholder Dispute, Interlocutory Injunction
Corporations Law Equity Oppression Remedy Director Indemnity Shareholder Dispute Interlocutory Injunction

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Parties

John Parilo

1st Plaintiff

WD Capital Pty Ltd ACN 146 628 837

2nd Plaintiff

Parilo Holdings Pty Ltd ACN 605 816 297

3rd Plaintiff

Graziers Pastoral Pty Ltd ACN 162 960 634

1st Defendant

Windsor Livestock Holdings Pty Ltd ACN 605 816 304

2nd Defendant

Windsor Livestock Pty Ltd ACN 169 917 793

3rd Defendant

Suelen McCallum

4th Defendant

Riad Tayeh

5th Defendant

Alan Gordon Taylor

6th Defendant

Free Flight Australia Pty Ltd ACN 162 958 563

7th Defendant

Redglint Pty Ltd ACN 003 922 638

8th Defendant

Procedural Posture

Oppression Suit / Interlocutory Application

Legal Issues

  1. 1 Whether directors are entitled to indemnity for legal fees from company funds during litigation
  2. 2 Whether interlocutory injunction restraining use of company funds for legal fees should be granted
  3. 3 Appropriate transparency and accounting of legal fees to shareholders

Ratio Decidendi

It is unnecessary and undesirable to determine the entitlement to indemnity for legal expenses at the interlocutory stage. Ample company assets and transparency through monthly accounting of legal fees reduce the necessity for injunctive relief. Disclosure regime as per Therma Truck ensures the parties' interests are balanced.

Court Disposition

Injunction refused; regime of monthly accounting of legal fees ordered.

Orders

  • Each of the first, second and third defendants, and the fourth and fifth defendants, must account monthly to the plaintiffs as to legal fees incurred in defence of this litigation.
  • The account must be by way of short narrative, not single line item or itemised bill of costs.