Haycraft v AF1 Services Pty Ltd [2022] FCA 1441

Haycraft v AF1 Services Pty Ltd [2022] FCA 1441

The stay application was dismissed because the undertaking was a joint undertaking to NAB only and was not enforceable by Mr Pearson as an undertaking between him and Mr Haycraft; winding up AF1 Services Pty Ltd would not itself be an action removing it as trustee and did not justify a stay to protect Mr Pearson's commercial interests; and, in any event, discretionary considerations weighed against allowing NAB effectively to impede statutory relief and against staying the whole proceeding on the basis of an undertaking concerning only the AF1 Property Trust. The security for costs application was dismissed because the requested undertakings were given, with costs in the cause because the...

Jurisdiction
Australia
Judgment Date
29 November 2022
Procedural Posture
Application Under S 461(1)(k) of the Corporations Act 2001 (cth) to Wind Up AF1 Services Pty Ltd on Just and Equitable Grounds, With Consequential Trustee Relief Under Ss 70 and 71 of the Trustee Act 1925 (nsw) / Interlocutory Application by the Second Defendant for a Stay of the Proceeding and Security for Costs
Outcome
Second defendant's application for a stay dismissed with costs; second defendant's application for security for costs dismissed upon undertakings, with costs incidental to that application to be costs in the cause.
Legal Topics
['stay of Proceedings' 'just and Equitable Winding Up' 'removal and Replacement of Trustee' 'undertaking to Bank' 'security for Costs' 'costs']
['practice and Procedure' 'corporations' 'trusts'] ['stay of Proceedings' 'just and Equitable Winding Up' 'removal and Replacement of Trustee' 'undertaking to Bank' 'security for Costs' 'costs']

Case Brief

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Procedural Posture

Application Under S 461(1)(k) of the Corporations Act 2001 (cth) to Wind Up AF1 Services Pty Ltd on Just and Equitable Grounds, With Consequential Trustee Relief Under Ss 70 and 71 of the Trustee Act 1925 (nsw) / Interlocutory Application by the Second Defendant for a Stay of the Proceeding and Security for Costs

Legal Issues

  1. 1 ["Whether the proceeding should be stayed unless and until Mr Haycraft obtained NAB's written consent to the removal and replacement of AF1 Services Pty Ltd as trustee of the AF1 Property Trust." 'Whether the written undertaking addressed to NAB was also an undertaking by Mr Haycraft and Mr Pearson to each other and enforceable by Mr Pearson.' "Whether the winding up of AF1 Services Pty Ltd would breach the undertaking to NAB or commercially prejudice Mr Pearson's interests under the finance facilities." "Whether the second defendant's security for costs application should be dismissed upon undertakings being given."]

Ratio Decidendi

The stay application was dismissed because the undertaking was a joint undertaking to NAB only and was not enforceable by Mr Pearson as an undertaking between him and Mr Haycraft; winding up AF1 Services Pty Ltd would not itself be an action removing it as trustee and did not justify a stay to protect Mr Pearson's commercial interests; and, in any event, discretionary considerations weighed against allowing NAB effectively to impede statutory relief and against staying the whole proceeding on the basis of an undertaking concerning only the AF1 Property Trust. The security for costs application was dismissed because the requested undertakings were given, with costs in the cause because the...

Court Disposition

Second defendant's application for a stay dismissed with costs; second defendant's application for security for costs dismissed upon undertakings, with costs incidental to that application to be costs in the cause.

Orders

  • ["The second defendant's application to stay the proceeding (prayer 1 of his interlocutory application) be dismissed with costs." "Upon the undertakings by the plaintiff's solicitor that the plaintiff not resign or otherwise cause his removal as trustee of the Haycraft Family Trust without first providing the second...