Kuterba v Sirtex Medical Limited (No 2) [2018] FCA 1489

Kuterba v Sirtex Medical Limited (No 2) [2018] FCA 1489

The Court made the notification order because the applicants had a prima facie case, there was a reasonable prospect Sirtex may be required to pay substantial damages, and there was a danger that Sirtex's largely liquid assets could be rapidly moved out of the jurisdiction. The order was characterised as a notification order rather than a freezing order because it did not restrain Sirtex from dealing with assets, and in the unusual circumstances no undertaking as to damages was required unless the order later operated in reality as a freezing order.

Jurisdiction
Australia
Judgment Date
27 September 2018
Procedural Posture
Shareholder Class Action / Amended Interlocutory Application Dated 26 September 2018 Seeking Three Business Days' Written Notice Before Implementation of Decisions Reducing Sirtex's Consolidated Liquid Assets Below $80 Million
Outcome
Application allowed; notification order made without requiring an undertaking as to damages, with liberty to apply on four hours' notice.
Legal Topics
['interlocutory Injunction' 'freezing Orders' 'undertaking as to Damages' 'court Power to Prevent Frustration of Process' 'shareholder Class Action']
['practice and Procedure' 'corporations' 'class Actions'] ['interlocutory Injunction' 'freezing Orders' 'undertaking as to Damages' 'court Power to Prevent Frustration of Process' 'shareholder Class Action']

Case Brief

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Procedural Posture

Shareholder Class Action / Amended Interlocutory Application Dated 26 September 2018 Seeking Three Business Days' Written Notice Before Implementation of Decisions Reducing Sirtex's Consolidated Liquid Assets Below $80 Million

Legal Issues

  1. 1 ["Whether the Court should order Sirtex to give the applicants at least three business days' written notice before implementing any decision that would reduce its consolidated liquid assets below $80 million." 'Whether the proposed notification order was in substance a freezing order.' 'Whether the applicants or IMF should be required to provide an undertaking as to damages.']

Ratio Decidendi

The Court made the notification order because the applicants had a prima facie case, there was a reasonable prospect Sirtex may be required to pay substantial damages, and there was a danger that Sirtex's largely liquid assets could be rapidly moved out of the jurisdiction. The order was characterised as a notification order rather than a freezing order because it did not restrain Sirtex from dealing with assets, and in the unusual circumstances no undertaking as to damages was required unless the order later operated in reality as a freezing order.

Court Disposition

Application allowed; notification order made without requiring an undertaking as to damages, with liberty to apply on four hours' notice.

Orders

  • ["Pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth), until further order or 30 June 2019, whichever is the earlier, the Respondent shall provide the Applicants with at least three business days' written notice before implementing any decision that is made (including a decision to declare or pay a...