Pearl Coast Divers Pty Ltd (in Liq) v Cossack Pearls Pty Ltd [2008] FCA 927

Pearl Coast Divers Pty Ltd (in Liq) v Cossack Pearls Pty Ltd [2008] FCA 927

Leave is granted for Mr Sharp to bring the statutory claims (TPA/FTA) on behalf of Pearl Coast under the Court's inherent powers, not under Part 2F.1A, and Mr Sharp may be substituted as trustee for Liquid Investments (WA) Pty Ltd for the Sharp Family Trust, as evidence supports that Liquid only acted in that capacity. Statutory claims cannot be assigned but derivative action is permissible where liquidators do not oppose and no asset risk arises.

Jurisdiction
Australia
Judgment Date
19 June 2008
Procedural Posture
Motion/application / Interlocutory Decision on Substitution and Leave to Bring Derivative Action
Outcome
Leave granted for Mr Sharp to bring derivative action on behalf of Pearl Coast re statutory claims. Substitution orders made for Mr Sharp in place of first plaintiff (for contract claims) and as trustee for second plaintiff (for statutory claims).
Legal Topics
['substitution of Parties' 'derivative Actions' 'company in Liquidation' 'assignment of Causes of Action' 'practice and Procedure']
['corporations Law' 'trade Practices' 'contract Law' 'trusts Law'] ['substitution of Parties' 'derivative Actions' 'company in Liquidation' 'assignment of Causes of Action' 'practice and Procedure']

Case Brief

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Procedural Posture

Motion/application / Interlocutory Decision on Substitution and Leave to Bring Derivative Action

Legal Issues

  1. 1 ['Whether an individual assignee can be substituted as first plaintiff for non-trade practices claims' 'Whether a personal trustee can be substituted for a corporate trustee as second plaintiff' 'Whether leave should be granted to bring a derivative action under s 237 of the Corporations Act 2001 (Cth) for trade practices claims by a company in liquidation' 'Whether Part 2F.1A of the Corporations Act applies to companies in liquidation' 'Whether the Court has inherent power to permit proceedings to be taken in the name of a company by contributors and creditors']

Ratio Decidendi

Leave is granted for Mr Sharp to bring the statutory claims (TPA/FTA) on behalf of Pearl Coast under the Court's inherent powers, not under Part 2F.1A, and Mr Sharp may be substituted as trustee for Liquid Investments (WA) Pty Ltd for the Sharp Family Trust, as evidence supports that Liquid only acted in that capacity. Statutory claims cannot be assigned but derivative action is permissible where liquidators do not oppose and no asset risk arises.

Court Disposition

Leave granted for Mr Sharp to bring derivative action on behalf of Pearl Coast re statutory claims. Substitution orders made for Mr Sharp in place of first plaintiff (for contract claims) and as trustee for second plaintiff (for statutory claims).

Orders

  • ['Order for Mr Sharp to indemnify Pearl Coast against costs and expenses incurred (including adverse costs), subject to reimbursement if damages recovered.' 'Order for Mr Sharp to indemnify defendants for any costs ordered against Pearl Coast and not satisfied.' 'Mr Sharp to provide security for costs.' 'Mr Sharp...