CIP Group Pty Ltd v So

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 16 December 2022
• Neutral Citation: [2022] FCA 1490
• Date: 16 December 2022

Federal Court of Australia

CIP Group Pty Ltd v So [2022] FCA 1490

File number:	QUD 93 of 2022
Judgment of:	DERRINGTON J
Date of judgment:	16 December 2022
Catchwords:	CORPORATIONS – oppression proceedings – application for leave to bring concurrent derivative claims – whether proposed derivative claims can be agitated in oppression action – scope of the decision in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd considered
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) Corporations Act 2001 (Cth)
Cases cited:	Anderson v Canaccord Genuity Financial Ltd (2022) 161 ACSR 1 Atlasview Ltd v Brightview Ltd [2004] BCC 542 Blakeney v Blakeney (2016) 113 ACSR 398 Blong Ume Nominees Pty Ltd v Semweb Nominees Pty Ltd (2017) 123 ACSR 19 Campbell v Backoffıce Investments Pty Ltd (2008) 66 ACSR 359 Charlton v Baber (2003) 47 ACSR 31 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 Fiduciary Ltd v Morningstar Research Pty Ltd (2005) 53 ACSR 732 Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] 4 All ER 164 LPD Holdings (Aust) Pty Ltd v Phillips (2013) 281 FLR 227 Maher v Honeysett and Maher Electrical Contractors [2005] NSWSC 859 McMillan v Coolah Home Base Pty Ltd (No 4) [2022] NSWSC 584 Metyor Inc (formerly Talisman Technologies Inc) v Queensland Electronic Switching Pty Ltd [2003] 1 Qd R 186 MG Corrosion Consultants Pty Ltd v Vinciguerra (2011) 82 ACSR 367 Oliana Foods Pty Ltd v Culinary Co Pty Ltd (in liq) [2020] VSC 693 Re Chime Corporation Ltd (2004) 7 HKCFAR 546 Re Gladstone Pacific Nickel Ltd (2011) 86 ACSR 432 Re JGS Investment Holdings Pty Ltd (2014) 32 ACLC 14-063 Re Orico Australia Pty Ltd [2019] VSC 313 Re Ter Wisscha Holdings Pty Ltd [2021] NSWSC 1447 Spies v R (2000) 201 CLR 603 Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313 Talisman Technologies Inc v Queensland Electronic Switching Pty Ltd [2001] QSC 324 Taxa Australia Pty Ltd v Wang [2016] NSWSC 1913 Trafalgar West Investments Pty Ltd v Superior Lawns Australia Pty Ltd (No 7) (2015) 107 ACSR 575 Walker v Wimborne (1976) 137 CLR 1
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	100
Date of hearing:	15 November 2022
Counsel for the Applicants:	Mr M Hodge KC with Mr M Taylor
Solicitor for the Applicants:	Bartley Cohen
Counsel for the First, Fourteenth to Seventeenth Respondents:	Mr P Dunning KC with Mr W LeMass
Solicitor for the First, Fourteenth to Seventeenth Respondents:	Colin Biggers & Paisley
Counsel for the Second to Twelfth Respondents:	The Second to Twelfth Respondents did not appear

ORDERS

		QUD 93 of 2022
BETWEEN:	CIP GROUP PTY LTD ACN 610 483 577 First Applicant ; CIP 1 PTY LTD ACN 611 408 710 Second Applicant ; PYRMONT PORTFOLIO PTY LTD ACN 608 496 617 Third Applicant
AND:	SHAN NGAI SO First Respondent ; GGPG PTY LTD ACN 609 675 505 (RECEIVER AND MANAGER APPOINTED) Second Respondent ; PARK RIDGE 94 PTY LTD ACN 616 893 924 (RECEIVER AND MANAGER APPOINTED) (and others named in the Schedule) Third Respondent

order made by:	DERRINGTON J
DATE OF ORDER:	16 DECEMBER 2022

THE COURT ORDERS THAT:

1. On the applicants’ undertakings:

   1. to indemnify the second to thirteenth respondents (Companies) against any costs orders made against them in the proceeding;

   2. to increase the sum held by their solicitors to support that indemnity to $750,000 within 14 days of this order, and not to deal with that sum unless the parties agree or the Court otherwise orders;

the applicants have leave pursuant to ss 236 and 237 of the Corporations Act 2001 (Cth) to bring proceedings in the name of the Companies against the first and seventeenth respondents for the claims made and the relief claimed in the draft statement of claim.

2. The applicants have leave to amend their originating process filed 25 March 2022 to incorporate the claims for which leave has been granted.

3. The applicants file a statement of claim by 4:00pm on 10 February 2023.

THE COURT DIRECTS THAT:

4. The applicants file written submissions with respect to costs limited to five pages by 4:00pm on 10 February 2023.

5. The respondents file written submissions with respect to costs limited to five pages by 4:00pm on 15 February 2023.

6. The matter be listed for a case management hearing and a hearing on the question for costs at 9:00am on 17 February 2023.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1. The applicants in this action are CIP Group Pty Ltd, CIP 1 Pty Ltd and Pyrmont Portfolio Pty Ltd, and Mr Clancy is a director or controller of each. In a variety of ways the applicants are members of the second to thirteenth respondents. The first respondent, Mr So, is a director of those respondents, as is Mr Clancy.

2. Mr So is the controller of the fourteenth to seventeenth respondents, being SIP Group Pty Ltd, SIP Pty Ltd, MT Family Pty Ltd and Ultimate Investment Portfolio Pty Ltd (Ultimate). Between them the first three have an interest in each of the second to thirteenth respondents.

3. In very broad and general terms the action concerns a dispute between, on the one hand, Mr Clancy and his corporate interests (the Clancy interests) and, on the other, Mr So and his corporate interests (the So interests). The So and Clancy interests had been carrying on business as property developers for some time as joint venturers, but have recently fallen out. This breakdown of relations has occurred in the course of their latest project.

4. The Clancy interests have commenced proceedings seeking, inter alia, relief under s 232 of the Corporations Act 2001 (Cth) (the Act) in respect of what they allege is oppressive conduct in relation to the operation of the second to thirteenth respondents (the operating companies). They have included in the proceedings claims by these operating companies against Mr So in respect of alleged breaches of fiduciary duty owed to them. It is said that the substance of these claims also constitutes the foundation of the allegations by the Clancy interests that the conduct of the operating companies was oppressive to, or unfairly prejudicial to their interests. The proceedings, as currently constituted, also seek to...