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Supreme Court 7 September 2004

Cinc v Bucan Holdings; Cinc v Bucan Holdings

[2004] NSWSC 847

Public order & justice offences
CORPORATIONS MANAGEMENT AND ADMINISTRATION PROCEDURE SUPREME COURT PROCEDURE CRIMINAL LAW JURISDICTION, PRACTICE AND PROCEDURE

Citation: Cinc v Bucan Holdings; Cinc v Bucan Holdings [2004] NSWSC 847
Court: Supreme Court of New South Wales, Equity Division
Date: 7 September 2004
Judge(s): Campbell J

Background

The first plaintiff was a director and former employee of a company (the first defendant) through which he and several other parties, including his brother, conducted a joint business. After a falling out, the other parties sought to exclude him from the business. The first plaintiff commenced proceedings in the Equity Division seeking a winding up of the company on the just and equitable ground.

On 12 August 2004, the defendants gave undertakings to the Supreme Court granting the first plaintiff access to the company's business premises and read-only access to its books and records. On 25 August 2004, a violent incident occurred at the premises during one of those access visits. The accounts of what happened were sharply contested.

Following the incident, the first plaintiff's brother applied to the Burwood Local Court and obtained an interim apprehended violence order (AVO) against the first plaintiff on 30 August 2004. The timing was significant: the AVO application was made on the same afternoon that the Supreme Court declined to restrict the first plaintiff's existing access regime. Key orders within the AVO would have prevented the first plaintiff from attending the company's business premises entirely, cutting across his statutory rights as a director and the existing Supreme Court undertakings.

  • Whether the Supreme Court has inherent jurisdiction to stay orders made by an inferior court, specifically a Local Court interim AVO.
  • Whether the AVO, obtained after the Supreme Court declined to modify the access regime, constituted an abuse of process of the Supreme Court.
  • How the first plaintiff's statutory right as a director to inspect the company's books and records (under the Corporations Act 2001 (Cth)) could be preserved in circumstances where there were allegations of violence against him.
  • What conditions could be imposed to allow access to continue safely pending the final hearing.

Decision

Campbell J found that the Supreme Court possesses inherent jurisdiction to stay orders of an inferior court where those orders interfere with proceedings properly before it or constitute an abuse of its own process. The AVO, obtained within hours of the Supreme Court's refusal to restrict the first plaintiff's access, effectively undermined that ruling. The timing and circumstances indicated that the Local Court process was being used in a manner that conflicted directly with the Supreme Court's supervisory role over its own proceedings.

His Honour acknowledged the serious nature of the violence allegations but noted that, at an interlocutory stage, it was not possible to resolve the contested factual accounts. He also observed that the existing Supreme Court undertakings remained on foot and that sanctions could attach for any breach. The first plaintiff, as a continuing director, retained a statutory entitlement under the Corporations Act 2001 (Cth) to inspect company books and records, and that right could not simply be extinguished by a Local Court order obtained in these circumstances.

Campbell J stayed orders 3 and 4 of the interim AVO until 22 October 2004 (the date fixed for the final hearing), but only upon the first plaintiff giving a series of undertakings to the Supreme Court. Those undertakings were designed to regulate the manner of access carefully and to minimise any risk of further confrontation between the brothers. The parties also consented to orders referring the dispute to mediation.

Orders Made

  • Orders 3 and 4 of the interim AVO made at Burwood Local Court on 30 August 2004 were stayed to and including 22 October 2004, upon the first plaintiff giving the following undertakings to the Court:
  • Not to attend premises at 2 Alpine Way, Glenwood or within 400 metres of those premises.
  • To attend the Burwood Road business premises only on Mondays, Wednesdays and Fridays between 12:00 pm and 1:30 pm.
  • To provide by email, by 5:00 pm the day before any inspection, a list of documents he wished to inspect.
  • To remain at the Burwood Road premises no longer than necessary to conduct the inspection.
  • Not to come within 10 metres of his brother (the second defendant) while at the Burwood Road premises, unless with his express consent.
  • To direct all requests for information, books and records to a nominated company officer (or, if that person was unavailable and had not nominated a substitute, to any person he chose).
  • By consent, orders for mediation of the dispute were made in accordance with short minutes of order.
  • Costs of the two-day application were reserved.

Key Takeaways

  • The Supreme Court confirmed that it holds inherent jurisdiction to stay orders made by an inferior court, including a Local Court interim AVO, where those orders interfere with proceedings properly before it or constitute an abuse of its process.
  • A statutory right of director access to company books and records under the Corporations Act 2001 (Cth) is not automatically overridden by a Local Court AVO obtained in circumstances that directly conflict with a superior court's existing orders.
  • Where contested allegations of violence arise during court-supervised access, the appropriate response at an interlocutory stage is to regulate the conditions of access rather than to extinguish it entirely, particularly where factual disputes cannot be resolved without a final hearing.
  • The timing of an application to an inferior court is a relevant consideration when assessing whether that application amounts to an abuse of the superior court's process: the AVO was sought on the same afternoon the Supreme Court refused to restrict the access regime, and Campbell J treated that sequence as significant.
  • Undertakings to the Supreme Court can serve as a workable mechanism for managing competing safety concerns and proprietary rights pending final resolution of a corporate dispute.

Legislation and Cases Referenced

Legislation
- Corporations Act 2001 (Cth), ss 290 and 1300

Cases
- Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWR 377
- Brambles Holdings Ltd v Trade Practices Commission (No 2) (1980) 44 FLR 182
- Cardile v LED Builders Pty Limited (1999) 198 CLR 380
- CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345
- Eagle Star Trustees Ltd v Tai Ping Trading Pty Ltd (No 2) (Supreme Court of NSW, 30 October 1990, unreported)
- Howse Fink and Johnson Computing Services Pty Ltd v Beard (Supreme Court of NSW, 26 October 1989, unreported)
- Jackson v Sterling Industries Limited (1987) 162 CLR 612
- Jago v The District Court of New South Wales (1989) 168 CLR 23
- Pioneer Concrete (Vic) Proprietary Limited v Trade Practices Commission (1983) 152 CLR 460
- Walton v Gardiner (1993) 177 CLR 378
- Williams v Spautz (1992) 174 CLR 509