Huang v Wang

Affidavit and documentary evidence

1. Mr Wellington reads his first affidavit dated 27 October 2022, which outlines the circumstances in which he met Mr Hutchison and became involved with a project to develop an electric aircraft, investing as a shareholder in the Company and lending money to the Company in connection with that project. He refers to steps taken to progress the development of the aircraft and to attendance at air shows where models of the aircraft were displayed, although it appears that the aircraft has not yet reached the final steps of development, still less been tested in any flying mode. Mr Wellington refers to his introduction of Mr Elkins, who also gave affidavit evidence and was cross-examined, to the project with a view to assisting its completion, and to the circumstances in which KPMG, or KPMG Law, were engaged to assist with capital raising efforts.
2. Mr Wellington also addresses the circumstances in which the relationship between the shareholders, and Mr Wellington and Mr Elkins as directors on the one hand and Mr Hutchison on the other, broke down. That occurred in the context that Mr Wellington and Mr Elkins were seeking to have Mr Hutchison, as well as other consultants to the Company, execute deeds of assignment of intellectual property rights that would clarify, confirm, or possibly establish the Company's ownership of intellectual property that was used to develop the aircraft. That dispute appears to have crystallised by the time of a board meeting in December 2021, although attempts to clarify the position in respect of intellectual property had occurred prior to that meeting and continued into the early part of 2022. I will return to the content of that board meeting below.
3. Mr Wellington also refers to the execution of a heads of agreement between the shareholders in March 2022, which does not appear to have resolved the disputes between them. His evidence is that he had seen the aircraft in a 75-80% finished state in April 2022, although it has apparently since been disassembled. There is a dispute between the parties, which I need not resolve, as to whether that was done by Mr Hutchison, and whether it was done for the purpose of painting the aircraft, but there appears to be no dispute that the aircraft has not since been reassembled. Mr Wellington's evidence is that Mr Hutchison did not execute or return documents contemplated by the heads of agreement by May 2022, and Mr Wellington subsequently terminated the heads of agreement and a loan agreement between him and the Company, and demanded repayment of his loan to the Company. Following further disputes, he then appointed Mr Vardy as receiver and manager of the Company's assets, exercising his rights as a secured lender to the Company.
4. It appears that, by the time Mr Vardy took possession of the Company's premises, which was about mid-June 2022, the aircraft was in the disassembled state to which I have referred above. Mr Wellington's evidence is that he could not locate, or at least identify, moulds for various components and parts of the aircraft or design documents that would be used to reassemble the aircraft. I will refer below to correspondence from Mr Hutchison which suggests that he has at least some of the relevant materials in his possession.
5. Mr Wellington also leads evidence in support of the interlocutory relief that he seeks, referring to the incorporation of another entity by Mr Hutchison, and continuing developments in electric aircraft technology. He refers to interest in the aircraft from several academic institutions and from investors and expresses the view that those investments could be advanced once the intellectual property is back in the Company's possession. He also expresses the view, admitted with a limitation under s 136 of the Evidence Act 1995 (NSW) as evidence of his understanding only, that the value of the intellectual property in the aircraft will drop, if it is not returned to the Company quickly, because the Company will lose its opportunity to finalise the project and exploit it commercially, and he will lose the value of his investment in the Company. That proposition is plausible, but that result could only be avoided by a final determination of the proceedings. The grant of interlocutory relief will not avoid that result, so far as Mr Hutchison is presently prevented from exploiting the property by the undertakings he has given, and the Company will likely be prevented from exploiting the property, where it would be held by the receiver until the disputes as to ownership are determined at a final hearing.. As I noted in the course of submissions, both parties therefore face the risk that, by the time their dispute is finally determined, the value of the property which is its subject matter will have been eroded or lost. Mr Wellington also expresses a belief that the Company owns all of the intellectual property relating to the aircraft, and that the return of that property would be in the Company's best interests so it can exploit the level of interest and commercial opportunities available. Again, that depends upon the determination of the issues in the proceedings on a final basis.
6. Mr Wellington indicates, in his first affidavit, that he is prepared to indemnify the Company with respect for the costs of the action and any cost liabilities that may result, and recognises that he will be required to give an undertaking as to damages, and gives that undertaking as to damages, in respect of interlocutory relief. However, a difficulty emerged in the course of the application, that Mr Wellington is not resident in Australia and does not appear to own property in Australia, and there is little or no evidence as to the extent to which he personally owns property overseas.
7. By a second affidavit dated 22 November 2022, Mr Wellington referred to the fact that he is a director and sole shareholder of another entity, Trading Consultants Pty Ltd ("Trading Consultants"), and he indicated that he was prepared to make available the assets of Trading Consultants to meet any costs order against him or any amount owing and ordered under an undertaking in the proceedings. He referred, in oral evidence, to the fact that Trading Consultants owns a property in Bowral, which he suggests is unencumbered. A second difficulty, which emerged in cross examination, is that he is one of three directors of Trading Consultants, the other two directors being his children. He has since tendered a resolution of the board of directors of that Company, directed to the giving of an indemnity to him. I will return to the adequacy of that indemnity below.
8. Mr Elkins, who (as I noted above) worked for a time on the project, gave evidence by his affidavit dated 27 October 2022. Mr Elkins outlined his involvement in the project and his attempts to obtain and execute an assignment deed as to intellectual property from Mr Hutchison, and also outlined events at the December 2021 board meeting to which I referred above.
9. Both Mr Wellington and Mr Elkins were cross-examined at some length. It is neither necessary nor appropriate to reach credit findings in an application of this kind and I do not do so. A substantial part of that cross-examination was directed to developing a proposition, also put in submissions, that Mr Hutchison must own the intellectual property because, otherwise, a deed of assignment of intellectual property was not required from him; or it was not possible for him to give it; or the particular form of the deed assignment, so far as it recited ownership of the intellectual property, was not correct. I do not accept that submission. First, Mr Hutchison himself contended to the contrary in December 2021 at the board meeting to which I will return below. Second, it is obviously plausible, as both Mr Wellington's and Mr Elkin's evidence in cross-examination made clear, that the assignment was sought to establish certainty as to the Company's ownership of intellectual property at the point of a further capital raising, even if it was probable that the Company already owned the intellectual property. Third, this would not be the first or last time that a document which was drafted to achieve such a result was somewhat imprecise, so far as it recited the assignor's ownership rather than merely the assignor's possible ownership of that property. Fourth, there is little utility in any cross-examination, as occurred at some length, as to whether Mr Williamson or Mr Elkins thought that the Company owned the intellectual property because the question is not what those persons thought but what is the fact and what is its proper legal characterisation. That matter was not advanced by the cross-examination of either Mr Williamson or Mr Elkins.
10. Mr Hutchison did not give evidence in the application. In those circumstances, the rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, as explained in Kuhl v Zurich Financial Services Ltd (2011) 243 CLR 361; [2011] HCA 11 and Musa v Alzreaiawi [2021] NSWCA 12 at [78], permits an inference that his evidence would not have assisted him and permits the Court to draw an inference unfavourable to him with greater confidence where his evidence which was not led could cast light on that inference. I do draw the inference, in the circumstances, that Mr Hutchison's evidence would not have assisted him in respect of the matters raised in this application.
11. The parties also tendered documentary evidence including a bulky exhibit to Mr Wellington's affidavit and additional documents tendered by Mr Hutchison in the course of cross-examination, which are largely consistent with the chronology of events that emerges from the affidavits to which I have referred above. The exhibit to Mr Wellington's affidavit included early analysis of the potential costs of the development of the aircraft, promotional material concerning the aircraft and photographs provided by Mr Hutchison of aircraft parts, including a large portion of the fuselage, after it had been removed from the mould used to create it (Ex A1, 193). There is evidence of a loan agreement dated 1 September 2020 and a general security deed (Ex A1, 273, 286) and Mr Wellington also exhibited a draft founders agreement term sheet (Ex A1, 432). A management report for the Company for the year ended 30 June 2021 (Ex R6) shows losses in 2020 and 2021 and a deficiency in assets and records substantial research and development expenses. That is not surprising in circumstances where the Company was a start-up vehicle seeking to develop the new aircraft.
12. Mr Bell, who appears for Mr Hutchison, also drew attention to correspondence concerning the suggested assignment of intellectual property in early December 2021 when Mr Elkins followed up, apparently, in respect of the assignment of intellectual property in preparation for a capital raising and Mr Hutchison responded, "Why are we giving away IP?" (Ex A1, 467). Mr Elkins responded that the proposed assignment was, "Not giving away - securing your personal IP on the plane to [the Company] so that [the Company] owns it" (Ex R3). Mr Hutchison relies on that explanation to seek to establish that he owns that intellectual property. However, as I have noted above, that that is a matter of fact and law and Mr Elkins' understanding as to that matter or the attempt to seek to obtain clarity about it by obtaining an assignment do not establish that Mr Hutchison had ownership of that intellectual property. Mr Bell also draws attention to a draft deed of assignment in a version prepared by KPMG or KPMG Law which, possibly imprecisely, includes a recital that the assignor owns the assigned intellectual property (Ex A1, 470). Another version of such an assignment, apparently prepared by another law firm engaged in respect of the capital raising, was the subject of cross-examination but was not tendered and may or may not have been more precise as to the purpose of the assignment.
13. Mr Wellington also tendered the minutes of the board meeting held on 17 December 2021 (Ex A1, 477), when the dispute between the shareholders appears to have crystallised. The minutes record a debate between the parties as to the assignment of intellectual property, in which each express a position which is not wholly consistent with that which they now advance. Mr Hutchison begins by stating that "he is not sure of the content meaning for the IP assignment deed", and Mr Elkins is recorded as advising of the "need to assign the IP in the [aircraft] to the Company", and stating that "[c]urrently, as the designer [Mr Hutchison] holds this IP personally but needs to confirm that it is 'owned' by [the Company]". Mr Hutchison then responds by advising that the IP "in his view" was already owned by the Company and that an additional deed was not required, and Mr Elkins takes issue with that matter and refers to legal advice. As I have noted, each party has, at least to some extent, reversed their respective positions, so far as Mr Wellington now contends that the intellectual property, where developed by Mr Hutchison as a director of the Company, is the Company's property, and Mr Hutchison now appears to contend the contrary. Similar evidence as to that meeting is led in each of Mr Wellington's and Mr Elkins' affidavits.
14. By February 2022, Mr Wellington and Mr Elkins were discussing the question of Mr Hutchison's continued role in the Company (Ex R7). By 25 February 2022, Mr Elkins had forwarded Mr Hutchison a draft shareholders deed, deed of indemnity and intellectual property deed, which appears was again directed to the assignment of the relevant intellectual property in the Company (Ex R2). About this time, the Company was also preparing an investor overview, in order to raise further capital, which presumably had focussed attention on the issue as to the ownership of intellectual property (Ex R4). In early March 2022, there was discussion as to possible commercial terms in respect of the resolution of differences between the shareholders (Ex A1, 488), and I referred to the execution of the heads of agreement above.
15. In early June 2022, Mr Vardy was appointed as receiver and manager by Mr Wellington, in his capacity as a secured lender to the company (Ex A1, 520). By about that time, Mr Hutchison had reversed the position which he had previously expressed in December 2021 and was asserting by an email dated 5 June 2022 that he owned the intellectual property which had been used in the development of the aircraft (Ex A1, 516), in the context of a debate about funding of the Company. He observed in that email that: "I will also remind you that the company does not own the IP which I have generated. As a result of this, if the company goes into liquidation then the value of the company will come down to the consumables that are currently in the building, which is very little."
16. By a further email dated 7 June 2022 to Mr Wellington, copied to others (Ex A1, 518) Mr Hutchison put the position bluntly, observing that: "I will not be putting one more cent into the company and I will not be signing any IP agreements (even though you have tried to blackmail me to sign agreements in the past). I will make it clear here and now, I own the IP for this project. The IP on the moulds and parts belong to me. So as it stands the moulds and parts are worthless. If required I can clearly show evidence that I own the IP for this project before the company was even started." That position is plainly inconsistent with the position that Mr Hutchison was expressing some six months before.
17. Mr Vardy in turn prepared an initial report on 20 September 2022 (Ex A1, 555). Mr Wellington and Mr Elkins each provided reports to the receiver on or about 6 September 2022 (Ex R8), which included an assets listing which suggested that the Company had at least some property that related to the construction of the aircraft, including moulds (Ex R5).
18. As at October 2022, Mr Hutchison appears to have been in possession of at least some intellectual property that was relevant to the development of the aircraft. By an email dated 5 October 2022, Mr Elkins had written to Mr Hutchison that: "Surely you can see that the IP that we developed really belongs to [the Company]. We wanted to make a final request for you to agree to do the right thing - formally assign the IP to the [C]ompany. This will enable us to commercialise the plane. If you agree, please then deliver all of the IP and company equipment to the Company. This includes everything to do with the project - for example, drawings, designs, parts, tools, codings/software, the Dropbox documents, the formulas, the moulds, the domain name, website etc…you need to stop using them yourself for your own purposes also. You must know that [the Company] can't let you walk away with the IP. [Mr Wellington] has invested more than $800,000 in the business. Please think carefully about this and let me know by 17 October if you agree."
19. Mr Hutchison responds by an email dated 6 October 2022. It is notable that that response does not say that Mr Hutchison does not have any intellectual property relating to the aircraft, or that he does not have, for example, any drawings, or any designs, or any parts, or any tools, or any coding/software, or any Dropbox documents, or any formulas, or moulds, or the domain name, or the website. Instead, what he says is: "On the basis that I deliver the IP to the Company as requested, what do you [Mr Wellington] and yourself suggest is the path forward?" Mr Hutchison could not be cross-examined as to this document, where he did not give evidence, but an inference is plainly available from this email that he has, in his possession, some or all of the materials which fall within the description contained in Mr Elkins' email, where he did not then deny that proposition.
20. Finally, I note that, immediately prior to the commencement of this hearing, Mr Vardy advised the Court, by email dated 22 November 2022 (Ex A2) that he would not be appearing at the hearing; he consented to the interlocutory orders that Mr Wellington was seeking; there were no funds in the Company for it to bring the proceedings; and as receiver and manager, he was not in a position to bring the proceedings. I recognise that, as Mr Bell emphasised, this is not affidavit evidence, but there is nothing that suggests that Mr Vardy's account of the position is not the fact.

Application for leave to bring derivative proceedings

1. Turning now to Mr Wellington's application for leave to bring derivative proceedings, I should first address the applicable principles, and then the parties' submissions. I have here drawn on my account of those principles in, inter alia, Re Fishinthenet Investments Pty Ltd [2019] NSWSC 490 ("Fishinthenet") and Re Australian International Yacht Club Ltd [2020] NSWSC 1884.
2. Mr Wellington has standing to bring an application under s 237 of the Act, where he is a director and substantial shareholder in the Company. In order to obtain leave under that section, an applicant must establish the five matters specified in s 237(2) of the Act on the balance of probabilities and, if the Court is satisfied the applicant has done so, the Court must grant that leave: Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313; [2002] NSWSC 583 at [26]; Huang v Wang [2016] NSWCA 164.
3. The first matter specified in s 237(2) of the Act is that it is probable that the Company will not bring the proceedings, absent the grant of leave. Mr Bulley, with whom Mr Brook appears for Mr Wellington, submits that this requirement is satisfied, where the Company is in receivership and Mr Vardy's position is that he is not in funds to bring the relevant proceeding. Mr Bell responds that Mr Wellington has appointed Mr Vardy as receiver, and could remove him as receiver, or could fund him to bring the relevant proceedings. I accept that that is the case, but it does not follow from that proposition that, where the Company is in fact in receivership, and there is no suggestion that the receiver is in funds to bring the proceedings, the proceedings would be brought by the Company as matters stand. It is not to the point that matters would be different, if Mr Wellington removed the receiver. It is also not to the point that Mr Wellington and Mr Elkins could, as a majority of the board, pass a resolution authorising the Company to bring the proceedings, because the powers of a board are ordinarily constrained during a receivership, and would likely not extend to authorising the commencement of proceedings, that would interfere with the receiver's role in respect of the management of the Company's assets. The case law has recognised that leave under s 237 of the Act to bring a derivative action can be granted where a company is in receivership: Re Sundara Pty Ltd [2015] NSWSC 1694 at [118]; Re Kalimpa Park Pty Ltd [2021] VSC 654 at [49].
4. The second matter specified in s 237(2) of the Act is whether Mr Wellington is acting in good faith. The case law establishes that relevant matters include whether he has an honest belief that a good cause of action exists and has reasonable prospects of success, although that belief will be tested against whether a reasonable person in the circumstances would hold that belief, and whether he is seeking to bring the proceedings for a collateral purpose. The case law recognises that it is relatively easy to satisfy that requirement if an application is made by a current shareholder who has more than a token shareholding, as Mr Wellington plainly does, and the derivative action seeks recovery of property so that the value of his shares would be increased.
5. Mr Bell submits that Mr Wellington is not acting in good faith because he could not reasonably believe that good cause of action exists and, possibly, because, if property was returned to the Company, it would be used for Mr Wellington's purposes as a secured creditor rather than for the benefit of the Company's shareholders. In response, Mr Bulley recognises that Mr Wellington's affidavit does not expressly state his belief as to the strength of the cause of action to be brought by the Company. However, the Court can infer that he has that belief from the costs that have been incurred in respect of the proceedings to date and in this application. It seems to me that Mr Wellington, and a reasonable person in his circumstances, could hold the belief that at least significant parts of the claim in respect of allegations of breach of fiduciary and statutory duty on the part of Mr Hutchison have reasonable prospects of success.
6. In order to establish such claims, Mr Wellington would need to show that, first, Mr Hutchison was correct in December 2021 in believing that the relevant intellectual property and other assets were the Company's property and his contrary assertion in mid-2022 was not correct, either because of his role as a director or because of the way in which that property was treated in developing the Company's business. Mr Bulley refers to evidence which go to that question in submissions. Second, if the property is the Company's property and Mr Hutchison now holds it, as his October 2021 email suggests, Mr Wellington would need to show that Mr Hutchison's conduct in retaining that property and not returning it to the Company amounts to his acting in conflict of interest or obtaining a profit from the Company without its consent which has the capacity to breach both fiduciary and statutory duties. It seems to me that both Mr Wellington and a reasonable person in his circumstances could take the view that that proposition could well be established.
7. I am satisfied in those circumstances that Mr Wellington is acting in good faith, even if Mr Wellington may also benefit as a secured creditor if the Company recovers assets which are then available to meet its debt to him. I do not accept Mr Bell's submission that good faith is not established because Mr Wellington has not chosen to waive the Company's legal professional privilege over any legal advice given as to the ownership of its intellectual property, noting that it is unlikely that he had the capacity to do so as a single director and shareholder in the Company in any event.
8. The third question relating to the best interests of the Company causes greater difficulty in the particular circumstances. In Swansson v RA Pratt Properties Pty Ltd above, Palmer J noted that this required that the Court be satisfied that the proposed action actually is, on the balance of probabilities, in the company's best interests. There is no real issue here as to any adverse impact upon the Company's operations from the bringing of this litigation, where it appears that the Company has not been able to further develop the aircraft since the appointment of the receivers, not least because the plane is presently disassembled and there is reason to think some of its parts and the intellectual property relating to its design are not in the Company's possession.
9. However, a difficulty arises here because, although Mr Wellington offers an undertaking to indemnify the Company in respect of the costs of the proceedings which, I assume, extends to any adverse costs order, there is a question as to the adequacy of that undertaking where he is resident outside Australia and does not appear to personally own any property in Australia. The case law has recognised that a relevant and significant matter in determining whether the proceedings are in a company's best interests is the adequacy of an indemnity in respect of the costs to which the company would be exposed by the conduct of proceedings and in the event of their failure: Power v Ekstein (2010) 77 ACSR 302; [2010] NSWSC 137; The App Shop Pty Ltd v Jalal Brothers Pty Ltd [2019] NSWSC 490 at [19] ("Jalal Brothers"); Australian International Yacht Club Ltd above at [15]. In assessing the value of any indemnity given to a company, the Court will also have regard to the financial strength of the party giving the relevant indemnity: Fishinthenet at [31]ff. That is uncertain here, as a practical matter, given the lack of evidence as to Mr Wellington's assets overseas, held in his own name, and the fact that he does not appear to be resident in or hold assets in Australia.
10. I bear in mind that, as I noted above, Mr Wellington has sought to offer the assets of Trading Consultants to meet any such indemnity and has tendered a resolution of the directors of that company, being himself and his two children, which resolved that Trading Consultants will indemnify Mr Wellington for the costs of the proceedings and that that indemnity includes any undertaking as to damages against Mr Wellington, that he may be ordered to pay personally in the proceedings. The difficulty with that resolution is, first, that there is limited evidence as to the assets of Trading Consultants, although I appreciate that Mr Wellington gave oral evidence that it held an unencumbered property of significant value. Second, Mr Bell rightly points out that Trading Consultants offers no undertaking that it will not dispose of that property, or secure that property to a third party, while the indemnity is in place, and it relies on that property for it to be met. Third, and importantly, this indemnity operates in an indirect way, by indemnifying Mr Wellington in respect of any claim by him. It seems to me that, in order to allow the Court to conclude that the action was in the Company's best interests, the Company would need to have a direct indemnity from Trading Consultants for the costs of the proceedings, rather than a claim against Mr Wellington, who is in turn indemnified by Trading Consultants potentially involving two stages of enforcement, and would also need to have a clearer claim to indemnity for an undertaking as to damages that is given in order to obtain interlocutory injunctive relief.
11. Where the status of that indemnity is presently, in my view, not satisfactory, I would not be able to conclude that the commencement of the proceedings is currently in the Company's best interests, and therefore could not grant leave to commence the proceedings as matters stand. I will return below to the consequences of that for the future conduct of the proceedings.
12. Fourth, the requirements of s 237 of the Act require that there be a serious question to be tried. This requires the application of the same test as applies in determining whether to grant an interlocutory injunction. It seems to me that the matters to which I have referred above, including Mr Hutchison's understanding at one point that the relevant property was the Company's property, and the evidence that supports an inference that he now has at least part of that property in his possession, is sufficient to raise a serious question to be tried, at least on the basis that there is an arguable case of breach of his directors' duties. I do not neglect the fact that Mr Bell criticised the form of some of the relief sought, and suggested that the evidence that was available, at this interlocutory stage, was not sufficient to support that relief. I need not be satisfied, in order to grant leave to bring the proceedings, that all the claims brought in them will succeed, nor is it necessary, in order to grant such leave, that all the evidence required to succeed at a final hearing is available at the early point at which such leave is sought. These are not matters that would lead me to decline to grant leave, or displace the conclusion which I have otherwise reached that a serious question to be tried is established.
13. Finally, a question arises as to whether notice has been given of the intent to bring the proceedings, or whether that requirement should be dispensed with. It was apparent to the parties here that there was a dispute as to the relevant matters, and Mr Hutchison has had ample opportunity, since short service was first obtained in respect of the proceedings, to identify the matters relied on in respect of leave to bring the derivative proceedings.
14. For these reasons, I am satisfied of most of the matters necessary to grant leave to bring the derivative proceedings under s 237 of the Act, but the difficulties with the form of undertaking offered by Mr Wellington, as it stands, are such that I could not grant that leave on that undertaking. I propose to take the course which I took in similar circumstances in Fishinthenet and in Jalal Brothers, and adjourn the proceedings for a short period, to allow a further opportunity to Mr Wellington to provide an adequate undertaking. If he does so, then leave to bring the derivative proceedings will be granted, and I will deal with the remaining question as to a mandatory injunction to which I refer below, on an interlocutory basis, and I will make further directions including that the matter continue on pleadings. If he does not do so, then the application for leave to bring the derivative proceedings would be dismissed, the existing undertaking given by Mr Hutchison in respect of dealings with relevant property would likely be discharged, and it would remain to determine whether any personal claims were available to Mr Wellington that could proceed without the grant of derivative leave.

Interlocutory injunctive relief

1. I should briefly deal with the question of interlocutory injunctive relief, although that question strictly does not now arise, where leave to bring the derivative action has not yet been granted. Mr Wellington seeks an order, on the usual undertaking as to damages, that Mr Hutchison deliver to Mr Vardy as receiver of the Company "all Property of [the Company] in his possession" by a specified date. The term "Property" is there defined, in a relatively specific way, by identifying particular forms of property which appear to have a connection with the aircraft. However, the formulation of that injunction, in its present form, would require Mr Hutchison to form a view as to whether any particular item was property "of", apparently in the sense of owned by, the Company in order to comply with it. That has the difficulty, first, that the ownership of the property appears to be disputed and will be determined at a final hearing. Until it is determined at a final hearing, there would be real uncertainty as to what property falls within the scope of an injunction in that form. Second, it would be unfair, in the extreme, to require Mr Hutchison to now make, in effect, an admission as to what property is property of the Company, in determining what property he must deliver to the Company to comply with such an injunction. Third, and fundamentally, that injunction would likely not be enforceable in contempt, because it is too uncertain to indicate to Mr Hutchison what property he should return. That is a difficulty which does not arise in respect of the undertaking previously given by Mr Hutchison, which omitted the criterion of ownership by the Company, and identified the particular property by reference to its connection with the aircraft. Although it is not necessary to finally determine the question, it is presently unlikely that I would grant in injunction in that form. It is not necessary, in those circumstances, to determine whether the Court could grant an interlocutory mandatory injunction, although I note that the Court has recently had occasion to address a similar question in the decision in Re Sunnya Pty Ltd (Supreme Court of New South Wales, Black J, 10 November 2022).
2. Mr Wellington alternatively sought an interlocutory restraining injunction, but such an application also does not need to be determined at this stage, because I have not granted leave to bring derivative proceedings. In any event, it appears that application was not pressed, where Mr Hutchison has given a corresponding undertaking to the Court until further order.

Costs

1. I will reserve the question of costs of this application, which may depend, at least in part, on their ultimate determination, once the issue as to the form of any undertaking is resolved.

Orders

1. I stand over the proceedings to 9.15am on 2 December 2022 to allow the parties to address these issues. I make the further directions that the Plaintiff serve and send to the Associate to Black J any proposed form of undertaking, any evidence in support of that undertaking, and any submissions as to that undertaking, by 4pm on 30 November 2022; and the Second Defendant serve, and send to the Associate to Black J, any evidence and any submissions in response by 4pm on 1 December 2022.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 December 2022