Kaloriziko Pty Ltd ATF Ryde Combined Unit Trust v Calibre Construction Group Pty Ltd

What happened

This was a procedural application in the New South Wales Court of Appeal, not the determination of the underlying construction dispute or the appeal itself. Adamson JA considered whether Camile Chanine could be authorised under ss 236 and 237 of the Corporations Act 2001 (Cth) to prosecute an appeal in the name of Kaloriziko Pty Ltd ATF Ryde Combined Unit Trust, described in the judgment as the developer or the company.

Calibre Construction Group Pty Ltd, the builder, began proceedings in the Supreme Court on 5 July 2022. It claimed unpaid amounts from the developer. The developer's defence concerned a retention sum: it argued that variations entitled it to retain the sum, while otherwise accepting that it held the money on trust for the builder pending determination of what was owed ([1], [3]). The builder also brought claims alleging knowing breach of trust against Mr Chanine, the developer's other director Eddie Tran, and Ninth Campsie Pty Ltd, a company associated with Mr Tran ([3]).

The claims against Mr Tran and Ninth Campsie were resolved by a deed of settlement. Their settlement left the developer and Mr Chanine as the active defendants ([4]). Mr Tran consequently no longer had an interest in the developer continuing to defend the proceeding ([5]). The developer's constitution required both Mr Chanine and Mr Tran to authorise litigation ([2]). That joint-authorisation rule became central again when the developer sought to appeal.

In June 2024, Stevenson J had already made orders under s 237 permitting Mr Chanine to take responsibility for the company's defence and to commence a cross-claim, subject to an indemnity undertaking ([6]). On 19 June 2025, the Supreme Court entered judgment for the builder against the developer for $2,137,430.86 plus interest. The summons was otherwise dismissed, as was the cross-summons ([7]).

The developer wished to appeal. Mr Tran did not authorise the appeal and, according to information given to the Court, was in custody on remand and not necessarily able to take an active role in it ([8]). Mr Chanine applied for leave to take responsibility for the appeal on the company's behalf. The builder did not oppose the application ([9]).

Adamson JA granted the application nunc pro tunc. The order authorised Mr Chanine to commence and prosecute, on behalf of and in the company's name, the claim set out in the Notice of Appeal filed 7 July 2025. It was conditional on his undertaking to indemnify the company for costs incurred in the proceedings and any adverse costs order. The Court made no order as to costs ([19]).

Why the court decided this way

The Court organised its consideration around the requirements it identified in s 237(2). Section 236, as summarised at [10], allows a member or officer to bring proceedings on behalf of a company or intervene in proceedings involving it to take responsibility for those proceedings or a particular step, if leave is granted under s 237. Section 236(2) requires proceedings brought for a company to be brought in that company's name ([11]).

First, the Court considered whether it was probable that the company would not itself bring the proceedings or properly take responsibility for them. The judgment states that the company's constitution required Mr Tran's cooperation for it to bring proceedings. Since Mr Tran no longer authorised the appeal, the Court was satisfied of the relevant probability ([13]). His lack of interest after settlement and his reported custody were contextual facts, but the stated basis for the Court's finding was Mr Tran's position together with the constitutional requirement.

Second, the Court considered good faith under s 237(2)(b). Mr Chanine relied on an affidavit sworn on 27 September 2025, with relevant documents exhibited. His counsel explained the proposed appeal grounds by reference to the Supreme Court judgment. The judgment identifies two matters: whether variations could be challenged although the developer had approved them at the time, and whether the deed between the builder, Mr Tran and Ninth Campsie extinguished any liability the developer might otherwise have through principles of coordinate liability ([14]). The builder did not contest good faith. Adamson JA accepted that Mr Chanine was acting in good faith ([14]).

Third, the Court considered the company's best interests under s 237(2)(c). Adamson JA described the appeal grounds as appearing arguable. The potential financial consequence mattered: if the company succeeded, its liability of more than $2 million could be reduced to nil ([15]). That was the Court's assessment for the leave application, not a decision that the appeal grounds were correct or that the liability would in fact be removed.

Fourth, the Court dealt with the 14-day written-notice requirement. The judgment records a concession that s 237(2)(e)(i) had not been fulfilled. It nevertheless found it appropriate to grant leave under s 237(2)(e)(ii) ([16]). The reasons do not elaborate on why the notice exception was appropriate, so the decision should not be read as setting out a general test or a broad rule about when notice can be dispensed with.

The order also addressed the company's exposure to costs. Leave was conditional on Mr Chanine undertaking to indemnify the company for costs incurred in the proceedings and any adverse costs order ([19]). The judgment does not state that this undertaking was itself a statutory precondition. It records it as a condition of the leave granted in this case.

Before and after state of the law

The judgment does not describe a change in the law, overrule earlier authority, or set out a history of derivative proceedings. It applies ss 236 and 237 of the Corporations Act to a particular company-governance problem: a constitution requiring joint director authorisation, combined with one director's unwillingness or inability to participate in the appeal.

The statutory propositions expressly stated are relatively focused. Section 236 allows a member or officer, with leave under s 237, to take responsibility on a company's behalf for proceedings or a particular step in them. Proceedings brought on behalf of the company must use the company's name ([10]–[11]). Section 237(2), as described by the Court, requires satisfaction of specified matters before leave is granted ([12]). The reasons expressly address probable company inaction or failure to take responsibility, good faith, the company's best interests, and the written-notice requirement ([13]–[16]).

The decision's contribution on these facts is its application of those provisions to an appeal where joint constitutional approval was required. The Court treated the absence of the second director's cooperation as relevant to whether the company would itself take responsibility for the appeal ([13]). It also treated the prospect of reducing a judgment debt exceeding $2 million as relevant to the company's best interests, when coupled with grounds the Court regarded as arguable ([15]).

The judgment does not discuss every matter listed in s 237(2), nor does it explain whether any unaddressed matter was contested or required separate analysis in this application. A careful account should therefore distinguish what the Court expressly found from any broader statutory analysis. On the reasons provided, the ruling is a case-specific grant of leave, not a comprehensive restatement of all requirements for statutory derivative proceedings.

After the ruling, Mr Chanine had authority under the order to prosecute the identified appeal claim on the company's behalf and in its name, subject to his indemnity undertaking ([19]). The ruling did not decide the appeal grounds, alter the Supreme Court judgment, or determine the substantive liability dispute.

Key passages with plain-English translation

At [2], the judgment says: “The developer’s constitution requires both of its directors, Mr Chanine and Mr Tran, to authorise the developer to engage in litigation.” In plain English, one director could not simply make the company litigate if the constitution required both directors to agree. The rule created a practical obstacle when Mr Tran would not authorise the appeal.

At [13], Adamson JA says: “I am satisfied of that probability having regard to Mr Tran’s position and the constitution of the developer which requires his cooperation for the company to bring proceedings.” This explains why the Court accepted that the company probably would not itself take responsibility. The relevant issue was not just that one director preferred not to appeal; the company's governance arrangement meant his cooperation was required.

At [14], the Court records two proposed issues for appeal: whether approved variations could later be challenged, and whether the settlement deed extinguished possible liability of the developer by reason of coordinate liability. These were described as bases for the grounds of appeal. The Court did not decide either question. Its immediate task was to assess the leave application, including good faith.

At [15], the Court refers to “arguable grounds of appeal” and says permission to appeal appeared to be in the developer's interests because success could reduce liability exceeding $2 million to nil. In plain English, the Court saw a plausible potential benefit to the company from allowing the appeal to proceed. That observation is not a prediction of success.

At [16], the Court notes that the 14-day notice requirement had not been met, but says it was appropriate to grant leave under s 237(2)(e)(ii). This means the Court used the statutory alternative identified in its reasons rather than treating the notice failure as an automatic bar.

Finally, [19] sets the operative order. Mr Chanine could prosecute the specified appeal on behalf of and in the name of the company, but only upon his undertaking to cover the company's costs and any adverse costs order. The order also states there would be no order as to costs.

What fact patterns trigger this precedent

The decision is relevant as an example where a company is a party to litigation, but its internal governance arrangements make it difficult for the company to take a litigation step. The particular feature here was a constitution requiring both directors to authorise litigation, while one director no longer supported or participated in an appeal ([2], [8], [13]).

It also concerns a person seeking to act for the company rather than pursue a personal claim in his own name. Mr Chanine sought authority to prosecute the appeal on behalf of the company, and the resulting order expressly required the appeal claim to be brought in the company's name ([10]–[11], [19]).

The ruling may be a useful factual comparator where the proposed applicant is a company officer, the company cannot practically make the relevant litigation decision, and the proposed proceeding is said to advance the company's interests. Here, the Court had affidavit material, an explanation of the appeal grounds, an unopposed assessment of good faith, and a potentially substantial financial benefit for the company ([14]–[15]). The builder's non-opposition is also part of the procedural setting ([9], [14]).

The decision also addresses a missed notice period. The applicant had not met the 14-day notice provision described at [16], but the Court found it appropriate to grant leave under the alternative provision. That aspect is fact-sensitive in the sense that the judgment gives no general explanation of what circumstances will justify dispensing with notice.

The result was tied to an undertaking protecting the company against proceeding costs and adverse costs orders ([19]). The judgment does not establish that an indemnity will be required in every application, but the condition is relevant when comparing the practical terms of leave orders.

How later courts have treated it

The supplied judgment contains no discussion of later decisions treating this case, and it provides no later-court citations. It is a judgment dated 13 October 2025, and the text supplied here records only Adamson JA's determination of the application before the Court. Accordingly, no claim about subsequent application, approval, distinction, or criticism can be made from this source.

Within the judgment itself, there is no precedent relationship to another cited case. The legal sources identified are ss 236 and 237 of the Corporations Act 2001 (Cth). The reasons apply those provisions to the facts but do not cite case authorities ([10]–[16]). The absence of cited authorities is important: this ruling supplies a concise statutory application, but the text alone does not establish how other courts have treated its reasoning.

Still-open questions

Several questions are left open by the limited scope of the application. Most directly, the Court did not decide whether the developer could succeed on either proposed ground of appeal. Whether approved variations could be challenged, and whether the deed of settlement affected the developer's possible liability through coordinate-liability principles, were identified only as grounds advanced in support of good faith ([14]).

The reasons do not state the full contents of Mr Chanine's affidavit or analyse the underlying construction contract, variation approvals, trust arrangements, or settlement deed. Nor do they explain what evidence supported each proposed ground beyond counsel's submissions and the affidavit material. Those matters would need to be assessed in the substantive appeal, not inferred from the leave decision.

The judgment also does not explain in detail why it was appropriate to grant leave despite failure to provide 14 days' written notice. It records the concession and states the Court's satisfaction under s 237(2)(e)(ii), without identifying a general test or the circumstances that carried weight ([16]). The ruling therefore confirms the availability of that statutory route in this instance, but leaves its broader application unelaborated.

The reasons address particular s 237(2) requirements but do not discuss every possible statutory matter. The judgment's account should not be expanded beyond what it actually says. It is also not a decision on the appeal's merits: the Court authorised Mr Chanine to prosecute the appeal subject to an indemnity, but did not disturb or affirm the Supreme Court's judgment ([19]).

This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on, or using this analysis, have it checked by a qualified Australian lawyer.