Youlden Enterprises Pty Ltd & Anor v Health Solutions

Youlden Enterprises Pty Ltd & Anor v Health Solutions - [2003] WASC 82 - WASC 2003 case summary — Zoe

[48]

"(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the Court (Rochfort v John Fairfax & Sons Ltd (19));

(b) It is a grave matter to interfere with this entitlement by a stay of proceedings which requires justification on proper grounds (supra);

(c) The burden is on the defendant in a similar action to show that it is just and convenient that the plaintiff's ordinary right should be interfered with (Jefferson v Bhetcha (905; 1113));

(d) Neither an accused (supra) nor the Crown (Rochfort v John Fairfax & Sons Ltd (at 21)) are entitled as of right to have a civil proceedings stayed because of a pending or possible criminal proceeding;

(e) The Court's task is one of the 'balancing of justice between the parties' (Jefferson Ltd v Bhetcha (at 904; 1113), taking account of all relevant factors (supra, at 905; 1113);

(f) Each case must be judged on its merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (supra, at 904; 1113);

(g) One factor to take into account where there are pending or possible criminal proceedings is what are sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceedings (supra) at 904, 1113). I return to this subject below.

(h) However, the so-called 'right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in the civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (supra, at 904-905; 1113);

(i) The Court should consider whether there is a real, and not merely notional, danger of injustice in the criminal proceedings (supra, at 904; 1113);

(j) In this regard factors which may be relevant include:

[96]

"26. On 9 August 2000 Graeme Kenneth Matcham applied for Corporate Financial Systems Pty Ltd ('CFS') to be registered as a company under the Corporations Law of WA.

27. CFS was registered as a company under the Corporations Law of WA on August 2000 with Antony Solin as the sole shareholder and director.

28. On or about 21 August 2000 Fogarty caused HSWA to pay, and HSA acquiesced or failed to prevent HSWA making a payment of $430,000 to CFS ('the CFS Payment').

29. The CFS Payment was caused to be made by Fogarty without the authority of HSWA.

30. CFS had no commercial relationship to HSWA and no consideration was provided by CFS for the CFS Payment and there was otherwise no reason for the CFS Payment.

31. By reason of acting in the manner pleaded in paragraphs 28 to 30 hereof, Fogarty breached the duties pleaded in paragraph 12(a) hereof in that Fogarty did not act honestly or bona fide in the interests of HSWA.

32. Youlden Enterprises and King Holdings have sought from Fogarty, HSA and HSWA by its board of directors an explanation for the CFS Payment.

33. No explanation has been provided by Fogarty, HSA or HSWA by its board of directors to Youlden Enterprises or King Holdings for the CFS Payment.

34. In or about July 2002 Fogarty was charged by the Director of Public Prosecutions with the offence of stealing in relation to the CFS Payment.

35. Sub-section 2611(4) of the Hospitals and Health Services Act 1927 (WA) requires that a body corporate that desires to obtain a licence to conduct a private hospital shall satisfy the Commissioner of Health for the State of Western Australia, inter alia, that all the natural persons concerned in the management or conduct of the applicant are persons of good character and repute and are persons fit to be concerned in the management or control of a private hospital.

36. Pursuant to section 26F of the Hospitals and Health Services Act 1927 (WA) where the Commissioner of Health for the State of Western Australia is satisfied that if the holder of a licence is a body corporate, any person concerned in the management or conduct of the body corporate is not fit to be concerned in or able to conduct a private hospital, the Commissioner may cancel or refuse to renew the licence granted in respect of that licence holder.

37. For the purposes of performing its obligations under the Peel Health Campus Agreement HSWA is the holder of a licence to conduct a private hospital under the provisions of the Hospitals and Health Services Act 1927 (WA).

38. In or about May and June 2002 Youlden Enterprises and King Holdings were informed that the Health Department had contingency plans in place to assume management of the Peel Health Campus in the event the private hospital licence is cancelled.

39. In or about April to July 2002, Youlden Enterprises and King Holdings requested that measures be taken by Fogarty, HSA or HSWA by its board of directors and/or sought advice as to what measures have or were being taken by Fogarty, HSA or HSWA by its board of directors in relation to the Peel Health Campus Agreement having regard to the CFS Payment and the investigations of the Western Australian police.

40. No measures are being taken by Fogarty, HSA or HSWA by its board of directors in relation to the Peel Health Campus Agreement having regard to the CFS Payment and the investigations of the Western Australian police."

[133]

(a) In or about February 1998 HSWA, with the authority and fully informed consent of the directors, executed an agreement between itself and HCD, pursuant to which HCD was, for reward, to provide a television hire service to the Peel Health Campus for a 10 year term (Hire Service Agreement).

(b) The Hire Service Agreement came into operation in or about February 1998 and was varied in or about January 1999.

(c) In or about July 1999 Fogarty and Gorton formed a partnership, which operated through HCL Pursuant to the terms of the partnership the business and operations of HCD in respect of matters relating to the Peel Health Campus were deemed also to be part of the partnership.

(d) On 22 September 1999 Fogarty informed HCI and Gorton that the business and operations of HCD in respect of matters relating to the Peel Health Campus were deemed also to be part of the partnership.

(e) In or about 1 November 1999 all the obligations and benefits of the Hire Service Agreement were assigned by HCD to King Holdings with the authority and approval of HSWA and the directors of HSWA.

(f) In or about 2000 HSWA terminated the Hire Service Agreement.

(g) At all material times HSWA, with approval of the directors, performed and observed the Hire Service Agreement and the Hire Service Agreement was ratified by the directors of HSWA.

(h) At all material times the directors of HSWA were aware and fully informed of the Hire Service Agreement.

(i) From in or about August 2000 Youlden Enterprises and King Holdings have been raising and agitating matters relating to improper payments by HSWA, non-payment of dividends by HSWA, non-payment of interest on loans to shareholders by HSWA, corporate governance such as the provision of financial and other information to shareholders, improper calls on shareholders and exclusion from management of Gorton and Youlden.

(j) On or about 25 February 2002 and thereafter on various occasions, Youlden Enterprises and King Holdings informed HSWA, HSA and Fogarty that an application under sections 232, 233 and 234 of the Corporations Law is proposed by Youlden Enterprises and King Holdings.

(k) The HCD Proceedings were instituted in September 2002."

At a glance

Court

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Before

Catchwords

Source

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Judgment (137 paragraphs)

Youlden Enterprises Pty Ltd & Anor v Health Solutions (WA) Pty Ltd & Ors [2003] WASC 82 (2 May 2003)

Parties

Legislation Cited (1)

Cases Cited (3)