The client and the opponent are co-directors and equal shareholders in a group of companies. The opponent removed a substantial sum of money from the holding company into a subsidiary company that the client had no visibility over.
The client commenced statutory derivative proceedings along with an application for interim relief. In the intervening days before the Court hearing, we were met with an ‘ex-parte’ application for interim relief against the client on the premise that a S.994 unfair prejudice petition would be issued. The opponent sought interim relief based on his own cross-allegations of misappropriation of funds along with a request for an interim receiver to be appointed to operate and safeguard the business.
The injunction issued by the opponent was defended on the basis that there was no need for the application to be made given that all allegations / cross-allegations were addressed in correspondence. The opponent’s application was clearly tactical i.e. an attempt to steal the client’s thunder and put the client on the backfoot.
The ex-parte application was adjourned. The Court was dissatisfied with the approach adopted by the opponent and the client was awarded costs on the indemnity basis payable by the opponent. In the intervening days before the return date to Court, we made an open offer to safeguard the operation of the business whilst the broader dispute could be dealt with by the Court. We proposed and spearheaded the appointment of an interim receiver to take over the management of the business to ensure it continued to operate effectively. The opponent agreed to our proposal, and therefore the hearing for the ex-parte application did not need to proceed.
It was of great satisfaction and comfort to the client that the opponent’s counterattack was immediately flattened, and the playing field levelled so that the business could be safeguarded, leaving the Court to deal with the real issues in dispute. Our sensible and pragmatic approach saved our client Court time and costs, whilst at the same time highlighting the unsatisfactory approach of the opponent and resulted in our client being awarded his costs on the indemnity basis.