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

Calibre Construction Group Pty Ltd (the builder), the respondent in this Court, commenced proceedings in the Supreme Court (the Court below) on 5 July 2022. The defendants to those proceedings were Kaloriziko Pty Ltd as trustee for Ryde Combined Unit Trust (the developer), the first defendant; Camile Chanine, the second defendant; Eddie Tran, the third defendant; and Ninth Campsie Pty Ltd, the fourth defendant. Mr Chanine and Mr Tran were directors of the developer and Ninth Campsie Pty Ltd is a company associated with Mr Tran.

The developer’s constitution requires both of its directors, Mr Chanine and Mr Tran, to authorise the developer to engage in litigation. For reasons given below, Mr Tran no longer authorised the developer’s defence of the builder’s claim or the developer’s proposed cross-claim in the Court below and has not authorised the developer’s appeal. Mr Chanine seeks an order under s 237 of the Corporations Act 2001 (Cth) that he be permitted to intervene in the proceedings for the purpose of taking responsibility for the appeal on behalf of the developer. A similar order was made in the Court below. The order sought is not opposed by the builder.

In the Court below, the builder sued the developer for unpaid amounts. The developer defended the proceedings, arguing that it was entitled to retain the retention sum by reason of variations. The developer otherwise accepted that it held the retention sum on trust for the builder pending determination of the amount owed. The builder also sued Mr Chanine, Mr Tran and Ninth Campsie Pty Ltd for alleged knowing breach of trust (on the basis that the developer ought to have paid the retention sum to the builder as beneficiary of the trust).

In the course of the proceedings in the Court below, the builders claim against Mr Tran and Ninth Campsie Pty Ltd was resolved and a deed of settlement entered into between the builder, Mr Tran and Ninth Campsie. This left the developer and Mr Chanine as the only remaining, active defendants.

Once the proceedings had been settled by Mr Tran and Ninth Campsie Pty Ltd, Mr Tran no longer had an interest in the developer continuing to defend the proceedings.

In the Court below, the developer and Mr Chanine filed an amended notice of motion in Court on 14 June 2024, seeking orders pursuant to s 237 of the Corporations Act that Mr Chanine be permitted to intervene in the proceedings. Stevenson J made orders on that day, which included the following:

On 19 June 2025, Stevenson J made final orders, including an order for judgment in favour of the builder against the developer in the sum of $2,137,430.86 plus interest. The summons was otherwise dismissed and the cross-summons was dismissed.

The developer wishes to appeal against those orders. The difficulty, once again, for the developer is that its other director, Mr Tran, having settled the proceedings, has no particular interest in the appeal. I am also informed by Ms Scott, who appears on behalf of the developer, that Mr Tran is presently in custody on remand and is not necessarily in a position to take an active role in the appeal, even were he minded to do so.

Mr Sheldon, who appears on behalf of the builder on the appeal, does not oppose the orders sought by the developer under s 237 of the Corporations Act, which are to be in a similar form to the order made by Stevenson J on 14 June 2024, extracted.

Section 236 of the Corporations Act provides that a person may bring proceedings on behalf of a company or intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for those proceedings or for a particular step in those proceedings, as long as the person is a member or an officer of that company and is acting with leave granted under s 237.

Section 236(2) provides that “[p]roceedings brought on behalf of a company must be brought in the company’s name”.

Section 237 provides for an application for leave for the purposes of s 236. Section 237(2) provides that “[t]he Court must grant the application if it is satisfied” of certain matters. I propose to address those matters in turn.

First, the Court must be satisfied that “it is probable that the company will not itself bring the proceedings, or properly take responsibility for them, or for the steps in them”: s 237(2)(a). 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.

Secondly, the Court must be satisfied that “[t]he applicant is acting in good faith”: s 237(2)(b). Ms Scott relies on the affidavit of Mr Chanine sworn 27 September 2025 to which relevant documents are exhibited. Ms Scott has persuaded me that the applicant is acting in good faith. She has outlined the basis for the grounds of appeal by reference to the judgment of the Court below and in particular has highlighted the various grounds of appeal. Ms Scott identified the following bases for the grounds of appeal. First, the question is whether variations can be challenged notwithstanding that they were approved by the developer at the time. Secondly, the question arises whether the deed entered into between the builder, Mr Tran and Ninth Campsie Pty Ltd extinguishes any liability which the developer might otherwise have to the builder by reason of the principles of coordinate liability. I note that Mr Sheldon, who appears for the builder does not contest that the applicant is acting in good faith.

Thirdly, s 237(2)(c) requires that I be satisfied that it is in the “best interests of the company that the applicant be granted leave”. On that question, having regard to what would appear to me to be arguable grounds of appeal, it would appear to me to be very much in the interests of the developer to be permitted to appeal because if it is successful then its liability in excess of $2 million will be reduced to nil.

Fourthly, I am required to be satisfied under s 237(2)(e) of the Corporations Act that, either the applicant has given “written notice to the company of the intention to apply for leave” at least 14 days before making the application (s 237(2)(e)(i)); or that “it is appropriate to grant leave even though subparagraph (i) is not satisfied”: s 237(2)(e)(ii). I understand it to be conceded that s 237(2)(e)(i) has not been fulfilled. Nonetheless, I am satisfied that it is appropriate to grant leave under s 237(2)(e)(ii).

I note that it is common ground that there ought be no order as to the costs of the appellant’s application today.

I make orders in terms of the short minutes of order which has been handed to me and which I will sign and date. For the record I will pronounce those orders in open court.

The Court orders that: