Sillery Pty Ltd v CHA SMG Australia Holding Pty Ltd - Share Assignment and Trust Fund

Australia Federal Court Latest Judgments

Filed March 26th, 2026

Detected April 8th, 2026

Summary

The Federal Court of Australia issued judgment in Sillery Pty Ltd v CHA SMG Australia Holding Pty Ltd [2026] FCA 396, a commercial dispute involving equitable and legal assignment of shares and non-remittance of funds from a solicitor's trust account. The Court granted the applicant leave to file and amend an originating application seeking to inspect corporate books and records. The applicant's interlocutory application to restrain share transfers was no longer pressed after evidence suggested a transfer of funds perfected the settlement.

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What changed

The Court granted procedural relief allowing the applicant (Sillery) leave to file and amend its originating application dated 26 March 2026 regarding inspection of corporate documents. The applicant's prior interlocutory application seeking to restrain the respondent from selling or transferring 81,854 shares was withdrawn after oral evidence indicated funds had been transferred to perfect a share settlement. The matter involves complex equitable and legal assignment issues concerning share ownership and trust account obligations.

Affected parties—including companies involved in share transfer transactions and their legal representatives—should ensure robust trust accounting procedures and clear documentation of fund remittance to prevent similar disputes. The case highlights the importance of timely communication between solicitors regarding the perfection of share transfers and the potential for urgent court intervention when such transfers are contested.

What to do next

Review corporate record-keeping practices for share transfers and trust fund management
Ensure compliance with member inspection rights under Corporations Act
Monitor for further proceedings on amended originating application

Source document (simplified)

Original Word Document (85.5 KB) Federal Court of Australia

Sillery Pty Ltd v CHA SMG Australia Holding Pty Ltd [2026] FCA 396

ORDERS

Applicant | |
| AND: | CHA SMG AUSTRALIA HOLDING PTY LTD

Respondent | |

A. The applicant no longer moves on its application for interlocutory relief dated 26 March 2026.

THE COURT ORDERS THAT:

The applicant’s originating application dated 26 March 2026 (Originating Application) be made returnable instanter.
Leave be granted to the applicant to file the Originating Application dated 26 March 2026.
Leave be granted to the applicant to amend the Originating Application, with such leave to be exercised by close of business on Monday, 30 March 2026.
Subject to further order of the Court, in the event that, on final hearing of the amended Originating Application, the applicant is entitled to obtain production of the documents listed in Prayer 1 of the Originating Application, the respondent is to pay the applicant’s costs of the hearing on 26 March 2026.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

1 This matter has come before me urgently as duty judge.

2 The applicant (Sillery), which the evidence reveals was, at the time of commencement of this hearing, the legal owner of shares in the respondent (CHA SMG), filed an interlocutory application seeking orders that CHA SMG, by itself, its directors, employees or agents, be restrained from taking any steps to offer for sale, sell, transfer or otherwise dispose of 81,854 shares held by Sillery (pursuant to arrangements which are unnecessary to detail for present purposes).

3 Sillery also filed an originating application dated 26 March 2026 seeking relief, as a member of CHA SMG, to inspect various books and records referred to in prayer 1 of that originating application.

4 Notwithstanding various and apparently reasonable requests for information being the subject of correspondence between the solicitors since February 2026, the matter came before me today without clarity as to whether a sale transferring Sillery’s shares had been perfected. It was only approximately an hour or so after commencement of the hearing that oral evidence was adduced suggesting there had been a transfer of funds to perfect a settlement of the transfer of Sillery’s shares.

5 Considering the evidence before me, I will proceed on the basis that there has been an equitable assignment of the shares, or if there has not been an equitable assignment by reason of the current non-remittance of funds held in the trust account of the solicitor for the purchaser, that there has been a series of transactions which will effectuate an equitable assignment very shortly and, following that, no doubt, a legal assignment.

6 In those circumstances, it would not be appropriate to grant the injunctive relief sought which is premised on Sillery maintaining ownership of the shares, and Ms Derrington, who appears on behalf of Sillery, no longer presses that relief in the light of the evidence that belatedly emerged.

7 I stood the matter down for a short time to see whether there would be any pragmatic resolution to this matter. Unfortunately, that course was unfruitful. Although the statutory entitlement to access the books and records of the company (provided that request is made in good faith and for a proper purpose) has now dissipated, Sillery still wishes to obtain access to the relevant material. Access is pressed because there has been a calculation of the consideration pursuant to which Sillery’s shares have been sold, and despite several attempts being made to procure information going to the calculation of value, it has not been provided.

8 If I granted leave for an amended originating application to be filed in which relief by way of preliminary discovery would be sought, no doubt that application would be founded on the basis that Sillery alleges it has a reasonable belief that, given the material it presently has, its shares may have been transferred for other than proper consideration.

9 I have no idea whether such a claim for adjectival preliminary relief would ultimately be vindicated. Having said this, it is notable that, at least some time ago, the solicitors for CHA SMG indicated to the solicitors for Sillery that, if certain information requested was provided, some of the concerns of Sillery may be allayed. In any event, it is unnecessary for me to descend into the details of any entitlement to preliminary discovery for present purposes.

10 My decision to stand down the matter was to see whether, consistently with the case management objectives referred to in Pt VB of the Federal Court of Australia Act 1976 (Cth), the relevant documents could be provided voluntarily in order to resolve this litigation before more costs are expended. CHA SMG has not consented to that course at the time of the delivery of these reasons.

11 Ultimately, Sillery’s attempt to obtain these documents, which have been sought for a considerable period of time, will be vindicated or will not be vindicated. If it is not vindicated, then no doubt the judge dealing with the application will deal with costs in a way which reflects the ultimate result. In the event Sillery is vindicated, today has been a wasted exercise which should have either been resolved by the provision of documents without the necessity for court proceedings, or at least when the matter was stood down by me to see whether or not there some sensible consensual resolution could be reached.

12 Having said that, I am not being critical of CHA SMG or its solicitors. Its position may well be vindicated in the end, but I am apprised of the details as to how things have progressed before me today. It is suggested that I ought to reserve costs, but, unfortunately, if I am not the docket judge, the judge hearing the matter would be unable to understand the details of how the matter has progressed today in the same way as me (having had the benefit of observing how things have emerged during the course of today’s hearing).

13 I had proposed to make an order that, in the event Sillery is successful in obtaining the documents, then CHA SMG should pay Sillery’s costs of today. In the light of submissions made on behalf of CHA SMG, I will refine that order as follows:

Subject to further order of the Court, in the event that, on final hearing of the amended originating application, the applicant is entitled to obtain production of the documents listed in prayer 1 of the originating application, the respondent is to pay the applicant’s costs of the hearing on 26 March 2026.

14 The qualification which I have included allows the docket judge, obviously enough, to exercise discretion to vary this order in the event that matters emerge during the future course of the proceedings which, in the opinion of that judge, mean that the order I made is regarded by that judge as not ultimately serving the overall ends of justice.

| I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee. |
Associate:

Dated: 7 April 2026

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