Sillery Pty Ltd v CHA SMG Australia Holding Pty Ltd

Sillery Pty Ltd came to the Federal Court urgently on 26 March 2026. At the start of the hearing, it was still the legal owner of 81,854 shares in CHA SMG Australia Holding Pty Ltd. Sillery wanted two things. First, it sought an injunction to stop CHA SMG, its directors, employees or agents from taking steps to offer for sale, sell, transfer or otherwise dispose of those shares. Second, it filed an originating application seeking access, as a member of the company, to inspect various books and records.

The public reasons show that the commercial tension behind the application was not simply about title to the shares. It was also about information. Sillery said there had been a calculation of the consideration for the sale of its shares, but despite several attempts it had not been given information going to that calculation of value. The court noted that there had been correspondence between the solicitors since February 2026 and that various requests for information appeared reasonable.

Even with that correspondence, the matter reached the court without clarity about whether the sale transferring Sillery's shares had actually been perfected. That uncertainty mattered because Sillery's urgent relief depended on its continuing ownership position, and its document access claim had been framed on the basis that it was a member of the company.

About an hour after the hearing began, oral evidence was adduced suggesting there had been a transfer of funds to perfect settlement of the transfer of Sillery's shares. That development changed the shape of the case in real time.

Lee J said the court would proceed on the basis that there had been an equitable assignment of the shares. Alternatively, if there had not yet been an equitable assignment because funds held in the purchaser's solicitor's trust account had not yet been remitted, there had at least been a series of transactions that would effect an equitable assignment very shortly and then, no doubt, a legal assignment.

That distinction was central. The injunction had been sought on the footing that Sillery was maintaining ownership of the shares. Once the court proceeded on the basis that the transaction had already reached equitable assignment, or was effectively at that point, the requested injunction was no longer appropriate. Sillery therefore no longer pressed the interlocutory relief.

This is the practical lesson many business owners miss in share transactions. Legal title, beneficial ownership, settlement mechanics and registration do not always move at exactly the same moment. A court may focus on the substance of the transaction and the steps already taken, not just on whether every final administrative step has been completed.

The court was not deciding the final merits of the parties' broader dispute. It was dealing with an urgent interlocutory hearing. The immediate questions were procedural and practical.

First, should the court grant urgent injunctive relief restraining dealings with the shares? Once the evidence suggested equitable assignment had already occurred, or would occur very shortly, the answer was no. The relief sought was premised on Sillery maintaining ownership, and that premise no longer held.

Second, could Sillery still seek access to company books and records as a member? Lee J said that the statutory entitlement to access the books and records of the company, provided the request is made in good faith and for a proper purpose, had now dissipated. In other words, the member-based route had fallen away in the circumstances as the transfer position changed.

Third, what should happen next if Sillery still wanted the documents? The judge indicated that an amended originating application would likely seek preliminary discovery. The likely basis for that application would be Sillery's allegation that it had a reasonable belief that, given the material it presently had, its shares may have been transferred for other than proper consideration.

Importantly, the court did not decide whether that proposed preliminary discovery claim would succeed. Lee J expressly said he had no idea whether such a claim for adjectival preliminary relief would ultimately be vindicated. That is a key limit on what this case stands for.

The court noted that Sillery no longer moved on its interlocutory application for urgent relief. Lee J then made a series of procedural orders.

First, the originating application dated 26 March 2026 was made returnable instanter. Second, leave was granted to Sillery to file that originating application. Third, leave was granted to amend it, with that leave to be exercised by close of business on Monday, 30 March 2026.

The reasons make clear that the amended application was expected to shift away from the original member-based inspection pathway and toward preliminary discovery. That was the practical consequence of the court's view that the share transfer had already reached, or was about to reach, equitable assignment.

The court also made a conditional costs order. Subject to further order, if on the final hearing of the amended originating application Sillery became entitled to obtain production of the documents listed in prayer 1 of the original application, CHA SMG was to pay Sillery's costs of the hearing on 26 March 2026.

Lee J explained the reasoning for that approach. He had stood the matter down to see whether the relevant documents could be provided voluntarily in a way consistent with the case management objectives in Pt VB of the Federal Court of Australia Act 1976 (Cth), so the litigation could be resolved before more costs were expended. That did not occur.

The judge said that if Sillery was ultimately vindicated, the day had been a wasted exercise that should have been resolved either by providing the documents without court proceedings or at least during the stand-down. At the same time, he was careful not to criticise CHA SMG or its solicitors, noting that their position might ultimately be vindicated.

For founders, investors and private companies, this case is best read as a warning about transaction management. The dispute appears to have become urgent because two things were unclear at the same time: whether the transfer had been perfected, and what information supported the calculation of the sale consideration.

If your business is buying out a shareholder, facilitating an exit or implementing a transfer under a shareholders agreement, the timing of each completion step matters. If funds are held in a solicitor's trust account, if remittance is delayed, or if there is uncertainty about when beneficial ownership passes, those details can affect what rights each party can still rely on.

A seller who expects to inspect records as a current member may find that route disappears once the court treats the transfer as equitably assigned.

The case also shows that information disputes can become more expensive than they need to be. Lee J referred to various and apparently reasonable requests for information and noted that, at least some time ago, CHA SMG's solicitors had indicated that if certain information were provided, some of Sillery's concerns might be allayed. That does not mean CHA SMG was wrong.

It does mean that where a share price depends on a calculation, businesses should think carefully about what supporting material can and should be provided, and when.

For a seller, the practical message is to identify early what documents are needed to test the price and to ask for them clearly and in writing. For a company or buyer, the practical message is to avoid unnecessary ambiguity. If information will not be provided, explain the basis. If it can be provided, delay may only increase the risk of urgent applications, amended pleadings and adverse costs arguments later.

Although the judgment is short, it highlights a recurring commercial problem. Parties often focus heavily on the transfer instrument and payment mechanics, but not enough on the information needed to support the agreed price. Here, Sillery said information relevant to the calculation of value had not been provided despite several attempts. That concern remained live even after the injunction fell away.

The court's reasons suggest that some requests for information were apparently reasonable and that there had been an earlier indication from CHA SMG's side that providing certain information might allay Sillery's concerns. Again, that is not a finding that the documents had to be produced. It is part of the context for the court's case management approach and the conditional costs order.

For businesses, the point is practical. If a transaction price depends on accounts, adjustments, formulas or internal calculations, the parties should decide before completion what supporting material will be available, when it will be provided, and whether confidentiality protections are needed. If that is left vague, the dispute may shift from a commercial disagreement about price to a procedural fight about standing, inspection rights and discovery.

The judgment was delivered by Lee J on 26 March 2026 in the Federal Court of Australia. The hearing took place the same day on an urgent basis. The court granted leave to amend the originating application by close of business on 30 March 2026.

This page should be read as an explainer of an interlocutory procedural decision only. The public reasons do not reveal the final outcome of any amended application or the ultimate resolution of the parties' underlying dispute about consideration or document access.