ACN 000 691 396 v J. F. Peel and Sons Pty Limited

[2009] FCA 1416

FEDERAL COURT OF AUSTRALIA

ACN 000 691 396 v J. F. Peel & Sons Pty Limited [2009] FCA 1416

ACN 000 691 396 PTY LIMITED v J.F. PEEL & SONS PTY LTD and PREMIER DAIRIES PTY LTD (ACN 000 683 787)

NSD 209 of 2009

GRAHAM J
16 NOVEMBER 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 209 of 2009

BETWEEN:

ACN 000 691 396 PTY LIMITED
Plaintiff

AND:

J.F. PEEL & SONS PTY LTD
First Defendant

PREMIER DAIRIES PTY LTD (ACN 000 683 787)
Second Defendant

J.F. PEEL & SONS PTY LTD
Cross Claimant

ACN 000 691 396 PTY LIMITED
First Cross Defendant

PREMIER DAIRIES PTY LTD (ACN 000 683 787)
Second Cross Defendant

SPRINGS DELIGHT INVESTMENTS PTY LIMITED (ACN 051 220 136)
First Applicant

VJ HALFPENNY GRAZING CO PTY LIMITED (ACN 000 681 050)
Second Applicant

DOROTHY DOREEN HALFPENNY
Third Applicant

JENNIFER JOY HALFPENNY
Fourth Applicant

JOHN-BRETT HALFPENNY
Fifth Applicant

ACN 000 691 396 PTY LIMITED
First Respondent

J F  PEEL & SONS PTY LTD
Second Respondent

PREMIER DAIRIES PTY LTD(ACN 000 683 787)
Third Respondent

FRITH COMMON PTY LIMITED (ACN 051 172 466)
Fourth Respondent

RJ HALFPENNY INVESTMENTS PTY LIMITED (ACN 000 639 565)
Fifth Respondent

RUSSELL JAMES HALFPENNY
Sixth Respondent

HELEN MAE HALFPENNY
Seventh Respondent

DAVID JOHN PERKINS
Eighth Respondent

JUDGE:	GRAHAM J
DATE OF ORDER:	16 NOVEMBER 2009
WHERE MADE:	SYDNEY

THE COURT GRANTS:

1.Leave to the plaintiff to file and serve an Amended Statement of Claim dated 13 November 2009.

2.Leave to the first defendant / cross claimant to file in Court an Amended Cross Claim by First Defendant.

3.Leave to the first defendant to file an affidavit of Leonard Peel sworn 23 October 2009.

4.Leave to the plaintiff to file and serve further affidavits on or before 25 November 2009.

5.Leave to the applicants to file and serve an Amended Interlocutory Process, to be made returnable before Graham J at 9:30am on 18 December 2009, incorporating prayers for relief as to the addition or removal of parties to it as well as other relief on or before 23 November 2009.

6.Leave to the applicants to file and serve such further affidavits as they may be advised on or before 30 November 2009.

7.Leave to the third and eighth respondents to file and serve such affidavits as they may be advised on or before 14 December 2009.

THE COURT ORDERS THAT:

8.The time for filing and service of affidavits by the second defendant / second cross defendant be extended up to and including 25 November 2009.

9.The applicants named in the Interlocutory Process filed 10 November 2009 pay 90% of the costs of today of the first, second and third respondents named in that Interlocutory Process

10.Such costs may be taxed and shall be payable forthwith.

11.The matter stand over for directions at 9:30am on Friday 18 December 2009.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 209 of 2009

BETWEEN:

ACN 000 691 396 PTY LIMITED
Plaintiff

AND:

J.F. PEEL & SONS PTY LTD
First Defendant

PREMIER DAIRIES PTY LTD (ACN 000 683 787)
Second Defendant

J.F. PEEL & SONS PTY LTD
Cross Claimant

ACN 000 691 396 PTY LIMITED
First Cross Defendant

PREMIER DAIRIES PTY LTD (ACN 000 683 787)
Second Cross Defendant

SPRINGS DELIGHT INVESTMENTS PTY LIMITED (ACN 051 220 136)
First Applicant

VJ HALFPENNY GRAZING CO PTY LIMITED (ACN 000 681 050)
Second Applicant

DOROTHY DOREEN HALFPENNY
Third Applicant

JENNIFER JOY HALFPENNY
Fourth Applicant

JOHN-BRETT HALFPENNY
Fifth Applicant

ACN 000 691 396 PTY LIMITED
First Respondent

J F  PEEL & SONS PTY LTD
Second Respondent

PREMIER DAIRIES PTY LTD(ACN 000 683 787)

Third Respondent

FRITH COMMON PTY LIMITED (ACN 051 172 466)
Fourth Respondent

RJ HALFPENNY INVESTMENTS PTY LIMITED (ACN 000 639 565)
Fifth Respondent

RUSSELL JAMES HALFPENNY
Sixth Respondent

HELEN MAE HALFPENNY
Seventh Respondent

DAVID JOHN PERKINS
Eighth Respondent

JUDGE:	GRAHAM J
DATE:	16 NOVEMBER 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. It would appear that a company known as Perfection Dairies Pty Ltd ACN 000 691 396 was incorporated on 15 May 1969.  The original shareholders were apparently a Mr Peel and a company associated with the Peel family.  The first defendant, J. F. Peel & Sons Pty Limited, has been involved in the milk industry for some time.  The second defendant, Premier Dairies Pty Limited, was incorporated shortly before Perfection Dairies Pty Limited.  It drew together the Halfpenny brothers, Victor and Russell, and other dairymen at a time when it was propitious for dairymen to form milk companies together. 

2. J. F. Peel & Sons Pty Limited and Premier Dairies Pty Limited entered into an arrangement, so it would seem, in or about October 1969 with respect to Perfection Dairies Pty Ltd.  With new articles of association being adopted for the plaintiff company it is said that the capital structure which ensued was that there were A class shares, B class shares and C class shares in the plaintiff.  The A class shares were apparently voting shares held as to one half by J. F. Peel & Sons Pty Limited, and as to the other half by Premier Dairies Pty Limited.  The B class shares were apparently held as to 40 shares by J. F. Peel & Sons Pty Limited and, as to the other 60, by Premier Dairies Pty Limited.  The C class shares were held as to half by J. F. Peel & Sons Pty Limited, and as to the other half by Premier Dairies Pty Limited. 

3. The proceedings NSD 209 of 2009 are directed at determining whether or not the economic interest of the defendants in the profits of the plaintiff were intended to be equal, or were they intended to be dealt with on the basis that the first defendant had a 40 per cent interest, and the second defendant had a 60 per cent interest.  I need not go into the detail of the claims made by the first defendant as to why it says the arrangement should be treated as 50/50, even though nominally it appears to have been 40/60 with respect to the B class shares. 

4. As it transpires, the second defendant is a company which no longer has dairymen owners, other than the Halfpenny brothers and their respective family companies. 

   I presume that Victor Halfpenny is now deceased.  His widow, Dorothy Doreen, has two children, Jennifer Joy and John-Brett, who continue to conduct the businesses of the Victor Halfpenny family. 

5. The other Halfpenny family is that of Russell, whose wife is Helen. 

6. A document described as schedule 13 in a bundle of exhibits to an affidavit, which has not as yet been read, of Jennifer Joy Halfpenny seeks to describe the history of the second defendant on one page.  It shows Jennifer and John-Brett Halfpenny as current directors, along with Russell and Helen Halfpenny. 

7. It would appear that the controlling shares in the second defendant are preference shares rather than ordinary shares, and it would appear that the two families’ companies have an equal number of shares but for one.  A company known as Frith Common Pty Limited, (ACN 051 172 466) is said to own 847 preference shares in the second defendant, whereas a company known as Springs Delight Investments Pty Limited (ACN 051 220 136) is said to own 846 preference shares.  The former company is apparently a Russell Halfpenny company, and the latter is a Victor Halfpenny company. 

8. In other proceedings presently before the Court, in the docket of Foster J, the Victor Halfpenny interests are claiming oppression by the Russell Halfpenny interests and, as I am informed, are seeking to have the second defendant in the proceedings before me, namely, Premier Dairies Pty Limited wound up.  Alternatively they seek other relief for oppression or orders for the winding-up of Premier Dairies Pty Limited on the just and equitable ground.  Of course, other relief is available, if oppression is established. 

9. It will be apparent from the above short narrative, as it has been given to me, and I should add that I make no findings on the facts that have been mentioned, that Springs Delight Investments Pty Limited, VJ Halfpenny Grazing Co Pty Ltd, Dorothy Doreen Halfpenny, Jennifer Joy Halfpenny and John-Brett Halfpenny are not parties to the proceedings presently before me, which concern the disputed arrangement between J. F. Peel & Sons Pty Limited and Premier Dairies Pty Limited as to whether or not the B class shares in the plaintiff, Perfection Dairies Pty Limited (ACN 000 691 396), as it was formerly known, are held 40/60, or 50/50. 

10. It will also be apparent that Frith Common Pty Limited, RJ Halfpenny Investments Pty Limited, Russell James Halfpenny, Helen Mae Halfpenny and David John Perkins are parties to the proceedings presently before me.

11. Tribe Conway & Company act for Springs Delight Investments Pty Limited, VJ Halfpenny Grazing Co Pty Ltd, Dorothy Doreen Halfpenny, Jennifer Joy Halfpenny and John-Brett Halfpenny, some or all of whom are, as I understand it, parties to the oppression proceedings presently before Foster J.  They come to Court in proceedings NSD 209 of 2009 as applicants seeking to stay the further conduct of the proceedings NSD 209 of 2009, and in some way to challenge the retainer of Mr Perkins, who is the solicitor on the record for Premier Dairies Pty Limited, the jointly owned Halfpenny company. 

    They also seek to restrain the Russell Halfpenny interests from appointing any other solicitor to act for Premier Dairies Pty Limited.  They further seek relief in relation to the representation of Premier Dairies Pty Limited contingently upon certain other matters falling one way or another.  It does not seem to me that the applicants for whom Tribe Conway & Company act have any standing to participate in the proceedings NSD 209 of 2009, given the terms of the interlocutory process, which was filed on 10 November 2009.  Whilst reference has been made to Order 6, rule 8 of the Federal Court Rules (‘the Rules’), it does not seem to me that the applicants ought to have been joined as parties in proceedings NSD 209 of 2009, nor are they parties whose joinder is necessary to ensure that all matters in dispute in proceeding NSD 209 of 2009 may be effectually and completely determined and adjudicated upon. 

12. Furthermore, it does not seem to me that the applicants qualify as interveners under Order 6, rule 17 of the Rules.  Whilst the Court has power under that rule to give leave to a person to intervene, it is important to note that the role of an intervener is solely to assist the Court in its task of resolving the issues raised by the parties, and whilst it is open to an intervening party to suggest witnesses who may be called, an intervener does not have any right to file pleadings, lead evidence or examine witnesses. 

    My understanding is that the applicants wish to take a much more active role in the proceedings NSD 209 of 2009 than the one which is contemplated by Order 6, rule 17.

13. Whilst reference has been made to ss 236 and 237 of the Corporations Act 2001 (Cth) in the interlocutory process, the contemplation that there may be orders made under those sections is itself expressed to be dependent upon other matters being resolved in one way or another. No direct application is made for any particular party to stand in the shoes of Premier Dairies Pty Limited to conduct the proceedings against Premier Dairies Pty Limited on that company’s behalf.

14. It seems to me that, as presently formulated, the interlocutory process is inadequate and inappropriate to achieve the outcome which the applicants seek.  Counsel for the applicants has indicated that his clients wish to proceed with an application for relief, but they do not wish to proceed with the application in its present form. 

    Leave should be granted to the applicants to file and serve an amended interlocutory process, and it is proposed that such a process be filed and served by 23 November. 

15. About 90 per cent of the time involved in the conduct of today’s directions hearing and consideration of the applicants’ interlocutory process has been devoted to ascertaining whether the applicants can, in some way or another, advance their claims for relief contained in the interlocutory process filed 10 November 2009, which is no longer pressed. 

16. In my opinion, it would be appropriate to make an order for the costs thrown away by the, in effect, abandonment of that interlocutory process to be paid by the applicants, and it seems to me that the suggested 90 per cent figure should be the subject of the relevant costs order. 

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

Associate:

Dated:       1 December 2009

Solicitor for the Plaintiff:	M T R Binetter of Binetter Vale Lawyers
Solicitor for the First Defendant:	J A Breene of Breene & Breene Solicitors
Solicitor for the Second Defendant:	D J Perkins of Perkins Solicitors
Counsel for the applicants to intervene:	J T Svehla
Solicitors for the applicants to intervene:	Tribe, Conway & Company
Date of Hearing:	16 November 2009
Date of Judgment:	16 November 2009