Australian Innovation Ltd v Petrovsky

[1996] FCA 587

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No.  G3429  of  1996
  )
GENERAL DIVISION                 )

BETWEEN:AUSTRALIAN INNOVATION LIMITED

Applicant

AND:PAUL ALEXANDRE PETROVSKY

Respondent

JUDGE MAKING ORDER:     LOCKHART J.
             WHERE ORDER MADE:      SYDNEY
             DATE ORDER MADE:       3 JULY 1996

MINUTE OF ORDER
THE COURT ORDERS THAT:

1. Pursuant to s. 1322(4) of the Corporations Law, the convening by the respondent of an extraordinary general meeting of members of the applicant to be held on 8 July 1996 is invalid.

1. The respondent shall pay the costs of the applicant of the proceeding including reserved costs, if any.

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

CATCHWORDS

CORPORATIONS - directors - meetings - resolutions - director's requisition of a meeting to replace directors - whether director acted without care and diligence: Corporations Law, s. 232(4) - whether director neglected to act bona fide in interests of company as whole - whether procedural irregularities - whether substantive injustice that cannot be remedied by order of Court: Corporations Law, s. 1322 - whether an abuse of power or process.

Corporations Law: ss. 232(4), 254, 1322

AUSTRALIAN INNOVATION LIMITED v PAUL ALEXANDRE PETROVSKY
G3429 of 1996

LOCKHART J.
3 JULY 1996
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No.  G3429  of  1996
  )
GENERAL DIVISION                 )

BETWEEN:AUSTRALIAN INNOVATION LIMITED

Applicant

AND:PAUL ALEXANDRE PETROVSKY

Respondent

3 July 1996

REASONS FOR JUDGMENT
LOCKHART J.
This is an application for an order pursuant to s. 1322(2) of the Corporations Law declaring that irregularities in relation to the convening by the respondent of a general meeting of members of the applicant to be held on 8 July 1996 have caused, or may cause, substantial injustice that cannot, or could not, be remedied by any order of the Court; and for a consequential order pursuant to s. 1322(6) that the convening by the respondent of that general meeting is invalid.

Because the meeting is scheduled to be held next Monday, 8 July 1996, and it is now Wednesday, 3 July, the matter is urgent.  If the applicant succeeds, notice will have to be given in some appropriate form to the shareholders of the applicant before next Monday. 

The applicant is a listed public company and I was informed that it has approximately 1,000 shareholders.

The proceeding is one round in a long-standing feud between certain shareholders and directors of the applicant. An earlier dispute was heard by Whitlam J. who gave judgment on 31 May 1996 in relation to a purported requisition by a director of the applicant for an extraordinary general meeting of the company. His Honour declared that the document of requisition did not constitute a valid and effective requisition under s. 246 of the Corporations Law.

The evidence before me is by affidavit; there was no oral evidence.  Much of the evidence and argument…