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Bateman v Newhaven Park Stud Ltd

Bateman v Newhaven Park Stud Ltd

Case [2004] NSWSC 566 29 June 2004

Contract Formation

Breach of Contract

Interlocutory Orders

Balance of Convenience

Contractual Obligations

Corporate Law & Governance

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Reported Decision:
49 ACSR 597
(2004) 22 ACLC 943

Supreme Court

CITATION: Bateman v Newhaven Park Stud Ltd [2004] NSWSC 566

HEARING DATE(S): 11/06/04, 16/06/04

JUDGMENT DATE:
29 June 2004

JURISDICTION:
Equity Division

JUDGMENT OF: Barrett J

DECISION: Interlocutory injunction refused

CATCHWORDS: CORPORATIONS - share buy back - requirement for approval by special resolution on which no vote cast in favour by person whose shares are to be bought back or by associates of such person - identifying "associates" - "acting in concert" - need to show understanding as to common objective - need for concert to be "in respect of" particular "matter" of voting on particular resolution - family relationships and past ties insufficient to raise serious question to be tried - whether interlocutory injunction in any event justified to defend utility of oppression proceedings - consideration of wide range of remedies court may grant if plaintiffs successful - balance of convenience considerations where interlocutory order would compel breach of contract

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.10, 15, 257D(1)(a), Part 2J.1,

CASES CITED: Adsteam Building Industries Pty Ltd v The Queensland Cement and Lime Co Ltd (No 4) [1985] 1 QdR 127
Bank of Western Australia Ltd v Ocean Trawlers Pty Ltd (1995) 16 ACSR 501
Re Brenfield Squash Racquets Club Ltd [1996] 2 BCLC 184
Davids Distribution Pty Ltd v National Union of Workers (1999) 165 ALR 550
Elders IXL Ltd v National Companies and Securities Commission [1987] VR 1
Fexuto Pty Ltd v Busnjak Holdings Pty Ltd (2001) 37 ACSR 672
Gillard v The Queen (2003) 78 ALJR 64
Grizonic v Suttor [2004] NSWSC 137
Heine Management Ltd v Australian Securities Commission (1993) 12 ACSR 578
Industrial Equity Ltd v Commissioner for Corporate Affairs (1989) 1 ACSR 153
IPT Systems Ltd v MTIC Corporate Pty Ltd (2000) 36 ACSR 454
John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A'sia) Pty Ltd (1991) 6 ACSR 63
Orr v Lane (1951) 52 SR (NSW) 37
Tait v The Queen (1962) 108 CLR 620
The King and the Attorney General of the Commonwealth v The Associated Northern Collieries (1911) 14 CLR 387
Re Tiger Investment Co Ltd (1999) 33 ACSR 438
Tillmans Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331
Village Roadshow Ltd v Boswell Film GmbH (2004) 49 ACSR 27

PARTIES :

Edmund Gregory Thomas Bateman - First Plaintiff
Abtourk (Syd No 391) Pty Limited - Second Plaintiff
Belinda Cawardine Bateman - Third Plaintiff
Charado Pty Limited - Fourth Plaintiff
Newhaven Park Stud Limited - First Defendant
Frederick John Kelly, Richard John Kelly, John Horace Ingham, Norman Eric Napper - Second Defendants
Burst Pty Limited - Third Defendant
Braylen Pty Limited - Fourth Defendant

FILE NUMBER(S): SC 3600/03

COUNSEL: Mr G K Burton - Plaintiffs
Mr R J Weber SC/Mr C Mantziaris - First Defendant and First and Fourth Second Defendants
Mr G A Sirtes - Second Second Defendant, Third and Fourth Defendants

SOLICITORS: Abbott Tout - Plaintiffs
Esplins -…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bateman v Newhaven Park Stud Ltd

Details

AGLC: Bateman v Newhaven Park Stud Ltd [2004] NSWSC 566
Case: [2004] NSWSC 566
Decision Date: 29 June 2004

CaseChat Overview and Summary

The case of Bateman v Newhaven Park Stud Ltd involved a dispute over the legality of a share buy-back by the defendant company, Newhaven Park Stud Ltd. The plaintiffs, who were shareholders in the company, sought to prevent the buy-back from proceeding on various grounds. The case was heard in the Supreme Court of New South Wales. The plaintiffs argued that the company's buy-back did not comply with the statutory requirements for a share buy-back, specifically the need for a special resolution where no vote cast in favour by the person whose shares are to be bought back or by their associates. The plaintiffs also sought an interlocutory injunction to prevent the buy-back pending the outcome of their proceedings.

The central legal issues before the court were whether the plaintiffs' associates were "acting in concert" for the purposes of the share buy-back, and whether an interlocutory injunction was warranted to preserve the utility of the plaintiffs' oppression proceedings. The court had to determine the meaning of "acting in concert" and whether the plaintiffs' family relationships and past ties were sufficient to establish a serious question to be tried. The court also had to consider the range of remedies available if the plaintiffs were successful in their proceedings, and the balance of convenience considerations where an interlocutory order would compel a breach of contract.

The court found that the plaintiffs' associates were not "acting in concert" for the purposes of the share buy-back, as there was no evidence of a common understanding as to a common objective in respect of the particular matter of voting on the resolution. The court also found that the plaintiffs had not established a serious question to be tried, as their family relationships and past ties were insufficient to raise such a question. The court held that an interlocutory injunction was not warranted, as the balance of convenience favoured the defendants. The court noted that if the plaintiffs were successful in their proceedings, they would be entitled to a range of remedies, including an order for the company to acquire their shares.

The court did not make any orders in favour of the plaintiffs, and the defendants were able to proceed with the share buy-back. The court's decision provides guidance on the meaning of "acting in concert" and the requirements for establishing a serious question to be tried in cases involving share buy-backs. The court's consideration of the range of remedies available and the balance of convenience considerations in interlocutory injunction applications is also noteworthy.

Orders