Beck v Weinstock - [2010] NSWSC 1068

Reported Decision:
241 FLR 235

New South Wales

Supreme Court

CITATION: Beck v Weinstock [2010] NSWSC 1068

HEARING DATE(S): 13, 14, 15, 16 September 2010

JUDGMENT DATE :
17 September 2010

JURISDICTION: Equity Division
Probate List

JUDGMENT OF: Hamilton AJ

DECISION: Purported redemption of redeemable preference shares void.

CATCHWORDS: CORPORATION [1117] - Share capital - Shares - classes of shares and shareholders - Redeemable preference shares - Shares issued as redeemable prefrence shares given no preference over issued shares, only over unissued shares - No valid issue of redeemable preference shares - Purported redemption invalid.

LEGISLATION CITED: Companies Act 1961
Corporations Act 2001 (Cth)

CATEGORY: Principal judgment

CASES CITED: In re Brighton and Dyke Railway Company (1890) 44 Ch D 28
Re Capel Finance Ltd (2005) 52 ACSR 601

TEXTS CITED: Ford’s Principles of Company Law (14th ed, 2010 and loose leaf ed)
Halsbury’s Laws of England (4th ed), Vol 7 (reissue, 1988)
Halsbury’s Laws of England (5th ed, 2009) Vol 15

PARTIES:
Tamar Rivqa Beck (First Plaintiff)
Alem Pty Limited (Second Plaintiff)
Amiram David Weinstock (First Defendant)
Helen Weinstock (Second Defendant)
Zipor Pty Limited (Third Defendant)
John Halliday (Fourth Defendant)
LW Furniture Consolidaed (Aust) Pty Limited (Fifth Defendant)

FILE NUMBER(S): SC 287773 of 2007

COUNSEL: J Simpkins SC with him T M Thawley (Plaintiffs)
CRC Newlinds SC with him P Silver (First, Second and Fifth Defendants)
Karl Burnett (solicitor) (Third Defendant)
S Balafoutis (Fourth Defendant)

SOLICITORS: Harris Freidman (Plaintiffs)
Milne Berry Berger & Freedman (First, Second and Fifth Defendants)
Karl Burnett (Third Defendant)
Chang Pistilli & Simmons (Fourth Defendant)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
PROBATE LIST

HAMILTON AJ

17 SEPTEMBER 2010

07/287773 TAMAR RIVQA BECK & ANOR V AMIRAM DAVID WEINSTOCK & ORS

JUDGMENT

1 The subject matter of these proceedings is extensive disputes in what may be called the Weinstock family concerning shares in private companies held by various members of the family and the administration of certain estates. The majority of these disputes were settled by agreement and I have made complicated and detailed consent orders relating to their disposal.

2 The only issues that remain for disposal are questions arising out of prayers 9A, 9B and 9C in the amended statement of claim. These relate to 8”C” Class Redeemable Preference Shares in the fifth defendant (“LWC”) that were held by Hedy Jadwiga Weinstock (“Hedy”) at her death on 6 July 2004. Those prayers are as follows:

“9A A declaration that the 8 C “Redeemable Preference Shares” that Hedy Jadwiga Weinstock held in LWC as hereinafter defined were not preference shares within the meaning of the Corporations Act and, accordingly, were not able to be redeemed by the fifth defendant.

9B A declaration that the purported redemption of such shares was void and of no effect.

9C An order under section 175 of the Corporations Act rectifying the register of the fifth defendant and ordering compensation.”

3 A search of LWC shows:-

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 Beck v Weinstock

Details

AGLC: Beck v Weinstock [2010] NSWSC 1068
Case: [2010] NSWSC 1068
Decision Date: 17 September 2010

CaseChat Overview and Summary

Beck brought an action against Weinstock and another, seeking to declare that certain transactions were void and to obtain an account of profits. Weinstock and the other defendant argued that they had no interest in the subject matter of the claim, and therefore, the claim should be dismissed as against them. The legal issue before the court was whether the shares issued were redeemable preference shares or not, and if so, whether the redemption of those shares was valid. The court found that the shares in question were not validly issued as redeemable preference shares because they did not have preference over issued shares but only over unissued shares. As such, the purported redemption of those shares was invalid. The court held that the claim against the defendants was properly dismissed as they had no interest in the subject matter of the claim. The court did not make any orders as the claim against the defendants was dismissed.

Orders