Bird v McComb - [2011] FCA 129

FEDERAL COURT OF AUSTRALIA
Bird v McComb [2011] FCA 129

Citation: Bird v McComb [2011] FCA 129

Parties: SUZANNE CHRISTINE BIRD v JOHN EDMUND MCCOMB, BRIMIN GEM PTY LTD (ACN 056 330 333), SCB HOLDINGS PTY LTD (ACN 085 917 371), CARRIAGES PTY LTD (ACN 063 116 852) and NEWTOUN PTY LTD (ACN 006 858 788)

File number(s): QUD 10 of 2011

Judge: GREENWOOD J

Date of judgment: 18 February 2011

Catchwords:
CORPORATIONS – consideration of an application for an interlocutory injunction so as to prevent alteration of registers of directors and members pending the determination of the principal proceeding – consideration of an interlocutory injunction to restrain entities from disposing of assets pending the determination of the principal proceeding

PRACTICE AND PROCEDURE- consideration of an application for interlocutory injunction

Legislation: Corporations Act 2001 (Cth), s 175, s 1324

Cases cited: ABC v O’Neill (2006) 227 CLR 57 – cited
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 – cited

Date of hearing: 17 February 2011

Date of last submissions: 17 February 2011

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 47

Counsel for the Plaintiff: Mr J Griffin QC and Mr A B Johnson

Solicitor for the Plaintiff: Mr P G Mylne, Mylne Lawyers

Counsel for the Defendants: Mr H A Scott‑Mackenzie

Solicitor for the Defendants: Mr D Hamilton, Tucker & Cowen Solicitors

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 10 of 2011

BETWEEN:
SUZANNE CHRISTINE BIRD
Plaintiff

AND:
JOHN EDMUND MCCOMB
First Defendant

BRIMIN GEM PTY LTD (ACN 056 330 333)
Second Defendant

SCB HOLDINGS PTY LTD (ACN 085 917 371)
Third Defendant

CARRIAGES PTY LTD (ACN 063 116 852)
Fourth Defendant

NEWTOUN PTY LTD (ACN 006 858 788)
Fifth Defendant

JUDGE:

GREENWOOD J

DATE OF ORDER:

18 FEBRUARY 2011

WHERE MADE:

BRISBANE

UPON THE USUAL UNDERTAKING as to damages given to the Court by the applicant plaintiff:
THE COURT ORDERS THAT:
1.Until the determination of the principal proceeding, the first defendant, John Edmund McComb, is restrained from entering into any arrangements or causing arrangements to be made that have the effect of changing the office bearers (that is to say, directors or secretary) of each of the second, third, fourth and fifth defendants or entering into arrangements or causing arrangements to be made that give rise to a transfer of shares in any of the second, third or fourth defendants, without the leave of the Court.
2.Until the determination of the principal proceeding, the first defendant John Edmund McComb, is restrained from causing any of the second, third, fourth or fifth defendants to enter into agreements for the sale and disposition of properties owned by those companies or entering into arrangements with financiers for the refinancing of existing securities granted either by any one of the companies in respect of the assets or undertaking of any one of the companies or alternatively in respect of any individual assets owned by any one of the…

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 Bird v McComb

Details

AGLC: Bird v McComb [2011] FCA 129
Case: [2011] FCA 129
Decision Date: 18 February 2011

CaseChat Overview and Summary

The case of Bird v McComb involved an application for an interlocutory injunction by the plaintiff, Bird, against the defendant, John Edmund McComb, and four associated companies. Bird sought to prevent McComb and the companies from altering the registers of directors and members and from disposing of assets pending the resolution of the principal proceeding. The matter was heard and determined by the court, which was tasked with assessing the merits of Bird's application for the injunction.

The central legal issues the court had to decide included whether McComb and the companies could be restrained from making changes to the office bearers of the companies, transferring shares, and disposing of properties without first obtaining the court's leave. Additionally, the court had to determine whether McComb should be allowed to conduct discussions or engage in normal business practices to reach agreements in principle for refinancing existing securities or selling real property assets, provided that no final agreements were entered into without the court's approval.

In its reasoning, the court examined the balance of convenience and the risk of irreparable harm. The court found that the plaintiff had demonstrated a significant likelihood of success on the merits of the case, and that the potential harm to Bird if the injunction was not granted outweighed the harm to the defendants if it were granted. Consequently, the court decided in favour of Bird and issued an interim order restraining McComb from making certain changes to the companies and from disposing of assets without court approval. The court also allowed McComb to engage in preliminary discussions and negotiations to reach agreements in principle, provided no final agreements were made without the court's leave.

The court further restrained the companies from entering into agreements for refinancing existing securities or disposing of real property assets without the court's leave. It granted the defendants the liberty to apply for leave to enter into such agreements and provided for future directions in the principal proceeding. The costs of the application for interim orders were reserved for later determination.

Orders

Orders of the court

1. Until the determination of the principal proceeding, the first defendant, John Edmund McComb, is restrained from entering into any arrangements or causing arrangements to be made that have the effect of changing the office bearers (that is to say, directors or secretary) of each of the second, third, fourth and fifth defendants or entering into arrangements or causing arrangements to be made that give rise to a transfer of shares in any of the second, third or fourth defendants, without the leave of the Court.

2. Until the determination of the principal proceeding, the first defendant John Edmund McComb, is restrained from causing any of the second, third, fourth or fifth defendants to enter into agreements for the sale and disposition of properties owned by those companies or entering into arrangements with financiers for the refinancing of existing securities granted either by any one of the companies in respect of the assets or undertaking of any one of the companies or alternatively in respect of any individual assets owned by any one of the companies, without the leave of the Court, subject to the following matters:

(a) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with a view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might put in place a refinancing of existing securities either granted by any one of those companies in respect of its undertaking or in respect of any individual asset owned by one of those companies, and, to that end, the first defendant shall be entitled to seek to fully identify the terms and conditions upon which such a refinancing might be undertaken, subject to no agreement being entered or concluded without the leave of the Court; and

(b) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with the view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might sell any one of its real property assets, subject to no agreement being reached or concluded without the leave of the Court.

3. Until the determination of the principal proceeding, the second, third, fourth and fifth defendants are restrained from entering into an agreement for refinancing existing securities granted either by the companies in respect of their undertaking or in respect of individual assets of those companies or of disposing of real property assets, without the leave of the Court.

4. The defendants have liberty to apply on reasonable notice and not more than one day’s notice in relation to any application either for leave as contemplated by Order 2 or so as to vary the operation of the interim order upon proper grounds.

5. The parties generally have liberty to apply on three days’ notice.

6. Directions will be made for the future conduct of the principal proceeding.

7. The costs of and incidental to the application for interim orders are reserved.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Citation:	Bird v McComb [2011] FCA 129
Parties:	SUZANNE CHRISTINE BIRD v JOHN EDMUND MCCOMB, BRIMIN GEM PTY LTD (ACN 056 330 333), SCB HOLDINGS PTY LTD (ACN 085 917 371), CARRIAGES PTY LTD (ACN 063 116 852) and NEWTOUN PTY LTD (ACN 006 858 788)
File number(s):	QUD 10 of 2011
Judge:	GREENWOOD J
Date of judgment:	18 February 2011
Catchwords:	CORPORATIONS – consideration of an application for an interlocutory injunction so as to prevent alteration of registers of directors and members pending the determination of the principal proceeding – consideration of an interlocutory injunction to restrain entities from disposing of assets pending the determination of the principal proceeding PRACTICE AND PROCEDURE- consideration of an application for interlocutory injunction
Legislation:	Corporations Act 2001 (Cth), s 175, s 1324
Cases cited:	ABC v O’Neill (2006) 227 CLR 57 – cited Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 – cited
Date of hearing:	17 February 2011
Date of last submissions:	17 February 2011
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	47
Counsel for the Plaintiff:	Mr J Griffin QC and Mr A B Johnson
Solicitor for the Plaintiff:	Mr P G Mylne, Mylne Lawyers
Counsel for the Defendants:	Mr H A Scott‑Mackenzie
Solicitor for the Defendants:	Mr D Hamilton, Tucker & Cowen Solicitors

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 10 of 2011

JUDGE:	GREENWOOD J
DATE OF ORDER:	18 FEBRUARY 2011
WHERE MADE:	BRISBANE