BSG Mining LLC v MRC Graphite (Norway) Pty Ltd - [2023] WASC 128

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   BSG MINING LLC -v- MRC GRAPHITE (NORWAY) PTY LTD [2023] WASC 128
CORAM:   HILL J
HEARD:   15 MARCH 2023 & 4 APRIL 2023; WRITTEN SUBMISSIONS 6 APRIL 2023
DELIVERED          :   21 APRIL 2023
FILE NO/S:   CIV 1217 of 2023
BETWEEN:   BSG MINING LLC
Plaintiff
AND
MRC GRAPHITE (NORWAY) PTY LTD
Defendant

Catchwords:

Practice and procedure - Interlocutory injunction - Application to restrain defendant from voting at extraordinary general meeting of company - Resolutions to be considered at meeting for removal and appointment of directors nominated by defendant - Dispute between shareholders as to whether defendant has committed events of default under shareholders deed - Whether serious question to be tried that defendant is a defaulting party under shareholders deed and not entitled to vote at any shareholders meeting - Balance of convenience - Turns on own facts

Legislation:

Nil

Result:

Interlocutory injunction granted

Category: B

Representation:

Counsel:

Plaintiff	:	J Garas SC & T C Russell
Defendant	:	R Young SC & J Y Wang

Solicitors:

Plaintiff	:	Gilbert + Tobin
Defendant	:	King & Wood Mallesons

Case(s) referred to in decision(s):

Atlas Holdings Pty Ltd (Trustee), Re Allied Resource Partners Pty Ltd v Allied Resource Partners Pty Ltd [2017] FCA 923; (2017) 122 ACSR 345
Carr Boyd Minerals Ltd v Ashton Mining Ltd (1989) 15 ACLR 599
Cordiant Communications (Australia) Pty Ltd v The Communications Group Holdings Pty Ltd [2005] NSWSC 1005; 194 FLR 322
Paringa Mining and Exploration Co plc v North Flinders Mines Ltd (1989) 14 ACLR 587
Re Freehouse Pty Ltd; Jordan v Avram (1997) 26 ACSR 662
Turnbull v National Roads and Motorists' Association Ltd [2004] NSWSC 577; (2004) 186 FLR 360
Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

HILL J:

On 3 March 2023, BSG Mining LLC (BSG) commenced these proceedings by way of writ of summons against MRC Graphite (Norway) Pty Ltd (MRC). On the same date, BSG sought an urgent interlocutory injunction to prevent an extraordinary general meeting (EGM) of Skaland Graphite AS (Skaland, or the Company) scheduled for the following Monday, 6 March 2023 at 5.30 pm from proceeding.
The application for an injunction came on before Forrester J on 3 March 2023 who made orders to adjourn the EGM until after a decision is made on BSG's application. Orders were also made for the defendant to file any responsive evidence in opposition to the application.
The matter was initially listed before me for hearing on 15 March 2023. On that day, I raised a specific query with the parties on the proper construction of cl 4.3 of the Shareholders Deed which had not been addressed by the parties in their submissions at that time. As a result, the parties agreed to adjourn the hearing until 4 April 2023 and orders were made for the filing of further affidavits and submissions. At the conclusion of the hearing on 4 April 2023, I gave…

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.

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Details

Case: [2023] WASC 128
Decision Date

CaseChat Overview and Summary

In the Supreme Court of Western Australia, BSG Mining LLC (BSG) sought an interlocutory injunction against MRC Graphite (Norway) Pty Ltd (MRC) to prevent MRC from exercising its voting rights at an extraordinary general meeting (EGM) of Skaland Graphite AS, a Norwegian company. The dispute centred on whether MRC had committed events of default under the Shareholders Deed, which governed the relationship between BSG, MRC, and Skaland. The primary issues were whether the requirement to obtain a Special Majority approval for certain decisions was a substantive obligation and whether MRC's failure to seek such approval constituted an Event of Default. The court found that the obligation was substantive, and there was a serious question to be tried regarding MRC's failure to obtain approval, potentially making it a Defaulting Party. The court also determined that the balance of convenience favoured granting the injunction, preserving the status quo until trial. Consequently, the court granted the interlocutory injunction, restraining MRC from voting at any general or extraordinary general meeting of Skaland until trial.

Orders