Burbank Trading Pty Ltd v Allmere Pty Ltd

Burbank Trading Pty Ltd, an appellant, and Allmere Pty Ltd, a respondent, were equal shareholders in a joint venture company. Burbank Trading brought an appeal against the decision of the primary judge that its pre-emptive rights under a shareholders' agreement were not triggered when Allmere Pty Ltd appointed a voluntary administrator. Burbank Trading sought an order for the sale of Allmere Pty Ltd's shares to it at a price determined by the court, or an order for specific performance of the pre-emptive rights. The court was required to determine whether the appointment of a voluntary administrator to Allmere Pty Ltd constituted a 'change in ultimate control' that triggered Burbank Trading's pre-emptive rights. The court was also required to determine whether the offer notice Burbank Trading issued was valid, whether there was adequate disclosure, whether there was a dispute as to the price notified, whether multiple concurrent notices were permitted under the pre-emptive clause, and whether Burbank Trading's consent to the transfer of shares was unreasonably withheld.

The court held that the appointment of a voluntary administrator to Allmere Pty Ltd did not constitute a 'change in ultimate control' that triggered Burbank Trading's pre-emptive rights. The court found that the phrase 'change in ultimate control' referred to a change in the majority of the shareholders or the board of directors, and not to a change in the management of the company. The court also found that the offer notice issued by Burbank Trading was not valid as it did not provide adequate disclosure and there was a dispute as to the price notified. The court held that multiple concurrent notices were not permitted under the pre-emptive clause, and that Burbank Trading's consent to the transfer of shares was not unreasonably withheld as it had not provided adequate disclosure.

The court dismissed the appeal and held that Burbank Trading's pre-emptive rights were not triggered. The court found that the appointment of a voluntary administrator to Allmere Pty Ltd did not constitute a 'change in ultimate control' that triggered Burbank Trading's pre-emptive rights. The court held that the offer notice issued by Burbank Trading was not valid as it did not provide adequate disclosure and there was a dispute as to the price notified. The court also found that multiple concurrent notices were not permitted under the pre-emptive clause, and that Burbank Trading's consent to the transfer of shares was not unreasonably withheld as it had not provided adequate disclosure. Burbank Trading was ordered to pay Allmere Pty Ltd's costs of the appeal.