Carpathian Resources Ltd v Hendriks

Case [2011] FCA 41

FEDERAL COURT OF AUSTRALIA

Carpathian Resources Ltd v Hendriks [2011] FCA 41

Citation: Carpathian Resources Ltd v Hendriks [2011] FCA 41
Parties: CARPATHIAN RESOURCES LTD (ACN 080 273 703) and HIGHMOOR BUSINESS CORPORATION v MICHAEL PETRUS HENDRIKS, CHARLES POSTERNACK and JAMES PAUL WIBERG
File number: WAD 405 of 2010
Judge: GILMOUR J
Date of judgment: 2 February 2011
Catchwords: CORPORATIONS – extraordinary general meeting – effect of foreign injunction restraining shareholder from voting against shares - determination of chairperson with notice of injunction to admit vote – whether injunction was a restriction attaching to the shares held by the company restrained – whether determination a proper exercise of power – Annual General meeting – eligibility of attendees to act as chairperson – proper construction of company constitution – whether chairperson appointed – whether poll effective – whether relief under s 1322 Corporations Act 2001 (Cth) apt – whether meeting adjourned as a result of disorder
Legislation: Corporations Act 2001 (Cth) ss 9, 127(1), (4), 128(1), 129(5), 231, 249F(1), 249X, 250D, 250E(1), 250N(2),1322
Cases cited:

Bank of Western Australia v Ocean Trawlers Pty Ltd (1995) 13 WAR 407
Bundaberg Sugar Ltd v Isis Central Sugar Mill Co Ltd [2007] 2 Qd R 214
Colorado Constructions Pty Ltd v Platus [1966] 2 NSWR 598
Concordant Communications (Australia) Pty Ltd v The Communication Group Holdings Pty Ltd (2005) 194 FLR 322
Fast Scout Ltd v Bergel (2001) 25 WAR 244
HNA Irish Nominee Ltd v Kinghorn (2010) 78 ACSR 553
Holmes v Lord Keyes [1959] Ch 199
Link Agricultural Pty Ltd v Shanahan, McCallum and Pivot Ltd [1999] 1 VR 466
Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1

Maritime Union of Australia v Patrick Stevedores Operations Pty Ltd [1998] 4 VR 143
MTQ Holdings (2006) WASC 96
Re: Golden West Resources Ltd (2008) 170 FCR 409 
Date of hearing: 17 & 18 January 2011
Place: Perth
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 166
Counsel for the Applicant/ Cross Respondent: Mr M L Bennett with Mr M P Bruce
Solicitor for the Applicant/ Cross Respondent: Lavan Legal
Counsel for the Respondents /Cross Claimants: Mr P Tottle with Ms Y Fang
Solicitor for the Respondent /Cross-Claimant: Tottle Partners

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 405 of 2010
BETWEEN:

CARPATHIAN RESOURCES LTD (ACN 080 273 703)
First Applicant/First Cross-Respondent

HIGHMOOR BUSINESS CORPORATION
Second Applicant/Second Cross-Respondent
AND:

MICHAEL PETRUS HENDRIKS
First Respondent/First Cross-Claimant

CHARLES POSTERNACK
Second Respondent/Second Cross-Claimant

JAMES PAUL WIBERG
Third Respondent/Third Cross-Claimant

JUDGE:

GILMOUR J

DATE OF ORDER:

2 FEBRUARY 2011

WHERE MADE:

PERTH

THE COURT DECLARES THAT:

1.Maximiliaan Henri Danishevski, Mitchell Aaron Hammer, David Eric Hammer, Hon. Timothy Charles Thornton Lewin, Kirill Dragun, Luigi Gagliardo, Paul DeCailly and Guido Vivi are not and have not been directors of Carpathian Resources Ltd.

2.Michael Petrus Hendriks has not been a director of Carpathian Resources Ltd since the conclusion of the general meeting of Carpathian Resources Ltd held on 16 December 2010.

Continue reading Carpathian Resources Ltd v Hendriks

Sign in free to access the full text

Details
AGLC
Carpathian Resources Ltd v Hendriks [2011] FCA 41
Case
[2011] FCA 41
Decision Date

CaseChat Overview and Summary

Carpathian Resources Ltd and Highmoor Business Corporation (collectively referred to as the applicants) sought an injunction to restrain the company's directors from proceeding with an Annual General Meeting (AGM) of the company on 17 December 2010. The applicants also sought various declarations about the validity of the AGM and its resolutions. The respondents, who were the directors of the company, opposed the application and made a cross-claim seeking declarations as to the validity of the AGM and the directors appointed at the meeting. The issue in this case was whether the injunction obtained by GTIB Inc in the First Nevis proceedings, which restrained OAG and II from voting against their respective shares in Carpathian, was a restriction attaching to the shares held by OAG and II, and if so, whether the determination of the chairperson at the AGM to admit the votes was a proper exercise of power. The court also had to consider whether the chairperson was eligible to act as chairperson, the proper construction of the company constitution, whether the chairperson was appointed, whether the poll was effective, whether relief under s 1322 of the Corporations Act 2001 (Cth) was apt, and whether the meeting was adjourned as a result of disorder. The court held that the injunction obtained by GTIB Inc did not attach to the shares held by OAG and II, and that the determination of the chairperson to admit the votes was a proper exercise of power. The court found that the chairperson was eligible to act as chairperson and that the construction of the company constitution was proper. The court also held that the chairperson was appointed, the poll was effective, and that relief under s 1322 of the Corporations Act 2001 (Cth) was not apt. The court found that the meeting was not adjourned as a result of disorder. The application was dismissed and there was judgment for the respondents on their cross-claim to the extent of the declarations and orders made by the court. The Australian Securities and Investments Commission was directed to rectify the register containing the names of directors of Carpathian Resources Ltd to give effect to the declarations. The applicants were ordered to pay the costs of the respondents and cross-claimants of the proceedings.

Orders

Orders of the court

1. The application be and is dismissed.

2. The Australian Securities and Investments Commission be directed to rectify the register containing the names of directors of Carpathian Resources Ltd (ACN 080 273 703) to give effect to the above declarations at (1)-(3).

Note:

Background

Background to the litigation

Accordingly, prior to pronouncing judgment I made orders in the following terms:1.The Court, noting the undertaking by Lavan Legal to deliver the original executed share transfer form for 3,333,333 shares in the first applicant to the respondents’ solicitors as soon as it is received, as Highmoor Business Corporation’s security for the respondents’ costs of this application in the sum of $50,000, hereby grants leave for:(a)Highmoor Business Corporation to be joined as the second applicant to these proceedings; and (b)the applicant to amend its application dated 20 December 2010 in terms of the minute of amended application lodged on 17 January 2011. 2.The respondents have leave to amend their cross-claim in terms of the proposed amended cross-claim lodged on 2 February 2011. BACKGROUND Carpathian is a public company listed, since 15 June 2001, on the Australian Securities Exchange (ASX). Since 28 February 2008:(a)OAG, a company incorporated in the Bahamas held 102,723,181 shares (39%) in Carpathian; and(b)International Investments Ltd (II), a company incorporated in the West Indies held 20,564,362 shares (8%) of the shares in Carpathian. Energo Holdings Corporation (Energo) is the beneficial owner of the shares held by OAG and II in Carpathian. Historically, Carpathian's principal activities concerned oil and gas exploration in the Carpathian Ranges in Eastern Europe, particularly in the Czech Republic. In 2009, the shareholders approved a change in the nature of its business activities. Through a subsidiary, Carpathian invested in the industries of retail vehicle fuel and convenient store sales, outdoor mobile advertising, satellite and cable television and prescription eyewear lens distribution. On 10 September 2010, GTIB Inc, a company controlled by Mr Maximiliaan Danishevksi commenced proceedings in the Eastern Caribbean Supreme Court (Nevis Circuit) against Energo (First Nevis proceedings). On 13 September 2010, GTIB Inc obtained an ex parte injunction in the First Nevis proceedings, relevantly, that prevented OAG and II from "voting … against their respective shares" in Carpathian (First Injunction). On 10 October 2010, 8 notices of consent to being nominated as a director of the applicant at the next general meeting of members called by ANZ Nominees Limited and consent to act as a director were sent to Carpathian's registered office. The consents were that of Mr Danishevski, Mr Timothy Lewin, Mr Kiril Dragun, Mr Guido Vivi, Mr Luigi Gallardo, Mr Paul DeCailly, Mr David Hammer and Mr Mitchell Hammer. On 15 October 2010, a date was set for the hearing of an application for the discharge of the First Injunction, that date being 26 November 2010. As at 15 October 2010, the directors of Carpathian were Charles Posternack and James Wiberg, the second and third respondents respectively and who were based in the United States of America, Mr Errol Levitt and Mr Gregory Peacocke each of whom were based in Australia. On 15 October 2010, HBC, a company incorporated in the Marshall Islands, as beneficial owner of the shares held by ANZ Nominees Limited, served a notice dated 14 October 2010 on Carpathian requisitioning a meeting to remove its then directors and proposing four directors (Mr Danishevski, Mr Mitchell Hammer, Mr David Hammer and Mr DeCailly) for election in their place.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Accordingly, for these reasons, the application will be dismissed and there will be judgment for the cross-claimants on their cross-claim to the extent of the following declarations and orders.Declarations1.Maximiliaan Henri Danishevski, Mitchell Aaron Hammer, David Eric Hammer, Hon. Timothy Charles Thornton Lewin, Kirill Dragun, Luigi Gagliardo, Paul DeCailly and Guido Vivi are not and have not been directors of Carpathian Resources Ltd.2.Michael Petrus Hendriks has not been a director of Carpathian Resources Ltd since the conclusion of the general meeting of Carpathian Resources Ltd held on 16 December 2010.3.Each of James Paul Wiberg and Charles Posternack was and is a director of Carpathian Resources Ltd.4.No resolutions were validly passed at the Annual General Meeting of Carpathian Resources Ltd on 17 December 2010. Orders 1.The Australian Securities and Investments Commission be directed to rectify the register containing the names of directors of Carpathian Resources Ltd (ACN 080 273 703) to give effect to the above declarations at (1)-(3). 2.The applicants pay the costs of the respondents and cross-claimants of the proceedings to be taxed if not agreed.