Coeur de Lion Investments Pty Limited v The President's Club Limited

In Coeur de Lion Investments Pty Limited v The President's Club Limited, the appellant, a shareholder in the respondent company which operated a timeshare scheme for residential villas, challenged a decision by the respondent to prevent it from voting at an Annual General Meeting. The appellant's right to vote was restricted under article 22(c) of the respondent's Articles of Association, which precluded voting if the member owed more than $500.00 per quarter share and that amount had been outstanding for more than one month. The Chairman ruled that the appellant was disentitled to vote because it owed more than $500.00 per quarter share in the ownership of a villa. The appellant sought a declaration that "quarter share" referred to a quarter of a share in the respondent's capital, not a quarter of a share in the ownership of a villa.

The legal issue before the court was whether the primary judge failed to have regard to the principles applicable to the construction of a company's constitutive document and whether the primary judge erred by having inappropriate regard to the factual matrix. Specifically, the court needed to determine whether the term "quarter share" referred to a quarter of a share in the respondent's capital or to a quarter of a share in the ownership of a villa. The court considered the principles of construction outlined in cases such as Lion Nathan Pty Limited v Paul [2006] FCA 1179 and HNA Irish Nominee Ltd v Kinghorn (2010) 78 ACSR 553; [2010] FCAFC 57, which emphasised the importance of giving primacy to the objective intention discernible from the language of the constitutive document and exercising restraint in considering surrounding circumstances.

The court found that the primary judge did not proceed on an incorrect appreciation of the specific principle of construction concerning a constitutive document. The primary judge correctly referred to the authorities agreed upon by both parties and did not materially differ in emphasis or effect from the relevant dicta in Lion Nathan. The court upheld the primary judge's decision, stating that there was nothing in the recent authorities dealing with the rules of interpretation of ordinary contracts that suggested the broader and more flexible approach favoured by the High Court for such contracts could be applied without qualification to the interpretation of corporate constitutions. The court held that the term "quarter share" referred to a quarter of a share in the ownership of a villa, not a quarter of a share in the respondent's capital.

The appeal was dismissed with costs.