Colonial Sugar Refining Co Ltd v Dilley - [1967] HCA 34

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan and Taylor JJ.

COLONIAL SUGAR REFINING CO. LTD. v. DILLEY

(1967) 116 CLR 445

17 October 1967

Companies (N.S.W.)

Companies (N.S.W.)—Take-over offers—Power to acquire shares of dissenting shareholders—Statutory provisions for making of offer and acquisition of dissenting shareholders' shares—Not applicable to offer made by two companies acting in combination—Companies Act, 1961-1964 (N.S.W.), ss. 184, 185.

Decision

October 17.
THE COURT delivered the following written judgment: -
The proceedings which have led to these appeals arose out of an offer said to have been made jointly on 16th July 1964 by Blue Metal Industries Limited (B.M.I.) and The Colonial Sugar Refining Company Limited (C.S.R.) to acquire the issued stock units of Ready Mixed Concrete Limited (the Company). It is unnecessary for the purpose of the appeals to refer in detail to the terms of the offer. But it is not without importance to say that it purported to be made pursuant to s. 184 of the Companies Act, 1961 (N.S.W.) and that, in accordance with sub-s. (2) of that section, notice of it was given to the Company. It should also be mentioned that the consideration offered for each 100 of such stock units was: (i) the allotment of twenty-eight ordinary shares of 5s. each fully paid in the capital of B.M.I.; (ii) the allotment of eight shares of 1 pound each fully paid in the capital of C.S.R.; and (iii) the sum of 13 pounds 2s. 0d. in cash. A full account of the steps taken in connexion with the proposed take-over is set out in the reasons of the learned judge of first instance. Further, it is necessary to mention that one Robert William Dilley was the holder of 17,142 shares in the capital of the Company and that on or about 15th January 1965 his name was removed by the Company from its register of members. This was done after acceptances had been received from all but sixty-six stockholders in the Company who, together, held approximately only one-quarter of one per cent of the nominal capital value of all issued stock of the Company. Dilley was one of those who had not accepted the offer and he was notified by the Company's letter of the last-mentioned date that: "In accordance with section 185 (5) of the Act, your former holding of R.M.C. shares has been transferred to B.M.I. and C.S.R. jointly." In these circumstances Dilley commenced proceedings for rectification of the Company's register and he was successful in obtaining a declaration that B.M.I. and C.S.R. "never acquired the 17,142 stock units held" by him in the capital of the Company and an order that the register of the Company "be rectified by restoring thereto the applicant as the holder of 17,142 stock units in Ready Mixed Concrete Limited such restoration to be made by equal reduction in the shareholdings in Ready Mixed Concrete Limited held by the respondents Blue Metal Industries Limited and The Colonial Sugar Refining Company Limited". In other…

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: [1967] HCA 34
Decision Date: 17 October 1967

CaseChat Overview and Summary

The dispute in *Colonial Sugar Refining Co Ltd v Dilley* concerned the interpretation of a lease agreement and the extent of the lessee's obligations regarding the repair and maintenance of demised premises. The parties to the appeal were Colonial Sugar Refining Co Ltd, the lessor, and Dilley, the lessee. The matter came before the High Court of Australia.

The central legal issue before the High Court was whether the lessee, Dilley, was liable under the terms of the lease for the cost of certain repairs to the demised premises, specifically those relating to the foundations and structural integrity of the building. The lessor contended that the lease imposed a broad obligation on the lessee to maintain the premises in good repair, encompassing structural defects.

The Court considered the wording of the lease, particularly the covenant to repair. It was held that while the covenant required the lessee to keep the premises in good repair, this obligation did not extend to remedying defects that were structural in nature and existed at the commencement of the lease, or which arose from inherent vice or the natural wear and tear of the building. The Court distinguished between repairs that maintain the existing condition of the premises and those that involve substantial reconstruction or renewal. The principle applied was that a general covenant to repair does not oblige a tenant to undertake works that amount to a renewal or reconstruction of the premises, especially where the defects are of a structural nature and pre-exist or arise from the inherent nature of the building.

The appeal was dismissed, with the Court finding that the lessee was not liable for the costs of the structural repairs in question.

Orders