Reported Decision: 72 NSWLR 693
New South Wales
Court of Appeal
CITATION: DOME RESOURCES NL v SILVER [2008] NSWCA 322 HEARING DATE(S): 11 and 12 March 2008
JUDGMENT DATE:
27 November 2008JUDGMENT OF: Beazley JA at 1; Basten JA at 2; Bell JA at 2 DECISION: (1) Dismiss the appeal.
(2) Dismiss the cross-appeal.
(3) Order that the appellants pay the respondents’ costs in this Court.
CATCHWORDS: CORPORATIONS – constitution – interpretation – directors’ powers – retirement deed – whether board of directors had authority to enter into retirement deed with director – whether board had to adopt scheme or plan before conferring retirement benefits on director - CORPORATIONS – directors – retirement benefits – conferral without member approval – whether retirement deed contravened provisions relating to termination payments in Part 2D.2 of Corporations Law – qualification of prohibition in s 200B on giving retirement benefits by s 200G – payment limit fixed by s 200G(2) – whether payments to third party for provision of director’s services constituted part of director’s total remuneration – definition of “remuneration” by reference to disclosure requirements in accounting standard (AASB 1017) – whether remuneration to be calculated by reference to period during which recipient was an officer of corporation – Corporations Law, ss 200B, 200G - INTEREST – pre-judgment interest – whether third party should be paid interest on amount ordered – whether proceedings for specific performance were “proceedings for the recovery of any money” – whether order that money be paid involved “amount for which judgment is given” – whether judgment referred only to judgment in action at law – Civil Procedure Act 2005 (NSW), s 100 - REMEDIES – standing of plaintiffs to seek relief – where specific performance sought – whether director and third party provided consideration for variation deed - STATUTORY INTERPRETATION – accounting standards – purposive interpretation – interpretation of “remuneration” in Corporations Law by reference to accounting standard (AASB 1017) – Australian Securities and Investments Commission Act 1989 (Cth) ss 224, 228 – Corporations Law, s 9 - STATUTORY INTERPRETATION – correction of typographical error – Corporations Law, ss 200B - WORDS & PHRASES – “action” – “indirectly” – “may be effected” – “otherwise made available” –“payment limit” – “remuneration” LEGISLATION CITED: Acts Interpretation Act 1901 (Cth), s 46A
Australian Securities and Investments Commission Act 1989 (Cth), ss 224, 228
Civil Procedure Act 2005 (NSW), ss 3, 100
Corporate Law Economic Reform Program Act 1999 (Cth), Schedule 3, item 187
Corporations Act 2001 (Cth), ss 140, 181-183,198A; Pt 2D.2
Corporations Law, ss 9, 200A, 200B, 200E, 200G, 200J, 202A, 202B, 208, 211, 226A, 228, 229, 237, 334; Pt 2D.2; Ch 2D, Ch 2E
Supreme Court Act 1970 (NSW), ss 16, 94
Supreme Court Act 1981 (UK), s 35A
Trade Practices Act 1974 (Cth), ss 52, 80, 87CATEGORY: Principal judgment CASES CITED: Bloch v Bloch [1981] HCA 56; 180 CLR 390
Bluebottle UK Ltd v Deputy Commissioner of Taxation [2007] HCA 54
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- AGLC
- Dome Resources NL v Silver [2008] NSWCA 322
- Case
- [2008] NSWCA 322
- Decision Date
CaseChat Overview and Summary
Dome Resources NL (the company) and its directors appealed and cross-appealed from a decision of the primary judge concerning the validity of a retirement deed entered into between the company and Mr Silver, a director. The dispute centred on whether the company's board of directors had the authority to enter into the retirement deed and whether the benefits conferred by the deed contravened provisions of the Corporations Law relating to termination payments. The appeal and cross-appeal were heard by the Court of Appeal of New South Wales.
The Court of Appeal was required to determine several key legal issues. Firstly, it had to consider whether the board of directors possessed the requisite authority to enter into the retirement deed without the adoption of a specific scheme or plan by the company's members. Secondly, the court was asked to determine whether the retirement deed contravened the prohibition in section 200B of the Corporations Law on giving retirement benefits without member approval, and if so, whether the qualification in section 200G applied. This involved interpreting the meaning of "remuneration" by reference to accounting standards and considering whether payments made to a third party for the provision of a director's services constituted part of the director's total remuneration. Finally, the court considered whether the company was liable to pay pre-judgment interest on the amount ordered to be paid to Mr Silver.
The Court of Appeal reasoned that the board of directors did have the authority to enter into the retirement deed, as the provisions of the Corporations Law did not mandate the adoption of a formal scheme or plan before conferring retirement benefits. The court analysed section 200G of the Corporations Law, which provides a payment limit for retirement benefits, and concluded that the payments contemplated by the deed did not exceed this limit. In interpreting the term "remuneration," the court adopted a purposive approach, referencing the relevant accounting standard (AASB 1017) to determine how such benefits should be calculated and whether payments to a third party should be included. The court also addressed the issue of pre-judgment interest, finding that the proceedings for specific performance did not fall within the definition of "proceedings for the recovery of any money" for the purposes of awarding interest under the Civil Procedure Act 2005 (NSW).
The Court of Appeal dismissed both the appeal and the cross-appeal.
The Court of Appeal was required to determine several key legal issues. Firstly, it had to consider whether the board of directors possessed the requisite authority to enter into the retirement deed without the adoption of a specific scheme or plan by the company's members. Secondly, the court was asked to determine whether the retirement deed contravened the prohibition in section 200B of the Corporations Law on giving retirement benefits without member approval, and if so, whether the qualification in section 200G applied. This involved interpreting the meaning of "remuneration" by reference to accounting standards and considering whether payments made to a third party for the provision of a director's services constituted part of the director's total remuneration. Finally, the court considered whether the company was liable to pay pre-judgment interest on the amount ordered to be paid to Mr Silver.
The Court of Appeal reasoned that the board of directors did have the authority to enter into the retirement deed, as the provisions of the Corporations Law did not mandate the adoption of a formal scheme or plan before conferring retirement benefits. The court analysed section 200G of the Corporations Law, which provides a payment limit for retirement benefits, and concluded that the payments contemplated by the deed did not exceed this limit. In interpreting the term "remuneration," the court adopted a purposive approach, referencing the relevant accounting standard (AASB 1017) to determine how such benefits should be calculated and whether payments to a third party should be included. The court also addressed the issue of pre-judgment interest, finding that the proceedings for specific performance did not fall within the definition of "proceedings for the recovery of any money" for the purposes of awarding interest under the Civil Procedure Act 2005 (NSW).
The Court of Appeal dismissed both the appeal and the cross-appeal.
Orders
Orders of the court
(1) Dismiss the appeal. (2) Dismiss the cross-appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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