IN THE FEDERAL COURT OF AUSTRALIA ) ) WESTERN AUSTRALIA DISTRICT REGISTRY) WAG 48 of 1996 ) GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:NEIL LUKE EDWARDS
Appellant
AND:IDAVILLE PTY LTD
First Respondent
AND: GRAHAM FRANCIS EDWARDS
Second Respondent
CORAM: Burchett, Ryan and Lee JJ. PLACE: Perth DATE: 17 September 1996
MINUTE OF ORDERS OF THE COURT
THE COURT ORDERS THAT:
(1)The appeal be allowed to the extent that the order in respect of costs made below be set aside, but otherwise be dismissed.
(2)In lieu of the order set aside, it be ordered that the costs of all parties be paid out of the assets of the trust.
(3)The costs of all parties of the appeal be paid out of the assets of the trust.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA ) ) WESTERN AUSTRALIA DISTRICT REGISTRY) WAG 48 of 1996 ) GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:NEIL LUKE EDWARDS
Appellant
AND:IDAVILLE PTY LTD
First Respondent
AND: GRAHAM FRANCIS EDWARDS
Second Respondent
CORAM: Burchett, Ryan and Lee JJ. PLACE: Perth DATE: 17 September 1996
REASONS FOR JUDGMENT
BURCHETT and RYAN JJ:
This appeal is concerned with the problem whether relief should have been granted to the appellant under s.260(2) of the Corporations Law on the ground that the affairs of the first respondent company were "being conducted in a manner that [was] oppressive or unfairly prejudicial to, or unfairly discriminatory against" the appellant, a member of the company. At the root of this problem, however, were events which occurred before the company was formed. The appellant, who is the son of the second respondent, lost a kidney surgically following a football injury sustained at the age of twenty. The consequences were particularly devastating for him, because he had been born with only one kidney. As a result, he has had two subsequent transplant operations. In an action for damages for medical negligence, the appellant recovered, by settlement, a net sum of $650,000. That sum was made the subject of a trust, to be administered by a company incorporated to act as trustee, of which the appellant ("the son") and his father ("the father") were made the shareholders and directors. This company is the first respondent.
By the instrument of trust, the power of appointment of a new trustee was…
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
AGLC
Edwards v Idaville Pty Ltd [1996] FCA 864
Case
[1996] FCA 864
Decision Date
CaseChat Overview and Summary
This appeal concerns the question of whether the appellant, Neil Luke Edwards, was entitled to relief under s.260(2) of the Corporations Law on the ground that the affairs of the first respondent company, Idaville Pty Ltd, were being conducted in a manner that was oppressive or unfairly prejudicial to, or unfairly discriminatory against, the appellant. The appellant, who is the son of the second respondent, Graham Francis Edwards, lost a kidney due to a football injury and had two subsequent transplant operations. He recovered a net sum of $650,000 by settlement in an action for damages for medical negligence, which was made the subject of a trust administered by a company, of which the appellant and his father were the shareholders and directors. The appellant sought orders under s.260(2) of the Corporations Law, relying on the dominant position conferred on his father, as the person with power to appoint a new trustee, being at the same time an equal director and shareholder of the company, and also its major creditor, by virtue of the arrangements concerning the company and the trust.
The court found that the father had failed to ensure the holding of meetings; however, the appellant had an equal power to call meetings, and the trial judge found that the business in fact transacted in his absence was not of an oppressive kind. The more serious matter of complaint related to the withdrawal of a sum of $75,000 on 8 February 1994 from the trust funds. The trial judge held it was "more probable than not" that the father failed to consult as he should have done with the son before taking this action. However, the trial judge concluded that the conduct relating to the two unauthorised withdrawals did not reach the level of being "oppressive" or "unfairly prejudicial" or "unfairly discriminatory". The court agreed with the trial judge that the circumstances as they appeared at the present time did not call for the making of an order against the company or against the father. The appeal should be allowed to the extent that the order in respect of costs should be set aside, and, in lieu thereof, it should be ordered that the costs of both parties be met by the trust.