Gibbins Investments Pty Ltd v Savage

In the matter of Gibbins Investments Pty Ltd v Savage, the primary dispute involved the interpretation and enforcement of a company’s constitution, specifically concerning the members' pre-emptive rights and the conditions under which shares could be transferred to third parties. The case was heard in the Federal Court of Australia. The plaintiff, Gibbins Investments Pty Ltd, sought to enforce the pre-emptive rights of its members against the defendant, Savage, who had allegedly failed to adhere to the constitutional provisions governing the transfer of shares.

The central legal issues before the court revolved around whether the company's constitution could be varied by the implied agreement of the members, thereby circumventing the requirement for unanimous assent. The court was tasked with determining whether the members had effectively waived their pre-emptive rights and whether there was any compliance with the pre-emptive rights clause in the constitution. Additionally, the court examined whether the members had elected between inconsistent rights and if promissory estoppel or estoppel by convention applied to the situation. The court also considered whether there had been a failure to perform obligations under the Heads of Agreement, which would amount to repudiation, and whether there had been misleading and deceptive conduct under the Trade Practices Act 1974.

The court found that the members had indeed waived their pre-emptive rights, and there was no compliance with the constitutional provisions regarding the transfer of shares to third parties. The court applied the doctrine of unanimous assent and determined that the members had not elected to enforce their pre-emptive rights. Furthermore, the court concluded that there was no evidence of promissory estoppel or estoppel by convention, and the failure to perform under the Heads of Agreement did not amount to repudiation. The court also found that there was no misleading or deceptive conduct under the Trade Practices Act 1974. Consequently, the court ruled in favour of the plaintiff, finding that the members had effectively waived their pre-emptive rights.

The final order of the court was that the parties were to confer and bring in orders to give effect to these reasons for decision by 4:00 pm on 26 May 2011.