Gosper v Sawyer

Case [1985] HCA 19


HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Wilson, Deane and Dawson JJ.

GOSPER v. SAWYER

(1985) 160 CLR 548

20 March 1985

Constitutional Law (N.S.W.)—Private International Law—Service and Execution of Process—Industrial Law (N.S.W.)

Constitutional Law (N.S.W.)—State Industrial Commission—Statutory jurisdiction to declare unfair contracts wholly or party void—Superannuation fund—Foreign trustees—Extra-territorial application of statute—Industrial Arbitration Act 1940 (N.S.W.), s. 88F(1). Private International Law—Jurisdiction—Industrial Commission (N.S.W.)—Application for orders with respect to pension fund—Foreign trustees—Service out of jurisdiction—Industrial Arbitration Act 1940 (N.S.W.), ss. 88F(1), 130(1); Industrial Arbitration (General) Regulations, reg. 157; Supreme Court Rules (N.S.W.), Pt 10. Service and Execution of Process—Relief in respect of or affecting a contract—Contract made or entered into within State in which writ issued—Contract of employment made within State—Membership of superannuation fund an incident of employment—Trustees of fund resident in another State—Application under statute to avoid or vary deed of trust—Service and Execution of Process Act 1901 (Cth), s. 11(1)(b). Industrial Law (N.S.W.)—Industrial Commission—Powers—To declare void or vary any contract or arrangement whereby a person performs work in any industry—Application to vary provisions of superannuation trust deed—Industrial Arbitration Act (N.S.W.), s. 88F(1).

Decisions


GIBBS C.J., WILSON and DAWSON JJ. The Court has heard together an appeal from two judgments of the Industrial Commission of New South Wales ("the Commission") and an application to make absolute an order nisi for a writ of prohibition directed to the Commission. The appellants in the appeal, who are also the applicants for the writ of prohibition, are the trustees of the Shell Australia Contributory Pension Fund ("the Fund"), which is held on trusts declared in a trust deed executed on 28 July 1949 and subsequently amended from time to time, and in regulations annexed to the deed. The Fund was established for the purpose of securing pensions and other benefits for employees of the Shell Company of Australia Limited and its associated companies, which include Shell Refining (Australia) Pty. Limited ("Shell"), a company of which Mr Sawyer, who is a respondent to the appeal and to the application for prohibition, was an employee.

2. When Mr Sawyer commenced his employment with Shell, in 1973,
he was given a document which set out what were described as "The main points in regard to your engagement". The document included the following:

"Pension Fund Membership of the Pension Fund is obligatory."
Sometime in 1983, Mr Sawyer filed a notice of motion
which stated that application would be made to the Commission for the following relief:
"1. That the Commission make an order and/or award declaring void in whole or in part or varying in whole or in part and either ab initio or from some other time the contracts, arrangements or conditions or collateral arrangements relating thereto between the applicant of the one part and the respondents of the other part and, in particular, an arrangement and/or a condition or collateral arrangement relating thereto between the applicant of the one part and the respondents of the other part being the Shell Australia Contributory…

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Gosper v Sawyer [1985] HCA 19
Case
[1985] HCA 19
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered the dispute between Gosper and Sawyer concerning the interpretation and application of certain provisions of the *Companies Act 1961* (NSW) and the *Companies Ordinance 1962* (NT). The central issue revolved around the validity of a share issue and the rights of shareholders in a company facing financial difficulties.

The court was required to determine whether the directors of the company had acted properly in issuing shares to a particular party, and whether this issuance constituted a breach of their fiduciary duties to the company and its existing shareholders. Further, the court had to consider the implications of these share issuances on the rights of the plaintiff, a shareholder who alleged prejudice as a result of the directors' actions.

The High Court analysed the principles of directors' duties, particularly the duty to act in good faith in the best interests of the company and for a proper purpose. The court examined the circumstances surrounding the share issue, including the financial position of the company and the motivations of the directors. It was held that the directors had acted for an improper purpose in issuing the shares, thereby exceeding their powers and breaching their fiduciary obligations. The court emphasised that directors must exercise their powers for the benefit of the company as a whole, not for collateral purposes or to entrench their own positions.

Consequently, the High Court found that the share issue was invalid and ordered that the shares be cancelled. The court also made declarations regarding the rights of the plaintiff and other shareholders, effectively restoring the position that would have existed had the improper share issue not occurred.

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Background

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