Herbert v Redemption Investments Ltd

Case [2002] QSC 340

SUPREME COURT OF QUEENSLAND

CITATION:

Herbert & Ors v Redemption Investments Ltd [2002] QSC 340

PARTIES:

KEITH HERBERT & LOYS ELSIE BARTLETT, KENNETH EDWARD JEPPESEN, PHIL COUGHLAN, RIMMELZWAAN SUPERANNUATION FUND, RICHANA PTY LTD, GRAEME DAVID & LOCHA MAKIE RIXON, NEWTOWN PTY LTD, LANGENAUER SUPERANNUATION FUND, KEITH BURSTON, BRENT OLLIVER, GLENN ALFRED & ROSLYN BREADSELL, TOM LOVATT, JOHN McKAY, TODD OLLIVER and WAYNE OLLIVER
(applicants)
v
REDEMPTION INVESTMENTS LIMITED
(ACN 086 525 466)
(respondent)

FILE NO:

S6135 of 2002

DIVISION:

Trial Division

DELIVERED ON:

18 October 2002

DELIVERED AT:

Brisbane

HEARING DATE:

11 September 2002

JUDGE:

Mackenzie J

ORDER:

Application dismissed with costs to be assessed

CATCHWORDS:

CORPORATIONS – INTERNAL DISPUTES – GENERAL PRINCIPLES – application for leave to bring proceedings – where application of s 237 - whether requirements of s 237 satisfied

Corporations Act 2001 (Cth), s 236, s 237, s 237(2)(a), s 237(2)(b), s 237(2)(c), s 237(2)(d), s 242
Corporate Law Economic Reform Program Bill 1998 (Cth)

Dowling v Colonial Mutual Life Assurance Society Ltd (1915) 20 CLR 509, considered
Goozee v Graphic World Group Holdings Pty Ltd [2002] NSW SC 640, applied
IOC Australia Pty Ltd v Mobil Oil Australia Ltd (1975) 11 ALR 417,considered
Jeans v Deangrove Pty Ltd (2001) NSW SC 84, applied
Metyor Inc (formerly Talisman Technologies Inc) v Queensland Electronic Switching Pty Ltd [2002] QCA 269, considered
RTP Holdings Pty Ltd v Roberts (2000) 36 ACSR 170, applied
Swansson v Pratt [2002] NSWSC 583, considered

COUNSEL:

M D Martin for the applicants

R N Taves for the repsondent

SOLICITORS:

North Coast Law for the applicants
McMahon Clarke Legal for the respondent

  1. MACKENZIE J: This is an application under ss 236 and 237 of the Corporations Act 2001 (Cth) for leave to bring proceeding in the name of Redemption Investments Limited (“RIL”) against Graham Eric Scott, Andrew Clark Miller, Ian Sydney Cotton and Alan Bruce Cowan. Messrs Scott, Cotton and Cowan were directors of the company at the time of the critical events and Mr Miller was secretary. He has from the 30 June 2000 been a director.

  1. Section 236 provides as follows:

“(1)A person may bring proceedings on behalf of a company … if:

(a)the person is:

(i)a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or

(ii)an officer or former officer of the company; and

(b)the person is acting with leave granted under section 237.

(2)Proceedings brought on behalf of a company must be brought in the company’s name.

(3)The right of a person at general law to bring, or intervene in, proceedings on behalf of a company is abolished.”

  1. Relevantly, s 237 provides as follows:

“(1)A person referred to in paragraph 236(1)(a) may apply to the Court for leave to bring, or to intervene in, proceedings.

(2)The Court must grant the application if it is satisfied that:

(a)it is probable that the company will not itself bring the proceedings or properly…

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AGLC
Herbert v Redemption Investments Ltd [2002] QSC 340
Case
[2002] QSC 340
Decision Date

CaseChat Overview and Summary

The case of Herbert v Redemption Investments Ltd involved the plaintiff, Herbert, seeking leave to bring proceedings against the defendant, Redemption Investments Ltd, a company incorporated under the Corporations Act 2001 (Cth). The primary dispute centred around Herbert's application for leave under section 237 of the Corporations Act to challenge internal company matters, specifically the conduct of Redemption Investments Ltd and its directors. The application was heard in the Federal Court of Australia.

The court had to determine whether Herbert had satisfied the statutory requirements outlined in section 237 to bring his application for leave. This involved assessing whether Herbert had a genuine prospect of success in his claim, and if it was in the interests of justice for him to be granted leave. The court also had to consider the interests of other members of the company and the public, as well as the need for the proceedings to be resolved expeditiously.

The court found that Herbert had not satisfied the statutory requirements for leave under section 237. The decision hinged on the court's conclusion that Herbert had not demonstrated a genuine prospect of success in his claim, nor had he shown that it was in the interests of justice for him to be granted leave. Furthermore, the court considered that the application did not meet the threshold for exceptional circumstances. Consequently, the application for leave was dismissed, and costs were awarded against Herbert, with the amount to be assessed.

Orders

Orders of the court

Application dismissed with costs to be assessed

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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