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Hongkong Xinhe International Investment Company Limited v Bullseye Mining Limited [No 2]

Hongkong Xinhe International Investment Company Limited v Bullseye Mining Limited [No 2]

Case [2020] WASC 446 4 December 2020

Interlocutory Orders

Standing

Serious Question to be Tried

Balance of Convenience

Statutory Interpretation

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LIMITED -v- BULLSEYE MINING LIMITED [No 2] [2020] WASC 446
CORAM:   HILL J
HEARD:   27 NOVEMBER 2020
DELIVERED          :   27 NOVEMBER 2020
PUBLISHED           :   4 DECEMBER 2020
FILE NO/S:   COR 83 of 2020
BETWEEN:   HONGKONG XINHE INTERNATIONAL INVESTMENT COMPANY LIMITED
Plaintiff

AND

BULLSEYE MINING LIMITED
First Defendant

PETER JOSEPH BURNS
Second Defendant

PETER GERARD BURNS
Third Defendant

DARIENA CATHERINE ANN MULLAN
Fourth Defendant

Catchwords:

Corporations - Interlocutory application to restrain annual general meeting of company - Whether first defendant complied with notice provisions in Corporations Act 2001 (Cth) and company's constitution -
Requirements for service by post - Serious question to be tried - Balance of convenience

Corporations - Interlocutory application for relief under s 1324 of Corporations Act - Whether substantial injustice to any shareholder by failure to comply with notice requirements

Legislation:

Acts Interpretation Act 1901 (Cth), s 29
Corporations Act 2001 (Cth), s 249H, s 249J, s 249L, s 249Z, s 250N, s 1322(2), s 1324(4), s 1324(6)

Result:

Plaintiff's interlocutory application dismissed
First defendant's interlocutory application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	M L Bennett & A J Tharby
First Defendant	:	M C Goldblatt
Second Defendant	:	No appearance
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Bennett + Co
First Defendant	:	Murcia Pestell Hillard
Second Defendant	:	McNally & Co
Third Defendant	:	McNally & Co
Fourth Defendant	:	McNally & Co

Case(s) referred to in decision(s):

Atlas Holdings Pty Ltd (Trustee), Re Allied Resource Partners Pty Ltd v Allied Resource Partners Pty Ltd [2017] FCA 923; (2017) 122 ACSR 345
Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd [2002] NSWSC 741; (2002) 42 ACSR 605
Australian Securities and Investments Commission v Parkes [2001] NSWSC 377; (2001) 38 ACSR 355
Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd [2002] NSWSC 310; (2002) 41 ACSR 561
Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114
CME Properties (Australia) Pty Ltd v Prime Capital Securities Pty Ltd [2016] WASC 231
Re Broadway Motors Holdings Pty Ltd (in liq) (1986) 6 NSWLR 45
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Turnbull v National Roads and Motorists' Association Ltd [2004] NSWSC 577; (2004) 186 FLR 360
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396
Western Ventures Pty Ltd v Resource Equities Ltd [2004] WASC 222; (2004) 51 ACSR 293

HILL J:

(This decision was delivered extemporaneously on 27 November 2020 and has been edited from the transcript).

On 25 November 2020, the plaintiff filed an interlocutory process seeking an injunction under s 1324(4) of the Corporations Act 2001 (Cth) (the Act) for orders restraining the first defendant from holding its annual general meeting for the year ended 30 June 2020 until a date…

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: Hongkong Xinhe International Investment Company Limited v Bullseye Mining Limited [No 2] [2020] WASC 446
Case: [2020] WASC 446
Decision Date: 4 DECEMBER 2020

CaseChat Overview and Summary

Hongkong Xinhe International Investment Company Limited applied for an interlocutory injunction to prevent Bullseye Mining Limited from proceeding with its annual general meeting. The applicant claimed that Bullseye had not complied with the notice provisions of the Corporations Act 2001 (Cth) and its own constitution, thereby invalidating the meeting. The applicant sought to restrain the meeting on the basis that it would result in a substantial injustice to the applicant and other shareholders.

The primary legal issues before the court were whether Bullseye had complied with the notice provisions of the Corporations Act and the company's constitution, and whether the applicant had established a serious question to be tried and demonstrated the balance of convenience favoured an interim injunction. The court had to consider the requirements for service by post, the content and timing of the notice, and whether the applicant had demonstrated a substantial risk of injustice if the meeting proceeded.

The court found that Bullseye had failed to comply with the notice provisions of the Corporations Act and the company's constitution, as the notice was not dispatched in accordance with the prescribed method. The court held that a serious question was raised as to the validity of the meeting, and the balance of convenience favoured granting the injunction. The applicant demonstrated a substantial risk of injustice if the meeting proceeded, as it would result in the appointment of directors without proper shareholder approval. The court concluded that an interim injunction was warranted to prevent the meeting from proceeding.

The court granted the applicant an interlocutory injunction restraining Bullseye from proceeding with the annual general meeting until the notice provisions were complied with. The injunction was to remain in effect until the substantive proceedings were resolved or further order by the court.

Orders