In the matter of iCash Payment Systems Limited
[2013] NSWSC 1084
•11 July 2013
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of iCash Payment Systems Limited [2013] NSWSC 1084 Hearing dates: Thursday 11 July 2013 Decision date: 11 July 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Application to vacate the orders of 8 May 2013 refused
Catchwords: PROCEEDURE - Application to vacate orders restraining defendant from proceeding with extraordinary general meeting - where plaintiff no longer seeks protection of interlocutory orders - where defendant is a listed company - where defendant has made notifications to market of deferral of meeting in accordance with stock exchange listing rules - where defendant has not given formal notice to shareholders - whether orders whether vacating orders would cause confusion to shareholders Category: Interlocutory applications Parties: Wookwon Kang (first plaintiff)
Byeongrib Yoo (second plaintiff)
Youngwoon Woo (third plaintiff)
Kisun Lee (fourth plaintiff)
Namweon Lee (fifth plaintiff)
Jonghong Park (sixth plaintiff)
Suhan Jo (seventh plaintiff)
Youngwoo Kim (eight plaintiff)
Byoungnam Lim (ninth plaintiff)
Eungin Kim (tenth plaintiff)
Chung Lim (eleventh plaintiff)
Kyoungsuck Oh (twelfth plaintiff)
Youngkwan Kang (thirteenth plaintiff)
Yeonhee Kim (fourteenth plaintiff)
iCash Payment Systems limited (defendant)Representation: Counsel:
Mr DFC Thomas (plaintiffs)
Mr JC Giles (defendant)
Solicitors:
Banki Haddock Fiora (plaintiffs)
Whittens & McKeough Pty Limited (defendant)
File Number(s): 13/ 202274
Judgment (ex tempore)
HIS HONOUR: On 3 July 2013 the plaintiffs approached the Court for an abridgement of time to serve an originating process seeking, by way of interlocutory relief, an order (if necessary) restraining the defendant from proceeding with an extraordinary general meeting scheduled for 22 July 2013, and, by way of final relief, declaratory and consequential relief in connection with the purported cancellation of shares held by the plaintiffs in the defendant. It was pressed upon the Court that an early resolution of the claim for final relief was required because it would affect the plaintiffs' ability to vote at the proposed extraordinary general meeting, which had been called pursuant to a requisition of members and at which it was sought to remove a number of current directors. The interlocutory relief would be necessary only if a final hearing could not be completed prior to 22 July 2013.
When, pursuant to the leave then granted, the proceedings returned before the Court on Monday 8 July, the plaintiffs' position was that, if the Court could accommodate it either the whole of the proceedings - or at least certain separate questions arising in them which would determine the plaintiffs' entitlement to the shares in question - should be heard before the meeting convened for 22 July. However, the defendant sought leave to file a cross-claim, and argued that it was not realistically possible to be ready for a hearing before 22 July and that the issues raised by the cross-claim were interdependent with those in the claim. It was my view that at least most of the issues raised by the cross-claim were closely related with those in the plaintiffs' claim and should not sensibly be severed. In addition, the Court did not have time available prior to 22 July for the hearing of the matter. In those circumstances, the defendant, while not seeking an order extending time for the holding of the meeting, properly drew the Court's attention to its ability to do so. The plaintiffs also did not seek such an order, nor an interlocutory injunction restraining the holding of the meeting, but indicated that if the Court were unable to accommodate the final hearing before 22 July, they would make no submission in opposition to such an order.
It seemed to me that in those circumstances, and where the Court could accommodate the matter on 14 and 15 August 2013, the interests of proceeding to a hearing in an orderly manner, the orderly and regular conduct of the company's affairs, and the preservation of all parties' position without detriment in the meantime, were best served by fixing the whole of the proceedings for hearing on 14 and 15 August, thereby affording both parties an opportunity to prepare for such a hearing at which all issues in dispute could be resolved, and in the meantime extending time for the requisitioned meeting to 22 August - that is to say, a week after the hearing - and restraining the defendant from proceeding with, by which I intended going ahead with, the meeting in the meantime. On that occasion, no party submitted that was an inappropriate course. It was implicit in the plaintiffs' submission that there was urgency associated with the matter such as to justify the granting of leave to serve short notice and such as to require the setting down of the final hearing on an urgent basis, that the plaintiffs wished the question of their entitlement to the shares in question to be determined before the EGM. The prejudice that the plaintiffs claimed was that they would not be able to vote at the meeting if that did not happen.
Today, some three days later, the plaintiffs ask that the order extending the time for the holding of the requisitioned meeting, and the injunction restraining the defendant from proceeding with it, be vacated, to the intent that the meeting then proceed on 22 July, notwithstanding that the plaintiffs would not be able to vote the disputed shares at it. The defendant opposes that course.
The plaintiffs submit that the orders in question were made for the protection of the plaintiffs, and therefore ought to be discharged as the plaintiffs no longer require their protection. That submission is not without force, but it tends to overlook that the orders were made as part of a regime intending to provide for the orderly conduct of the proceedings and affairs of the company, with a view to resolution of all issues at a trial in mid-August, in a context where the plaintiffs had urged that the trial needed to take place before the meeting.
Since the orders of 8 July the defendant has caused notice to be given to the Australian Stock Exchange in compliance with the listing rules, of the postponement of the meeting. The plaintiffs, I think correctly, submit that the appropriate notification of postponement has not been given formally to members, but in the context of a listed company it can not seriously be doubted that at least some members who might take interest in announcements made about their company on the stock exchange would be aware that the meeting had been postponed - and that the Court had made the orders in question, since the notice refers to the orders of the Court.
In those circumstances, for the court a few days later to vacate those orders would presumably require further notification to the ASX and to members to confirm that the meeting was going ahead, when it is at least conceivable that in the meantime some members might have changed their position or their availability for the meeting in reliance on the notice already given to the ASX.
It was submitted that there is no actual evidence of confusion, but the confusion would not in reality arise until there were two competing notices published by the ASX; one, that the meeting had been postponed and another that it was now no longer postponed. In addition, that would involve publishing upon the ASX site that the Court, having made orders which, as I have said, were not opposed by either party, in substance effecting a postponement or deferral of the meeting, had vacated those orders, as I have said, essentially because one party has changed its position as to whether it wished the shareholding issue to be resolved before the meeting took place.
It was submitted that there are two separate issues, one relating to entitlement to the shares and the other relating to the management of the company, but in circumstances where entitlement to the shares affects the ability to vote at a meeting at which directors are to be removed or replaced, it is impossible to so segregate the issues. Indeed, the plaintiff did not segregate them in that way when it was contending that the case needed to be resolved before the meeting, and it is only now that it puts them forward as separate and discrete and unrelated issues.
To vacate the orders now would have the potential to cause confusion to shareholders, would convey an impression that the Court was deferring meetings and then almost randomly no longer deferring them, and would not assist the orderly resolution of all issues or the orderly conduct of the affairs of the company, which is what the regime established on 8 July 2013 was intended to do.
I decline to vacate the orders of 8 May 2013. I order that the plaintiff pay the defendant's costs of today.
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Decision last updated: 20 September 2013
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