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Kingemel Pty Ltd v Rosa Processing Pty Ltd

Kingemel Pty Ltd v Rosa Processing Pty Ltd

Case [2022] WASC 7 13 January 2022

Contract Formation

Breach of Contract

Unconscionable Conduct

Fiduciary Duty

Statutory Interpretation

Statutory Construction

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   KINGEMEL PTY LTD -v- ROSA PROCESSING PTY LTD [2022] WASC 7
CORAM:   KENNETH MARTIN J
HEARD:   16 - 18 AUGUST 2021
DELIVERED          :   13 JANUARY 2022
PUBLISHED           :   13 JANUARY 2022
FILE NO/S:   COR 145 of 2020
BETWEEN:   KINGEMEL PTY LTD
First Plaintiff
SANKALPA PTY LTD
Second Plaintiff
CXO HOLDINGS PTY LTD
Third Plaintiff
LYCKEBO PTY LTD
Fourth Plaintiff
SIRIUS SOLUTIONS PTY LTD
Fifth Plaintiff
EA COLLINS PTY LTD
Sixth Plaintiff
MONTILLA PTY LTD
Seventh Plaintiff
IAN DESMOND BRADSHAW
Eighth Plaintiff
MIKALE PTY LTD
Ninth Plaintiff
AND
ROSA PROCESSING PTY LTD
First Defendant
CAZMAC INTEGRATED SOLUTIONS PTY LTD
Second Defendant
CARRABINA PTY LTD
Third Defendant
ADJCOR PTY LTD
Fourth Defendant
SARJESIAN SUPER INVESTMENTS PTY LTD
Fifth Defendant
ASH-ROSEBUD SUPER PTY LTD
Sixth Defendant
GJERN SUPER PTY LTD
Seventh Defendant
CARDIN SENG BEE LIM DE COSTER
Eighth Defendant
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Ninth Defendant
ROCK MINING AUSTRALIA PTY LTD
Tenth Defendant

Catchwords:

Corporations law - Oppression action by existing shareholders - Sole directors resolution diluting plaintiffs holding member voting control to new shareholders - New shareholders convene general meeting and remove and replace existing director - Breach of constitution by not offering new shares first to existing shareholders - Discretion to grant relief

Legislation:

Corporations Act 2001 (Cth)

Result:

Share issue resolution of 4 November 2019 is invalid

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr L A Warnick
Second Plaintiff	:	Mr L A Warnick
Third Plaintiff	:	Mr L A Warnick
Fourth Plaintiff	:	Mr L A Warnick
Fifth Plaintiff	:	Mr L A Warnick
Sixth Plaintiff	:	Mr L A Warnick
Seventh Plaintiff	:	Mr L A Warnick
Eighth Plaintiff	:	Mr L A Warnick
Ninth Plaintiff	:	Mr L A Warnick
First Defendant	:	Mr M L Bennett
Second Defendant	:	Ms R Young
Third Defendant	:	Ms R Young
Fourth Defendant	:	Ms R Young
Fifth Defendant	:	Ms R Young
Sixth Defendant	:	Ms R Young
Seventh Defendant	:	Ms R Young
Eighth Defendant	:	Ms R Young
Ninth Defendant	:	No appearance
Tenth Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Solomon Hollett Lawyers
Second Plaintiff	:	Solomon Hollett Lawyers
Third Plaintiff	:	Solomon Hollett Lawyers
Fourth Plaintiff	:	Solomon Hollett Lawyers
Fifth Plaintiff	:	Solomon Hollett Lawyers
Sixth Plaintiff	:	Solomon Hollett Lawyers
Seventh Plaintiff	:	Solomon Hollett Lawyers
Eighth Plaintiff	:	Solomon Hollett Lawyers
Ninth Plaintiff	:	Solomon Hollett Lawyers
First Defendant	:	Bennett + Co
Second Defendant	:	McNally & Co
Third Defendant	:	McNally & Co
Fourth Defendant	:	McNally & Co
Fifth Defendant	:	McNally & Co
Sixth Defendant	:	McNally & Co
Seventh Defendant	:	McNally & Co
Eighth Defendant	:	McNally & Co
Ninth Defendant	:	No appearance
Tenth Defendant	:	No appearance

Cases referred to in decision:

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25
Harlows Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL [1968] HCA 37; (1968) 121 CLR 483

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.

Continue reading Kingemel Pty Ltd v Rosa Processing Pty Ltd

Details

AGLC: Kingemel Pty Ltd v Rosa Processing Pty Ltd [2022] WASC 7
Case: [2022] WASC 7
Decision Date

CaseChat Overview and Summary

In the Supreme Court of Western Australia, the plaintiffs, shareholders in Rock Mining Australia Pty Ltd (RMA), filed a Corporations Act application seeking relief from statutory oppression and rectification of the RMA shareholder register. The plaintiffs' claims stemmed from a resolution made by the former sole director of RMA, Mr. De Coster, on 4 November 2019, which allocated shares to eight defendants. The allocation diluted the plaintiffs' shareholdings and voting control. The plaintiffs raised three challenges against the validity of the resolution: breach of RMA's Constitution, improper purpose of maintaining control, and breach of fiduciary duty. The defendants argued that the plaintiffs' claims were discretionary and should not be granted relief. The court found that the resolution was invalid due to the breach of RMA's Constitution, improper purpose of maintaining control, and breach of fiduciary duty. Consequently, the court granted relief to the plaintiffs, declaring the resolution invalid, rectifying the shareholder register, and preventing the defendants from exercising their voting rights.

Orders