L.K. Bros Pty Ltd v Collins

SUPREME COURT OF QUEENSLAND

CITATION:

L.K. Bros Pty Ltd v Collins & Anor [2004] QSC 026

PARTIES:

L.K. BROS PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ACN 103 878 351
(applicant)
v
GERALD COLLINS AND PHILIP JEFFERSON
(first respondent)
and
LANDMARA PTY LTD ACN 010 406 229
(second respondent)

FILE NO:

SC No 11391 of 2003

DIVISION:

Trial

PROCEEDING:

Application for declaratory relief

ORIGINATING COURT:

Supreme Court, Brisbane

DELIVERED ON:

27 February 2004

DELIVERED AT:

Brisbane

HEARING DATE:

9 February 2004

JUDGE:

Chesterman J

ORDER:

1.   Application dismissed

2.   Costs to be assessed on the standard basis

CATCHWORDS:

CORPORATIONS – MANAGEMENT AND ADMINISTRATION – where a company director executed a  franchise agreement as both director and director/secretary – whether the franchise agreement was properly executed by the director

CORPORATIONS – MANAGEMENT AND  ADMINISTRATION – where a company director executed a charge deed without the actual authority of the other company director – whether the director had authority to execute the charge deed

COUNSEL:

The applicant appeared on his own behalf
J B Sweeney for the respondents

SOLICITORS:

Nicol Robinson Halletts for the respondents

1. The

   applicant briefly carried on the business of retailing general merchandise from a convenience store known as ‘Night Owl’ located on Logan Road at Mount Gravatt.  There is a chain of such stores, the name and goodwill of which is owned by the second respondent, which enters into franchise agreements with particular franchisees who then conduct business at a particular store.  The first respondents are chartered accountants who were appointed by the second respondent as receivers of the applicant’s business pursuant to the terms of a mortgage debenture ‘purportedly entered into’ between the applicant and the second respondent in

   
   

   April 2003.

1. The applicant seeks a declaration that it did not effectively execute, and is not bound by, the mortgage debenture pursuant to which the second respondent appointed the first respondents as receivers.  The applicant seeks a further declaration that the appointment of the first respondents was ineffective and invalid.

1. Only one point arises for determination in the proceedings and it can be disposed of shortly.  The applicant’s contention is that it did not execute the mortgage debenture in accordance with its constitution, and that the directors of the applicant did not authorise the applicant to make the agreement constituted by the charge.

1. The applicant has two directors and two shareholders.  They are Mr Daniel Louati and his father-in-law Mr Yasuyuki Komoto.  The applicant has six issued shares, five of which are owned by Mr Louati and one by Mr Komoto.  Mr Louati is Tunisian.  According to his affidavit he has a poor grasp of English and has difficulty in reading, writing and understanding the English language.  He sought leave to appear for his company.  The solicitors who formerly represented it withdrew, apparently because of the applicant’s inability to pay for their services.  I accept that Mr Louati’s command of English is limited.

1. Mr Louati’s wife is Japanese.  The other director and shareholder, Mr Komoto, is Mrs Louati’s father.…