Lebbon v Kogi Iron Limited

[2018] FCA 1024

FEDERAL COURT OF AUSTRALIA

Lebbon v Kogi Iron Limited [2018] FCA 1024

File number:

SAD 159 of 2018

Judge:

BESANKO J

Date of judgment:

2 July 2018

Catchwords:

CORPORATIONS – application for an injunction restraining the appointment of directors – where it is not known whether the directors will be elected

PRACTICE AND PROCEDURE – where application made ex parte and as a matter of urgency – where nothing to explain the delay in bringing the application – where applicants do not have a strong case on the merits – consideration of the balance of convenience – application refused

Date of hearing:

2 July 2018

Registry:

South Australia

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Category:

Catchwords

Number of paragraphs:

8

Counsel for the Prospective Applicants:

Mr M Hoile

Solicitor for the Prospective Applicants:

Diaspora Legal

Counsel for the Prospective Respondent:

The Prospective Respondent did not appear

ORDERS

SAD 159 of 2018

BETWEEN:

TIMOTHY OWEN LEBBON

First Prospective Applicant

LEADENHALL AUSTRALIA PTY LTD

Second Prospective Applicant

AND:

KOGI IRON LIMITED

Prospective Respondent

JUDGE:	BESANKO J
DATE OF ORDER:	2 JULY 2018

THE COURT ORDERS THAT:

1.The application is refused.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BESANKO J:

1. This is an application for an injunction restraining Kogi Iron Limited from appointing Messrs Edwin Philip Ashley, Malcolm Roy Brandon or John Alexander Maclean as directors of Kogi Iron Limited.  The meeting is due to be held today at 10.00 am AWST time.  It is now just after 11.30 am ACST.  The application was issued earlier this morning, and I listed the matter as soon as I could after I had had the opportunity to read the papers.  The application is made ex parte and as a matter of urgency.

2. So far as I can see from the papers, it is made at the last minute and there is no explanation as to the reasons it was not made earlier.  I note Annexure 9 to Mr Lebbon’s affidavit is the notice of general meeting, and that notice is dated 29 May 2018.  There is nothing in Mr Lebbon’s affidavit to explain the delay in bringing his application.

3. There is a further unsatisfactory aspect to the application.  Annexure 11 of Mr Lebbon’s affidavit is an email from a Ms Donald dated 1 July 2018.  Apparently there has been a response to that email.  The terms of that response were, in effect, read out by counsel for the applicants, but the response itself was not put before the Court.  That, to my mind, is unsatisfactory.

4. As to the merits of the application, the applicants submit that there has been non‑compliance with clause 13.3 of the company’s constitution in that a notice within the terms of that clause has not been provided in the case of each of the proposed new directors.  Counsel for the applicants was not able to point to any provision whereby the company was required to provide copies of those notices to the applicants, and it is not obvious to me in those circumstances that the Court should infer that the notices do not exist.

5. In the alternative, if, in fact, the notices are those which are Annexures 5, 6, 7 and 8 to Mr Lebbon’s affidavit, then I do not think it can be said that the applicants have a strong case on the merits, as I read the terms of clause 13.3 of the constitution.  I am not saying that it has no case, but simply that on what has been put to me to this point, it does not appear to be a strong case.

6. As far as the balance of convenience is concerned, there are two important considerations.  As I understand the submissions of the applicants, they contend that even if the directors are elected (assuming an injunction is not granted) their election will be invalid, and the applicants will be able to obtain relief to that effect.

7. Secondly, I understand from the papers and from the submissions made by counsel for the applicants that there will be opposition at the meeting to the election of the proposed new directors, and it is not known whether or not they will be elected.  If they are not elected, then there would appear to be no further reason why these proceedings would need to progress further.  If they are elected, as I understand the applicants’ case, and as I have already said, the applicants contend that their appointments would be invalid. 

8. In my opinion, it is not appropriate to grant an injunction in all these circumstances, and I refuse the application.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

Associate:        

Dated:        10 July 2018