Lew v Coles Myer Limited
[2002] VSC 535
•19 November 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8218 of 2002
| IN THE MATTER OF COLES MYER LIMITED | ||
| SOLOMON LEW | Plaintiff | |
| V | ||
| COLES MYER LIMITED AND COMPUTERSHARE INVESTOR SERVICES PTY LTD | Defendants | |
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JUDGE: | Hansen J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19 November 2002 | |
DATE OF JUDGMENT: | 19 November 2002 | |
CASE MAY BE CITED AS: | Lew v Coles Myer Limited & Anor | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 535 | |
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CORPORATIONS – Annual general meeting – Proxy votes – Director seeking to inspect – Terms and conditions of inspection.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N.J. Young Q.C. with Mr M.N. Connock | Clayton Utz |
| For the First Defendant | Mr D.H. Denton S.C. with Mr P.G. Cawthorn | Freehills |
| No appearance for the Second Defendant | ||
HIS HONOUR:
I have heard an urgent application this afternoon brought by Solomon Lew for orders permitting him or persons on his behalf to inspect instruments of proxy and certain other documents falling within some items enumerated in correspondence that has passed between the solicitors, prior to the holding of the annual meeting of Coles Myer Limited ("Coles Myer") which is convened for ten o'clock tomorrow morning.
The application is made orally on an affidavit sworn by Max Casen of Clayton Utz, the solicitors for Mr Lew. An originating process has not been filed. Mr Casen’s affidavit is entitled as in a proceeding between Mr Lew as plaintiff and Coles Myer and Computershare Investor Services Pty Ltd ("Computershare") as defendants. Hence, the respondents to the present application are Coles Myer and Computershare. Computershare is involved as the provider of registry services and is involved in the collation, organisation and analysis of the instruments of proxy that have been received from members of the company.
Mr Young QC, who has appeared for the plaintiff, has provided me with a form of writ which the plaintiff proposes to issue, and which I will require to be issued by four o'clock tomorrow. The order which I am about to make will be headed "In the matter of an intended proceeding", as the affidavit in support, sworn by Mr Casen, should have been headed, but that is a small matter.
It is not clear to me whether, following the order which I propose to make, it will be necessary for a summons to be made returnable, as one would usually be, if an injunction is granted in the circumstance of an intended proceeding. Counsel can consider that later.
The proposed writ which has been produced to me bears on it an endorsement which raises a claim regarding an agreement alleged to have been made between Mr Lew and Coles Myer on or about 18 November 2002, whereby he would be provided with certain information and be permitted to carry out various tasks in order to observe and scrutinise voting procedures in connection with the election of directors at the annual meeting to be held tomorrow.
The endorsement identifies four categories of documents or tasks which the plaintiff wants to be able to inspect, or to review. They are the four areas of work which were identified by Mr Young in making his application. It is said that notwithstanding the agreement, Coles Myer has informed Mr Lew that it will not permit him to undertake any of the tasks or activites. Declarations and injunctions are claimed to permit the performance of the tasks. I will come back to them later.
The case is put, as I follow it from Mr Young’s submissions, on the basis of a right held by a director as indicated in general terms by Street J in Armstrong v. Landmark Corporation Limited (1966), 85 W.N. (NSW). There is not time, in the present urgency, to reflect and elaborate upon the extent of that right.
I have heard counsel for Coles Myer, which was properly informed of the application. If they had not been informed of it, I would have required that they be informed of it; the applicant proceeded properly in that respect. However, in the urgency of the proceeding, Coles Myer has not prepared and provided me with any affidavit evidence on the point which I think is the real substance and matter of concern in determining the application.
I have, however, heard counsel, and it is in the nature of applications conducted with urgency, as this one has been, that the judge has to take statements from the Bar table along with such evidence as there might be that has been sworn to, and seek to arrive at the conclusion which in the circumstances achieves an appropriate and just balance, without harm being done to either interest.
The concern which I had at the outset, and which I continue to have, is one which concerns the practicality of the implementation of the entitlement which the plaintiff seeks to enforce between now and ten o'clock tomorrow morning.
While 90 per cent of the shares in this company may be held by only 200 shareholders it is, as I would understand it, from general knowledge, a company with a large number of shareholders, many of whom are small shareholders I suspect, and there may be very many numbers of proxy forms. In fact there was reference at one stage to there being more than 100,000, I think. Is that correct, Mr Young?
MR YOUNG: There's over 120,000.
HIS HONOUR: Over 120,000 having been submitted yesterday.
MR YOUNG: Yes, Your Honour.
HIS HONOUR: And it does not, I think, take much imagination to conceive that a great deal of work must be taking place in preparation for the meeting when it commences – and to enable the chairman, in particular, when he has to commence the meeting – to be in a position of having as final advice as may be possible on the matter of proxies. In any event, I do not propose to simply refuse the application on that account. However, it is a factor which affects me, supported as it was by Mr Denton’s submissions.
I propose to make a limited form of order permitting inspection between now and the commencement of the meeting, but on the proviso that any right of inspection, or any inspection that may be had, not unreasonably interfere with the orderly task of preparation for the meeting. If it does, then in my view the right must simply stand over until after the meeting.
I will require that the plaintiff file a writ in the form produced to the court, which has been initialled by me and placed on the file - which at the moment is in the matter of an intended proceeding - by four o'clock tomorrow. On the plaintiff giving the usual undertaking for damages, which Mr Young has indicated he has authority to give, and I take him as giving it, I will make the following orders:
(1)The first defendant permit the plaintiff to inspect the proxies lodged by or on behalf of the 200 shareholders, provided that:
(a)Any such inspection be permitted only to the extent that it not unreasonably interfere with the orderly task of preparation by the first defendant, and those engaged by them in that behalf, for the annual meeting of the company to be held on 20 November 2002.
(b)Any such inspection be had on the basis of the terms of agreement set out in the letter from Clayton Utz to Freehills dated 18 November 2002, and a letter of indemnity from the plaintiff to Coles Myer Ltd dated 19 November 2002 both being part of Exhibit MC3 to the affidavit of Max Cason sworn 19 November 2002.
(2)The first defendant produce the documents and information in items 4, 7, 8 and 14 in the list attached to Freehills letter to Clayton Utz dated 18 November 2002 for inspection by the plaintiff at a place and time to be appointed after the conclusion of the said meeting. Is there anything else, Mr Young?
[There was then discussion as to the terms of the orders, including the substance of the proposed order 2 being in the form of an undertaking, which counsel for Coles Myer requested, and to which his Honour acceded.
The following undertakings were given and orders made.]
The Firstnamed Defendant undertook by its counsel to produce the documents and information referred to in items 4, 7, 8 and 14 in the list attached to Freehills letter to Clayton Utz dated 18 November 2002 (being part of exhibit "MC 3" to the affidavit of Max Casen) for inspection by the Plaintiff at a time and place to be appointed after the conclusion of the annual meeting of the Firstnamed Defendant.
The Plaintiff by his counsel undertook to file a writ in the form produced to the Court, initialled by the Honourable Justice Hansen, and placed on the Court file, by 4.00pm on 20 November 2002.
The Plaintiff by his counsel undertook to abide by any order which the Court may make as to damages, in case the Court shall be of the opinion that the defendants shall have sustained any, by reason of this order, which the Plaintiff ought to pay.
Order that:
1. The Firstnamed Defendant permit the Plaintiff, by his agents, Clayton Utz and ASX Perpetual, to inspect the proxies lodged by or on behalf of the top 200 shareholders provided that:
(a) any such inspection be permitted only to the extent that it not unreasonably interfere with the orderly task of preparation by the Firstnamed Defendant and those engaged by it for the annual meeting of the Firstnamed Defendant to be held on 20 November 2002; and
(b) any such inspection be had on the basis of the terms of the agreement set out in the letter from Clayton Utz to Freehills dated 18 November 2002, and the letter of indemnity from the Plaintiff to the Firstnamed Defendant dated 19 November 2002, both being part of exhibit "MC 3" to the said affidavit of Max Casen.
2. Costs are reserved.
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