Lew v Coles Myer Limited - [2002] VSC 535

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…

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.

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Details

Case: [2002] VSC 535
Decision Date: 19 November 2002

CaseChat Overview and Summary

Lew, a shareholder of Coles Myer Limited, sought to inspect the company's register of members and related documents to verify the validity of proxy votes cast at an annual general meeting. Coles Myer Limited opposed this inspection, citing that it was not a director or officer of the company, and therefore not entitled to inspect the documents under the Corporations Act 2001 (Cth). The case before the court was to determine whether Lew's status as a shareholder entitled him to inspect the company's records under the Act, or whether such rights were exclusive to directors and officers.

The primary legal issue before the court was whether a shareholder, who is not a director or officer of the company, has the right to inspect the company's register of members and related documents. The court examined relevant provisions of the Corporations Act 2001 (Cth) and case law to determine the scope of inspection rights afforded to shareholders. It considered whether the inspection rights were intended to be limited to directors and officers, or whether they extended to shareholders as a means of ensuring corporate transparency and accountability.

The court concluded that under the Corporations Act 2001 (Cth), inspection rights are indeed limited to directors and officers of the company. It found that the statutory framework was designed to protect the privacy and confidentiality of company records, and that extending inspection rights to shareholders could undermine these protections. The court held that while shareholders have certain rights to information, the right to inspect company records is not one of them, and is reserved for directors and officers. The court's decision was based on the principle that the inspection rights are intended to facilitate the performance of the directors' duties, rather than to serve the interests of individual shareholders.

The court's decision in Lew v Coles Myer Limited reinforces the importance of maintaining the confidentiality of company records and the limitations on shareholders' rights to inspect such records. The final orders of the court were that Lew's application to inspect the company's register of members and related documents was dismissed, and that Coles Myer Limited was not required to provide the requested information. The decision clarifies the scope of inspection rights under the Corporations Act 2001 (Cth), and provides guidance to companies and shareholders regarding the protection of company records.

Orders