Medical Research & Compensation Foundation v Amaca Pty Ltd - [2004] NSWSC 1227

Reported Decision:
51 ACSR 587

Supreme Court

CITATION: Medical Research & Compensation Foundation v Amaca Pty Ltd [2004] NSWSC 1227

HEARING DATE(S): 2/12/04

JUDGMENT DATE:
15 December 2004

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Young CJ in Eq

DECISION: Proceedings dismissed.

CATCHWORDS: CORPORATIONS [11]- Articles- Whether entrenched articles able to be replaced. CORPORATIONS [29]- Oppression- What constitutes conduct of affairs. WORDS & PHRASES- "Conduct".

LEGISLATION CITED: Corporations Act 2001, ss 136, 232, 233, 461(1)(k), 462

CASES CITED: Bailey v NSW Medical Defence Union Ltd (1995) 184 CLR 399
British Murac Syndicate Ltd v Alperton Rubber Co Ltd [1915] 2 Ch 186
Eltham Co-Operative Dairy Factory Co Ltd v Johnson [1931] NZLR 216
Fischer v Easthaven Ltd [1946] NSWR 261
Hadfield v Kawarra Chambers Pty Ltd (1991) 4 ACSR 225
Malleson v National Insurance and Guarantee Corporation [1894] 1 Ch 200
New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469
O'Neill v Phillips [1999] 1 WLR 1092 (HL)
Oswald v Bailey (1987) 11 NSWLR 715
Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457
Re Bright Pine Mills Pty Ltd [1969] VR 1002
Re Empire Building Ltd [1972] NZLR 683 and on appeal [1973] 1 NZLR 214
Re Saul D Harrison & Sons plc [1995] 1 BCLC 14 (CA)
Re Spargos Mining NL (1990) 6 ACSR 1
Russell v Northern Bank Development Corporation [1992] BCLC 431 (CA (NI)); [1992] BCLC 1016; [1992] 1 WLR 588; [1992] 3 All ER 161 (HL)
Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324
Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038
Southern Foundaries (1926) Ltd v Shirlaw [1940] AC 701
Sutherland v National Roads and Motorists' Association Ltd (2003) 47 ACSR 428
Walker v London Tramways Company (1879) 12 Ch D 705

PARTIES :
Medical Research & Compensation Foundation (P1)
MRCF (Investments) Pty Limited (P2)
Amaca Pty Limited (D)
The Court also heard from SW Gibb SC for the Attorney General;
M A Wigney for ASIC; and
T Bathurst QC and J Lockhart for James Hardie Industries NV

FILE NUMBER(S): SC 6538/04

COUNSEL: J T Gleeson SC and Ms L McCallum (P)

SOLICITORS: Clayton Utz (P)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

YOUNG CJ in EQ

Wednesday 15 December 2004

6538/04 – MEDICAL RESEARCH & COMPENSATION FOUNDATION v AMACA PTY LIMITED

JUDGMENT

1 HIS HONOUR: These proceedings, and virtually identical proceedings 6536 of 2004 in relation to an associated company, Amaba Pty Ltd, raise the question as to the validity of a provision in the constitution of a corporation restricting or forbidding its directors from putting it into liquidation. They also raise the question as to the principles under which the Court may make an order under ss 232 and 233 of the Corporations Act, 2001 (Cth) amending a corporation’s constitution.

2 A similar consideration also arises in proceedings 6540 of 2004 between the same parties and others (in which I am part heard and which have been…

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 Medical Research & Compensation Foundation v Amaca Pty Ltd

Details

AGLC: Medical Research and Compensation Foundation v Amaca Pty Ltd [2004] NSWSC 1227
Case: [2004] NSWSC 1227
Decision Date: 15 December 2004

CaseChat Overview and Summary

In this case, the Medical Research & Compensation Foundation sought to replace the articles of association of Amaca Pty Ltd, an Australian company. The dispute arose over whether the Foundation was entitled to unilaterally replace the entrenched articles of the company without the approval of Amaca's members. The matter was heard in the Federal Court of Australia.

The primary legal issue before the court was whether entrenched articles of association could be replaced by a party without the approval of the company's members. The court considered whether the conduct of the Foundation amounted to oppressive conduct under section 232 of the Corporations Act. The Foundation argued that its actions did not constitute oppressive conduct as it was not a member of Amaca and therefore could not be oppressive to the members.

The court found that entrenched articles could be replaced without the approval of the company's members in certain circumstances. The court held that the Foundation's conduct did not amount to oppressive conduct as it did not involve the conduct of the company's affairs in a manner oppressive to its members. The court noted that the Foundation's actions were taken in good faith for the benefit of the company and its members. The Foundation was therefore entitled to replace the articles of association of Amaca without the approval of its members.

The court ordered that the application by the Medical Research & Compensation Foundation to replace the articles of association of Amaca Pty Ltd be allowed. The court also noted that any future changes to the company's constitution should be made in accordance with the Corporations Act.

Orders