Morrison v Woodthorpe [No 3] - [2022] WASC 454

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   MORRISON -v- WOODTHORPE [No 3] [2022] WASC 454
CORAM:   TOTTLE J
HEARD:   14 - 17 NOVEMBER 2022
DELIVERED          :   22 DECEMBER 2022
FILE NO/S:   COR 64 of 2022
BETWEEN:   ALLAN ROY MORRISON
First Plaintiff
ADAMUS RESOURCES PTY LIMITED
Second Plaintiff
AND
KEVIN MARK WOODTHORPE
First Defendant
PETER BASIL WALLACE MICHAEL
Second Defendant
MOSES KOPENA BOSOMPEM
Third Defendant

Catchwords:

Corporations - Application to rectify register maintained by the Australian Securities & Investments Commission - Removal of director and secretary by resolution executed under s 249B of the Corporations Act 2001 (Cth) - Where member purportedly executing s 249B resolution a company incorporated in Nevis - Whether director executing resolution was de facto managing director of member company - Whether removal of director of subsidiary fell within putative managing director's implied actual authority - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 249B, s 1274, s 1322(4)
Rules of the Supreme Court 1971 (WA), O 9A

Result:

Application granted

Category: B

Representation:

Counsel:

First Plaintiff	:	E M Heenan SC & J R Shepherd
Second Plaintiff	:	E M Heenan SC & J R Shepherd
First Defendant	:	J F Park & R E Lennon
Second Defendant	:	J F Park & R E Lennon
Third Defendant	:	No appearance

Solicitors:

First Plaintiff	:	Blackwall Legal LLP
Second Plaintiff	:	Blackwall Legal LLP
First Defendant	:	Dentons Australia
Second Defendant	:	Dentons Australia
Third Defendant	:	No appearance

Cases referred to in decision:

Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492
Entwells Pty Ltd v National and General Insurance Co Ltd (1991) 5 ACSR 424
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2QB 480
Harold Holdsworth & Co (Wakefield) Ltd v Caddies [1955] 1 WLR 352
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
Re Centura Global Holdings Ltd [2016] NSWSC 62; (2016) 111 ACSR 185
Re Seabay Kitchen Pty Ltd [2019] NSWSC 790
SPP Ltd v Chew Beng Gim [1993] SGGA 66; [1993] 3 SLR(R)

TOTTLE J:

These proceedings arise out of a dispute between Ms Angela List and Mr Paul List. They are married but separated and are litigating in various jurisdictions over control of companies with interests in mining assets in Ghana and Mali. Those interests were acquired in separate transactions between 2017 and 2021 for an aggregate consideration of more than US$130 million. The litigation in this court was conducted through proxies - the first plaintiff representing Mr List and the defendants representing Ms List.[1] Mr List and Ms List were the only witnesses.
[1] Both Mr List and Ms List are Interested Non-Party's for the purpose of O 9A of the Rules of the Supreme Court 1971 (WA).
The proceedings concern the validity of the following:
(a)The removal of the first plaintiff as a director of the second plaintiff by Ms List (acting in her capacity as a director of BCM Investments Ltd - the sole shareholder…

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 Morrison v Woodthorpe [No 3]

Details

AGLC: Morrison v Woodthorpe [No 3] [2022] WASC 454
Case: [2022] WASC 454
Decision Date

CaseChat Overview and Summary

This is a case concerning the validity of various changes to the composition of the board of directors and the role of company secretary of a company incorporated in Australia. The plaintiff, Mr Allan Roy Morrison, who was the director and company secretary of the second plaintiff, Adamus Resources Pty Ltd, claims that the removal of him as director and company secretary of the second plaintiff and the appointment of other individuals in his place was invalid. The defendants, Kevin Mark Woodthorpe and Peter Basil Wallace Michael, seek to defend the validity of the changes to the composition of the board of directors and the role of company secretary on the basis that Ms Angela List, who was the spouse of Mr Morrison and the sole director of BCM Investments Ltd, which was the sole shareholder of the second plaintiff, had the authority to make the changes. BCM Investments Ltd is a company incorporated in Nevis.

The key issue the court was required to decide was whether Ms List had the authority to remove Mr Morrison as a director and company secretary of the second plaintiff and to appoint the first and second defendants in his place. In the alternative, the court was required to determine whether Ms List had the authority to appoint the first and second defendants as directors of the second plaintiff in the first place. If the court found that Ms List had the authority to make the changes to the composition of the board of directors and the role of company secretary of the second plaintiff, then it was not necessary to determine whether the appointments of the first and second defendants were valid.

The court found that Ms List did not have the authority to remove Mr Morrison as a director and company secretary of the second plaintiff and to appoint the first and second defendants in his place. The court reached this conclusion on the basis that it did not accept that Ms List acted as the managing director or chief executive officer of BCM Investments. The court found that Ms List was employed as the Director (Finance & Administration) of the BCM Group and was conducting the negotiations in that capacity. The court also found that the removal of Mr Morrison as a director of the second plaintiff was not an act that fell within the implied authority of a managing director of BCM Investments.

The court also found that Ms List's authority to act on behalf of BCM Investments was terminated when Mr Morrison commenced the Nevis proceedings and sought to restrain Ms List from any involvement in the management of the company. The court found that the commencement of the Nevis proceedings and the terms of the ex parte injunction were sufficient to bring any implied authority to an end. The court found that the subsequent variation in the terms of the injunction was of no moment because it did not reflect any change in Mr Morrison's position.

The court ordered that the registers maintained by ASIC be rectified in accordance with the terms of the final orders. The court also ordered that the parties be heard as to the terms of the final orders and as to costs.

Orders