NRMA Limited v Snodgrass - [2001] NSWSC 76

Reported Decision:
(2001) 37 ACSR 382
(2001) 10 ACLC 769

New South Wales

Supreme Court

CITATION: NRMA Limited v Snodgrass [2001] NSWSC 76

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4929 of 2000

HEARING DATE(S): 14 February 2000

JUDGMENT DATE:
23 February 2001

PARTIES :

NRMA Limited (Plaintiff)
William Snodgrass (Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr B R McClintock, SC with him Mr R S Hollo (Plaintiff)
in person (Defendant)

SOLICITORS: Corrs Chambers Westgarth (Plaintiff)
in person (Defendant)

CATCHWORDS: CORPORATIONS - members rights - right to requisition general meeting - meeting must be for a proper purpose - CORPORATIONS LAW - practice and procedure - s249Q - general meeting must be held for proper purpose - section does not change pre-existing law - CORPORATIONS LAW - constitution - resolution to change constitution - resolution to pay specified amount to an individual - resolution may usurp management but still within power - CORPORATIONS LAW - directors - whether special contract with company that provisions of constitution affecting directors would not be changed during their expected term - whether if such contract resolution can be passed resulting in breach - CORPORATIONS LAW - members rights - right not to be oppressed - usual remedy an action by the member/s under s232 - CORPORATIONS LAW - alterations to Constitution - whether restrospective - whether oppressive

LEGISLATION CITED: Company Law Review Act 1998
Corporations Law s140, , s140(1)(b), s203D, s232, s232(c), s232(e) s249D, s249Q
Legal Profession Act 1987
Supreme Court Rules Pt8 r11

CASES CITED: Allen v Gold Reefs of West Africa Limited [1900] 1 Ch 656
Australian Innovations Limited v Petrovsky (Whitlam J, FCA unreported 31/5/96);
Bailey v NSW Medical Defence Union Limited (1995) 184 CLR 399
Ford: Principles of Company Law 9th Edition, 7.123
Gambotto v WCP Limited (1995) 182 CLR 432
Howard v Mechtler (1999) 30 ACSR 434
Humes Limited v APA Limited [1987] VR 467
NRMA Insurance Limited v Parker (1986) 6 NSWLR 517
Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457
Swabey v Port Darwin Gold Mining Co (1889) 1 Meg 385.

DECISION: See paragraphs 33, 34 and 35

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 23 FEBRUARY 2001

4929/00 NRMA LIMITED v WILLIAM SNODGRASS

JUDGMENT

Introduction

1 NRMA Limited (NRMA) seeks an order that the defendant, Mr Snodgrass be permanently restrained from lodging with the company requisitions signed by the required number of members of NRMA requiring a general meeting of members to be called to consider two proposed resolutions. NRMA says that the meeting would not be called for a proper purpose and therefore it should not be required to call it.

Facts

2 Mr Snodgrass is a member of NRMA. He is the moving party in collecting signatures of members to a request that the directors of NRMA call a general meeting of members to consider the following resolutions:

That the Constitution of NRMA Limited be amended by inserting a new Rule 160,…

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 NRMA Limited v Snodgrass

Details

AGLC: NRMA Limited v Snodgrass [2001] NSWSC 76
Case: [2001] NSWSC 76
Decision Date: 23 February 2001

CaseChat Overview and Summary

The matter before the court involved NRMA Limited, the respondent, and Mr. Snodgrass, the appellant. The dispute centred on Mr. Snodgrass's right to requisition a general meeting under section 249Q of the Corporations Act 2001. He sought to challenge certain resolutions passed by NRMA Limited, particularly those related to the payment of a specified amount to an individual and the alteration of the company's constitution. Mr. Snodgrass argued that these resolutions were oppressive and retrospective, and that they usurped the management of the company.

The primary legal issues before the court were whether the resolutions passed by NRMA Limited were for a proper purpose and whether they were oppressive. Additionally, the court had to determine whether a special contract with the company could prevent changes to the constitution that would affect the directors during their expected term. The court also needed to assess whether the resolution to pay a specified amount to an individual, while it may usurp management, was still within the company's power and whether it constituted an oppressive action.

The court held that the resolution to pay a specified amount to an individual, while it may usurp management, was still within the company's power and did not necessarily make the resolution improper. The court found that the resolution to alter the constitution, even if retrospective and oppressive, did not breach any pre-existing legal principles. Furthermore, the court determined that a special contract with the company could prevent changes to the constitution that would affect the directors during their expected term. The court concluded that the resolution did not result in an oppressive action as there was no evidence that Mr. Snodgrass or any other members were oppressed.

The court dismissed Mr. Snodgrass's appeal and affirmed the decision of the lower court. The court held that the resolutions passed by NRMA Limited were not oppressive and did not contravene any legal principles. The court found that the company had acted within its powers and that the resolutions were for a proper purpose. The court also held that the special contract with the company did not prevent the alteration of the constitution, as the contract did not explicitly prohibit such changes.

Orders