Re Geelong Quarries Pty Ltd
[2022] VSC 528
•8 September 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2021 03781
IN THE MATTER OF GEELONG QUARRIES PTY LTD (ACN 129 611 025)
BETWEEN:
| ANTHONY PETER HOARE | Plaintiff |
| v | |
| MATHEW CHARLES HOARE & ANOR (According to the Schedule of Parties) | Defendants |
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JUDGE: | Button J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 September 2022 |
DATE OF JUDGMENT: | 8 September 2022 |
CASE MAY BE CITED AS: | Re Geelong Quarries Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VSC 528 |
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INJUNCTIONS – Interlocutory injunction – Application for interlocutory injunction to restrain company directors from holding a meeting to vote to terminate an agreement and conduct a tender process for quarrying services – Whether there is a prima facie case – Whether the balance of convenience favours granting the interlocutory injunction – Where the proper plaintiff in an oppression proceeding has not been joined to the proceeding – Where there are multiple proceedings and plaintiff has foreshadowed a consolidation application – Where balance of convenience favours granting the interlocutory injunction – Application granted upon undertakings.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | T North QC C Gobbo | Colin Biggers & Paisley |
| For the First Defendant | P Bick QC P Caillard | Bowman & Knox |
| For the Second Defendant | R Greenberger | Wightons Lawyers |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
The interlocutory application...................................................................................................... 1
Affidavits relied on....................................................................................................................... 2
Proceedings between the siblings............................................................................................... 3
The Family Trusts and the Will................................................................................................... 5
Quarrying operations: GQ and HB............................................................................................ 8
The parties’ key contentions.......................................................................................................... 10
Legal principles and test to be applied........................................................................................ 14
Consideration.................................................................................................................................... 15
Urgency: does the status quo need to be changed?............................................................... 15
Prima facie case........................................................................................................................... 16
Failure to name ET as plaintiff......................................................................................... 16
Whether matters identified by Anthony as serious questions to be tried arise in this proceeding.............................................................................................................. 17
Conclusions on prima facie case...................................................................................... 23
Balance of convenience and the lesser risk of injustice......................................................... 26
Relief................................................................................................................................................... 28
Postscript............................................................................................................................................ 30
HER HONOUR:
Introduction
The interlocutory application
By summons dated 23 August 2022, the plaintiff (Anthony) sought interlocutory injunctions against the defendants (the Summons). The first defendant (Mathew) is Anthony’s brother, and the second defendant (Kim) is Anthony’s sister. I will refer to them by their first names as Anthony and Mathew have the same surname (Hoare).
Each of Anthony, Mathew and Kim are presently directors of Geelong Quarries Pty Ltd (GQ). Each of the siblings currently holds five shares in GQ, through controlled entities, H4MC Pty Ltd (H4MC) in Mathew’s case, ET Investments (Vic) Pty Ltd (ET) in Anthony’s case, and Markee Custodians Pty Ltd (Markee) in Kim’s case.
While somewhat wider in its terms, the Summons was directed at preventing a meeting of the board of GQ from proceeding. The meeting was to have been held on 18 August 2022.[1] The board meeting was called by Mathew to consider terminating the informal quarrying services agreement between GQ and an entity effectively controlled by Anthony, Hoare Bros Pty Ltd (HB), and also conducting a tender process, to be controlled by Mathew, to appoint a new quarrying services provider (Mathew’s Notice).
[1]The Court was approached to hear an urgent application before the date on which the meeting was to occur, and undertakings were given that the meeting would not proceed on 18 August 2022, pending the issue and determination of a summons seeking interlocutory injunctions. The Summons was then issued on 23 August 2022. No undertaking has been proffered not to hold the meeting for any longer duration, although it was indicated during the hearing that it was not proposed by Mathew to hold the meeting in the week of 5 September 2022 (T126.28–T127.1). Accordingly, there remains some urgency in determining Anthony’s application, the outcome of which I reserved on 1 September 2022.
The Summons was also directed to preventing a resolution referred to in a notice dated 9 July 2022, issued by Markee (being Kim’s company), being voted on by Mathew and Kim (Kim’s Notice). Kim’s Notice proposed a resolution that ‘[GQ] exercise its rights to a further ten (10) year term pursuant to the [Quarry Agreement]’. The Quarry Agreement and its terms are addressed below.
The Summons came before me as duty judge. The interlocutory injunctions were not sought until the trial and determination of the proceeding, but instead were sought for a shorter period of time, being until ‘the earlier of determination of the Plaintiff’s Consolidated [sic – Consolidation] Application, or further order of the Court, or agreement between the parties’.
The Consolidation Application refers to an application foreshadowed by Anthony in an email sent by his solicitors on 1 August 2022, proposing, amongst other things, to consolidate this proceeding with two related Supreme Court proceedings.
Affidavits relied on
Anthony relied on three affidavits, which he swore:
(a) his affidavit of 11 October 2021 in this proceeding (Anthony’s First Affidavit);
(b) his affidavit of 25 November 2021 in the Separation Proceeding (Anthony’s Second Affidavit); and
(c) his affidavit of 23 August 2022 in this proceeding (Anthony’s Third Affidavit).[2]
[2]Anthony swore a further affidavit on 30 August 2022 correcting a typographical error in Anthony’s Third Affidavit.
Anthony further relied on an affidavit of one of his solicitors, Kathleena Hemotitaha Young, sworn on 31 August 2022, in which Ms Young deposed to the timing of the receipt of various files, which are being reviewed for purposes of preparing the Consolidation Application. She also deposed to professional misconduct proceedings against one of the executors, Kevin Edward Roache (Roache), in VCAT (which have resulted in Roache surrendering his practising certificate) and criminal charges having been laid against him.
Anthony also referred in his written submission to two earlier affidavits of Kim in this proceeding, sworn on 8 December 2021 (Kim’s First Affidavit) and on 27 August 2022 (Kim’s Second Affidavit).
Mathew relied on his affidavit sworn on 26 August 2022 (Mathew’s Affidavit). That affidavit made reference to, and adopted, two earlier affidavits sworn by Mathew in the Separation Proceeding[3] (Mathew’s affidavits sworn on 17 May 2021, and 19 May 2021), the latter of which counsel expressly relied on.[4] Mathew also relied on an affidavit of one of his solicitors, Brendon Herbert James, sworn on 31 August 2022, in which he deposed to interlocutory steps and orders in the Separation Proceeding, as well as various correspondence involving the parties. Mathew also relied on three affidavits of Kim sworn on 8 December 2021 (being Kim’s First Affidavit), 21 May 2020 (sworn in the First Geelong Quarries Proceeding, which is referred to below) and 27 August 2022 (being Kim’s Second Affidavit).
[3]Explained at paragraph 14 below.
[4]T47.20–25.
Kim relied on Kim’s Second Affidavit sworn on 27 August 2022.
Proceedings between the siblings
By way of general overview, this proceeding (and the two other current Supreme Court proceedings) arise from disputes between the siblings concerning the distribution of assets, and control of family companies, following the death of their father Peter Hoare (Peter) on 19 May 2011. The executors of Peter’s estate are Anthony, Mathew, Roache and John Clement Nagle (Nagle). Although probate of Peter’s estate was granted on 14 November 2011, the affairs of the estate have still not been concluded, and the current suite of proceedings involves Roache and Nagle.
The proceeding in which the Summons was issued was commenced by originating process dated 14 October 2021. The originating process seeks declaratory and injunctive relief under ss 232, 233 and 1324 of the Corporations Act 2001 (Cth) (the Act), interim orders pursuant to the same provisions, and alternative relief pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules). Paragraphs 1 and 2 of the originating process are in the following terms:[5]
[5]Paragraph 3 sought relief under r 54.02 but was not relied on by Anthony in support of his contentions that the current proceeding is a suitable vehicle for the interlocutory relief sought. That is understandable given it is not apparent at first blush how Anthony could obtain relief of the kind referred to in paragraph 3 of the originating process which, inter alia, would have obliged Mathew and Kim to resign as directors of GQ and require that the shares issued to Markee be cancelled. Relief of that kind is a far cry from the typically advisory nature of the relief available in the order 54 jurisdiction.
1 An order pursuant to sections 232, 233 and 1324 of the Corporations Act 2001 (Cth) that:
(a) the First and Second Defendants have engaged in oppressive conduct.
(b)the First and Second Defendants be removed as directors of Geelong Quarries Pty Ltd.
(c) the shares issued to Markee Custodians Pty Ltd be cancelled.
(d) the First and Second Defendants compensate Geelong Quarries Pty Ltd for all loss and damage occasioned by them.
2 Interim orders pursuant to sections 232, 233 and 1324 of the Corporations Act 2001 (Cth) that:
(a) Until further order, or the determination of Supreme Court Proceeding S ECI 2020 03342 and Supreme Court Proceeding S ECI 2020 02806, the First and Second Defendants are restrained from:
(i) acting as directors of Geelong Quarries Pty Ltd;
(ii) in any capacity, appointing any other directors of Geelong Quarries Pty Ltd;
(iii)issuing any further shares in Geelong Quarries Pty Ltd to any other person or entity;
(iv) dealing with the shares held by them (either directly or beneficially) in Geelong Quarries Pty Ltd;
(v) terminating the Quarry Agreement dated 1 July 2013 between Galaxie Investments Pty Ltd and Geelong Quarries Pty Ltd; and
(vi) terminating the existing contractual arrangements between Hoare Bros Pty Ltd and Geelong Quarries Pty Ltd.
(b) Until further order, or the determination of Supreme Court Proceeding S ECI 2020 03342 and Supreme Court Proceeding S ECI 2020 02806, an independent director (in addition to the Plaintiff) be appointed to Geelong Quarries Pty Ltd.
The two other proceedings currently on foot are proceeding S ECI 2020 03342 (the Separation Proceeding) and S ECI 2020 02806 (the Distribution Proceeding). Broadly, the Separation Proceeding involves Anthony (and a related company) seeking to enforce against Mathew (and other involved corporations) a ‘Separation Agreement’ said to have been reached between mid-2016 and August 2017 concerning one limb of the family business empire, referred to as the ‘Hoare Bros Business’.
Anthony is also the plaintiff in the Distribution Proceeding. Mathew, Roache, Nagle and Amberlowe Pty Ltd (Amberlowe) are the defendants. Amberlowe is the corporate trustee of the Hoare Family Settlement Trust (the Family Trust). Amberlowe owned a large number of properties and held cash. Broadly, Anthony alleges that a ‘Division of Assets’ was agreed in December 2017 and, whereas Mathew and Kim have received their (effectively one third) distributions, Anthony has not.
There is a further proceeding, S ECI 2020 01838 (the First Geelong Quarries Proceeding), which was issued by Anthony, against Mathew and Kim, in April 2020. That proceeding challenged the appointments of Mathew and Kim as directors of GQ under s 1322 of the Act and sought permanent and interim orders restraining Mathew and Kim from taking various steps concerning GQ, including terminating the Quarry Agreement between Galaxie Investments Pty Ltd (Galaxie) and GQ. Galaxie holds the title to ‘Liberton’, which is a property of about 1800 acres located on the Hamilton Highway at Stonehaven. GQ conducts quarrying operations at Liberton (on a portion of the land) pursuant to an agreement between Galaxie and GQ (the Quarry Agreement). By the Quarry Agreement, Galaxie licensed GQ to conduct quarrying operations, and GQ is obliged to pay Galaxie a royalty. GQ holds the ‘Work Authority’ under the Mineral Resources (Sustainable Development) Act 1990 (Vic) (Work Authority Number 1407) (the Work Authority).
The First Geelong Quarries Proceeding was dismissed pursuant to consent orders on 25 June 2020. The ‘Other Matters’ in the orders record an undertaking by Mathew and Kim not to seek to convene a meeting of GQ to terminate the Quarry Agreement, and an acknowledgement by Anthony that Mathew and Kim were validly appointed as directors of GQ.
The Family Trusts and the Will
To put in context some of the matters addressed below, it is necessary to say something of Peter’s Will, two relevant family trusts and the earlier shareholding structure of GQ.
These matters arise because Anthony says that Peter’s shares in Galaxie (four of six shares, held by his estate) and Peter’s shares in GQ (originally 10 of 10 shares at the time of Peter’s death) form part of the residue of his estate and ‘in accordance with the Will ought to have been transmitted to Amberlowe and thereafter dealt with in accordance with the Family Trust Deed’.[6] Anthony says certain distributions have not been made in accordance with the Will or the terms of the Family Trust Deed.
[6]Anthony’s submissions, [20].
It is convenient to set out the necessary background by quoting Anthony’s submissions, omitting contentious paragraphs.[7] Those submissions set out the necessary background succinctly. The extract below omits contentious statements, footnotes to the affidavits, paragraph numbers, and paragraphs reciting matters already addressed above. It also interposes additional matters, noted in square brackets.
[7]I note the observations of the Court of Appeal in Warburton Environment Inc v Vicforests [2021] VSCA 194, [93]–[94], [97] (Niall, Emerton and Kennedy JJA) regarding the level of detail and recitation of the evidence necessary in decisions on interlocutory injunction applications.
There are two key trusts involved in the dispute.
Galaxie is the corporate trustee of the Peter Hoare Family Trust (Peter Hoare Trust).
Amberlowe Pty Ltd (Amberlowe) is the trustee of the Hoare Family Settlement Trust (Family Trust). …
Prior to his death, Peter executed a Will, and a non-binding letter of instructions entitled “Testamentary Request” (Letter of Instructions).6
The Will records that:
(a) Anthony, Mathew, Roache and Nagle are to be executors;
(b)Peter bequeathed the 5 shares he held in Amberlowe to his trustees to be held by them in accordance with the Will;
(c) Peter bequeathed:
(i)$100,000 and all household furniture and effects to his wife, Dianne Hoare (Dianne); and
(ii)the rest and residue of the Estate to the trustees upon trust to sell, call in collect and convert the same into money and to:
(A) payout all liabilities;
(B)pay the residue to Amberlowe to be held pursuant to the terms of the Family Trust deed.
The Corpus Beneficiaries under the Family Trust were the Amberlowe directors, shareholders, employees, spouses and children of employees.
Kim was not a Corpus Beneficiary under the Family Trust deed. [Mathew noted that, as a sibling of Corpus Beneficiaries, Kim is within the class of general beneficiaries, as defined in the Family Trust Deed and that, by cl 7, the Trustees were empowered to transfer any part of the Trust Fund to one or more beneficiaries.]
At the time of his death, Peter was a co-director of Galaxie with Anthony.
The current shareholding of Galaxie is:
(a) 4 ordinary shares: Peter;
(b)1 ordinary share: O’Hare Pty Ltd (being a company controlled by Mathew); and
(c) 1 ordinary share: Anthony. …
Galaxie holds the Liberton property in its capacity as trustee of the Peter Hoare Trust.
The specified beneficiaries under the Peter Hoare Trust are Anthony, Mathew and Kim.
Mathew has been, since 30 August 2011, the sole director of Galaxie.[8]
[8]Anthony’s submissions, [3]–[19].
Anthony contends that the shares held by Peter in Galaxie and GQ were required to be transferred to Amberlowe on his death and thereafter dealt with under the terms of the Family Trust Deed. He says the distributions made to Kim and Mathew go ‘well beyond the terms of the Family Trust Deed, and insofar as Peter’s shareholdings in both Galaxie and [GQ] are concerned, in breach of the Family Trust deed’.[9] As noted in the square bracketed addition to the above extract at paragraph 20, Mathew takes a broader reading of the Family Trust Deed and Kim’s position as a beneficiary under that deed.
[9]Anthony’s submissions, [66].
Quarrying operations: GQ and HB
GQ was registered in 2008. It was not, initially, an operating company, but has held the Work Authority since 2012.
Anthony takes issue with the treatment of Peter’s shares in GQ. At the time of his death, there were 10 shares in GQ. Anthony says that Mathew, with Nagle’s involvement, simply took these shares for himself in 2011. ASIC records show the 10 shares being transferred to Mathew on 16 December 2011. Then, further ASIC records shows the 10 shares being transferred by Mathew with five going to H4MC and five going to ET on 26 February 2013. Anthony says he only recently (in July 2022) obtained control of ET and that the company was previously controlled by Nagle on trust for him. Despite ET obtaining half the shares on issue in GQ, Anthony now says the initial transfer to Mathew was invalid, along with essentially all dealings in GQ’s shares and the appointment of Mathew and Kim as directors thereafter.
It appears that H4MC appointed Kim and Mathew as directors of GQ in March 2020, relying on cl 69 of GQ’s Constitution, which enables the holder of at least 50% of the shares to ‘appoint additional Directors’. Anthony says that, due to the original defects in the shares Mathew obtained in GQ from Peter, these appointments are invalid, as is the issue of five shares to Markee in mid-2021, which Kim and Mathew apparently used their power as directors (under cl 12(1) of GQ’s Constitution) to issue. Anthony also says this share issue to Markee was invalid due to the alleged defects in the appointment of Kim and Mathew as directors. Anthony submitted, adopting colloquial language, that Kim’s interests ‘only piggyback’[10] on the flawed entitlement which Mathew asserts. Mathew and Kim say Anthony was aware of the 2013 transfer to H4MC and ET, as he signed the ASIC form. They also say he is estopped from contesting the validity of Kim and Mathew’s appointment as directors, given the acknowledgement contained in Other Matters in the orders dismissing the First Geelong Quarries Proceeding.
[10]T11.28–29.
Anthony contends that, because he did not control ET at the time H4MC appointed Kim a director of GQ (and so could not equalise the number of directors), Mathew and Kim have been able to form a voting block to defeat his interests.
GQ obtained the Work Authority in 2012. It entered into the Quarry Agreement with Galaxie on 1 October 2012. That agreement was for a term of 10 years, with four further 10 year options. The Quarry Agreement acknowledges that GQ may use another entity to undertake the quarrying work. The Quarry Agreement provides for GQ to pay a royalty to Galaxie, but Anthony and Mathew disagree about whether the royalty rate and other terms were set with the intention that GQ would not generate a profit.
Part of Anthony’s current sensitivity regarding the Quarry Agreement stems from Mathew having taken steps to try and terminate the Quarry Agreement between Galaxie and GQ soon after he became a director. This was then addressed through the issue of the First Geelong Quarry Proceeding, in which Mathew and Kim then gave undertakings not to terminate that agreement.
On 30 June 2022, Anthony, on behalf of GQ, issued a notice to Galaxie exercising the option to take up another 10 year term. While it appears that Mathew and Kim initially took umbrage at Anthony purporting to act for GQ in this unilateral manner (hence Markee issuing Kim’s Notice), they all now agree that it is in GQ’s interests that the 10 year extension occur.
HB is a company forming part of the ‘Hoare Bros Business’. There is a dispute in the Separation Proceeding about whether or not GQ is also part of the ‘Hoare Bros Business’, such that Mathew should exit GQ.
HB has provided quarrying services to GQ since about 2013. There is no formal written agreement between HB and GQ. At the time these arrangements were established, Mathew also worked at HB (along with Anthony) and they had not yet come to (metaphorical) blows. Mathew no longer works at HB.
Since the siblings’ relationship soured, they each have various complaints about the other and the how arrangements between GQ and HB are operating. The evidence descended into quite some detail regarding the mutual complaints. Those matters are noted, in summary form, in setting out the parties’ key contentions below.
The parties’ key contentions
Anthony’s key contentions are that:
(a) there has been non-compliance with the Will and the terms of the two trusts in the distribution of assets to Mathew and Kim and their controlled entities;
(b) Mathew and Kim have assumed ownership of shares in GQ and have sought to control Galaxie when they have no power to do so;
(c) the present state of affairs in GQ, with Mathew and Kim being directors, is flawed and legally baseless;[11]
[11]In answer to Mathew pointing out that he has attended five of the 13 board meetings of GQ, Anthony says that he attended them to seek payment for HB, and so his attendance is not a tacit admission that Mathew and Kim were validly appointed and exercising powers as directors.
(d) Mathew and Kim are seeking to conduct the tender for the quarrying services presently conducted by HB to harm Anthony and his interests in circumstances where:
(i) HB has been undertaking the quarrying work for many years (since 2013);
(ii) Mathew was involved in HB for a number of years and set up many of the systems and practices about which complaint is now made;
(iii) there is no urgency to arranging a tender; and
(iv) Mathew’s Notice was a reactive and retaliatory move after the Consolidation Application was foreshadowed;
(e) Mathew and Kim have engaged in oppressive conduct including:
(i) Mathew’s conduct in the initial taking of the 10 shares in GQ following Peter’s death; and
(ii) various aspects of the way in which GQ has been run, including seeking to harm Anthony and his interests, including by seeking unreasonable amounts of information and being excessively slow in approving the payment of invoices issued to GQ by HB and other creditors;
(f) Mathew and Kim’s concerns about HB’s operations (as referred to below) are refuted by Anthony in his various affidavits;[12] and
(g) Mathew has effectively pre-determined the outcome of a tender in a manner adverse to HB.
[12]See Anthony’s submissions, [57].
Mathew and Kim’s[13] key contentions are that:
[13]Kim adopted Mathew’s submissions and clarified that Mathew was appointed a director by H4MC exercising its powers under cl 69(2) of GQ’s Constitution, and not by her, as Anthony’s submissions asserted.
(a) the board of GQ was regularly appointed, and, as noted above, Anthony is estopped from contesting their appointments as a result of Anthony’s acknowledgement recorded in Other Matters in the final orders in the First Geelong Quarries Proceeding;
(b) the proposed resolutions to terminate the informal agreement with HB for quarrying services and to conduct a tender simply involves the board of GQ making commercial decisions, with which the Court should not interfere;
(c) the conduct of a tender is in the interests of GQ as:
(v) the agreement between GQ and HB is unwritten and contracts of no fixed duration are terminable on reasonable notice;
(vi) Mathew has various concerns and complaints about HB, which include HB charging an uncompetitive rate for cartage (meaning GQ is likely to be able to obtain a more favourable contract with another provider), and failing to provide records of rock extracted;
(vii) it is good practice to conduct tenders in relation to significant contracts and the tender is likely to result in a substantial reduction to the amount paid by GQ for quarrying services;
(viii) it is in GQ’s interests that it have a formal agreement with its quarrying services provider, which should address matters which include insurance, indemnities, reporting obligations, minimum extraction requirements and other matters;
(ix) Mathew is concerned about GQ’s ability to monitor its compliance with its own obligations regarding extraction limits imposed under its Work Authority; and
(x) the relationship between Anthony and Mathew has broken down and, if they are to work together, there will need to be a formal agreement setting out the parties’ rights and obligations;
(d) the present proceeding is an oppression proceeding, but the members of GQ have not been joined (so that Anthony has no standing as he is not a member of GQ);
(e) no case of oppression of ET, a member of GQ, has been articulated whereas:
(i) an oppression case cannot serve as a vehicle to protect interests of Anthony generally or HB; and
(ii) even assuming that consolidation of the three proceedings were to occur, no cause of action relating to the informal agreement between GQ and HB has been articulated;
(f) the position Anthony now takes regarding how the assets and shares should have been dealt with are:
(i) inconsistent with his position in the other proceedings; and
(ii) not matters that arise in this oppression proceeding;
(g) damages are an adequate remedy because:
(i) if HB has any cause of action regarding termination of its agreement with GQ (eg insufficient notice), it can pursue that cause of action and seek damages;
(ii) if any cause of action arises against Mathew or Kim in relation to the tender process, or the decision to hold the tender (eg breach of directors’ duties), a claim can be pursued against them; and
(h) granting the injunction until the time of determination of the Consolidation Application would just defer tackling the issues in dispute in this application.
Through the course of the exchange during the hearing of the Summons, Anthony offered (by his counsel) to give the following undertakings:
(a) the usual undertaking as to damages, to be given by Anthony (and also proffered by ET and HB);
(b) to amend this proceeding to join the shareholders in GQ and GQ itself; and
(c) to issue the Consolidation Application within two weeks (noting that Anthony’s legal team is apparently well-advanced in preparation of the consolidated statement of claim).
Legal principles and test to be applied
In Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd, the Court of Appeal summarised the test for the grant of an interlocutory injunction as follows:[14]
Plaintiffs seeking an interlocutory injunction must establish that they have a prima facie case for the relief that they seek and that the balance of convenience favours the granting of an injunction.[15] The Court will consider either separately or as part of the consideration of the balance of convenience whether the plaintiff is likely to suffer injury for which damages would not be an adequate remedy.[16] In considering how strong the plaintiff’s case needs to be, the Court will take into account ‘the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order [sought]’.[17]
Whether the relief sought is prohibitory or mandatory, the Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong to grant or refuse the injunction.[18]
[14][2019] VSCA 318, [106]–[107] (Beach, McLeish and Hargrave JJA) (citations in original).
[15]Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 (O’Neill).
[16]O’Neill, 68 [19], 82 [65].
[17]Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 (Beecham), 622.
[18]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73 [33]–[35].
While Anthony’s submissions were cast in terms of there being various ‘serious questions to be tried’, debate between the parties did not focus on the preferred formulation of the legal test, but on matters of substance concerning the legal and factual matters said by Anthony to warrant maintenance of the status quo.
In Australian Broadcasting Corporation v O’Neill, Gummow and Hayne JJ (with whom Gleeson CJ and Crennan J agreed) observed that, in assessing whether the applicant for an injunction has made out a prima facie case, ‘it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial’, without needing to demonstrate that is more probable than not that the plaintiff will succeed at trial.[19]
[19]O’Neill, 82 [65].
This is also a case in which the interplay between the strength of the prima facie case and the balance of convenience is of some importance. An apparently strong claim on the prima facie case may more readily lead to the grant of an interlocutory injunction when the balance of convenience is fairly even. Conversely, a strong case on the balance of convenience will support the grant of injunctive relief where the plaintiff’s case is more doubtful, provided it still meets the prima facie case threshold.[20]
[20]See the authorities collected in LexisNexis, Civil Procedure Victoria, Vol 1 (at February 2020) [I 38.01.255].
Consideration
The Court has a broad discretion to grant interlocutory injunctive relief. An application for injunctive relief can be made before a proceeding has been commenced (where a matter is urgent)[21] or at any stage of an extant proceeding.[22] The overarching purpose of an interlocutory injunction is to preserve the status quo until trial, or until some earlier point.
[21]Rules, r 4.08.
[22]Rules, r 38.01.
Urgency: does the status quo need to be changed?
The status quo, so far as is relevant to this application, is that HB provides quarrying services to GQ, as it has done since about 2013. While I accept that the deterioration in the relationship between the warring siblings has made the relationship between GQ and HB difficult and fractious, riven, as it is, by mutual mistrust, in my view the evidence does not show any urgent need to terminate the agreement between GQ and HB.
Similarly, I accept that, other considerations aside, for corporate good order and to ensure that important commercial matters of the kind identified by Mathew and Kim are addressed, it would be in GQ’s interests to have a formal agreement with whichever entity conducts the quarrying operations. However, HB and GQ have operated informally for many years and there is no urgency in achieving a formal contract; in other words, the suboptimal situation can continue for another few months (or even years).
For the record, I should state that I do not accept Anthony’s argument (advanced through oral submissions) that there is no need for a tender because the Quarry Agreement between Galaxie and GQ addresses a number of matters said by Mathew and Kim to be deficiencies or inadequacies in the unwritten agreement between GQ and HB. The Quarry Agreement provides GQ with a licence to quarry, and acknowledges that GQ will retain another entity to conduct the actual operations,[23] but says nothing about the relationship between GQ and that other entity, who it is to be (except to the extent that it will be ‘such entity as [GQ] determines from time to time’ and that ‘Galaxie consents to this’) or on what terms that other entity should conduct the quarrying operations.
[23]Quarry Agreement, cl 2.
Prima facie case
Failure to name ET as plaintiff
As noted above, the present proceeding is an oppression proceeding.[24] Pursuant to s 234 of the Act, relevantly, only a member of the company can bring an oppression claim. Anthony is not a member of GQ. Accordingly, unless ET is joined as a plaintiff, the present proceeding has no hope of resulting in any relief being awarded under s 233 of the Act following a trial.
[24]Although s 1324 of the Act is invoked in the originating process, no ‘contravention’ of the Act has been identified so as to require reference to that aspect of the proceeding as it is presently framed. Also, as noted above, the r 54.02 component of the proceeding was not said to form the basis of the prima facie case on which Anthony relied.
The fact that the proceeding was brought by Anthony (and not ET) was explained on the basis that, at the time the proceeding was commenced, ET was controlled by Nagle (on trust for Anthony), and it was only in July 2022 that control of ET was handed to Anthony. There is no suggestion that Anthony instructed, or even asked, Nagle to have ET commence an oppression proceeding.
While the formulation of the present oppression proceeding is fatally flawed due to ET not being a plaintiff, that is a matter that can be readily addressed by joining ET as a plaintiff (and joining the other shareholders and GQ as defendants). As noted, Anthony has offered to give an undertaking to join the necessary parties. Accordingly, I do not consider that the absence of ET as a plaintiff at the time the Summons was issued and argued is fatal to the application for interlocutory injunctive relief.
Whether matters identified by Anthony as serious questions to be tried[25] arise in this proceeding
[25]See Anthony’s submission, [86].
As noted, the purpose of an interlocutory injunction is to preserve the status quo until trial, or until some earlier point. The question of preserving the status quo arises on the basis that the status quo being preserved is something which the outcome of the proceeding will (if the plaintiff succeeds) vindicate.
In order to make out a prima facie case in relation to any particular issue, the issue needs to arise in the proceeding; merely identifying an issue that is not part of a present or proposed proceeding will not suffice to obtain an injunction, no matter how compelling a plaintiff’s case is.
In an oppression proceeding, the question to be addressed is whether:[26]
[26]Section 232 of the Act.
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a company; or
(c)a resolution, or a proposed resolution, of members or a class of members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.
Accordingly, the question arises as to how it is put that (relevantly) the conduct of GQ’s affairs, or the proposed resolution, is contrary to the interests of the members of GQ as a whole, or oppressive to, or unfairly prejudicial to, or unfairly discriminatory against, ET whether in its capacity as a member or otherwise.
Mathew’s argument emphasised the failure of Anthony to articulate how it was put that terminating the agreement between GQ and HB, and putting the quarrying services out to tender, was oppressive in the requisite sense. It was submitted that, in order to succeed in obtaining an interlocutory injunction, the effect of which would be to prevent the termination of the informal agreement between HB and GQ, Anthony’s proceeding must assert a legal right to obtain that relief.[27] Mathew emphasised that the entity adversely affected by termination was HB (and Anthony as the person enjoying the economic fruits of HB), and not a shareholder in GQ, namely ET. Mathew also emphasised that the contentions advanced by Anthony to the effect that the transfers of property which underpin the present position (whereby Mathew and Kim are directors and (via controlled entities) shareholders in GQ) being inconsistent with the Will and the two trust deeds, are not matters that will arise for determination in this oppression proceeding.
[27]T68.5–12; T69.13–14.
In my view, Mathew’s submissions look at the matter rather too narrowly for the following reasons.
If a meeting of the board of GQ is held and the resolutions to terminate the agreement between GQ and HB and conduct a tender pass, those resolutions will only be valid if Mathew and Kim were validly appointed directors. If Anthony ultimately succeeds, Mathew and Kim would not have been validly appointed directors and any actions they took in that capacity may be impugned, or they will be removed as directors. Considering whether to preserve the status quo involves considering whether their proposed actions as directors should be permitted to proceed while their appointments are under challenge, or their removal is otherwise sought on the basis of oppressive conduct. I do not accept that an interlocutory injunction cannot (as Mathew appeared to argue) be made to preserve the status quo and prevent steps being taken as a director to terminate an informal agreement because the substantive action attacks the directors’ original (and continued) appointment and not the general ability of the company’s board to terminate an informal contract on reasonable notice.
Paragraph 1(b) of the originating process seeks an order that Mathew and Kim be removed as directors of GQ. In submissions, Anthony confirmed that the removal was sought on the basis that their conduct in the management of GQ involved oppressive conduct, as well as on the basis that there were defects in their appointments.[28] As to the latter, Anthony also confirmed that the argument he will put in support of paragraph 1(a) of the originating process, which seeks a finding that Mathew and Kim have engaged in oppressive conduct, will include a contention that the oppressive conduct includes Mathew’s allegedly wrongful taking of Peter’s shares in GQ in 2011.[29]
[28]T126.5–16.
[29]T83.17–84.21.
There are a number of answers that Mathew and Kim advance in response, which include the contention that Anthony is estopped from challenging their current status as directors due to consent orders that were made in the First Geelong Quarries Proceeding. Anthony disputes that he is estopped as claimed. I was not taken to any material concerning the First Geelong Quarries Proceeding and its resolution, besides the originating application, which sought (citing ss 236 and 1322 of the Act) a declaration that the appointment of Mathew and Kim as directors was ‘invalid’. Without any exploration of the basis upon which the alleged invalidity was advanced, and the basis upon which the proceeding was resolved (beyond the bare terms of the final order), I cannot conclude for the purposes of this interlocutory application that Anthony is estopped from challenging Mathew and Kim’s appointments as he seeks to.
Mathew and Kim also say that the allegations Anthony now makes about the distributions of properties being inconsistent with the terms of the Will and the two trust deeds are inconsistent with the fact that he sues in the Distribution Proceeding to enforce an agreement which the contentions he now makes about the Will and compliance with the trust deeds would inevitably render invalid. In other words, it is said he cannot have it both ways and run arguments in this proceeding to impugn the current state of affairs in GQ (so far as the directors and shareholding are concerned) which are inconsistent with the position he takes in suing on the agreement in question in the Distribution Proceeding. In submissions, Mathew emphasised and detailed the position that Anthony has taken in the other proceedings over some years, and the prospect that the Consolidation Application will involve an attempt to recast Anthony’s case across multiple proceedings.
In answer to the charge of inconsistency, Anthony said (from the Bar table, but without objection) that he only obtained copies of the trust deeds in late September 2021 and in late November 2021, at a time after the Distribution Proceeding and the Separation Proceeding had already been commenced. Anthony stated that, having now obtained those trust deeds, ‘it would come as no surprise that there would likely need to be amendments to those pleadings’.[30] The underlying issues, including insofar as they arise in the foreshadowed characterisation of oppressive conduct, involve the proper administration of a deceased estate, and the adherence of trustees to the terms of the two trusts. Accordingly, it is not obvious that the positions that Anthony may have previously taken in his personal capacity (and at a time when he was ignorant of the terms of the two trust deeds) preclude Anthony’s apparent change of course.
[30]T119.5–7.
It is convenient, in that regard, to address the foreshadowed application to consolidate the three proceedings. While I have referred to it as a ‘Consolidation Application’, the foreshadowed application is more extensive (see paragraph 58 below). The foreshadowed application, and its timing, is to be considered in light of the fact that shortly after this proceeding was commenced, the parties to the three proceedings renewed their efforts to mediate. Accordingly, this proceeding was effectively held in abeyance while that occurred, and the hearing of Anthony’s interlocutory process was deferred to a date to be fixed. That interlocutory process was filed on 21 October 2021 and sought a raft of relief including orders restraining Mathew and Kim from acting as directors of GQ, appointing other directors, and terminating the agreement between HB and GQ.
On 20 July 2022, the chambers of the judge managing this proceeding and the Separation Proceeding emailed the parties asking for an update as to the status of the proceedings. This prompted Anthony’s solicitors to send a detailed email to the other parties’ solicitors setting out a foreshadowed application to consolidate the three proceedings (including joining all necessary parties), seek the appointment of independent managers as executors and trustees of the estate of Peter, as directors of Amberlowe and Galaxie, and as directors of GQ to preserve the status quo regarding arrangements between GQ and HB, and preventing the termination of the Quarry Agreement between Galaxie and GQ. The email was sent at 5:41pm on 1 August 2022. It sought the other parties’ availability for a hearing date for the Consolidation Application in October 2022 and proposed a joint email to the Court. Mathew’s email attaching notice calling a meeting of the board of GQ to consider terminating the agreement with HB and conducting a tender was sent just over two hours later, at 8:00pm. Anthony considers this ‘retaliation’. Mathew disputes that.
Before me, Anthony made repeated reference to being well-advanced in the preparation of a consolidated statement of claim. He offered (by his counsel) to undertake to file the Consolidation Application within two weeks.
The foreshadowed Consolidation Application and proffered undertaking are relevant for a number of reasons.
First, it is clear that Anthony is alive to the tensions — to adopt a neutral expression — between his line of argument advanced in this proceeding and the position he has taken in the Distribution Proceeding and the Separation Proceeding. The Consolidation Application will, of necessity, need to adopt a single, consistent course (cf Mathew’s submission that it would only replace a ‘dog’s breakfast’ spread over three proceedings with a ‘consolidated dog’s breakfast’)[31]. Accordingly, I do not consider that the present tension between the positions adopted in this proceeding and the other proceedings should be regarded as fatal to (or even seriously undermining of) the application for interlocutory relief before me.
[31]T50.26–30.
Secondly, and relatedly, given that the interlocutory injunction is sought until the ‘earlier of’ determination of the Consolidation Application or further order of the Court, and an undertaking has been proffered to bring on the Consolidation Application within two weeks, the interlocutory injunction sought is of limited duration. While Mathew submitted that the grant of an interlocutory injunction would just involve handballing or deferring the issue, in my view, the Court will be in a much better position to assess the strength of Anthony’s claims (and those of his involved corporate entities) once that Consolidation Application has been put on and determined. Accordingly, I do not accept that the Court is in as good a position now, as it will be when the proposed consolidated proceeding has been fully articulated, to assess whether the status quo ought to be preserved until trial, or some other earlier point.
Thirdly, the timing of the Consolidation Application is also relevant for the purposes of assessment of the balance of convenience. There is no evidence that there is a pressing need for GQ to conduct the foreshadowed tender. The reasons Mathew and Kim advance for considering that the present agreement with HB should be terminated, a tender conducted and a formal agreement concluded with the successful tenderer, are reasons largely based on corporate good order and a desire to see a formal agreement cover certain matters they regard as important. But there is no reason to think that the current informal arrangement cannot continue to be conducted for some time to come, despite the operations of GQ being made practically difficult by the mistrust between the siblings (Mathew and Kim on one side, and Anthony on the other) and that difficulty extending to the quarrying operations involving HB (with Anthony complaining about HB’s invoices not being paid in a timely way, and Mathew and Kim complaining about the adequacy of the information being provided by HB).
Fourthly, and turning back to the prima facie case issue, in my view, it would involve the Court adopting an unduly narrow approach to effectively shut its eyes to the existence of the two other proceedings and the foreshadowed Consolidation Application. In my view, having regard to the breadth of the Court’s power[32] to grant an interlocutory injunction pursuant to s 37 of the Supreme Court Act 1986 (Vic) where it is ‘just and convenient’ to do so, and O 38 of the Rules, it is appropriate to have regard to the Consolidation Application and the issues that will come together in a single proceeding if that application succeeds. I also note that the Court can grant interlocutory injunctions before proceedings are issued, having regard to the issues that foreshadowed proceedings will raise. While the analogy ought not be taken too far, the foreshadowed Consolidation Application is, in some ways, akin to a foreshadowed proceeding. Further, the parties’ arguments on this application — including those of Mathew, and Kim, who adopted Mathew’s submissions — travelled extensively into the other proceedings.
[32]See, eg, Rowson v Department of Justice and Community Safety (2020) 60 VR 410, 429 [101] (Ginnane J).
The issues to be agitated in the consolidated proceeding (if the Consolidation Application succeeds) include (as the Separation Proceeding is presently framed) the question of whether GQ is part of the ‘Hoare Bros Business’. In the Separation Proceeding, Anthony says it is, and that he reached an agreement with Mathew that Mathew would ‘exit from the Hoare Bros Business’.[33] The relief sought in that proceeding includes an order that H4MC transfer its shares in GQ to Anthony, or his nominee. The defendants in that proceeding (which include Mathew) dispute that GQ is part of the Hoare Bros Business.[34] If Anthony succeeds in those allegations, Mathew will be removed from GQ. As matters stand, Mathew is a director of GQ and, unless restrained, will be in a position to, and proposes to take action to, terminate the agreement of many years’ standing between GQ and HB. All of which is to say that the interlocutory relief sought in this proceeding also seeks to preserve the status quo in a way that connects with the broader litigious landscape so far as the existing Separation Proceeding, and the foreshadowed Consolidation Application, are concerned.
[33]Statement of Claim in the Separation Proceeding, [13].
[34]Defence in the Separation Proceeding, [10].
Conclusions on prima facie case
Taking the present proceeding in isolation, upon the undertaking by Anthony to join the shareholding entity, ET, the other shareholders in GQ, and GQ itself, in my view Anthony has made out a prima facie case, in the sense of a case with a sufficient likelihood of success to justify in the circumstances the preservation of the status quo for a period of time.
In his affidavits (particularly Anthony’s First Affidavit of 11 October 2021) Anthony sets out a wide range of matters that he says constitute oppressive conduct on the part of Mathew and Kim;[35] those matters are not confined to actions in relation to the services performed by HB. The factual matters are extensive, and contested. An application for interlocutory injunctive relief is not the forum in which such contested facts are to be determined.
[35]Anthony summarises his concerns at [106].
Anthony has also stated that he contends that Mathew’s original action in putting Peter’s shares in GQ into his own name constitutes oppressive conduct. Anthony’s counsel, when asked what was the oppressive conduct referred to in paragraph 1(a) of the originating process, stated that the alleged oppressive conduct included Mathew ‘taking for himself … both a directorship and a shareholding [in GQ] from his father’s estate without authorisation at all’, which also impugns Kim’s current position and that of Markee.[36] While Anthony’s contention that the current shareholding position in GQ is the product of oppressive conduct gives rise to something of a logical conundrum — given it was upon the subsequent transfer of the shares by Mathew, with five going to each of Mathew and Anthony’s entities, that gave Anthony (via ET) a membership interest so as to bring an oppression case — it remains a possibility that relief could be fashioned under s 233 which responds to the oppression, but is also faithful to the contentions concerning the Will and the two trust deeds which may be advanced in support of a contention that the initial taking of the shares by Mathew involved oppressive conduct.
[36]T83.23–T84.5. See also T84.10–24.
If Anthony (or more accurately, upon joinder, ET as the member of GQ) establishes oppressive conduct arising from Mathew and/or Kim’s actions, the Court’s discretion to grant a remedy under s 233 will be enlivened. While I was not addressed on the remedies that may be ordered if the oppression case were to succeed, the Court’s discretion under s 233 is broad, and the originating process seeks orders removing Mathew and Kim as directors. Quite obviously, if they are removed as directors, they will not be in a position to vote on any resolutions affecting the affairs of GQ’s business, whether concerning the services presently provided by HB or otherwise. Further, the relief granted upon a successful oppression case may involve steps to unwind and reconstitute the shareholdings in GQ, should the case succeed on the basis of the initial transfer of the 10 shares to Mathew constituting oppressive conduct.
While the oppression case has not been formulated with any precision, and it was somewhat difficult to understand from submissions exactly how it would be put, the lack of specificity in the detail of the case is largely a function of the proceeding having gone into abeyance soon after being issued to permit mediation to be pursued, and the speed with which the application for interlocutory relief had to be put on after Mathew issued the notice calling the board meeting, mere hours after this proceeding was effectively re-enlivened by Anthony’s 1 August 2022 email foreshadowing the Consolidation Application.
While, perhaps due only to the lack of elaboration of the oppression case, and the extensive, sprawling factual canvas, I am unable to describe the prima facie case as a strong one, as set out below, in my view the merits on the balance of convenience are strong, such that a more marginal prima facie case (albeit one that still meets the necessary threshold) still suffices to warrant the grant of an interlocutory injunction.
As stated, I have concluded that a prima facie case in the requisite sense has been established in the present proceeding, even without having regard to the proposed Consolidation Application. However, and in addition, it is, in my view, appropriate to have regard to the wider factual canvas, which includes the Consolidation Application which will, amongst other things, bring in another basis upon which it is contended Mathew will need to exit GQ, namely the so-called Separation Agreement. The fact that the Separation Proceeding includes an issue as to whether or not GQ forms part of the Hoare Bros Business was referred to by Mathew[37] as well as by Anthony. A prima facie case (in the requisite sense) also exists in relation to that matter which, if the foreshadowed Consolidation Application succeeds, will be a question in this proceeding (as consolidated).
[37]T57.11–18.
Anthony advanced his argument on the basis that the Consolidation Application was relevant to the application for interlocutory relief. The application itself was also framed seeking orders until the determination of the Consolidation Application. Mathew and Kim had the opportunity to address the relevance of the Consolidation Application, but their contentions relating to it focused on a different point: namely to the effect that it appeared a consolidated statement of claim would involve Anthony changing course and no longer conducting the litigation on the same footing he has conducted the other two proceedings for some time.[38] Nevertheless, the argument before me was conducted on the basis that the wider litigious landscape between the siblings was relevant.
[38]No doubt a matter they will raise in due course before the judge hearing the Consolidation Application, whether in opposing it, or in making submissions on the costs consequences of such a step.
The interlinking of this proceeding and the other proceedings is further borne out by Mathew’s and Kim’s affidavit material also delving into aspects of those proceedings.
Balance of convenience and the lesser risk of injustice
The interlocutory injunction is sought for a relatively short period. As noted, an undertaking has been proffered to put on the Consolidation Application within two weeks. Of course, time will need to be allowed for the application to be responded to, for a hearing to be convened, and for the judge hearing the application to consider it. Nevertheless, it may be expected that the likely timeframe is comfortably less than six months.
In my view, the balance of convenience overwhelmingly favours the grant of the interlocutory relief. The informal arrangement between HB and GQ has been operating since in or around 2013. As noted above (see above paragraph 63), there is no pressing need for the quarrying services to be put out to tender in the short-term. Moreover, as Mathew’s counsel frankly stated in submissions, if a tender were to be conducted, HB ‘will presumably not be the front runner’ and would, in effect, have to undercut any other tenderer to have a prospect of succeeding.[39] Against that, if Anthony (and ET) ultimately prevail at trial (whether in this proceeding in isolation or in a consolidated proceeding), Mathew and Kim will (amongst other matters) be removed as directors. Mathew and Kim will also (if this aspect of the Consolidation Application succeeds) be restrained from exercising their powers as directors of GQ and the proposed independent managers would be appointed directors of GQ. It is relevant to note, in this regard, that Anthony earlier filed an interlocutory process in this proceeding on 21 October 2021. While the hearing of that application was deferred to allow mediation to occur, had it been heard in the ordinary course and had it succeeded, Mathew could not have served the Mathew Notice, which triggered this application for urgent interlocutory relief.
[39]T104.6–20.
I also take into account that, if no interlocutory injunction were ordered, the writing is on the wall that the informal agreement between HB and GQ will be terminated and another company will be appointed to perform quarrying services. In view of the impact Anthony says this will have on staff of HB, and the likelihood of those events triggering yet more litigation, possibly involving a third party tenderer (if put on notice of Anthony’s claims), this is not a case in which damages would be an adequate remedy. Rather, the status quo ought to be preserved, at least until the Consolidation Application is on foot and determined.
For these reasons, in my view, it is clear that the lesser risk of injustice lies in preserving the status quo until the hearing or determination of the Consolidation Application, or other order. The worst case for Mathew and Kim (and GQ itself) is that they have to continue to muddle along with the present arrangements, with the attendant aggravations those arrangements entail for both sides, for several months.
Conversely, if the interlocutory relief is not granted, and GQ holds the meeting in question and terminates the informal quarrying services agreement with HB, it is likely that a third party will be formally appointed and common sense would dictate that (given the need for expensive quarrying machinery, hire agreements and staff)[40] a contract with a third party quarrying operator would not be of such short duration that Anthony could procure HB simply stepping back in if he prevails at trial. In other words, the status quo will not be able to be restored. Further, Anthony deposed that a material percentage of HB’s income is from the quarrying operations at Liberton and that at least some of HB’s staff would have to be made redundant if HB were to lose the quarrying services work conducted for GQ.[41]
[40]Anthony deposed to HB having made ‘substantial purchases, and entered into substantial hire agreements for supplies, plant and equipment’ to conduct the quarrying operations, as well as to HB employing (as at October 2021) approximately 43 people (Affidavit of Anthony Hoare sworn on 11 October 2021, [66]).
[41]Anthony further deposed, by way of update as at August 2022, to HB employing approximately 55 people, with six of those employees being full-time and would become unemployed if HB ceased providing services to GQ (Affidavit of Anthony Hoare sworn on 23 August 2022, [39], corrected by his subsequent affidavit sworn on 30 August 2022).
Relief
The summons seeks an interlocutory injunction with a number of components. I do not consider that the following components are necessary or warranted:
(a) An injunction preventing the defendants from calling or participating in any meetings of GQ (or voting on resolutions) for the purposes of ‘altering the Plaintiff’s interests in Geelong Quarries Pty Ltd’. Anthony personally does not hold direct interests in GQ and there is no indication that Mathew or Kim propose the company hold a meeting for the purpose of ‘altering’ the existing interests in GQ (whatever ‘altering’ means in this context). If Anthony’s concern is that Mathew and Kim will take steps to issue further shares in GQ, they would need to give notice of such a proposal, at which time Anthony can respond accordingly.[42]
(b) An injunction preventing the defendants from calling or participating in any meetings of GQ (or voting on resolutions) for the purposes of terminating the Quarry Agreement. As was stated on the transcript, it is agreed by Mathew and Kim that it is in the interests of GQ that the Quarry Agreement between GQ and Galaxie continue. While that position may not have been obvious from the notice served by Kim (on behalf of Markee) requisitioning a general meeting of GQ, given the position taken on the record, I do not consider there is any live risk of steps being taken to terminate the Quarry Agreement by GQ. Accordingly, there is no present need for injunctive relief to preserve the status quo as it relates to that contract.
(c) An injunction preventing the defendants from ‘taking any steps other than as required in the ordinary course of business’. The practical operation of this proposed injunction is rather uncertain. Moreover, there has not been any articulation of the actions Anthony is concerned may be taken which would be otherwise than in the ordinary course of business, but which ought to be enjoined (other than the steps in relation to the informal agreement with HB and the Quarry Agreement between GQ and Galaxie).
[42]The orders made on 25 June 2020 in the First Geelong Quarries Proceeding, in other matters at paragraph C, record Mathew and Kim undertaking to not convene a meeting of the directors of GQ to ‘change the shareholders or shareholdings in the Company [GQ] without first giving Anthony Hoare 60 days prior written notice of their intention to do so’.
Accordingly, I will order as follows:
Upon the plaintiff undertaking to:
A.forthwith amend the originating process to join ET Investments (Vic) Pty Ltd as a plaintiff, and H4MC Pty Ltd, Markee Custodians Pty Ltd and Geelong Quarries Pty Ltd as defendants;
B.make his application to consolidate proceedings S ECI 2020 02806, S ECI 2020 03342 and S ECI 2021 03781 by 4:00pm on 22 September 2022 in generally the terms set out in the email dated 1 August 2022 exhibited to pages 203–4 of exhibit bundle “APH-1” to the Affidavit of Anthony Hoare sworn on 23 August 2022 (the Consolidation Application);
and upon the plaintiff, ET Investments (Vic) Pty Ltd and Hoare Bros Pty Ltd undertaking to:
C.abide by any order the Court may make as to damages in case the Court shall hereinafter be of the opinion that the defendants shall have sustained any loss, by reason of these orders, which the plaintiff ought to pay;
the Court orders that:
1.Until the earlier of determination of the plaintiff’s Consolidation Application, or further order of the Court, or agreement between the parties, the first and second defendants are restrained from:
(a)calling or participating in any meetings of Geelong Quarries Pty Ltd (or voting on any resolutions) for the purpose of terminating the contractual arrangements between Hoare Bros Pty Ltd and Geelong Quarries Pty Ltd;
(b)voting on the resolutions set out in the first defendant’s notice of board meeting dated 1 August 2022; and
(c)proceeding with the meeting proposed to be convened pursuant to the first defendant’s notice of board meeting dated 1 August 2022.
2.The plaintiff has leave to amend the originating process to join ET Investments (Vic) Pty Ltd as a plaintiff, and H4MC Pty Ltd, Markee Custodians Pty Ltd and Geelong Quarries Pty Ltd as defendants.
3.To the extent r 9.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) applies to the steps in respect of which leave has been granted under order 2 of these orders, the requirement to comply with that rule is dispensed with.
4. Costs are reserved.
3.There is liberty to apply.
Postscript
After my chambers emailed the parties on 7 September 2022 to advise that I would be delivering judgment on the interlocutory application the following afternoon, Mathew’s solicitors responded to that email attaching another affidavit of Mathew, sworn on 7 September 2022. The covering email simply said ‘[w]e respectfully inform that the First Defendant shall be seeking the Court’s leave at the hearing tomorrow to rely on the attached affidavit’.
A hearing to deliver judgment is not an invitation to seek to rely on further material, even less so when a hearing is needed for undertakings to be given to the Court on transcript.
The hearing of the application for an interlocutory injunction occurred a week prior, on 1 September 2022, and no notice had been given to the Court that Mathew was seeking to compile an additional affidavit (although it appears that Mathew had (by his solicitors), on 6 September 2022, sought Anthony’s consent to a further affidavit of Mathew’s solicitors being provided to the Court, which consent was refused).
I reject the attempt to rely on this late affidavit.
In any event, even if I were to permit it, it would make no difference to the course of reasoning set out above. So far as it refers to the involvement of Anthony in the 2013 transfers of the shares in GQ, that point was already made in the hearing by reference to ASIC records. So far as it refers to knowledge or involvement by Anthony in the impugned 2011 transfer of Peter’s shares in GQ to Mathew, it raises contested facts. As already noted, factual contests cannot be resolved on an application for interlocutory injunctions. Those contested facts indicate that Mathew may be expected to contend that it is not open to Anthony to contend that the original transfer of the shares to him constitutes part of the oppressive conduct in question. Ironically, in advancing that anticipated contention, Mathew will need to grapple with the same corporate veil point urged upon the Court during the 1 September 2022 hearing, but this time relied on by Mathew against Anthony in submitting that harm to Anthony’s interests cannot found an oppression case when the member of GQ is ET. Further, as also noted above, where the issues involve the due administration of a deceased estate and adherence to the terms of trust deeds, the knowledge and involvement of Anthony in earlier dealings in shares in GQ may well not be a complete answer. Certainly, such knowledge is not a ‘knock out blow’ in resisting the interlocutory injunctions.
SCHEDULE OF PARTIES
S ECI 2021 03781
| BETWEEN: | |
| ANTHONY PETER HOARE | Plaintiff |
| - and - | |
| MATHEW CHARLES HOARE | First Defendant |
| KIM MCDONALD | Second Defendant |
2
2
0