Legal Research
Cases
Re Tolco Pty Ltd

Re Tolco Pty Ltd

Case [2016] NSWSC 1069 3 August 2016

Members’ Rights

Inspection of Books

Good Faith

Corporate Law & Governance

No judgment structure available for this case.

Type to search within this case.

Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Tolco Pty Limited [2016] NSWSC 1069
Hearing dates: Friday, 29 May 2015
Date of orders: 03 August 2016
Decision date: 03 August 2016
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
See paras [27]-[28]

Catchwords: CORPORATIONS – members’ rights and remedies – inspection of books – whether application made in good faith and for proper purpose – application by 50% shareholder in closely held company – application granted.
Legislation Cited: (CTH) Corporations Act 2001, s 9, s 254T, s 247A, s 440D
Cases Cited: Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344
Barrack Mines Ltd v Grants Patch Mining Ltd (1987) 12 ACLR 357
Barrack Mines Ltd v Grants Patch Mining Ltd (No 2) [1988] 1 Qd R 606
Boulos v Carter (2005) 54 ACSR 827
Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115
Claremont Petroleum NL [No 2], Re [1990] 2 Qd R 310
Czerwinski v Syrena Royal Pty Ltd (No 1) (2000) 34 ACSR 245; [2000] VSC 125
ENT Pty Ltd v Sunraysia [2007] NSWSC 270; (2007) 61 ACSR 626
Garina Pty Ltd v Action Holdings Ltd (1989) 7 ACLC 962
Humes Ltd v Unity APA Ltd (No 1) [1987] VicRp 42; [1987] VR 467; (1986) 11 ACLR 641.
Keenfern Pty Ltd v Thorlock International Ltd (2002) 20 ACLC 1322; [2002] WASC 142
Knightswood Nominees Pty Ltd v Sherwin Pastoral Co Ltd (1989) 15 ACLR 151; 7 ACLC 536.
McNeill v Hearing & Balance Centre Pty Ltd [2007] NSWSC 942
Motasea Pty Ltd, In the matter of [2014] NSWSC 69
Praetorin Pty Ltd v TZ Ltd [2009] NSWSC 1237; (2009) 76 ACSR 236
Rowland v Meudon [2008] NSWSC 381; (2008) 220 FLR 362; 66 ACSR 83.
Smartec Capital Pty Limited v Centro Properties Limited & Anor [2011] NSWSC 495
Snelgrove v Great Southern Managers Australia Ltd [2010] WASC 51
Style Ltd, Re; Merim Pty Ltd v Style Ltd [2009] FCA 314; (2009) 255 ALR 63
Tinios v French Caledonia Travel [1994] FCA 1154; (1994) 13 ACSR 658.
United Rural Enterprises Pty Ltd v Lopmand Pty Ltd [2003] NSWSC 404
United Rural Enterprises Pty Ltd v Lopmand Pty Ltd (2003) 45 ACSR 271; [2003] NSWSC 405
Vinciguerra v MG Corrosion Consultants Pty Ltd [2007] FCA 503; (2007) 61 ACSR 583
Texts Cited: Christos Mantziaris, "The member's right to inspect the company books: Corporations Act, s 247A" (2009) 83 ALJ 621
Category: Principal judgment
Parties: Tom Folino-Gallo & Sons Investments Pty Limited (plaintiff)
Tolco Pty Limited (defendant)
Representation:
Counsel:
G M McGrath (plaintiff)
R Glasson (defendant)
Solicitors:
Hansons Lawyers (plaintiff)
Eakin McCaffery Cox (defendant)

File Number(s): 2014/250065

Judgment

By Originating Process filed on 28 August 2014, the plaintiff Tom Folino-Gallo & Sons Investments Pty Limited (“TFGS”) sought orders under (CTH) Corporations Act 2001, s 247A, authorising it to inspect books and records of the defendant Tolco Pty Limited, in which…

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 Re Tolco Pty Ltd

Details

AGLC: Re Tolco Pty Ltd [2016] NSWSC 1069
Case: [2016] NSWSC 1069
Decision Date: 03 August 2016

CaseChat Overview and Summary

The case of Re Tolco Pty Ltd concerned an application by a 50% shareholder in a closely held company to inspect the company’s books and records. The applicant sought to exercise statutory rights provided by section 247C of the Corporations Act 2001 (Cth). The dispute was heard by the Supreme Court of New South Wales, Equity Division.

The central legal issue was whether the application was made in good faith and for a proper purpose. The court had to consider the nature of the shareholding and the rights afforded by the statute, as well as the balance between the rights of minority shareholders and the rights of the company to protect its confidentiality and commercial interests. The applicant argued that the inspection was necessary to understand the company’s financial position and operations, while the company opposed the application, citing potential harm to its business interests.

The court found that the application was indeed made in good faith and for a proper purpose. It emphasised the importance of protecting minority shareholders’ rights and noted that the 50% shareholder, while holding a significant interest, was still a minority shareholder in the context of the company's overall structure. The court was satisfied that the applicant had demonstrated a legitimate need for the inspection, and thus granted the application. The court balanced the applicant’s rights with the company’s legitimate concerns, ultimately determining that the inspection was warranted under the circumstances.

The final orders of the court mandated that Tolco Pty Ltd provide the applicant with access to the requested books and records within a specified timeframe, ensuring that the inspection was conducted in a manner that minimised any potential harm to the company's operations and confidentiality.

Orders