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Rowland v Meudon Pty Ltd

Rowland v Meudon Pty Ltd

Case [2008] NSWSC 381 2 May 2008

Jurisdiction

Inspection of Documents

Levies for Litigation Costs

Corporate Law & Governance

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Reported Decision:
220 FLR 362

New South Wales

Supreme Court

CITATION: ROWLAND v MEUDON PTY LIMITED [2008] NSWSC 381

HEARING DATE(S): 21/04/2008

JUDGMENT DATE :
2 May 2008

JURISDICTION: EQUITY

JUDGMENT OF: Bryson AJ

DECISION: 1.An order pursuant to Section 247A of the Corporations Act 2001, authorising the Plaintiff to inspect documents recording matters taken into account by the directors of the company in the defence, or prosecution of the defence, of Supreme Court proceedings No. 5011/2002 and the Appeal, and in particular documents recording:
i. deliberations of the company or the Board concerning the prospects of success of the defence of the respective proceedings;
ii. advices, whether of a legal nature or otherwise, in relation to the respective proceedings and their prosecution;
iii. consideration given to the costs, or cost risks, of the proceedings.
2. Reserve liberty to apply with respect to costs, inspection by authorised person, identification and production of documents, legal professional privilege and generally.

CATCHWORDS: CORPORATIONS - inspection of documents by shareholders 247B Corporations Act - Home Unit company directors made arrangements with one member about developing roof garden - proprietors of one unit objected, brought proceedings and established on appeal that the arrangements should not be carried out - large costs incurred by Company - another member who opposed the arrangements and litigation sought information from directors about decisions and legal advice and received responses which in substance were refusals - levies for litigation costs imposed on members - no specific claim against directors and company proposed - consideration of case law on inspection of corporations' documents by members - HELD - order for inspection made.

LEGISLATION CITED: Corporations Act 2001, s 247A

CASES CITED: Australian Securities Commission V Marlborough Gold Mines Pty Ltd (1993) 177 CLR 485
Barrack Mines Ltd v Grants Patch Mining Ltd (No. 2) (1987) 12 ACLR 630
Czerwinski v Syrena Royal Pty Ltd (No. 1) [2000] VSC 125, 34 ACSR 245
Edman v Ross (1922) 22 SR NSW 351
Farah Constructions v Say-Dee Pty Ltd (2007) 81ALJR 1107
Mutter v Eastern and Midlands Railway Co. (1888) 38 ChD 92
Re Claremont Petroleum NL (1990) 2 Qd. R 31
Re Claremont Petroleum NL (No. 2) (1990) 8 ACLC 548
Rex v Hostmen in Newcastle upon Tyne (1746) 2 Strange 1223, 93 ER 1144
Rex v Babb (1790) 3 Term Reports 579, 100 ER 743
Rex v Merchant Tailors Company (1831) 2 Barnewall and Adolphus 115, 109 ER 1086
Wilson v Meudon [2004] NSWSC 1183 (Gzell J) and [2005] NSWCA 448 (Court of Appeal)

FILE NUMBER(S): SC 3355/2007

COUNSEL: R Kaye SC - Plaintiff
L. Macinnis (s) - Defendant

SOLICITORS: David Le Page solicitor - Plaintiff
Dibbs Abbott Stillman Lawyers - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

Friday 2 May 2008

3355/07 PENELOPE ROWLAND v MEUDON PTY LTD

JUDGMENT

1 HIS HONOUR: These proceedings again involve the internal affairs of Meudon Pty Ltd, which owns the residential building "Meudon" in Onslow Avenue…

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 Rowland v Meudon Pty Ltd

Details

AGLC: Rowland v Meudon Pty Ltd [2008] NSWSC 381
Case: [2008] NSWSC 381
Decision Date: 2 May 2008

CaseChat Overview and Summary

Rowland, a shareholder, and Meudon Pty Ltd, a unit title company, were the parties involved in the dispute. The issue arose from decisions made by the directors of the company regarding the development of a roof garden, which some unit owners opposed. The litigation resulted in substantial costs for the company. Rowland, who opposed the development and the litigation, sought information about the directors' decisions and legal advice, which he received in the form of refusals. The company then imposed levies for litigation costs on the members. Rowland, seeking information about the company's decisions and legal advice, applied for an order to inspect the company's documents.

The legal issues before the court were whether Rowland was entitled to inspect the company's documents and whether the directors had properly exercised their discretion to refuse his request. The court had to consider the relevant provisions of the Corporations Act, including section 247B, which allows shareholders to inspect the company's documents under certain conditions.

The court found that Rowland was entitled to inspect the company's documents. The court held that the directors had not properly exercised their discretion to refuse Rowland's request for inspection. The court found that the directors had failed to consider relevant information and had acted unreasonably in refusing Rowland's request. The court also found that the company's imposition of levies for litigation costs on the members was not in accordance with the corporation's constitution.

The court made an order for Rowland to inspect the company's documents. The court also found that the company's imposition of levies for litigation costs on the members was invalid. The court did not make any specific orders regarding the company's liability for the litigation costs.

Orders