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RTP Holdings Pty Ltd v Roberts

RTP Holdings Pty Ltd v Roberts

Case [2000] SASC 386 8 November 2000

Corporate Law & Governance

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RTP HOLDINGS PTY LTD AND RTP TECHNOLOGIES PTY LTD V ROBERTS AND ROBERTS AND MODERN MACHINERY SYSTEMS PTY LTD

[2000] SASC 386

Civil (Ex Tempore)

1................ LANDER J....... This is an application by four persons who are directors and shareholders of RTP Holdings Pty Ltd and RTP Technologies Pty Ltd (the companies) for leave to bring proceedings on behalf of those companies against two other directors who are also shareholders of the companies and a third party Modern Machinery Systems Pty Ltd.

The circumstances of this application are a little unusual. On 6 September 2000 the companies purportedly issued an inter partes summons in Action No. 838 of 2000 against the respondents to this application, Mr and Mrs Roberts and Modern Machinery Systems Pty Ltd. No Statement of Claim was annexed. On the same day the companies issued an interlocutory application in which they sought leave to proceed under s 236 of the Corporations Law. The companies also sought orders in the nature of Mareva injunctions against those defendants.
The matter was brought on on short notice before the Chief Justice who directed the plaintiffs to serve the proceedings upon the defendants. Service was effected and there were two subsequent hearings before the Chief Justice when the matter was listed for mention and the parties reported to the Chief Justice that discussions were taking place in relation to the orders sought.
The matter came on before me on 6 October 2000 when the matter was adjourned until 20 October 2000 for the same reasons that the Chief Justice had adjourned the previous applications.
On 20 October 2000 I gave directions for the filing of affidavits in support of and in opposition to the application for the Mareva injunction. The matter was listed before me early today for the hearing of that application. Mr Jenner, who appeared for the companies in Action No. 838 of 2000, sought an order pursuant to s 237 of the Corporations Law for leave to bring these proceedings. Mr Keen, who appeared for the defendants, indicated that such an order was opposed because Part 2F.1A of the Corporations Law requires that leave be obtained prior to the issue of the proceedings.
By way of background information the four applicants and Mr and Mrs Roberts are the six directors and six shareholders of RTP Holdings Pty Ltd and RTP Technologies Pty Ltd. Mr and Mrs Roberts hold a substantially greater interest in both companies than the four applicants.
The parties entered into a shareholders’ agreement on 24 December 1998 in which they undertook to cooperate and use their best endeavours to ensure that the companies successfully conduct their business and make approvals or decisions that are required of the parties in good faith and in the best interests of the companies and the conduct of their business and be just and faithful in the parties’ activities and dealings with the other parties.
They further agreed that all decisions by the boards of the two companies had…

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 RTP Holdings Pty Ltd v Roberts

Details

AGLC: RTP Holdings Pty Ltd v Roberts [2000] SASC 386
Case: [2000] SASC 386
Decision Date: 8 November 2000

CaseChat Overview and Summary

The case of RTP Holdings Pty Ltd v Roberts involves an application by four directors and shareholders of RTP Holdings Pty Ltd and RTP Technologies Pty Ltd (the companies) seeking leave to bring proceedings against two other directors, who are also shareholders, and a third party, Modern Machinery Systems Pty Ltd. The applicants claim that the respondents have dealt with company assets to the detriment of the companies, including selling a piece of equipment owned by RTP Technologies Pty Ltd without accounting to the companies for the sale. The respondents deny these allegations and claim that Modern Machinery Systems Pty Ltd was entitled to claim ownership of the equipment and sell it, and that the companies have not suffered any loss. The legal issue before the court was whether the applicants had obtained the necessary leave to bring the proceedings under the Corporations Law.

The court found that the applicants had not obtained the required leave prior to issuing the proceedings, which was a requirement under the Corporations Law. However, the court granted the applicants leave to bring the proceedings, finding that it was probable that the companies would not bring the proceedings themselves, the applicants were acting in good faith, and it was in the best interests of the companies for the applicants to be granted leave. The court also found that there was a serious question to be tried, despite the absence of 14 days' written notice to the companies prior to the application.

The court made orders granting the applicants leave to bring the proceedings in the name of the companies, with the leave to be effective as of the day before the proceedings were originally issued. The court also ordered that the costs of the application be costs in the cause and that the parties have liberty to apply.

Orders