SDW2 Pty Ltd v JLF Corporation Pty Ltd

SDW2 Pty Ltd brought an application against JLF Corporation Pty Ltd and others, seeking an interlocutory injunction in the Federal Court of Australia. The dispute revolves around shares held in a third party company, where the applicant alleges that a transfer of shares was void and that it is entitled to purchase shares held by the first and fourth defendants. The applicant seeks to restrain the third defendant from holding certain meetings and the first defendant from casting votes on particular resolutions.

The central legal issue before the court was whether the applicant had established a serious question to be tried regarding the validity of the share transfer and the entitlement to purchase shares, and if the balance of convenience favoured granting the interlocutory relief. The court considered whether the applicant had demonstrated a real prospect of success at the trial and whether there was a serious question to be tried regarding the voidness of the share transfer and the entitlement to purchase shares.

The court determined that the applicant had established a serious question to be tried on both the validity of the share transfer and the entitlement to purchase shares. The court found that the applicant had demonstrated a real prospect of success on both issues. Regarding the balance of convenience, the court considered the potential harm to the applicant if the relief was not granted, weighed against the harm to the defendants if the relief was granted. The court concluded that the balance of convenience favoured the grant of the interlocutory injunction.

The court ordered that the first defendant must not cast any votes in respect of its shareholding in the third defendant at any properly convened meeting to remove the applicant's representative as a director or to appoint another director without the agreement in writing of the applicant, until the trial of the proceeding or an earlier order of the Court. The court also granted liberty to apply on the giving of not less than three days' notice in writing to all other parties.