Specto Pty Ltd v Darrell Crouch and Associates Pty Ltd
[2008] WADC 143
•18 SEPTEMBER 2008
SPECTO PTY LTD -v- DARRELL CROUCH & ASSOCIATES PTY LTD [2008] WADC 143
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WADC 143 | |
| Case No: | CIV:1250/2008 | 15 AUGUST 2008 | |
| Coram: | REGISTRAR KINGSLEY | 18/09/08 | |
| PERTH | |||
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Judgment given | ||
| PDF Version |
| Parties: | SPECTO PTY LTD (ACN 104 522 036) DARRELL CROUCH & ASSOCIATES PTY LTD (ACN 009 301 035) |
Catchwords: | Practice Application for summary judgment pursuant to O 14 SCR Turns on own facts |
Legislation: | Corporations Act s 257, s 275F Supreme Court Rules O 14 |
Case References: | Nil |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
DARRELL CROUCH & ASSOCIATES PTY LTD (ACN 009 301 035)
Defendant
Catchwords:
Practice - Application for summary judgment pursuant to O 14 SCR - Turns on own facts
Legislation:
Corporations Act s 257, s 275F
Supreme Court Rules O 14
Result:
Judgment given
(Page 2)
Representation:
Counsel:
Plaintiff : Mr D Lenhoff
Defendant : Mr B Wheatley
Solicitors:
Plaintiff : Holborn Lenhoff Massey
Defendant : Mossensons
Case(s) referred to in judgment(s):
Nil
(Page 3)
1 REGISTRAR KINGSLEY: The plaintiff sues under an agreement made 1 July 2005 whereby the plaintiff would acquire 10 per cent of the issued share capital of the defendant for a consideration of $100,000. The agreement provided that after a period of 18 months had elapsed from the date of the agreement, the plaintiff would have the right, upon three months' written notice to the defendant, to require the defendant to repurchase the shares from the plaintiff for a consideration of $100,000 (cl 6.1).
2 Pursuant to the agreement the plaintiff paid the consideration and the shares were duly issued to the plaintiff. In June 2007 the plaintiff gave the defendant three months' written notice requiring the defendant to repurchase the shares for the consideration of $100,000. The defendant paid the plaintiff a sum of $30,000 leaving a balance due of $70,000.
3 In October 2007 the plaintiff pleads that the plaintiff and defendant made a second agreement whereby the defendant would be given a six month extension until 31 March 2008 to pay the balance of $70,000. The plaintiff would be entitled to be paid interest in respect of the balance at an agreed rate. The plaintiff pleads that pursuant to the terms of the second agreement the defendant has paid the plaintiff the interest, but has refused to pay the balance.
4 The plaintiff has brought an application for summary judgment for the balance of $70,000. That application is supported by an affidavit of Sharon Coleen Reed sworn 18 June 2008.
5 Subsequent to the plaintiff's summons pursuant to O 14 Supreme CourtRules the defendant brought an application to stay the action. The defendant, through Darrell John Crouch, has sworn an affidavit on 7 July 2008 in support of his application to stay the action and in opposition to the plaintiff's application for summary judgment.
6 Crouch deposes that the plaintiff purports to rely upon a written agreement dated 1 July 2005 which Crouch deposes is inadmissible as the agreement has not been stamped. The evidence is that the document has been stamped and this issue raised by Crouch falls away.
7 Crouch deposes that the agreement refers to the plaintiff as trustee for the Reed Family Trust and the affidavit in support sworn by Reed on 18 June 2008 does not depose that the plaintiff is suing in its capacity as trustee for the Reed Family Trust.
(Page 4)
8 In a subsequent affidavit sworn 23 July 2008 Reed deposes that the plaintiff is the trustee of the Reed Family Trust and sues in that capacity. Accordingly, that issue raised by Crouch falls away.
9 Crouch then deposes that the agreement at cl 6 provides that the buy back of shares is subject to compliance with s 257 of the Corporations Act and that at s 257A of the Corporations Act:
"A company is authorised to buy back its shares only if the buy back does not materially prejudice the company's ability to pay its creditors."
10 There is also a requirement that the company follows the procedures laid down in Part 2J.1 Div 2.
11 Crouch also deposes that at s 275F of the Corporations Act:
"A company intending to buy back shares must lodge with the Australian Securities and Investment Commission notice of its intentions."
12 Crouch deposes that no notice of the company's intention to buy back shares has been lodged with the Australian Securities and Investment Commission. Annexed to the affidavit of Reed sworn 23 July 2008 is a notice of share buy back details dated 4 April 2008 and apparently signed by Crouch in his capacity as director. Also annexed to the affidavit of Reed is a notice to shareholders of an extraordinary general meeting of shareholders of Darrell Crouch & Associates Pty Ltd to be held on Tuesday, 4 April 2008 giving notice of a special resolution that:
• The company enter into a selective buy back of the ordinary shares currently owned by Specto Pty Ltd as trustee for the Reed Family Trust.
13 The notification of share buy back detail is dated 4 April 2008 and apparently signed by Crouch. At Part 2 of the notification information is sought as to the date of passing of a resolution, and that date is given as 4 April 2008.
14 Crouch deposes that the defendant has been deprived of cash flow due to its failure to receive multiple commissions from a major sales project as a result of the receivership and liquidation of the developer. As a result, Crouch deposes that the defendant will now be materially prejudiced in its ability to pay the $70,000. However in a letter dated 11 March 2008 the defendant wrote to Specto Pty Ltd advising that they
(Page 5)
- are continuing in the process of following the necessary formalities in reference to the share buy back and that on receipt of $75,000 Specto Pty Ltd is to sign a written release of the share certificates to the defendant. Crouch on behalf of the defendant writes that funds have been set aside by the defendant until all formalities are finalised. Thus it appears that the defendant has set aside funds in March 2008 and in April 2008 the defendant has resolved to buy back the shares. In my opinion that issue raised by Crouch has no merit.
15 Crouch deposes that the buy back of shares requested by the plaintiff has not been approved by the shareholders of the plaintiff (sic). However, the notice dated 4 April 2008 and lodged with ASIC states that the date a resolution was passed was 4 April 2008.
16 In my opinion the contentions raised by Crouch in his affidavit have no merit.
17 In relation to the stay application, the procedures set out under cl 10 of the agreement in relation to dispute resolution refer to a dispute concerning the agreement or the conduct of the business affairs of the company (the two other disputes not being relevant here). In this matter there is no dispute concerning the agreement. It would appear by a notice dated 11 February 2008 that the shareholders had before them a special resolution and subsequent to that date by letter dated 11 March 2008, some $30,000 having already been paid in partial payment, the defendant states that it is holding monies aside to pay the plaintiff when all formalities are finalised.
18 Whilst the authorities are clear that summary judgment ought to not be granted lightly, in my opinion the defendant has not satisfied me that there is an issue or question in dispute which ought to be tried. I will enter judgment for the plaintiff against the defendant in the sum of $70,000 together with interest and costs of the action and applications.
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