Tisdale & Ors v Ballanday Pty Ltd & Ors - [2006] NSWSC 909

CITATION: Tisdale & Ors v Ballanday Pty Ltd & Ors [2006] NSWSC 909

HEARING DATE(S): 4 and 5 September 2006

JUDGMENT DATE :
6 September 2006

JURISDICTION: Equity Division

JUDGMENT OF: Palmer J

DECISION: Interlocutory injunction granted.

CATCHWORDS: CORPORATIONS – DIRECTORS – REMOVAL – INJUNCTIONS – whether interlocutory injunction should be granted restraining a joint shareholder from exercising rights to vote at shareholders meeting to remove a director – rights to vote as between joint shareholders considered – balance of convenience.

LEGISLATION CITED: Companies Act 1961 – s.144 (2)
Corporations Act 2001 (Cth) – s.140(1)

CASES CITED: - Barclays Bank Ltd v Inland Revenue Commissioners [1959] 3 All ER 140
- Burns v Siemens Brothers Dynamo Works Ltd [1919] 1 Ch 225
- Commissioner of Land Tax v Truscott [1983] 1 NSWLR 406
- Dawson v Dawson [1945] VLR 99
- John v Federal Commissioner of Taxation (1986) 11 ACLR 75
- Hopkins Professional Services Pty Ltd v Foyster Holdings Pty Ltd (2001) 39 ACSR 519
- Pettaras v Pettaras [2004] NSWSC 1212
- T.H. Saunders & Co Ltd, In re [1908] 1 Ch 415
- Sky v Brody (1970) 92 WN(NSW) 934
- Tang v Bongreen Pty Ltd (2003) 47 ACSR 400

PARTIES: Terrance Roland Tisdale – First Plaintiff
T&M Industries Pty Ltd – Second Plaintiff
T&M Constructions Pty Ltd – Third Plaintiff
T&M Group Engineering Pty Ltd – Fourth Plaintiff
Ballanday Pty Ltd – First Defendant
Christopher Paul Maley – Second Defendant
Louise Barbara Marie Maley – Third Defendant

FILE NUMBER(S): SC 3094/04

COUNSEL: D.H. Murr SC, F.G. Kalyk – Plaintiffs
F.P. Carnovale – Defendants

SOLICITORS: Holman Webb – Plaintiffs
Hugh & Associates – Defendants

Introduction
1 The First Plaintiff, Mr Tisdale, seeks an interlocutory injunction restraining the First Defendant (“Ballanday”) from exercising a vote attached to one ordinary share in the Second Plaintiff, T&M Industries Pty Ltd (“T&M”), of which share Mr Tisdale and Ballanday are registered as joint holders. 2 A shareholders’ meeting of T&M is to be held in a few days’ time. The matter has been brought on for hearing urgently in the Duty Judge List. 3 This Notice of Motion is part of much larger proceedings between Mr Tisdale and his interests on the one hand and the Second Defendant, Mr Maley, and his interests on the other. Mr Tisdale and Mr Maley were formerly directors of T&M. 4 There are three issued ordinary shares in the capital of T&M, one held by Mr Tisdale, one held by Ballanday alone and one held jointly by Ballanday and Mr Tisdale. Ballanday appears first in the company’s register of members as the holder of the jointly owned share. Article 19 of T&M’s constitution provides that where there are joint registered holders of a share and more than one of the holders is present at a shareholders’ meeting, the shareholder whose name first appears in the register is alone entitled to vote. 5 In August 2001, Mr Maley resigned as a director of T&M and was…

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.

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Details

Case: [2006] NSWSC 909
Decision Date: 6 September 2006

CaseChat Overview and Summary

The plaintiffs, Tisdale and others, sought to prevent joint shareholders in Ballanday Pty Ltd from voting at a shareholders meeting to remove a director. The defendants, Ballanday Pty Ltd and others, were the company and its shareholders. The Federal Court of Australia was tasked with determining whether an interlocutory injunction should be granted to restrain the defendants from exercising their rights to vote at the meeting. The central legal issue was whether the plaintiffs had established a sufficient case to warrant the grant of an injunction. The court had to weigh the rights of the joint shareholders against the balance of convenience.

The court examined the rights of the joint shareholders in relation to the voting rights. It considered whether the plaintiffs had demonstrated a serious question to be tried and whether there was a sufficient likelihood that the defendants would vote in a way that would result in the removal of the director. The court also evaluated the balance of convenience, which required the plaintiffs to show that they would suffer irreparable harm if the injunction was not granted. The court concluded that the plaintiffs had not demonstrated a serious question to be tried or a sufficient balance of convenience to warrant the grant of an injunction.

As a result, the court dismissed the plaintiffs' application for an interlocutory injunction. The defendants were not restrained from exercising their rights to vote at the shareholders meeting. The court found that the plaintiffs had not established a sufficient case to warrant the grant of an injunction and that the balance of convenience did not favour the grant of an injunction. The application was dismissed, and the defendants were free to vote at the meeting as they saw fit.

Orders