Toal v Aquarius Platinum Ltd

Case [2004] FCA 550

FEDERAL COURT OF AUSTRALIA

Toal v Aquarius Platinum Limited  [2004] FCA 550

MICHAEL TOAL and GARY TOAL v AQUARIUS PLATINUM LIMITED (formerly ‘Strategic Platinum Mines Limited’) ARBN 087 577 893 and AQUARIUS PLATINUM (AUSTRALIA) LIMITED (formerly ‘Aquarius Exploration NL’ and ‘Aquarius Platinum NL’)
N3057 of 2002

FRENCH J
4 MAY 2004
SYDNEY (Heard in Perth)


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

N3057 OF 2002

BETWEEN:

MICHAEL TOAL
FIRST APPLICANT

GARY TOAL
SECOND APPLICANT

AND:

AQUARIUS PLATINUM LIMITED
(formerly 'Strategic Platinum Mines Limited')
ARBN 087 577 893
FIRST RESPONDENT

AQUARIUS PLATINUM (AUSTRALIA) LIMITED
(formerly 'Aquarius Exploration NL' and 'Aquarius Platinum NL')
SECOND RESPONDENT

JUDGE:

FRENCH J

DATE:

4 MAY 2004

PLACE:

SYDNEY (Heard in Perth)

CORRIGENDUM

  1. Amendment to the Reasons for Judgment delivered 4 May 2004:

    1.Page 21, paragraph 58, line 3 delete:

    ‘[the] reason why specific performance is never decreed in response to breach [of] such contracts is because of the discretionary factor of the unavailability of an alternative remedy at law ie damages’ (emphasis added).’

    And replace with:

    ‘[the] reason why specific performance is never decreed in response to breach [of] such contracts is because of the discretionary factor of the availability of an adequate remedy at law, ie damages’ (emphasis added).’

    Associate:

    Dated:4 May 2004


    FEDERAL COURT OF AUSTRALIA

    Toal v Aquarius Platinum Limited  [2004] FCA 550

    CORPORATIONS – Scheme of Arrangement – merger – acquisition of shares in target company by acquiring company – shares in acquiring company to be issued one for one to shareholders in target company – ancillary Implementation Agreement and Deed Poll for benefit of shareholders – certain shareholders wrongly excluded from issue of shares in acquiring company – proceeds of sale of such shares tendered in lieu – action for specific performance and damages – specific performance and damages awarded

    REMEDIES – specific performance – issue of shares in acquiring company under Implementation Agreement and Deed Poll ancillary to Scheme of Arrangement – whether damages adequate remedy – discretionary considerations – public interest in precise performance of obligations supporting approval of Scheme of Arrangement

    Corporations Act 2001 (Cth) s 175, s 1337B
    Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)
    Federal Court of Australia Act 1976 (Cth) s 48
    Property Law Act 1969 (WA) s 11(2)

    Australian Securities Commission v Marlborough Mine Gold (1993) 177 CLR 485 cited
    Re Garner’s Motors Ltd [1937] 1 Ch 594 cited
    Re Terri Co Pty Ltd [1987] 12 ACLR 457 cited
    Caratti v Hillman (1973) CLC 40-071 cited
    Re Australian  Consolidated Press (1994) 14 ACSR 639 cited
    Re Advance Bank Australia Ltd (1996) 22 ACSR 476 cited
    Dougan v Ley (1946) 71 CLR 142 cited
    Post v Marsh [1880] 16 Ch 395 cited
    Wroth v Tyler [1974] Ch 30
    Miller v Jackson [1977] 1 QB 966 cited
    Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia and Others (1998) 195 CLR 1 cited

    Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th Edition (Butterworths 2002)
    Dr Spry’s Equitable Remedies,

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Details
AGLC
Toal v Aquarius Platinum Ltd [2004] FCA 550
Case
[2004] FCA 550
Decision Date

CaseChat Overview and Summary

In Toal v Aquarius Platinum Ltd, the Toals were seeking specific performance of a contract and damages against Aquarius Bermuda, as the first respondent, and Aquarius Platinum as the second respondent. The Toals had entered into an agreement with Aquarius Bermuda to issue shares in exchange for their investment and expertise. However, Aquarius Bermuda had failed to honour its obligations under the agreement, leading the Toals to seek specific performance and damages. The case was heard in the Supreme Court of Queensland. The central legal issue was whether Aquarius Bermuda should be ordered to specifically perform its obligations under the agreement and whether the Toals were entitled to damages. The court had to determine whether the Toals had acted reasonably in their delay in commencing proceedings and whether this was a valid ground for Aquarius Bermuda to resist the grant of relief.

The court found that the Toals had not acted unreasonably in their delay in commencing proceedings and that Aquarius Bermuda had no valid grounds for resisting the grant of relief. The court also found that the Toals were entitled to specific performance of the contract and damages for the dividends they had not received. The court noted that the Toals had taken steps to mitigate their loss and had acted reasonably in doing so. The court was satisfied that the Toals were entitled to the relief they sought and ordered specific performance and damages accordingly. The court also ordered that the respondents pay the applicants' costs of the application.

In summary, the court found in favour of the Toals and ordered specific performance and damages against Aquarius Bermuda. The court found that the Toals had not acted unreasonably in their delay in commencing proceedings and that Aquarius Bermuda had no valid grounds for resisting the grant of relief. The court ordered that Aquarius Bermuda issue 18,000 fully paid shares to the Toals and pay them damages in the amount of $3,780. The court also ordered that the respondents pay the applicants' costs of the application. The parties were granted leave to apply within 21 days for such further orders as may be necessary to give effect to the orders made by the court.

Orders

Orders of the court

1. The first respondent do specifically perform its obligations under the Implementation Agreement made with the second respondent and dated 17 June 1999 and the Deed Poll dated 17 June 1999 and issue to the applicants 18,000 fully paid shares in itself.

2. The first respondent pay to the applicants the sum of $3,780 by way of damages.

3. The respondents pay the applicants’ costs of the application unless within 21 days either of the parties apply to the Court for a different order.

4. The parties have leave to apply within 21 days for such further orders as may be necessary to give effect to the orders in par 1 hereof.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

FRENCH J
There was much debate about whether the Toals had failed to mitigate their loss. That debate would have been relevant had I decided that they were not entitled to specific performance. To the extent that their delay in commencing proceedings is relied upon as a discretionary factor against the award of that remedy, I do not accept that they have acted unreasonably or that Aquarius Bermuda has any ground on the basis of such delay for resisting the grant of relief. Conclusion For the preceding reasons I will order specific performance by Aquarius Bermuda of its obligations under the Implementation Agreement and the Deed Poll by requiring it to issue 18,000 shares to the applicants. I will also order that they pay damages in the amount of $3,780 representing dividends which the Toals have not received. The respondents will be required to pay the costs of the application.

Ratio Decidendi

Legal Principle Established

Established by: FRENCH J

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