Court of Appeal
New South Wales
Case Title: Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd Medium Neutral Citation: [2014] NSWCA 326 Hearing Date(s): 13, 14, 15 May 2014 Decision Date: 17 September 2014 Before: Bathurst CJ at [1]; Beazley P at [2]; Barrett JA at [3] Decision: 1. Vary order 3 made in the Equity Division on 3 May 2013 by omitting "as and from 29 June 2001".
2. Appeal otherwise dismissed.
3. Cross-appeal dismissed.
4 Order that the appellants pay the respondent's costs of the appeal.
5. Order that the cross-appellant pay the cross-respondents' costs of the cross-appeal.[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: CORPORATIONS - membership rights and remedies - share capital - dividends - payment of dividends - whether the constitution required the payment of dividends on a particular class of shares without declaration or other decision to pay - where the constitution created a right to receive a dividend in respect of a particular period and specified the date for payment thereof - each such dividend to be equal to a stated fraction of "the profit of the company available for dividend purposes" for the period "based on" accounts for the period - meaning of "available for dividend purposes" - extent to which the directors had discretion in determining the profit of a period "available for dividend purposes" - CORPORATIONS - members' remedies and internal disputes - oppressive or unfair conduct - whether conduct of the company by accepting a contractual restraint on the payment of dividends and relying on that and other grounds to withhold dividend was within Corporations Act s 232 - where the contractual restraint was embodied in a loan agreement with the holding company - whether there was any commercial rationale for the restraint - where the company's decision to accept the restraint was made by directors all of whom were officers of the holding company - CORPORATIONS - constitution of a company - alteration thereof - by court order - time at which the alteration takes effect - EQUITY - rectification - rectification of instruments ex abundanti cautela - CORPORATIONS - constitution of a company - whether the constitution is amenable to equitable jurisdiction to order rectification - PROCEDURE - amendment of claim - whether discretion miscarried when an amendment application made on the eighth day of the trial was refused. Legislation Cited: Civil Procedure Act 2005 (NSW)
Companies Act 1961 (NSW)
Companies and Securities Legislation (Miscellaneous Amendments) Act 1985 (Cth)
Companies (New South Wales) Code
Company Law Review Act 1998 (Cth) Corporations Law of New South Wales
Corporations Act 2001 (Cth)
Corporations Amendment (Corporate Reporting…
Keep reading for free
Create a free CaseChat account to read Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd and more:
- Read every judgment in full
- Ask AI and get answers linked to paragraphs
- See how each paragraph was cited in later cases
- Download judgments as PDF or Word
One click creates your free account or signs you in.
By continuing you agree to the Terms and Privacy Policy.
- Case
- [2014] NSWCA 326
- Decision Date
CaseChat Overview and Summary
The Court of Appeal was required to determine several key legal issues. These included whether the company's constitution mandated the payment of dividends on the plaintiff's shares without the need for a formal declaration or decision by the directors. The court also had to consider the meaning of "profit of the company available for dividend purposes" and the extent of the directors' discretion in determining this figure. Furthermore, the court examined whether the company's conduct, in accepting a contractual restraint on dividend payments and subsequently withholding dividends, constituted oppressive or unfair conduct under section 232 of the Corporations Act 2001 (Cth). The court also considered the amenability of the company's constitution to rectification under equitable jurisdiction and whether a discretion miscarried when an application to amend the claim made during the trial was refused.
The Court of Appeal reasoned that the constitution did not create an automatic right to a dividend, but rather a right to have a dividend declared if certain conditions were met. The court found that the directors retained a discretion in determining the profit available for dividend purposes, and that the contractual restraint, while significant, did not automatically preclude the declaration of a dividend. Regarding the oppression claim, the court found that the conduct was not oppressive, as there was a commercial rationale for the restraint and the decision to accept it was made by directors who were officers of the holding company. The court also addressed the rectification issue, noting that while rectification of a constitution is possible, it was not warranted in this instance. The court varied an earlier order concerning the time at which an alteration to the constitution took effect.
The Court of Appeal varied an order made in the Equity Division by omitting a specific date from it, and otherwise dismissed the appeal and the cross-appeal. The appellants were ordered to pay the respondent's costs of the appeal, and the cross-appellant was ordered to pay the cross-respondents' costs of the cross-appeal.
Orders
Orders of the court
1. Vary order 3 made in the Equity Division on 3 May 2013 by omitting "as and from 29 June 2001".
2. Appeal otherwise dismissed.
3. Cross-appeal dismissed.
4 Order that the appellants pay the respondent's costs of the appeal.
5. Order that the cross-appellant pay the cross-respondents' costs of the cross-appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.