Watson, J.M. v British Building Society - [1987] FCA 459

Re: JUDITH MAY WATSON
And: BRITISH BUILDING SOCIETY
No. WAG81 of 1987
Trade Practices - Constitutional Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Trade Practices - misleading and deceptive conduct - attempted takeover of building society - new members including solicitors joining to vote for party seeking to takeover - supplied with qualifying funds - letter to new members from Chairman - requiring statutory declaration funds not held in trust - letter suggests beneficial ownership condition of right to vote - injunctions sought relate to contractual cause of action - serious question to be tried - balance of convenience favours society - member has no personal interest in funds or vote - claim for interlocutory relief dismissed.

Constitutional Law - corporations power - whether limited to trading or financial activities of trading or financial corporations - relationship of trading or financial activities to conduct in trade or commerce.

Trade Practices Act 1974 s.4

Judiciary Act s.78B

Building Societies Act 1976 (WA) s.28

Orison Pty Ltd v. Strategic Minerals Corporation NL (unrep. French J. 12/8/87)

Strickland v. Rocla Concrete Pipes Ltd (1971) 124 CLR 468

Commonwealth v. State of Tasmania (1983) 46 ALR 625

Actors and Announcers Equity Association of Australia v. Fontana Films Pty Ltd (1982) 40 ALR 609

Huddart Parker & Co. Pty Ltd v. Moorehead (1909) 8 CLR 330

HEARING

PERTH

#DATE 7:8:1987

Counsel for the Applicant: Mr M.W. Odes with Ms A. Theron

Solicitors for the Applicant: Messrs. Parker & Parker

Counsel for the Respondent: Mr M.L. Barker with Ms. C. McLure

Solicitors for the Respondent: Messrs. Keall Brinsden

ORDER

The claim for interlocutory relief is dismissed.

Costs reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

On 29 April 1987 Mrs Judith Watson opened an account with the British Building Society and deposited the sum of $9,800.00 in a Fixed Term Share Cash Dividend account, bearing interest at a rate of 15% per annum for a period of 6 months.

She thereby became a member of the Society with an apparent entitlement of up to 10 votes at its Annual General Meeting to be held on Monday, 10 August.
The timing of her deposit was significant in two ways. It was the day before the last day of the Society's financial year. Under the Society's rules the entitlement to vote in its Board election at the Annual General Meeting depends upon the amount of principal standing to the credit of the member's shares in the books of the Society on the last day of April preceding the election. The minimum qualifying amount for the maximum entitlement of 10 votes is $9,001.00.
Her deposit also coincided with an unusually high number of new accounts, opened about that time and involving deposits in excess of $9,001.00.
Many of the new account depositors had something in common, namely, a connection with an unlisted public company called Capital Hall Limited.…

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: [1987] FCA 459
Decision Date: 07 AUGUST 1987

CaseChat Overview and Summary

The case of Watson, J.M. v British Building Society involves a dispute relating to a proposed takeover of the British Building Society. The plaintiff, a solicitor, was among a group of new members who joined the society in order to vote in favour of the proposed takeover. The society alleges that the new members, including the plaintiff, were supplied with qualifying funds by a party seeking to take over the society, and that this constituted misleading and deceptive conduct under the Trade Practices Act. The society sought interlocutory relief in the form of injunctions to prevent the new members from voting.

The legal issues before the court included whether the conduct of the society in seeking to prevent the new members from voting was justified, and whether the plaintiff had a personal interest in the funds or the right to vote. The court also had to consider whether the plaintiff's claim for interlocutory relief should be dismissed on the basis that there was no serious question to be tried, or whether the balance of convenience favoured the society.

The court found that there was a serious question to be tried, as the allegations of misleading and deceptive conduct were not without merit. However, the court also found that the balance of convenience favoured the society, as the plaintiff had no personal interest in the funds or the right to vote, and the society's members would be prejudiced if the new members were allowed to vote. The court therefore dismissed the claim for interlocutory relief, and reserved costs.

The court's decision highlights the importance of ensuring that members of a building society have a genuine interest in the society, and that the society's members are not prejudiced by the actions of new members. It also underscores the need for careful consideration of the balance of convenience when deciding whether to grant interlocutory relief in cases involving alleged misleading and deceptive conduct.

Orders

Orders of the court

The claim for interlocutory relief is dismissed.

Costs reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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