Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Weinstock v Beck [2011] NSWCA 228 Hearing dates: 16 June 2011 Decision date: 17 August 2011 Before: Giles JA at [1]; Young JA at [2]; Handley AJA at [105] Decision: (1) By majority appeal allowed with costs.
(2) Orders 1 and 2 in the Equity Division set aside.
(3) In lieu thereof substitute a declaration that the 8 C class shares held by the late Hedy Jadwiga Weinstock were redeemable preference shares which were validly redeemed by the company on or about 29 July 2004.
(4) The respondent to pay the defendants' costs of and incidental to the hearing in the Equity Division on these issues.
(5) The respondent Tamar Rivqa Beck is to have a certificate under the Suitors Fund Act for the costs of the 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- redeemable preference shares- whether shares can be "redeemable preference shares" if there are no issued shares over which they take preference- the rights described in the articles of association determine whether shares are preferential- there is a distinction between the rights attached to a share and the enjoyment of those rights- shares with potential preferential rights but no effective content may be preference shares- appeal allowed- redemption effective. Legislation Cited: Companies Act 1862 (UK), s 33
Companies Act 1961, ss 16, 54, 51, 63, 66
Corporations Act 2001 (Cth), ss 9, 254A, 254E, 254J, 254K, 254L, 411
Singapore Companies Act, s 4Cases Cited: Alliance Perpetual Building Society v Clifton [1962] 1 WLR 1270
Andrews v Gas Meter Co [1897] 1 Ch 361
Beck v LW Furniture Consolidated (Aust) Pty Ltd [2011] NSWSC 235
Campbell v Rofe (1932) 48 CLR 258
Hogsett v Aetna Building and Loan Association 96 P 52 (Kan SC) (1908)
Hutton v The Scarborough Cliff Hotel Company Ltd (1865) 4 De GJ & S 672; 46 ER 1079
In re St James' Court Estate Ltd [1944] Ch 6
People ex rel S Cohn & Co v Miller 72 NE 525 (NY) (1904)
Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; 207 CLR 165
Re Capel Finance Ltd [2005] NSWSC 286; 52 ACSR 601
Re Metal Constituents Ltd [1902] 1 Ch 707
Re Powell-Cotton's Resettlement [1957] Ch 159; 1 All ER 404
Re Schaffer Stores Co Inc 229 NYS 735 (1928)
Robertson v FCT [1952] HCA 71; 86 CLR 463
Rubas v Parkinson [1929] 3 DLR 558
Scott v Frank F Scott (London) Ltd [1940] Ch 794
Starring v American Hair & Felt Co 191 A 887 (Del Ch) (1937)
White v Bristol…
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- AGLC
- Weinstock v Beck [2011] NSWCA 228
- Case
- [2011] NSWCA 228
- Decision Date
CaseChat Overview and Summary
The central legal issue before the Court of Appeal was whether the 8 C class shares could be considered "redeemable preference shares" for the purposes of their redemption, given that there were no other issued shares over which these C class shares could take preference. This question turned on the interpretation of the company's articles of association and the nature of the rights attached to the shares.
The Court of Appeal, by majority, held that the rights attached to a share, as described in the articles of association, determine whether it is a preference share, irrespective of whether those rights are presently effective or capable of being enjoyed. The Court distinguished between the rights attached to a share and the actual enjoyment of those rights. Therefore, shares that possess potential preferential rights, even if they have no effective content at a particular time, can still be classified as preference shares. Consequently, the Court found that the C class shares were indeed redeemable preference shares and had been validly redeemed by the company.
The Court of Appeal allowed the appeal, setting aside the orders of the Equity Division. It declared that the 8 C class shares were redeemable preference shares and were validly redeemed. The respondent was ordered to pay the defendants' costs in the Equity Division, and the respondent was also granted a certificate under the Suitors Fund Act for the costs of the appeal.
Orders
Orders of the court
(1) By majority appeal allowed with costs.
(2) Orders 1 and 2 in the Equity Division set aside.
(3) In lieu thereof substitute a declaration that the 8 C class shares held by the late Hedy Jadwiga Weinstock were redeemable preference shares which were validly redeemed by the company on or about 29 July 2004.
(4) The respondent to pay the defendants' costs of and incidental to the hearing in the Equity Division on these issues.
(5) The respondent Tamar Rivqa Beck is to have a certificate under the Suitors Fund Act for the costs of the 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
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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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