Wilson v Meudon Pty Ltd

The dispute in *Wilson v Meudon Pty Ltd* concerned the interpretation of a company's articles of association governing the rights of shareholders in a home unit company. The appellants, holders of shares in a home unit, sought to restrain the company and the holder of the penthouse shares from extending the penthouse over an area designated as a "Roof Garden for Penthouse" in the company's articles. The case was heard in the Court of Appeal of New South Wales.

The central legal issues before the court were whether the provisions in the articles delineating the "Roof Garden for Penthouse" constituted rights annexed to the shares of the home unit immediately below the penthouse, whether these rights were "Class Rights" that could only be altered in accordance with a specific article governing modification of rights, and whether the penthouse shareholder's proposed extension constituted an infringement of these rights. The court also considered the nature of the penthouse shareholder's entitlement, whether it was a leasehold or a contractual licence, and the principle of quiet enjoyment.

The Court of Appeal held that the provisions of the articles designating the roof area as a "Roof Garden for Penthouse" were indeed rights annexed to the shares of the home unit below. These were determined to be Class Rights, meaning they could not be altered except by the procedure outlined in the Modification of Rights Article, a procedure over which the holders of the relevant shares had control. Consequently, the court found that the appellants were entitled to restrain the company and the penthouse shareholder from any acts or decisions that would permit the extension of the penthouse over the Roof Garden. The court disapproved of the decision in *Reid House Pty Ltd v Beneke*.

The appeal was allowed with costs, and relief was granted to the appellants in accordance with the orders set out in the judgment.