Aloridge Pty Ltd (Provisional liquidator appointed) v West Australian Gem Explorers Pty Ltd (In liq) & Ors [1996] FCA 1125

CATCHWORDS CORPORATIONS - purported removal of director - issue of shares contrary to right of pre-emption conferred by Articles of Association - whether invalid - whether "procedural irregularity" within s.1322 of Corporations Law. Corporations Law - s.1322 ALORIDGE PTY LIMITED (Provisional liquidator appointed) v. WEST AUSTRALIAN GEM EXPLORERS PTY LIMITED (In liquidation) & ORS No. G3114 of 1993 BEAUMONT J. SYDNEY 23 DECEMBER 1996

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G3114 of 1993 ) GENERAL DIVISION ) BETWEEN: ALORIDGE PTY LIMITED (Provisional liquidator appointed) First applicant GEORGE LOUKAS Second applicant AND WEST AUSTRALIAN GEM EXPLORERS PTY LIMITED (In liquidation) First respondent GEORGE CHRISTIANOS Second respondent FREDERICK SALKANOVIC Third respondent AND BETWEEN: GEORGE CHRISTIANOS Cross-claimant AND ALORIDGE PTY LIMITED (Provisional liquidator appointed) First cross-respondent GEORGE LOUKAS Second cross-respondent CORAM: BEAUMONT J. DATE: 23 DECEMBER 1996 MINUTES OF ORDER THE COURT ORDERS: 1. Direct that the parties respectively bring in draft short minutes of order in respect of the claims and cross-claims respectively. 2. Costs reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G3114 of 1993 ) GENERAL DIVISION ) BETWEEN: ALORIDGE PTY LIMITED (Provisional liquidator appointed) First applicant GEORGE LOUKAS Second applicant AND WEST AUSTRALIAN GEM EXPLORERS PTY LIMITED (In liquidation) First respondent GEORGE CHRISTIANOS Second respondent FREDERICK SALKANOVIC Third respondent AND BETWEEN: GEORGE CHRISTIANOS Cross-claimant AND ALORIDGE PTY LIMITED (Provisional liquidator appointed) First cross-respondent GEORGE LOUKAS Second cross-respondent CORAM: BEAUMONT J. DATE: 23 DECEMBER 1996 REASONS FOR JUDGMENT INTRODUCTION In these proceedings, brought by leave of Burchett J. granted on 8 October 1993, the first applicant, Aloridge Pty Limited (Provisional liquidator appointed) ("Aloridge"), a member and shareholder of the first respondent, West Australian Gem Explorers Pty Limited (In liquidation) ("WAGE") applied to this Court for an order setting aside an allotment, purportedly made on 30 March 1992, of 9,600 shares of $1.00 each in the capital of WAGE to the second respondent, George Christianos. Subsequently the application was amended to include a claim by Mr Loukas for a declaration that on 23 March 1992 he had been invalidly removed as a director of WAGE. Some of the earlier history of the litigation is recounted in the reasons for judgment of the Full Court in an interlocutory appeal in this matter (see Christianos v. Aloridge Pty Limited (1995) 131 ALR 129). Originally, by its application filed on 30 April 1993, Aloridge applied, not only for the relief now sought by it, but also, alleging that the affairs of WAGE were being conducted oppressively, for an order that a receiver be appointed to the assets of WAGE. Subsequently, by its amended application filed on 5 August 1993, Aloridge sought, inter alia, an order that WAGE be wound up under the Corporations Law ("the Law"). On 5 August 1993, Burchett J. appointed a provisional liquidator of WAGE. On 8 October 1993, Burchett J. ordered that Aloridge be granted leave to proceed in this matter, subject to a term to be mentioned shortly, and subject to any further order. The term imposed by his Honour was that any judgment obtained by Aloridge was not to be enforced without the leave of the Court. Since then, and after the Full Court judgment, an order has been made, apparently without opposition, for the winding up of WAGE. The grant of this leave was necessary, if the matter were to proceed, by virtue of the provisions of s.471B of the Law, to the effect that while a company is being wound up, a person cannot begin or proceed with, inter alia, a proceeding in a court against the company except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.