Maddocks v DJE Constructions Pty Ltd [1982] HCA 17

High Court of Australia Stephen, Mason, Murphy, Aickin and Brennan JJ. Maddocks v DJE Constructions Pty Ltd [1982] HCA 17

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

April 23 Stephen, Mason, Murphy, Aickin and Brennan JJ.

This is an appeal from the Court of Appeal of the Supreme Court of New South Wales which allowed an appeal from Wootten J. in a proceeding instituted in the Equity Division. The early history of these proceedings, which is complex and not altogether clear from the documents in the appeal book, appears to be irrelevant to the present appeal and was so treated by the appellant who appeared in person and by counsel for the respondent. The issues with which this appeal is concerned are a claim by the respondent that the appellant was not a holder of any shares in the respondent and that he be restrained from exercising or attempting or purporting to exercise any powers or rights as a shareholder or member of the company and an order restraining the appellant from operating or attempting to operate or purporting to operate on the respondent's bank account.

When the matter came on for trial before Wootten J. on 14 May 1980 the only question argued was whether the respondent was entitled to a declaration that the appellant was not a holder of any shares in the respondent. The material findings of fact made by Wootten J. may be summarized as follows. The company was incorporated under the Companies Act 1961 N.S.W. in July 1973. The subscribers to the memorandum of association were D. J. Ensor and D. L. Hanratty, each of whom subscribed for one share. Hanratty held his share on trust for one A. W. Logan. D. J. Ensor ("Ensor") and his father E. J. Ensor became directors of the company, the former being the managing director. E. J. Ensor held no shares in the company. In November 1974 the company made an application for a builder's licence under the Builders Licensing Act 1971 N.S.W. but was advised that such a licence would not issue except to a company which had a paid-up capital of at least $6,000. It appears that at some time in late 1974 Ensor and Logan agreed that the company should increase its issued shares by 5,998 shares and that on 28 November 1974 Logan gave Ensor a cheque drawn by one Veronica Reilly on her own bank account and that Logan then said: "This is the cheque for the issue of the 5,998 shares; give me a counter cheque to cover Miss Reilly's cheque because her cheque will bounce because there are no funds to meet it". On the same day Ensor gave Logan the cheque drawn on the respondent's account for the same amount, $5,998. After some mistiming which resulted in Miss Reilly's cheque being dishonoured the cheques were re-presented and the respondent's cheque paid to the credit of Miss Reilly's account and her cheque was again presented and honoured. At some later stage Logan said to Ensor: "I would like the shares issued in the name of J. D. Maddocks as nominee for me", to which Ensor agreed. Wootten J. found that it must have been arranged at an earlier stage that the shares would be issued to Logan or his nominee, even if the identity of the nominee was communicated later, but nothing turns on this aspect of the matter.