Sassine v Ray & Sons Constructions Pty Ltd [2009] NSWSC 1135

New South Wales Supreme Court

CITATION : Sassine v Ray & Sons Constructions Pty Ltd [2009] NSWSC 1135

HEARING DATE(S) : 24/09/09

JUDGMENT DATE : 24 September 2009

JURISDICTION : Equity

JUDGMENT OF : White J

EX TEMPORE JUDGMENT DATE : 24 September 2009

DECISION : Refer to paras 22-24 of judgment.

CATCHWORDS : EQUITY – equitable remedies – injunctions – injunction sought to restrain plaintiff from exercising voting right attached to share at meeting of company – whether serious question to be tried – balance of convenience does not warrant interfering with proposed meeting – interlocutory process dismissed

Plaintiff: George Sassine 1st Defendant: Ray & Sons Constructions Pty Ltd PARTIES : 2nd Defendant: Charlie Sassine 3rd Defendant: Milaad Sassine 4th Defendant: John Sassine

FILE NUMBER(S) : SC 5830/07

COUNSEL : Plaintiff/Respondent: M Pesman 3rd Defendant/Applicant: D R Meltz

SOLICITORS : Plaintiff: HWL Ebsworth Legal 3rd Defendant: Veritas Legal

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

WHITE J

Thursday, 24 September 2009

5830/07 George Sassine v Ray & Sons Constructions Pty Ltd & 3 Ors JUDGMENT 1 HIS HONOUR: The applicant is the third defendant in these proceedings and one of the cross-claimants to a cross-claim brought against the plaintiff. 2 It appears to be common ground that there are five issued shares in the first defendant, Ray & Sons Constructions Pty Ltd. Prior to late 1999 or early 2000, each of five brothers held one of those shares. The present applicant, Milaad Sassine, alleges that in about late 1999 or 2000 one of the brothers, Michael Sassine, agreed that in consideration of being paid $300,000 by Ray & Sons Constructions Pty Ltd, his share would be bought back by the company and cancelled, leaving each of the other four brothers holding one share each. 3 In his cross-claim against the plaintiff, George Sassine, the applicant alleges that George Sassine caused the company to pay $300,000 to Michael Sassine, but instead of the company cancelling Michael's share, the share was transferred to the plaintiff, George. By his cross-claim, the applicant alleges that that share is held by George on trust for three of the cross-claimants, namely, the present applicant, Milaad Sassine, and for two other cross-claimants, Charlie Sassine and John Sassine, and for himself (i.e. George Sassine) in equal shares. Alternatively, the applicant alleges that the share is held by George Sassine on trust for the company; or alternatively, that the share should be cancelled. 4 George Sassine denies the allegations in the cross-claim that there was an agreement for the cancellation of the share as contended by the applicant. He admits that the one share in question is held by him on trust for each of himself, the applicant, John Sassine and Charlie Sassine in equal shares. 5 No evidence has been read on this application to establish that there is a serious question to be tried that the facts are as alleged in the cross-claim. That is so notwithstanding that the cross-claim was filed on 20 March 2008. 6 A meeting of shareholders of the company has been convened to be held tomorrow at 11am. I was advised, without objection, that the meeting was convened by John Sassine, one of the cross-claimants. The notice convening the meeting states that the resolutions sought to be passed are for the appointment of George Sassine as a director and secretary of the Company, for the removal of the applicant Milaad Sassine as a director and secretary, for the National Australia Bank to be informed that only the directors of the company are authorised to operate the company's bank accounts, that Milaad Sassine and Michael Sassine are not directors of the company and are not authorised to operate any company bank accounts, and that the company instruct its solicitors to commence proceedings in the name of the company against Milaad Sassine and the National Australia Bank in respect of an alleged unauthorised withdrawal by Milaad Sassine of $260,000 from the company's bank account and related matters. The last resolution proposed is that the company file a submitting appearance in the existing Supreme Court proceedings. 7 On 16 September 2009 the solicitors for the applicant wrote to George Sassine's solicitors. They asserted that Mr George Sassine is not entitled to exercise anything other than one vote for his share, noting his admission that the second share is held in trust either for the company as a whole or equally for the brothers. Mr George Sassine's submission is that the second share is held on trust equally for all brothers. 8 Yesterday, George Sassine's solicitors responded to that correspondence. They said: " We note ... that you are mistaken with regards to our client's voting entitlements with respect to our client's second share which is held on trust for both the brothers equally in the Company as a whole. We note that our client can exercise a vote with respect to both his shares and the above second share. Should our client choose to exercise his vote with respect to the second share, such a vote shall be made in circumstances where it is deemed appropriate and where the exercise of such a vote is made in good faith and in the best interests of the Company. However, given the above court proceedings, we confirm that our client shall not be exercising his right to vote with respect to the above second share in relation to resolutions 3, 4 and 6 as outlined in the Notice of General Meeting. "