Currawinya Pty Limited v Adam; Adam v Currawinya Pty Limited [No. 2] [2011] NSWSC 1

Supreme Court New South Wales

Medium Neutral Citation: Currawinya Pty Limited v Adam; Adam v Currawinya Pty Limited [No. 2] [2011] NSWSC 1 Hearing dates: 9 September 2010 Decision date: 28 January 2011 Before: Slattery J Decision: In conclusion, I have found that the 13 March 1999 resolution passed in general meeting did not create a valid rule or regulation under Currawinya's memorandum of association clause 2(a)(iii). It was not effective in my view, to prevent the defendants from utilising the company's common property by the grazing of cows pursuant to a licence to do so which they enjoyed. I have found that the company's trespass claim fails. But I have also found that the 13 March 1999 resolution does not modify any rights to a class of shares of which the defendants are the sole members. Nor do the defendants' contract claim, misrepresentation claim, or estoppel claim succeed. I have found that the defendants were not entitled to the lease to which they claim to be entitled. But on the other hand the company has not offered a lease to the defendants, or indeed any other shareholders in conformity with the company's constitution. Nor did the company mislead the defendants about their right to graze cattle on Currawinya when they acquired their shares from Mr Bordet in 1986. The parties should provide submissions: as to the future course, if any, of the defendants' claims under Corporations Act, ss 232 and 233; as to whether or not the proceedings should be mediated at this point and finally as to questions of costs. I direct the parties to bring in short minutes of order to give effect to these reasons. Catchwords: CORPORATIONS - constitution and replaceable rules - types of companies - construction of constitution - company incorporated for multiple occupancy living in a rural environment - dispute about members' right to use common property for grazing cattle - constitution does not grant a right to graze cattle on common property to members - whether resolution of members passed in March 1999 is effective to withdraw permission to graze cattle on common property - whether resolution modifies class rights in contravention of procedure prescribed under the company's constitution - whether company's affairs conducted oppressively - application for winding up company adjourned so parties can modify their affairs on the basis of the Court's judgment - HELD - resolution not effective to withdraw permission to graze cattle resolution is not a rule or regulation under memorandum of association clause 2(a)(iii) - no interference with class rights