Sumiseki Materials Co Ltd -v- Wambo Coal Pty Ltd [2013] NSWSC 235

Supreme Court New South Wales

Medium Neutral Citation: Sumiseki Materials Co Ltd -v- Wambo Coal Pty Ltd [2013] NSWSC 235 Hearing dates: 6, 7, 11, 12, 13, 14, 18 & 19 February 2013 Decision date: 25 March 2013 Jurisdiction: Equity Division - Commercial List Before: Hammerschlag J Decision: Plaintiff entitled to declaratory relief with respect to the construction of the Restructure Agreement and the Constitution and to a monetary verdict in respect of unpaid dividends. Order under s 233 of the Corporations Act 2001 (Cth) that the Constitution be modified by inserting after the word "contrary" in the first line of Art 2.1B the words "including any provision which purports to grant the directors a discretion with respect to the declaration or payment of dividends or the capitalising, reserving or carrying forward of profits". Plaintiff's claim for declaratory relief with respect to the operation of cl 13 of the Restructure Agreement dismissed. Catchwords: CONTRACT - CORPORATIONS - where a written Restructure Agreement required parties to amend a company's constitution to provide for the issue of and rights governing B Class shares including the right to receive dividends calculated by reference to profits of the company available for dividend purposes - construction of the phrase "profits available for dividend purposes" in the agreement and constitution - whether the words used by the parties in the particular instruments gave to the directors of the company discretion to utilise distributable profits for purposes other than paying the B Class dividend - RECTIFICATION - whether if the agreement and constitution are to be properly construed contrary to the plaintiff's contention, the requirements for rectifying the agreement have been satisfied - ESTOPPEL - whether the defendant has unconscionably departed from an assumption common to the parties - MINORITY OPPRESSION - Corporations Act 2001 (Cth) ss 232, 233 - whether in denying the plaintiff its rights and expectations to receive dividends on the B Class shares there has been conduct of the company's affairs oppressive to, unfairly prejudicial to, or unfairly discriminatory against the plaintiff - whether relief should be given - REMEDIES - where a contractual provision entitles one party to be offered participation in new projects - where no new project has yet been embarked upon and where none may be embarked upon - whether a declaration of the validity and legal enforceability of the provision should be made because the other party previously denied enforceability of the provision. Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: Gardner v Dairy Industry Authority of New South Wales (1977) 52 ALJR 180 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 Jireh International Pty Ltd v Western Export Services Inc [2011] NSWCA 137 Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 86 ALJR 1 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64 Pacific Carriers v BNP Paribas (2004) 218 CLR 451 HNA Irish Nominee Ltd v Kinghorn (2010) 78 ACSR 553 Prenn v Simmonds [1971] 1 WLR 1381 Heesh v Baker [2008] NSWSC 711; (2008) 67 ACSR 192 Long Acre Press Ltd v Odhams Press Ltd [1930] 2 Ch 196 Fisher v Black and White Publishing Company [1901] 1 Ch 174 Bagot Pneumatic Tyre Company v Clipper Pneumatic Tyre Company [1902] 1 Ch 146 Evling v Israel & Oppenheimer Ltd [1918] 1 Ch 101 re Buenos Ayres Great Southern Railway Co Ltd [1947] 1 Ch 384 Tosich v Tosich Construction Pty Ltd (1993) 10 ACSR 590 Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427 Crane v Hegeman-Harris Co Inc [1939] 1 All ER 662 Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 NSW Medical Defence Union Ltd v Transport Industries Insurance Co Ltd (1986) 6 NSWLR 740 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 Westland Savings Bank v Hancock [1987] 2 NZLR 21 Muriti v Prendergast [2005] NSWSC 281 Pukallus v Cameron (1982) 180 CLR 447 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Maurice Tarabay v Fifty Property Investments Pty Ltd [2009] NSWSC 617 Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 Campbell v Backoffice Investments Pty Ltd (2008) 66 ACSR 359 Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 84 ACSR 121 HNA Irish Nominee Ltd v Kinghorn (No 2) (2012) 88 ACSR 427 Re Cumberland Holdings Ltd (1976) 1 ACLR 361 Jenkins v Enterprise Gold Mines NL (1992) 6 ACSR 539 Category: Principal judgment Parties: Sumiseki Materials Co Ltd - Plaintiff Wambo Coal Pty Ltd (ACN 000 668 057) - First Defendant Peabody Australia Mining Limited (ACN 002 818 699) - Second Defendant Representation: Counsel: N.C. Hutley SC with M.J. Darke - Plaintiff S.D. Robb QC with J.R. Williams - Defendants Solicitors: Allens Linklaters - Plaintiff Herbert Smith Freehills - Defendants File Number(s): 2010/234866