Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd [2014] NSWCA 326

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd [2014] NSWCA 326 Hearing dates: 13, 14, 15 May 2014 Decision date: 17 September 2014 Before: Bathurst CJ at [1]; Beazley P at [2]; Barrett JA at [3] Decision: 1. Vary order 3 made in the Equity Division on 3 May 2013 by omitting "as and from 29 June 2001". 2. Appeal otherwise dismissed. 3. Cross-appeal dismissed. 4 Order that the appellants pay the respondent's costs of the appeal. 5. Order that the cross-appellant pay the cross-respondents' costs of the cross-appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: CORPORATIONS - membership rights and remedies - share capital - dividends - payment of dividends - whether the constitution required the payment of dividends on a particular class of shares without declaration or other decision to pay - where the constitution created a right to receive a dividend in respect of a particular period and specified the date for payment thereof - each such dividend to be equal to a stated fraction of "the profit of the company available for dividend purposes" for the period "based on" accounts for the period - meaning of "available for dividend purposes" - extent to which the directors had discretion in determining the profit of a period "available for dividend purposes" - CORPORATIONS - members' remedies and internal disputes - oppressive or unfair conduct - whether conduct of the company by accepting a contractual restraint on the payment of dividends and relying on that and other grounds to withhold dividend was within Corporations Act s 232 - where the contractual restraint was embodied in a loan agreement with the holding company - whether there was any commercial rationale for the restraint - where the company's decision to accept the restraint was made by directors all of whom were officers of the holding company - CORPORATIONS - constitution of a company - alteration thereof - by court order - time at which the alteration takes effect - EQUITY - rectification - rectification of instruments ex abundanti cautela - CORPORATIONS - constitution of a company - whether the constitution is amenable to equitable jurisdiction to order rectification - PROCEDURE - amendment of claim - whether discretion miscarried when an amendment application made on the eighth day of the trial was refused. Legislation Cited: Civil Procedure Act 2005 (NSW) Companies Act 1961 (NSW) Companies and Securities Legislation (Miscellaneous Amendments) Act 1985 (Cth) Companies (New South Wales) Code Company Law Review Act 1998 (Cth) Corporations Law of New South Wales Corporations Act 2001 (Cth) Corporations Amendment (Corporate Reporting Reform) Act 2010 (Cth) Cases Cited: Aon Risk Services Pty Ltd v Australian National University [2009] HCA 27; 239 CLR 175 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; 148 CLR 170 Ammonia Soda Co Ltd v Chamberlain [1918] 1 Ch 266 Australasian Oil Exploration Ltd v Lachberg [1958] HCA 51; 101 CLR 119 Bagot Pneumatic Tyre Co v Clipper Pneumatic Tyre Co [1902] 1 Ch 146 Bailey v Medical Defence Union Ltd [1995] HCA 28; 184 CLR 399 Best v Newton King Ltd [1942] NZLR 360 Bishop v Smyrna and Cassaba Railway Co [1895] 2 Ch 265 Bluebottle UK Ltd v Commissioner of Taxation [2007] HCA 54; 232 CLR 598 Bratton Seymour Service Co Ltd v Oxborough [1992] BCLC 693 Burk v Ottawa Gas & Electric Co 123 Pac 857 (1912) Burland v Earle [1902] AC 83 Caird v Moss (1886) 33 Ch D 22 Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95 Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55 Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337 Company of Proprietors of the Kent Waterworks v Lamplough [1904] AC 27 Crocker v Waltham Watch Co 53 NE 2d 230 (1944) De Vall v Wainwright Gas Co [1932] 2 DLR 145 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 88 ALJR 447 Evans v Chapman [1902] WN 78 Evling v Israel & Oppenheimer Ltd [1918] 1 Ch 101 Fidelity Management & Research Co v Gulf Canada Resources Ltd (1996) 27 BLR (2d) 135 Fisher v Black and White Publishing Co [1901] 1 Ch 174 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 Heesh v Baker [2008] NSWSC 711; 67 ACSR 192 Henry v The Great Northern Railway Co (1857) 1 DeG & J 606; 44 ER 858 HNA Irish Nominees Ltd v Kinghorn (No 2) [2012] FCA 228; 88 ACSR 427 House v R [1936] HCA 40; 55 CLR 499 Industrial Equity Ltd v Blackburn [1977] HCA 59; (1977) 137 CLR 567 Jenkins v Enterprise Gold Mines NL (1992) 6 ACSR 539 Lavercombe v Auscott Ltd [2006] NSWSC 867; 202 FLR 390 Lee v Neuchatel Asphalte Co (1889) 41 Ch D 1 Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; 156 FCR 1 Long Acre Press Ltd v Odhams Press Ltd [1930] 2 Ch 196 Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184; 310 ALR 113 Marra Developments Ltd v B W Rofe Pty Ltd [1977] 2 NSWLR 616 McKillen v Misland (Cyprus) Investments Ltd [2011] EWHC 3466 (Ch) Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 Namberry Craft Pty Ltd v Watson [2011] VSC 136 O'Neill v Phillips [1999] 1 WLR 1092 Paterson v R Paterson & Sons Ltd [1916] 2 SLT 227 Prenn v Simmonds [1971] 1 WLR 1381 QBE Insurance Group Ltd v Australian Securities Commission (1992) 38 FCR 270 Re Buck [1964] VR 284 Re Buenos Ayres Great Southern Railway Co Ltd [1947] 1 Ch 384 Re Cumberland Holdings Ltd (1976) 1 ACLR 361 Re Odessa Waterworks Co Ltd [1901] 2 Ch 190n Re Saul D Harrison & Sons plc [1995] 1 BCLC 14 Re The Spanish Prospecting Co Ltd [1911] 1 Ch 92 Santos Ltd v Pettingell (1979) 4 ACLR 110 Scott v Frank F Scott (London) Ltd [1940] Ch 794 Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427 Smolarek v Liwszyc [2006] WASCA 50; 32 WAR 101 Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd [2013] NSWSC 235 Sumiseki Materials Co Ltd v Wambo Coal Pty Ltd (No 2) [2013] NSWSC 488 Sun Alliance Investments Pty Ltd v Commissioner of Taxation [2004] FCAFC 11; 134 FCR 102 Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; 84 ACSR 121 Tosich v Tosich Construction Pty Ltd (1993) 10 ACSR 590 Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 Trilogy Management Ltd v YT Charitable Foundation (International) Ltd [2012] JCA 152 Wayde v New South Wales Rugby League Ltd [1985] HCA 68; 180 CLR 459 Weinstock v Beck [2011] NSWCA 228 Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; 86 ALJR 1 Texts Cited: S Aleveras and J du Plessis, "The payment of dividends: Legal confusion, complexities and the need for comprehensive reform in Australia" (2014) 32 Company and Securities Law Journal 312 J K Walsh, "The exercise of powers in the interests of a company" (1967) 8 University of Western Australia Law Review 176 Category: Principal judgment Parties: Wambo Coal Pty Ltd (First Appellant) Peabody Australia Mining Limited (Second Appellant) Sumiseki Materials Co Ltd (Respondent) Representation: Counsel: N J Young QC/K L Andronos (Appellants) N C Hutley SC/M J Darke (Respondent) Solicitors: Johnson Winter & Slattery (Appellants) Allens Respondent File Number(s): CA2013/159593 Decision under appeal Citation: [2013] NSWSC 235, [2013] NSWSC 488 Before: Hammerschlag J File Number(s): 2010/234866