B J McAdam Pty Limited ACN 000 288 639 v Jax Tyres Pty Limited ACN 000 955 840 [2012] FCA 600

B J McAdam Pty Limited ACN 000 288 639 v Jax Tyres Pty Limited ACN 000 955 840 [2012] FCA 600

Given the urgency and specific circumstances, including the possibility of unforeseeable consequences and lack of pressing need for the dividend, the balance of convenience favoured restraining the declaration of any dividend by the first respondent until final hearing. Undertakings offered did not sufficiently preserve the status quo, as declaration of dividend would alter legal relations.

Parties
First Plaintiff: B J McAdam Pty Limited ACN 000 288 639; Second Plaintiff: Bruce James McAdam; Third Plaintiff: Merim Holdings Pty Ltd ACN 112 224 807; Fourth Plaintiff: Shirley Marlene McAdam; First Defendant: Jax Tyres Pty Limited ACN 000 955 840; Second Defendant: Jax Franchising Systems Pty Limited ACN 060 109 891; Third Defendant: Jax Tyres Investments Pty Limited ACN 112 266 832; Fourth Defendant: Ian Frederick Hurrell; Fifth Defendant: Vakofa Pty Limited ACN 003 318 625; Sixth Defendant: Colnagow Investments Pty Ltd ACN 128 667 532; Seventh Defendant: Quickfit Tyre Service Pty Ltd ACN 071 116 615; Eighth Defendant: Jax Quikfit Franchising Systems Pty Limited ACN 112 050 058; Ninth Defendant: Chylos Pty Limited ACN 001 402 562; Tenth Defendant: Valnock Pty Limited ACN 010 596 077; Eleventh Defendant: Jax Tyres Finance Pty Limited ACN 112 213 895; Twelfth Defendant: Jeffery David Board
Jurisdiction
Australia
Judgment Date
06 June 2012
Procedural Posture
Interlocutory Application / Interlocutory Hearing and Orders
Outcome
Interlocutory injunction granted; first, fourth and twelfth respondents restrained from declaring any dividend from the first respondent until determination of application.
Legal Topics
Interlocutory Injunction, Restraint of Dividend Declaration, Balance of Convenience, Adequacy of Damages, Preservation of Status Quo
Practice and Procedure Corporations Interlocutory Injunction Restraint of Dividend Declaration Balance of Convenience Adequacy of Damages Preservation of Status Quo

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Parties

B J McAdam Pty Limited ACN 000 288 639

First Plaintiff

Bruce James McAdam

Second Plaintiff

Merim Holdings Pty Ltd ACN 112 224 807

Third Plaintiff

Shirley Marlene McAdam

Fourth Plaintiff

Jax Tyres Pty Limited ACN 000 955 840

First Defendant

Jax Franchising Systems Pty Limited ACN 060 109 891

Second Defendant

Jax Tyres Investments Pty Limited ACN 112 266 832

Third Defendant

Ian Frederick Hurrell

Fourth Defendant

Vakofa Pty Limited ACN 003 318 625

Fifth Defendant

Colnagow Investments Pty Ltd ACN 128 667 532

Sixth Defendant

Quickfit Tyre Service Pty Ltd ACN 071 116 615

Seventh Defendant

Jax Quikfit Franchising Systems Pty Limited ACN 112 050 058

Eighth Defendant

Chylos Pty Limited ACN 001 402 562

Ninth Defendant

Valnock Pty Limited ACN 010 596 077

Tenth Defendant

Jax Tyres Finance Pty Limited ACN 112 213 895

Eleventh Defendant

Jeffery David Board

Twelfth Defendant

Procedural Posture

Interlocutory Application / Interlocutory Hearing and Orders

Legal Issues

  1. 1 Whether an interlocutory injunction should restrain the declaration of a dividend by the first defendant
  2. 2 Whether injunction is required to preserve status quo
  3. 3 Whether damages are an adequate remedy

Ratio Decidendi

Given the urgency and specific circumstances, including the possibility of unforeseeable consequences and lack of pressing need for the dividend, the balance of convenience favoured restraining the declaration of any dividend by the first respondent until final hearing. Undertakings offered did not sufficiently preserve the status quo, as declaration of dividend would alter legal relations.

Court Disposition

Interlocutory injunction granted; first, fourth and twelfth respondents restrained from declaring any dividend from the first respondent until determination of application.

Orders

  • Until the determination of the application to be heard on 17 July 2012, the first, fourth and twelfth respondents, by themselves or their agents, be restrained from taking any steps to declare any dividend from the first respondent.
  • The question of costs be reserved until 17 July 2012.