Onslow Salt Pty Ltd (ACN 050 159 558) [2003] FCA 429

Onslow Salt Pty Ltd (ACN 050 159 558) [2003] FCA 429

Issue of redeemable preference shares by Onslow Salt Pty Ltd was invalid due to absence of rights in the company constitution at the time; application was non-contentious, there was no prejudice, and no public policy against validation; order validating the issue and confirming its terms under s 254E was granted.

Parties
Applicant: Onslow Salt Pty Ltd; Shareholder: Salt Asia Holdings Pty Ltd; Shareholder: Gulf Holdings Pty Ltd
Jurisdiction
Australia
Judgment Date
28 April 2003
Procedural Posture
Corporations Law Application / Final Orders
Outcome
application granted
Legal Topics
Validation of Share Issue, Redeemable Preference Shares, Company Constitution, Court's Discretion Under S 254 E of Corporations Act 2001
Corporations Law Validation of Share Issue Redeemable Preference Shares Company Constitution Court's Discretion Under S 254 E of Corporations Act 2001

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Parties

Onslow Salt Pty Ltd

Applicant

Salt Asia Holdings Pty Ltd

Shareholder

Gulf Holdings Pty Ltd

Shareholder

Procedural Posture

Corporations Law Application / Final Orders

Legal Issues

  1. 1 Whether the issue of redeemable preference shares by Onslow Salt Pty Ltd, made without requisite provision in the company constitution, should be validated under section 254E of the Corporations Act 2001

Ratio Decidendi

Issue of redeemable preference shares by Onslow Salt Pty Ltd was invalid due to absence of rights in the company constitution at the time; application was non-contentious, there was no prejudice, and no public policy against validation; order validating the issue and confirming its terms under s 254E was granted.

Court Disposition

application granted

Orders

  • Issues of redeemable preference shares in Onslow Salt Pty Ltd to Salt Asia Holdings Pty Ltd are validated and confirmed under s 254E of the Corporations Act 2001.
  • Preference shares do not confer voting, dividend, or notice rights; liable to redemption at company's option for issue price; rank equally with other preference shares; confer no further right to participate in surpluses/profits; further preference share issues do not vary rights.