Bird v McComb (No. 2) [2011] FCA 507

Bird v McComb (No. 2) [2011] FCA 507

The Court considered it proper to preserve the capacity of Brimin Gem and SCB to continue operating in the ordinary course of business, including by allowing borrowing to discharge ordinary obligations, pending trial. The interlocutory restraints remain but are varied as specified to allow such borrowing and specified payments, and to require disclosure of trust and company financials. The underlying issue of whether the properties are trust assets or company property is for trial.

Parties
Plaintiff: Suzanne Christine Bird; First Defendant: John Edmund McComb; Second Defendant: Brimin Gem Pty Ltd (ACN 056 330 333); Third Defendant: SCB Holdings Pty Ltd (ACN 085 917 371); Fourth Defendant: Carriages Pty Ltd (ACN 063 116 852); Fifth Defendant: Newtoun Pty Ltd (ACN 006 858 788); Sixth Defendant: Austral Pacific Queensland Pty Ltd as trustee of the BM Family Trust
Jurisdiction
Australia
Judgment Date
17 May 2011
Procedural Posture
Corporations/interlocutory Injunction Application to Vary / Interlocutory (variation of Injunctions)
Outcome
Orders varying interlocutory restraints and requiring further disclosure; injunction maintained with variations; Austral Pacific Queensland Pty Ltd joined as sixth defendant; costs reserved.
Legal Topics
Varying Interlocutory Restraint Orders, Director and Shareholder Disputes, Trust Assets and Beneficial Interests, Borrowing for Business Expenses During Litigation
Corporations Law Equity Practice and Procedure Varying Interlocutory Restraint Orders Director and Shareholder Disputes Trust Assets and Beneficial Interests Borrowing for Business Expenses During Litigation

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Parties

Suzanne Christine Bird

Plaintiff

John Edmund McComb

First Defendant

Brimin Gem Pty Ltd (ACN 056 330 333)

Second Defendant

SCB Holdings Pty Ltd (ACN 085 917 371)

Third Defendant

Carriages Pty Ltd (ACN 063 116 852)

Fourth Defendant

Newtoun Pty Ltd (ACN 006 858 788)

Fifth Defendant

Austral Pacific Queensland Pty Ltd as trustee of the BM Family Trust

Sixth Defendant

Procedural Posture

Corporations/interlocutory Injunction Application to Vary / Interlocutory (variation of Injunctions)

Legal Issues

  1. 1 Whether defendants should be given leave to borrow funds to discharge interest, rates, and legal obligations despite interlocutory restraints
  2. 2 Whether assets are properly the subject of company or trust property
  3. 3 Whether the interlocutory orders restraining dealings in shares, changes in officers, or property sales/encumbrances should be varied

Ratio Decidendi

The Court considered it proper to preserve the capacity of Brimin Gem and SCB to continue operating in the ordinary course of business, including by allowing borrowing to discharge ordinary obligations, pending trial. The interlocutory restraints remain but are varied as specified to allow such borrowing and specified payments, and to require disclosure of trust and company financials. The underlying issue of whether the properties are trust assets or company property is for trial.

Court Disposition

Orders varying interlocutory restraints and requiring further disclosure; injunction maintained with variations; Austral Pacific Queensland Pty Ltd joined as sixth defendant; costs reserved.

Orders

  • Leave given to Brimin Gem Pty Ltd (or Austral Pacific Queensland Pty Ltd) to borrow monies to discharge specified obligations (interest, rates, $60,000 for 26 Seafarer Ct, legal fees) as set out in affidavits.
  • First and second defendants to file affidavits exhibiting financials/tax returns for the BM Family Trust 1992-2010 within 14 days.