Were Securities Limited v Red Sheriff Limited [2004] FCA 42

Were Securities Limited v Red Sheriff Limited [2004] FCA 42

There is a serious question to be tried as to whether the plaintiff is independently entitled to five business days’ notice of board meetings under the Shareholders Agreement and whether the directors’ waiver can affect the plaintiff’s contractual rights. The balance of convenience favours restraint given the potential impairment of the plaintiff’s rights and the absence of meaningful disadvantage to the first defendant.

Jurisdiction
Australia
Judgment Date
02 February 2004
Procedural Posture
Interlocutory Application / Injunction (interlocutory Relief)
Outcome
Interlocutory injunction granted
Legal Topics
['shareholders Agreement' 'notice of Board Meetings' 'injunctions' 'privity of Contract']
['contract Law' 'corporations Law'] ['shareholders Agreement' 'notice of Board Meetings' 'injunctions' 'privity of Contract']

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Procedural Posture

Interlocutory Application / Injunction (interlocutory Relief)

Legal Issues

  1. 1 ['Whether the first defendant breached the Shareholders Agreement by giving less than five business days notice of a board meeting' 'Whether the plaintiff is entitled to notice of board meetings under clause 3.13(b) independent of directors’ notice under clause 3.10' 'Whether directors can waive the five-day notice requirement to the effect of binding other parties such as shareholders']

Ratio Decidendi

There is a serious question to be tried as to whether the plaintiff is independently entitled to five business days’ notice of board meetings under the Shareholders Agreement and whether the directors’ waiver can affect the plaintiff’s contractual rights. The balance of convenience favours restraint given the potential impairment of the plaintiff’s rights and the absence of meaningful disadvantage to the first defendant.

Court Disposition

Interlocutory injunction granted

Orders

  • ['Upon Were Securities Limited, by its counsel, giving the usual undertaking as to damages, the first defendant is restrained until further order from holding any meeting of its Board to consider or vote upon any of the matters referred to in the affidavit of Richard John Flitcroft of 30 January 2004 at paragraph 17...