Clark v J & E Holdings Pty Ltd & Ors [1993] QSC 237

0 0 0 0 .Se- 93/0J.37 IN THE SUPREME COURT OF QUEENSLAND No. 4310 of 1993 Brisbane Before Mr Justice Mackenzie [Re: Susanna Clark v. J & E Holdings & Ors] BETWEEN: SUSANNA ELIZABETH CLARK Plaintiff AND: J. & E. HOLDINGS PTY LTD (ACN 056 213 631) First Defendant ROBERT CLARK Second Defendant ROMA NOEL CLARK Third Defendant REASONS FOR JUDGMENT -MACKENZIE J. Judgment delivered on 23/08/1993 Counsel: Solicitors: Hearing Date: D. Spence for plaintiff J. Bell for defendants Thomas MacLurkin for plaintiff Freehill Hollindale & Page for defendants 5 July 1993 -- 1 of 10 -- 0 0 () IN THE SUPREME COURT OF QUEENSLAND Brisbane Before Mr Justice Mackenzie [Re: Susanna Clark v. J & E Holdings & Ors] BETWEEN: SUSANNA ELIZABETH CLARK AND: No. 4130 of 1993 Plaintiff J. & E. HOLDINGS PTY LTD (ACN 056 213 631) First Defendant ROBERT CLARK Second Defendant AND: ROMA NOEL CLARK Third Defendant REASONS FOR JUDGMENT -MACKENZIE J. Judgment delivered on 23/08/1993 The applicant/plaintiff filed a writ on 11th June, 1993 seeking a declaration that Robert Clark was not a validly appointed director of J. & E. Holdings Pty. Ltd. (J. & E. Holdings), a declaration that certain resolutions were void and certain mandatory and restraining orders with respect to the -- 2 of 10 -- .~-----·~~~~~- 2 conduct of the company's affairs. The notice of motion that has brought the matter before me sought orders restraining the company, its servants, agents and shareholders from acting on resolutions:- (a) Terminating the services of the applicant as a director; (b) Thanking her for her services as a former director; (c) That Roma Noel Clark be appointed a director in lieu of Susanna Elizabeth Clark; (d) That Robert Clark, Roma Noel Clark or Robyn Anne Clark be authorised to operate a particular account of the company; (e) That shares be allotted to one Sylvia Victoria Clark; and (f) That benefits provided in lieu of wages to Rodney John Clark be ratified. An order was also sought restraining J. & E. Holdings from acting on resolutions purportedly passed at a shareholders meeting on 12th June, 1993. An order was also sought that certain authorities to operate bank accounts of the company be revoked and that the applicant and Robyn Anne Clark be authorised to· operate those bank accounts.as co-signatories. Orders were C', /" . also sought requiring the company to revoke the authority of C_) Rodney John Clark to act as its agent in any capacity, restraining him from actihg as a director, restraining Robert Clark and Roma Clark from acting as directors and authorising the applicant and Robyn Anne Clark to act in the capacity of directors. A restraint upon the disposal of assets of the company was also sought. ---........ ~~~~~--~~~------- -- 3 of 10 -- 3 In response to the filing of the notice of motion the respondents filed a summons for transfer of the proceedings .to the New South Wales Supreme Court (Sydney Registry). J. & E. Holdings was incorporated in May, 1992. Its registered office is at Cabramatta in the State of New South Wales. However the Clarks reside in Brisbane and the material suggests that the company's activities were managed from Brisbane. J. & E. Holdings holds one-half of the share holding () of Windbid Pty Ltd, the major asset of which is a caravan park at Windsor, New South Wales. The other shareholder is Levora Pty 0 0 c Ltd. James Giles Bourke representing Levora and Rodney John Clark representing J. & E. Holdings were initially directors of Windbid. Rodney John Clark is the husband of the applicant, Susanna Clark but they separated on 22nd May, 1993. Rodney John Clark is a non~practising New South Wales solicitor who was 22nd October, 1992 declared bankrupt on his own petition. According to the applicant, Rodney John Clark was given authority to remain as a signatory of cheques drawn on the company bank account and was authorised to be its agent. Mr Clark disputes that he acted at any time in the capacity of a director after his bankruptcy. The respondents, Robert Clark and Roma Noel Cl~rk are the father and mother of Rodney John Clark and Robyn Anne Clark is his sister. Behind the application for transfer to New South Wales lies the fact that proceedings have been instituted in the Supreme Court of New South Wales by J. & E. Holdings against Mr Bourke, Levora and Windbid. An affidavit sworn in those proceedings -- 4 of 10 -- -.~-- .. ---- 4 which was exhibited before me shows that disputes arose over the financial and day-to-day management of the caravan park. The amended summons in the New South Wales proceedings seeks relief from oppression in the conduct of Windbid, an order for purchase by J. & E, Holdings of Levora's shares in Windbid, an accounting and audit and an order directing Windbid to recover any moneys owing to it by Mr Bourke and Levora. It also seeks a restraint upon Mr Bourke from acting in any capacity on behalf of Windbid. In the alternative the appointment of a receiver and manager of (! Windbid'is sought for the purpose of enforcing compliance with the orders sought and either to· sell the company as a going concern or to wind-up the company. The applicant, Susanna Clark has filed an affidavit in the New South. Wales proceedings asserting that Rodney John Clark commenced the action in J. & E. Holdings' name without authority. There is before me a minute authorising Rodney John Clark to protect the interests of the company. The precise basis upon which it is asserted that there is no authority on the part of Rodney John Clark to commence the action is not made explicit. Rodney John Clark is at the centre of two breakdowns in relationships. There have been allegations and counter-allegations about the conduct of opposing parties in both sets of litigation and one is left with the impression, so far as it can be gained from documentary material, that a certain degree of objectivity has been lost. Further complicating the matter is that it appears that the applicant Susanna Clark now has· a working relationship with Mr Bourke because under a resolution passed by Windbid, the effectiveness of which is an -------- ---------------- (l (l () -- 5 of 10 -- 0 0 0 0 5 issue in the New South Wales proceedings, a company of which she is a principal is entitled to $500 per week from Windbid. There are allegations and counter-allegations about the validity of things done with respect to the internal management of J. & E. Holdings and Windbid. The caravan park is the major asset of J. & E. Holdings and the realistic view seems to be that the resolution of the issues between the various parties involved in J. & E. Holdings and Windbid will be closely bound up with one another on the material as it stands. The resolution of issues in the New South Wales proceedings will probably involve the determination of questions relevant to the internal management of J. & E. Holdings. The determination of the validity of certain acts done in the course of the internal management of J. & E. Holdings are likely to have a bearing on the course of the New South Wales proceedings.· It is true that not all of the matters in respect of which relief is sought in the Queensland proceedings will necessarily be involved in the New South Wales proceedings but one would hope that if the underlying fundamental questions as to validity of the various disputed matters are determined in the course of the New South Wales proceedings that will provide a sign post towards a sensible resolution of the remaining issues. It is not easy to separate out those issues which will necessarily be involved in the New South Wales proceedings and those that may not with any degree of confidence. Accordingly, the option of transferring only part of the proceedings to New South Wales is unattractive. The Corporations (Queensland) Adt 1990 includes a system of cross-vesting "to the exclusion of the Jurisdiction of Courts -- 6 of 10 -- /}' . I 6 (Cross-Vesting) Act 1987" (s. 40). Under s. 42 jurisdiction is conferred on the Supreme Court of Queensland, the Supreme Courts of each of the other States and the Capital Territory and the Federal Court with respect to "civil proceedings" under the Corporations Law of Queensland. Under s.44 of the Corporations {Queensland) Act this Court has a discretion to transfer the proceeding or application to another court if it appears to this Court that having regard to the interests of justice it is more appropriate for the proceeding or the application in the proceeding to be determined by the other court. Under s.44B the Court must have regard to (a) the principal place of business of any body corporate (l concerned in the proceedings or application; and (b) the place or places where the events that are the subject of the proceeding or application took place. The ultimate question to be answered is whether it is more appropriate that another court deal with the matter. In () determining that, regard must be had to the interests of justice, and in determining that regard must be had to the principal place of business of the body corporate concerned in the proceedings c) and the place orpla-ces where events that are the subject of the proceedings took place. The events that are the subject of the Queensland proceedings took place in Queensland. The principal place of business of the body corporate·concerned in the proceedings is attended with some difficulty. The main asset of the company is situated in New .south Wales.· Such evidence as there is suggests that there were meetings in New South Wales of the directors of -- 7 of 10 -- 7 the company of which J. & E. Holdings was a 50 per cent shareholder. It is true that the meetings of J. & E. Holdings took place in Queensland. In the circumstances it certainly cannot be said that the company does not carry on business in New South Wales in the sense that its business interests and the execution of its rights in respect of them appear to have occurred at least to some extent in New South Wales. As to the question of where the interests of justice suggest ~ the matter should be dealt with the reality of the matter is that there are proceedings on foot in New South Wales which preceded 0 0 the institution of the present proceedings. For reasons that I have outlined above it is likely that the resolution of the proceedings in New South Wales will require a number of the issues raised in the Queensland proceedings to be explored. Accordingly if the Queensland proceedings are not transferred to New South Wales there is a significant risk that the issues would be litigated in two courts. As between the parties to the proceedings in Queensland there would not necessarily be an issue estoppel as the New South Wales litigation is between different parties. The question then to be addressed is whether it is appropriate that another court deal with the matter instituted in this Court. The considerations to which I have referred have· satisfied me that to the extent that the proceedings are "civil proceedings" under the Corporations Law of Queensland it is appropriate to order that the proceedings in Writ 884 of 1993 be transferred to the Supreme Court of New South Wales, Sydney Registry. -- 8 of 10 -- 8 To the extent that the proceedings may not fit the description of "civil proceedings"· under the Corporations Law of Queensland, it is necessary to con~ider the alternative basis of cross-vesting, the Jurisdiction of Courts (Cross-Vesting) Act 1987. Section 5(2) of the Act requires certain criteria to be taken into account. The first is that the relevant proceeding is related to another proceeding pending in the Supreme Court of another State. The second is that it is "more appropriate" that the relevant proceeding b.e determined by that other Supreme Court, having regard to three criteria. It follows from what has been said previously that the interests of justice make it more (1 Cl appropriate in the circumstances of the case that the relevant . proceeding be determined in the Supreme Court of New South Wales. Accordingly, to the extent that the Jurisdiction of Courts (Cross-Vesting) Act 1987 is the applicable law I would order that the proceedings be transferred to the Supreme Court of New South Wales, Sydney Registry. In so doing I do not presume to express any view as to the way in which the transferred proceedings should progress from this point. So far as the application for interlocutory relief is concerned, in my opinion I should not at this point make orders that may have the effect of complicating the conduct of the proceedings in the Supreme Court of New South Wales. That Court, when seised of both matters, will be in the best position to decide what should be done with respect to the management of J. & E. Holdings pending resolution of the matters. ,-- ·. \ _ _) -- 9 of 10 -- 0 0 0 9 The orders that I make are: 1. That the notice of motion filed on 11th June, 1993 on behalf of the plaintiff be adjourned to a date to be fixed. 2. That the proceedings be transferred to the Supreme Court of New South Wales, Sydney Registry. 3. That the costs of and incidental to each application be reserved to a Judge of the Supreme Court of New South Wales. -- 10 of 10 --