FEDERAL COURT OF AUSTRALIA

Central Exchange Ltd (ACN 000 742 843) v Rivkin Financial Services Ltd (ACN 061 287 045) [2004] FCA 1436

CENTRAL EXCHANGE LIMITED (ACN 000 742 843) v RIVKIN FINANCIAL SERVICES LIMITED (ACN 061 287 045)

N1473 OF 2004

EMMETT J

5 NOVEMBER 2004

SYDNEY

THE COURT ORDERS THAT:

1.         the plaintiff pay one-half of the defendant’s costs up to and including 12 October 2004.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 21 October 2004 I announced my conclusions on the issues raised in the proceeding and gave my reasons for those conclusions ex tempore.  I directed the parties to bring in short minutes of orders to reflect my conclusions.  The parties have now agreed on orders other than orders as to costs. 

2                     In the absence of agreement as to costs orders I directed the parties to make written submissions on the question of costs.  I have now considered the submissions made by the parties. 

3                     The principal issue in the proceeding concerned the purported postponement of, and change of the place for, the meeting of members called by Central Exchange Limited (‘Central’) pursuant to s 249F of the Act.  That involved two sub-issues, being the power of the Board to postpone or change the place for such a meeting and, secondly, the question of any material personal interest of the Directors.  While the Company was ultimately successful in relation to those matters, the Company had three attempts at formulating an effective resolution of the Directors.  It was on the basis of the third attempt that I concluded that the postponement was effective.

4                     Another important issue in the proceeding concerned the effectiveness of the notice given by Central to the Company under s 249F.  That issue also involved sub-issues.  The first was the question of whether the notice gave at least 28 days written notice and whether, if it did not, the failure to comply should be remedied by court order.  The second sub-issue concerned the question of whether consents furnished by Central’s nominees could be relied upon to satisfy the requirements of the Constitution.  Central was ultimately successful in relation to those matters, although the Company succeeded on the 28 days’ notice issue. 

5                     Thus, Central has been successful in its aim of calling a meeting of the members of the Company to consider the election of its nominees as directors.  On the other hand, the Company has been successful in its aim of postponing that meeting to the date of the annual general meeting of the Company.  In the circumstances, both parties have achieved a measure of success in real terms. 

6                     I do not consider that it is appropriate to endeavour to apportion the effort and time involved in the respective issues in relation to which the parties have been successful.  Nevertheless, I am persuaded that the majority of the effort involved in the preparation of evidence and written submissions prior to the hearing was directed to the question of the validity of the postponement of the meeting called by Central.  I consider that it is appropriate to order Central to pay one half of the Company’s costs up to and including 12 October 2004,  the day fixed for the hearing of the proceeding. 

Associate:

Dated:              5 November 2004