Bird v McComb [2011] FCA 129 (18 February 2011)

Last Updated: 21 February 2011

FEDERAL COURT OF AUSTRALIA

Bird v McComb [2011] FCA 129

Citation:	Bird v McComb [2011] FCA 129
Parties:	SUZANNE CHRISTINE BIRD v JOHN EDMUND MCCOMB, BRIMIN GEM PTY LTD (ACN 056 330 333), SCB HOLDINGS PTY LTD (ACN 085 917 371), CARRIAGES PTY LTD (ACN 063 116 852) and NEWTOUN PTY LTD (ACN 006 858 788)
File number(s):	QUD 10 of 2011
Judge:	GREENWOOD J
Date of judgment:	18 February 2011
Catchwords:	CORPORATIONS – consideration of an application for an interlocutory injunction so as to prevent alteration of registers of directors and members pending the determination of the principal proceeding – consideration of an interlocutory injunction to restrain entities from disposing of assets pending the determination of the principal proceeding PRACTICE AND PROCEDURE- consideration of an application for interlocutory injunction
Legislation:	Corporations Act 2001 (Cth), s 175, s 1324
Cases cited:	ABC v O’Neill (2006) 227 CLR 57 – cited Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 – cited
Date of hearing:	17 February 2011
Date of last submissions:	17 February 2011
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	47
Counsel for the Plaintiff:	Mr J Griffin QC and Mr A B Johnson
Solicitor for the Plaintiff:	Mr P G Mylne, Mylne Lawyers
Counsel for the Defendants:	Mr H A Scott-Mackenzie
Solicitor for the Defendants:	Mr D Hamilton, Tucker & Cowen Solicitors

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 10 of 2011

BETWEEN:	SUZANNE CHRISTINE BIRD Plaintiff
AND:	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

JUDGE:	GREENWOOD J
DATE OF ORDER:	18 FEBRUARY 2011
WHERE MADE:	BRISBANE

UPON THE USUAL UNDERTAKING as to damages given to the Court by the applicant plaintiff:

THE COURT ORDERS THAT:

1. Until the determination of the principal proceeding, the first defendant, John Edmund McComb, is restrained from entering into any arrangements or causing arrangements to be made that have the effect of changing the office bearers (that is to say, directors or secretary) of each of the second, third, fourth and fifth defendants or entering into arrangements or causing arrangements to be made that give rise to a transfer of shares in any of the second, third or fourth defendants, without the leave of the Court.
2. Until the determination of the principal proceeding, the first defendant John Edmund McComb, is restrained from causing any of the second, third, fourth or fifth defendants to enter into agreements for the sale and disposition of properties owned by those companies or entering into arrangements with financiers for the refinancing of existing securities granted either by any one of the companies in respect of the assets or undertaking of any one of the companies or alternatively in respect of any individual assets owned by any one of the companies, without the leave of the Court, subject to the following matters:

(a) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with a view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might put in place a refinancing of existing securities either granted by any one of those companies in respect of its undertaking or in respect of any individual asset owned by one of those companies, and, to that end, the first defendant shall be entitled to seek to fully identify the terms and conditions upon which such a refinancing might be undertaken, subject to no agreement being entered or concluded without the leave of the Court; and

(b) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with the view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might sell any one of its real property assets, subject to no agreement being reached or concluded without the leave of the Court.

3. Until the determination of the principal proceeding, the second, third, fourth and fifth defendants are restrained from entering into an agreement for refinancing existing securities granted either by the companies in respect of their undertaking or in respect of individual assets of those companies or of disposing of real property assets, without the leave of the Court.
4. The defendants have liberty to apply on reasonable notice and not more than one day’s notice in relation to any application either for leave as contemplated by Order 2 or so as to vary the operation of the interim order upon proper grounds.
5. The parties generally have liberty to apply on three days’ notice.
6. Directions will be made for the future conduct of the principal proceeding.
7. The costs of and incidental to the application for interim orders are reserved.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 10 of 2011

BETWEEN:	SUZANNE CHRISTINE BIRD Plaintiff
AND:	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

JUDGE:	GREENWOOD J
DATE:	18 FEBRUARY 2011
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The applicant plaintiff in this proceeding, Ms Suzanne Christine Bird, seeks by way of final relief a series of declarations and orders in reliance upon s 175 of the Corporations Act 2001 (Cth) on the footing that Ms Bird is a “person aggrieved” who seeks an order for rectification of the Register to be maintained under the Corporations Act by a series of companies, so as to reflect what Ms Bird says is the correct position in relation to membership and her position as a director and thus officer of the relevant companies.
2. The present application is directed to interlocutory orders restraining the first defendant, John Edmund McComb, from causing changes to be entered in the Register of each company (and notified to the regulator) as to the directors of each entity or changes in membership without the written consent of Ms Bird or her solicitors, pending the determination of the principal proceeding.
3. Perhaps more importantly for present purposes, Ms Bird seeks an injunction restraining each of the four entities (the second, third and fourth defendants) from entering into refinancing arrangements in relation to properties held by those entities or entering any charge over those properties. More generally, Ms Bird seeks an interlocutory order preventing those entities from dealing with their assets pending the determination of the principal relief.
4. The circumstances said to give rise to a right to the final relief and an interlocutory injunction in aid of the final relief are set out in the affidavit of Ms Bird sworn 18 January 2011 and filed on 19 January 2011.
5. The circumstances are these.
6. Mr McComb lives in Queensland. Ms Bird and Mr McComb lived in a de facto relationship between 1974 and 2005 for a period of 31 years. They did so in Victoria and in Queensland. During the 31 year de facto relationship Ms Bird and Mr McComb held interests in and conducted particular business activities through a number of proprietary companies limited by shares. When the de facto relationship ended in 2005 all of the real property in which Mr McComb and Ms Bird held an interest was owned by the various companies in which they held shares.
7. Those companies are Brimin Gem Pty Ltd (“Brimin”), the second defendant; SCB Holdings Pty Ltd (“SCB”), the third defendant; Carriages Pty Ltd (“Carriages”), the fourth defendant; and Newtoun Pty Ltd (“Newtoun”), the fifth defendant.
8. Although the de facto relationship ended in 2005, Ms Bird continued to receive an income from Brimin in an amount of $1,200 per week. On 16 March 2009, payments ceased.

Brimin

9. Brimin was registered on 25 June 1992.
10. There are 12 ordinary shares issued in that company. Six of those shares were issued to Ms Bird in 1997 as beneficially owned fully paid shares. On 25 June 1992, Ms Bird was appointed a director of Brimin. So too was Mr McComb. On 20 August 1997, Ms Bird was appointed secretary of Brimin. On 31 January 2003, Mr McComb lodged Form 316 with the Australian Securities and Investments Commission (“ASIC”) by which he declared that Ms Bird was a continuing director of Brimin but that all 12 fully paid issued shares were held by him. On 6 October 2004, Mr McComb lodged a Form 484 with ACIC by which he certified as accurate the information that Ms Bird had ceased to be a director and secretary of Brimin.
11. Ms Bird says that she did not agree either expressly or impliedly to transfer her six shares in Brimin to Mr McComb. Nor did she authorise any person to alter the Register of Members or notify ASIC that she had transferred her shares in Brimin to Mr McComb. She says that she has not received any consideration for the transfer of the shares and that would seem to necessarily follow from the proposition that she has not agreed to transfer the shares.
12. As to the directorship in Brimin, Ms Bird says that she did not agree to the appointment of Mr McComb as a director or secretary of Brimin and that she has not resigned from the office of director or secretary of Brimin. Nor has she authorised any person to alter the Register or notify ASIC of those changes.
13. She therefore contends that she is a continuing director and secretary of Brimin and has never ceased that office. She also contends that she owns 50% of the issued share capital of Brimin with all the rights attaching to those shares.
14. Ms Bird says that Brimin is the registered owner of six properties located at 1 Mackeith Court, Mount Eliza; 2 Mackeith Court, Mount Eliza; 3 Mackeith Court, Mount Eliza; 235, Canadian Bay Road, Mount Eliza; 18 Taroona Close, Mount Eliza; and 85 Elizabeth Avenue, Rosebud West. Ms Bird says that each of the first five properties has been listed for sale.

SCB

15. SCB was registered on 19 January 1999.
16. It is a proprietary company limited by shares. A search of the ASIC records conducted on 19 December 2010 suggests that the number of shares issued in SCB is one ordinary share. One fully paid ordinary share in SCB was issued to Ms Bird. On 14 August 2002, Mr McComb was appointed a director of SCB. Ms Bird had been appointed a director on 19 January 1999. She was also appointed company secretary on that date. The share held by Ms Bird was transferred to Brimin. The document reflecting that transfer bears the reference 025652333. On 17 December 2010, Mr McComb in his capacity as director, certified that the share held by Brimin had been transferred to him on 17 December 2010 being the “earliest date of change” in the membership of SCB. The ASIC records suggest that Ms Bird ceased to be a director and secretary of SCB on 22 January 2003. That notification was given to ASIC by Mr McComb on 22 January 2003 who certified that the information was correct.
17. Ms Bird says that she did not agree to transfer her shareholding in SCB to Brimin and nor did she authorise any person to alter the Register of SCB to that effect or notify ASIC of such a change. Again, Ms Bird says that she has not received any consideration for a transfer of the share. Ms Bird says that she did not agree to the appointment of Mr McComb as a director or secretary of SCB and nor did she agree to resign as a director and secretary of SCB on or about 22 January 2003 or at all.
18. Ms Bird says that SCB is the registered owner of three properties, namely properties at 12 Walker Street, Safety Beach, 16 Walker Street, Safety Beach and 18 Walker Street, Safety Beach.
19. Accordingly, Ms Bird says that she retains the shareholding in SCB and she continues to be a director and secretary of SCB. It necessarily follows that Ms Bird’s central contention is that Mr McComb has changed the relevant particulars of membership of SCB and purported to remove Ms Bird as a director and secretary of SCB, just as in the case of Brimin.

Carriages

20. Carriages was registered on 13 January 1994.
21. It is a proprietary company limited by shares. The issued capital in Carriages is two fully paid $1.00 shares. Ms Bird was issued with one of those shares. The other was issued to a company called Esterglade Pty Ltd. Ms Bird was appointed a director on 13 January 1994. Mr McComb was appointed a director on 15 December 1994. Ms Bird was appointed secretary of Carriages on 13 January 1994. On 5 February 2004, ASIC was notified by document number 0E9627018 (according to an ASIC search conducted on 21 December 2010) that Ms Bird’s shareholding in Carriages had been transferred to Brimin which now holds both issued shares. On 8 January 2003, Mr McComb was appointed a director of Carriages. The Form 304 recording the new appointment of Mr McComb as a director from 8 January 2003 purports to have been lodged by Ms Bird in her capacity as a company director at that date.
22. The ASIC search conducted on 21 December 2010 records that ASIC was notified that Ms Bird ceased to be a director and secretary of Carriages on 10 November 2010. The document providing notification of those matters bears the reference OE8581404. Ms Bird says that she has not agreed to transfer her shareholding in Carriages to Brimin; has not received consideration for any such transfer; has not agreed to the appointment of Mr McComb as a director or secretary of Carriages; has never ceased to be a director or secretary of Carriages; has never resigned from those offices; and has never authorised any person to alter the Register of details for that company or notify ASIC of any change to such details.
23. It follows that Ms Bird contends that she is a continuing shareholder in Carriages and a continuing director and secretary of that company. It follows that she contends that Mr McComb has improperly purported to transfer her shareholding and improperly remove her from the office of director and secretary.

Newtoun

24. Newtoun is a proprietary company limited by shares.
25. It was registered on 7 October 1987. Ms Bird says that on 26 February 2004 ASIC was notified by document number 0E9631038 that she had ceased to hold office as a director of Newtoun. The notification document was lodged by Mr McComb on 26 February 2004 in which Mr McComb certifies that Ms Bird’s ceasing to be a company officeholder was correct information. Ms Bird says that she has not resigned as a director of Newtoun and nor has she authorised any person to alter the Register in relation to Newtoun or notify ASIC of any such change.
26. Ms Bird says that when the de facto relationship ended in 2005 after a period of 31 years over which assets were acquired in various entities, she did not seek a property settlement pursuant to Part 19 of the Property Law Act 1974 (Qld) within the time limited by that Act. Payments to her from Brimin ceased on 16 March 2009. Mr McComb on his own behalf and on behalf of the four entities has responded to Ms Bird’s application and relies, principally, upon an affidavit of Dugald Hamilton, a solicitor in the employ of Tucker & Cowen, the solicitors for all respondents.
27. There are three matters relied upon by the respondents in answer to Ms Bird’s application for interlocutory relief. The first concerns the steps Ms Bird has taken to assert rights before the Supreme Court of Queensland and the Supreme Court of Victoria. The second concerns a specific matter of delay in agitating any of these issues on the footing that Ms Bird accepted in an affidavit sworn 6 July 2010 in the Supreme Court proceedings that she became aware on 16 March 2009 that she had been removed as a director of Brimin on 30 September 2004 and as a shareholder on 1 April 1998. The third matter concerns the prejudice the companies will suffer in their attempts to secure refinancing should interlocutory orders be made preventing the entities from continuing to operate as a going concern in conducting the orthodox business undertaking of each company.
28. As to the first matter, Ms Bird filed an application before the Supreme Court of Queensland on 8 July 2010 by which she sought leave to proceed with an application under Part 19 of the Property Law Act so as to obtain a property adjustment arising out of the de facto relationship over 31 years with Mr McComb. An amending application was filed before that Court on 4 November 2010. The proceeding was dismissed by Martin J on 25 November 2010 on the footing that Ms Bird had failed to discharge the onus of demonstrating that hardship would result if leave were not given. Martin J was not satisfied that a proper explanation had been given for the lengthy delay in bringing the application either from the date of separation in 2005 or from the date when payments from Brimin ceased on 16 March 2009.
29. On 15 December 2010, Ms Bird lodged caveats over the properties owned by Brimin, SCB and Newtoun. Eleven properties were involved in those caveat proceedings. On 7 February 2011, Brimin, SCB and Newtoun commenced proceedings in the Victorian Supreme Court against Ms Bird and the Registrar of Titles seeking declarations that Ms Bird had no caveatable interest in any of the properties. On 16 February 2011, Vickery J made declarations that Ms Bird had no caveatable interest in the properties and the Registrar of Titles was directed not to record the caveats against the titles.
30. Counsel for Ms Bird contends that Ms Bird sought to protect her position by commencing proceedings in the Supreme Court of Queensland for leave to seek a property adjustment under the Property Law Act. She filed those proceedings on 8 July 2010 which was approximately 15 months after payments from Brimin ceased and some considerable time (approximately five years) after the separation. As to the Victorian proceedings, Ms Bird lodged caveats so as to prevent any dealing in the properties. Plainly enough, Ms Bird’s standing in relation to those properties is simply as a shareholder in the relevant entity which does not confer any caveatable interest over the property. Counsel for Ms Bird concedes that Ms Bird, who I understand was self-represented in those proceedings, was misconceived about that matter.
31. Counsel for Ms Bird says that these proceedings are concerned with Ms Bird’s true position as a continuing shareholder in and a director and officer of the relevant entities.
32. Mr McComb has not filed an affidavit in response to the contentions deposed to by Ms Bird. Counsel for Mr McComb and the corporate respondents says from the Bar table that each of the allegations made by Ms Bird in her affidavit are denied. A denial of the allegations by Mr McComb by affidavit would put the contentions squarely in controversy. Plainly enough, no questions of fact will be resolved in an interlocutory application. However, it is odd that Mr McComb has not filed an affidavit in which he says anything about the central contentions of Ms Bird. He does not identify, even through the mechanism of information and belief through Mr Dugald Hamilton, the relevant facts which demonstrate a proper basis upon which Ms Bird’s shareholding was transferred or upon which she either resigned in writing from the offices she held or the process by which she was properly removed from each office. Mr Hamilton’s affidavit was filed on 16 February 2011 and further affidavits were filed by leave.
33. Although there is, no doubt, tension between Mr McComb and Ms Bird, an affidavit was filed by the solicitor for Ms Bird, Mr Mylne, on 16 February 2011 by which Mr Mylne deposes to nine attempts to serve the application and supporting affidavits upon Mr McComb at his residence culminating in an unfortunate conversation on 1 February 2011 in which Mr McComb made it perfectly plain that he did not wish to engage on the questions agitated by Ms Bird. That may be an explanation of Mr McComb’s failure to file an affidavit in which he deals with any aspect of the central contentions she makes. Similarly, Mr Mylne sent copies of the application and supporting documents to each of the respondent companies by registered mail to their registered office. All documents were sent back to the sender. Perhaps it is not surprising then that Mr McComb has elected not to address any of the central allegations Ms Bird makes.
34. In any event, for present purposes, each of the central allegations remain unanswered other than by way of a denial from the Bar table.
35. Counsel for the respondents says that each of the respondent companies carry on the business of buying and selling property. The respondents urge upon the Court the proposition that no interlocutory order ought to be made that has the effect of preventing the companies from going about the orthodoxy of their business arrangements and in particular the buying and selling of properties owned by each company and, with most immediate relevance, the completion of arrangements to refinance several mortgages over properties, which have now expired. The evidence going to that matter is contained in brief terms in para 17 of the affidavit of Mr Hamilton sworn 16 February 2011 and it is simply in these terms:
    17. I have been informed by Mr John Edmund McComb, and verily believe, that [Brim] and [SCB] are currently attempting to refinance several of their mortgages over properties owned by them, the terms of which have expired.
        
    18. I have further been informed by Mr McComb, and verily believe, that this refinance cannot occur due to the caveats which have been lodged by the plaintiff over the properties of [Brim], [SCB] and Newtoun.
        
    19. I have been informed by Mr McComb, and verily believe, that the refinance is to be solely used for the business of each of the respective Defendant companies.
        
36. There is no evidence on behalf of the respondents of whether properties are being sold by the entities; whether the proposed refinancing arrangements represent a discharge of existing facilities with new facilities being taken up by a new financier at the levels of the current debts; whether the refinancing arrangements simply involve a roll-over or renewal of the existing facilities with the existing financier; whether the refinancing arrangements provide for further charges and draw downs above and beyond the amounts secured by the charges in favour of the existing mortgagees; if further draw downs are provided for in the refinancing arrangements, whether those monies will be applied to the purchase of other properties or how those monies might be used or deployed.
37. If Ms Bird is ultimately successful in the proceedings and demonstrates that she is a shareholder in the way she contends and that Mr McComb has purported to transfer or cause to be transferred her shareholding in favour of others (or himself), and has purported to remove her as an officer of the company, Ms Bird’s interests in the shares will confer upon her an interest in the entities which, having regard to the properties owned by those entities, may be an interest of significant value. In any event, she is a person who has standing as a person aggrieved for the purposes of s 175 of the Corporations Act and she is a person whose interests have been, are or would be affected by the conduct, the subject of the proceedings, for the purposes of s 1324 of the Corporations Act conferring jurisdiction on the Court to grant an interlocutory injunction in aid of the final relief sought under s 175.
38. An interlocutory injunction is granted in aid of final relief according to the organising principles discussed in ABC v O’Neill (2006) 227 CLR 57 by Gummow and Hayne JJ at [65] to [72] and Gleeson CJ and Crennan J at [19]. The question is whether Ms Bird has made out a prima facie case in the sense of demonstrating a sufficient likelihood of success (a “serious question”) in the proceedings to justify the preservation of the status quo pending the trial. The sufficiency of the likelihood of success depends, in part, upon the nature of the rights asserted and the practical consequences likely to flow from the orders sought: ABC v O’Neill, Gummow and Hayne JJ [65] and [70]. The further question is where the balance of convenience lies. See also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 per Gleeson CJ at [11] and [18]. Counsel for the respondents concedes that the affidavit material relied upon by Ms Bird makes out a prima facie case. The real question agitated by the respondents is the prejudice the respondents will suffer if restrained in the manner sought by the applicant plaintiff.
39. I am satisfied on the basis of Ms Bird’s material that she has demonstrated a sufficient colour of right to the final relief and has satisfied the organising principles as to a prima facie case or serious question identified in ABC v O’Neill.
40. Apart from the reference to 16 March 2009, Ms Bird does not identify when she first became aware of circumstances which suggested that steps had been taken to remove her from the Register of Members as a shareholder in the particular entities or the steps taken to purportedly remove her as an officer of the relevant entities. Although no submission is put by the respondents expressly on the matter that follows, it seems to me that there is a question about the conduct of Ms Bird in relation to the governance of the entities. Ms Bird says that the de facto relationship ended in 2005 and that as far as she is concerned she has been and remains a director of the relevant entities. She also says that she has never agreed to any sale, transfer or disposition of her shareholding in the second, third and fourth defendants. It presumably follows (leaving aside the specific question of notice from 16 March 2009), that, from the termination of the de facto relationship, Ms Bird has not engaged in the governance or decision-making of the companies since 2005 and if that is so Ms Bird may have left the governance and decision-making about the activities of those companies to others. That may mean that Mr McComb has been left, in effect, “in charge” of the companies either by himself or with others. That may be entirely consistent with Ms Bird not knowing of the changes until 16 March 2009 in respect of Brimin.
41. No facts are asserted by Mr McComb or Mr Hamilton about the interim governance of the companies or how the companies were governed from the time when Ms Bird, on Mr McComb’s view of it, either resigned or accepted removal as a director and/or secretary of one or more of the entities. That may be because Mr McComb has chosen not to identify any foundation in fact for the changes which clearly took place and in many respects as a result of documents lodged by him in his name.
42. It may be that Ms Bird continued to have dialogue with Mr McComb about the activities of the companies and, according to her affidavit, she has proceeded on the footing that she has been a shareholder throughout.
43. The question of the steps taken by Ms Bird (or not) in relation to the governance of the entities and the activities undertaken in the period since the end of the de facto relationship go to the question of whether an interim order ought to be made restraining the companies from buying and selling properties or undertaking the refinancing arrangements. Those matters also go to aspects of the merits of the principal application. Ms Bird seems to have been content to have received the weekly amount of $1,200.00 from Brimin without agitating a continuing role in the decision-making and governance of the entities as director or secretary. Nevertheless, Ms Bird, according to her affidavit, has acted on the footing that she has at all times retained the shareholding she asserts which is the foundation of her interest in the entities, the net asset backing value of which is, no doubt, directly related to the net value of the shares which she says lie in her hands and should be so recorded in the Register of the company and so recorded with ASIC.
44. It seems to me that the status quo ought to be maintained pending the determination of the principal relief although the real question is the framing of an order which achieves that result whilst enabling things to be done by the entities which are conducive to the preservation of the status quo.
45. A further matter in answer to the application relied upon by the respondents is the adequacy of any undertaking as to damages by Ms Bird. Ms Bird is said by her counsel to be impecunious and her position in that regard is attributable, it is said, to the conduct the subject of the proceedings. The respondents seek security in support of the usual undertaking as to damages. Because Ms Bird is an individual applicant and is personally liable for compensation as the Court might assess it in accordance with the undertaking she must give, and the conduct in question is said to be the source of Ms Bird’s impecuniosity, it is not appropriate to order that Ms Bird provide security in support of the usual undertaking as to damages as a condition of interim relief.
46. The following orders will be made:
    1. Until the determination of the principal proceeding, the first defendant, John Edmund McComb, is restrained from entering into any arrangements or causing arrangements to be made that have the effect of changing the office bearers (that is to say, directors or secretary) of each of the second, third, fourth and fifth defendants or entering into arrangements or causing arrangements to be made that give rise to a transfer of shares in any of the second, third or fourth defendants, without the leave of the Court.
    2. Until the determination of the principal proceeding, the first defendant John Edmund McComb, is restrained from causing any of the second, third, fourth or fifth defendants to enter into agreements for the sale and disposition of properties owned by those companies or entering into arrangements with financiers for the refinancing of existing securities granted either by any one of the companies in respect of the assets or undertaking of any one of the companies or alternatively in respect of any individual assets owned by any one of the companies, without the leave of the Court, subject to the following matters:

(a) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with a view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might put in place a refinancing of existing securities either granted by any one of those companies in respect of its undertaking or in respect of any individual asset owned by one of those companies, and, to that end, the first defendant shall be entitled to seek to fully identify the terms and conditions upon which such a refinancing might be undertaken, subject to no agreement being entered or concluded without the leave of the Court; and

(b) the first defendant (whether by himself or by those advisers appointed by him whether accountants, lawyers or otherwise to act on his behalf) shall be entitled to conduct discussions or negotiations or engage in normal business practices with the view to seeking to reach arrangements, in principle, by which any one of the second, third, fourth or fifth defendants might sell any one of its real property assets, subject to no agreement being reached or concluded without the leave of the Court.

3. Until the determination of the principal proceeding, the second, third, fourth and fifth defendants are restrained from entering into an agreement for refinancing existing securities granted either by the companies in respect of their undertaking or in respect of individual assets of those companies or of disposing of real property assets, without the leave of the Court.
4. The defendants have liberty to apply on reasonable notice and not more than one day’s notice in relation to any application either for leave as contemplated by Order 2 or so as to vary the operation of the interim order upon proper grounds.
5. The parties generally have liberty to apply on three days’ notice.
6. Directions will be made for the future conduct of the principal proceeding.
7. The costs of and incidental to the application for interim orders are reserved.
47. The applicant plaintiff also seeks an order that Mr McComb disclose to the solicitors for Ms Bird the assets and liabilities of the companies. The question to be determined in the principal proceeding is whether Ms Bird’s assertions of a continuing shareholding interest and a continuing role as an officer of the companies is made good. Directions orders will be made which address the documents to be produced relevant to the determination of that question.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

Associate:

Dated: 18 February 2011