Welcome to today’s Chamberlains Selection, where we will discuss with James d’Apice on the matter of Barjeba v Bogg [2020] WASC 195. We will talk about an alleged shareholder who sought an immediate injunction to stop a company declaring a dividend or reducing its share capital.

An alleged shareholder, P, sought an immediate injunction to stop a Co declaring a dividend or reducing its share capital: [1] P’s alleged status a shareholder, P said, gave rise to an entitlement to $700K in dividends. Failure to pay those dividends was a breach of the Co’s constitution – which was, P said, a breach of duty and oppressive: [2] In the substantive claim, P was seeking orders requiring the Ds to purchase P’s shares: [3] The Court was satisfied there was a serious question (whether P was indeed a shareholder in the Co) to be tried: [6], [7] However, The Court rejected P’s argument that damages would not be adequate compensation, a necessary step to get an interlocutory injunction.

In the substantive claim, P was seeking was a declaration that it owned shares and an order that the Ds buy those shares i.e. P wanted money. Clearly P considered the payment of money to be adequate: [8] The Court characterised the relief as a “freezing order” in essence. As the planned dividend would not see the Co divesting itself of a unique, irrecoverable asset the balance of convenience did not favour the making of an injunction: [11] P’s application failed. Costs followed: [13] Please join me to discuss this interesting decision.