Interim injunction refused

Press, 19 June 1976, Page 5

Interim injunction refused

An application for an interim injunction to stop two men putting forward a motion to wind up the Canterbury Orchestra Trust at itsj annual meeting on June 30 has been refused by Mr Justice Casey in a< reserved decision given in the Supreme Court: yesterday. The Orchestra Trust ap-j plied for the injunction[ against Donald Edward Dal-1 lev. an engineer, and Robert Alec Smitham. a manager. ; The case was heard on [ June 15. Mr C. B. Atkinson I appeared for the Orchestra[ Trust and Mr A. A. P. Willy!

ilfor Messrs Dailey and Smitham, who opposed the J granting of the injunction. | His Honour said that the >[notice of intention to dissolve 'the Orchestra Trust, given by 'Messrs Dailey and Smitham, .[accorded with the provisions 'iof clause 18 of the constitution of the trust and, if pasi.sed by a three-quarters J majority of those present and I voting at the meeting, the ‘ resolution would dissolve that body. [ The trust had begun an [action seeking an injunction [against Messrs Dailey and Smitham to prevent them [ putting the motion at the annual meeting or at any other meeting and sought a I number of declarations in reilation to its constitution.

. I Pending the trial of that I [action, the trust moved for [an interim injunction to restrain the defendants from proceeding with the notice of motion on June 30 or any . adjourned date. The application was argued at considerable length. Mr Atkinson had submitted that clause 18 of the constitution, which permitted any person to attend the annual meeting and vote for dissolution, was beyond its: power to include in its con-i stitution. It contravened, he said, the! clear meaning and intention: of the Charitable Trusts Act,: 1957, section 25, which set out the way that such a body incorporated under that act was to be wound up and that . those provisions were exclusive and allowed no method of voluntary winding-up as [provided by clause 18. In seeking the injunction, the trust claimed to be protecting its right not to be dissolved by the operation of provisions which were ultra vires and were of no effect. “There can be few instances where an incorporated body is driven to protect itself in this way from the operation of its own rules,” his Honour said. What was sought in the application was the preservation of the status quo until the validity of clause 18 could be fully argued; After listening to both counsel’s submissions, he could not say that the material available failed to disclose that the trust had any real prospect of succeeding at the trial for a permanent injunction. It would be a legal argu-

iment turning on mainly undisputed facts in the affidavi its. Mr Atkinson had to per- ' suade the Court that the • trust could bring itself • within the provisions of section 25, providing for winding up by the Court in; i specific circumstances; and that, although the section did not say so in express [ words, its provisions were [exclusive and permitted of J no other way whereby injcorporated trustees could be [dissolved. [ “I think he may well have [difficulties, but I am not [prepareu to conclude at this stage that he has no real prospect of succeeding, in spite of Mr Willy’s cogent arguments to th,e contrary,” said his Honour. It was clear that damages ; would not be an adequate remedy to either party to compensate for the effect of the interim injunction if the main action failed, and so he ’ had to consider the question of balance of convenience in deciding whether to preserve the status quo. Unless Messrs Dailey and Smitham could get their mo- ■ tion before the meeting of ’ June 30, for all practical purposes they would ■ be totally deprived of their opportunity. Clause 18 only allowed such a resolu1 tion for dissolution to be passed at an annual meeting. “The trust, so I am in- • formed, is seeking an alteration of this clause, among ■ others, to ensure that such a I resolution will no longer be > possible and the probabi- ■ lities are that this will be • achieved by the time of the

next annual meeting,” his Honour said. “On the other hand, the trust puts up a formidable ■ case of likely prejudice. I gather, from previous experience related to me by counsel, that there is every prospect of the resolution being passed by the appropriate majority at the meeting and this will put the trustees in the position ofi having to rely on a favourtable outcome of the main ■ action. “1 think anybody in their I position would decline to act further in the affairs of the . trust until the main action i I was resolved, but I am sure! lit could be heard very! quickly, the exigencies of | the case obviously requiring} it,” his Honour said. ; “Indeed, in the light of I : both counsel’s professed > eagerness on behalf of their ’ clients to have the case tried • promptly, it would be quite : possible, on appropriate application to the Court, to i have it heard before June ■ 30. “If not, there should be I very little delay thereafter, ■ during which the affairs of ’ the trust should not be I significantly prejudiced by I an uncertainty in its legal f position. “Weighing these factors against the virtual certainty : that an interim injunction will effectively deprive the defendants of their ability to i put such a motion, I think , the balance of convenience i must be decided in their : favour and I dismiss the application, reserving the question of costs,” his Honour : said.