Background
Andrew Ziebarth claimed to be a director and shareholder of WA Petmeat Pty Ltd, a pet-meat business that owned premises in Wangara, Western Australia. He alleged that he had been removed as a director without resigning or receiving notice of a removal meeting, that the company’s records had been altered to substantially reduce his shareholding, and that Mali Nayaned had assumed control of the company. He sought final relief restoring his position as director and shareholder and alleged unwarranted oppression of his shareholder interests.
Ziebarth commenced urgent proceedings after receiving information suggesting that WA Petmeat’s business and property were being sold. The application proceeded before Colvin J largely ex parte, although shareholder Stanley Eatt appeared and consented to the interim relief. The evidence had not been tested and the other affected parties had not yet responded.
The Court’s Holding
The Court held that Ziebarth had established serious questions to be tried as to whether he had been irregularly removed as a director and shareholder, whether an agreement to sell the business and property had been made without proper authority, and whether sale proceeds might be distributed in proportions that did not reflect the company’s true shareholding.
The balance of convenience favoured a short interim injunction. Without relief, the business and property might be transferred and the proceeds might pass to Nayaned, who was said to be relocating or to have relocated to Thailand, potentially making damages or compensation ineffective. Although an injunction could prejudice an unidentified third-party purchaser, its short duration, limited effect on daily operations, the right of interested parties to seek discharge on two business days’ notice, Eatt’s consent, and Ziebarth’s undertaking as to damages supported granting relief.
The Court therefore restrained WA Petmeat until 5:00 pm AWST on 9 October 2026, or further order, from dealing with the Wangara property and from transferring money or granting interests in assets connected with any sale of its business. The balance of Ziebarth’s interlocutory application was adjourned, and costs were reserved.
Key Takeaways
- An arguable dispute over corporate authority and share ownership can justify preserving company assets until the affected parties can be heard.
- The risk that a business, land, or sale proceeds will leave the applicant’s practical reach may weigh strongly in the balance of convenience.
- Potential prejudice to an arm’s-length purchaser remains relevant, but may be managed through narrowly framed, short-duration relief and liberty to seek its discharge promptly.
Why It Matters
The decision illustrates the Federal Court’s willingness to preserve the status quo where disputed changes to directorship and shareholdings may affect the authority for an imminent business sale. It also shows that the Court may act urgently on untested evidence when delay could make final relief ineffective.
The ruling was interim only. It did not finally determine Ziebarth’s status, the validity of the alleged sale, the true shareholdings, or the oppression claim.