In the matter of Arada Australia Pty Ltd

Before: Brereton J

Decision: The plaintiffs’ application for interlocutory relief is dismissed

Catchwords: CORPORATIONS – interlocutory application – where plaintiffs seek interlocutory injunction – where defendants proffered an undertaking to take all reasonable steps to have second plaintiff registered as a director – where defendants do not contest there is a serious question to be tried – where balance of convenience does not favour the injunctive relief – where there is a real risk that the management affairs will be dysfunctional – plaintiffs’ application dismissed – costs to be decided on the papers

Legislation Cited: Corporations Act 2001 (Cth)

Cases Cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46
Re Eden Resort Hotel Pty Ltd [2013] NSWSC 493
Re JC Jewels Pty Ltd [2024] NSWSC 532
Remrose Pty Ltd v Allsilver Holdings Pty Ltd [2005] WASC 251; (2005) 225 ALR 588
Turnbull v National Roads & Motorists’ Association Ltd [2004] NSWSC 577; (2004) 50 ACSR 44

Texts Cited: N.A.

Category: Principal judgment

Parties: Fidem 2 Pty Ltd (first plaintiff)
Joseph Alha (second plaintiff)
JJJ Family Holdings Pty Ltd (third plaintiff)
Arada Australia Pty Ltd (first defendant)
Arada Dev Corp Pty Ltd (second defendant)
Arada Holdings Australia Pty Ltd (third defendant)
Arada Management Services Pty Ltd (fourth defendant)
Ahmed AlKhoshaibi (fifth defendant)
Alae (Aladdin) Kheir (sixth defendant)

Representation: Counsel:
R M Foreman SC; K E Holcombe (plaintiffs)
S G Finch SC; R Zambelli; T F Scott (defendants)
Solicitors:
Arnold Bloch Leibler (plaintiffs)
Gilbert + Tobin (defendants)

File Number(s): 2025/390509

Publication restriction: N.A.

JUDGMENT – EX TEMPORE (Revised FROM the TRANSCRIPT)

1. These proceedings were commenced on Friday 10 October 2025. In very broad terms, the dispute concerns the management of two companies called Arada Australia Pty Ltd and Arada Dev Corp Pty Ltd.

2. Those companies are the first and second defendant respectively. The third defendant is Arada Holdings Australia Pty Ltd, which holds 80 per cent of the shares in Arada Australia and Arada Dev Corp. The fourth defendant, Arada Management Services Pty Ltd, is a services company and runs the Arada Group’s business activities in Australia. It is owned by Arada Dev Corp. The fifth defendant is Mr AlKhoshaibi. The sixth defendant is Mr Kheir. Mr AlKhoshaibi and Mr Kheir are directors of Arada Australia and Arada Dev Corp and also Arada Holdings Australia. Arada LLC is the ultimate shareholder of Arada Holdings Australia and is the parent of the Arada Group, which is a very large property development group with headquarters in the United Arab Emirates. Mr AlKhoshaibi is the CEO for the Arada Group.

3. Fidem 2 is the first plaintiff. It owns 20 per cent of the shares in Arada Australia and Arada Dev Corp. Mr Alha is the sole director of Fidem 2, a director of Arada Australia and Arada Dev Corp, and the managing director of Arada Management Services. He is the second plaintiff. The third plaintiff is JJJ Family Holdings. It had a consultancy agreement with Arada Management Services. Mr Alha is the sole director of JJJ Family Holdings Pty Ltd.

4. At 10:06pm on 6 October 2025, Mr AlKhoshaibi issued a notice of a joint board meeting of Arada Australia and Arada Dev Corp to be held virtually at 11am on 15 October 2025, that is, approximately 55 minutes from the time I am now delivering these reasons. The notice proposes, among other things, the following resolutions:

5. the position of Australian Managing Director is redundant with immediate effect;

6. Arada Management Services is authorised to terminate the Consultancy Agreement and Employment Agreement with immediate effect.

7. At 11:01pm on 6 October 2025, Mr AlKhoshaibi sent a letter to Mr Alha purporting to place him on gardening leave, including by directing him not to undertake any duties as employee, not to use his work email account or telephone and not to attend or access any company office or place of business.

8. The matter came before me yesterday in the duty list for a hearing of the plaintiffs’ application for injunctive relief. The injunctive relief claimed is reflected in paragraphs 6 to 10 of the originating process, which are in the following terms:

6. Pursuant to ss 232, 233 and/or s 1324 of the Corporations Act, or the Court’s inherent jurisdiction, until further order of the Court, Mr AlKhoshaibi and Mr Alae (Aladdin) Kheir (Mr Kheir) and each of them be restrained from:

a. moving or causing to be moved the Resolutions proposed in the Notice of Meeting dated 6 October 2025 (the Resolutions);

b. voting or purporting to vote in favour of the Resolutions.

7. Further or in the alternative, pursuant to ss 232, 233 and/or s 1324 of the Corporations Act, or the Court’s inherent jurisdiction, until further order of the Court, the Defendants are restrained individually or jointly from:

a. making the position of Australian Managing Director of Arada Management Services Pty Ltd (ACN 667 968 069) (AMS) redundant;

b. terminating Mr Joseph Alha’s employment as Australian Managing Director of AMS;

c. terminating the consultancy agreement dated 1 December 2023 between AMS and JJJ Family Holdings Pty Ltd (ACN 133 223 784) (Consultancy Agreement).

8. Further or in the alternative, pursuant to ss232, 233 and/or s 1324 of the Corporations Act, or the Court’s inherent jurisdiction, until further order of the Court, the Defendants are restrained individually or jointly from moving, seconding or voting upon any proposed resolution to:

a. make the position of Australian Managing Director of AMS redundant;

b. terminate Mr Joseph Alha’s employment as Australian Managing Director of AMS;

c. terminate the Consultancy Agreement.

9. In the alternative, orders pursuant to s 233 of the Corporations Act or the Court’s inherent jurisdiction:

a. declaring that the Resolutions, as passed, are invalid;

b. ordering that:

i. the position of Australian Managing Director of AMS be reinstated;

ii. Mr Joseph Alha be reinstated as Australian Managing Director of AMS; and

iii. the Consultancy Agreement be reinstated.

10. Orders pursuant to s 233 of the Corporations Act, or the Court’s inherent jurisdiction, that:

a. the Defendants, and each of them, do all things necessary to register with the Australian Securities and Investments Commission (ASIC) Mr Joseph Alha as a director of Arada Australia Pty Ltd (ACN 664 320503) (Arada Australia);

b. the Defendants, and each of them, do all things necessary to register with ASIC Joseph Alha as a director of Arada Dev Corp Pty Ltd (ACN 667 966 314) (Arada Dev Corp).

7. Order 9 cannot be made at this time because there have been no resolutions.

8. Order 10 is unnecessary because the defendants, through Senior Counsel, have proffered an undertaking that they will undertake to take all reasonable steps within 14 days to have Mr Alha registered as a director of both Arada Australia and Arada Dev Corp.

9. The real dispute for present purposes concerns orders 6 to 8 of the originating process. The effect of the injunctive relief that is claimed will, if granted, mean that Mr Alha will remain as the managing director of Arada Management Services and the consultancy agreement with JJJ Family Holdings will continue until further order of the Court.

10. It is common ground that in order to grant interlocutory injunctive relief the Court needs to be satisfied that there is a serious question to be decided and that the balance of convenience favours the grant of relief (see Australian Broadcasting Corporation v O*’*Neill (2006) 227 CLR 57; [2006] HCA 46 at [19]).

11. For the purposes of this application, the defendants do not contest that there is a serious question to be decided. That essentially involves an acceptance that there is a serious question to be tried that the intended conduct by the defendants that the plaintiffs seek to restrain will give rise to remedies available to the plaintiffs under ss 232 and 233 of the Corporations Act 2001 (Cth). Those sections concern oppressive conduct of the affairs of a company.

12. The application thus turns on the balance of convenience. In my view, the balance of convenience lies against the grant of interlocutory relief.

13. There is evidence before me that strongly suggests that there has been a mutual breakdown of trust and confidence between Mr AlKhoshaibi and Mr Kheir on the one hand and Mr Alha on the other. There is no direct evidence from any of them, but there is indirect evidence that indicates that Mr Alha has made strong allegations of misconduct, including dishonesty, against Mr AlKhoshaibi and Mr Kheir. While Mr AlKhoshaibi and Mr Kheir make strong allegations against Mr Alha, including about his conduct in the workplace. Both sides dispute the allegations. I do not make any findings of wrongdoing by any person, but the making of the allegations, and the point that the parties now find themselves, indicates a serious fracture in their relationship.

14. I am satisfied that there is a real risk that the management of the affairs of Arada Australia and Arada Dev Corp will be dysfunctional with Mr Alha as the managing director involved in senior management. I am satisfied that Mr Alha has lost the confidence of the 80 per cent shareholder. He has lost the confidence of Mr AlKhoshaibi, the group CEO, to whom he reports. Mr AlKhoshaibi is the group CEO of the entire Arada business, of which the Australian business comprises a relatively small part. Nevertheless, Mr AlKhoshaibi has managerial responsibility and it is easy to see why it is important that he have faith and confidence in Mr Alha, as the local Australian managing director.

15. I recognise that if the resolutions are passed, Mr Alha and Fidem 2 will be excluded from the participation in the management of the Australian Arada entities, in circumstances where Fidem 2 contends that it has:

16. made a capital investment in Arada Australia and Arada Dev Corp in the amount of some $50 million;

17. made a significant investment in the Australian Arada entities through the contribution of Mr Alha’s expertise, experience and local know‑how;

18. brought properties valued at approximately $180 million to the Australian Arada entities’ project pipeline;

19. contributed staff to the Australian Arada entities;

20. a legitimate expectation of involvement in the management of those entities; and

21. has participated in the management of those entities, including through Mr Alha’s performance of the role of the Australian managing director, for nearly two years.

22. Even accepting all these things to be true, and I note that there may be dispute about some of those matters at final hearing, it seems likely that the respective sides will be unable to continue to work effectively together as managers of the Australian Arada entities.

23. In these proceedings the plaintiffs seek, as primary relief, orders that require Arada Holdings to purchase Fidem 2’s shares in Arada Australia and Arada Dev Corp. They seek, in the alternative, that those companies be wound up. That relief reflects the reality that the relationship must come to an end. While the plaintiffs also seek final relief that reflects the interlocutory relief it now seeks (including a permanent injunction restraining the defendants from making the position of Australian managing director redundant), plainly, they cannot have that relief and also obtain orders for the purchase of shares or a winding‑up. That was accepted by the plaintiffs.

24. The defendants have indicated that they contend that they (or one of them) is prepared to buy Fidem 2’s shares at fair value. It seems likely that a buyout will occur and that if there is a dispute it will principally concern the assessment of what is their fair value.

25. If the plaintiffs’ allegations about oppressive conduct are made good that will find reflection in the value of the price to be paid for the shares or otherwise by way of compensation. That may involve some complexity, but it is a matter that the Court is equipped to address.

26. I recognise that the proposed resolutions contemplate that Mr Alha’s position is redundant. It is not proposed in the resolution that he be dismissed for cause. Whether or not Mr Alha’s position is redundant is a matter in dispute. It is not a matter I can resolve. I accept, however, that there is evidence that indicates a possibility that his position is redundant and that there is evidence that the group CEO considers that the position is now redundant. It is not clear on the evidence that there is a significant risk that if Mr Alha is removed and that if the consultancy agreement comes to an end there will be irreparable damage to the Australian Arada companies between now and the resolution of the proceedings. There is every reason to anticipate that the Court would ensure that the proceedings are resolved efficiently and without delay.

27. The plaintiffs contend that the allegations of misconduct on Mr Alha’s part are made late and not genuinely, and certainly that they lack foundation. That may prove to be correct, but it is not something I can resolve. For the purpose of this application, I accept that the relationship between Mr AlKhoshaibi and Mr Kheir on the one hand and Mr Alha on the other has broken down such that Mr AlKhoshaibi and Mr Kheir no longer trust Mr Alha to fulfil a managerial role.

28. Both sides contended in favour of maintaining the status quo, but disagreed about what that entailed. I do not think it is particularly helpful to refer to the status quo in this case. That is because the relationship between the parties has recently changed. Any injunctive relief made by this Court will not be able to turn back the clock to a time before the apparent breakdown of the relationship. There is no status quo in the conventional sense.

29. If I were to grant interlocutory relief, it would force together, as the most senior managers, people who, on the evidence, no longer trust or respect one another to undertake those roles. I do not consider that the balance of convenience favours that outcome.

30. I take into account that Mr Alha is not being removed as a director. If the resolutions pass, he will cease to be the managing director. But he will still have rights as a director. He is not being shut of the companies altogether. I recognise that there is a difference between the role of a non‑executive director and that of an employed managing director.

31. In coming to my conclusion, I have taken into account the frequently cited observations of Campbell J in Turnbull v National Roads & Motorists*’* Association Ltd [2004] NSWSC 577; (2004) 50 ACSR 44 as follows (at [51]):

The power of the court to make an order under ss 232 and 233 Corporations Act, on the ground that something prescribed by the Corporations Act is contrary to the interests of the members as a whole, is a power which must be exercised with the greatest of care. The court is extremely reluctant to interfere, in advance, with the ordinary processes of company democracy. It is a well-established rule of thumb that a court will, only in the rarest of circumstances, injunct the holding of a company meeting. Questions of what is, or is not, in the interests of the members as a whole are often best left to be decided by the officers, organs and procedures of the company itself, or by the court deciding, after events have happened, whether those events fall short of a legally required standard of conduct by virtue of them not having occurred in the interests of the members as a whole…

26. There will always be exceptions. An example is Re Eden Resort Hotel Pty Ltd [2013] NSWSC 493. In that case, Black J restrained, for a period of about two weeks, the passage of resolutions of a meeting that would cause a director to be removed. His Honour took into account that the resolution was contrary to the private interests of the director.

27. In Remrose Pty Ltd v Allsilver Holdings Pty Ltd [2005] WASC 251; (2005) 225 ALR 588, Hasluck J granted an interlocutory injunction that restrained the removal of a director. His Honour accepted that there was an arguable case that if the director in that case was removed it would have a significant adverse impact on the group, or the entitlements of the majority shareholders.

28. A recent decision where an injunction was refused in a case that had some similarities with the present case, although there were some differences, is Re JC Jewels Pty Ltd [2024] NSWSC 532.

29. These cases and others relied on by the parties show that questions about the balance of convenience are highly fact dependent.

30. To sum up, I conclude that the balance of convenience lies against the interlocutory injunction essentially for the following reasons:

31. Mr Alha has apparently lost the confidence of the group’s CEO, to whom he reports, as well as the confidence of the majority shareholder and the CFO.

32. It seems inevitable that the first plaintiff’s interests in the Australian Arada companies will be bought out or the companies will be wound up. That is the relief the plaintiffs seek in the proceedings. It is likely that those proceedings will occur in the not too distant future.

33. I am not satisfied that Mr Alha is so integral to the businesses that his removal pending the buyout or winding‑up will have serious adverse effects on the companies. There is some evidence (albeit disputed) that his position is redundant. I accept on the evidence that there is at least a possibility that his position is redundant.

34. There is a possibility that restraining the removal of Mr Alha and, in effect, compelling the majority shareholder and group CEO to work with him as managing director will have an adverse effect on the business, including because that relationship may prove to be dysfunctional.

35. I consider that any adverse consequences to the plaintiffs arising from any oppressive or unlawful conduct can adequately be addressed in the final resolution of the proceedings.

36. For these reasons, the plaintiffs’ application for interlocutory relief is dismissed.

37. The defendants have proposed procedural directions to have the main proceedings moved forward with appropriate expedition.

38. It is desirable that the matter move forward with appropriate expedition, and all parties should expect that to occur.

39. I list this matter for directions before the Corporations List judge on Monday morning on 20 October 2025 for the making of appropriate directions for the efficient progress of the matter.

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