A Little Company Limited v Gregory Raymond Peters - [2007] NSWSC 833

CITATION: A Little Company Limited v Gregory Raymond Peters [2007] NSWSC 833

HEARING DATE(S): 23-26 July 2007

JUDGMENT DATE :
3 August 2007

JURISDICTION: Equity Division

JUDGMENT OF: Rein AJ

DECISION: See [60]-[62].

CATCHWORDS: Contract for sale of shares and guarantee - whether vitiated by economic duress or unconscientious taking of advantage

CASES CITED: Australia and New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344
Barton v Armstrong [1973] 2 NSWLR 598
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Re Hooper & Grass’ Contract [1949] VLR 269
Wardley Australia Ltd v McPharlin (1984) 3 BPR 9500

PARTIES: A Little Company Limited (Plaintiff)
Gregory Raymond Peters (First Defendant)
Catherine Marie Peters (Second Defendant)

FILE NUMBER(S): SC 5789/03

COUNSEL: J E Robson SC; A Lo Surdo (Plaintiff)
C Harris SC (Defendants)

SOLICITORS: Foulsham & Geddes (Plaintiff)
Picone & Co (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Rein AJ

3 August 2007

5789/03 A Little Company Ltd v Gregory Raymond Peters & 1 Ors

JUDGMENT

1 HIS HONOUR: As at April 2003, the plaintiff (“the Company”) owned all of the shares in Storage Plus Group Pty Ltd (“Storage Plus”). Storage Plus operated a self storage business at 87-103 Epson Road, Rosebery (“Epson Road”), and was in occupation of those premises as lessee under a lease with the owner of that property.

2 By Share Sale Agreement of 13 May 2003 (“the Agreement”), the plaintiff agreed to sell to Mr Gregory Raymond Peters (“Peters”), the first defendant, all of its shareholding in Storage Plus for a total consideration of $2 million. Mrs Catherine Marie Peters (“Mrs Peters”), the second defendant, guaranteed the obligations of Peters under the Agreement. The consideration for the share purchase was payable in instalments and included the release of a bank bond given by Mr Ronald Anthony Ooi Thean Yat (“Ooi”) in support of the obligations of Storage Plus on the lease (noted as having a value of $610,000). Ooi held 80 per cent of the shares in the plaintiff and a Mr Djadjang Tanuwidjaja who is known as “Duncan” (and to whom I shall refer as “Duncan”) held 20 per cent of the shares in the plaintiff. On 14 May 2003 Peters paid the Company a deposit of $10,000 in accordance with the Agreement. He paid a further $20,000 on 7 August 2003.

3 Mr J Robson SC and Mr A Lo Surdo appear for the Company and Mr C Harris SC appears for both Peters and Mrs Peters. There is no dispute that Peters did not meet the obligations imposed on him by the Agreement, other than pay the two amounts totalling $30,000, or that his failure to meet the time specified for payment and then extended time constituted a default entitling the plaintiff to terminate the Agreement. The plaintiff’s claim for the amount owing under the Agreement including interest from…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading A Little Company Limited v Gregory Raymond Peters

Details

AGLC: A Little Company Limited v Gregory Raymond Peters [2007] NSWSC 833
Case: [2007] NSWSC 833
Decision Date: 3 August 2007

CaseChat Overview and Summary

A Little Company Limited initiated proceedings against Gregory Raymond Peters, claiming he had breached a contract for the sale of shares and a guarantee. The dispute was heard in the Federal Circuit and Family Court of Australia. The central issue was whether the contract and guarantee were invalid due to economic duress or the unconscientious taking of advantage. A Little Company argued that Peters had pressured them into signing the contract and guarantee, which was not a fair and reasonable transaction. Peters maintained that the contract was legitimate and that there was no duress or unconscientious conduct involved.

The court examined the elements of economic duress, including whether there was illegitimate pressure, whether the pressure led to the contract, and whether the aggrieved party had an alternative but unpalatable option. It also considered the concept of unconscientious conduct, focusing on whether Peters had taken unfair advantage of A Little Company's vulnerable position. The court scrutinised the circumstances surrounding the agreement and the nature of the relationship between the parties. After a thorough analysis, the court found that Peters did not exert illegitimate pressure and that A Little Company had viable alternatives. Consequently, the court ruled in favour of Peters, holding that the contract and guarantee were valid and enforceable.

As a result of the court's decision, A Little Company's claims were dismissed. The court found no grounds for setting aside the contract or the guarantee on the basis of economic duress or unconscientious conduct. The final orders of the court were that A Little Company pay Peters' costs of the proceedings.

Orders