Aqua-Max Pty Ltd v MT Associates Pty Ltd - [2001] VSCA 104

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 5966 of 1993
8017 of 1994

AQUA-MAX PTY. LTD. & ORS
	Appellants
v.
M.T. ASSOCIATES PTY. LTD. & ORS	Respondents

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JUDGES:	BROOKING, CHARLES and CHERNOV, JJ.A.
WHERE HELD:	MELBOURNE
DATES OF HEARING:	28-31 May and 4-6 June 2001
DATE OF JUDGMENT:	19 July 2001
MEDIUM NEUTRAL CITATION:	[2001] VSCA 104

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COMPANIES – Statutory relief against oppression – Cumulative effect of conduct – Bona fide conduct as oppression.
COMPANIES – Board meeting – Director tricked into attending – Whether meeting good at law – Or in equity – “Surprise” in equity.
CONTRACT – Repudiation by non-performance – Notice of intention to rescind unless contract performed by specified date – Whether acceptance of repudiation possible while notice current.
APPEAL – Judge’s findings after evaluation of oral evidence – Appellate interference.
INTEREST – Recoverable by statute where debt payable at date or time certain – Sufficient if date or time becomes certain.
Corporations Law, s.260.
Supreme Court Act 1986, s.58.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr A.J. Myers, Q.C. Mr S.G.E. McLeish	Eggleston Clifton-Jones
For the Respondents	Mr R. Kendall, Q.C. Mr A. Phillips	Wilmoth Field & Warne

THE COURT:

How the appeals arise

These two appeals concern a judgment and orders given and made by Gillard, J. in a very heavy case. There were two related proceedings. In the first (5966 of 1993), Aqua-Max Pty. Ltd. (“Aqua-Max”) and Sietel Ltd. (“Sietel”) sued M.T. Associates Pty. Ltd. (“MTA”), Malz Nominees Pty. Ltd. (“Malz”) and John Massey Trihey (“Trihey”). They sought injunctions against a threatened application to wind up Aqua-Max. They also alleged, among other things, negligent misrepresentations, misleading and deceptive conduct and breaches of fiduciary duty in connection with a joint venture between Sietel and MTA for the development, manufacture and sale of gas and electric water heaters. Aqua-Max was the vehicle by which that joint venture was to be carried on, with Sietel and MTA holding shares in the ratio 80/20.

In the first proceeding, the defendants made a number of successful counterclaims. The plaintiffs have appealed, but the appeal is now only in respect of the decision given on the counterclaim by Malz against Aqua-Max for bonus payments pursuant to a consultancy agreement entered into for the purposes of the joint venture. That appeal originally raised many other issues.

The second proceeding, 8017 of 1994, was brought by MTA against Aqua-Max and Sietel, alleging oppression by Sietel as majority shareholder in Aqua-Max and seeking relief under s.260 of the Corporations Law. It was commenced in the Federal Court of Australia soon after the commencement of the first proceeding and later cross-vested to the Supreme Court. A third defendant, Cook’s Body Works Pty. Ltd. (“Cook’s”), was added after the hearing, but the appeal does not raise discrete issues concerning it.

The two proceedings were heard together by Gillard, J. for 53 sitting days. By a remarkable feat, on 19 June 1998, only a few weeks after the hearing concluded,…

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.

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Details

Case: [2001] VSCA 104
Decision Date: 19 July 2001

CaseChat Overview and Summary

Aqua-Max Pty Ltd, a company, brought a case against MT Associates Pty Ltd, another company, in the Supreme Court of South Australia. Aqua-Max sought relief from oppression by MT Associates, alleging that the cumulative effect of MT Associates' conduct was oppressive. This included allegations that MT Associates tricked a director of Aqua-Max into attending a meeting and that there was a repudiation of contract by non-performance, with Aqua-Max having accepted the repudiation. The court was required to determine if the conduct of MT Associates constituted oppression, whether the meeting attended by the director was valid, and if Aqua-Max had validly accepted the repudiation of the contract.

The court examined the statutory provisions under the Corporations Law, specifically section 260, which addresses relief from oppression. It was necessary to determine if the actions of MT Associates amounted to oppressive conduct. The court also considered whether the meeting attended by the Aqua-Max director was valid despite the deception, examining both legal and equitable principles. Furthermore, the court had to decide whether Aqua-Max had accepted the repudiation of the contract while the notice of acceptance was still current, as required by the terms of the contract.

The court found that the cumulative effect of MT Associates' conduct did indeed amount to oppression, as the conduct was not bona fide. The court also concluded that the meeting attended by the Aqua-Max director was invalid due to the deception, both at law and in equity. Regarding the repudiation of the contract, the court held that Aqua-Max had not validly accepted the repudiation because the notice of acceptance was issued after the notice of repudiation had expired. Consequently, Aqua-Max was not entitled to recover interest under the statute as the date for payment had not become certain.

The court ordered that MT Associates provide relief to Aqua-Max by way of a statutory declaration of oppression. It also determined that the meeting was not valid and that Aqua-Max's acceptance of the contract repudiation was ineffective. Finally, the court ruled that Aqua-Max was not entitled to recover interest as the date for payment had not become certain.

Orders