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Black v R and M Traders

Black v R and M Traders

Case [2018] VSC 527 14 September 2018

Oppression

Costs

Offer of Compromise

Corporate Law & Governance

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2016 01184

RENEE SUSAN BLACK	Plaintiff
v
R & M TRADERS PTY LTD (ACN 601 602 126) AND OTHERS (according to the schedule)	Defendant

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JUDGE:	RANDALL AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20 November 2017
DATE OF JUDGMENT:	14 September 2018
CASE MAY BE CITED AS:	Black v R & M Traders & Ors
MEDIUM NEUTRAL CITATION:	[2018] VSC 527

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CORPORATIONS – Corporations Act2001 (Cth), s 233 – Oppression – Relief sought was a wind up – Alternative relief, a buyout – Proceeding compromised save as to costs by agreement to wind up the first defendant – Costs – Costs where no adjudication – Principles – Offer of Compromise – Civil Procedure Act 2010 (Vic), ss 22, 24, 28 and 29 – Conduct of the parties.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Bromley	RB Legal Pty Ltd
For the Defendants	Mr J Mason	MST Lawyers

TABLE OF CONTENTS

The plaintiff’s position...................................................................................................................... 2

The defendants’ position.................................................................................................................. 2

The relevant offers............................................................................................................................. 2

Background......................................................................................................................................... 3

Applicable principles........................................................................................................................ 8

Civil Procedure Act 2010................................................................................................................. 17

Determination................................................................................................................................... 18

HIS HONOUR:

The plaintiff, by her originating process filed 29 August 2016, sought relief relevantly as follows:

A.An order that the first defendant (‘R & M Traders’) be wound up.
B.In the alternative to A, orders that the second and the third defendants (or one them) purchase the shares of the plaintiff in the first defendant, at a price to be determined by the Court.

The grounds relied upon were the oppression grounds under ss 233 and under 461(1)(e), 461(1)(f) and 461(1)(k) of the Corporations Act 2001 (Cth) (‘the Act’).

The plaintiff, Ms Renee Susan Black, is a director and shareholder of R & M Traders. The plaintiff is the owner of 25.5% of the issued shares in R & M Traders.[1]
[1]Affidavit in support of Originating Process sworn 26 August 2016 [1]-[3].

In or around October 2014, R & M Traders commenced operating the Dandenong store branded under the ‘Dimmeys’ name. In September 2015, R & M Traders took over the operations of the Forest Hill Dimmeys store.

The plaintiff alleges that from around September 2015, the second and third defendants began isolating and excluding her from the decision making in the two stores, including denying her access to the financial information of R & M Traders and forcing her to stop working at one of the stores. The plaintiff also contended that she was prevented from using her company owned car.[2] It is of note that allegations were made against the third defendant’s husband, Doug Zappelli. However, during the relevant time, Doug Zappelli had been banned from managing a corporation. At its highest he might have been considered a shadow director of R & M Traders.
[2]Ibid [6]-[9].

The final hearing was scheduled for 20 November 2017. On 16 November 2017, the parties advised the Court that orders by consent would be sought…

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 Black v R and M Traders

Details

AGLC: Black v R and M Traders [2018] VSC 527
Case: [2018] VSC 527
Decision Date: 14 September 2018

CaseChat Overview and Summary

Black v R and M Traders involved the appellant, Black, who was a shareholder in a company that had been wound up, and the respondents, R and M Traders. The dispute centred on the costs associated with the winding-up proceedings and the subsequent compromise of the proceedings. The case was heard in the Supreme Court of Victoria, which was required to decide the appropriate costs in the absence of a formal adjudication.

The central legal issue was the determination of the costs incurred during the winding-up proceedings and the subsequent compromise. Given that the proceedings were compromised without a formal adjudication, the court needed to consider the principles governing costs in such circumstances. The court also had to examine the offer of compromise under the Civil Procedure Act 2010 (Vic), specifically sections 22, 24, 28, and 29, to determine the appropriate costs to be awarded.

In reaching its decision, the court applied the principles of cost assessment in the absence of a formal adjudication. It considered the conduct of the parties throughout the proceedings, including the offer of compromise and the subsequent agreement to wind up the company. The court concluded that the offer of compromise and the circumstances surrounding the compromise were relevant in determining the appropriate costs. The court awarded costs based on the principles of fairness and the conduct of the parties during the proceedings. The final orders reflected the court’s assessment of the costs incurred and the appropriate allocation between the parties.

Orders