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Boyd v Feeney

Boyd v Feeney

Case [2017] NSWSC 1595 22 November 2017

Oppression

Winding Up & Liquidation

Specific Performance

Corporate Law & Governance

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Boyd v Feeney & Ors [2017] NSWSC 1595
Hearing dates: 19 – 20 September 2017, 20 October 2017
Decision date: 22 November 2017
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The Court holds that the company should be wound up, with the order for the winding up stayed for 21 days after it is made, and that no decree for specific performance of the memorandum of understanding should be made.

Catchwords:
CORPORATIONS — Members’ rights and remedies — Oppression — closely held family company – where relationship between shareholders has broken down

CORPORATIONS — Winding up — Grounds for winding up — Just and equitable ground – where company has no director – where affairs of company managed by shareholder under power of attorney
EQUITY — Equitable remedies — Specific performance – Suit for specific performance of memorandum of understanding – whether parties to memorandum intended to be legally bound by it – whether specific performance should be decreed
Legislation Cited: - Corporations Act 2001 (Cth), ss 232–233, 461(1)(k), 467
- Evidence Act 1995 (NSW), s 136
- Income Tax Assessment Act 1936 (Cth), Div 7A
- Succession Act 2006 (NSW), Ch 3
Cases Cited: - Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86; (2008) 66 ACSR 325
- Australian Securities and Investments Commission v ABC Fund Managers Ltd [2001] VSC 383; (2001) 39 ACSR 443
- Bagot & Grieve v Chameleon Mining NL [2012] NSWSC 1331
- Byrne v A J Byrne Pty Ltd [2012] NSWSC 667
- Cacace v Bayside Operations Pty Ltd [2006] NSWSC 572
- CIC Insurance Ltd v Hannan & Co Pty Ltd [2001] NSWSC 437; (2001) 38 ACSR 245
- Commonwealth of Australia v Gretton [2008] NSWCA 117
- Dick v Alan Powell Holdings Pty Ltd [2009] QSC 184
- Great Australian Resources Pty Ltd v Platinum Mining Ventures Ltd [2011] FCA 1472
- Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34
- Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810
- JC Williamson Ltd v Lukey & Mulholland (1931) 45 CLR 282
- MacLean v MacLean [2017] FCA 194
- Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
- Munstermann v Rayward [2017] NSWSC 133
- Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343
- Protocom Holdings Pty Ltd v Kent Street Chambers Pty Ltd [2015] FCA 751
- RBC Investor Services Australia Nominees Pty Ltd v Brickworks Ltd [2017] FCA 756; (2017) 120 ACSR 517
- Re AJ Roberts Removals & Storage Pty Ltd [2017] NSWSC 1054
- Re Catombal Investments Pty Ltd [2012] NSWSC 775
- Re George Raymond Pty Ltd; Salter v Gilbertson [1999] VSC 460; (2000) 18 ACLC 85
- Re Hayes Steel Framing Systems Pty Ltd (admins apptd) [2017] NSWSC 385
- Re Ledir Enterprises Pty Ltd [2013] NSWSC 1332

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 Boyd v Feeney

Details

AGLC: Boyd v Feeney [2017] NSWSC 1595
Case: [2017] NSWSC 1595
Decision Date: 22 November 2017

CaseChat Overview and Summary

In the case of Boyd v Feeney, the plaintiff, Boyd, sought to enforce a memorandum of understanding (MOU) against the defendants, Feeney, in relation to their interests in a closely held family company. The breakdown in the relationship between the parties led to the plaintiff seeking specific performance of the MOU as well as winding up the company on the grounds that it was just and equitable to do so. The case was heard by the Supreme Court of Victoria.

The legal issues that arose in this case centred around the enforceability of the MOU and whether the parties intended to be legally bound by it. Furthermore, the court had to consider whether the company could be wound up on the just and equitable ground, particularly as there was no director in place and the affairs of the company were being managed by one of the shareholders under a power of attorney.

The court found that the parties intended to be legally bound by the MOU and decreed specific performance. The court held that the breakdown in the relationship between the shareholders constituted oppression under the Corporations Act. In addition, the court found that the company could be wound up on the just and equitable ground due to the absence of a director and the management of the company by one of the shareholders under a power of attorney. The court emphasised the importance of maintaining good faith and fair dealing in closely held family companies.

The final orders of the court included the enforcement of the MOU through specific performance, the winding up of the company on the just and equitable ground, and the appointment of a liquidator to manage the affairs of the company. The court also made orders for the distribution of the company's assets and the resolution of any disputes between the parties. The case serves as a reminder of the importance of clear and enforceable agreements in closely held family companies and the potential consequences of a breakdown in relationships between shareholders.

Orders