Brady Queen Pty Ltd v Austhome Developments Pty Ltd (No 5) - [2021] VSC 240

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2017 00204

IN THE MATTER OF 280 QUEEN PTY LTD (ACN 600 087 741)
(IN ITS OWN CAPACITY AND AS TRUSTEE OF THE 280 UNIT TRUST)

BRADY QUEEN PTY LTD (ACN 600 268 817) (IN ITS OWN CAPACITY AND AS TRUSTEE OF THE BRADY QUEEN UNIT TRUST) & ANOR	Plaintiffs
v
AUSTHOME DEVELOPMENTS PTY LTD (ACN 140 051 387) (IN ITS OWN CAPACITY AND AS TRUSTEE OF THE WU FAMILY TRUST) & ANOR	Defendants

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JUDGE:	Sifris JA
WHERE HELD:	Melbourne
DATE OF HEARING:	Determined on the papers
DATE OF JUDGMENT:	10 May 2021
CASE MAY BE CITED AS:	Brady Queen Pty Ltd & Anor v Austhome Developments Pty Ltd & Anor (No 5)
MEDIUM NEUTRAL CITATION:	[2021] VSC 240

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COSTS – Claim and counterclaim dismissed – Both parties lost – Claim and counterclaim entirely lacking in merit - Open offer in court ineffective – No order as to costs.

COSTS – Proceeding commenced as a shareholder oppression case – Buy-out orders made following report of special referee – Defendants opposed the appointment of special referee and the report of the special referee which was accepted by the court as the basis for the buy-out – Defendants to pay costs of the special reference.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A Schlicht and Ms C Dawes	Capstone Koroneos Legal
For the Defendants	Mr L W L Armstrong QC and Mr N Kaskani	Aptum Legal

HIS HONOUR:

A Introduction[1]

[1]The procedural background is taken from my previous Judgment in this proceeding: Brady Queen Pty Ltd & Ors v Austhome Developments Pty Ltd & Ors [2021] VSC 18 (Fourth Judgment). I will assume familiarity with the Fourth Judgment.

The first plaintiff, Brady Queen Pty Ltd (Brady Queen) and the first defendant, Austhome Developments Pty Ltd (Austhome) were shareholders in a company, 280 Queen Pty Ltd (the Company or 280 Queen). The Company is the registered proprietor of the land situated at 272-282 Queen Street (280 Queen Street).

The Company is the trustee of the 280 Queen Unit Trust (the Unit Trust). The Unit Trust was created in order to undertake the development of a multi-storey, multi-use high rise tower at 280 Queen Street by a joint venture comprising Brady Queen, a company associated with Mr Anthony Brady (Brady) and Austhome, a company associated with Mr David Wu (Wu) (the Project or the Development). Each of Brady and Wu were directors of the Company.

Brady Queen held a two-thirds interest in the shares in the Company and units in the Unit Trust. Austhome held a one-third interest in the shares and units.

The proceeding initially involved competing claims of conduct said to constitute oppression under s 232 of the Corporations Act 2001 (Cth) (the Act) (the Oppression Case).

Brady Queen alleged…

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: [2021] VSC 240
Decision Date: 10 May 2021

CaseChat Overview and Summary

The case of Brady Queen Pty Ltd v Austhome Developments Pty Ltd (No 5) involved a dispute between two companies, Brady Queen Pty Ltd and Austhome Developments Pty Ltd. The nature of the dispute was complex, originating as a shareholder oppression claim but transitioning into a matter of buy-out orders following the report of a special referee. The defendants, Austhome Developments, opposed both the appointment of the special referee and the subsequent report, which was ultimately accepted by the court. The proceedings concluded with both the claim and counterclaim being dismissed as entirely lacking in merit.

The legal issues that the court was required to address included whether the claim and counterclaim were justified and whether any orders should be made in relation to costs. A significant aspect of the case was the effectiveness of an open offer made in court by Brady Queen to settle the matter, which the court deemed ineffective. Another critical issue was the defendants' opposition to the special referee's report and their refusal to participate in the process, which led to the defendants being ordered to pay the costs associated with the special referee.

The court's reasoning was grounded in the premise that both parties had lost the substantive matters of their claims. Given the dismissal of both the claim and counterclaim, the court found that neither party was entitled to costs. Furthermore, the court determined that the open offer made in court was ineffective, which further supported the conclusion that neither party should receive costs. The defendants' opposition to the special referee's appointment and report was noted, but since the court accepted the report, the defendants were held responsible for the costs of the special referee. The court ultimately decided that no party should be awarded costs due to the lack of merit in both the claim and counterclaim, and the ineffective open offer.

Orders