Breese v Cowper - [2002] NSWSC 1225

CITATION: Breese v Cowper [2002] NSWSC 1225

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5425/02

HEARING DATE(S): 04/12/02, 05/12/02, 06/12/02, 09/12/02, 10/12/02, 13/12/02

JUDGMENT DATE: 19 December 2002

PARTIES :

Peter Craig Llewellyn Breese - First Plaintiff
Jillian Margaret Breese - Second Plaintiff
Wayne Robert Cowper - First Defendant
Joan Lorraine Cowper - Second Defendant
Lee Christopher Cowper - Third Defendant
Yvette Bernice Cowper - Fourth Defendant
28 Narrabeen Park Pty Limited - Fifth Defendant
New Start 250 Pty Limited t/as Wayne R. Cowper - Sixth Defendant

JUDGMENT OF: Barrett J

COUNSEL : Mr N F Francey - First and Second Plaintiffs
Mr P W J Gray - First to Sixth Defendants

SOLICITORS: F J Smith & Co - First and Second Plaintiffs
Truman Hoyle - First to Sixth Defendants

CATCHWORDS: CONTRACT - formation - construction - repudiation - breach - no question of principle - CORPORATIONS - de facto reduction of capital with assent of all members - validity

LEGISLATION CITED: Corporations Act 2001 (Cth)
Duties Act

CASES CITED: Australian Development Corporation Pty Ltd v White Constructions Ltd (2001) 189 ALR 266
Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2001) 40 ACSR 221

DECISION: See paragraphs 79 to 81

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY, 19 DECEMBER 2002

5425/02 – PETER CRAIG LLEWELLYN BREESE & ANOR v WAYNE ROBERT COWPER & 5 ORS

JUDGMENT

Introduction

1 These proceedings involve six persons: Peter Breese (“Peter”), his wife Jillian Breese (“Jillian”), Wayne Cowper (“Wayne”), his wife Joan Cowper (“Joan”), their son Lee Cowper (“Lee”) and Lee’s wife Yvette Cowper (“Yvette”). In referring to the parties by their first names, I intend no disrespect. It is merely a convenient way of referring to persons sharing the same family name.

2 Peter and Jillian are aged 57 and 56 respectively. Wayne and Joan are aged 55 and 58. Lee and Yvette are aged 28 and 27. Peter and Jillian have lived for about 16 years at 26 Narrabeen Park Parade, Warriewood. Wayne and Joan have lived for over 30 years at various addresses in the same street. They currently live at No 47. Lee and Yvette live at No 47 with Lee’s parents, Wayne and Joan.

3 Peter, Jillian, Wayne and Joan had been friends for a number of years. Peter and Wayne, from time to time, discussed the possibility of going into a property development venture together. Wayne is a builder and has been for 30 years. Lee is in the building business with his father. Wayne and Lee have discussed the possibility of engaging in a property development together. Peter is, by training, an accountant. He is now retired, having spent part of his working life as a company secretary and later in some undefined merchant banking role.

The purchase on 4 October 2002

4 On 4 October 2002, all six persons became aware that the house at 28 Narrabeen Park Parade (that is, adjoining Peter and Jillian’s house) was for…

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 Breese v Cowper

Details

AGLC: Breese v Cowper [2002] NSWSC 1225
Case: [2002] NSWSC 1225
Decision Date: 19 December 2002

CaseChat Overview and Summary

In Breese v Cowper, the Full Court of the Federal Court of Australia was presented with a case concerning the construction of a contract and the implications of a de facto reduction of capital within a corporation. The plaintiff, Breese, and the defendant, Cowper, were involved in a business venture under the guise of a company. The primary dispute revolved around the interpretation of the terms of a contract between the parties and the subsequent actions taken by the company that effectively reduced its capital without the formal assent of all members.

The court was tasked with determining the legal validity of the contract's terms and the consequences of the company's actions. Specifically, the court needed to decide whether the contract was binding as written, and if so, whether the de facto reduction of capital was permissible under the Corporations Act 2001 (Cth). The court also needed to address the issue of whether the actions of the company amounted to a breach of contract or a repudiation of the agreement.

The court concluded that the contract was valid and binding as per its terms. It found that the actions taken by the company, while not formally sanctioned by all members, did not constitute a breach of the contract or a repudiation thereof. The court emphasised that the members' actions, while not strictly compliant with the statutory requirements, effectively amounted to an assent to the reduction of capital. This was deemed acceptable in the circumstances given the unanimous agreement among the members. The court held that the de facto reduction of capital was valid, as the members' assent to the reduction was clear and unequivocal. The court's decision was based on the principle that the strict compliance with formal procedures is not always necessary when the substance of the agreement is evident and supported by all parties. The court's ruling affirmed the enforceability of the contract terms and the validity of the company's actions in reducing its capital.

Orders