Legal Research
Cases
Chidiac v Bhatt

Chidiac v Bhatt

Case [2014] NSWSC 1253 12 September 2014

Corporate Law & Governance

Contract Law

Restitution

Type to search within this case.

Supreme Court

New South Wales

Medium Neutral Citation: Chidiac v Bhatt, Vaidya and Rosybarb Pty Ltd [2014] NSWSC 1253
Hearing dates: 1 - 3 and 24 - 25 July 2014
Decision date: 12 September 2014
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Parties to be heard as to form of orders for rectification of share register and register of directors and for repayment of amounts charged to credit card, as to amount of damages recoverable against first defendant and as to costs.

Catchwords:
CORPORATIONS - membership, rights and remedies - application for rectification of share register under Corporations Act 2001 (Cth) s 175 - whether purported transfers of ordinary shares in company was invalid - whether plaintiff was validly removed as director.

CONTRACT - existence of contract - whether plaintiff and first defendant entered into oral contract in respect of transfer of shares and vehicle for payments to third party - breach - whether established that first defendant breached contract.

RESTITUTION - money lent - where first defendant acknowledges that relevant monies constituted a loan - whether established that first defendant has repaid relevant amounts to discharge debt liability.
DAMAGES - where plaintiff is party to contract conferring benefit to third party - where breach of contract in respect of non-delivery of vehicle established - quantification - whether plaintiff can recover substantive damages - whether plaintiff has suffered loss or damage arising from breach - where plaintiff claims damages quantified in amount of payments made in performance of contract - where first defendant has partly performed contract - whether total failure of consideration provided by first defendant established.
Legislation Cited: - Corporations Act 2001 (Cth) ss 175, 180, 198E, 201F, 201G, 201H, 1071B, 1274B(2)
- Civil Procedure Act 2005 (NSW) s 98
- Uniform Civil Procedure Rules 2005 (NSW) r 42
Cases Cited: - Armagas Ltd v Mundogas SA [1985] 1 Ll R 1
- Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
- Bell v Burton (1993) 12 ACSR 325
- Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39
- Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40
- Coulls v Bagot's Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460
- Craig v Silverbrook [2013] NSWSC 1687
- Foxeden Pty Ltd v IOOF Building Society Ltd [2003] VSC 356
- Grant v John Grant & Sons Pty Ltd [1950] HCA 54; (1950) 82 CLR 1
- Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60
- Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
- John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1
- Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674
- Mercedes Holdings Pty Ltd v Waters (No 3) [2011] FCA 236
- Peninsula Gold Pty Ltd v Sunbeam Victa Holdings Ltd (1996) 20 ACSR 553

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 Chidiac v Bhatt

Details

AGLC: Chidiac v Bhatt [2014] NSWSC 1253
Case: [2014] NSWSC 1253
Decision Date: 12 September 2014

CaseChat Overview and Summary

In the case of Chidiac v Bhatt, the plaintiff, Chidiac, sought rectification of the share register of a company, alleging that purported transfers of ordinary shares were invalid. Additionally, the plaintiff contested the validity of his removal as a director and claimed damages for breaches of contract. The first defendant, Bhatt, was involved in the alleged invalid share transfers and was also the subject of the contract dispute. The case was heard in the Supreme Court of Victoria.

The court had to determine several legal issues, including whether the purported transfers of ordinary shares were invalid, which would render the plaintiff's removal as a director ineffective. It also had to establish whether an oral contract existed between the plaintiff and the first defendant regarding the transfer of shares and a vehicle for payments to a third party, and if so, whether the first defendant breached that contract. Furthermore, the court needed to ascertain if the first defendant had repaid relevant amounts to discharge his debt liability, given his acknowledgment that the relevant monies constituted a loan.

The court found that the purported transfers of ordinary shares were invalid, and as a result, the plaintiff's removal as a director was also invalid. It held that an oral contract existed between the plaintiff and the first defendant, which the latter breached. However, the court determined that the plaintiff could not recover substantive damages for the breach as he had not suffered any loss or damage arising from it. Additionally, the court found that the first defendant had partly performed the contract, and therefore, it was not a total failure of consideration.

The court ordered that the share register of the company be rectified to reflect the invalidity of the share transfers and the plaintiff's continued status as a director. Furthermore, it found that the first defendant had repaid relevant amounts to discharge his debt liability. However, it dismissed the plaintiff's claim for damages, finding that he had not suffered any loss or damage arising from the breach of contract.

Orders