Denis Cassegrain & Ors v Gerard Cassegrain & Co Pty Ltd & Ors

The Court was asked to determine whether the transfer of shares of a corporation in two other corporations by the directors to the wife and daughter of one of the directors constituted oppression of minority shareholders and whether the transfers were made at an undervalue. The Court was also required to determine whether the requisite notice was given, whether there was consent or acquiescence, and whether the wife and daughter were knowingly receiving the shares. Additionally, the Court had to consider whether the directors breached their statutory and fiduciary duties in the circumstances of the transfer of corporation assets to a family member, and whether the transfers were made to delay, hinder or defraud creditors.

The Court held that the transfers of shares were oppressive as they were made without proper notice and consent, and the minority shareholders were prejudiced by the transfers. The Court found that the wife and daughter were knowingly receiving the shares as they were aware of the circumstances that would indicate to an honest and reasonable person that the transfers were made to avoid litigation and the appointment of a provisional liquidator. The Court also held that the directors breached their statutory and fiduciary duties by transferring corporation assets to a family member without obtaining consent. Finally, the Court found that the transfers were made to delay, hinder or defraud creditors, and therefore, the alienation of shares was void under s 37A of the Conveyancing Act 1919 (NSW).

The Court ordered that the transfers of shares be set aside and that the shares be returned to the original corporations. The Court also ordered that the directors personally indemnify the corporations for any loss or damage suffered as a result of the transfers. The Court further ordered that the wife and daughter personally indemnify the corporations for any loss or damage suffered as a result of the transfers, as they were knowingly receiving the shares. The Court declined to apply the "rule" in Jones v Dunkel and held that it was not necessary for the plaintiffs to give evidence to prove oppression or prejudice.