Fedorovitch v St Aubins Pty Ltd (No 2)

The case of Fedorovitch v St Aubins Pty Ltd (No 2) arose in the Supreme Court of Victoria, involving an internal dispute within a home unit company. The plaintiffs, the Fedorovitch family, sought a remedy for oppressive conduct by the defendants, St Aubins Pty Ltd. The primary dispute centred on the valuation of shares in the company and the appropriate remedy for the alleged oppression. The plaintiffs argued that they should be bought out by the company, while the defendants contended for a different valuation method. Additionally, the plaintiffs sought to include a capital gains tax element in the valuation, which the defendants opposed.

The court was tasked with determining the correct method for valuing the shares in a home unit company and whether capital gains tax should be factored into the valuation. The key issue was whether the valuation should reflect the market value of the shares or an alternative method proposed by the defendants. Furthermore, the court had to decide whether any form of compensation, such as capital gains tax, could be added to the valuation.

The Supreme Court of Victoria concluded that the valuation of the shares should not include any element of compensation, such as capital gains tax. The court found that the appropriate method for determining the value of the shares was one that reflected the market value at the time of the dispute. The court emphasised that no compensation, including tax considerations, could be added to the valuation. Consequently, the court ordered the defendants to buy out the plaintiffs' shares based on the determined market value, without any additional elements.

The final orders of the court mandated that St Aubins Pty Ltd purchase the plaintiffs' shares at a price reflecting the market value, excluding any capital gains tax considerations. The court's decision provided clarity on the valuation of shares in home unit companies and the limitations on adding compensation elements to such valuations.