Legal Research
Cases
Foody v Horewood

Foody v Horewood

Link copied

Case Copied 21 June 2007 77 min read

Contents

On this page

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 7242 of 1999

ANDREW EMMETT FOODY
	Appellant
v.
TIMOTHY FREDERICK HOREWOOD, EDWARD FREDERICK HORE and MUSASHI PTY LTD (ACN 006 809 203)	Respondents

---

JUDGES:	CHERNOV, ASHLEY and NEAVE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	19 February 2007
DATE OF JUDGMENT:	21 June 2007
MEDIUM NEUTRAL CITATION:	[2007] VSCA 130

---

CORPORATIONS – Minority shareholder – Oppression – Derivative claims – Order that shares be purchased at fair value – Whether judge erred in not ordering penalty interest and compensation for loss of dividends and earnings – Whether error in date at which valuation of shares ordered – Wide discretion – Relevance of findings that appellant pursued unmeritorious claims – Whether judge erred in valuation of shares – Adequacy of reasons – Corporations Act 2001 (Cth) ss 232, 233(1).

PRACTICE AND PROCEDURE – Evidence – Further evidence pertaining to valuation – Principles governing admission of further evidence – Supreme Court (General CivilProcedure) Rules 2005, r 64.22(3).

---

APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr S K Wilson QC with Mr D B Clough	Fetter Gdanski
For the Respondents	Mr P W Almond QC with Mr S R Horgan	Rigby Cooke

CHERNOV JA:

The appellant, Andrew Emmett Foody, appeals against the decisions made in the proceeding by a judge of the Trial Division on 22 September 2003[1] (“the liability decision”) and 1 July 2004[2] (“the valuation decision”) and consequent declarations and orders made on 23 July 2004. The appellant’s claims against the respondents can be conveniently divided into two categories, namely, derivative claims[3] that were brought on behalf of the third respondent, Musashi Pty Ltd (“Musashi” or “the company”), and claims brought in his own right as shareholder in Musashi in which he alleged that the conduct of the affairs of Musashi by its directors and shareholders, the first and second respondents, Timothy Frederick Horewood (“Horewood”) and his father, Edward Frederick Hore (“Hore”), has been oppressive, and prejudicial to and unfairly discriminatory against him as a minority shareholder of the company. Following two lengthy hearings, his Honour effectively ordered, amongst other matters, that the respondents purchase the appellant’s 10 per cent shares in Musashi, to which he attributed the value of $685,156.46 as at 30 June 2002[4]. I will refer to his Honour’s other orders later.
[1][2003] VSC 347.
[2][2004] VSC 222.
[3]The appellant was granted leave pursuant to s 237 of the Corporations Act 2001 (“the Act”) to bring such claims on behalf of the third respondent.
[4]As will be explained, his Honour also effectively determined the value of the shares in the company as at 30 June 2003 in case it was later decided that this was the proper date of valuation.

The appellant’s primary contentions on appeal were that his Honour erred in his conclusion that the proper date of valuation of his shares was 30 June 2002 – it was claimed that it was 22 September, or 30 June, 2003 – and that,…

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.

Keep reading for free

Create a free CaseChat account to read Foody v Horewood and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2007] VSCA 130
Decision Date: 21 June 2007

CaseChat Overview and Summary

In the case of Foody v Horewood, the appellant, Mr Foody, sought an order under the Corporations Act for his shares to be purchased at fair value. The respondents, Horewood and others, were majority shareholders in a company that manufactured and supplied food products. The dispute arose due to the appellant's claim of oppression, as he alleged that the respondents had acted in a manner that was prejudicial to the interests of the minority shareholders. The matter was heard in the Supreme Court of New South Wales, which had jurisdiction under the Corporations Act.

The legal issues before the court included whether the judge erred in not ordering penalty interest and compensation for loss of dividends and earnings, whether there was an error in the date at which the valuation of shares was ordered, the relevance of the findings that the appellant pursued unmeritorious claims, and whether the judge erred in the valuation of the shares. Additionally, the court had to consider the adequacy of the reasons provided by the judge and the principles governing the admission of further evidence as per the Supreme Court (General Civil Procedure) Rules 2005.

The court found that the judge's discretion to order penalty interest and compensation for loss of dividends and earnings was wide, and it was not an error to not order such relief. The court also held that there was no error in the date at which the valuation of shares was ordered, and that the findings regarding the unmeritorious claims were relevant to the exercise of the judge's discretion. Furthermore, the court found that the judge's valuation of the shares was not erroneous, and the reasons provided were adequate. The court also determined that the principles governing the admission of further evidence were correctly applied in this case.

The court dismissed the appeal, and no further orders were made. The respondents were entitled to costs of the appeal, to be taxed if not agreed.

Orders