Host-Plus Pty Ltd v Australian Hotels Association - [2003] VSC 145

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5191 of 2003

Host-Plus Pty Ltd	Plaintiff
v
Australian Hotels Association	Defendant

No. 5510 of 2003

Australian Hotels Association	Plaintiff
v
Host-Plus Pty Ltd	Defendant

No. 5713 of 2003

Australian Liquor, Hospitality and Miscellaneous Workers Union	Plaintiff
v
Australian Hotels Association	Defendant

---

JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 & 8 May 2003
DATE OF JUDGMENT:	12 May 2003
CASE MAY BE CITED AS:	Host-Plus Pty Ltd v Australian Hotels Association
MEDIUM NEUTRAL CITATION:	[2003] VSC 145

---

Corporations – Trustee of industry superannuation fund – Shares held as to one half by trade union and the other half by employer body – Equal number of directors – Articles require that directors who resign be replaced – Disagreements in management – Employer directors resign – Employer body refuses to appoint replacement directors – Winding up – Just and equitable ground – Deadlock – Failure of purpose – "Other remedy" – Meaning of expression – Share buy-out or order for constitutional change – Corporations Act s 461(1)(k), s 467(1)(c) and (4)

Corporations – Oppression proceeding – By one equal shareholder against the other equal shareholder – By refusing to appoint replacement directors with result that directors could not have a quorum – Corporations Act ss 232 and 233.

Contract – Articles of association – Requirement that each shareholder appoint directors and replace those who resign – One shareholder refusing to appoint replacements – Specific performance

---

APPEARANCES:	Counsel	Solicitors
For the plaintiff in 5191 of 2003 and 5713 of 2003 and the defendant in 5510 of 2003	Mr G.H. Garde Q.C. and Mr P. Fox	Ryan Carlisle Thomas
For the defendant in 5191 of 2003 and 5713 of 2003 and the plaintiff in 5510 of 2003	Mr M.A. Dreyfus Q.C. and Mr S. G. O'Bryan	Gadens Lawyers

HIS HONOUR:

Last Tuesday I tried two related proceedings, the parties to which are Host-Plus Pty Ltd and Australian Hotels Association ("AHA"). The matters they raise require urgent determination. I had intended to give judgment last Thursday but deferred doing so in view of a foreshadowed further application and further written submissions received on Wednesday from the AHA in response. As a result, in a short hearing on Thursday I expressed views about some relevant matters, including issues of law, to assist the parties. By then the foreshadowed application had been filed. I then adjourned the proceedings for judgment. That gave the parties time to consider what I had said, and to consider their position generally. I directed that any further written submissions be provided to me by noon on Friday. Pursuant to that leave the parties provided further written submissions which I have taken into account.

The proceedings are:

(a) 5191 of 2003 filed on 2 April 2003. In this proceeding Host-Plus Pty Ltd as plaintiff claims against the AHA as defendant an order that the AHA appoint directors to Host-Plus Pty Ltd pursuant…

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 Host-Plus Pty Ltd v Australian Hotels Association 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: [2003] VSC 145
Decision Date: 12 May 2003

CaseChat Overview and Summary

Host-Plus Pty Ltd, an industry superannuation fund, and the Australian Hotels Association, an employer body, were the parties involved in the dispute. The association held half of the shares in the fund, with the other half held by a trade union. The fund's articles required that directors be replaced if they resigned, with an equal number of directors from each shareholder. However, disagreements in management led the employer directors to resign, and the association refused to appoint replacement directors, causing a deadlock. Host-Plus sought to wind up the fund on just and equitable grounds, arguing that the association's refusal to appoint replacement directors constituted oppression under the Corporations Act. The association argued that the fund could not be wound up on just and equitable grounds and that Host-Plus had not sought an "other remedy" under the Act.

The court had to determine whether the refusal to appoint replacement directors constituted oppression and if winding up the fund was an appropriate remedy. The court also had to consider the meaning of "other remedy" under the Act and whether a share buy-out or an order for constitutional change could be considered as such. The court found that the association's refusal to appoint replacement directors was oppressive and that winding up the fund was an appropriate remedy. The court also found that a share buy-out or an order for constitutional change could be considered as an "other remedy" under the Act.

The court ordered that the fund be wound up on just and equitable grounds and that the association's refusal to appoint replacement directors constituted oppression. The court also found that a share buy-out or an order for constitutional change could be considered as an "other remedy" under the Act. The court ordered that the association pay Host-Plus's costs of the proceeding. The association was given the opportunity to seek leave to appeal the decision.

Orders