In the matter of OTS (Australia) Pty Ltd

In the matter of OTS (Australia) Pty Ltd, the court was presented with a dispute between members of the company and the directors regarding the form of relief available to the members under the Corporations Act 2001 (Cth). The members sought a compulsory purchase order of their shares, alleging that they had been oppressed in the conduct of the company's affairs. The case was heard in the Federal Court of Australia, which was tasked with determining the appropriate form of relief and the valuation of the shares in question.

The primary legal issue before the court was whether an earnings-based or a revenue-based valuation methodology was preferable for determining the value of the shares in question. The court was also required to consider the circumstances in which a compulsory purchase order might be appropriate, given the allegations of oppression. The members argued for an earnings-based valuation, while the directors contended for a revenue-based valuation.

The court found that, in principle, an earnings-based valuation was ordinarily preferable because it provided a more accurate reflection of the underlying value of the company. However, the court also considered a revenue-based valuation as a check, which indicated that the earnings-based valuation was conservative. Given the evidence presented, the court concluded that the members were entitled to a compulsory purchase order of their shares, with the valuation to be determined by a revenue-based approach. The court further ordered that the company pay the members' legal costs associated with the proceedings.

In summary, the court determined that the members of OTS (Australia) Pty Ltd were entitled to a compulsory purchase order of their shares, and that the valuation of the shares should be determined by a revenue-based approach. The company was also ordered to pay the members' legal costs.