CORPORATIONS – Oppressive conduct – Whether affairs of company conducted in an oppressive manner – Unilateral decision by defendant to acquire member’s interest – Unlawful appropriation of shares – Refusal to reinstate member’s status as registered shareholder - Exclusion of member from business operations – Denial of access to company records – Repeated failure to comply with court orders – Prior finding of contempt - Whether defendant’s conduct was unfairly prejudicial to member – Commercial unfairness – Consideration of relevant principles – Oppression made out.
CORPORATIONS – Oppression relief – Appropriate remedies – Whether defendant should be ordered to buy out member – Whether company should be wound up – Winding up as a remedy of last resort – Whether ‘some other remedy’ available that is less intrusive – Valuation of shares – Expert opinion – Compulsory buyout order – Corporations Act 2001 (Cth) ss 232(e), 233(1)(a), (d), 461(1)(f), (g) and (k).
PRACTICE AND PROCEDURE – Costs – Discretion of the court – Whether indemnity costs order appropriate – Unmeritorious and improper conduct by defendant – Breach of court orders – Significant delay and costs – Indemnity costs awarded.
APPEARANCES:
Solicitors
For the Plaintiff
M Guo of counsel
Wiin Lawyers
For the Defendant
In person
Not Applicable
HIS HONOUR:
Introduction
The plaintiff, Ya Liu (‘Ms Liu’,) applies for oppression relief in connection with the affairs of L&G Co Pty Ltd (‘the Company’). The Company carries on business as a newsagency and Tatts Lotto outlet at 321 Springvale Road, Springvale. A portion of the premises is subleased to an Asian grocery store known as ‘Oli’s’ Grocery’. Ms Liu owns 49 of the 100 issued shares in the Company, with the balance owned by the defendant, Ping Gan (‘Ms Gan’).
Ms Gan represented herself at trial as she had done from time to time when she chose to appear at the various directions hearings throughout the lengthy, problematic and unsatisfactory course of the proceeding. Ms Gan also gave oral evidence at trial and was cross examined. Ms Liu gave evidence along with David Ferrier (‘Mr Ferrier’), a forensic accountant. Both were cross examined by Ms Gan.
The principal relief now sought by Ms Liu is an order that her shares be bought out by Ms Gan. In the alternative, Ms Liu seeks an order that the Company be wound up.
Relevant Events
Ms Liu acquired her shares in the Company from Ms Gan pursuant to a share purchase agreement made between Ms Gan as the seller and Ms Liu as the purchaser dated 11 June…
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.
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AGLC
Liu v Gan (No 2) [2025] VSC 372
Case
[2025] VSC 372
Decision Date
CaseChat Overview and Summary
The case of Liu v Gan (No 2) involved a dispute between the plaintiff, Liu, and the defendant, Gan, concerning the oppressive conduct of the defendant in relation to the plaintiff’s shares in a company. The matter was heard in the Federal Court of Australia. Liu sought relief under the Corporations Act 2001 (Cth) alleging that Gan had engaged in oppressive conduct by unilaterally acquiring his shares, unlawfully refusing to reinstate his status as a registered shareholder, and excluding him from the company's operations and access to records. Liu also claimed that Gan had repeatedly failed to comply with court orders, leading to a prior finding of contempt.
The central legal issues the court had to address were whether Gan's conduct constituted oppressive behaviour under the Corporations Act and, if so, what remedies were appropriate. The court had to determine if Gan's actions were unfairly prejudicial to Liu, considering both commercial unfairness and the relevant principles established in prior cases. Additionally, the court needed to decide on the appropriate relief, including whether Gan should be ordered to buy out Liu's shares or if winding up the company was a suitable remedy.
The court found that Gan's conduct was indeed oppressive, as it amounted to an unlawful appropriation of Liu's shares, exclusion from the company's operations, and denial of access to company records. The court held that Gan's actions were unfairly prejudicial and oppressive, particularly given Liu's exclusion from the company's operations and records. Regarding the appropriate remedy, the court opted for a compulsory buyout order, determining that winding up the company was a remedy of last resort and that a buyout was less intrusive. The court awarded indemnity costs against Gan due to his unmeritorious and improper conduct, significant delays, and breaches of court orders.