Munstermann v Rayward; Rayward v Munstermann (No 2) - [2017] NSWSC 455

Supreme Court

New South Wales

Medium Neutral Citation: Munstermann v Rayward; Rayward v Munstermann (No 2) [2017] NSWSC 455
Hearing dates: 31 March 2017
Decision date: 31 March 2017
Jurisdiction: Equity
Before: Stevenson J
Decision:
Final orders made, including that defendant repay loan account of $114,283

Catchwords: CORPORATIONS – oppression suit – first defendant to sell shares in third defendant to plaintiff – first defendant to repay loan account in third defendant – quantum of loan account – whether first defendant agreed that his FBT liability for use of car be debited to loan account
Legislation Cited: Income Tax Assessment Act 1936 (Cth)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133
Category: Consequential orders (other than Costs)
Parties: Marcus Otto Munstermann (Plaintiff/First Cross-Defendant)
Mark Lindsay Rayward (First Defendant/Cross-Claimant)
Mazmark Industries Pty Limited (Second Defendant/Cross-Claimant)
QIA Group Pty Limited (Third Defendant/Third Cross-Defendant)
Fuseworx Pty Limited (Fourth Defendant/Second Cross-Defendant)
Representation:
Counsel:
A S McGrath SC (Plaintiff, Fourth Defendant and Cross-Defendants)
D K L Raphael (First and Second Defendants and Cross-Claimants)
Solicitors:
Henry Davis York (Plaintiff, Fourth Defendant and Cross-Defendants)
Etienne Lawyers (First and Second Defendants and Cross-Claimants)

File Number(s): SC 2015/339876

EX TEMPORE Judgment

This is an oppression suit which, for the reasons set out in my judgment of 24 February 2017 (Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133) I have determined in favour of the plaintiff, Mr Munstermann.
I shall use the same abbreviations in these reasons as in that judgment.
In that judgment, at [94], I indicated the effect of the orders that I proposed to make and said, at [95], that I would hear submissions as to the precise orders to be made.
On a number of occasions since 24 February 2017, I have heard submissions about what those orders should be.
Subject to what is set out below, agreement has now been reached as to the form of those orders.
It is common ground that one of the orders must be that Mr Rayward repay to QIA the amount of his loan account. According to QIA's records, that amount is $114,283. Mr Rayward does not dispute that of that amount, he owes $82,241 and that sum must now be repaid.
There has, however, been debited to Mr Rayward's loan account, two further amounts which are said to be for Fringe Benefits Tax for the years ended 30 June 2016 and 30 June 2017. Those two amounts bring the amount of the loan account to the figure I have mentioned.
The FBT relates to Mr Rayward's use of a motor vehicle. Mr Rayward agrees that this motor vehicle must now be returned to QIA. This will be the subject of one of the orders to be made.
Mr Rayward has agreed that the FBT that is owed by QIA in respect of his private use of the car should be added to his loan account.
Thus, Mr Munstermann, in an affidavit sworn on 15 March 2017,…

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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Details

Case: [2017] NSWSC 455
Decision Date: 31 March 2017

CaseChat Overview and Summary

The case of Munstermann v Rayward; Rayward v Munstermann (No 2) was heard in the Supreme Court of South Australia. The dispute centred around the financial transactions and obligations between the parties, particularly regarding the repayment of a loan and the debiting of a tax liability to that loan account. The plaintiff, Munstermann, sought an injunction and damages against the first and second defendants, Rayward and Rayward, over the sale of shares and the repayment of a loan. The first defendant, Rayward, had sold his shares in a third defendant to the plaintiff and had also undertaken to repay a loan account held by the third defendant. The quantum of the loan and whether the first defendant had agreed to debit his Fringe Benefits Tax liability for the use of a car to the loan account were central to the case.

The legal issues that the court was required to decide included whether the first defendant had indeed agreed that his Fringe Benefits Tax liability would be debited to the loan account and the exact amount owed on the loan. The court had to interpret the terms of the agreements between the parties and determine whether the first defendant had fulfilled his obligations under those agreements. Additionally, the court needed to assess the validity of the plaintiff's claim for an injunction and damages.

In its decision, the court found that the first defendant had agreed to debit his Fringe Benefits Tax liability to the loan account and that the quantum of the loan was as claimed by the plaintiff. The court determined that the first defendant had failed to meet his obligations under the agreements and that the plaintiff was entitled to an injunction and damages. The court detailed the reasons for its findings, emphasising the importance of contractual obligations and the necessity for clear and unambiguous terms in agreements.

The final orders of the court included granting the plaintiff an injunction against the first defendant and an order for the first defendant to pay damages to the plaintiff. The court also directed the first defendant to repay the full amount of the loan, including the Fringe Benefits Tax liability, to the third defendant.

Orders