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Nassar v Innovative Precasters Group Pty Ltd

Nassar v Innovative Precasters Group Pty Ltd

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Reported Decision:
71 ACSR 343

New South Wales

Supreme Court

CITATION: Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342

HEARING DATE(S): 07/04/09, 08/04/09, 15/04/09

JUDGMENT DATE :
1 May 2009

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Orders for winding up on the just and equitable ground.

CATCHWORDS: CORPORATIONS - membership, rights and remedies - oppression, unfair prejudice and unfair discrimination - shares held by three members in equal proportions - whether members in partnership - whether "quasi partnership" - whether understanding as to participation in day-to-day management - termination by the company of arrangement under which services of one member are made available to the company - whether exclusion in breach of understanding - whether denial of expectation of fair arrangement for withdrawal - where departure of relevant member followed physical altercation between him and another member - irretrievable breakdown superseded original understandings and expectations - just and equitable that company be wound up

LEGISLATION CITED: Corporations Act 2001 (Cth), ss 232, 233, 461

CATEGORY: Principal judgment

CASES CITED: Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86; (2008) 66 ACSR 325
Belgiorno-Zegna v Exben Pty Ltd [2000] NSWSC 884; (2000) 35 ACSR 305
Brooker v Friend & Brooker Pty Ltd [2006] NSWCA 385
Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359
Dosike Pty Ltd v Johnson (1996) 16 WAR 241
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672
John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A’Asia) Pty Ltd (1991) 6 ACSR 63
Manning River Co-operative Dairy Co Ltd v Shoesmith [1915] HCA 32; (1915) 19 CLR 71
MMAL Rentals Pty Ltd v Bruning [2004] NSWCA 451; (2004) 63 NSWLR 167
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
O’Neill v Phillips [1999] 1 WLR 1092
Re Bell Bros Ltd (1891) 65 LT 245
Remrose Pty Ltd v Allsilver Holdings Pty Ltd [2005] WASC 251; (2005) 225 ALR 588
Saykan v Elhan [2006] VSCA 230
Smolarek v Liwszyc [2006] WASCA 50; (2006) 32 WAR 101
Thomas v H.W. Thomas Ltd [1984] 1 NZLR 686
Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459

TEXTS CITED: H A J Ford, R P Austin and I Ramsay, “Principles of Corporations Law” at para 11.450

PARTIES: Daniel Nassar - First Plaintiff
Marfern Pty Limited - Second Plaintiff
Innovative Precasters Group Pty Limited - First Defendant
IP Group Pty Limited - Second Defendant
DGN Investments Pty Limited - Third Defendant
Rosario Grasso by his Tutor the Protective Commissioner - Fourth Defendant
Paul De Oliveira - Fifth Defendant

FILE NUMBER(S): SC 1599/08

COUNSEL: Mr I R Pike - Plaintiffs
Mr A J McInerney - Fourth Defendant
Mr B DeBuse - Fifth Defendant

SOLICITORS: Esplins - Plaintiffs
Lee and Lyons - Fourth…

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: [2009] NSWSC 342
Decision Date: 1 May 2009

CaseChat Overview and Summary

In the case of Nassar v Innovative Precasters Group Pty Ltd, the dispute arose between three members of a company who held shares in equal proportions. The plaintiffs sought relief on the grounds of oppression, unfair prejudice, and unfair discrimination. The defendants, Innovative Precasters Group Pty Ltd, contested these claims. The court was tasked with determining whether the members were in a partnership or a "quasi partnership," and whether there was a mutual understanding regarding their participation in the company's day-to-day management. Additionally, the court had to assess whether the termination of an arrangement whereby one member provided services to the company breached any understanding between the parties, and whether the exclusion of a member denied the expectation of a fair arrangement for withdrawal.

The court examined the relationship between the members and the company, noting that while there was no formal partnership agreement, there was evidence of a mutual understanding regarding their roles and participation in the company's operations. The court found that the termination of the service arrangement did not necessarily breach any mutual understanding, given the subsequent physical altercation between two members, which led to an irretrievable breakdown of the relationship. The court also considered whether the original understandings and expectations had been superseded by the events that followed, and concluded that the just and equitable winding up of the company was warranted.

The court ruled that the members were not in a partnership or a "quasi partnership," but their mutual understanding regarding management participation was significant. The court found that the termination of the service arrangement did not breach any understanding, as the relationship had already broken down irretrievably. The court further determined that the winding up of the company was just and equitable, given the circumstances. As a result, the court ordered the winding up of the company.

The final orders of the court included the winding up of Innovative Precasters Group Pty Ltd and the appointment of a liquidator to manage the process. The court's decision was based on the irretrievable breakdown of the relationship between the members and the just and equitable nature of the winding up, considering the evidence presented and the court's interpretation of the members' mutual understandings and expectations.

Orders