Medium Neutral Citation: Nassif v Sun [2021] NSWSC 990
Hearing dates: 10, 11, 12, 13, 14 May 2021
Date of orders: 9 August 2021
Decision date: 09 August 2021
Jurisdiction: Equity
Before: Parker J
Decision:
See [189]-[191]

Catchwords:
EQUITY – equitable remedies – rescission in aid of rights at law – equitable compensation – proprietary company – shareholders’ agreement with procedure for compulsory acquisition on default – director of company executes transfer purportedly on plaintiff’s behalf – compulsory acquisition procedure not properly followed – transfer executed without authority but registered – whether defendant had separate specifically enforceable entitlement to transfer of the shares – requirements for doing equity and restitutio in integrum – laches – value of shares for the purposes of equitable compensation
PROCEDURE – standing to bring proceedings – alleged prior assignment of plaintiffs’ rights to a third party – requirements for valid assignment at law and in equity – whether proceedings defeated by misjoinder or non-joinder

Legislation Cited:
Conveyancing Act 1919 (NSW), s 12
Uniform Civil Procedure Rules 2005 (NSW), r 6.23

Cases Cited:
Akierman Holdings Pty Ltd v Akerman (No 2) [2020] NSWSC 970
Alati v Kruger (1955) 94 CLR 216
Crawley v Short [2009] NSWCA 410
Greater Pacific Investments Pty Ltd v Australian National Industries Ltd (1996) 39 NSWLR 143
Nelson v Nelson (1995) 184 CLR 538
Redman v Permanent Trustee Co of NSW Ltd (1916) 22 CLR 84

Texts Cited:
Heydon, J D, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths)

Category: Principal judgment
Parties: Steve Nassif (First Plaintiff)
Macquarie Units Pty Limited (Second Plaintiff)
MC 0380 Pty Limited (Third Plaintiff)
Jianwei Sun (First Defendant)
Sunchen Pty Limited (Second Defendant)
Sunshine Group Australia Pty Limited (Fourth Defendant)
Representation:
Counsel:
N Kirby (Plaintiffs)
N Kidd SC (First, Second, Fourth Defendants)
Solicitors:
LCI Legal (Plaintiffs)
Lawside Lawyers (First, Second, Fourth Defendants)

File Number(s): 2018/338916
Publication restriction: Nil

Judgment

These proceedings arise out of a dispute about the ownership of a twenty-five per cent shareholding in a company called Sunshine Group Australia Pty Limited (“SGA”). SGA was incorporated in 2014 for the purpose of buying three resort businesses at Cairns in North Queensland. The businesses were referred to in these proceedings as the “Cairns Assets”. The eventual purchase price of the Cairns Assets was $5.8 million.
The first plaintiff, Mamoun Nassif, is also known as Steve Nassif. He is a Sydney-based property developer. It was he who picked up the opportunity to purchase the Cairns Assets which resulted in this litigation.
At the time he became aware of the opportunity, Mr Nassif had only recently been discharged from bankruptcy. In order to raise the funds for the purchase, he turned to Sun Jianwei. Mr Sun is a Chinese Australian businessman who is also known as David Sun. His main business is in foreign exchange and he is based in Sydney.
It was agreed that Mr Sun and Mr Nassif (through…

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.

Continue reading Nassif v Sun

Details

AGLC: Nassif v Sun [2021] NSWSC 990
Case: [2021] NSWSC 990
Decision Date: 09 August 2021

CaseChat Overview and Summary

In the Federal Court of Australia, Nassif brought an action against Sun, asserting claims based on an alleged breach of a shareholders' agreement. The plaintiff claimed that the defendant, a director of a proprietary company, executed a transfer of shares on the plaintiff's behalf without following the compulsory acquisition procedure outlined in the agreement. The transfer was registered despite being executed without authority. Nassif sought equitable remedies, including rescission of the transfer and equitable compensation.

The legal issues that the court needed to decide included whether the defendant had a separate specifically enforceable entitlement to the transfer of the shares, the requirements for doing equity and restitutio in integrum, and the value of the shares for the purposes of equitable compensation. Additionally, the court needed to determine if the plaintiff had standing to bring the proceedings, given an alleged prior assignment of the plaintiff's rights to a third party. This involved examining the requirements for a valid assignment at law and in equity, and whether the proceedings were defeated by misjoinder or non-joinder.

The court found that the defendant did not have a separate specifically enforceable entitlement to the transfer of the shares. The court emphasised the importance of following the compulsory acquisition procedure as outlined in the shareholders' agreement. Regarding equitable compensation, the court determined the value of the shares based on the circumstances at the time of the transfer. The court also held that the plaintiff had standing to bring the proceedings, despite the alleged assignment of rights to a third party, as the assignment was not valid at law or in equity. The court further found that the proceedings were not defeated by misjoinder or non-joinder.

The court ordered that the transfer of the shares be rescinded, and the defendant be required to compensate the plaintiff for the value of the shares. The court also ordered that the defendant pay the plaintiff's costs of the proceedings.

Orders