Nguyen v Nguyen Huynh (WA) Pty Ltd

[2022] WASC 218

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   NGUYEN -v- NGUYEN HUYNH (WA) PTY LTD [2022] WASC 218

CORAM:   HILL J

HEARD:   10 - 14, 19 FEBRUARY 2020

DELIVERED          :   1 JULY 2022

FILE NO/S:   COR 149 of 2018

BETWEEN:   THI LIEU NGUYEN

Plaintiff

AND

NGUYEN HUYNH (WA) PTY LTD

First Defendant

VAN LONG HUYNH

Second Defendant

NGA THI NGUYEN

Third Defendant

Catchwords:

Corporations - Claim for oppression - Whether third defendant was appointed a director of the first defendant - Whether third defendant was issued a share in the first defendant - Whether plaintiff was removed as a director of the first defendant - Payment of personal expenses by the company - Supply of goods by first defendant to business associated with second and third defendants and whether goods have been paid for - Whether conduct constitutes oppression under s 232 and s 233 of Corporations Act - Appropriate orders to be made

Legislation:

Corporations Act 2001 (Cth) s 232, s 233

Result:

Plaintiff's claim of oppression made out

Order that the second and third defendants purchase the plaintiff's share in the first defendant on the basis of a 50% share in the first defendant subject to certain adjustments

Category:    B

Representation:

Counsel:

Plaintiff	:	A P Hershowitz
First Defendant	:	G M G McIntyre SC
Second Defendant	:	G M G McIntyre SC
Third Defendant	:	G M G McIntyre SC

Solicitors:

Plaintiff	:	Greenstone Legal
First Defendant	:	D'Angelo Legal
Second Defendant	:	D'Angelo Legal
Third Defendant	:	D'Angelo Legal

Cases referred to in decision:

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1

Anglo Australian Resources NL v Bloom Financial Advice Pty Ltd [No 2] [2019] WASC 480

Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369

AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [2019] WASC 306

Browne v Dunn (1893) 6 R 67 (HL)

Chase Corporation (Australia) Pty Ltd v North Sydney Brick and Tile Co Ltd (1994) 35 NSWLR 1

Clamp v Fairway Investments Pty Ltd (1971-1973) CLC 40-077

Ebrahimi v Westbourne Galleries Ltd [1973] AC 360

Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599

Exton v Extons Pty Ltd [2017] VSC 14; (2017) 53 VR 520

Garrett v Nicholson [1999] WASCA 32; (1999) 21 WAR 226

Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73

Hughes v St Barbara Mines Ltd (No 4) [2010] WASC 160

In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547

Jarrett v Perpetual Trustee Co Ltd [2007] NSWSC 1231; (2007) 64 ACSR 552

John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

Joint v Stephens [2008] VSCA 210

Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995)

Laurendi v Boral Contracting Pty Ltd [2002] WASCA 297

McCarthy v Wheeler and Wongan Hotels Pty Ltd [1998] VSC 67

Mercanti v Mercanti [2016] WASCA 206; (2016) 50 WAR 495

Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692

Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corporation (1975) 11 SASR 504

Nominal Defendant v Cordin [2017] NSWCA 6

Paterson v The Queen [2004] WASCA 63; (2004) 28 WAR 233

Patterson v Humfrey [2014] WASC 446

Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33

Rankine v Rankine (1995) 18 ACSR 725

Re Ledir Enterprises [2013] NSWSC 1332

Re London School of Electronics Ltd [1986] Ch 211; [1985] 3 WLR 474

Re Optimisation Australia Pty Ltd [2018] NSWSC 31; (2018) 362 ALR 374

Roden v International Gas Applications (1995) 125 FLR 396

Russell v Lee Holdings Pty Ltd [No 3] [2020] WASC 346

Sanford v Sanford Courier Services Pty Ltd (1986) 10 ACLR 549; (1987) 5 ACLC 394

Swiss Screens (Australia) Pty Ltd & Anor v Burgess & Ors (1987) 11 ACLR 756

The Bell Group Ltd (in liq) v Westpac Banking Corporation Ltd (No 9) [2008] WASC 239; (2008) 70 ACSR 1

Thomas v HW Thomas Ltd [1984] 1 NZLR 686

Watson v Foxman (1995) 49 NSWLR 315

HILL J:

1As is the case with many claims of oppression, these proceedings arise out of the unfortunate breakdown of family relationships concerning a family enterprise.  The plaintiff, who is also known as Lena, is the niece of the third defendant, Nga and her husband, Van, the second defendant.  During the trial, the parties were referred to by their first names.  Without intending any disrespect to any of the parties, I have adopted this practice in these reasons.

2The proceedings concern a claim by Lena in relation to the affairs of the first defendant, which owns and manages the Manning IGA.  On the incorporation of the first defendant, Lena and Van were directors and equal shareholders of the company.  The records of the company maintained by the Australian Securities and Investments Commission (ASIC) disclose that Lena ceased to be a director on 12 July 2018 and that from 7 February 2020 the directors of the first defendant have been Van and Nga.  These records disclose that Nga was appointed as a director on 12 September 2010.[1] 

[1] Exhibit 2. 

3Lena says Nga was never appointed a director of the first defendant or issued with a share in the first defendant. As a consequence, Lena says Van and Nga did not have the ability to remove her from the management of the Manning IGA or as a director of the first defendant.  The acts of which she complains include the removal of her access to and ability to operate the company's bank accounts and what she contends amounts to her constructive dismissal as manager of the Manning IGA.  Lena seeks an order that Van and Nga purchase her share in the first defendant on the basis and at a valuation that the oppression had not occurred.

4The defendants deny each of the claims made by Lena.  While they dispute Lena is entitled to the relief sought, they have offered to purchase Lena's share in the first defendant at a price to be determined 'subject to any adjustment for monies found to be owed by Lena to the Company'.[2]  This offer has been made on the basis that Lena owns a one-third interest in the first defendant rather than the one-half interest she contends.[3]

[2] Defendants' response to plaintiff's concise statement filed 25 January 2019 [2].

[3] Exhibit 1, TB, Vol 1, Doc 81.  While this document is marked 'Without prejudice except as to costs', the letter was tendered by consent at trial with the 'without prejudice' portion of the letter redacted (ts 21).

5During the course of the trial, the defendants conceded there had never been a formal meeting of directors at which Nga had been appointed as a director, or issued a share, and did not rely on an undated minute of meeting of directors at which these matters were said to have been authorised.[4] Instead, in closing submissions, the defendants contended that an informal meeting took place between family members at Van and Nga's home at which Lena was present, where it was 'understood and agreed' that Nga should become a shareholder and director of the first defendant, which was formalised in September 2010.[5]  This was said to be 'perfectly reasonable' as Nga contributed to the purchase of the business and the liabilities of the first defendant were secured by her home, which she owned jointly with Van.[6]  In relation to the remaining allegations, the defendants contend that, by the end of 2015, the relationship between the parties had broken down and Lena voluntary resigned from the business.  Given this, they submit it was reasonable for them to remove her as a director in 2018.  The defendants maintained their denial that they acted in a manner which was oppressive to Lena's interests or that any relief should be granted. 

[4] Defendants' closing submissions [5]; Exhibit 1, TB Vol 1, Tab 11. 

[5] Defendants' closing submissions [3].

[6] Defendants' opening submissions [19].

6The defendants' contentions misunderstand the position at law.  The question for this court is not whether it was 'perfectly reasonable' for Nga to be appointed as a director or be issued with a share in the first defendant and for Lena to be removed as a director.  The question is whether the parties complied with the process required under the Corporations Act 2001 (Cth) (Act) for the appointment and removal of a director and the issue of a share, even taking into account the informality that often occurs in family-owned companies. In this case, as was ultimately conceded at trial, the first defendant did not comply with 'the formalities' of the Act,[7] nor did a formal meeting occur at which the directors of the first defendant resolved Nga should be appointed a director or issued a share.  Nor am I satisfied that any discussions took place which constituted an informal directors' meeting at which there was a meeting of minds between Van and Lena, as the directors of the first defendant, that these matters should occur.  No circular resolution was signed by the directors or the members of the first defendant which resolved or confirmed these matters.  As a result, it is my view that Nga was not validly appointed as a director or company secretary of the first defendant, nor was she issued a share in the company.  This conclusion invalidates much of the conduct that followed, including the removal of Lena's access to the first defendant's bank accounts, her exclusion from management and, ultimately, her removal as a director of the first defendant. 

[7] ts 445.

7In my view, Lena has established that the conduct of the first defendant's affairs by Van and Nga was and is oppressive to her interests as a shareholder in the first defendant.  I am satisfied that an order should be made for the purchase of her share in the first defendant on the basis that there are only two issued shares and that Lena has a 50% interest in the first defendant.

8In relation to Lena's remaining claims of oppression, while I do not consider these matters constitute oppressive or unfair conduct on the part of Van and Nga, I am satisfied that a number of adjustments are required to the financial statements of the first defendant. These adjustments require amounts totalling $1,491,816.19 to be recorded as loan accounts being:

(a)$951,202.42 to be recorded as a loan to Long Nga Fashion; and

(b)an amount of $540,613.77 (as set out in Attachment A to these reasons) to be recorded as a shareholder loan to Van. 

9In valuing Lena's share in the first defendant, no deduction ought be made for any risk associated with repayment of these loans.

10The basis for these conclusions is set out in my detailed reasons which follow.

Background Facts

11Ultimately, many of the background facts were not in dispute between the parties.  Rather, the question as to what caused the breakdown of the relationship between the parties and the legal consequences of this were in contest.  There was also a significant contest as to what personal or other expenses were paid for by the business and how these should be accounted for.

12The first defendant was incorporated on 6 January 2010.[8]  At the time the first defendant was incorporated, two shares were issued; one to Lena and the other to Van.[9]  Both Lena and Van were appointed directors and Lena the company secretary.

[8] Exhibit 1, TB Vol 6, Tab 141.

[9] Exhibit 1, TB Vol 6, Tab 141.

13On or about 14 April 2010, the first defendant offered to purchase the Manning IGA.[10]  The first defendant obtained finance from Bankwest for the purchase on 27 May 2010[11] and settlement occurred on 10 June 2010.[12]  From the date of its purchase, Lena was the manager of the Manning IGA and was responsible for its day to day activities.

[10] Exhibit 1, TB Vol 1, Tab 1.

[11] Exhibit 1, TB Vol 1, Tab 4.

[12] Exhibit 1, TB Vol 1, Tab 10.

14The records of the first defendant contain an undated minute of a meeting of directors.  The minute records that at this meeting, resolutions were passed to issue a share in the company to Nga and to appoint her as a director, alternate director and additional company secretary of the first defendant.[13]  These matters were said to have occurred 'from 12 September 2010'.  Forms were lodged with ASIC on 12 September 2010 by the company's accountant to reflect these matters as well as the issue of a share to Nga.[14]  Lena denies that any such meeting took place at which these matters were discussed and agreed.

[13] Exhibit 1, TB Vol 1, Tab 11.

[14] Exhibit 1, TB Vol 6, Tab 144.

15In May 2011, Lena and another of her uncles purchased the Festival Café & Bakery (Festival Café).[15]  In late 2011, Van and Nga, through their company Long Nga Fashion Pty Ltd (Long Nga Fashion), purchased a convenience store known as the Eastgate Convenience Store (Eastgate).  In respect of both ventures, goods were provided to these businesses by the Manning IGA, although there is a dispute as to whether all goods supplied to Eastgate were paid for.

[15] Exhibit 1, TB Vol 1, Tab 87.

16During 2015, the relationship between Lena and Van started to deteriorate. In about July 2015, Van and Nga's son Anthony began to work at the Manning IGA.  Lena says she was asked to train him as an assistant manager.

17In September and October 2015, Lena's access to operate the banking accounts of the business was removed.  Meetings to attempt to resolve the issues between them were not successful and in about December 2015, Lena ceased to work at the Manning IGA.

18From 1 February 2016 until June 2018, the parties' solicitors exchanged correspondence in relation to the issues between the parties regarding the Manning IGA, Lena's removal as a director of the first defendant as well as matters concerning the Festival Café and Lena's family trust.

19On 12 July 2018, a general meeting of the first defendant was held.  Only Van and Nga attended this meeting.  At this meeting, a resolution was passed which removed Lena as a director of the company.[16]  The meeting also resolved to confirm the appointment of Nga as a director of the first defendant effective 12 September 2010 and to ratify any of her actions since that date.[17]

[16] Exhibit 1, TB Vol 6, Tab 146.

[17] Exhibit 1, TB Vol 6, Tab 144.

20Shortly afterwards, on 31 August 2018, Lena commenced these proceedings.

21All parties accept there has been a complete breakdown of trust and confidence between Lena on the one hand and Van and Nga on the other.  Regrettably, the parties were unable to reach agreement as to the basis upon which Lena's interests in the first defendant should be purchased. 

Delay in delivery of judgment

22The hearing of this matter took place in February 2020.  It has not been possible to complete the reasons for my decision as quickly as I would have liked. 

23To ensure that my ability to properly assess the parties' cases and the evidence given at trial has not been impaired by the delay between the hearing and the publication of these reasons, I have taken the following steps.  First, I continued to have a clear impression of the evidence given by each of the parties (Lena, Nga and Van).  Each of them gave evidence in person, in Nga and Van's case with the assistance of an interpreter and were subjected to cross-examination.  During the course of the trial, I made contemporaneous notes of their evidence and my observations of each of them as witnesses.  My assessment of the witnesses has been assisted by my review of these notes, my review of the transcript, as well as the documents that were tendered in evidence.  I have also re-listened to the oral recordings of the witness' evidence.  Where the transcript is unclear or hard to follow, I have re-listened to these portions on more than one occasion.

24Second, at the conclusion of the evidence, I had the benefit of detailed oral and written closing submissions from counsel for both parties.  In these submissions, both counsel made submissions on the evidence given by the witnesses, including as to the findings each contends should be made.

25Third, my conclusions as to the credit and reliability of each of the witnesses are not based on their demeanour.  That is, I have not drawn any adverse conclusion on the credibility of any of the witnesses based on their demeanour.  The conclusions I have reached are based on the internal consistency of the evidence that each gave and its consistency with contemporaneous records and facts that were objectively established.

Procedural background

26These proceedings were commenced by originating process pursuant to the Act on 31 August 2018 and were supported by a lengthy affidavit of Lena.  Responsive affidavits were filed by Nga and Van (among others) on 18 October 2018.

27On 24 October 2018, the matter was admitted to the commercial and managed cases list as a Corporations List matter. 

28On 20 November 2018, orders were made for the parties to file concise statements summarising, among other things, the material facts said to constitute the acts of oppression, the relief sought from the court, and the primary legal grounds for the relief sought.  The purpose of the concise statement was to identify the issues between the parties which require resolution as well as the facts which are actually in dispute. These statements also ensure that each of the parties understood the position of the other.  It is, however, important to emphasise these documents are not pleadings and the matter did not proceed by way of pleadings.

29Lena filed her concise statement on 14 December 2018.  In her concise statement, she contended the following matters constituted the acts of oppression on which she relied:

(a)the purported issue of a share in the first defendant to Nga and the appointment of Nga as a director, alternate director and secretary of the first defendant without Lena's knowledge or consent;

(b)the removal of Lena as a director of the company, her exclusion from the management of the company and denial of access to company records;

(c)the conduct of Van and/or Nga which led to Lena resigning as an employee from Manning IGA including having been asked to train Van and Nga's son as manager of the business;

(d)the use of company funds by Van and Nga for purposes which were not for the benefit of the first defendant.  These included funding Eastgate, purchasing motor vehicles for private use, and using company funds to defend these proceedings; and

(e)the refusal to declare dividends to shareholders, even when the first defendant made a profit.

30The defendants filed a responsive statement on 25 January 2019.  In response, the defendants say that:

(a)Lena was always aware that Nga was going to be appointed as a director and be a shareholder in the first defendant;

(b)until December 2015, Lena was responsible for the day to day management of Manning IGA. In December 2015, Lena resigned from her employment.  She has ceased to be involved in the Manning IGA or the business of the first defendant since that time and was validly removed as a director in July 2018; and

(c)they have not misused any funds or property of the business.  Any funds used by them for Eastgate have been repaid.

31In July 2019, orders were made for the parties to file statements of facts and contentions as well as a list of the documents on which they relied.  Lena filed these documents on 31 July 2019 and amended documents on 9 August 2019.  The defendants filed responses to these documents on 5 September 2019. 

32Given the issues that arose in the proceedings, which were likely to depend on findings of credit in respect of the witnesses to be called by the parties, on 18 September 2019, orders were made for outlines of evidence to be filed on the basis that evidence-in-chief would be given orally.  On the same date, the matter was ordered to be listed for trial commencing 10 February 2020 for five days.

Issues for determination

33From the documents filed by the parties, the issues that I am required to determine are:[18]

(a)whether Lena has established her claims of oppression;

(b)what percentage of the company Lena owns;

(c)what, if any, adjustments should be made to the financial records of the company to account for payments to Lena and separately, Van and Nga.

[18] Plaintiff's opening submissions [29].

34In order to determine these issues, it is necessary to consider the following disputed matters of fact:

(a)Was Nga validly appointed as a director, alternate director and company secretary of the first defendant?

(b)Was a share in the company validly issued to Nga?

(c)Was Lena validly removed as a director and from the management of the company? 

(d)Have the funds of the company been used only for company business?  If not, what is the nature and extent of these amounts?

(e)What, if any, adjustments should made to the financial books and records of the first defendant?

35At the start of the trial, Lena also claimed she had been denied access to the first defendant's records.  In closing submissions, counsel for Lena confirmed this was no longer relied on.[19]  For that reason, I have not considered this matter further in these reasons.

[19] ts 469.

Approach to the evidence

Onus and general comments

36The plaintiff accepts she bears the onus of proving the claims she brings.

37In this case, the evidence at trial concerned events that occurred over the previous 10 years.  Many of the matters in dispute between the parties concerned oral discussions between them which, understandably given their relationship, were not documented or evidenced in writing. 

38In considering the evidence in this case, I have applied the following principles.

39First, the court must recognise that human memory of what was said in a conversation is fallible for a variety of reasons.  Ordinarily, this will increase over time, particularly where disputes or litigation intervene.  This is because the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said.  All too often, what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed.[20]

[20] Watson v Foxman (1995) 49 NSWLR 315, 318 - 319 (McLelland CJ in Eq).

40Second, the credibility of a witness and their veracity may be tested by reference to the objective facts which can be proved independently, particularly by reference to documents.  It is preferable to rely on contemporaneous documents in cases which involve events which occurred long before the litigation.  Often the only safe course in such cases is to place primary emphasis on the objective factual surrounding material, the inherent commercial probabilities, and the contemporaneous documents. Documents will often provide more valuable information than the attempted recollection of the facts by witnesses with an interest in the outcome of the litigation.  This is particularly the case when the documents are accepted as genuine and were prepared by a person who had no reason to misstate the facts in these documents.[21]

[21] In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 [7] (Black J); Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599 [15]; Hughes v St Barbara Mines Ltd(No 4) [2010] WASC 160 [157] (Martin J).

41Third, contemporaneous statements and documents are likely to be a more accurate reflection of events than later statements.  This is because false memories can intrude, especially when the person recalling events has tried to assemble recollections logically.  In doing so, the person can attempt to have some rational explanation in the person's mind as to what has happened.  It is important to keep in mind that memories are both fluid and malleable and are constantly rewritten whenever they are retrieved.[22] 

[22] Nominal Defendant v Cordin [2017] NSWCA 6 [165], [171] (Davies J, with whom Emmett AJA agreed).

42Fourth, the court must be alive to the reality that words are capable of bearing different and potentially opposed meanings depending on the nuance and emphasis that is given to particular words. A person's appreciation of the significance of these matters must necessarily be considerably diminished if there is a significant delay between the date when the conversation took place and the hearing at which the evidence of that conversation is given.[23]

[23] Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Unreported, FCA, 29 June 1995), 122 - 123 (Tamberlin J).

The witnesses

43At trial, each of the parties gave evidence and was cross‑examined. Van gave evidence with the assistance of an interpreter and Nga's evidence was given wholly through an interpreter. 

44For each of the parties, English was not their first language.  Their first language is Vietnamese.  One of the difficulties that arose in the witnesses recounting events was that a number of the conversations which occurred or messages that were exchanged were in Vietnamese.  In addition to the difficulties that arise in attempting to recall conversations that occurred almost 10 years ago, there were further difficulties in the witnesses giving evidence in English about a conversation or message which occurred in Vietnamese.  In some cases, particularly in relation to all parties' evidence on what was described as a 'savings game', there is no readily available English equivalent.

45It was clear from the evidence given by each of Lena, Nga and Van that the personal relationship between them has completely broken down.  This fact, together with their differing views as to why this had occurred, impacted the evidence that each of them gave. 

46In relation to the evidence that was given by the parties, I have considered their evidence carefully and in accordance with the principles summarised above.  I have set out below my specific findings on their credibility and the evidence they gave in relation to each of the critical events.

47The plaintiff also sought to adduce evidence from an accountant, Jennifer Low.  Ultimately, because of the defendants' objections to this evidence, which I upheld, no substantive evidence was led from Ms Low. 

48The defendants called one additional witness: Donald Monaghan, who is Lena's uncle and used to be a 50% owner of the Festival Café with her.  He gave evidence in relation to a very minor issue.  I accept his evidence in its entirety.

49The parties also tendered, by consent, a trial bundle comprising seven lever arch folders as well as a number of other documents.  There was an issue in relation to what documents ultimately comprised the trial bundle which I address below.

50In assessing the evidence, I have considered the contemporaneous documentary evidence, as well as the oral evidence.  Generally, I have assessed the contemporaneous documentary evidence as being the most reliable evidence.  However, in relation to the document which purports to be a minute of meeting of directors, as set out at [159] - [178], I do not accept that any meeting of directors occurred at which these resolutions were passed.

Lena

51Lena is Nga's niece (Lena's father is one of Nga's brothers).  Lena moved to Australia from Vietnam in July 1999 when she was 24 years old.[24]  At that time, Van and Nga were already living in Australia, together with another one of Nga's sisters, Ga, who is married to Mr Monaghan.[25]  Initially, on her arrival in Australia, Lena lived with Ga and Mr Monaghan.  At that time, Van and Nga treated Lena like a daughter.[26] 

[24] ts 60.

[25] ts 61.

[26] ts 62.

52On her arrival in Australia, Lena learnt English at a college before commencing university studies at Edith Cowan University.[27]  Ultimately, Lena did not complete her studies.[28]  Lena bought her first business in 2006, a lunch bar in Welshpool, which was subsequently sold.  She then worked in a beauty salon until the purchase of the Manning IGA.[29] 

[27] ts 60

[28] ts 61.

[29] ts 62.

53Lena's evidence was that in Vietnamese culture, she was expected to listen to and follow what Van and Nga said if they asked her to do something.  She said she had never refused to follow a direction given to her by Van.[30]  Van agreed he expected Lena to listen to him if he gave her advice or an instruction.[31]  From my observation of Lena in the witness box, Lena was confident and, to adopt the words of the defendants' senior counsel, is no 'shrinking violet'.[32]  That said, I accept that Lena was expected to show respect to her aunt and uncle, Nga and Van.

[30] ts 62.

[31] ts 260 - 261.

[32] ts 452.

54Lena did not use the assistance of an interpreter in giving her evidence.  It was clear from her evidence that English was not her first language.  Lena's comprehension of English was good, although at times the transcription service failed to accurately record her answers.  On a couple of occasions, Lena struggled to find the appropriate words in English to answer the questions she was asked.  At times, this made her evidence somewhat difficult to follow.  However, it was clear that Lena understood the questions she was being asked and carefully answered each of the questions. 

55In cross-examination, Lena conceded certain matters, such as the query by the mortgage broker as to why Nga was not a shareholder or director of the first defendant,[33] and was consistent in her denial of other matters, such as she had not attended a meeting to add Nga as a director, alternate director and company secretary of the first defendant or to issue her with a share. As I set out below at [159] - [178], this suggestion, which was put to Lena in cross-examination,[34] was subsequently departed from and the defendants now accept no such meeting occurred.

[33] ts 137.

[34] ts 137.

56While there were aspects of Lena's evidence which I do not accept, I find that generally she was an honest witness.  In most cases, Lena's evidence was more consistent with the contemporaneous documents.  However, this does not mean I am required to accept all of her evidence, as honest witnesses can still be mistaken. 

57In relation to a number of the payments Lena says she made to Van and/or Nga, it is clear that she did not make contemporaneous notes of these payments.  There are discrepancies between the records she made as well as in the evidence Lena gave at trial.  Lena accepted that a number of these documents had been reconstructed by her from her memory of events.  These reconstructions occurred at a time the relationship between the parties had started to breakdown. As a consequence, I consider these documents, together with Lena's evidence of these matters, are attendant with the risks I have referred to at [39] - [42].  In considering Lena's evidence, I have also considered the reliability of her evidence.  However, where her evidence conflicts with Van, I prefer the evidence of Lena.

Van

58Van is married to Nga.  He was born in Vietnam and escaped Vietnam to come to Australia by boat.[35]  Van described his occupation as making clothing and agreed he had been in business since about 1990.[36]  Van agreed that when Lena first came to Australia, he and Nga treated her as if she was their daughter.  During his evidence, Van's evidence was that he loved Lena 'like my daughter'[37] and that she was a member of his family.[38]  This continued until their relationship deteriorated in 2014 or 2015.[39]

[35] ts 351.

[36] ts 266.

[37] ts 233.

[38] ts 228.

[39] ts 260.

59Van gave his evidence partly in English (or 'broken English' to use Van's words)[40] and partly in Vietnamese which was then interpreted into English.  At the commencement of his evidence, it was accepted this was an appropriate manner in which he should give his evidence.[41]  In practice, however, the way in which he gave his evidence differed between his evidence-in-chief and cross-examination. In his evidence‑in‑chief, after the question was translated for Van, his evidence was given primarily in English; he only occasionally sought the assistance of the interpreter in answering the question.  In contrast, almost the entirety of the answers he gave in cross-examination were in Vietnamese which were then interpreted into English.  It was not clear why this was the case.  While I accept that some of the questions from counsel for the plaintiff in cross-examination were more complex, difficult, or required more complex answers, this was not always the case.  In addition, Van struggled to answer a number of the questions put to him in cross-examination, when he did not have the same difficulty in his evidence‑in‑chief. 

[40] ts 221.

[41] ts 221.

60By way of example, at the commencement of his cross-examination, counsel for the plaintiff asked him about his initial discussions with Lena regarding the purchase of the Manning IGA.  Van gave a number of different answers to this question including that Lena's discussions were with Nga and not about purchasing a business;[42] he then agreed he had discussions with Lena about purchasing a business;[43] then the discussions took place between all family members[44] before reverting to his evidence that the discussions were between Lena and Nga;[45] then 'It's not that because it has many meanings';[46] then again that Lena spoke to Nga;[47] before ultimately agreeing he spoke to Lena.[48]

[42] ts 262.

[43] ts 263.

[44] ts 264.

[45] ts 264.

[46] ts 265.

[47] ts 265.

[48] ts 265.

61Van was also asked in cross-examination whether they discussed Lena becoming manager of the business so that she had a regular income.  Van also gave a number of different answers to this question.  He initially said he did nothing about her becoming the manager;[49] then that she would be running the shop and was the 'kind of owner' of the business;[50] then it was the family working together 'so your question is very hard to reply';[51] before agreeing he discussed with Lena buying a business together for her to manage so she could have a regular income.[52] These answers in cross-examination were in stark contrast to his evidence-in-chief where, in answer to a question as to what arrangement was made concerning Lena's role in the business, Van answered 'Lena [was] the manager that control[led] the business'.[53]

[49] ts 266.

[50] ts 266.

[51] ts 267.

[52] ts 267.

[53] ts 228.

62In respect of both of these matters, these issues were not in dispute between the parties.  It reflects poorly on the credibility of Van's evidence that he did not agree with counsel for the plaintiff or answer these questions in a consistent and straightforward manner.

63Another example of his apparent difficulty with answering questions in cross-examination arose in response to a question as to whether Lena was present at the initial meeting or meetings with the accountant.  Initially, Van said that he, Lena, Nga and 'the family' met with the accountant.  After his affidavit of 18 October 2018 was put to him,[54] Van said he now remembered and that he was confused and did not understand the original question.[55]  Van then agreed that it was only him who met with the accountant.[56]

[54] Exhibit 13.

[55] ts 269 - 270.

[56] ts 270.

64I accept that on a number of occasions the questions asked by counsel for the plaintiff in cross-examination were lengthy and relatively complex.  It was also the case that Van, the interpreter and counsel for the plaintiff regularly spoke over each other, despite repeated requests from the court for this not to occur.  However, in my view, neither of these matters is a complete answer to or explanation of the inconsistencies in Van's evidence or the manner in which he gave his evidence. 

65Counsel for Lena submitted that Van was not a credible witness and that where his evidence conflicts with Lena, I should prefer the evidence of Lena.

66Most of the defendants' denial of Lena's claims of oppression arose from the insistence that was maintained, both prior to and during much of the trial, that Nga was validly appointed as a director, alternate director and company secretary and issued a share at a meeting on or about 12 September 2010 and their conduct in removing Lena as a signatory of the bank accounts of the Manning IGA and as a director of the company was justified.  In cross-examination, Van accepted he provided instructions to Lavan Legal (Lavan), the solicitors who initially acted for the defendants.[57]  He agreed he 'probably' told them that it was agreed when the company was set up that the three of them (Lena, Van and Nga) would be directors.[58]  During cross-examination, counsel for the plaintiff put to Van the contents of his affidavit sworn in opposition to the plaintiff's application in which he stated 'On about 12 September there was a meeting at the registered office'.[59]  At this stage and for the first time, Van agreed there had been no actual meeting of directors.[60] 

[57] ts 281.

[58] ts 282.

[59] ts 285.

[60] ts 291.

67Until this point, all of the correspondence that passed between the parties prior to the commencement of proceedings and the court documents that were filed in these proceedings asserted this meeting had occurred.  At all times, Lena contended it did not.  The fact that the concession a formal meeting did not take place was only made in cross‑examination reflects extremely poorly on Van's credit.

68In relation to the company documents, Van's evidence initially was that he 'never touched any document with respect to [the] accountant at all'.[61]  The following day, Van qualified this evidence and agreed there were some documents he signed but did not know the content of.  His evidence was that on these occasions, he was asked to sign the documents because Lena was not available.  After being shown documents lodged by the accountant with ASIC regarding the appointment of Nga as a director, alternate director and company secretary which were signed by Van,[62] he agreed the accountant asked him to go to their office to sign this document.[63]  His explanation as to why he changed his evidence was that he did not understand the question in English.[64]

[61] ts 304.

[62] Exhibit 1, TB Vol 6, Tab 145.

[63] ts 314.

[64] ts 317.

69There were a number of other aspects of Van's evidence that were unsatisfactory in that he gave conflicting answers to the same question and when confronted with this, tried to explain the inconsistencies away or said he was confused with the question, or alternatively that he did not understand what he was being asked.  This only occurred in cross‑examination; he appeared to understand the questions asked of him in evidence‑in‑chief by his senior counsel.

70It was apparent from Van's answers that he was distressed and angry about these proceedings and that this impacted the evidence he gave.  It was clear from his evidence and from the events that occurred that Van was head of the family and was used to people doing what he wanted, when he wanted.  For example, even though he had no role in the management of the Manning IGA, when he decided to remove Lena's access to the bank accounts and change the EFTPOS facilities, these events occurred.  His conduct in removing Lena as a trustee of her own family trust was another example where he sought to impose his will on Lena.  His explanation as to why this occurred was particularly unsatisfactory and not believable. 

71For these reasons, I consider that Van was an unsatisfactory witness.  I do not place any weight on his oral evidence unless it is independently corroborated.  Where his evidence differs to Lena's, I prefer the evidence of Lena.

Nga

72Nga is married to Van, the second defendant.  Her third brother is Lena's father.  Nga was born in Vietnam and does not speak English.  Nga gave her evidence entirely through an interpreter.  Nga was clearly very nervous in giving her evidence and spoke very quietly.  At times, she was overcome by emotion and was clearly very distressed about the dispute.  On occasions, the interpreter struggled to interpret what Nga was saying.  The interpreter explained that Nga spoke 'broken Vietnamese' and on occasions what she said did not make sense.[65]

[65] ts 420.

73Nga did not have a clear recollection of many of the events that are central to the dispute between the parties.  It was clear that she had little involvement in the running of the Manning IGA and the events that occurred.

74A number of aspects of her evidence were unsatisfactory.  The primary example of this is in the relation to her appointment as a director and shareholder of the company.  As set out above, at all times prior to the cross-examination of Van, the defendants maintained there was a meeting on about 12 September 2010 at which it was resolved that Nga be appointed as a director, alternate director and company secretary and issued a share in the company.  Nga swore an affidavit which attested to this in opposition to Lena's claim.[66]  In contrast, her evidence at trial, both in examination in chief and cross-examination, was consistent, namely that she could not remember a meeting at about this time,[67] she had never attended a meeting at which resolutions were passed, and that there were family discussions at her home.[68]  Notwithstanding this evidence, Nga maintained that all she knew was 'that there was three persons' involved in the business.[69]  No satisfactory explanation was provided for the discrepancies between her evidence at trial and her affidavit.  She explained that she was 'very busy at that time', and that she relied on her solicitors.[70]

[66] Exhibit 11.

[67] ts 407.

[68] ts 408.

[69] ts 389.

[70] ts 411.

75Another example was when she was asked whether the purchase of the Manning IGA occurred for the benefit of all of the family.  On a number of occasions in cross-examination, Nga was asked whether her family benefitted from the purchase of the business.  She gave several answers to this.  First, she did not know what benefit it gave her family but that it gave Lena a job.  Second, again that it gave Lena a job and allowed Lena to pay off her mortgage and buy another home and allowed them to purchase another home.  Third, that she loved Lena very much and family to her meant everyone and not just her children.  Fourth, it benefitted the family because her son could work at the Manning IGA while he was studying at university.  She also answered that she did not understand what she was she was being asked.[71]

[71] ts 412.

76On the evidence before me, it is clear the company paid Van and Nga's mortgage as well as the repayments on the Mercedes‑Benz that Nga drives.  On any view, these are significant benefits.  Given these matters were raised in the concise statement and were in dispute between the parties, it reflects poorly on Nga's credit that she did not acknowledge she received these benefits from the first defendant. 

77In addition, Nga's reluctance in cross-examination to make any concessions, even on relatively minor or immaterial points, did not reflect well on her.  In my view, Nga's evidence was clouded by her distress as to what has occurred and her loyalty to her husband.  For this reason, I consider the contemporaneous documents are the most reliable evidence.  Where her evidence differs to that of Lena, I prefer the evidence of Lena.

Jones v Dunkel inference

78The defendants did not call their former accountant, Ms Luu, or the finance broker from BankWest to give evidence at trial.  Counsel for the plaintiff submitted that this gave rise to the question as to whether I should draw a Jones v Dunkel inference from this decision.[72]  

[72] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, 308, 312, 320 - 321.

79Before considering whether and what inference should be drawn from this decision, it is important to set out the limits of the inference that can be drawn. These were usefully summarised by Vaughan J in AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2).[73]  As his Honour noted,[74] the rule in Jones v Dunkel:

(a)does not mean that an adverse inference should be drawn that the evidence that has not been called would be positively damaging to that party's case.  As was stated by Menzies J in Jones v Dunkel, the absence of a witness cannot be used to make up any deficiency in the evidence; and 

(b)does not prevent a favourable inference being drawn in favour of the defendants if other evidence justifies this inference. 

[73] AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [2019] WASC 306.

[74] AVWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [145].

80If matters of fact which are pleaded in the defence are otherwise established by the evidence, the failure to call Ms Luu or the finance broker from BankWest does not prevent a finding of fact being made. 

81There are two consequences which may flow from the unexplained failure to call a witness.  First, it may enable the court to draw an inference that the evidence of the witness would not assist the party's case.  Second, the court may draw with greater confidence an inference which is unfavourable to that party.  However, that inference must be available on the evidence.  The relevant witness must be one who may be able to 'cast light on the fact relied on as the ground for the inference'.

82Ultimately, for the reasons set out below, it has not been necessary to draw any inference based on this rule.  This is because there was no dispute as to what the finance broker said (or did not say) at the relevant meeting and the defendants withdrew any reliance on the minutes of directors' meeting.

Rule in Browne v Dunn

83The plaintiff also sought to rely on the rule in Browne v Dunn.[75]Counsel for the plaintiff contended the defendants failed to challenge Lena's evidence in relation to a number of factual matters which I am required to determine.

[75] Browne v Dunn (1893) 6 R 67 (HL).

84The rule in Browne v Dunn is not simply a rule of professional practice; it is necessary to ensure a trial is conducted fairly and to enable the court to determine where the truth lies.  It gives a witness the opportunity to deal with evidence to be given by other witnesses or inferences that are sought to be drawn from it.  It also enables a party the opportunity to call evidence to corroborate their explanation or to contradict the evidence or inference that is sought to be drawn.[76] 

[76] The Bell Group Ltd (in liq) v Westpac Banking Corporation Ltd (No 9) [2008] WASC 239; (2008) 70 ACSR 1[1024] - [1026] citing with approval Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1, 16. See also Garrett v Nicholson [1999] WASCA 32; (1999) 21 WAR 226 [37]; Laurendi v Boral Contracting Pty Ltd [2002] WASCA 297 [28] - [29]; Paterson v The Queen [2004] WASCA 63; (2004) 28 WAR 233 [197].

85Relevantly, unless notice has been clearly given, it is necessary to put to an opponent's witness in cross‑examination the case on which it is proposed to rely in contradicting the witness' evidence.  This is particularly the case where the challenge to the evidence relies on inferences to be drawn from other evidence in the proceedings.[77]

[77] The Bell Group Ltd (in liq) v Westpac Banking Corporation Ltd (No 9) [1028].

86However, as was noted by Vaughan J in AvWest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2), notice of an opponent's case can be given in a number of ways, including from the opening or from the general manner in which the case was conducted.[78]

[78] Avwest Aircraft Pty Ltd as trustee for AVWest Aircraft Trust v Clayton Utz (a firm) (No 2) [152].

87I have considered the application of the rule in Browne v Dunn when addressing the specific matters on which is sought to be relied by the plaintiff.   

Trial bundle

88At the commencement of the trial, I ordered that the trial bundle be admitted in evidence as Exhibit 1, subject to the following.  Any document that was not referred to by counsel or a witness or in written opening or closing submissions would, at the conclusion of the trial, be removed from the trial bundle.  If there was any dispute in relation to whether a document should remain in the trial bundle, this could be referred to me and I would determine the matter on the papers.[79]

[79] ts 17.

89Prior to the commencement of the trial, the plaintiff's solicitors gave notice that Lena objected to the tender of a number of documents in the trial bundle.  These included objections to documents 173, 174, 174(a), 174(b), and 174(c).[80]

[80] Email from Greenstone Legal to Associate to Justice Hill copied to D'Angelo Law dated 6 February 2020. 

90At the conclusion of the trial, I ordered the parties to confer as to which documents should be removed from Exhibit 1.  After conferral between the solicitors for the parties, nine documents remained in dispute, being documents 25, 102, 103, 104, 173, 174, 174(a), 174(b) and 174(c).  Both the plaintiff and defendants filed submissions in support of the position they contended.[81] 

[81] Plaintiff's submissions filed 3 March 2020; Defendants' submissions filed 4 March 2020.

91It was not in dispute that these documents were not specifically referred to by any of the witnesses during the hearing.[82]  The defendants submitted these documents should remain in the trial bundle because they 'contain material that is relevant to issues on which evidence was given during the course of the hearing'.[83]  On this basis, the defendants submitted the fact that 'a document was not put into evidence in the usual way does not enable the Court to ignore that document placed before it through the Trial Bundle'.[84]

[82] Plaintiff's submissions filed 3 March 2020 [6]; Defendants' submissions filed 4 March 2020 [1].

[83] Plaintiff's submissions filed 3 March 2020 [8].

[84] Defendants' submissions filed 4 March 2020 [5].

92I do not accept this submission.  It was made clear at the commencement of the trial that the contents of the trial bundle were only provisionally accepted as an exhibit.  In order for a document in the trial bundle to become part of the court's record of the trial, a second step was required namely that it be referred to by counsel or a witness or in written opening or closing submissions.  If this did not occur, the document was to be removed from the trial bundle and would not form part of the record of the trial.  Further, where the other party objected to the tender of the document, it was necessary for the document to be formally proved.

93As counsel for the plaintiff set out in their written submissions, the plaintiff conducted the trial on this express basis.[85]  In my view, it is too late in submissions filed after the defendants have closed their case and both parties have given closing submissions (both written and oral), for the defendants to seek to alter the basis on which documents were adduced in evidence.  This is particularly the case in respect of any documents which were objected to by the plaintiff. 

[85] Plaintiff's submissions filed 3 March 2020 [10].

94For these reasons, unless any of these documents were referred to during the course of the hearing or in written submissions, consistent with the ruling I made at the commencement of the trial, these documents will be removed from the trial bundle.  Where objection was taken to a document, it was necessary for the document to be formally proved.

95This conclusion does not, however, mean that all of the documents which are in dispute should be removed from the trial bundle.  Documents 102,[86] 103,[87] 104,[88] 173,[89] and 174[90] were referred to during the course of the trial.  Consistent with the ruling I made at the commencement of the trial, these documents will not be removed and will form part of the trial bundle and the record of the trial. 

[86] Defendants' opening submissions, fn 32; Defendants' closing submissions fn 29.

[87] Plaintiff's closing submissions [133]; Defendants' opening submissions, fn 32; Defendants' closing submissions fn 29.

[88] Defendants' opening submissions, fn 32; Defendants' closing submissions fn 29.

[89] ts 393.

[90] ts 168 - 169.

96However, none of documents 174(a), 174(b) and 174(c) were put to any of the witnesses or formally proved.  Given the objection that was taken to them by the plaintiff, it is not sufficient for the defendants to refer to them in a footnote of their closing submissions.[91]  It was necessary for these documents to be formally proved or tendered.  For these reasons, these documents will be removed from the trial bundle and not form part of Exhibit 1 or the record of this trial.

[91] Defendants' closing submissions, fn 19.

97Finally, in relation to document 25, the defendants say this document is relevant to Lena's knowledge of Nga's position in the company.  This document was not put to Lena during cross‑examination.  She was not asked to comment on it or explain the circumstances in which it came into existence.  In circumstances where the document has not been put to any witness nor referred to by either party in their opening or closing submissions, consistent with the ruling I made at the commencement of the trial, this document will not form part of the trial bundle.  On this basis, it will be removed from the trial bundle and not form part of Exhibit 1 or the record of this trial.

Legal principles

Oppression

98The plaintiff's claim is based on a claim for oppression, pursuant to s 232 and 233 of the Act.

99Section 232 of the Act provides:

232 Grounds for Court order

The Court may make an order under section 233 if:

(a) the conduct of a company's affairs; or

(b) an actual or proposed act or omission by or on behalf of a company; or

(c) a resolution, or a proposed resolution, of members or a class of members of a company;

is either:

(d) contrary to the interests of the members as a whole; or

(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.

For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company.

Note: For affairs, see section 53.

100Where one or both of the conditions in s 232(d) or s 232(e) of the Act are satisfied, the court may make an order under s 233 of the Act.

101In this case, the plaintiff contends the conduct she complains of falls within s 232(e) of the Act.[92]  That is, Lena contends that the conduct of Van and/or Nga has been oppressive to, unfairly prejudicial to, or unfairly discriminatory against her in her capacity as a member and in other capacities. 

[92] ts 25.

102The principles that apply to determine whether conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory against, are well known and are not in dispute.  They can be summarised as follows. 

103On an application under s 232 of the Act for orders pursuant to s 233 of the Act, the court may make orders where the conduct, act or proposed act or resolution is either contrary to the interests of the members as a whole or 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against' a member or members, whether in that capacity or in any other capacity.[93]  The weight of authority is that this is a composite phrase and that these individual elements are simply different aspects of what is the essential criterion of the section, namely commercial unfairness.[94] 

[93] Corporations Act2001 (Cth) s 232.

[94] Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 704 (Young J); Joint v Stephens [2008] VSCA 210 [134]; Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73 [4]; Russell v Lee Holdings Pty Ltd [No 3] [2020] WASC 346 [137].

104The question as to whether the conduct in question can be characterised as 'oppressive to, unfairly prejudicial to, or unfairly discriminatory' turns on an objective assessment of the relevant facts and circumstances of the particular case.  As Sifris J stated in Exton v Extons Pty Ltd:[95]

From a review of the more relevant authorities, the critical issue is commercial unfairness, judged objectively. It usually results in some harm or prejudice by such conduct that is not reasonably or commercially justifiable.  Of course all of the facts and circumstances and context needs to be examined in order to determine whether such conduct alleged is oppressive.  Further, upon such examination conduct that may appear unfair may be fully justified.  It goes without saying that the authorities referred to below deal with a range of different factual considerations and relationships.  Each case must depend on its own facts and circumstances.

[95] Exton v Extons Pty Ltd [2017] VSC 14; (2017) 53 VR 520 [48].

105In determining whether there has been commercial unfairness, this has to be considered in the context of the particular relationship between the parties which is in issue.  This will often involve a balancing exercise between competing considerations.[96]   

[96] Joint v Stephens [136]; Hillam v Ample Source International Ltd (No 2) [4].

106In Re Ledir Enterprises,[97] Black J cited with approval the observations of Richardson J in Thomas v HW Thomas Ltd:[98]

Fairness cannot be assessed in a vacuum or simply from one member's point of view. It will often depend on weighing conflicting interests of different groups in the company. It is a matter of balancing all the interests involved in terms of the policies underlying the companies legislation in general and s 209 in particular; thus to have regard to the principles governing the duties of a director in the conduct of the affairs of a company and the rights and duties of a majority shareholder in relation to the minority; but to recognise that s 209 is a remedial provision designed to allow the Court to intervene where there is a visible departure from the standards of fair dealing; and in the light of the history and structure of the particular company and the reasonable expectations of the members to determine whether the detriment occasioned to the complaining member's interests arising from the acts or conduct of the company in that way is justifiable.

[97] Re Ledir Enterprises [2013] NSWSC 1332 [179].

[98] Thomas v HW Thomas Ltd [1984] 1 NZLR 686, 694.

107In considering whether the conduct complained of by the plaintiff is oppressive, it is relevant to consider the course of conduct of the parties, including the conduct of the plaintiff.  In Re London School of Electronics Ltd, Nourse J explained why the plaintiff's conduct was relevant in the following terms:[99]

The conduct of the petitioner may be material in a number of ways, of which the two most obvious are these.  First, it may render the conduct of the other side, even if it is prejudicial, not unfair. Secondly, even if the conduct on the other side is both prejudicial and unfair, the petitioner's conduct may nevertheless affect the relief which the court thinks fit to grant under subsection (3).  In my view there is no independent or overriding requirement that it should be just and equitable to grant relief or that the petitioner should come to the court with clean hands. (footnotes omitted) (citations omitted)

[99] Re London School of Electronics Ltd[1986] Ch 211, 222; [1985] 3 WLR 474, 482, cited with approval in Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369 [102].

108In Morgan v 45 Flers Avenue Pty Ltd, Young J noted that whether oppression was established was to be determined by reference to the nature of the business carried on by the company and the nature of the relations between its participants and:[100]

whether objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair.

[100] Morgan v 45 Flers Avenue Pty Ltd, 704.

109Because the test is an objective test, a plaintiff does not have to prove the defendant knew or believed their conduct was unfair.  The question of commercial unfairness is to be judged having regard to the facts known to the parties at the time of the conduct complained of, and not by reference to what subsequently transpires or facts which subsequently become known.[101]  For this reason, if a respondent acts on the basis of an honest but mistaken belief, the conduct may not be unfair.[102]

[101] Chase Corporation (Australia) Pty Ltd v North Sydney Brick and Tile Co Ltd (1994) 35 NSWLR 1, 26; Joint v Stephens [138].

[102] Joint v Stephens [138].

110In the context of a closely held company which was established on the basis that the shareholders would be engaged in the day to day conduct of the business as well as its management, removal from a salaried position within a company may be unfair, even it if a valid exercise of the powers of the directors.  This is particularly the case if shareholders obtain their benefit from the company primarily from their salary rather than dividends.[103] 

[103] ReOptimisation Australia Pty Ltd [2018] NSWSC 31; (2018) 362 ALR 374 [67] citing with approval Ebrahimi v Westbourne Galleries Ltd [1973] AC 360, 378 - 379.

111In Sanford v Sanford Courier Services Pty Ltd,[104] the court held that high levels of salaries and other payments made by a couple who ran the business to themselves were oppressive because the plaintiff in that case, who was an equal shareholder but no longer a director, did not receive a salary and, as such, did not share fairly in the profits of the company.

[104] Sanford v Sanford Courier Services Pty Ltd (1986) 10 ACLR 549; (1987) 5 ACLC 394.

112As was noted by Brereton J in Re Optimisation Australia Pty Ltd:[105]

[I]n a case of a closely held company, formed or continued on the basis of a personal relationship involving mutual confidence, in which shareholders have entered into association upon the understanding that each of them who has ventured capital will also participate in the management of the company, and there are legal or practical restrictions on the transfer of shares, so that a member cannot take out his or her stake and go elsewhere, it is usual, rather than exceptional, for equitable considerations to constrain the legal powers of the majority, such that it would usually be considered unjust, inequitable or unfair for a majority to use their voting power to exclude a member from participation in management, without giving him the opportunity to remove his capital upon reasonable terms. (emphasis in the original)

[105] Re Optimisation Australia Pty Ltd [298].

113If Lena succeeds in her allegation that the conduct of the defendants is oppressive, she seeks an order for the buy-out of her share at a value to be determined.   In undertaking the valuation, what needs to be assessed is the value of the share had it not been for the oppressive conduct.[106]

[106] Rankine v Rankine (1995) 18 ACSR 725, 729 - 730; Patterson v Humfrey [2014] WASC 446 [209].

114The Court of Appeal recently summarised the principles that govern buy-out orders under s 233 of the Act in Porter Street Investments Pty Ltd v Nellbar Pty Ltd.[107]  In that case, the court observed that:[108]

Section 233(1) is in wide terms. The court 'can make any order under this section that it considers appropriate in relation to the company'. The remedial power under s 233(1) is confined only to the extent that the subject-matter, scope and purpose of the provision may enable the court to determine that a particular exercise of the power would be definitely extraneous to any object the legislature could have had in mind. In determining what is definitely extraneous regard must be had to the non-exhaustive list of permissible kinds of orders in ss 233(1)(a) ‑ (j).

[107] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33 [92] - [93].

[108] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [93].

115The court went on to state that:[109]

Section 233(1) of the Corporations Act does not prescribe the basis on which the price for shares is to be fixed if a compulsory purchase order or a buy-back order is made.  As Gummow, Hayne, Heydon and Kiefel JJ stated in Campbell v Backoffice Investments Pty Ltd:

Although s 233(1)(d) gives the court power to make an order for the purchase of shares by a member, the Corporations Act is silent about the terms on which such a sale may be ordered.  In particular, the Corporations Act does not identify the basis upon which the price for the shares is to be fixed if an order for compulsory purchase is made. Under earlier forms of the oppression provisions of companies legislation, orders were made for the compulsory sale of shares by one member to another at prices to be fixed according to various criteria. In some cases the price has been fixed at the value the shares would have had at the commencement of the proceedings but for the effect of the oppressive conduct. In other cases a date other than the date of commencement of the proceedings has been fixed. Again, there is no reason to give the present oppression provisions some narrower construction. In particular, the power given to the court by s 233(1)(d) should not be hedged about by implied limitations. (citations omitted)

[109] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [96].

116The court then summarised the following principles which arise from the authorities:[110]

[110] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [97] - [98].

1.The court has a wide discretion once s 233 has been enlivened by a finding of oppression under s 232 - a discretion that extends both as to the appropriate remedy and, if the court orders compulsory purchase of shares, as to the mode of valuation of the shares.

2.The purpose of a buy-out order is not to compensate for loss; it is to separate the oppressor and the oppressed.

3.The court should fix a price for the shares that represents a fair value in all the circumstances of the case.

4.In looking to the 'fair value' one must look at all the circumstances of the case and seek to put the oppressed in the same position as nearly as can be if there had been no oppression, erring, if there is to be any erring, on the side of the oppressed.

5.The date at which the shares are to be valued varies having regard to all relevant circumstances.

6.There is no hard rule as to the selection of the valuation date.  The question is what is the fair time for valuation of the shares having regard to the overriding requirement of justice and fairness to both parties in all the circumstances of the case.  As was said by Chernov JA (Neave JA agreeing) in Foody v Horewood:

[T]he court's discretion in determining the date of valuation in respect of shares to be purchased from an oppressed minority shareholder is wide and absolute, subject to the requirement that it be exercised judicially, and is to be informed by the justice and fairness of the particular situation.  In [the judgment under appeal] his Honour recognised, correctly, I think, that there is no firm rule by which the relevant date of valuation is to be selected …

In short, the overriding requirement when valuing the shares of a company for the purpose of a compulsory purchase order or a buy-back order is that the valuation, and the date at which the valuation is carried out, be fair.  What fairness requires depends on the facts of the particular case. (citations omitted)

Corporate governance of the first defendant

117The first defendant does not have a constitution.[111]  As a consequence, by reason of s 134 of the Act, the Replaceable Rules prescribed by the Act apply to the first defendant and the internal management of the first defendant is solely governed by these provisions. 

[111] ts 58.  See also Exhibit 2. 

Appointment and removal of directors

118Under the Act, a director can be appointed in one of two ways: first, by a resolution passed at a general meeting of the company (s 201G); and second, by the other directors of the company (s 201H(1)).  Where there are insufficient directors to constitute a quorum, a director can be appointed for the purpose of constituting a quorum of directors (s 201H(1)).  If a director is appointed by resolution of the other directors, their appointment must be confirmed by a resolution at a general meeting within two months, failing which the person ceases to be a director (s 201H(2)).

119Pursuant to s 201K of the Act, a director may appoint an alternate director 'with the other directors' approval'. 

120For the removal of a director, it is necessary for there to be a resolution of shareholders at a general meeting of the company (s 203C). 

Appointment of company secretary

121Pursuant to s 204D of the Act, a company secretary can be appointed by the directors of the company.  It is necessary for the person appointed as company secretary to sign a consent to act prior to being appointed (s 204C).

Meetings of directors

122Under the Act, a director can call a meeting of directors by giving reasonable notice individually to each other director (s 248C).  Unless otherwise determined by the directors, the quorum for a directors' meeting is two directors who must be present during the entirety of the meeting (s 248F).

123Any resolution that is passed by directors must be passed by a majority of directors (s 248G(1)).  However, the chair has a casting vote if required, in addition to any vote they have in their capacity as director (s 248G(2)).

Meetings of shareholders

124It is open to the shareholders of a company to pass a resolution without a general meeting being held, if all members who are entitled to vote on the resolution, sign a resolution which states they are in favour of the resolution (s 249A(2)).

125For meetings of members, 21 days' notice of any meeting is required to be given to all members unless the members otherwise agree (s 249H).  The quorum for a members' meeting is two members (s 249T(1)).  Where no quorum is present within 30 minutes of the scheduled start time of the meeting, the meeting is adjourned to such date, time and place that the directors specify and, if not specified, to the same day, time and place the following week (s 249T(3)).  If there is still no quorum present at the resumed meeting within 30 minutes after the scheduled starting time, the meeting is dissolved (s 249T(4)).

Issue of shares

126Under the Act, the company has the ability to issue and cancel shares in the company (s 124(a)).

127Before issuing shares in any class, the directors are required to offer the shares to existing shareholders in proportion to the number of shares already held (s 254D(1)).  This requires directors to give each shareholder a statement setting out the terms of any offer, including the number of shares offered and the period for which the offer remains open (s 254D(2)).  If the offer is not taken up by any shareholder, the directors may issue the shares as they see fit (s 254D(3)). 

128There is an exception to these requirements where a resolution is passed at a general meeting which authorises the directors to issue shares without first offering them to existing shareholders (s 254D(4)).

Notices of meeting and quorum requirements

129Where a meeting has been convened or conducted in breach of the requirement to give all directors or members proper notice, the meeting is null and void and no business can be validly transacted at the meeting.[112]  In addition, where a quorum for a meeting is specified, this will be construed as an essential requirement, unless the contrary intention appears.  In the absence of a quorum, a meeting is not properly constituted and cannot transact any business.  For this reason, if the persons present proceed to conduct what purports to be a meeting, notwithstanding the absence of a quorum, it has no legal effect.

[112] Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corporation (1975) 11 SASR 504, 527.

130As was noted by Wells J in Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corp:[113]

The strictness of this rule is derived from the fundamental proposition that if the governing instrument authorizes a stated number of members to constitute the body which is to perform a particular duty, and nothing more is said as to who is required to join in the acts of that body, it is the plain intention of the instrument that every member should participate in those acts, and the instrument will be construed accordingly.  A provision as to a quorum is a relaxation of the strict rule which, on that account, must be itself construed strictly.

[113] Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corp, 528.

131Because no valid business has been conducted at an inquorate meeting, it is not possible to ratify any resolution that was passed at a subsequent validly constituted meeting.  An act of ratification does not 'translate that act from one that is void to one that is valid.'[114]  Any resolution must be made afresh and can only operate as a fresh decision.[115]

[114] Myer Queenstown Garden Plaza Pty Ltd v Port Adelaide City Corp, 528.  See also Lang AD, Horsley's Meetings: Procedure, Law and Practice (6^th ed, 2010) [5.1].

[115] Anglo Australian Resources NL v Bloom Financial Advice Pty Ltd [No 2] [2019] WASC 480 [28]; Clamp v Fairway Investments Pty Ltd (1971-1973) CLC 40-077; McCarthy v Wheeler and Wongan Hotels Pty Ltd [1998] VSC 67 [35].

132In a family company or closely held company, it has long been accepted that there can be a degree of informality in what may constitute a meeting of directors.  There is no requirement for a formal meeting where someone is appointed chair of the meeting, a resolution is put, seconded, debated and then voted on.  What is required is that there be an agreement of the directors to a decision about the management of the business of the company.  If there is an agreement, which is recorded in a minute which accurately reflects what the decision was, the meeting and the minute will be effectual, even if the minute is formally expressed and appears to record a more formal event than the one that took place.[116]

[116] Swiss Screens (Australia) Pty Ltd & Anor v Burgess & Ors (1987) 11 ACLR 756, 758. See also The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [5586] - [5587].  Cited with approval by Buss P in Mercanti v Mercanti [2016] WASCA 206; (2016) 50 WAR 495 [175].

133In Mercanti v Mercanti, Buss P summarised the relevant principles in the following terms:[117]

[117] Mercanti v Mercanti [184] - [185].

In summary:

(a)directors may meet informally;

(b)directors may meet without being physically together;

(c)the critical point is that there must be a meeting of minds as distinct from a physical meeting; and

(d)the directors may concur informally in the company taking a particular action, but they must concur in their capacity as directors in the management of the company's affairs.

Whether, in a particular case, there was a meeting of minds in the relevant sense is a question of substance as distinct from a question of form.  (citations omitted)

134In some circumstances, it will be possible to identify a decision of the directors from their subsequent actions, which imply a previous decision must have been made.[118]

[118] Roden v International Gas Applications (1995) 125 FLR 396.

135Irregularities or anomalies in the records of a company will not always negate decisions of the directors in the context of a family company.  In relation to family companies:[119]

concurrence between directors in the course of a company's affairs which form part of the management of the business of the company may be evident from the conduct of directors and be the equivalent of a 'meeting'. That may be so, notwithstanding irregularities or anomalies in company record-keeping.

[119] Jarrett v Perpetual Trustee Co Ltd [2007] NSWSC 1231; (2007) 64 ACSR 552 [111].

Purchase of Manning IGA

136It was not in dispute between the parties that Van and Lena were looking to purchase a supermarket together in about January 2010[120] or that they had previously been in business together in 2003 or 2004.

[120] ts 63 (Lena); ts 222 (Van).

137Lena's evidence was that prior to the purchase of the Manning IGA, she had a discussion with Van about going into business together.  They discussed having an equal shareholding in the business, both being directors and that she would work in the business as manager.[121] Her recollection was that they discussed looking for a supermarket to purchase, as she had previously worked for a friend in their supermarket,[122] and that a friend of Van's suggested the IGA in Manning.[123]  Lena denied she ever had a discussion with Van that Nga would be involved in the business or be a director.[124]

[121] ts 63.

[122] ts 63.

[123] ts 64.

[124] ts 66.

138As noted above at [60], Van gave a number of different answers in relation to discussions that led to the purchase of the Manning IGA.  Ultimately, Van agreed that in late 2009 or early 2010, he spoke to Lena about buying a business together.[125]  Because of the length of time that had passed, Van could not recall the details of the discussions but agreed they discussed purchasing a business together, of which Lena would be the general manager and be able to earn a regular income.[126]  His evidence was that Lena told him she was having financial difficulties at the time and buying the business would assist her to get a regular income.[127]  Van also agreed that only he and Lena looked for a suitable business to purchase,[128] but maintained that 'whatever I could have bought - my wife [Nga] would have a share of it'.[129]

[125] ts 262 - 263.

[126] ts 263.

[127] ts 265.

[128] ts 223 (XM in Chief); ts 265 (XXM).

[129] ts 265.

139Nga's evidence was that in late 2009, Lena came to her house and asked her to find her a job.[130]  She and Van agreed to help her and agreed that Lena and Van would go into business together.[131]  Following this, Van and Lena started looking for a business to purchase.  At the time, Nga was not involved in the selection of the business because she was busy with her own business, Long Nga Fashion, and her younger son was in year 12.[132] 

[130] ts 384.

[131] ts 404.

[132] ts 385; ts 405.

140Van agreed that at the time the company was set up, the company was 'only between [him] and Lena'[133] and there was no suggestion that Nga would be involved.[134]  His evidence was that the accountant asked who the directors were going to be and explained that a 'director is like [a] boss' and he told her that the directors were him and Lena.  He did not recall being asked who the shareholders would be and said the accountant filled out the form.[135]

[133] ts 223.

[134] ts 266 (XXM).

[135] ts 274 - 275.

141On 6 January 2010, Ms Luu, the tax agent of Van and Nga, lodged with ASIC an application for registration of the first defendant on the instructions of Van.[136]  Lena's evidence was that it was Van who decided the structure for any business purchased should be a company.[137]  The application was completed by Ms Luu and signed by Lena.[138]  It recorded that the directors of the first defendant were Lena and Van, Lena was the company secretary and two ordinary shares were on issue, one owned by Lena and the other by Van.[139] 

[578] Exhibit 1, TB Vol 5, Tab 139, p 1679.  See also Exhibit 1, TB Vol 7, Tab 187, p 2687.

Payment of increased wages

405At the time Lena left the business in December 2015, her evidence was that the business had 15 to 18 employees and a weekly wages bill of between $9,500 and $10,500.  This included the salary paid to Lena.[579]

[579] ts 130.

406In cross-examination, Van was asked why the salaries of family members had increased so significantly from 2015 ($295,000) to 2016 ($510,000).  Van explained that for the other employees of the business they had received a query from Fair Work about underpayment and payment of superannuation but did not know why there was an increase for family members.  Once again, his response was that he would have to ask the accountant about this as he did not know why this figure had increased.[580]  He then explained that they were paid by bank transfer and not in cash.[581]

[580] ts 374.

[581] ts 374.

407Counsel for the plaintiff put to Van that he had manipulated the financial statements of the first defendant to decrease the value of the shares in the first defendant.  Van denied this was the case.[582]

[582] ts 375.

408In closing submissions, counsel for the plaintiff invited the court to direct an investigation into these increases and make any adjustments required.  For the following reasons, I am not prepared to accede to this request.  First, while I accept there is an unexplained discrepancy in these payments, I am not satisfied this is a deliberate attempt by the defendants to reduce the value of Lena's share in the first defendant.  Second, the accounts of the first defendant for the financial year ending 30 June 2015 show there was a significant increase in the wages bill for both staff members and family members in that year.  The salaries increased from $241,413.75 in the 2014 financial year to $411,316.89 in the 2015 financial year.[583]  At this time, Lena was employed as the manager of the Manning IGA.  There was a significantly smaller increase between the 2015 financial year and the 2016 financial year of only $53,433.14[584] before a more substantial increase in the 2017 financial year of $130,181.78.[585]  No evidence was adduced in relation to wages over this period and whether these increases were inconsistent with the wage rises in similar industries.  Third, Lena had the opportunity to consider whether this was a matter for investigation prior to trial and could have sought to adduce expert evidence but did not.  Fourth, ordering an account or investigation on this matter would be inconsistent with the position requested in the relation to the credit card payments.  I do not consider it is in the interests of either of the parties to further prolong the dispute between them any longer than necessary.

[583] Exhibit 1, TB Vol 2, Tab 115.

[584] Exhibit 1, TB Vol 2, Tab 117.

[585] Exhibit 1, TB Vol 2, Tab 118.

409That said, I am satisfied on the evidence before me that a number of payments to Van and Nga have been recorded as directors' fees or as 'Salaries - Family members'.  These payments, which are set out in Attachment F, total $188,623.46.  There is no evidence that similar payments were made to Lena.  My preliminary view is that in assessing the value of Lena's share in the first defendant, any valuation must account for these payments which are part of the commercially unfair conduct that I have found.  I consider that any payment to Lena should be adjusted to reflect that Van and Nga received this benefit and that she has not received an equivalent benefit.  Given this matter was not raised during the hearing, I will hear from the parties before making any orders in respect of this matter.

Date of the valuation of the shares

410There is no firm rule as to the date on which any valuation of Lena's share in the first defendant should occur.[586] 

[586] Porter Street Investments Pty Ltd v Nellbar Pty Ltd [97(5), (6)] - [98].

411At trial, no submissions were made by any party as to what was the appropriate date of valuation.  For this reason, prior to making any determination of the appropriate date of the valuation of Lena's share, I will hear from the parties.

Conclusion

412For the reasons set out above, I am satisfied that Lena has established that Van and Nga have been oppressive to, unfairly prejudicial to, or unfairly discriminatory against her in her capacity as a member of the first defendant.  For this reason, Van and Nga should be required to purchase Lena's share in the first defendant on the basis that Lena is a 50% shareholder in the first defendant.  I also consider that a number of adjustments are required to be made to the financial statements to reflect these reasons.

413I am also satisfied that declarations should be made that the purported appointment of Nga as a director of the first defendant and the issue of a share in the first defendant to her on or about 12 September 2010 are invalid, the resolution purporting to ratify these resolutions on 12 July 2018 are invalid, and that the resolution to remove Lena as a director of the first defendant is also invalid.

414Before making any final orders, I will hear from the parties as to the date of the valuation of Lena's share in the first defendant, the other matters set out in these reasons and as to the appropriate orders as to costs.

Attachment A - Calculation of total of Van's shareholder loan

Attachment	Amount	Reference in judgment
C (Mortgage repayments for Van and Nga)	$376,368.90	[350]
E (car repayments and other expenses)	$115,736.28 (Mercedes-Benz) $9,053.48 (Mercedes-Benz insurance) $25,438.51 (Ford Fiesta)	[364]
Cash payments to Van and Nga	$11,800.00	[395], [396]
Credit card payments	$2,216.60	[404]
Total	$540,613.77	[8]

Attachment B - Payments for salaries

Attachment C - Home loan payments

Van and Nga

Date	Amount	Allowed	Evidence/Explanation
BankWest
15/06/10	$950.00	$950.00	TB2449
12/07/10	$4,369.38	$4,369.38	TB2450
11/08/10	$4,369.38	$4,369.38	TB2451
13/09/10	$4,369.38	$4,369.38	TB2452
11/10/10	$4,369.38	$4,369.38	TB2453
11/11/10	$4,369.38	$4,369.38	TB2454
13/12/10	$4,511.82	$4,511.82	TB2455
11/01/11	$4,511.82	$4,511.82	TB2456
11/02/11	$4,554.33	$4,554.33	TB2457
11/03/11	$4,554.33	$4,554.33	TB2458
Commonwealth Bank
12/04/11	$4,554.33	$4,554.33	TB2459
21/04/11	$4,554.33	$4,554.33	TB2460
12/05/11	$4,554.33	$4,554.33	TB2461
14/06/11	$4,554.33	$4,554.33	TB2462
12/07/11	$4,554.33	$4,554.33	TB2463
12/08/11	$4,554.33	$4,554.33	TB2464
13/09/11	$4,554.33	$4,554.33	TB2465
12/10/11	$4,554.33	$4,554.33	TB2466
14/11/11	$4,554.33	$4,554.33	TB2467
13/12/11	$4,445.08	$4,445.08	TB2468
12/01/12	$4,339.01	$4,339.01	TB2469
14/02/12	$4,339.01	$4,339.01	TB2470
13/03/12	$4,339.01	$4,339.01	TB2471
12/04/12	$4,339.01	$4,339.01	TB2472
14/05/12	$4,374.14	$4,374.14	TB2473
12/06/12	$4,264.21	$4,264.21	TB2474
12/07/12	$4,497.65	$4,497.65	TB2475
14/08/12	$4,497.65	$4,497.65	TB2476
12/09/12	$4,497.65	$4,497.65	TB2477
12/10/12	$4,497.65	$4,497.65	TB2478
13/11/12	$4,414.29	$4,414.29	TB2479
12/12/12	$4,414.29	$4,414.29	TB2480
14/01/13	$4,327.63	$4,327.63	TB2481
12/02/13	$4,327.63	$4,327.63	TB2482
12/03/13	$4,327.63	$4,327.63	TB2483
12/04/13	$4,327.63	$4,327.63	TB2484
14/05/13	$4,327.63	$4,327.63	TB2485
12/06/13	$4,222.12	$4,222.12	TB2486
12/07/13	$4,222.12	$4,222.12	TB2487
14/08/13	$4,222.12	$4,222.12	TB2488
12/09/13	$4,117.69	$4,117.69	TB2489
14/10/13	$4,117.69	$4,117.69	TB2490
12/11/13	$4,117.69	$4,117.69	TB2491
12/12/13	$4,117.69	$4,117.69	TB2492
14/01/14	$4,117.69	$4,117.69	TB2493
12/02/14	$4,117.69	$4,117.69	TB2494
12/03/14	$4,117.69	$4,117.69	TB2495
St George Bank
14/04/14	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/05/14	$2,770.00	$2,770.00	TB2497
13/06/14	$2,770.00	$2,770.00	TB2498
14/07/14	$2,770.00	$2,770.00	TB2499
13/08/14	$2,770.00	$2,770.00	TB2500
15/09/14	$2,770.00	$2,770.00	TB2501
15/10/14	$2,770.00	$2,770.00	TB2502
13/11/14	$2,770.00	$2,770.00	TB2503
15/12/14	$2,770.00	$2,770.00	TB2504
13/01/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/02/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/03/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/04/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/05/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
15/06/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/07/15	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
13/08/15	$2,770.00	$2,770.00	TB2506
14/09/15	$2,770.00	$2,770.00	TB2507
13/10/15	$2,770.00	$2,770.00	TB2508
13/11/15	$2,770.00	$2,770.00	TB2509
14/12/15	$2,770.00	$2,770.00	TB2510
13/01/16	$2,770.00	$2,770.00	TB2511
14/02/16	$2,770.00	$2,770.00	Inference drawn from prior and subsequent payments
14/03/16	$2,770.00	$2,770.00	TB2512
13/04/16	$2,770.00	$0.00	No evidence of this payment as having been made
13/05/16	$2,770.00	$0.00	No evidence of this payment as having been made
13/06/16	$2,770.00	$0.00	No evidence of this payment as having been made
13/07/16	$2,770.00	$0.00	No evidence of this payment as having been made
15/08/16	$2,770.00	$0.00	No evidence of this payment as having been made
28/09/16	$3,000.00	0.00	TB2513 – no evidence that this is for home loan.  Account details do not match the home loan accounts.
12/10/16	$3,000.00	$0.00	No evidence of this payment as having been made
05/12/16	$900.00	$0.00	No evidence of this payment as having been made
15/12/16	$3,000.00	$0.00	No evidence of this payment as having been made
30/06/18	$13,339.86	$0.00	No evidence of this payment as having been made
16/07/18	$1,000.00	0.00	TB2505 – no evidence that this is for home loan.  Account details do not match the home loan accounts.
20/08/18	$2,352.00	0.00	TB2505 – no evidence that this is for home loan.  Account details do not match the home loan accounts.
Bank fees	$1,185.00	$0.00	No evidence of these payments as having been made
Payment to Bankwest	$252,000.00	$252,583.74	TB113 (Ex 1 TB Vol 1, Tab 22)
Total	$562,412.02	$521,368.90
Offsetting claim	$145,000.00	$145,000.00	TB2496.  While it is not clear that this journal entry relates to Van and Nga's home loan, I accept the concession made by Lena that this amount should be deducted.
Total	$417,412.02	$376,368.90

Lena

Date	Amount	Allowed	Evidence/Explanation
St George Bank
13/05/14	$1,534.00	TB2497
13/06/14	$1,534.00	TB2498
14/07/14	$1,534.00	TB2499
13/08/14	$1,534.00	TB2500
15/09/14	$1,534.00	TB2501
15/10/14	$1,534.00	TB2502
13/11/14	$1,534.00	TB2503
15/12/14	$1,534.00	TB2504
13/01/15	$1,534.00	Inference drawn from prior and subsequent payments
13/02/15	$1,534.00	Inference drawn from prior and subsequent payments
13/03/15	$1,534.00	Inference drawn from prior and subsequent payments
13/04/15	$1,534.00	Inference drawn from prior and subsequent payments
13/05/15	$1,534.00	Inference drawn from prior and subsequent payments
15/06/15	$1,534.00	Inference drawn from prior and subsequent payments
13/07/15	$1,534.00	Inference drawn from prior and subsequent payments
13/08/15	$1,534.00	TB2506
14/09/15	$1,534.00	TB2507
13/10/15	$1,534.00	TB2508
13/11/15	$1,534.00	TB2509
14/12/15	$1,534.00	TB2510
13/01/16	$1,534.00	TB2511
14/02/16	$1,534.00	Inference drawn from prior and subsequent payments
14/03/16	$1,534.00	TB2512
Total:	$35,282.00

Attachment D - Fees paid to Lavan and RSM

Date	Amount	Allowed	Evidence/Explanation
Lavan
14/03/16	$5,934.45	$5,934.45	TB2515 and TB 2523
03/04/16	$360.90	$360.90	TB2515
04/04/16	$308.00	0.00	TB2524 – no evidence that this payment is for these proceedings.
02/05/16	$4,128.30	$4,128.30	TB2515
12/05/16	$9,285.10	$9,285.10	TB2515
19/07/16	$8,357.36	$8,357.36	TB2516
28/07/16	$5,256.90	$5,256.90	TB2516 and TB2525
28/09/16	$5,207.40	$5,207.40	TB2516 and TB2526
07/10/16	$3,805.01	$3,805.01	TB2516
19/10/16	$7,224.25	$7,224.25	TB2516
15/11/16	$1,048.85	$1,048.85	TB2516 and TB2527
30/01/17	$6,751.58	$6,751.58	TB2516 and TB2528
09/02/17	$5,000.00	$5,000.00	TB2517 and TB2529
29/03/17	$459.25	$459.25	TB2517 and TB2530
29/03/17	$467.50	$467.50	TB2517 and TB2530
16/05/17	$555.50	$555.50	TB2517
22/05/17	$423.50	$423.50	TB2517
14/08/17	$943.25	$943.25	TB2518 and TB2531
15/09/17	$3,751.00	$3,751.00	TB2519 and TB2533
20/09/17	$522.50	$522.50	TB2519 and TB2534
28/11/17	$1,376.10	$1,376.10	TB2519 and TB2536
11/12/17	$797.50	$797.50	TB2519
16/01/18	$1,870.00	$1,870.00	TB2519 and TB2538
12/02/18	$1,321.65	$1,321.65	TB2519 and TB2539
29/03/18	$4,009.50	$4,009.50	TB2519 and TB2540
18/04/18	$1,072.50	$1,072.50	TB2519 and TB2541
05/07/18	$9,173.18	$9,173.18	TB2542
14/09/18	$7,262.34	$7,262.34	TB2543
17/09/18	$2,457.24	$2,457.24	TB2544
23/10/18	$12,652.75	$12,652.75	TB2545
30/10/18	$29,840.75	$29,840.75	TB2546
Total:	$141,624.11	$141,316.11
RSM
26/10/16	$5,492.85	$5,492.85	TB2521
30/01/17	$8,360.00	$8,360.00	TB2520 and TB2528
09/02/17	$8,360.00	$8,360.00	TB2520 and TB2529
22/05/17	$7,891.10	$7,891.10	TB2520
04/09/17	$8,525.00	$8,525.00	TB2522 and TB2532
03/10/17	$8,525.00	$8,525.00	TB2520 and TB2535
22/12/17	$9,350.00	$9,350.00	TB2522 and TB2537
16/01/18	$9,350.00	$9,350.00	TB2522 and TB2538
31/03/18	$9,350.00	0.00	TB2522 - Duplication of previous entry
14/05/18	$7.700.00	$7.700.00	TB2522
19/06/18	$7.700.00	$7.700.00	TB2522
Total:	$90,603.95	$81,253.95

Attachment E - Car Repayments and other expenses

Mercedes-Benz

Date	Amount ($)	Allowed ($)	Evidence/Explanation
Commonwealth Bank
7/02/2014	$1,958.42	$1,958.42	Exhibit 1, TB Vol 1, Tab 20
7/03/2014	$1,958.42	$1,958.42	Exhibit 1, TB Vol 1, Tab 20
9/04/2014	$1,958.42	$1,958.42	Exhibit 1, TB Vol 1, Tab 20
9/05/2014	$1,958.42	$1,958.42	Exhibit 1, TB Vol 1, Tab 20
10/06/2014	$1,958.42	$1,958.42	Exhibit 1, TB Vol 1, Tab 20
9/07/2014	$1,958.42	$1,958.42	TB2549
8/08/2014	$1,958.42	$1,958.42	TB2549
9/09/2014	$1,958.42	$1,958.42	TB2549
9/10/2014	$1,958.42	$1,958.42	TB2549
7/11/2014	$1,958.42	$1,958.42	TB2549
9/12/2014	$1,958.42	$1,958.42	TB2549
9/01/2015	$1,958.42	$1,958.42	TB2549
9/02/2015	$1,958.42	$1,958.42	TB2549
10/03/2015	$1,958.42	$1,958.42	TB2549
9/04/2014	$1,958.42	$1,958.42	TB2549
8/05/2015	$1,958.42	$1,958.42	TB2549
9/06/2015	$1,958.42	$1,958.42	TB2549
9/07/2015	$1,958.42	$1,958.42	TB2551
7/08/2015	$1,958.42	$1,958.42	TB2551
9/09/2015	$1,958.42	$1,958.42	TB2551
9/10/2015	$1,958.42	$1,958.42	TB2551
9/11/2015	$1,958.42	$1,958.42	TB2551
9/12/2015	$1,958.42	$1,958.42	TB2551
9/01/2016	$1,958.42	$0.00	TB2551 Note that payment was made on 8/01/2016 and refunded on 11/1/2016
9/02/2016	$2,017.41	$2,017.41	TB2551
St George Bank
1/02/2016	$1,991.66	$1,991.66	TB2551
6/04/2016	$2,053.65	$2,053.65	TB2551
8/04/2016	$1,959.17	$1,959.17	TB2552
9/05/2016	$1,958.42	$1,958.42	TB2552
9/06/2016	$1,958.42	$1,958.42	TB2552
8/07/2016	$1,958.42	$1,958.42	TB2553
9/08/2016	$1,958.42	$1,958.42	TB2553
9/09/2016	$1,958.42	$1,958.42	TB2553
7/10/2016	$1,958.42	$1,958.42	TB2553
9/11/2016	$1,958.42	$1,958.42	TB2553, TB2558
9/12/2016	$1,958.42	$1,958.42	TB2553
9/01/2017	$1,958.42	$1,958.42	TB2553, TB2560
9/02/2017	$1,958.42	$1,958.42	TB2553, TB2561
9/03/2017	$1,958.42	$1,958.42	TB2553, TB2565
7/04/2017	$1,958.42	$1,958.42	TB2553, TB2566
9/05/2017	$1,958.42	$1,958.42	TB2553
9/06/2017	$1,958.42	$1,958.42	TB2553, 2567
7/07/2017	$1,958.42	$1,958.42	TB2554, TB2569
9/08/2017	$1,958.42	$1,958.42	TB2554, TB2570
8/09/2017	$1,958.42	$1,958.42	TB2554, TB2571
9/10/2017	$1,958.42	$1,958.42	TB2554, TB2572
9/11/2017	$1,958.42	$1,958.42	TB2554, TB2574
8/12/2017	$1,958.42	$1,958.42	TB2554, TB2585
9/01/2018	$1,958.42	$1,958.42	TB2554, TB2586
9/02/2018	$1,958.42	$1,958.42	TB2554
9/03/2018	$1,958.42	$1,958.42	TB2555, TB2587
9/04/2018	$1,958.42	$1,958.42	TB2555
9/05/2018	$1,958.42	$1,958.42	TB2555, TB2699
Further 7 months of repayments	$13,708.94	$13,708.94	Exhibit 1, TB vol 1, Tab 20, p 107. The contract was for 60 months and I accept all repayments were made by the 1st defendant
Total	$117,693.41	$115,736.28

Car Insurance - Mercedes Benz

Date	Amount ($)	Allowed ($)	Evidence/Explanation
13/01/2014	$123.94	$123.94	TB2493
11/02/2014	$123.78	$123.78	TB2494
11/03/2014	$123.78	$123.78	TB2495
10/04/2014	$123.78	$123.78	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
12/05/2014	$123.78	$123.78	Same as above
10/06/2014	$123.78	$123.78	Same as above
10/07/2014	$123.78	$123.78	Same as above
12/08/2014	$123.78	$123.78	Same as above
10/09/2014	$123.78	$123.78	Same as above
10/10/2014	$123.78	$123.78	Same as above
11/11/2014	$123.78	$123.78	Same as above
10/12/2014	$123.57	$123.57	Same as above.  The amount claimed is less than the standard monthly payment so I have allowed the lower amount as the amount claimed.
12/01/2015	$254.01	$254.01	TB1669
10/02/2015	$160.44	$160.44	TB1669
10/03/2015	$160.44	$160.44	TB1669
10/04/2015	$160.44	$160.44	TB1669
12/05/2015	$160.44	$160.44	TB1669
10/06/2015	$160.44	$160.44	TB1669
10/07/2015	$160.44	$160.44	TB2666
11/08/2015	$160.44	$160.44	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
10/09/2015	$160.44	$160.44	Same as above
12/10/2015	$160.44	$160.44	Same as above
10/11/2015	$160.44	$160.44	Same as above
10/12/2015	$160.44	$160.44	Same as above
12/01/2016	$247.10	$153.43	I draw an inference from the insurance payments that monthly payments changed in the January of each year.  However, there is no evidence to support a payment of $247.10 being made so I have allowed the monthly payment for the 2016 calendar year.
10/02/2016	$153.43	$153.43
10/02/2016	$46.03	$0.00	There is no evidence that this payment was made or what it was for.
22/03/2016	$153.43	$153.43	TB2562, TB2564
12/04/2016	$153.43	$153.43	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
10/05/2016	$153.43	$153.43	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
10/06/2016	$153.43	$153.43	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
12/07/2016	$153.43	$153.43	TB2681
10/08/2016	$153.43	$153.43	TB2681
12/09/2016	$153.43	$153.43	TB2681
11/10/2016	$153.43	$153.43	TB2681
10/11/2016	$153.43	$153.43	TB2557, TB2681
12/12/2016	$153.43	$153.43	TB2681
10/01/2017	$232.04	$255.24	TB2559, TB2681
10/02/2017	$161.50	$161.50	TB2561
10/03/2017	$161.50	$161.50	TB2563
11/04/2017	$161.50	$161.50	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
10/05/2017	$161.50	$161.50	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
12/06/2017	$161.50	$161.50	I draw an inference from the above repayments that this payment was made as a monthly repayment of insurance
11/07/2017	$161.50	$161.50	TB2568, TB2691
10/08/2017	$161.50	$161.50	TB2570, TB2691
12/09/2017	$161.50	$161.50	TB2570, TB2692
10/10/2017	$161.50	$161.50	TB2572, TB2692
10/11/2017	$161.50	$161.50	TB2573, TB2692
12/12/2017	$161.50	$161.50	TB2575, TB2692
10/01/2018	$251.99	$251.99	TB2586, TB2692
12/02/2018	$158.27	$158.27	TB2692
12/03/2018	$158.27	$158.27	TB2587, TB2692
10/04/2018	$158.27	$158.27	TB2692
10/05/2018	$158.27	$158.27	TB2692
12/06/2018	$158.27	$158.27	TB2692
10/07/2018	$158.27	$158.27	TB2588
10/08/2018	$158.27	$158.27	TB2589
11/09/2018	$158.27	$158.27	TB2590
10/10/2018	$158.27	$158.27	TB2591
Total:	$9,169.98	$9,053.48

Ford Fiesta

Date	Amount ($)	Allowed ($)	Evidence/Explanation
9/09/2010	$423.98	$423.98	Inference from contract ((Tabs 7 and 9) and financial accounts of the first defendant.
11/10/2010	$423.98	$423.98	Same as above.
9/11/2010	$423.98	$423.98	Same as above.
9/12/2010	$423.98	$423.98	Same as above.
10/01/2011	$423.98	$423.98	Same as above.
9/02/2011	$423.98	$423.98	Same as above.
9/03/2011	$423.98	$423.98	Same as above.
11/04/2011	$423.98	$423.98	Same as above.
9/05/2011	$423.98	$423.98	Same as above.
9/06/2011	$423.98	$423.98	Same as above.
11/07/2011	$423.98	$423.98	Same as above.
9/08/2011	$423.98	$423.98	Same as above.
9/09/2011	$423.98	$423.98	Same as above.
10/10/2011	$423.98	$423.98	Same as above.
9/11/2011	$423.98	$423.98	Same as above.
9/12/2012	$423.98	$423.98	Same as above.
9/01/2012	$423.98	$423.98	Same as above.
9/02/2012	$423.98	$423.98	Same as above.
9/03/2012	$423.98	$423.98	Same as above.
10/04/2012	$423.98	$423.98	Same as above.
9/05/2012	$423.98	$423.98	Same as above.
11/06/2012	$423.98	$423.98	Same as above.
9/07/2012	$423.98	$423.98	Same as above.
9/08/2012	$423.98	$423.98	Same as above.
10/09/2012	$423.98	$423.98	Same as above.
9/10/2012	$423.98	$423.98	Same as above.
9/11/2012	$423.98	$423.98	Same as above.
9/12/2012	$423.98	$423.98	Same as above.
9/01/2013	$423.98	$423.98	Same as above.
11/02/2013	$423.98	$423.98	Same as above.
11/03/2013	$423.98	$423.98	Same as above.
10/04/2013	$423.98	$423.98	Same as above.
9/05/2013	$423.98	$423.98	Same as above.
10/06/2013	$423.98	$423.98	Same as above.
9/07/2013	$423.98	$423.98	Same as above.
9/08/2013	$423.98	$423.98	Same as above.
9/09/2013	$423.98	$423.98	Same as above.
9/10/2013	$423.98	$423.98	Same as above.
11/11/2013	$423.98	$423.98	Same as above.
9/12/2013	$423.98	$423.98	Same as above.
9/01/2014	$423.98	$423.98	Same as above.
10/02/2014	$423.69	$423.69	Same as above.  Given a lower amount is claimed, I have allowed this amount.
10/03/2014	$423.98	$423.98	Same as above.
9/04/2014	$423.98	$423.98	Same as above.
9/05/2014	$423.98	$423.98	Same as above.
9/06/2014	$423.98	$423.98	Same as above.
9/07/2014	$423.98	$423.98	TB2550, TB2556
11/08/2014	$423.98	$423.98	TB2550, TB2556
9/09/2014	$423.98	$423.98	TB2550, TB2556
9/10/2014	$423.98	$423.98	TB2550, TB2556
10/11/2014	$423.98	$423.98	TB2550, TB2556
9/12/2014	$423.98	$423.98	TB2550, TB2556
9/01/2015	$423.98	$423.98	TB2550, TB2556
9/02/2015	$423.98	$423.98	TB2550, TB2556
9/03/2015	$423.98	$423.98	TB2550, TB2556
9/04/2015	$423.98	$423.98	TB2550, TB2556
11/05/2015	$423.98	$423.98	TB2550, TB2556
9/06/2015	$423.98	$423.98	TB2550, TB2556
9/07/2015	$423.98	$423.98	Inference from contract ((Tabs 7 and 9), financial accounts of the first defendant and the records referred to from July 2014.
10/08/2015	$423.98	$423.98	Inference from contract ((Tabs 7 and 9), financial accounts of the first defendant and the records referred to from July 2014.
Total:	$25,438.51	$25,438.51

Attachment F – Payments to Van and Nga

Date	Amount	Description	Evidence/ TB Ref
17/11/15	$5,000.00	Director's monthly	Tab 177  p 2509.  By that date, Lena did not have access to bank accounts.
21/07/16	$5,000.00	Van Wages	Tab 187 p 2669
29/08/16	$5,000.00	Director wages	Tab 187 p 2670
20/09/16	$5,000.00	Director wages	Tab 187 p 2670
30/06/17	$63,719.67	Adjust Director's Salary	Tab 187 p 2674 (takes into account the above three payments)
30/06/18	$16,905.00	Long Huynh's wages	Tab 187, p 2689
30/06/18	$8,086.00	Nga Nguyen's wages	Tab 187, p 2689
30/06/18	$55,979.51	Long Huynh's wages	Tab 187, p 2689 Tab 188, p 2718
30/06/18	$38,933.28	Nga Nguyen's wages	Tab 188, p 2718
Total	$188,623.46*

* The payments on 21/07/16, 29/08/16, and 20/09/16 are included in the adjustment on 30/06/17 and have not been included in this total.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

HW
Associate to the Honourable Justice Hill

1 JULY 2022

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION: NGUYEN -v- NGUYEN HUYNH (WA) PTY LTD [2022] WASC 218 (S)

CORAM:   HILL J

HEARD:   3 OCTOBER 2022

DELIVERED          :   3 OCTOBER 2022

PUBLISHED           :   5 OCTOBER 2022

FILE NO/S:   COR 149 of 2018

BETWEEN:   THI LIEU NGUYEN

Plaintiff

AND

NGUYEN HUYNH (WA) PTY LTD

First Defendant

VAN LONG HUYNH

Second Defendant

NGA THI NGUYEN

Third Defendant

Catchwords:

Corporations – Oppression – Date on which valuation of shares should occur – Whether an adjustment should be made to financial statements to reflect payments made to second and third defendants – Turns on own facts

Legislation:

Nil

Result:

Orders made for date of valuation of shares to be 30 June 2018 and adjustment to the financial statements to reflect payments to second and third defendants

Category:    B

Representation:

Counsel:

Plaintiff	:	A P Hershowitz
First Defendant	:	G M G McIntyre SC
Second Defendant	:	G M G McIntyre SC
Third Defendant	:	G M G McIntyre SC

Solicitors:

Plaintiff	:	Greenstone Legal
First Defendant	:	Acuity Law Partners
Second Defendant	:	Acuity Law Partners
Third Defendant	:	Acuity Law Partners

Case(s) referred to in decision(s):

Nguyen v Nguyen Huynh (WA) Pty Ltd [2022] WASC 218

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript.)

415On 1 July 2022, I delivered reasons for my decision upholding the plaintiff's claim for oppression (Reasons).[587]  On that date, the matter was adjourned without final orders being made to enable the parties to consider my Reasons and the appropriate orders that should be made to reflect my Reasons, including as to the costs of the proceedings.  On that date, directions were made to program the matter through to a hearing.

[587] Nguyen v Nguyen Huynh (WA) Pty Ltd [2022] WASC 218.

416The matter came back before me today.  Most of the orders, including as to the appropriate order as to costs, were agreed between the parties.  Only two issues remained in dispute between the parties, namely:

(a)the date on which any valuation of the shares in the first defendant (the Company) should take place to enable the purchase of the plaintiff's share in the first defendant in accordance with my Reasons; and

(b)whether adjustments should be made to the financial statements of the first defendant to reflect certain payments that had been made to the second and third defendants which have been recorded in the accounts as either salaries or directors' fees.

Date of valuation

417Counsel for the plaintiff submits there are three logical dates on which the date of the valuation can occur, namely:

(a)30 June 2016 - the end of the first financial year after the plaintiff ceased to be employed by the first defendant;

(b)30 June 2018 - the date which is closest to the purported removal of the plaintiff as a director of the Company and the issue of the writ in these proceedings; or

(c)30 June 2022 - the date closest to the delivery of the reasons for decision.

418The plaintiff seeks an order that the date of valuation be fixed at 30 June 2018 on the basis that it was on or about this date that the second and third defendants asserted sole control over the Company to the exclusion of the plaintiff.  The defendants dispute this contention and says that the appropriate date for the valuation of the plaintiff's share in the Company is today's date, when final orders are to be made.

419The legal principles that govern the selection of the appropriate date of valuation are not in dispute between the parties.  They were set at [116] in my Reasons.

420In this case, for the following reasons, I consider that the appropriate date for the valuation of the plaintiff's share in the Company is 30 June 2018. 

421First, the primary grounds of oppression which were made out by the plaintiff concerned the appointment of the third defendant as a director and the exercise of that power by the third defendant, and the issue of a share to the third defendant.  Until late 2015, it does not appear that the third defendant had sought to exercise any power as a director of the Company.  However, in late 2015, the second and third defendants removed the plaintiff's authority to operate the bank accounts, and then in July 2018 removed her as a director of the Company.  For this reason, I consider that the acts of oppression for which I have found, culminated in the removal of the plaintiff as a director of the Company, which supports a valuation on 30 June 2018 to take account of that oppression.

422Second, since the plaintiff's removal as a director, the plaintiff has had no involvement in the running of the Company, no entitlement to the books and records, or to participate in any decision that has been made.  Whilst there is no evidence before me as to whether any of those decisions or the management of the Company have impacted on the valuation of the Company, it is at least a possibility.   

423Third, the trial considered the financial books and records of the Company up to and including 30 June 2018.  There is no evidence before the court as to what has occurred after this date and whether matters, such as the COVID‑19 pandemic or the current global economic situation, have impacted the valuation of the Company. 

424Given each of these matters, it is my view that the appropriate date for the valuation of the shares in the Company is 30 June 2018.

Adjustment for directors' fees and salaries

425The plaintiff seeks an order that any valuation of the Company take account of the payments of $188,623 which have been made to the second and third defendants.  The defendants oppose this order and say that if the court seeks to make any finding on this, they wish to adduce evidence from Mr Gordon Du, the taxation accountant of the first defendant, who they say will give evidence that these payments have been made for work and not directors' fees.  While that submission is made in their written submissions, no application has been made to re‑open the matter or to explain why Mr Du was not called to give evidence at the trial.

426In any event, the question is not how the accountant has characterised or recorded these payments, but whether in fact the second and third defendants worked in the business for which they received a salary. This was the subject of evidence at trial. At [286] and following of my Reasons, and particular at [290], I made specific findings in relation to the evidence that was given by both the second and third defendants. The relevant findings were that, after the plaintiff left the business, the business was managed by their son, Anthony. I specifically rejected the evidence of the third defendant that she and the second defendant worked in the business. On this basis, I do not accept that they were entitled to a salary.

427Given these factual findings, I consider it is appropriate for an adjustment to be made to the financial accounts of the first defendant for the directors' fees and salaries in the terms sought by the plaintiff.

Conclusion

428For these reasons, I consider it is appropriate for orders to be made in terms of the minute of proposed orders filed by the plaintiff.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

FD
Associate to the Honourable Justice Hill

5 OCTOBER 2022