Page v Good Impressions Offset Printing Pty Limited - [2011] NSWSC 1398

Supreme Court

New South Wales

Medium Neutral Citation: Page v Good Impressions Offset Printing Pty Limited [2011] NSWSC 1398
Hearing dates: Monday, 7 November 2011
Decision date: 07 November 2011
Before: White J
Decision:
Refer to paras [20] and [22]-[26] of judgment.

Catchwords: CORPORATIONS - notice of motion - application for enforcement of shareholders' agreement - where clause of shareholders' agreement sets out procedures to be followed if shareholder intends to transfer shares owned or controlled by him - where plaintiff seeks acquisition of shares as a remedy against alleged oppressive conduct, s 233 Corporations Act 2001 (Cth) - clause of shareholders' agreement does not apply to transfer of shares as a result of a court order for the purchase of shares pursuant to s 233, Corporations Act - parties cannot by agreement regulate how the court might exercise its powers under s 233, Corporations Act
Legislation Cited: Corporations Act 2001 (Cth)
Category: Interlocutory applications
Parties: Andrew Michael Page (Plaintiff/Respondent)
Peter Bruce Edwards (2nd Defendant/Applicant)
Representation: D Eardley (Plaintiff)
J Darvall (2nd Defendant)
Herring & Associates (Plaintiff)
Paul Mattick & Associates (2nd Defendant)

File Number(s): 2011/53083

Judgment

HIS HONOUR : By notice of motion filed on 26 September 2011 the second defendant seeks the following orders:

" 1. The plaintiff comply with the terms of paragraphs 12 and 30 of the Shareholders' Agreement made in or about 1999 between Lynn Frances Edwards, the second defendant, the plaintiff and the first defendant.

2. The hearing of the motion filed by the plaintiff on 29 August 2011 be stayed pending the plaintiff's compliance with order 1. "

Paragraph 30 of the shareholders' agreement contained a clause for alternative dispute resolution. Insofar as the relief sought was based on that clause, it is no longer pressed. That is because Barrett J has earlier ordered the proceedings to be mediated. I am told that has been done. In effect the substance of clause 30 has been complied with.

Clause 12 of the Shareholders' Agreement sets out procedures to be followed if the shareholder intends to transfer the shares owned or controlled by him. It provides:

" 12. DISPOSAL OF SHARES BY SHAREHOLDERS

12.1 Except as herein provided, no Shares in the Company shall be transferred by any Shareholder unless and until the rights of pre-emption hereinafter conferred shall have been exhausted. For the purpose of this clause, a Shareholder shall mean either of the Edwards or Andrew Michael Page.

12.2 A Shareholder who intends to transfer the Shares owned or controlled by him in the Company (called 'the Vendor') shall give notice in writing to the Directors ('the Transfer Notice') indicating such intention. The Transfer Notice must include all the Shares owned by the Vendor. The Transfer Notice shall constitute the Board as agent for the sale of the Shares at a price equal to the value of the Shares of the Vendor as determined by the Company's Accountant on instructions from the Board, (such valuation to be completed as soon as possible after…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 1398
Decision Date: 07 November 2011

CaseChat Overview and Summary

In the case of Page v Good Impressions Offset Printing Pty Limited, the plaintiff, Page, sought to enforce a shareholders' agreement against the defendant, Good Impressions Offset Printing Pty Limited. The dispute arose from Page's application for the acquisition of shares under section 233 of the Corporations Act 2001 (Cth) due to alleged oppressive conduct. The primary issue before the court was whether a clause in the shareholders' agreement applied to the transfer of shares resulting from a court order, or if the parties could regulate how the court might exercise its powers under section 233.

The court examined the language of the shareholders' agreement and the statutory framework provided by the Corporations Act. It concluded that the clause in the shareholders' agreement, which outlined procedures for transferring shares, did not apply to the transfer of shares as a result of a court order for the purchase of shares pursuant to section 233. The court held that parties cannot, by agreement, dictate how the court might exercise its powers under section 233, which is a statutory remedy designed to address oppressive conduct. The court found that the shareholders' agreement did not restrict its jurisdiction to enforce the statutory remedy available under section 233.

In light of the reasoning, the court dismissed the defendant's application, affirming that the shareholders' agreement could not override the statutory provisions of the Corporations Act. The court's decision underscored the principle that statutory remedies provided by the Corporations Act cannot be constrained by private agreements between shareholders. The court's ruling provided clarity on the interplay between shareholders' agreements and statutory powers under the Corporations Act, ensuring that the statutory remedies remain effective and not subject to contractual limitations.

Orders