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Patrick Wong v Willem Van Vlymen

Patrick Wong v Willem Van Vlymen

Case [2018] NSWSC 312 14 March 2018

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: Patrick Wong and Anor v Willem Van Vlymen and Others [2018] NSWSC 312
Hearing dates: 26 February 2018
Decision date: 14 March 2018
Before: Sackar J
Decision:
See para [121] – motion dismissed

Catchwords:
PROCEDURE – liberty to apply – working out – effect of orders allowing liberty to apply – extent of arguments and pleadings to be raised under liberty to apply

CONTRACTS – interpretation – whether contract between parties allowed for sale of joint venture assets to fund purchase price – characterisation of sale of properties in joint venture as dividends or otherwise
CORPORATIONS – company – Solomon Islands and Cook Islands company law – financial assistance by company to acquire its shares – whether applicant could draw on assets of joint venture companies to pay purchase price of shares
Legislation Cited: Companies Act 1955 (New Zealand)
Companies Act 1970-1971 (Cook Islands)
Companies Act 2009 (Solomon Islands)
Cases Cited: Australian Hardboards Ltd v Hudson Investment Group Ltd [2007] NSWCA 104
Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246
Deborah Raulfs v Fishy Bite Pty Limited (No 3) [2013] NSWSC 1732
Glover v Willert [1996] QCA 132
Haque v Haque (No 2) (1965) 114 CLR 98
J Sainsbury PLC v O’Connor [1991] 1 WLR 963
Katter v Melhem [2015] NSWCA 213
Kelly v The Public Trustee [2007] NSWSC 1485
Wong v Van Vlymen [2016] NSWSC 161
Category: Principal judgment
Parties: Patrick Wong (first plaintiff)
Overseas Shipping Trading and Investment Pty Limited (Cook Islands company number 3421/1998) (second plaintiff)
Willem Van Vlymen (first defendant/applicant on motion)
Magriet Van Vlymen (second defendant)
Pacific Investment Holdings Pty Ltd (third defendant)
Orbis Investment Ltd (Cook Islands company number 3749/2000) (fourth defendant)
Pacific Investment Ltd (Cook Islands company number 3749/2000) (fifth defendant)
Representation:
Counsel:
R Newlinds SC, D Barnett, Ms P Abdiel (plaintiffs)
N Hutley SC, S Burchett (defendants)
Solicitors:
Birchall Legal (plaintiffs)
Keleher lawyers (defendants)

File Number(s): 2015/60753

Judgment

The proceedings
Background facts
Legal principles
Liberty to apply and ‘working out’
Dividends enure to vendor until full purchase price is paid
Financial assistance for the purpose of acquiring shares

Parties’ submission
Applicant’s submissions
Liberty to apply and ‘working out’
Construction of the contract

Respondent’s submissions
Liberty to apply and ‘working out’
Construction of the contract
Dividends enure to vendor until full purchase price is paid
Financial assistance for the purpose of acquiring shares
Breach of fiduciary duty and other allegations

Consideration
Working Out
The Contractual Arrangements
Other Arguments
Financial assistance
Shareholdings and dividends

2016 Settlement Deed
Conclusion

Judgment

The proceedings

These proceedings concern an application by the First Defendant (Applicant) (Van Vlymen) for orders and directions for the working out of specific performance orders made by Stevenson J in the NSW Supreme Court dated 9 March 2016 (9 March 2016 Orders). These orders were pursuant to the judgment of Stevenson J in Wong v Van Vlymen [2016] NSWSC 161 (Wong v Van Vlymen). In this judgment, Stevenson J…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Patrick Wong v Willem Van Vlymen

Details

AGLC: Patrick Wong v Willem Van Vlymen [2018] NSWSC 312
Case: [2018] NSWSC 312
Decision Date: 14 March 2018

CaseChat Overview and Summary

The dispute between Patrick Wong and Willem Van Vlymen was heard in the Federal Court of Australia. The case involved a disagreement over the interpretation of a contract between the parties, specifically whether the contract permitted the sale of assets belonging to a joint venture in order to fund the purchase price of shares. The crux of the matter was whether the sale of properties held by the joint venture should be characterised as dividends or otherwise. Additionally, the case examined the applicability of Solomon Islands and Cook Islands company law in relation to financial assistance by a company to acquire its own shares, and whether the applicant could utilise the assets of the joint venture companies to pay the purchase price of the shares.

The legal issues before the court encompassed the interpretation of the contract between the parties, with a focus on whether it allowed for the sale of joint venture assets to fund the purchase price. Furthermore, the court had to determine the nature of the sale of properties held by the joint venture, specifically whether they should be considered as dividends or otherwise. The case also required the court to examine the relevance of Solomon Islands and Cook Islands company law in the context of financial assistance by a company to acquire its own shares, and whether the applicant could draw on the assets of the joint venture companies to pay the purchase price of the shares.

In its judgment, the court found that the contract between the parties did not permit the sale of joint venture assets to fund the purchase price of shares. The court also determined that the sale of properties held by the joint venture should not be characterised as dividends. Furthermore, the court held that Solomon Islands and Cook Islands company law was applicable in this case, and that the applicant could not draw on the assets of the joint venture companies to pay the purchase price of the shares. The court concluded that the effect of the orders allowing liberty to apply was to limit the extent of arguments and pleadings that could be raised under such liberty.

The final orders of the court were that the applicant was not permitted to sell the assets of the joint venture companies to fund the purchase price of shares, and that the sale of properties held by the joint venture should not be characterised as dividends. The court also confirmed the applicability of Solomon Islands and Cook Islands company law in this case, and that the applicant could not draw on the assets of the joint venture companies to pay the purchase price of the shares.

Orders