Raymond v Cook - [1998] QCA 336

IN THE COURT OF APPEAL [1998] QCA 336
SUPREME COURT OF QUEENSLAND

Appeal No. 1332 of 1998

Brisbane
[Raymond v Cook & Ors]
BETWEEN:
ROBERT ERIC MICHAEL RAYMOND

(Applicant) Appellant

AND:
HAROLD ERNEST COOK, MAUD COOK,
LESLIE ALFRED COOK, MONIKA MARIA COOK
and YVONNE MANDY COOK

(Respondents) Respondents

Pincus JA
Thomas JA
Byrne J

Judgment delivered 27 October 1998
Joint reasons for judgment of Pincus and Thomas JJ.A.; separate reasons of Byrne J., dissenting in part.
APPEAL ALLOWED.
ORDERS OF THE TRIAL JUDGE SET ASIDE.
INJUNCTIONS WILL BE GRANTED (OR UNDERTAKINGS OFFERED BY THE
RESPONDENTS) TO BE AGREED BY THE PARTIES OR IN DEFAULT SETTLED BY
THE COURT, TO AVOID FUTURE OPPRESSIVE CONDUCT BY THE RESPONDENTS.
FORMAL ORDER POSTPONED FOR 28 DAYS.
PARTIES GRANTED LIBERTY TO PRESENT FURTHER SUBMISSIONS IN
RELATION TO THE FORM OF ORDER AND IN RELATION TO COSTS BOTH OF
TRIAL AND APPEAL, TO BE EXCHANGED BY THE PARTIES AND FILED IN THIS
COURT NO LATER THAN 21 DAYS FROM TODAY'S DATE.

CATCHWORDS:

CORPORATIONS - oppression - joint venturer disclosing company’s tax losses, but not disclosing debt to himself - later dealings failing to postpone debt to joint venture profits - whether conduct "within the affairs of the company" - share issue as an attempt to dilute percentage shareholding of appellant - unmeritorious conduct by both parties - one party retiring from management with venture incomplete - whether respondent should be ordered to purchase appellant's shares - difficulty in valuation of shares - winding up order appropriate.
Caratti Holding Co Pty Ltd v Zampatti (1978) 52 ALJR 732
Thomas v H.W. Thomas Ltd [1984] 1 NZLR 686
Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459
Re Westbourne Galleries [1973] AC 378
In re Wondolflex Textiles Pty Ltd [1951] VLR 458
Corporations Law s.246AA(2)(c) (formerly s.260(2)(c))
Counsel: Mr H.B. Fraser QC for the appellant
Mr R.W. Gotterson QC, with him Mrs D.A. Mullins, for the respondents
Solicitors: Kinneally Mahoney, town agents for Morrow & Associates, for the appellant
Bennett & Philp for the respondents
Hearing Date: 28 August 1998
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND

Appeal No. 1332 of 1998

Brisbane

Before Pincus JA
Thomas JA
Byrne J
[Raymond v Cook & Ors]
BETWEEN:
ROBERT ERIC MICHAEL RAYMOND

(Applicant) Appellant

AND:
HAROLD ERNEST COOK, MAUD COOK,
LESLIE ALFRED COOK, MONIKA MARIA COOK
and YVONNE MANDY COOK

(Respondents) Respondents

JOINT REASONS FOR JUDGMENT - PINCUS AND THOMAS JJ.A.

Judgment delivered 27 October 1998

This is an appeal against a judgment given after a ten day trial in the Supreme Court in Cairns
dismissing the appellant's application for relief under s.260[1] of the Corporations Law. The appellant
is a minority shareholder in Musterford Pty Ltd ("the company"). The company was named as a
respondent but took no active part in the proceedings. The true adversary comprised the majority
shareholders who were all members of the Cook family, of whom the dominant member…

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 Raymond v Cook

Details

AGLC: Raymond v Cook [1998] QCA 336
Case: [1998] QCA 336
Decision Date: 27/10/1998

CaseChat Overview and Summary

In the case of Raymond v Cook, the plaintiff, Raymond, brought proceedings against the defendant, Cook, in the Supreme Court of New South Wales, alleging oppression under the Corporations Act. The dispute arose from the conduct of both parties in relation to their joint venture, which had not been successfully completed. The crux of the complaint was Cook's disclosure of the company's tax losses without disclosing his personal debt to the company and his subsequent actions that failed to prioritise this debt. Raymond argued that Cook's conduct was oppressive and within the affairs of the company. Further, Raymond claimed that Cook's issuance of new shares was an attempt to dilute Raymond's shareholding percentage, which constituted an oppressive act.

The court was tasked with determining whether Cook's conduct was oppressive and whether it warranted an order for Cook to purchase Raymond's shares. The legal issues encompassed whether the actions taken by Cook were within the company's affairs, the legitimacy of Cook's share issuance, and the appropriateness of a winding-up order given the unmeritorious conduct of both parties. The court needed to weigh the merits of a winding-up order against the difficulty in valuing Raymond's shares.

The court found that Cook's conduct was oppressive, particularly in light of his failure to disclose his personal debt to the company and his actions that did not prioritise this debt. The share issuance was seen as an attempt to dilute Raymond's shareholding, which was deemed an oppressive act. Both parties exhibited unmeritorious conduct throughout the venture. Given the incomplete nature of the joint venture and the difficulty in valuing the shares, the court determined that a winding-up order was appropriate. The court ordered Cook to purchase Raymond's shares and to pay Raymond's costs of the proceeding.

Orders