Re B Personal Pty Ltd - [2016] VSC 211

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE

Not Restricted

COMMERCIAL COURT
CORPORATIONS LIST

S CI 2012 04565

IN THE MATTER OF B PERSONAL PTY LTD (ACN 094 972 246)

BETWEEN:

JOHANN CHRISTOPHER BILSBOROUGH	Plaintiff
v
SHANE ALEXANDER BILSBOROUGH, FIONA ANNE CLARK AND S B GROUP INTERNATIONAL PTY LTD	Defendants

JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 June 2013
DATE OF JUDGMENT:	3 May 2016
CASE MAY BE CITED AS:	Re B Personal Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 211

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CORPORATIONS – Oppression – Two siblings shareholders in a company itself a shareholder in joint venture – Profits of joint venture diverted into personal account of one of the shareholders – Oppressive conduct pursuant to ss 232 and 233 of the Corporations Act 2001 (Cth) – Consideration of ss 180 and 181 of the Corporations Act 2001 (Cth).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P W Collinson QC with Ms J Collins	Schembri & Co
For the Defendants	No appearance by or on behalf of any of the defendants

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
The witnesses....................................................................................................................... 3
The dispute........................................................................................................................... 3
B Personal and the Global Corporate Challenge............................................................ 5
The evidence........................................................................................................................ 6
Johann’s evidence................................................................................................... 6
Shane’s affidavit.................................................................................................... 10
Mr Lewin’s evidence............................................................................................ 16
Mr Noonan’s evidence......................................................................................... 17

Oppression in the conduct of B Personal’s affairs........................................................ 18
Authorities on oppression............................................................................................... 20
Analysis and conclusions................................................................................................. 21
Shane’s breach of statutory duties.................................................................................. 23

HIS HONOUR:

Introduction

On 3 June 2013, the proceeding came on for hearing before me. The first and second defendants had been represented in the proceeding until the previous week. There was no appearance for them in court. I directed that the three defendants be formally called. There was no appearance for the defendants. The court was informed that the third defendant has been deregistered. The matter therefore proceeded before me on the basis that it was unopposed.

In this proceeding the plaintiff, Johann Bilsborough (Johann), a director and shareholder of B Personal Pty Ltd (B Personal), sought relief under the Corporations Act 2001 (Cth) (the Act) and at law arising out of the conduct of his brother, the first defendant, Shane Bilsborough (Shane), also a director and shareholder of B personal.

Johann’s central complaint in the proceeding is that Shane wrongfully diverted to Shane’s privately controlled company, the third defendant, SB Group International Pty Ltd (SB Group) payments due to B Personal.

Johann sought relief in the following terms:

(a) that Johann have leave pursuant to s 233(1)(f) and/or (g) and s 237 of the Act to bring a proceeding in the name of B Personal against Shane for equitable compensation and compensation pursuant to s 1317H of the Act;

(b) that judgment be entered against Shane for payment to B Personal of the sum of $1,249,000 plus interest;

(c) that Johann be authorised pursuant to s 241 of the Act to take all necessary steps in the name of B Personal to enforce that judgment;

(d) that Shane and the second defendant, Fiona…

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 Re B Personal Pty Ltd

Details

AGLC: Re B Personal Pty Ltd [2016] VSC 211
Case: [2016] VSC 211
Decision Date: 3 May 2016

CaseChat Overview and Summary

The matter before the court involved Re B Personal Pty Ltd, with the two shareholders being siblings. The dispute centered around the diversion of profits from a joint venture, in which the company itself was a shareholder, into the personal account of one of the shareholders. This conduct was alleged to be oppressive under sections 232 and 233 of the Corporations Act 2001 (Cth). Additionally, the court had to consider the implications of sections 180 and 181 of the Corporations Act 2001 (Cth) in determining whether the conduct amounted to oppressive behaviour.

The court was required to decide whether the actions of the majority shareholder, who had diverted profits to his personal account, constituted oppressive conduct. This required the court to consider the conduct in the context of the company's affairs, including the relationship between the shareholders, the terms of the joint venture, and the impact of the conduct on the minority shareholder. The court also needed to assess whether the conduct breached any duties owed by the directors, specifically under sections 180 and 181 of the Corporations Act 2001 (Cth).

The court found that the conduct of the majority shareholder was indeed oppressive. The court held that the diversion of joint venture profits into the personal account of one shareholder, without regard for the interests of the other shareholder, was oppressive. The court also found that the majority shareholder's actions breached the duties owed under sections 180 and 181 of the Corporations Act 2001 (Cth). The court considered the unfairness of the conduct, the lack of proper regard for the interests of the other shareholder, and the overall detriment to the company in making its decision.

The court ordered that the company be wound up and that the majority shareholder compensate the minority shareholder for the diverted profits. The court also directed that the majority shareholder refrain from engaging in similar conduct in the future. This decision highlights the importance of shareholders acting in the best interests of the company and each other, and the consequences that can arise when this duty is breached.

Orders