Re Chambeyron Pty Ltd - [2017] VSC 241

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2015 000489

IN THE MATTER of CHAMBEYRON PTY LTD

COLBART PTY LTD

Plaintiff

KATE PARSONS (AS LITIGATION GUARDIAN FOR KEVIN FRANCIS GERRATY)

KATE PARSONS (AS LITIGATION GUARDIAN FOR ROSEMARIE CECILA GERRATY)

FRANCINE MARIE GERRATY

CHAMBEYRON PTY LTD

First Defendant

Second Defendant

Third Defendant

Fourth Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	22, 23, 27, 28 February, 1, 6, 7, 8, 9, 16 March 2017
DATE OF JUDGMENT:	11 May 2017
CASE MAY BE CITED AS:	Re Chambeyron Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 241

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CORPORATIONS – Shareholders in a family-owned company proposed gifting their shares in the company to another company controlled by the donors’ children – Whether donors executed valid share transfers – Whether the donors of the shares did all that was necessary for them to do to effect a gift of the shares – Where register of members not produced – Where no evidence that share transfers prepared and signed – Held donee of the gift had not established that the donors had done all that was necessary for them to transfer the shares to the donee – Held donors entitled to be registered as members of the company – Sections 176, 231, 1091D and 1322(4) of the Corporations Act 2001 (Cth) (Corporations Act).

EQUITY – Circumstances where equity will enforce a gift.

EVIDENCE – Presumption of regularity – Whether presumption applies to infer shares were validly transferred from the existence of an intention by the donors to transfer the shares and subsequent conduct consistent with the shares having been transferred.

EVIDENCE – Whether inferences that shares were transferred outweighed by direct evidence that no transfers were signed by the donees.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J S Mereine	Tolhurst Druce & Emmerson
For the First and Second Defendants	Mr W Keogh solicitor for the litigation guardian for the First and Second Defendants	W Keogh solicitor
For the Third Defendant	Ms F Gerraty in person
For the Fourth Defendant	No appearance

TABLE OF CONTENTS

Introduction.......................................................................................................................... 2
Frank and Marie................................................................................................................... 3
Relevant legal principles.................................................................................................... 6
The Gerraty business........................................................................................................ 10
The July 2001 restructuring.............................................................................................. 11
Transfer of units................................................................................................................. 15
Frank’s past business dealings........................................................................................ 19
Evidence of Mr Clyne....................................................................................................... 22
Evidence of Kevin............................................................................................................. 35
Evidence of Philip............................................................................................................. 36
Evidence of Paul................................................................................................................ 39
Evidence of John................................................................................................................ 41
Evidence of Kate................................................................................................................ 42
Evidence of David............................................................................................................. 45
Evidence of Francine......................................................................................................... 47
Transfers and the Corporations Act................................................................................ 56
The register of members................................................................................................... 57
The presumption of regularity........................................................................................ 60
The transfer of the shares.................................................................................................. 64
Conclusion.......................................................................................................................... 71

HIS HONOUR:

Introduction

This case concerns a dispute over the control and ownership of the assets that Kevin Francis Gerraty (Frank) and his wife Rosemarie Gerraty (Marie), built up during their working lives. Four of their children (John, Paul, Philip and Kevin) claim that they now control the assets. Frank and Marie resist that claim.

Frank and Marie have seven children, five…

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 Chambeyron Pty Ltd

Details

AGLC: Re Chambeyron Pty Ltd [2017] VSC 241
Case: [2017] VSC 241
Decision Date: 11 May 2017

CaseChat Overview and Summary

The case of Re Chambeyron Pty Ltd involved the shareholders of a family-owned company who proposed gifting their shares to another company controlled by their children. The issue before the court was whether the shareholders had executed valid share transfers, and if they had done all that was necessary for them to effect a gift of the shares. The matter was heard in the Federal Circuit and Family Court of Australia.

The legal issues at hand were whether the donors of the shares had completed all necessary steps for a valid transfer, and whether the presumption of regularity could be used to infer that the shares had been transferred based on the intention and conduct of the donors. Additionally, the court needed to consider whether the presumption of regularity was outweighed by direct evidence that no transfers had been signed by the donees.

The court found that the donee of the gift had not established that the donors had done all that was necessary for them to transfer the shares to the donee. The court determined that the donors were entitled to be registered as members of the company. The court relied on sections 176, 231, 1091D and 1322(4) of the Corporations Act 2001 (Cth), which set out the requirements for the registration of members and share transfers in a company. The court also considered the principles of equity and evidence, concluding that the presumption of regularity did not apply in this case due to the absence of direct evidence of the share transfers. The court further found that the direct evidence of no signed transfers outweighed any inference that the shares had been transferred based on the intention and conduct of the donors.

The final orders of the court were that the donee of the gift was not entitled to be registered as a member of the company and the donors were entitled to be registered as members of the company.

Orders