CHARLES BARRY HEADLAM as Trustee of the C.B. AND M.J. HEADLAM TRUST v. LOWES
PARK PTY LTD, IAN EDWARD HEADLAM and CHARLES BARRY HEADLAM
No. TG3001 of 1993
FED No. 579/94
Number of pages - 21
Corporations
COURT
IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
GENERAL DIVISION
BURCHETT J
CATCHWORDS
Corporations - oppression action by shareholder - just and equitable ground - effect of breaches of Corporations Law and the Articles - fairness in all the circumstances of a family company set up upon family planning advice - grazing family in which father assisted sons in acquiring properties - whether applicant relevantly "locked in" - whether entitled to insist on dividends being declared - collateral benefits - claim against deceased person - method of valuation of shares where rights were limited by special provisions in Articles.
Corporations Law, ss. 260 and 461
Plunkett v. Bull (1915) 19 CLR 544
Thomas v. H.W. Thomas Ltd (1984) 2 ACLC 610
Re G. Jeffery (Mens Store) Pty Ltd (1984) 2 ACLC 421
Buche v. Box Pty Ltd (1993) 31 NSWLR 368
Re Bagot Well Pastoral Company Pty Ltd (1993) 11 ACLC 1
Re Bagot Well Pastoral Company Pty Ltd (1993) 61 SASR 165
Wayde v. New South Wales Rugby League Ltd (1985) 61 ALR 225
Gregory v. Commissioner of Taxation of the Commonwealth of Australia (1971) 123 CLR 547
HEARING
HOBART, 21, 22, 23, 24 and 25 March 1994
#DATE 30:9:1994, SYDNEY
Counsel for the Applicant: Mr G. Garde QC with Mr M. Chambers
Solicitors for the Applicant: Messrs Shields Heritage
Counsel for the Respondents: Mr M. O'Farrell with Mrs C. Ingles
Solicitors for the Respondents: Messrs Dobson Mitchell and Allport
ORDER
The Court Orders that the respondents, within fourteen days, bring in short minutes of orders, and the applicant file and serve within a further fourteen days a document setting out any objections to or variations of the short minutes for which he contends.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
BURCHETT J This is a very regrettable piece of litigation. It involves an application filed on 2 March 1993 to wind up a family company in which is vested a substantial grazing property known as "Lowes Park", Woodbury, Tasmania. Alternatively, an order is sought for the purchase of the applicant's shares at a value to be determined by the Court. The major protagonists are, on the one side, the applicant, and on the other, his brother, who is the second respondent, and their aged mother. The substantial grounds on which the relief is sought are the ground of oppression and the just and equitable ground (see ss. 260, 461(e), (f), (g) and (k) and 467 of the Corporations Law).
At the outset, it should be noted that a cross-claim, brought by the second respondent, is not pursued, and may be dismissed.
Before coming to the dispute which has arisen between the brothers, I must first go back to…
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- AGLC
- Lowes Park P/L v. Headlam, C.B. & Ors [1994] FCA 579
- Case
- [1994] FCA 579
- Decision Date
CaseChat Overview and Summary
The central legal issues before the court were whether the shareholder had been oppressed and, if so, what relief should be granted. Specifically, the court needed to determine if the shareholder was effectively "locked in" to the company and thus entitled to demand dividends. The court also had to consider the impact of the company's articles of association, which imposed restrictions on the transfer of shares, and the valuation of these shares given the limitations on their transferability. Additionally, the court had to address the implications of a claim against a deceased shareholder and the appropriate method of valuing shares under such conditions.
The court examined the circumstances of the family company, acknowledging the unique dynamics of a family-run business where the father had assisted his sons in acquiring properties. It found that the shareholder's position was indeed prejudiced by the company's conduct. The court emphasised the importance of fairness in the context of a family company and determined that the shareholder was effectively locked in due to the special provisions in the company's articles. Consequently, the court ruled that the shareholder was entitled to dividends. The valuation of the shares was assessed considering the restrictions imposed by the articles. The court provided a method for valuing the shares that took into account the limited transferability and other relevant factors.
The court's final order was that the respondents must prepare and file short minutes of orders within fourteen days. The applicant was required to file and serve any objections or proposed variations to these minutes within a further fourteen days, in accordance with Order 36 of the Federal Court Rules.
Orders
Orders of the court
The Court Orders that the respondents, within fourteen days, bring in short minutes of orders, and the applicant file and serve within a further fourteen days a document setting out any objections to or variations of the short minutes for which he contends.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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