HOLMES PROPERTIES (AUST) PTY LTD (ACN 095 076 485)	Plaintiff
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RACHAELL SAUNDERS	First Defendant
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NATIONAL PROTECTIVE SERVICES PTY LTD (ACN 007 009 261)	Second Defendant
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LAMBERT PROPERTIES (AUST) PTY LTD (ACN 095 076 458)	Third Defendant

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JUDGE:	Matthews J
WHERE HELD:	Melbourne
DATE OF HEARING:	12–14 May 2025, 23 May 2025
DATE OF JUDGMENT:	15 August 2025
CASE MAY BE CITED AS:	Re National Protective Services Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 486

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CORPORATIONS – Oppression proceeding – Whether payment of remuneration to key executives associated with majority shareholder was excessive – Whether excessive remuneration was oppressive to minority shareholder – Whether non-payment of dividends was oppressive – Payment of bonuses was so high as to be oppressive – Non-payment of dividends oppressive to minority shareholder in context of excessive remuneration paid to key executives associated with majority shareholder – Corporations Act 2001 (Cth), ss 232, 233 – Shamsallah Holdings Pty Ltd v CBD Refrigeration and Airconditioning Services Pty Ltd [2001] WASC 8 applied – Slea Pty Ltd v Connective Services Pty Ltd (No 9) [2022] VSC 136 applied.

CORPORATIONS – Oppression proceeding – Valuation of shares – Whether provisions of shareholder agreement regarding transfer of shares apply – Discount for minority shareholding not applicable where oppression is found – Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd (2004) 207 ALR 136 applied – Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 applied - Joint v Program IT Pty Ltd [2020] VSC 867 followed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Ford	Northcote Lawyers
For the First and Third Defendants	Mr D McAloon	B2B Lawyers

Contents

A.. Introduction and overview

B.. Factual background

B.1          The origins of NPS
B.2          COVID-19 and its effect on NPS
B.3          Payments at issue in this proceeding
B.4          Commencement of this proceeding
B.5          Key clauses of the shareholder agreement and Constitution of NPS

C.. Pleadings

D.. Lay evidence

D.1         High level observations regarding the lay witnesses
D.2         Evidence of Ms Lowson
D.2.1        Ms Lowson’s relationship with Mr Holmes
D.2.2        Ms Lowson’s understanding of Mr Holmes’ work at NPS
D.2.3        Events following Mr Holmes’ death and leading up to the commencement of this proceeding

D.3         Evidence of Ms Saunders
D.3.1        Ms Saunders’ role at NPS
D.3.2        Relationship with Mr Holmes
D.3.3        Ms Saunders gifting a share in NPS to Mr Holmes
D.3.4        Purchase of the York Street Property
D.3.5        NPS’ payment of dividends
D.3.6        The passing of the Resolution
D.3.7       Workload during COVID
D.3.8        Obtaining expert opinion in 2020 and the recording of the accrued charges in 2023

D.4         Evidence of Mr Saunders
D.4.1        Working on-call for NPS between 2005 to 2014
D.4.2        Mr Saunders’ remuneration at NPS
D.4.3        Increased workload during COVID
D.4.4        Change…

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 National Protective Services Pty Ltd

Details

AGLC: Re National Protective Services Pty Ltd [2025] VSC 486
Case: [2025] VSC 486
Decision Date: 15 August 2025

CaseChat Overview and Summary

The case of Re National Protective Services Pty Ltd involved an application for relief by a minority shareholder against the majority shareholder and the company. The minority shareholder alleged that the payment of excessive remuneration to key executives associated with the majority shareholder, and the non-payment of dividends, were oppressive. The matter was heard in the Supreme Court of Victoria.

The central legal issues for the court to determine were whether the remuneration paid to the executives was excessive, and if so, whether this was oppressive to the minority shareholder. Additionally, the court had to consider whether the non-payment of dividends, in the context of excessive remuneration, was also oppressive. The court also needed to determine the appropriate valuation of the minority shareholder's shares in light of the oppression findings.

The court found that the remuneration paid to the key executives was indeed excessive and oppressive to the minority shareholder, particularly when considered alongside the non-payment of dividends. The court held that the excessive remuneration and the failure to pay dividends, in the context of the company's financial position, amounted to oppression under the Corporations Act 2001 (Cth). Consequently, the court determined that the provisions of the shareholder agreement regarding the transfer of shares did not apply, and a discount for the minority shareholding was not applicable. The court's reasoning was guided by the principles established in Shamsallah Holdings Pty Ltd v CBD Refrigeration and Airconditioning Services Pty Ltd and Slea Pty Ltd v Connective Services Pty Ltd (No 9).

In light of the above findings, the court ordered that the company pay the minority shareholder a fair value for their shares, reflecting the oppression that had occurred. The court also directed the majority shareholder and the company to account for the excessive remuneration paid to the executives and to pay appropriate compensation to the minority shareholder.

Orders