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Re Pure Nature Sydney Pty Ltd

Re Pure Nature Sydney Pty Ltd

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Case Copied 19 June 2018 60 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Pure Nature Sydney Pty Ltd [2018] NSWSC 914
Hearing dates: 11 May 2018 and 15 – 18 May 2018
Decision date: 19 June 2018
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
The First Defendant is to be wound up and Mr Steven Nicols, of Nicols & Brien, is to be appointed as liquidator of the First Defendant. This order to be stayed to 2pm on 4 July 2018.

Catchwords:
CORPORATIONS – oppression – application for an order for the purchase of shares by a member of a company under s 233(1)(d) of the Corporations Act 2001 (Cth) – where both parties have engaged in oppressive conduct – whether to grant order for buy-out of one party’s share by the other.
CORPORATIONS – winding up – application to wind up company on just and equitable ground under s 461(1)(k) of the Corporations Act – where breakdown of relations and loss of confidence between company's members – whether company should be wound up.
Legislation Cited: - Corporations Act 2001 (Cth) ss 9, 182, 183, 232, 233, 461, 466, 467
- Evidence Act 1995 (NSW) s 136
Cases Cited: - Australian Institute of Fitness Pty Ltd v Australian Institute of Fitness (Vic/Tas) Pty Ltd (No 3) [2015] NSWSC 1639; (2015) 109 ACSR 369
- Belgiorno-Zegna v Exben Pty Ltd [2000] NSWSC 884; (2000) 35 ACSR 305
- Duc v PTS Australian Distributor Pty Ltd [2005] NSWSC 98
- Ebrahimi v Westbourne Galleries Ltd [1973] AC 360
- Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672
- Guerinoni v Argyle Concrete & Quarry Supplies Pty Ltd [2000] WASCA 170; (1999) 34 ACSR 469
- Hillam v Ample Source International Ltd (No 2) [2012] FCAFC 73; (2012) 202 FCR 336
- Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692
- Munstermann v Rayward [2017] NSWSC 133
- Nassar v Innovative Precasters Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343
- Re AJ Roberts Removals & Storage Pty Limited [2017] NSWSC 1054
- Re Amazon Pest Control Pty Ltd [2012] NSWSC 1568
- Re Catombal Investments Pty Ltd [2012] NSWSC 775
- Re Ledir Enterprises Pty Ltd [2013] NSWSC 1332; (2013) 96 ACSR 1
- Re Yenidje Tobacco Company Ltd [1916] 2 Ch 426
- Ruut v Head (1996) 20 ACSR 160
- Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152
- Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) 84 ACSR 121
- Victory Projects Pty Ltd v AAA Self Storage Pty Ltd [2016] NSWSC 1758 and
- Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459
- Wondoflex Textiles Ltd [1951] VLR 458 at 465; Ruut v Head (1996) 20 ACSR 160
Category: Principal judgment
Parties: Song A Chae (Plaintiff)
Pure Nature Sydney Pty Limited (First…

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.

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Details

Case: [2018] NSWSC 914
Decision Date: 19 June 2018

CaseChat Overview and Summary

Pure Nature Sydney Pty Ltd was the subject of an application filed by a shareholder, who sought an order for the purchase of their shares under section 233(1)(d) of the Corporations Act 2001 (Cth) due to oppressive conduct by the other shareholders. The applicant also made an application to wind up the company on just and equitable grounds under section 461(1)(k) of the Corporations Act due to the breakdown of relations and loss of confidence between the company's members. The court was required to determine whether the oppressive conduct was sufficient to warrant a buy-out of the applicant's shares and whether the company should be wound up due to the irretrievable breakdown of relations.

The court found that both parties had engaged in oppressive conduct, but the oppressive conduct by the other shareholders was not sufficient to warrant a buy-out order under section 233(1)(d) of the Corporations Act. The court held that the applicant's own conduct had also contributed to the breakdown of relations and loss of confidence, and that winding up the company on just and equitable grounds was not in the best interests of the company and its members. The court noted that the applicant had not demonstrated that the company could not continue to operate effectively without them, and that there were other remedies available to address the oppressive conduct.

The court dismissed both applications, finding that the oppressive conduct by the other shareholders did not warrant a buy-out order under section 233(1)(d) of the Corporations Act, and that winding up the company on just and equitable grounds was not in the best interests of the company and its members. The court emphasised the importance of the parties working together to resolve their differences and to ensure the continued success of the company. The court also noted that the applicant had other remedies available to address the oppressive conduct, such as seeking an injunction or damages.

Orders