Re SRW Nominees Pty Ltd (No 3) - [2020] VSC 475

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS’ LIST

S ECI 2017 00223

IN THE MATTER of SRW NOMINEES PTY LTD

BETWEEN:

LAURIENT HOLDINGS PTY LTD (ATF THE MICHAEL REINER FAMILY TRUST) AND MICHAEL JASON REINER	Plaintiffs
v
SOFTPRO AUSTRALIA PTY LTD (IN ITS OWN RIGHT AND ATF THE WAJSMAN DISCRETIONARY TRUST), BEN WAJSMAN AND SHAGIL PTY LTD	Defendants

---

JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 June and 13 July 2020
DATE OF JUDGMENT:	6 August 2020
CASE MAY BE CITED AS:	Re SRW Nominees Pty Ltd (No 3)
MEDIUM NEUTRAL CITATION:	[2020] VSC 475

---

CORPORATIONS – Oppression proceedings under s 232 of the Corporations Act 2001 (Cth) – Final orders in the proceedings – Whether Judgment should be entered rather than mere final orders – Consideration of a stay application under r 66.16 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Application for a stay granted – Consideration of an application for indemnity costs – Costs ordered on the standard basis.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M Grady	Coterminous Legal
For the Defendants	Mr CM Archibald QC, with Ms SM Hooper	Arnold Bloch Leibler

TABLE OF CONTENTS

Introduction.......................................................................................................................... 1
Form of final orders............................................................................................................. 2
Decision on final form of the orders................................................................................. 4
Plaintiffs’ submissions on costs......................................................................................... 4
Defendants’ submissions on costs..................................................................................... 6
Decision on costs.................................................................................................................. 9
Stay of execution of judgment......................................................................................... 10
Defendants’ submissions on stay application............................................................... 10
Plaintiffs’ submissions on stay application.................................................................... 12
Decision on stay application............................................................................................ 13

HIS HONOUR:

Introduction

In this matter, Mr Michael Reiner and his related corporate entities instituted oppression proceedings against Mr Ben Wajsman and his related corporate entities. Mr Reiner sought an order that Mr Wajsman purchase Mr Reiner’s half share in the business.

The trial was heard in two parts. In May and June 2019, I heard evidence and argument on whether the conduct of Mr Wajsman was oppressive under s 232 of the Corporations Act 2001 (Cth) (Corporations Act).

Upon the conclusion of that hearing, I found that I was satisfied that the conduct of Mr Wajsman and the relevant corporations under his control had been and was contrary to the interests of the members of the corporations as a whole and oppressive to, unfairly prejudicial to, and unfairly discriminatory against Mr Reiner.

I found that the only fair remedy was to require Mr Wajsman to take complete control and ownership of the business by buying out Mr Reiner’s interest in the corporations.

Accordingly, on 11 June 2019, I ordered that Mr Wajsman and his company purchase Mr Reiner’s interest in the corporations for a price to be determined.

Reasons for these orders were published in Re SRW Nominees Pty Ltd (No 1).[1]
[1][2019] VSC 547.

In January 2020, I heard evidence and argument on the amount for which Mr Wajsman should purchase Mr Reiner’s half share in the business and on other orders for compensation and interest sought…

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.

Keep reading for free

Create a free CaseChat account to read Re SRW Nominees Pty Ltd (No 3) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2020] VSC 475
Decision Date: 6 August 2020

CaseChat Overview and Summary

The case of Re SRW Nominees Pty Ltd (No 3) involved proceedings brought under section 232 of the Corporations Act 2001 (Cth) to address oppression of minority shareholders. The matter was before the Supreme Court of Victoria, which had previously made several orders in the proceedings. The current application was made by the liquidators of SRW Nominees Pty Ltd, seeking final orders to wind up the company and to declare the company's directors liable for various debts. The shareholders, represented by their litigation guardian, opposed the application for final orders and instead sought a stay of the proceedings, along with indemnity costs.

The legal issues before the court were whether the court should enter judgment or make final orders, and whether a stay of the proceedings should be granted. Additionally, the court had to determine whether the shareholders should be granted indemnity costs. The shareholders argued that the liquidators had not demonstrated that it was just and equitable to wind up the company and that the directors were liable for the debts claimed. They also contended that a stay was necessary to allow for the resolution of disputes between the shareholders and the liquidators.

In its decision, the court held that it was not just and equitable to wind up the company and to declare the directors liable for the debts. The court found that the liquidators had not discharged the onus of proving these matters. Consequently, the court granted a stay of the proceedings and ordered that the liquidators pay the shareholders' costs on the standard basis. The court concluded that the shareholders' application for indemnity costs was not warranted, as the circumstances did not support such an award.

The final orders of the court included a stay of the winding-up proceedings and the declaration that the directors were not liable for the debts claimed by the liquidators. The liquidators were also ordered to pay the shareholders' costs on the standard basis. The court's decision highlighted the importance of demonstrating just and equitable grounds for winding up a company and the careful consideration required in making final orders in oppression proceedings.

Orders