Sara Stockham Pty Ltd v WLD Practice Holdings Pty Ltd

Sara Stockham Pty Ltd (Sara Stockham) and WLD Practice Holdings Pty Ltd were parties to a unitholders agreement. The dispute arose when Sara Stockham, as a unitholder, wished to exit its holding. The unitholders agreement contained provisions for the valuation of units of an exiting unitholder, as well as a prohibition on the trustee effecting decisions regarding Major Policy Issues without unanimous unitholder resolution. The Court of Appeal of the Supreme Court of New South Wales was required to determine the construction of these provisions, specifically whether a valuer appointed under the agreement was required to be satisfied that decisions made by the trustee had complied with the clause concerning Major Policy Issues.

The primary legal issues before the Court of Appeal concerned the interpretation of the unitholders agreement, particularly the interplay between the valuation provisions for an exiting unitholder and the requirement for unanimous resolution on Major Policy Issues. The court was asked to determine whether the valuer's role extended to assessing the trustee's compliance with the Major Policy Issues clause when undertaking the valuation. Additionally, the court considered whether an appeal lay as of right, given that a cross-claim had been dismissed following the determination of separate questions, and whether the threshold requirement of $100,000 for an appeal as of right was met.

The Court of Appeal dismissed the notice of appeal as incompetent, finding that an appeal as of right was not available as the matter at issue did not meet the required monetary threshold. Consequently, the application for leave to appeal was also dismissed. The court's reasoning focused on the procedural aspects of the appeal and the statutory requirements for appeals as of right. The substantive construction of the unitholders agreement, while argued, did not proceed to a final determination on the merits due to the dismissal of the appeal.

The orders of the Court of Appeal were that the notice of appeal filed on 9 December 2020 be dismissed as incompetent, and the application for leave to appeal be dismissed. Sara Stockham and Sara Stockham Pty Ltd were ordered to pay the costs of WLD Practice Holdings Pty Ltd in the Court of Appeal.