Court of Appeal
Supreme Court
New South Wales
- Summary available
Medium Neutral Citation: Dr Shanahan v Jatese Pty Ltd [2019] NSWCA 113 Hearing dates: 21 March 2019 Date of orders: 20 May 2019 Decision date: 20 May 2019 Before: Bathurst CJ at [1]; Bell P at [113]; Emmett AJA at [143] Decision: (1) Appeal dismissed.
(2) Appellants to pay the respondents’ costs of the appeal.Catchwords: CORPORATIONS – Members’ rights and remedies – Oppression – Where conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory - primary judge found affairs of Canberra Eye Hospital Pty Ltd carried on in a manner oppressive to and unfairly prejudicial to appellants.
VALUATION – Types of property – Shares – Oppression –– primary judge found oppressive conduct - primary judge dismissed claim for relief under s 233 Corporations Act 2001 (Cth) – appellants claimed that as a consequence of oppressive conduct, appellants sold their shares to interests associated with respondents at less than their fair value – appellants sought order that respondents pay the appellants compensation, representing difference between the fair value of shares and sale price – whether primary judge erred in method of valuation of shares sold by the appellants - whether primary judge erred in failure to include hypothetical income in valuation of shares – whether primary judge erred in taking into account death of surgeon in valuation of shares.Legislation Cited: Corporations Act 2001 (Cth)
Trade Practices Act 1974 (Cth)Cases Cited: Armory v Delamirie (1722) 1 Stra 505; 93 ER 664
Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Dynasty Pty Ltd v Coombs (1995) 59 FCR 122
ES Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1994) 15 ACSR 536
Foody v Horewood [2007] VSCA 130
Gregory v Commissioner of Taxation (Cth) (1971) 123 CLR 547; [1971] HCA 2
Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46
HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54
HTW Valuers (Central Queensland) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54
Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (No 2) (1990) 24 NSWLR 499
McCartney v Orica Investments Pty Ltd [2011] NSWCA 337
Mopeke Pty Ltd v Airport Fine Foods Pty Ltd [2007] NSWSC 153
Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3
Rankine v Rankine (1995) 124 FLR 340; 18 ACSR 725
Re Bird Precision Bellows Ltd [1986] Ch 658
Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549
Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324
Smith Martis Cork & Rajan Pty Ltd v Benjamin Corp Pty Ltd [2004] FCAFC…
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Details
- AGLC
- Dr Shanahan v Jatese Pty Ltd [2019] NSWCA 113
- Case
- [2019] NSWCA 113
- Decision Date
CaseChat Overview and Summary
Shanahan v Jatese Pty Ltd concerned an appeal to the Court of Appeal of New South Wales regarding a finding of oppressive conduct in relation to Canberra Eye Hospital Pty Ltd. The appellants, former shareholders, alleged that the affairs of the company had been conducted in a manner oppressive to, unfairly prejudicial to, or unfairly discriminatory against them. Following the primary judge's finding of oppressive conduct, the appellants sought compensation for the difference between the alleged fair value of their shares and the price at which they were sold to parties associated with the respondents.
The central legal issues before the Court of Appeal were whether the primary judge had erred in the method of valuation of the shares sold by the appellants. Specifically, the appellants contended that the primary judge had wrongly failed to include hypothetical income in the valuation and had improperly taken into account the death of a surgeon in that valuation. These valuation disputes arose in the context of the appellants' claim for compensation under section 233 of the *Corporations Act 2001* (Cth), following the primary judge's determination that oppressive conduct had occurred.
The Court of Appeal dismissed the appeal, upholding the primary judge's decision. The Court found no error in the primary judge's approach to the valuation of the shares. The reasoning involved a detailed consideration of the principles of share valuation in oppression proceedings, particularly in circumstances where the oppressive conduct itself may have impacted the value of the shares. The Court concluded that the primary judge had correctly applied these principles and that the factors considered, including the death of the surgeon and the exclusion of hypothetical income, were appropriate in determining the fair value of the shares in the context of the established oppressive conduct. Consequently, the appellants were ordered to pay the respondents' costs of the appeal.
The central legal issues before the Court of Appeal were whether the primary judge had erred in the method of valuation of the shares sold by the appellants. Specifically, the appellants contended that the primary judge had wrongly failed to include hypothetical income in the valuation and had improperly taken into account the death of a surgeon in that valuation. These valuation disputes arose in the context of the appellants' claim for compensation under section 233 of the *Corporations Act 2001* (Cth), following the primary judge's determination that oppressive conduct had occurred.
The Court of Appeal dismissed the appeal, upholding the primary judge's decision. The Court found no error in the primary judge's approach to the valuation of the shares. The reasoning involved a detailed consideration of the principles of share valuation in oppression proceedings, particularly in circumstances where the oppressive conduct itself may have impacted the value of the shares. The Court concluded that the primary judge had correctly applied these principles and that the factors considered, including the death of the surgeon and the exclusion of hypothetical income, were appropriate in determining the fair value of the shares in the context of the established oppressive conduct. Consequently, the appellants were ordered to pay the respondents' costs of the appeal.
Orders
Orders of the court
(1) Appeal dismissed.
(2) Appellants to pay the respondents’ costs of the appeal.
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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