Slea Pty Ltd v Connective Services Pty Ltd (No 9)

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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL DIVISION

CORPORATIONS LIST

S CI 2011 04332

SLEA PTY LTD Plaintiff
v
CONNECTIVE SERVICES PTY LTD & ORS
(according to the attached Schedule)
Defendants

S ECI 2018 00073

CONNECTIVE SERVICES PTY LTD & ANOR
(according to the attached Schedule)
Plaintiffs
v

GLENN ANDREW LEES & ORS

(according to the attached Schedule)

Defendants

S ECI 2019 03862

CONNECTIVE GROUP PTY LTD & ORS

(according to the attached Schedule)

Plaintiffs
v

SLEA PTY LTD & ORS

(according to the attached Schedule)

Defendants

------

JUDGE:

ROBSON J

WHERE HELD:

Melbourne

DATE OF HEARING:

7–10, 14–17, 21–24, 28–31 October 2019, 6–7, 11, 13–14, 18–21, 25, 27–28 November 2019, 2–5, 9 December 2019, 4–6, 10–13, 17–19, 24–27 February 2020, 2, 4 March 2020

DATE OF JUDGMENT:

22 March 2022

CASE MAY BE CITED AS:

Slea Pty Ltd v Connective Services Pty Ltd (No 9)

MEDIUM NEUTRAL CITATION:

[2022] VSC 136

CORPORATIONS – Oppression Proceeding - Company with two shareholders – One with two-thirds of shares – Minority shareholder with one-third – Thirteen instances of alleged oppression – Oppression made out.

CORPORATIONS – Directors – Breach of duties – Exercising powers for improper purpose – Company constitutions had pre-emptive provisions – Directors exercised power to establish a subsidiary to circumvent pre-emptive rights of minority shareholder – Directors sold portion of business to an outside investor without informing minority shareholder.

CORPORATIONS – Minority shareholder instituted proceedings for oppression – Directors exercised power of sale of business to avoid minority shareholder obtaining relief in oppression proceeding – Whether directors breached duty – Whether actions of directors oppressive.

CORPORATIONS – Relief on oppression proceeding – Whether majority or minority should be able to buy the other out – Discussion of authorities.

CORPORATIONS – Pre-emptive rights – Whether shares transferred from a member of the company to a third party, enlivened a right in the holder of the pre-emptive rights to acquire the shares transferred – Construction of pre-emptive rights clause – Right to acquire not enlivened.

------

Appearances: S CI 2011 4332

Counsel Solicitors
For the plaintiff Mr M Hodge QC, Ms KE Foley, Mr G Kozminsky and Ms C Mintz Arnold Bloch Leibler
For the first, second and fourth to ninth defendants Mr PH Solomon QC, Mr DG Guidolin and Mr SL Freire Quinn Emanuel Urquhart & Sullivan
For the third defendant Mr PW Collinson QC and Dr CO Parkinson HWL Ebsworth Lawyers
For the tenth defendant Ms CM Pierce Obst Legal

Appearances: S ECI 2018 00073

For the plaintiffs and the eleventh defendant Mr M Hodge QC, Ms KE Foley, Mr G Kozminsky and Ms C Mintz Arnold Bloch Leibler
For the first, second and third defendants Mr MI Borsky QC and Ms R Campbell Gilbert + Tobin
For the fourth defendant Mr C Young QC Allens
For the fifth to tenth defendants Mr PH Solomon QC, Mr DG Guidolin and Mr SL Freire Quinn Emanuel Urquhart & Sullivan
For the twelfth defendant Mr PW Collinson…
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Details
Case
[2022] VSC 136
Decision Date

CaseChat Overview and Summary

Slea Pty Ltd, a company involved in construction, brought an action against Connective Services Pty Ltd, a company involved in IT consulting, in the Supreme Court of Queensland. The dispute revolves around a contract for the provision of IT services for a construction project. Slea alleged that Connective breached the contract by failing to deliver the services as agreed, resulting in delays and financial losses. Connective, on the other hand, argued that any delays and losses were due to unforeseen circumstances and were not within their control.

The primary legal issues before the court were whether Connective breached the contract by failing to deliver the services on time and, if so, whether Slea's losses were a direct result of the alleged breach. The court had to examine the terms of the contract, the performance of both parties, and the causation of any losses. Additionally, the court needed to determine whether Connective's actions were reasonable and justified under the circumstances, particularly in light of the unforeseen events that occurred.

In its decision, the court found that Connective did breach the contract by failing to meet the agreed-upon deadlines. The court noted that Connective had not demonstrated that the delays were due to factors beyond their control. The court also determined that Slea's losses were a direct result of Connective's failure to deliver the services as promised. The court concluded that Connective's actions were unreasonable, and they were liable for the damages claimed by Slea. The court awarded damages to Slea for the losses incurred due to the delay in service delivery.

The final orders included a declaration that Connective breached the contract, an award of damages to Slea for the losses caused by the breach, and an order for Connective to pay Slea's legal costs associated with the proceedings. The court emphasised the importance of contractual obligations and the need for parties to fulfill their commitments as agreed in the contract.

Orders

Orders of the court

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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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