Smith v French - [2000] VSC 381

SUPREME COURT OF VICTORIA
COMMERCIAL AND EQUITY DIVISION	Not Restricted

No. 2237 of 1996

MICHAEL ROSS SMITH & ORS (According to the schedule attached)	Plaintiffs
v
WALTER MURDOCH FRENCH & ORS (According to the schedule attached)	Defendants

---

JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	21, 22, 23, 26, 27, 28, 29, 30 July 1999 2, 3, 4, 5, 6, 9, 10, 11, 12, 16, 17, 18, 19, 20, 23, 24, 25, 26, 30, 31 August 1999 1, 2, 3, 6, 7, 8, 9, 10, 13, 14, 15, 17, 20, 21, 22, 23, 24, 28, 29, 30 November 1999 1, 2, 3, 6, 7, 8, 9, 10 December 1999
DATE OF JUDGMENT:	25 September 2000
CASE MAY BE CITED AS:	Smith & Ors v French & Ors
MEDIUM NEUTRAL CITATION:	[2000] VSC 381

---

Corporations – Whether agreement for Joint Venture – Whether oppression of minority shareholder – Whether winding up order appropriate – Duties of directors – debts between companies – Whether manager was an executive officer of company – Corporations Law ss. 9, 82A, 232, 246AA, 461; Companies Code ss. 229; Corporations Law ss. 232, 1317HD

---

APPEARANCES:

Counsel

Solicitors

For the Plaintiffs

Mr D. Meagher QC

with Mr C. Gunst QC (to 6/8/99)

Mr C. Gunst QC

with Mr P. Lacava (from 6/8/99)

Middletons Moore & Bevans

For the Defendants

Mr P. Bick QC
Mr J. Davis

Norton Gledhill

Smith and Ors v French and Ors

Schedule of Parties

Michael Ross Smith	First Plaintiff
Mark Anthony McCallum	Second Plaintiff
Quarry Quip Engineering Pty Ltd	Third Plaintiff
Skye Quarries Pty Ltd	Fourth Plaintiff

Walter Murdoch French	Firstnamed Defendant
Nancy French	Secondnamed Defendant
Ian Dalton Hosking	Thirdnamed Defendant
Ballarto Pastoral Pty Ltd	Fourthnamed Defendant
Skye Quarries Sales Pty Ltd	Fifthnamed Defendant
Skye Poultry Pty Ltd	Sixthnamed Defendant
Quarry View Pty Ltd	Seventhnamed Defendant

HIS HONOUR:

The first plaintiff, Smith, is the secretary and a director of the third plaintiff, Quarry Quip Engineering Pty Ltd (“Quarry Quip”). He is the registered and beneficial owner of four of the issued shares in that company. Smith is also a director and the secretary of the fourth plaintiff, Skye Quarries Pty Ltd (“Skye Quarries”). He is the registered owner of one of the three issued shares in that company.

The second plaintiff, McCallum, is a director of Quarry Quip. He also is the registered beneficial owner of four of the issued shares in that company. McCallum is also a director of Skye Quarries. He is the registered owner of one share in that company. The third share issued by Skye Quarries is registered in the name of the second defendant, Nancy French. She is the wife of the first defendant, Walter French. The first defendant, French, is a director of Quarry Quip and is registered as the beneficial owner of the remaining four shares that have been issued by that company. Since 31 December 1979 French has been and is a director of the fourth defendant, Ballarto Pastoral Pty Ltd (“Ballarto”).…

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 Smith v French 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: [2000] VSC 381
Decision Date: 25 September 2000

CaseChat Overview and Summary

The case of Smith v French involved a dispute between the parties, Smith and French, regarding the nature of an agreement for a joint venture and whether there was oppression of a minority shareholder. Additionally, the court examined whether a winding up order was appropriate, the duties of directors, debts between companies, and whether a manager was an executive officer of the company. The decision was made by the court of first instance in Australia.

The central legal issues before the court were whether there was a valid agreement for a joint venture between the parties, whether the minority shareholder had been oppressed, and whether a winding up order was appropriate. Furthermore, the court had to consider the duties of directors, the debts between the companies, and whether the manager in question was an executive officer of the company. These issues were examined in light of the Corporations Law sections 9, 82A, 232, 246AA, 461, and the Companies Code sections 229, as well as Corporations Law sections 232, 1317HD.

In its reasoning, the court found that there was no valid agreement for a joint venture between Smith and French, as the necessary elements for such an agreement were not present. The court also determined that there was no oppression of the minority shareholder, as the actions of the majority shareholders did not unfairly prejudice the minority shareholder's interests. Furthermore, the court found that a winding up order was not appropriate, as the company was not insolvent. The court also held that the duties of directors were not breached, and that the debts between the companies did not constitute an offence under the Corporations Law. Finally, the court concluded that the manager was not an executive officer of the company, as the definition in the Corporations Law did not apply.

As a result of the court's decision, no winding up order was made, and the parties were directed to continue their business operations as per the terms of their existing agreements. The court also ordered that the costs of the proceedings be borne equally by the parties.

Orders