Snell v Glatis (No 2)

Case [2020] NSWCA 166

Court of Appeal


Supreme Court


New South Wales

  • Summary available
  • Amendment notes
Medium Neutral Citation: Snell v Glatis (No 2) [2020] NSWCA 166
Hearing dates: 25 June 2020; 15 July 2020
Decision date: 06 August 2020
Before: Bell P at [1];
Meagher JA at [8];
Leeming JA at [9].
Decision:

1. Grant leave to the appellant to rely on the further amended notice of appeal filed 26 June 2020.

2. Appeal allowed in part.

3. Set aside orders 7-14 made on 27 November 2019.

4. Direct the parties to supply agreed short minutes of order, or, in default of agreement, minutes of the orders each seeks and submissions not exceeding 5 pages in support, within 28 days of today, with submissions in response within 14 days thereafter, with a view to the remaining issues to be determined on the papers including the costs of the appeal (unless otherwise agreed).

Catchwords:

CORPORATIONS – oppression – remedies – compulsory buy-out or winding up – many instances of oppressive conduct over many years – companies not actively trading – principal assets real estate and loans – primary judge ordered compulsory buy-out – appellant required to pay $66 million within 30 days – appellant elderly and unwell – relevance of inability to pay – forensic decision not to adduce evidence of financial circumstances – subject to pecuniary orders remedying particular items of oppression, winding up ordered

Legislation Cited:

Corporations Act 2001 (Cth), ss 232, 233

Uniform Civil Procedure Rules 2005 (NSW), r 36.16

Cases Cited:

Allways Resources Holdings Pty Ltd v Samgris Resources Pty Ltd [2017] QSC 74; 121 ACSR 1

Asia Pacific Joint Mining Pty Ltd v Allways Resources Holdings Pty Ltd [2018] 3 Qd R 520; [2018] QCA 48

Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201; [2007] NSWCA 104

Boateng v Dharamdas [2019] NSWCA 233

Clark Equipment Credit of Australia Ltd v Como Factors Pty Ltd (1988) 14 NSWLR 552

Crawley v Short [2009] NSWCA 410; 76 ACSR 286

Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; 28 ACSR 688

Haviland v McLeary (1894) 15 NSW Eq 22

House v The King (1936) 55 CLR 419; [1936] HCA 40

In the matter of OTS (Australia) Pty Ltd [2017] NSWSC 175

Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133

Re a Company (1986) 2 BCC 99,453

Re Hollen Australia Pty Ltd [2009] VSC 95; 27 ACLC 199

Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50

Short v Crawley (No 30) [2007] NSWSC 1322

Short v Crawley (No 38) [2008] NSWSC 917; 67 ACSR 627

Snell v Glatis [2020] NSWCA 78

Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152

Texts Cited:

E Daniell, The Practice of the High Court of Chancery (5th ed 1871), Vol 1

W Parker, The Practice in Equity (The Law Book Co of Australasia Ltd, 1930)

Category:Principal judgment
Parties: Keith Eddy Snell (Appellant)
Christopher Glatis (First Respondent)

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AGLC
Snell v Glatis (No 2) [2020] NSWCA 166
Case
[2020] NSWCA 166
Decision Date

CaseChat Overview and Summary

In *Snell v Glatis (No 2)*, the Court of Appeal of New South Wales considered an appeal concerning allegations of oppressive conduct within companies. The primary judge had ordered a compulsory buy-out of the appellant's shares for $66 million, payable within 30 days. The appellant, who was elderly and unwell, sought to appeal this order, arguing, among other things, his inability to meet the payment deadline.

The central legal issues before the Court of Appeal were whether the primary judge erred in ordering a compulsory buy-out given the appellant's financial circumstances and whether winding up the companies was a more appropriate remedy. The court also had to consider the relevance of the appellant's forensic decision not to adduce evidence of his financial position at the original hearing.

The Court of Appeal allowed the appeal in part. While acknowledging that there had been many instances of oppressive conduct over many years, and that the companies were not actively trading, the court found that winding up was the more appropriate remedy in this instance, particularly given the appellant's inability to pay the buy-out sum. The court set aside the orders for the compulsory buy-out and directed the parties to agree on short minutes of order or, failing agreement, to submit their proposed orders and supporting submissions for determination on the papers, including the costs of the appeal.

Orders

Orders of the court

1. Grant leave to the appellant to rely on the further amended notice of appeal filed 26 June 2020.

2. Appeal allowed in part.

3. Set aside orders 7-14 made on 27 November 2019.

4. Direct the parties to supply agreed short minutes of order, or, in default of agreement, minutes of the orders each seeks and submissions not exceeding 5 pages in support, within 28 days of today, with submissions in response within 14 days thereafter, with a view to the remaining issues to be determined on the papers including the costs of the appeal (unless otherwise agreed).

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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