BETWEEN: ERROL DALE STONE
First Plaintiff
ROBYN TERESA STONE
Second Plaintiff
AND
GLENDYC PTY LTD (ACN 008 758 110)
First Defendant
DONALD THOMAS STONE
Second Defendant
PHYLLIS YVONNE STONE
Third Defendant
NOEL RAYMOND STONE
SHAUNA FRANCES STONE
Fourth Defendants

Catchwords:

Contract - Transfer of shares in land holding company pursuant to dissolution of family farming partnership - Whether plaintiff contracted to purchase shares for a consideration payable in ten annual instalments without further payment - Whether arrangement too uncertain to be legally enforceable

Partnership - Family farming business - Retirement of parents - Objective for sons to continue farming independently - Dissolution by division of machinery and land into separate farms for each son - Annual payments by each son to finance retirement - Completion of qualifying period by each son - Payment of further sum by each son after qualifying period before transfer of controlling shares

Equity - Estoppel - Whether detrimental reliance by plaintiff working and improving farm in order to obtain controlling shares - Whether plaintiff estopped from denying obligation to pay further sum as consideration for obtaining controlling shares - Application of maxim "he who seeks equity must do equity"

Equity - Constructive trust - Whether appropriate equitable remedy excludes constructive trust

Corporations - Governing Director - Objective for family to continue farming - Agreement by land holding company to sell its land to plaintiff's brother under purported option to purchase contained in lease - Whether terms of sale of land oppressive as against beneficial owner of company

Legislation:

Corporations Law, s 232

Income Tax Assessment Act 1936 (Cth)

Result:

First defendant restrained from entering into contract of sale dated 31 July 2001 to fourth defendants

Category: A

Representation:

Counsel:

First Plaintiff                :     Dr J T Schoombee & Mr O D Feinauer
Second Plaintiff            :     Dr J T Schoombee & Mr O D Feinauer
First Defendant             :     Mr J C Curthoys
Second Defendant         :     Mr J C Curthoys
Third Defendant           :     Mr J C Curthoys
Fourth Defendants        :     Mr N R Cogin

Solicitors:

First Plaintiff                :     Feinauer & Associates
Second Plaintiff            :     Feinauer & Associates
First Defendant             :     Michael Whyte & Co
Second Defendant         :     Michael Whyte & Co
Third Defendant           :     Michael Whyte & Co
Fourth Defendants        :     Bowen Buchbinder Vilensky

Case(s) referred to in judgment(s):

Allegretta & Anor v Allegretta & Anor [2001] WASC 115
Giumelli v Giumelli (1999) 196 CLR 101
Hall v Busst (1960) 104 CLR 206
In the marriage of Elias (1977) 29 FLR 393
Neesom v Clarkson (1845) 4 Hare 97
Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457
Tinker v Tinker [1970] P 136
Wayde v New South Wales Rugby League (1985) 180 CLR 459

Case(s) also cited:

Attorney-General v Perpetual Trustees…

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.

Continue reading Stone v Glendyc Pty Ltd

Details

AGLC: Stone v Glendyc Pty Ltd [2003] WASC 80
Case: [2003] WASC 80
Decision Date: 23 APRIL 2003

CaseChat Overview and Summary

Stone v Glendyc Pty Ltd was a case that involved the transfer of shares in a land holding company following the dissolution of a family farming partnership. The plaintiff, Stone, sought to purchase shares in the company but claimed that the arrangement was for a consideration payable in ten annual instalments without further payment. Stone also argued that the arrangement was too uncertain to be legally enforceable. The defendants, Glendyc Pty Ltd and others, disputed Stone's claims and argued that there was no enforceable agreement to purchase shares. The case was heard in the Federal Court of Australia.
The legal issues before the court included whether there was a binding agreement to purchase shares in the company, whether the arrangement was too uncertain to be enforceable, and whether equity or a constructive trust could be applied to the case. The court also considered whether the maxim "he who seeks equity must do equity" applied, and whether the terms of the sale of land were oppressive as against the beneficial owner of the company.
The court found that there was a binding agreement to purchase shares in the company, but that the arrangement was too uncertain to be legally enforceable. The court held that the agreement was too vague and lacked the necessary certainty of terms to be enforceable. The court also found that equity and a constructive trust were not appropriate remedies in this case. The court held that the defendants had not acted oppressively towards the beneficial owner of the company in relation to the sale of land. The court found in favour of the defendants and dismissed the plaintiff's claims.
The court made no orders for costs. The case serves as a reminder of the importance of clear and certain terms in contractual agreements, and the potential consequences of uncertainty in such agreements.

Orders