Tomanovic v Global Mortgage Equity Corporation Pty Ltd

The appeal concerned a dispute between the Tomanovic interests and the Sayer interests regarding their commercial relationship and shareholdings in various companies, including Australian Financial Services Corporation Pty Ltd and One Australia Pty Ltd. The primary judge had dismissed proceedings brought by the Tomanovic interests seeking relief under sections 232 and 233 of the *Corporations Act 2001* (Cth) for oppression. The Tomanovic interests also appealed the dismissal of their cross-claim in separate common law proceedings concerning the repayment of a substantial sum of money.

The central legal issues before the Court of Appeal were whether the conduct of the Sayer interests constituted oppression of the Tomanovic interests, and if so, what relief was appropriate. Specifically, the court considered whether oppression could arise even in the absence of a breach of contract or estoppel, and whether such conduct could be oppressive even if carried out in good faith. The court also had to determine the power to grant relief concerning assets held by a corporate trustee on trust, and the appropriateness of the "legitimate expectation" test in oppression claims. Furthermore, the court was required to consider the principles for determining the valuation date for a compulsory buy-out order and whether such an order was preferable to winding up the companies.

The Court of Appeal, in allowing the appeal in part, found that circumstances justifying compulsory buy-out orders did exist, contrary to the primary judge's decision. The court clarified that oppression can occur even if there is no breach of contract or estoppel, and that good faith does not preclude a finding of oppression. The court also noted that keeping a minority shareholding's value locked up could constitute oppression, and that a reasonable offer to buy out the minority did not necessarily negate a claim of oppression. The court agreed with the primary judge that winding up the companies was not appropriate, particularly given the potential for serious commercial detriment.

The Court of Appeal ordered that the parties confer promptly to agree on the specific orders to give effect to the judgment. If agreement was not reached within 21 days, each party was to file draft orders and supporting submissions.