Tzavaras v Tzavaras & Sons Pty Ltd

This matter concerned an appeal from a decision of the Supreme Court regarding the winding up of a family company. The appellant, who had severed ties with the company, remained a director and sought its winding up on the grounds of oppressive conduct. The primary judge had determined that other relief was more suitable than winding up.

The Court was required to determine whether the appellant had been excluded from the company's management, business, and affairs in a manner that constituted oppressive conduct. Further, the Court had to consider whether a buy-out of the appellant's shares under s 233(1)(d) of the *Corporations Act 2001* (Cth) was appropriate, given the difficulty in valuing the appellant's interest in the company and an associated family trust. The Court also had to assess whether winding up the company under ss 232(e) or 461(1)(e) of the *Corporations Act* was the most suitable course, particularly considering the potential consequences for an otherwise solvent trust of which the company was a trustee.

The Court found no error of the kind established in *House v The King* in the primary judge's decision to refuse winding up. It reasoned that the nature of the appellant's interest in the company and the associated family trust was unable to be valued, making a share buy-out order impractical. However, the Court allowed the appeal in part, finding that the primary judge had erred in not making an order under s 233(1)(c) of the *Corporations Act*. The Court determined that the beneficiaries of the Tzavaras Family Trust should not be permitted to use or occupy the trust property for commercial purposes without paying the company the commercial value of such use or occupation.

Consequently, leave to include certain proposed grounds of appeal was refused. The appeal was allowed in part, specifically in relation to the order made under s 233(1)(c). The remainder of the appeal was dismissed. The Court also directed parties to file submissions regarding final costs orders.