Wain v Drapac

In the case of Wain v Drapac, the dispute involved the beneficial ownership of shares in two companies and units in two trusts, held by employees who had been provided with copy certificates. The plaintiffs, Wain and others, sought a declaration of their beneficial ownership of the shares and units, as well as an order for their purchase at fair value. The defendants, Drapac and others, argued that the shares and units were held as an escrow or were subject to a resulting trust. The matter was heard in the Supreme Court of Western Australia.

The primary legal issues before the court were whether the copy certificates held by the plaintiffs constituted an escrow arrangement or resulted in a resulting trust, and if not, whether the plaintiffs were the beneficial owners of the shares and units. Additionally, the court had to consider whether the plaintiffs' removal from their positions and the oppressive conduct of the defendants warranted an order for the purchase of the plaintiffs' shares and units at fair value under the Corporations Act 2001 (Cth).

The court held that the copy certificates did not establish an escrow or resulting trust, and therefore the plaintiffs were the beneficial owners of the shares and units. The court found that the defendants had engaged in oppressive conduct by terminating the plaintiffs' employment and removing them as directors, without making a reasonable offer to purchase their shares and units. The court also found that the defendants' conduct in relation to a loan by a related company and a plan to dilute the shareholders' interests further supported the conclusion of oppressive conduct. Consequently, the court ordered the purchase of the plaintiffs' shares and units at fair value, in line with the provisions of the Corporations Act 2001 (Cth).

The final orders of the court included a declaration that the plaintiffs were the beneficial owners of the shares and units in question, and an order for the defendants to purchase the plaintiffs' shares and units at fair value, reflecting the oppressive conduct and the absence of a reasonable offer to purchase.