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Zeaiter v Zeaiter

Zeaiter v Zeaiter

Case [2025] NSWSC 60 19 February 2025

Contract Formation

Misleading or Deceptive Conduct

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Supreme Court

New South Wales

Medium Neutral Citation: Zeaiter v Zeaiter [2025] NSWSC 60
Hearing dates: 3-7, 10-12 February 2025
Date of orders: 19 February 2025
Decision date: 19 February 2025
Jurisdiction: Equity - Commercial List
Before: Peden J
Decision:
At [222]

Catchwords:
CONTRACTS — Formation — Agreement — Whether plaintiff executed deed of agreement— Where plaintiff denies signing deed — Where expert evidence from forensic document examiner is that signature is authentic — Where lay and documentary evidence is that plaintiff signed deed
CONTRACTS — Construction — Interpretation — Whether deed rescinded prior oral agreement by implication — Whether deed requires payment for goodwill
CONTRACTS — Misleading conduct under statute — Misleading or deceptive conduct — Whether deed ought to be set aside — Whether compensation should be awarded — Whether reasonable expectation of disclosure arose for defendant to disclose to plaintiff payments where plaintiff and defendant are brothers and both directors of family company — Whether plaintiff misled by proposed valuation of business — Where same conduct said to be unconscionable
VALUATION — Methods of valuation — Whether provisioning for capital gains tax appropriate — Whether valuation on asset or valuation on income approach preferrable — Where valuation made for purposes of separating interests in family company
CORPORATIONS — Members’ rights and remedies — Oppression — Whether failure to disclose payments or failure to make particular payments equally to shareholders oppressive — Whether plaintiff has standing as a person who has ceased to be a member of company
CORPORATIONS — Constitution — Whether alleged failure to pay distributions equally is a breach of company constitution

Legislation Cited:
Australian Consumer Law ss 18, 243
Australian Securities and Investments Commission Act 2001 (Cth) s 12
Corporations Act 2001 (Cth) ss 232, 233, 234
Evidence Act 1995 (NSW) s 79

Cases Cited:
Addenbrooke Pty Ltd v Duncan (No 2) [2017] FCAFC 76
Allen v Roughly (1955) 94 CLR 98
Axis Bank Ltd v Gujarat NRE India Pty Ltd [2020] NSWSC 1711
Beevers v Port Phillip Sea Pilots Pty Ltd [2007] VSC 556
Damjanovic v York Agencies Pty Ltd [2003] NSWCA 222
Davis v R [2024] NSWCCA 120
Dungowan Manly Pty Ltd v McLaughlin [2012] NSWCA 180
ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24
Hillam v Iacullo (2015) 90 NSWLR 422
Jeans v Cleary [2006] NSWSC 647
Lustre Hosiery Ltd v York (1935) 54 CLR 134
May v Walker [2024] NSWSC 612
Musa v Alzreaiawi [2021] NSWCA 12
Olson v Keefe (No 3) [2018] FCA 2001
Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27
Salad Fresh Pty Ltd v P&M Quality Smallgoods Pty Ltd [2015] NSWSC 1717
Smith v Joyce (1954) 89 CLR 529
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Touma v Highfields Australia Pty Ltd [2024] NSWCA 160
Tzavaras v Tzavaras & Sons Pty Ltd [2023] NSWCA 168

Category: Principal judgment
Parties: Anthony Zeaiter (First Plaintiff)
Newline Property Investments Pty Ltd (Second Plaintiff)
Charbel Zeaiter (First Defendant)
Newbuild…

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 Zeaiter v Zeaiter

Details

AGLC: Zeaiter v Zeaiter [2025] NSWSC 60
Case: [2025] NSWSC 60
Decision Date: 19 February 2025

CaseChat Overview and Summary

The case of Zeaiter v Zeaiter involved a dispute between siblings, the plaintiff and defendant, who were both directors of a family company. The primary issues were whether the plaintiff had executed a deed of agreement, the interpretation of the deed in terms of its effect on an earlier oral agreement, and whether the deed should be set aside due to misleading or deceptive conduct. The plaintiff argued that he did not sign the deed and that the proposed valuation of the business was misleading. The defendant maintained that the plaintiff had signed the deed, which was authentic, and that the valuation was fair.

The court examined the evidence regarding the plaintiff's signature on the deed, including expert testimony from a forensic document examiner, and concluded that the signature was genuine. The court also assessed the arguments about the interpretation of the deed and whether it impliedly rescinded the prior oral agreement or required payment for goodwill. Furthermore, the court considered whether the deed should be set aside due to misleading or deceptive conduct, particularly whether the defendant had a reasonable expectation to disclose certain payments to the plaintiff.

The court found that the deed was valid and executed by the plaintiff. It held that the deed did not rescind the prior oral agreement by implication but rather supplemented it. The court also determined that the plaintiff had not been misled by the proposed valuation of the business. Regarding the failure to disclose payments and the unequal distribution of payments to shareholders, the court found these actions to be oppressive but did not grant relief because the plaintiff lacked standing as he had ceased to be a member of the company. The court did not find the failure to pay distributions equally to be a breach of the company constitution.

The court ordered that the deed remain in effect, with no compensation awarded to the plaintiff. The court did not find the failure to disclose payments or unequal distribution of payments to be grounds for setting aside the deed or awarding relief.

Orders