In the matter of QB Foods Pty Limited [2021] NSWSC 1227

In the matter of QB Foods Pty Limited [2021] NSWSC 1227

Gavin’s increase of his salary from July 2020 without the consent of Adriano and Pino and his withdrawal of $120,000 from the company, later repaid, together with the proposal to issue shares that would substantially dilute Adriano and Pino’s holding, was oppressive conduct under s 232 of the Corporations Act 2001 (Cth). The appropriate remedy is an order requiring Gavin and Amy to buy out Adriano and Pino’s shares at fair value as determined by the midpoint of the accepted expert range, adjusted as set out in the judgment.

Parties
First Plaintiff: Adriano Locantro; Second Plaintiff: Pino Locantro; First Defendant: QB Foods Pty Limited; Second Defendant: Amy Stagnitta; Third Defendant: Gavin Stagnitta
Jurisdiction
Australia
Judgment Date
28 September 2021
Procedural Posture
Oppression Proceeding / Principal Judgment
Outcome
Orders for Gavin and Amy to buy out Adriano and Pino’s shares at fair value; parties to bring in short minutes of order to give effect to the judgment.
Legal Topics
Oppression, Members' Rights and Remedies, Exercise of Discretion as to Remedy, Whether Compulsory Buyout Orders or Winding Up Appropriate, Management Exclusion, Share Issue and Dilution
Equity Corporations Law Oppression Members' Rights and Remedies Exercise of Discretion as to Remedy Whether Compulsory Buyout Orders or Winding Up Appropriate Management Exclusion Share Issue and Dilution

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Adriano Locantro

First Plaintiff

Pino Locantro

Second Plaintiff

QB Foods Pty Limited

First Defendant

Amy Stagnitta

Second Defendant

Gavin Stagnitta

Third Defendant

Procedural Posture

Oppression Proceeding / Principal Judgment

Legal Issues

  1. 1 Whether defendants' conduct was oppressive to, unfairly prejudicial to, or unfairly discriminatory against plaintiffs under s 232 of the Corporations Act 2001 (Cth)
  2. 2 Whether increases in director's salary and withdrawal of company funds was oppressive
  3. 3 Whether proposed share issue was oppressive as it would substantially dilute plaintiffs' shareholding

Ratio Decidendi

Gavin’s increase of his salary from July 2020 without the consent of Adriano and Pino and his withdrawal of $120,000 from the company, later repaid, together with the proposal to issue shares that would substantially dilute Adriano and Pino’s holding, was oppressive conduct under s 232 of the Corporations Act 2001 (Cth). The appropriate remedy is an order requiring Gavin and Amy to buy out Adriano and Pino’s shares at fair value as determined by the midpoint of the accepted expert range, adjusted as set out in the judgment.

Court Disposition

Orders for Gavin and Amy to buy out Adriano and Pino’s shares at fair value; parties to bring in short minutes of order to give effect to the judgment.

Orders

  • Defendants to purchase Plaintiffs' shares at fair value, determined according to the midpoint of the range in the joint expert report, with adjustments as specified.
  • Parties to bring in agreed short minutes of order or, if not agreed, their respective short minutes and submissions, within 14 days.