In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 595

In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 595

In awarding relief for oppressive conduct under s 232 of the Corporations Act 2001 (Cth), it is appropriate to attribute a nominal value to the goodwill associated with the appropriated company name where evidence shows the company could have charged a premium for the use of its name but the value cannot be precisely calculated. In the absence of detailed valuation evidence, the court is entitled to evaluate and fix a fair, nominal sum based on available material and in light of the need to err in favour of the oppressed party.

Jurisdiction
Australia
Judgment Date
01 June 2012
Procedural Posture
Equity Oppression Remedy Application / Determination of Nominal Value for Goodwill and Consequential Orders
Outcome
Nominal value for goodwill attributed; consequential order for payment made
Legal Topics
['oppression Remedies' "directors' Duties" 'company Valuation' 'goodwill Assessment']
['corporations Law' 'equity'] ['oppression Remedies' "directors' Duties" 'company Valuation' 'goodwill Assessment']

Case Brief

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Procedural Posture

Equity Oppression Remedy Application / Determination of Nominal Value for Goodwill and Consequential Orders

Legal Issues

  1. 1 ['Whether there is compensable value in the goodwill associated with the use of the company name separate from the trade mark when granting relief for oppressive conduct under s 232 Corporations Act 2001 (Cth)' 'How a nominal value should be determined for appropriated goodwill in the absence of expert evidence']

Ratio Decidendi

In awarding relief for oppressive conduct under s 232 of the Corporations Act 2001 (Cth), it is appropriate to attribute a nominal value to the goodwill associated with the appropriated company name where evidence shows the company could have charged a premium for the use of its name but the value cannot be precisely calculated. In the absence of detailed valuation evidence, the court is entitled to evaluate and fix a fair, nominal sum based on available material and in light of the need to err in favour of the oppressed party.

Court Disposition

Nominal value for goodwill attributed; consequential order for payment made

Orders

  • ['The first defendant is to pay the first plaintiff, in addition to the amount previously ordered, the sum of $4,000 within 28 days (subject to any set-off relating to future costs orders).' 'Matter stood over for submissions on costs to 14 June 2012 at 9am.']