Fedorovitch v St Aubins Pty Ltd (No 2) [1999] NSWSC 776

Fedorovitch v St Aubins Pty Ltd (No 2) [1999] NSWSC 776

The fair and appropriate remedy in this oppression context is for the second defendant, at their option within 28 days, to purchase the plaintiffs' shares at a value of $310,000. No adjustment is to be made for potential capital gains tax or associated transactional costs, as these are not appropriate compensatory adjustments in the context of oppression orders under s 246AA of the Corporations Law. The usual approach that the majority purchase the minority’s shares is to be followed unless exceptional circumstances are demonstrated, which is not the case here.

Jurisdiction
Australia
Judgment Date
21 July 1999
Procedural Posture
Oppression Suit / Post Reasons, Application for Final Orders and Valuation
Outcome
Orders made for sale or purchase of shares; costs orders as specified
Legal Topics
['oppression Remedy' 'share Valuation' 'minority Shareholder Rights' 'capital Gains Tax and Share Buyout']
['corporations Law' 'equity'] ['oppression Remedy' 'share Valuation' 'minority Shareholder Rights' 'capital Gains Tax and Share Buyout']

Case Brief

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Procedural Posture

Oppression Suit / Post Reasons, Application for Final Orders and Valuation

Legal Issues

  1. 1 ['What is the appropriate remedy for oppression under s 246AA of the Corporations Law in a home unit company?' 'How should the shares be valued and is capital gains tax to be considered in the share price?']

Ratio Decidendi

The fair and appropriate remedy in this oppression context is for the second defendant, at their option within 28 days, to purchase the plaintiffs' shares at a value of $310,000. No adjustment is to be made for potential capital gains tax or associated transactional costs, as these are not appropriate compensatory adjustments in the context of oppression orders under s 246AA of the Corporations Law. The usual approach that the majority purchase the minority’s shares is to be followed unless exceptional circumstances are demonstrated, which is not the case here.

Court Disposition

Orders made for sale or purchase of shares; costs orders as specified

Orders

  • ['Declaration that St Aubins Pty Ltd acted oppressively to the plaintiffs within s 246AA of the Corporations Law.' 'Plaintiffs to place their shareholding for sale by public auction with a reserve of $310,000, or by private treaty at not less than $310,000, with contracts exchanged by 21 October 1999.' 'If unsold by...