RBC Investor Services Australia Nominees Pty Limited v Brickworks Limited [2017] FCA 756

RBC Investor Services Australia Nominees Pty Limited v Brickworks Limited [2017] FCA 756

The maintenance of the cross shareholding arrangement between Brickworks Limited and Washington H Soul Pattinson and Company Limited is not oppressive or unfair to shareholders within the meaning of the Corporations Act 2001 (Cth) ss 232 and 233. Reasonable directors, having regard to all relevant circumstances, would not have considered the maintenance of the cross shareholding to date as unfair or oppressive. There was no agreement, arrangement or understanding to maintain the cross shareholding to entrench the boards or Millner family’s control. No proven financial detriment or disenfranchisement results to minority shareholders beyond the usual effects of a substantial shareholding....

Jurisdiction
Australia
Judgment Date
10 July 2017
Procedural Posture
Corporate Oppression Proceeding / Final Judgment
Outcome
Second cross-claim dismissed with costs to cross-defendants.
Legal Topics
['oppression Remedy' 'cross Shareholding' 'corporate Governance' 'shareholder Rights' 'board Control']
['corporations Law'] ['oppression Remedy' 'cross Shareholding' 'corporate Governance' 'shareholder Rights' 'board Control']

Case Brief

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Procedural Posture

Corporate Oppression Proceeding / Final Judgment

Legal Issues

  1. 1 ['Whether maintenance of cross shareholding in publicly listed companies is oppressive under the Corporations Act 2001 (Cth)' 'Whether an agreement, arrangement or understanding between directors to maintain cross shareholding exists' 'Whether cross shareholding depresses value of shares' 'Whether cross shareholding entrenches board and disenfranchises shareholders']

Ratio Decidendi

The maintenance of the cross shareholding arrangement between Brickworks Limited and Washington H Soul Pattinson and Company Limited is not oppressive or unfair to shareholders within the meaning of the Corporations Act 2001 (Cth) ss 232 and 233. Reasonable directors, having regard to all relevant circumstances, would not have considered the maintenance of the cross shareholding to date as unfair or oppressive. There was no agreement, arrangement or understanding to maintain the cross shareholding to entrench the boards or Millner family’s control. No proven financial detriment or disenfranchisement results to minority shareholders beyond the usual effects of a substantial shareholding....

Court Disposition

Second cross-claim dismissed with costs to cross-defendants.

Orders

  • ['The second cross-claim is dismissed.' "The cross-claimant is to pay the cross-defendants' costs of the second cross-claim as agreed or taxed." 'Publication of reasons for judgment, apart from paragraphs 1 to 5, except to parties and legal representatives, be suppressed for 48 hours to allow notification of...