BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192

BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192

The defendants, by excluding the plaintiffs from the management of the companies and diverting business opportunities and monies for personal benefit, engaged in conduct that was objectively oppressive, unfairly prejudicial, and discriminatory within the meaning of s 232(e) of the Corporations Act 2001 (Cth). The appropriate remedy is for the oppressors (Jay McAlister and Imoda Realty Pty Ltd) to purchase the oppressed parties' shares at fair value negating the effects of the oppression, valued as at the date of effective exclusion.

Parties
First Plaintiff: BAM Property Group Pty Ltd as trustee for BAM Property Trust; Second Plaintiff: Brett Adam McAlister; First Defendant: Imoda Group Holdings Pty Ltd ACN 168 849 170; Second Defendant: Imoda Properties Pty Ltd ACN 167 609 092; Third Defendant: Yaroomba Holdings Pty Ltd; Fourth Defendant: Imoda Realty Pty Ltd ACN 148 144 950; Fifth Defendant: Jay Peter McAlister
Jurisdiction
Australia
Judgment Date
02 August 2019
Procedural Posture
Oppression Proceedings (corporations Act) / Judgment After Trial
Outcome
Claim upheld; orders made for purchase of plaintiffs' shares by defendants at specified value plus interest and security for payment.
Legal Topics
Oppression Remedy, Exclusion From Management, Diversion of Corporate Opportunities, Valuation of Shares, Family Business Dispute
Corporations Law Oppression Remedy Exclusion From Management Diversion of Corporate Opportunities Valuation of Shares Family Business Dispute

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Parties

BAM Property Group Pty Ltd as trustee for BAM Property Trust

First Plaintiff

Brett Adam McAlister

Second Plaintiff

Imoda Group Holdings Pty Ltd ACN 168 849 170

First Defendant

Imoda Properties Pty Ltd ACN 167 609 092

Second Defendant

Yaroomba Holdings Pty Ltd

Third Defendant

Imoda Realty Pty Ltd ACN 148 144 950

Fourth Defendant

Jay Peter McAlister

Fifth Defendant

Procedural Posture

Oppression Proceedings (corporations Act) / Judgment After Trial

Legal Issues

  1. 1 Whether conduct of the companies' affairs was oppressive to, unfairly prejudicial to, or unfairly discriminatory against members; specifically, whether exclusion from management and diversion of business amounted to oppression under s 232(e) of Corporations Act 2001 (Cth).
  2. 2 What is the appropriate remedy for established oppression, including valuation and purchase of shares under s 233.

Ratio Decidendi

The defendants, by excluding the plaintiffs from the management of the companies and diverting business opportunities and monies for personal benefit, engaged in conduct that was objectively oppressive, unfairly prejudicial, and discriminatory within the meaning of s 232(e) of the Corporations Act 2001 (Cth). The appropriate remedy is for the oppressors (Jay McAlister and Imoda Realty Pty Ltd) to purchase the oppressed parties' shares at fair value negating the effects of the oppression, valued as at the date of effective exclusion.

Court Disposition

Claim upheld; orders made for purchase of plaintiffs' shares by defendants at specified value plus interest and security for payment.

Orders

  • Imoda Realty Pty Ltd and Jay Peter McAlister to purchase the shares of BAM Property Group Pty Ltd and Brett Adam McAlister in Imoda Group Holdings Pty Ltd and Yaroomba Holdings Pty Ltd for $710,996.
  • Imoda Realty Pty Ltd and Jay Peter McAlister to pay interest on $710,996 from 16 September 2017 to the date of judgment at 5.5%, being $73,388.42.