Liang Zhen Lin v BHW Capital Pty Ltd & Anor [2013] NSWSC 1786

Liang Zhen Lin v BHW Capital Pty Ltd & Anor [2013] NSWSC 1786

No agreement was proved for Irwin to transfer a 15 per cent shareholding to Ben Lin for $15. The 20 January 2013 agreement was between Jally Lin and the company for transfer of a 15 per cent shareholding in return for a $300,000 capital injection, with payment by 22 January 2013 initially an essential term. The company did not terminate at that time and, by Irwin's 16 April 2013 email calling for final payment and return of the transfer, elected to affirm the contract, so time was no longer essential and the purported termination on 19 April 2013 was ineffective. Because 50 of the 150 shares had been transferred to Altis Architecture, specific performance was only available, at the...

Jurisdiction
Australia
Judgment Date
05 December 2013
Procedural Posture
Proceedings Concerning Specific Performance of Alleged Share Transfer Agreements and Validity of a Resolution Removing a Director / Principal Judgment After Hearing
Outcome
The first claim for transfer of a 15 per cent shareholding for $15 was dismissed; the challenge to the resolution removing Jally Lin as director failed; and the proceedings were stood over for the plaintiffs to elect between specific performance for the remaining 100 shares with damages or damages for failure to...
Legal Topics
['specific Performance' 'time of the Essence' 'election to Affirm Contract' 'share Transfer Agreement' 'removal of Director by Shareholders' 'fraud on the Power']
['contracts' 'corporations'] ['specific Performance' 'time of the Essence' 'election to Affirm Contract' 'share Transfer Agreement' 'removal of Director by Shareholders' 'fraud on the Power']

Case Brief

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Procedural Posture

Proceedings Concerning Specific Performance of Alleged Share Transfer Agreements and Validity of a Resolution Removing a Director / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether Irwin agreed in December 2012 to transfer a 15 per cent shareholding to Ben Lin for $15.' 'Whether the agreement of 20 January 2013 for transfer of a 15 per cent shareholding in return for a $300,000 capital injection was made with Irwin, with Irwin and Innes jointly, or with the company.' 'Whether time was of the essence for payment of the $300,000 by 22 January 2013 and whether any right to terminate was lost by election to affirm the contract.' 'Whether the plaintiffs were entitled to specific performance where 50 of the 150 shares had been sold to Altis Architecture.' 'Whether the resolution removing Jally Lin as a director was invalid as a fraud on the power or because of an agreement to appoint Ben Lin in his place.']

Ratio Decidendi

No agreement was proved for Irwin to transfer a 15 per cent shareholding to Ben Lin for $15. The 20 January 2013 agreement was between Jally Lin and the company for transfer of a 15 per cent shareholding in return for a $300,000 capital injection, with payment by 22 January 2013 initially an essential term. The company did not terminate at that time and, by Irwin's 16 April 2013 email calling for final payment and return of the transfer, elected to affirm the contract, so time was no longer essential and the purported termination on 19 April 2013 was ineffective. Because 50 of the 150 shares had been transferred to Altis Architecture, specific performance was only available, at the...

Court Disposition

The first claim for transfer of a 15 per cent shareholding for $15 was dismissed; the challenge to the resolution removing Jally Lin as director failed; and the proceedings were stood over for the plaintiffs to elect between specific performance for the remaining 100 shares with damages or damages for failure to...

Orders

  • ['Proceedings stood over to a convenient time so the plaintiffs can consider whether to elect to pursue specific performance in relation to the remaining 100 shares that can be transferred.' 'The Court will deal with questions relating to damages, hear the parties on costs, and make other orders in accordance with...