The Food Improvers Pty Limited v BGR Corporation Pty Ltd (No 4) [2007] FCA 220

The Food Improvers Pty Limited v BGR Corporation Pty Ltd (No 4) [2007] FCA 220

It was just and equitable, and necessary to address oppression, to order the winding up of BGR and its subsidiaries and appoint a liquidator. The court exercised its powers under ss 233 and 461(1)(k) of the Corporations Act 2001 (Cth) to set aside an oppressive dividend resolution and to propound and substitute a fair resolution. The refusal by the defendant shareholders to accept the proposed settlement was not unreasonable, as it did not conclusively resolve the dispute, so indemnity costs were not warranted.

Jurisdiction
Australia
Judgment Date
28 February 2007
Procedural Posture
Corporations – Winding Up Under the Corporations Act / Final Orders Following Principal Judgment and Submissions on Costs and Consequential Relief
Outcome
Liquidator appointed, companies to be wound up, oppressive resolution set aside and substituted, costs orders as specified, application for indemnity costs dismissed.
Legal Topics
['winding Up' 'liquidator Appointment' 'oppression Remedy' 'dividends' 'company Management' 'costs']
['corporations Law' 'equity'] ['winding Up' 'liquidator Appointment' 'oppression Remedy' 'dividends' 'company Management' 'costs']

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Procedural Posture

Corporations – Winding Up Under the Corporations Act / Final Orders Following Principal Judgment and Submissions on Costs and Consequential Relief

Legal Issues

  1. 1 ['Whether the court should order the winding up of companies under ss 233 and 461(1)(k) of the Corporations Act 2001 (Cth)' "Whether the court has power to set aside an oppressive directors' resolution and substitute another" 'Whether indemnity costs should be ordered against defendants for not accepting a draft deed of settlement']

Ratio Decidendi

It was just and equitable, and necessary to address oppression, to order the winding up of BGR and its subsidiaries and appoint a liquidator. The court exercised its powers under ss 233 and 461(1)(k) of the Corporations Act 2001 (Cth) to set aside an oppressive dividend resolution and to propound and substitute a fair resolution. The refusal by the defendant shareholders to accept the proposed settlement was not unreasonable, as it did not conclusively resolve the dispute, so indemnity costs were not warranted.

Court Disposition

Liquidator appointed, companies to be wound up, oppressive resolution set aside and substituted, costs orders as specified, application for indemnity costs dismissed.

Orders

  • ['Order 4 of 12 February 2007 is varied to declare the second defendant liable to repay consultancy fees.' 'Second defendant to pay first defendant $311,550.86.' "Directors' 22 February 2006 dividend resolution set aside; substitute resolution imposed regarding fees, dividends, and distributions as detailed."...