Complete Compliance Solutions Pty Ltd v Online OHS Pty Ltd [2013] NSWSC 843

Complete Compliance Solutions Pty Ltd v Online OHS Pty Ltd [2013] NSWSC 843

The notice issued by OOHS purporting to terminate the Shareholder Agreement was not valid as it failed to specify how any alleged breach was to be rectified and did not properly alert CCS to the steps required. Accordingly, OOHS was not entitled to exercise the option under clause 14. CCS did not breach its obligations under the Shareholder Agreement, so the purported termination and option exercise were invalid.

Jurisdiction
Australia
Judgment Date
21 June 2013
Procedural Posture
Equity Division / Principal Judgment
Outcome
Plaintiff's claims upheld; declarations of invalidity granted; costs in favour of plaintiff; directions made for submissions on special costs order.
Legal Topics
['shareholders Agreement' 'company Law' 'termination of Contract' 'rectification of Breach' 'convertible Notes']
['contract Law' 'equity'] ['shareholders Agreement' 'company Law' 'termination of Contract' 'rectification of Breach' 'convertible Notes']

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Procedural Posture

Equity Division / Principal Judgment

Legal Issues

  1. 1 ['Whether the plaintiff breached the Shareholders Agreement' "Whether the plaintiff's breach was capable of rectification" 'Whether proper notice was given by the first defendant' 'Whether the first defendant validly exercised the option under clause 14 after purported termination']

Ratio Decidendi

The notice issued by OOHS purporting to terminate the Shareholder Agreement was not valid as it failed to specify how any alleged breach was to be rectified and did not properly alert CCS to the steps required. Accordingly, OOHS was not entitled to exercise the option under clause 14. CCS did not breach its obligations under the Shareholder Agreement, so the purported termination and option exercise were invalid.

Court Disposition

Plaintiff's claims upheld; declarations of invalidity granted; costs in favour of plaintiff; directions made for submissions on special costs order.

Orders

  • ["Declares First Defendant's purported termination of the Shareholder Agreement by notice dated 26 March 2012 was invalid and of no effect." "Declares First Defendant's purported exercise of the option in clause 14 by letter dated 26 March 2012 was invalid and of no effect." "Orders First Defendant to pay...