In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155

In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155

The use of majority voting power by the second defendant to remove the plaintiff from management, contrary to the Shareholders' Agreement without reasonable opportunity to realise his minority interest at fair value, constituted oppression under s 232 of the Corporations Act. Deductions for alleged losses were unjustified. The plaintiff was entitled to an order for the compulsory buy-out of his shares at a fair value, and repayment of his directors' loan.

Parties
Plaintiff: Damian Cameron; First Defendant: Mosman & Co Pty Limited ACN 165 325 208; Second Defendant: Bill Koutrodimos
Jurisdiction
Australia
Judgment Date
05 September 2019
Procedural Posture
Oppression Suit (corporations) / Final Judgment After Contested Hearing
Outcome
Declaration of oppression; compulsory buy-out of minority shareholder's interest; repayment of loan; costs to plaintiff.
Legal Topics
Oppression, Shareholders' Agreements, Exclusion From Management, Remedies Under S 233, Replaceable Rules Under Corporations Act, Quasi Partnerships
Corporations Law Equity Oppression Shareholders' Agreements Exclusion From Management Remedies Under S 233 Replaceable Rules Under Corporations Act Quasi Partnerships

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Parties

Damian Cameron

Plaintiff

Mosman & Co Pty Limited ACN 165 325 208

First Defendant

Bill Koutrodimos

Second Defendant

Procedural Posture

Oppression Suit (corporations) / Final Judgment After Contested Hearing

Legal Issues

  1. 1 Whether the conduct of majority shareholder constituted oppression within the meaning of s 232 of the Corporations Act 2001 (Cth)
  2. 2 Whether fair value must be paid for minority shares upon exclusion from management
  3. 3 Whether deductions/losses to value of shares were justified by alleged breaches of directors' duties

Ratio Decidendi

The use of majority voting power by the second defendant to remove the plaintiff from management, contrary to the Shareholders' Agreement without reasonable opportunity to realise his minority interest at fair value, constituted oppression under s 232 of the Corporations Act. Deductions for alleged losses were unjustified. The plaintiff was entitled to an order for the compulsory buy-out of his shares at a fair value, and repayment of his directors' loan.

Court Disposition

Declaration of oppression; compulsory buy-out of minority shareholder's interest; repayment of loan; costs to plaintiff.

Orders

  • Declare that the second defendant engaged in oppressive conduct within the meaning of section 232 of the Corporations Act 2001 (Cth) in the conduct of the affairs of the first defendant.
  • Order pursuant to section 233(1)(d) of the Corporations Act that the second defendant purchase the plaintiff's shares in the first defendant for $69,000.