Jolan Pty Ltd v Essential Investments Pty Ltd (No 3) [2021] FCA 1627

Jolan Pty Ltd v Essential Investments Pty Ltd (No 3) [2021] FCA 1627

Because existing and incoming shareholders had undertaken to acquire all of Jolan's shares and $1,160,000 was held in trust, but delay until 28 January 2022 was unwarranted, orders were made requiring completion of the share sale by 14 January 2022 with ancillary orders and a further hearing if needed. Refusal of Jolan's settlement offers did not justify indemnity costs because the offers did not accommodate the Shareholders' Agreement pre-emptive rights and the 10 August 2021 offer also required releases from many persons within seven days. However, indemnity costs were justified against the Company because the defendants made and maintained allegations that ought never to have been...

Jurisdiction
Australia
Judgment Date
21 December 2021
Procedural Posture
Corporations Oppression Proceedings Under S 233 of the Corporations Act 2001 (cth) / Determined on the Papers After Trial Judgment, on Final Orders and Costs
Outcome
Orders made requiring sale of Jolan's shares at $1.16 per share by 14 January 2022; first defendant ordered to pay 90% of Jolan's costs on the indemnity basis; no costs order made against the second to fourth defendants.
Legal Topics
['oppression Remedy' 'share Purchase Order' 'indemnity Costs' 'settlement Offers' 'overarching Purpose' 'pre Emptive Rights' 'winding Up as Alternative Remedy']
['corporations' 'civil Procedure' 'costs'] ['oppression Remedy' 'share Purchase Order' 'indemnity Costs' 'settlement Offers' 'overarching Purpose' 'pre Emptive Rights' 'winding Up as Alternative Remedy']

Case Brief

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Procedural Posture

Corporations Oppression Proceedings Under S 233 of the Corporations Act 2001 (cth) / Determined on the Papers After Trial Judgment, on Final Orders and Costs

Legal Issues

  1. 1 ["Whether final orders should require completion of the sale of Jolan's shares rather than immediately ordering a company buy-back or winding up." "Whether Jolan's costs should be paid on an indemnity basis because the defendants unreasonably refused settlement offers." "Whether Jolan's costs should be paid on an indemnity basis because of unreasonable conduct in the defence of the proceeding." 'Whether any costs order should be made against the second to fourth defendants.']

Ratio Decidendi

Because existing and incoming shareholders had undertaken to acquire all of Jolan's shares and $1,160,000 was held in trust, but delay until 28 January 2022 was unwarranted, orders were made requiring completion of the share sale by 14 January 2022 with ancillary orders and a further hearing if needed. Refusal of Jolan's settlement offers did not justify indemnity costs because the offers did not accommodate the Shareholders' Agreement pre-emptive rights and the 10 August 2021 offer also required releases from many persons within seven days. However, indemnity costs were justified against the Company because the defendants made and maintained allegations that ought never to have been...

Court Disposition

Orders made requiring sale of Jolan's shares at $1.16 per share by 14 January 2022; first defendant ordered to pay 90% of Jolan's costs on the indemnity basis; no costs order made against the second to fourth defendants.

Orders

  • ['The plaintiff and the first defendant shall take all reasonable steps to cause the completion of the sale of the shares owned by the plaintiff in the first defendant to any interested existing shareholder of the first defendant and any person who has signed an undertaking, at a price of $1.16 per share, as soon as...