Visnic v Sywak & Ors [2007] NSWSC 701

Visnic v Sywak & Ors [2007] NSWSC 701

On the balance of probabilities, the arrangement between the plaintiff and first defendant following the 1996 acquisition of former business associates' shares was that each was beneficially entitled to half the shares in Adellos Pty Limited and Parlamartu Pty Limited, despite registration in the first defendant's name. There was no agreement or valid transfer in 1999 for the plaintiff to relinquish his beneficial interest in any of the four companies. The rectification of share registers is warranted, and equal shareholdings have resulted in deadlock, justifying winding up the defendant companies on the just and equitable ground.

Parties
Plaintiff: Milan Visnic; First Defendant: Peter Orest Sywak; Second Defendant: Adellos Pty Limited; Third Defendant: Parlamartu Pty Limited; Fourth Defendant: Castlove Pty Limited; Fifth Defendant: Donovi Pty Limited
Jurisdiction
Australia
Judgment Date
03 July 2007
Procedural Posture
Equity Proceedings / Judgment
Outcome
Orders for declarations, rectification of share registers, transfer of shares, appointment of liquidator and winding up, costs to plaintiff.
Legal Topics
Beneficial Ownership of Shares, Trusts in Corporate Context, Rectification of Share Registers, Deadlock and Winding Up on Just and Equitable Ground
Corporations Law Equity Beneficial Ownership of Shares Trusts in Corporate Context Rectification of Share Registers Deadlock and Winding Up on Just and Equitable Ground

Case Brief

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Parties

Milan Visnic

Plaintiff

Peter Orest Sywak

First Defendant

Adellos Pty Limited

Second Defendant

Parlamartu Pty Limited

Third Defendant

Castlove Pty Limited

Fourth Defendant

Donovi Pty Limited

Fifth Defendant

Procedural Posture

Equity Proceedings / Judgment

Legal Issues

  1. 1 Whether the shares in Adellos Pty Limited, Parlamartu Pty Limited, Castlove Pty Limited and Donovi Pty Limited legally held by Mr Sywak were beneficially held in equal shares for the plaintiff and defendant.
  2. 2 Whether there was an agreement in 1999 for the transfer of the plaintiff's remaining shares to the first defendant.
  3. 3 Whether the share registers should be rectified under the Corporations Act 2001 (Cth), s 175.

Ratio Decidendi

On the balance of probabilities, the arrangement between the plaintiff and first defendant following the 1996 acquisition of former business associates' shares was that each was beneficially entitled to half the shares in Adellos Pty Limited and Parlamartu Pty Limited, despite registration in the first defendant's name. There was no agreement or valid transfer in 1999 for the plaintiff to relinquish his beneficial interest in any of the four companies. The rectification of share registers is warranted, and equal shareholdings have resulted in deadlock, justifying winding up the defendant companies on the just and equitable ground.

Court Disposition

Orders for declarations, rectification of share registers, transfer of shares, appointment of liquidator and winding up, costs to plaintiff.

Orders

  • Declare plaintiff entitled at law and in equity to (i) one of two issued shares in Castlove, (ii) nine of eighteen issued shares in Donovi, (iii) two of eight issued shares in each of Adellos and Parlamartu.
  • Declare plaintiff beneficially entitled to two further shares in each of Adellos and Parlamartu held legally by first defendant.