Barbagallo v Clifton Fletcher Pty Ltd & Ors [2004] NSWSC 699

Barbagallo v Clifton Fletcher Pty Ltd & Ors [2004] NSWSC 699

The Court found that in May or June 2001 Mr Barbagallo and the other four directors made an enforceable agreement that, if Mr Barbagallo resigned and ceased taking part in management, they would purchase his 25 percent shareholding at fair market value assessed as at 30 June 2001 using the method employed by Mr Bevan for Mr Wehby's earlier sale. The term "fair market value" was sufficiently certain and could be determined by the Court. Article 4(1) did not defeat the claim because the parties had proceeded on the basis of the sale arrangement. The fair market value was assessed at $900,000. The alleged oppression was not established, and Clifton Fletcher Pty Ltd's cross-claim was dismissed.

Jurisdiction
Australia
Judgment Date
10 August 2004
Procedural Posture
Equity Proceeding for Specific Performance, Corporations Act S233 Oppression Relief and Share Valuation, With Company Cross Claim / Judgment After Hearing; Further Orders Reserved for Interest Damages and Costs
Outcome
Contract to be specifically performed; oppression claim not made out; cross-claim dismissed; costs reserved; matter to be listed for further orders concerning interest damages and costs.
Legal Topics
['specific Performance' 'oppression Under Corporations Act S233' 'valuation of Shares' 'fair Market Value' 'quasi Partnership' 'cross Claim']
['contract' 'equity' 'corporations Law'] ['specific Performance' 'oppression Under Corporations Act S233' 'valuation of Shares' 'fair Market Value' 'quasi Partnership' 'cross Claim']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Equity Proceeding for Specific Performance, Corporations Act S233 Oppression Relief and Share Valuation, With Company Cross Claim / Judgment After Hearing; Further Orders Reserved for Interest Damages and Costs

Legal Issues

  1. 1 ["Whether there was an enforceable contract requiring the other directors to purchase Mr Barbagallo's 25 percent shareholding in Clifton Fletcher Pty Ltd at fair market value" 'Whether the phrase "fair market value" was void for uncertainty' "Whether the defendants' conduct amounted to oppression, unfair prejudice or unfairly discriminatory conduct under Corporations Act s233" 'How fair market value of the 25 percent shareholding should be assessed as at 30 June 2001' "Whether non-compliance with Article 4(1) of Clifton Fletcher Pty Ltd's Articles of Association defeated the plaintiff's claim" "Whether Clifton Fletcher Pty Ltd's cross-claim against Mr Barbagallo should succeed"]

Ratio Decidendi

The Court found that in May or June 2001 Mr Barbagallo and the other four directors made an enforceable agreement that, if Mr Barbagallo resigned and ceased taking part in management, they would purchase his 25 percent shareholding at fair market value assessed as at 30 June 2001 using the method employed by Mr Bevan for Mr Wehby's earlier sale. The term "fair market value" was sufficiently certain and could be determined by the Court. Article 4(1) did not defeat the claim because the parties had proceeded on the basis of the sale arrangement. The fair market value was assessed at $900,000. The alleged oppression was not established, and Clifton Fletcher Pty Ltd's cross-claim was dismissed.

Court Disposition

Contract to be specifically performed; oppression claim not made out; cross-claim dismissed; costs reserved; matter to be listed for further orders concerning interest damages and costs.

Orders

  • ['The contract between Mr Barbagallo and Messrs Licciardello, Cassar, Duignan and Vella is to be specifically performed.' 'The case in oppression is not made out.' 'The cross-claim of Clifton Fletcher Pty Ltd is dismissed.' 'The matter is to be listed before Cripps AJ for further orders to give effect to the...