Territory Realty Pty Ltd v Garraway [2009] FCA 292

Territory Realty Pty Ltd v Garraway [2009] FCA 292

The 2007 share issue, in combination with an unfair buyout proposal, management and consultancy fees, constituted oppressive conduct under s 232 of the Corporations Act against the minority shareholder Territory Realty; the pre-emptive rights under Article 5 were breached in earlier share transfers, but acquiescence and election precluded relief for those breaches; contract/tort and misleading/deceptive conduct claims were time-barred and extension of limitation not granted.

Jurisdiction
Australia
Judgment Date
01 April 2009
Procedural Posture
Corporations/oppression/contract/tort/conduct/limitation / Final Judgment After Trial (reasons)
Outcome
Finding of oppression under s 232; order for buyout of minority shares by majority at fair value.
Legal Topics
['pre Emptive Rights' 'share Transfers' 'oppressive Conduct' 'wrongful Interference With Contractual Relations' 'misleading and Deceptive Conduct' 'waiver/acquiescence/election' 'extension of Limitation Period' 'asset Disposition' 'shareholder Remedies' 'management Fees' 'valuation of Shares']
['corporations' 'contract' 'tort' 'property' 'equity' 'statutory Interpretation'] ['pre Emptive Rights' 'share Transfers' 'oppressive Conduct' 'wrongful Interference With Contractual Relations' 'misleading and Deceptive Conduct' 'waiver/acquiescence/election' 'extension of Limitation Period' 'asset Disposition' 'shareholder Remedies' 'management Fees' 'valuation of Shares']

Case Brief

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Procedural Posture

Corporations/oppression/contract/tort/conduct/limitation / Final Judgment After Trial (reasons)

Legal Issues

  1. 1 ['Whether share transfers breached pre-emptive rights in Articles' 'Whether subsequent conduct amounted to waiver, acquiescence, or election' 'Whether intentional interference with contractual relations occurred' 'Whether management and consultancy fees were oppressive' 'Whether conduct of the affairs of Dundee Beach Pty Ltd was oppressive or unfairly prejudicial' 'Whether misleading and deceptive conduct occurred under Consumer Affairs and Fair Trading Act (NT)' 'Whether extension of limitation period should be granted']

Ratio Decidendi

The 2007 share issue, in combination with an unfair buyout proposal, management and consultancy fees, constituted oppressive conduct under s 232 of the Corporations Act against the minority shareholder Territory Realty; the pre-emptive rights under Article 5 were breached in earlier share transfers, but acquiescence and election precluded relief for those breaches; contract/tort and misleading/deceptive conduct claims were time-barred and extension of limitation not granted.

Court Disposition

Finding of oppression under s 232; order for buyout of minority shares by majority at fair value.

Orders

  • ['Bishop Estate Pty Ltd and/or Excess Pty Ltd to purchase the 16 shares of Territory Realty Pty Ltd in Dundee Beach Pty Ltd at $309,312 per share within 60 days, notice to be given within 30 days' 'If Bishop Estate and/or Excess do not purchase, Territory Realty to have opportunity to purchase 16 shares each from...