Rambaldi; in the matter of Philip Charles Weeden, a bankrupt v Weeden [2008] FCA 1597

FEDERAL COURT OF AUSTRALIA

Rambaldi; in the matter of Philip Charles Weeden, a bankrupt v Weeden [2008] FCA 1597

BANKRUPTCY – transfer of small minority shareholding in closely-held private company to majority shareholder – transfer for nominal sum on day prior to minority shareholder filing for bankruptcy – market value of shares – articles of association include pre-emptive rights and directors' right of refusal to transfer – no dividends paid for substantial period and none to be paid in future CORPORATIONS – valuation of minority shareholdings in proprietary companies Acts Interpretation Act 1901 (Cth) s 15AB Bankruptcy Act 1966 (Cth) s 120 Corporations Act 2001 (Cth) ss 232, 461, 1072C Evidence Act 1995 (Cth) s 79 Federal Court Rules (Cth) O 29 r 2 Income Tax Assessment Act 1936 (Cth) Div 7A Explanatory Memorandum to the Bankruptcy Amendment Bill 1996 (Cth)

Abrahams v Federal Commissioner of Taxation (1944) 70 CLR 23 cited Cannane v Official Trustee (1996) 65 FCR 453 distinguished Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Ltd (1934) 51 CLR 509 cited Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 distinguished Gambotto v WCP Limited (1995) 182 CLR 432 cited Geita Sebea v Territory of Papua (1941) 67 CLR 544 cited Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547 cited Hilder v Dexter [1902] AC 474 cited Jenkins v Enterprise Gold Mines NL (1992) 10 ACLC 136 applied Mallett v Mallet (1984) 156 CLR 605 cited Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (1995) 122 FLR 294 applied Mordecai v Mordecai (1988) 12 NSWLR 58 applied Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535 distinguished Scottish Cooperative Wholesale Society Ltd v Meyer [1959] AC 324 cited Shamsallah Holdings Pty Ltd v CBD Refrigeration and Airconditioning Services Pty Ltd (2001) 19 ACLC 517 cited Spencer v The Commonwealth (1907) 5 CLR 418 applied Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer Vizagapatam [1939] AC 302 cited Lonergan W, The Valuation of Businesses, Shares and Other Equity (4th ed, Allen & Unwin, 2003) IN THE MATTER OF PHILIP CHARLES WEEDEN, a bankrupt GESS MICHELE RAMBALDI and ANDREW REGINALD YEO (AS JOINT & SEVERAL TRUSTEES OF THE PROPERTY OF PHILIP CHARLES WEEDEN, A BANKRUPT) v PHILIP CHARLES WEEDEN and BETTY WEEDEN