Corbett v Corbett Court Pty Limited, in the matter of Corbett Court Pty Limited [2015] FCA 1176

FEDERAL COURT OF AUSTRALIA

Corbett v Corbett Court Pty Limited, in the matter of Corbett Court Pty Limited [2015] FCA 1176 Citation: Corbett v Corbett Court Pty Limited, in the matter of Corbett Court Pty Limited [2015] FCA 1176

Parties: PAUL HERBERT CORBETT v CORBETT COURT PTY LIMITED (ACN 062 978 545), JOHN KEITH CORBETT, RENELLE ANTOINETTE CORBETT and AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

File number: NSD 1432 of 2012

Judge: FARRELL J

Date of judgment: 4 November 2015

Catchwords: CORPORATIONS – company established by parents for benefit of eight children – one child holds half of the shares and appointed a director with both parents – other seven children hold other half of the shares in the company – company built supermarket and shopping mall using loans from other companies controlled by parents and bank debt – other companies controlled by parents and father provide guarantees of company's bank debt – parents die intestate – anchor tenant at shopping mall threatened to reduce rent due to level of vacancies in shopping mall – sole director of company refused to appoint independent director and appointed his wife as director instead – company sought to raise capital in order to fund building work to install second anchor tenant in shopping mall – shareholders either refused or ignored two offers to subscribe for shares – seven minority shareholders refused to attend meetings of company after wife appointed as director – shares issued to directors and loans made by them to fund building work to install second anchor tenant CORPORATIONS – oppression – whether issue of shares to directors contrary to interests of members as a whole or oppressive, unfairly prejudicial to or unfairly discriminatory against minority shareholder under s 232 of the Corporations Act 2001 (Cth) ("Corporations Act") – whether share issue valid under company constitution – whether conduct of company prior to parents' deaths gave rise to legitimate expectation that shareholding proportions would be maintained – whether the company needed funds at the time of the share issue – whether other sources of funds available – whether purpose of share issue was to dilute shareholding of minority – whether share issue was commercially fair – consideration of appropriate remedy to order under s 233 of the Corporations Act