FEDERAL COURT OF AUSTRALIA Jolan Pty Ltd v Essential Investments Pty Ltd (No 2) [2021] FCA 1533 File number(s): QUD 101 of 2021 Judgment of: DOWNES J Date of judgment: 7 December 2021 Catchwords: CORPORATIONS – oppression proceedings – company formed for purpose of acquiring business to be sold within two years – largest five shareholders each entitled to appoint director to board of company – board required to approve business plan and budget of subsidiaries – removal of director appointed by shareholder to board – whether shareholder entitled to participate in management of company – whether shareholder excluded from management – where shareholder ceased to be provided information relating to the business of the corporate group – where directors resolved to further delay sale of business of corporate group – whether shareholder impeded in its attempt to sell its shares and exit the company – whether court can consider conduct which occurred after the commencement of the proceedings – appropriate remedy pursuant to s 233 Corporations Act 2001 (Cth) – compulsory purchase of shares – method of valuation of shares of minority shareholder – whether value of minority shares should be subject to discount – where concerns raised about financial ability of company to buy back shares – whether winding up order should be made PRACTICE AND PROCEDURE – whether draft reasons should be provided to enable parties to identify aspects of reasons which should be suppressed – where same result can be achieved by publishing judgment to parties only to enable identification of confidential parts of the reasons to be identified – where trial conducted in open court Legislation: Corporations Act 2001 (Cth) ss 53, 232, 233, 461, Pt 2F.1 Federal Court of Australia Act 1976 (Cth) s 22 Federal Court Rules 2011 (Cth) r 17.08(c) Cases cited: BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192 Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Catalano v Managing Australia Destinations Pty Ltd (2014) 314 ALR 62; [2014] FCAFC 55 Shanahan v Jatese Pty Ltd [2019] NSWCA 113 Dynasty Pty Ltd v Coombs (1995) 59 FCR 122; [1995] FCA 610 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 Garraway v Territory Realty Pty Ltd [2010] FCAFC 9 Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73 HNA Irish Nominee Ltd v Kinghorn (No 2) (2012) 290 ALR 372; [2012] FCA 228 Hylepin Pty Ltd v Doshay Pty Ltd (2020) 148 ACSR 30; [2020] FCA 1370 Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201 In Re Blue Index Ltd [2014] EWHC 2680 (Ch) In Re DG Brims & Sons Pty Ltd (1995) 16 ACSR 559; [1995] QSC 053 Irvine v Irvine (No 2) [2007] 1 BCLC 445; [2006] EWHC 583 (Ch) John J Starr (Real Estate) Pty Ltd v Robert R Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63 Kokotovich Constructions Pty Ltd v Wallington (1995) 17 ACSR 478 Mopeke Pty Ltd v Airport Fine Foods Pty Ltd (2007) 61 ACSR 395; [2007] NSWSC 153 Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 O'Neill v Phillips [1999] 1 WLR 1092 Re Bird Precision Bellows Ltd [1984] Ch 419 Re Bird Precision Bellows Ltd [1986] Ch 658 Re Ledir Enterprises Pty Ltd (2013) 96 ACSR 1; [2013] NSWSC 1332 Re Tivoli Freeholds Ltd [1972] VR 445 Shum Yip Properties Development Ltd v Chatswood Investment & Development Co Pty Ltd (2002) 166 FLR 451; [2002] NSWSC 13 Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 2) (2010) 88 IPR 633; [2010] FCA 1212 Smith Martis Cork & Rajan Pty Ltd v Benjamin Corp Pty Ltd (2004) 207 ALR 136; [2004] FCAFC 153 Tomanovic v Global Mortgage Equity Corp Pty Ltd (2011) 288 ALR 310; [2011] NSWCA 104 Wallington v Kokotovich Constructions Pty Ltd (1993) 11 ACSR 759 Wilmar Sugar Australia Ltd v Mackay Sugar Ltd (2017) 120 ACSR 1; [2017] FCAFC 40 Wilmar Sugar Australia Ltd v Queensland Sugar Ltd (2016) 335 ALR 72; [2016] FCA 20 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 500 Date of hearing: 20 – 23 September 2021, 1 October 2021, 30 November 2021 Counsel for the Plaintiff: Mr S Webster with Ms M Barnes Solicitor for the Plaintiff: Holding Redlich Counsel for the Defendants: Mr J Peden QC with Mr E Robinson Solicitor for the Defendants: Cronin Miller Litigation ORDERS QUD 101 of 2021 BETWEEN: JOLAN PTY LTD ACN 613 047 448 Plaintiff AND: ESSENTIAL INVESTMENTS PTY LTD ACN 610 685 535 First Defendant TODD HISCOCK Second Defendant TL HISCO INVESTMENT PTY LTD ACN 612 008 910 (and another named in the Schedule) Third Defendant order made by: DOWNES J DATE OF ORDER: 7 December 2021 THE COURT ORDERS THAT: 1. Subject to order 2, the first defendant shall forthwith send by email a copy of this Order and the reasons for judgment to each of its shareholders, excluding the plaintiff and the third and fourth defendants. 2. If the first defendant does not have an email address for any shareholder, a copy of this Order and the reasons for judgment shall be sent by express post to that shareholder, with such documents to be posted by no later than 12.00pm on 8 December 2021. 3. By 4.00pm (AEST) on 8 December 2021, the parties shall file and serve submissions (limited to 5 pages) which identify any part of the reasons for judgment which that party claims should be the subject of a suppression order. 4. By 4.00pm (AEST) on 13 December 2021, the parties shall file and serve any submissions which they wish to make (limited to 10 pages) in relation to the form of the final orders to be made, including the appropriate costs order to be made. 5. By 4.00pm (AEST) on 13 December 2021, the parties shall file and serve any affidavit material which shall be confined to the issue of the appropriate costs order to be made. 6. By 4.00pm (AEST) on 15 December 2021, any shareholder of the first defendant or other interested person (other than the parties to this proceeding) shall file and serve on the parties to this proceeding any submissions which they wish to make (limited to 10 pages) in relation to the final orders which are proposed to be made in this proceeding as indicated in the reasons for judgment. 7. If any shareholder proposes to file any submissions in accordance with order 6, the legal or other costs associated with those submissions shall not be paid by the first defendant. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT DOWNES J: INTRODUCTION [1] RELEVANT LEGAL PRINCIPLES [26] Overview [26] When oppression is to be assessed [38] Relevance of reasonable offer to purchase the minority shareholding [45] CREDIT OF WITNESSES [50] CHRONOLOGY OF RELEVANT EVENTS [65] Events leading to the formation of the Company [65] Shareholders' Agreement [90] Management of the Business prior to late 2020 [109] Event leading to the resignation of Mrs McWilliam from the board of the Company [126] Mr McWilliam is then removed as director of both the Company and Essential Coffee [190] The insurance issue [201] The inertia clause issue [232] Expression of opinion about Mrs McWilliam [250] Events post CML letter of 7 December 2020 [253] Mrs McWilliam is appointed as a director of the Company who is then removed [263] Mr McWilliam is appointed as a director of the Company [277] Mrs McWilliam is appointed as a director of the Company but then removed [281] Jobkeeper issue [289] Offers to purchase Jolan's shares [296] Whether the oppression arose because of "baiting" [301] Whether reasons should be published in draft [304] CONSIDERATION [312] Exclusion from management [312] Did Jolan have an entitlement to participate in the management of the Company? [312] Was Jolan deprived of its entitlement to participate in the management of the Company? [317] Failure to provide information [351] Failure or refusal to provide information and thereby impeding the sale of Jolan's shares [352] Jolan's access to information about the Business is diminished [358] Failure by shareholders to exercise powers to achieve Exit Event [362] Conclusion [374] APPROPRIATE REMEDY UNDER SECTION 233 [375] The parties' respective submissions at trial [375] Whether second to fourth defendants should be ordered to purchase Jolan's shares [396] Whether the Company should be ordered to purchase Jolan's shares [402] Price at which shares should be acquired [405] Whether the Company should be wound up [474] Conclusion as to remedy [490] INTRODUCTION 1 The plaintiff (Jolan) seeks orders under s 233 of the Corporations Act 2001 (Cth) (Act) to remedy the oppression, unfair prejudice and unfair discrimination against it as a minority shareholder of the first defendant (Company). 2 The Company is the holding company of three subsidiaries, Essential Coffee Pty Ltd (Essential Coffee), Essential Coffee (NZ) Limited (Essential Coffee NZ) and Essential Brands Group Pty Ltd (together the Group). 3 The primary business of Essential Coffee and Essential Coffee NZ is the supply of coffee machines and consumables (in particular, coffee beans) (Business). Essential Brands Group Pty Ltd holds the intellectual property for Essential Coffee and Essential Coffee NZ. 4 Mr Todd Hiscock, who was employed in the Business, approached others to invest in the Company and buy the Business. In Mr Hiscock's words, he "got investors to the table with a view of doubling their money in one to two years". One of the investors who Mr Hiscock "got to the table" was Mr James McWilliam. 5 As observed by the defendants' expert, the venture appeared to be "established with a particular strategy in mind to acquire some franchises and so on, bring them in and, for want of a better term, flip it within a couple of years". 6 In 2016, Mr Hiscock was a trusted friend of Mr McWilliam. Prior to June 2016, Mr McWilliam was told various things by Mr Hiscock including to the effect that he should invest $1 million towards the overall $5 million purchase price of the Business, the investment would be "short term" with an exit event within two years, the investment would be doubled in two years, and he (Mr McWilliam) would get a paid executive position within the Business paying $150,000 per annum. Mr Hiscock also said that, as one of the top five shareholders, Mr McWilliam would be entitled to a board seat. 7 Jolan was incorporated on 16 June 2016 and is the trustee of the Jolan Trust, which was used as the vehicle by Mr McWilliam, and his wife, Mrs Nikola McWilliam to invest $1 million in the Company and become one of its five largest shareholders. In order to do this, they borrowed money from Mr McWilliam's parents, and from Mr McWilliam's business, Gutter Mesh Trading Co Pty Ltd (which in turn borrowed $750,000 from a bank). 8 In July 2016, Mr McWilliam caused Jolan to enter a shareholders' agreement which required all shareholders to exercise their powers with the purpose of achieving an "Exit Event" within two years. An Exit Event included, amongst other things, the sale or transfer of all or substantially all of the shares in the Company. 9 Since 1 July 2016, Jolan has been the largest single shareholder of the Company. As a substantial shareholder, Jolan has certain contractual rights under the shareholders' agreement to appoint a director to the board of the Company. 10 In 2016, Mr McWilliam commenced in his role as a paid executive director of Essential Coffee as well as director of the Company pursuant to a nomination by Jolan. 11 There has been only one active campaign to sell the Company, which was run by Yarra Advisory Pty Ltd (Yarra Advisory) from about June 2019 to September 2019. 12 When it became plain that an Exit Event was not going to be achieved in the short term, Jolan attempted to sell its shares. In parallel with this process, it nominated Mrs McWilliam to be a director of the Company in March 2020. Mrs McWilliam, a practising solicitor, then raised some concerns with corporate governance issues with the board's processes, at least one of which the Company's solicitor agreed with. 13 On 25 May 2020, Mr Hiscock sent an email to others within the Company which requested "a plan to be put forward to the shareholders in attempts to end what is clearly vindictive, vexatious and frivolous conduct via Nikola." 14 In July 2020, the Company caused its solicitors to write to Mrs McWilliam in relation to the circumstances surrounding the release of the Company's confidential information to a prospective purchaser of Jolan's shares and alleging that her conduct may constitute a breach of her duties as a director of the Company. This led to exchanges between the Company's solicitors and Mrs McWilliam's solicitors, and her ultimate resignation as a director in November 2020 following a notice being issued to shareholders with a proposed resolution that she be removed as a director of the Company. 15 Jolan nominated Mr McWilliam to be its director on the board of the Company. The reaction of the Company was swift. The Company caused its solicitors to write to him making various allegations concerning events which had occurred years earlier, many of which were incorrect, and which Mr Hiscock (at least) knew to be incorrect. The letter was written for the purposes of persuading the shareholders of the Company to remove him as a director. It succeeded, and Mr McWilliam was removed as a director of the Company in February 2021. 16 Mr McWilliam was also removed as a director of Essential Coffee. Shortly after this occurred, directors of the Company were no longer given information relating to the subsidiaries (as had been done previously). 17 Mrs McWilliam was again nominated by Jolan to be a director of the Company, but was then removed again on 18 March 2021. She was later nominated by Jolan again and removed again, and Jolan has not had its nominated director on the board of the Company since June 2021. 18 Jolan's shareholding is significant, and it is to be expected that any third party purchaser would wish to undertake appropriate due diligence before buying into a private company. One purchaser, Mr Russell Egan, had executed a non-disclosure agreement. In March 2021, he asked to visit the Company's headquarters and meet the CEO, Mr Hiscock, but Mr Hiscock did not meet with him, leaving it to others to do so. Mr Egan also requested certain information, and Jolan sought this information from the Company, but the Company refused to provide it. Mr Egan did not proceed to acquire Jolan's shares. 19 Also in March 2021, the Company imposed a restriction on its directors which had the effect that they could not disclose information received in their capacity as directors to the shareholder which had appointed them. 20 On 20 April 2021, a decision was made by the board of the Company to defer consideration of achieving an Exit Event until 12 – 18 months after certain events had occurred. 21 On 8 June 2021, a majority of the shareholders of the Company resolved to make any director who has been removed by shareholders in a general meeting ineligible for reappointment for a period of 12 months from the date of removal. 22 On 29 November 2021, the shareholders of the Company passed the following resolutions: (a) Resolution 1: In the event of an adverse Court Order being made against EI in the matter of Jolan Pty Ltd v Essential Investments Pty Ltd & Ors (the Proceeding) the Shareholders approve a capital raise whereby the Shareholders can commit to purchase up to one million shares in EI at a price determined by the Judge as part of the Court Order. The Shareholders authorise EI to purchase Jolan's shares at the price ordered by the court, cancel those shares, and issue new shares at the same price. The new shares will be issued to participating Shareholders. (b) Resolution 2: The Shareholders approve the executive of Essential Investments Pty Ltd to do all things necessary to raise new emergency capital by seeking investors for and issuing new Ordinary Shares in Essential Investments Pty Ltd up to a value of $850,000 to $1.1 million to be offered to existing and new Shareholders on a first come, first served basis, at a price of $0.80 per Share. 23 The oppression which has been established by Jolan in this case can be generally grouped into categories as follows, although it is the combined effect of the totality of the conduct which constitutes the oppression: (a) Jolan's exclusion from management by the removal (and eventual barring from appointment) of its appointed directors to the board of the Company; (b) the removal of Mr McWilliam from the board of Essential Coffee coupled with the cessation of the provision of information about the subsidiaries to the directors of the Company; (c) the imposition of restrictions placed on the information provided to directors of the Company and able to be provided by those directors to the shareholder which appointed them; (d) the withholding from Jolan of information to enable Jolan to sell its shares to Mr Egan and so exit the Company and the passing of resolutions which placed restrictions on information able to be provided to purchasers; (e) the failure to take steps to achieve the Exit Event, including a refusal to engage with potential offers to purchase, and the decision to defer any possible sale for at least 12 – 18 months after certain criteria are satisfied (the timing of which is also uncertain). 24 While other matters were relied upon by Jolan to allege oppression, it has not been necessary to address those matters in light of the findings made below. 25 For the reasons which follow, Jolan has established its claims and is entitled to relief under s 233 of the Act. RELEVANT LEGAL PRINCIPLES Overview 26 By the Statement of Claim, Jolan pleads that the conduct of the Company was "oppressive to, unfairly prejudicial to or unfairly discriminatory against Jolan within the meaning of s 232" of the Act. 27 Section 232 of the Act provides that the Court may make an order under s 233 of the Act if the conduct of the company's affairs, or an actual or proposed act or omission by or on behalf of the company, or a resolution or proposed resolution of the members or a class of members of the company, is oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity (s 232(e)). 28 The 'affairs' of a body corporate are described broadly, including for the purpose of s 232 and s 233, in s 53 of the Act. Those affairs include the formation, membership, business, transactions and dealings, property, profits and liabilities of the company (s 53(a)); the internal management of the body (s 53(c)); the ownership of shares in the body (s 53(e)); the powers of persons to exercise voting rights (s 53(f)); and the circumstances of the acquisition or disposal of shares in the body (s 53(h)): Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201 at [123] (Markovic, Banks-Smith and Anderson JJ). All of the allegations made in the Statement of Claim fall within the scope of the affairs of the Company within the meaning of s 232 of the Act. 29 The expression "oppressive to, unfairly prejudicial to, or unfairly discriminatory against" is a compound expression, meaning that it does not involve separate tests for the elements within it: see Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73 at [4] (Emmett, Jacobson and Buchanan JJ); Tomanovic v Global Mortgage Equity Corp Pty Ltd (2011) 288 ALR 310; [2011] NSWCA 104 at [140]; HNA Irish Nominee Ltd v Kinghorn (No 2) (2012) 290 ALR 372; [2012] FCA 228 at [506]; Wilmar Sugar Australia Ltd v Queensland Sugar Ltd (2016) 335 ALR 72; [2016] FCA 20 at [88]. 30 The essential focus under s 232 of the Act is on whether there has been commercial unfairness in the conduct of the affairs of the company: see Hylepin Pty Ltd v Doshay Pty Ltd (2020) 148 ACSR 30; [2020] FCA 1370 at [24]: The phrase "oppressive to, unfairly prejudicial to, or unfairly discriminatory against" in 232(e) is … concerned with conduct that involves "commercial unfairness", or "a departure from the standards of fair dealing, or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair": In the Matter of Ledir Enterprises Pty Ltd [2013] NSWSC 1332; 96 ACSR 1 at [178] per Black J. Whether there has been "unfairness" in the requisite sense is to be judged objectively: Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 … at 472-473 per Brennan J. The relevant test is "whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision" (Wayde at 472-473 per Brennan J) or whether "objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair": Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 at [9]. 31 This summary of principles was not challenged on appeal in Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201 at [131] (Markovic, Banks-Smith and Anderson JJ). 32 The Full Court in Catalano v Managing Australia Destinations Pty Ltd (2014) 314 ALR 62; [2014] FCAFC 55 at [9] (Siopis, Rares and Davies JJ) observed that: The test of unfairness requires an objective assessment of the conduct in question with regard to the particular context in which the conduct occurs. The question is whether objectively in the eyes of the commercial bystander there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the conduct or decision fair. As the test is objective, whether or not the conduct is oppressive will not depend upon the motives for what was done. It is the effect of the acts that is material. (citations omitted) 33 The Full Court (Dowsett, Jagot and White JJ) also observed the following in Wilmar Sugar Australia Ltd v Mackay Sugar Ltd (2017) 120 ACSR 1; [2017] FCAFC 40 at [73]: While the test is objective, in the sense that the purpose or motive of the decision-maker cannot be determinative, purpose or motive may nevertheless be relevant. For example, if the decision-maker was motivated to make a decision to achieve some particular unfairness against a member, that fact might enable it to be concluded more readily that the effect of the decision is as the decision-maker intended (namely, unfair). 34 Moreover, conduct can contravene s 232 even if it is lawful, in good faith or compliant with the company's constitution. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25, Gummow, Heydon, Hayne and Kiefel JJ stated at [176]: Section 232 should not be read more narrowly. Wrongful exclusion from management may be a form of oppression. It is not to be supposed that the only conduct of a company's affairs that is to be classified as "oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member" is conduct of the company's affairs that is otherwise lawful. The fact that Mr Campbell's conduct was said to constitute breach of his or Sentinel's contractual obligations under the shareholders agreement, or the procuring of a breach by Healthy Water of its obligations under the services agreement with Backoffice, does not preclude engagement of the oppression provisions. Neither is it to be supposed that there cannot be oppression on the part of one who thinks that he or she is acting rightly. It is therefore not to the point to examine Mr Campbell's motives for acting as he did. 35 In Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201 at [133] – [136], the Full Court stated that: It can be accepted that findings as to oppressive conduct may be founded on a whole course of conduct. In Aqua-Max, the Court of Appeal observed that: [61] …There are numerous cases which look to the effect (including the cumulative effect of all the various pieces of unfairness) independently of the question whether the alleged oppressor's actions are legal or comply with the article of association … Where a course of conduct is relied upon, it is appropriate to have an overview. In John J Starr (Real Estate), Young J said at 72 that: Although in this sort of case one needs to have an overview, and sometimes a series of a relatively minor matters can add up to oppressive conduct, I think the way to deal with the evidence is … to deal with each of the 16 counts and then draw the various threads together. In each of the cases upon which Hylepin relied as to cumulative conduct, at least one of the instances of separate conduct relied upon was found independently to be oppressive: Grego v Copeland at [56]-[60]; Vigliaroni at [70]-[84]; John J Starr (Real Estate) at 72 (and where the cumulative effect of the conduct was 'sufficiently serious' to amount to oppression); and Aqua-Max at [168]-[171]. We accept, however, that depending on the circumstances, an accumulation of conduct, even where none of the separate matters of conduct is found to be oppressive, may have that result. 36 The failure to comply with reasonable requests for information to which a party is entitled is capable of constituting oppression: see Shum Yip Properties Development Ltd v Chatswood Investment & Development Co Pty Ltd (2002) 166 FLR 451; [2002] NSWSC 13 at [198]; Re Ledir Enterprises Pty Ltd (2013) 96 ACSR 1; [2013] NSWSC 1332 at [194]-[197] and [199]. 37 Similarly, it may be oppressive to alter internal business operations such that information which had previously been provided is no longer given, particularly where it would prevent the minority from having any relevant input into the business: BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192 at [72]-[74]. When oppression is to be assessed 38 The defendants submitted at trial that Jolan was unable to rely on any events which occurred after 1 April 2021 (being the date on which proceedings were commenced) for the purposes of establishing oppression. Repeated reliance was placed upon the decision of BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192 at [46]. That case applied the decision of Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 at [22], which stated that: The court must formulate an opinion about oppression or unfair prejudice as at the date of the institution of proceedings and the issue of relief under s 233 must be determined at the date of the hearing. 39 This proposition originated with Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97. Having regard to [159] of Fexuto, it is apparent that the case before the Court of Appeal was argued on the common basis that the time at which the Court must formulate the opinion about oppression or unfair prejudice was the date of the institution of the proceedings. It was not a statement of principle by the Court of Appeal. 40 In any event, my reading of the statement of principle in Munstermann does not preclude consideration of acts of oppression which occur after the institution of the proceedings. 41 Indeed, such a consequence would be remarkable in circumstances where an oppressor engages in different or more extreme acts of oppression after proceedings have been commenced. It would have the consequence that the party being oppressed could not amend its pleading to refer to the further acts of oppression in the existing proceedings but must start fresh proceedings (for example) and consolidate those proceedings with the existing proceedings. And so on again for each new act of oppression which occurs until trial. 42 It is relevant that no such constraint is contained within s 232 of the Act which, by its express terms, contemplates that the oppression might not have even occurred as at the date of the order made under s 233: see s 232(b). 43 Further, the oppression provisions under Part 2F.1 apply to conduct which occurred but has ceased by the time of trial or which is continuing. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [182], the plurality stated that: It is not necessary to decide whether that conclusion follows because there was no power to make such an order in those circumstances or because the discretion to make such an order could be exercised only by refusing to do so. Because the current form of the oppression provisions in Pt 2F.1 was introduced with a view to making it clear that the Court may make orders even if the act, omission or conduct complained of has yet to occur or has ceased, it may very well be that the fact that there was no continuing oppression when this case came to trial does not entail that the court had no power to make any of the orders for which s 233 provides. … (emphasis added) 44 For these reasons, I do not accept the submission that Jolan is unable to rely on events after 1 April 2021 in order to establish its case under s 232 of the Act. Relevance of reasonable offer to purchase the minority shareholding 45 Where the majority has made a reasonable offer to purchase the minority shareholding, and that offer was ignored or rejected, that fact can be relevant in considering whether any exclusion was "unfair", and accordingly whether oppression is established: O'Neill v Phillips [1999] 1 WLR 1092 at 1107; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 at [103] and [109]. 46 In O'Neill, Lord Hoffmann identified five factors to be considered in assessing the reasonableness of the defendant's offer at 1107 to 1108: (a) first, the offer must be to purchase the shares at a fair value representing an equivalent proportion of the share capital – that is, without any minority discount; (b) second, the value, if not agreed, should be determined by a competent expert; (c) third, the value should be determined by the expert as an expert, with the objective of economy and expedition; (d) fourth, the offer should provide for equality, in that both parties have the same right of access to information about the company which bears upon the value of the shares, and have the opportunity to make submissions to the expert; (e) fifth, the offer should include the payment of costs, unless the majority shareholders were not given reasonable time to make the offer. 47 Lord Hoffman's comments in O'Neill v Phillips were analysed in detail by Campbell JA (with whom Macfarlan and Young JJA agreed) in Tomanovic. In that case, Campbell JA cautioned against treating buy-out offers as "an addition to, or a substitute for, the statutory text" at [234], noting at [235]: … it is not as though "exclusion from management" and "absence of a reasonable offer" are elements of a cause of action, so that a plaintiff in an Oppression suit (or, perhaps, in the sub-species of Oppression suits in which exclusion from management is a prime element in the Oppression alleged) has the onus of proving absence of a reasonable offer. Rather, the making of a reasonable offer is merely one factor that, in some (but not all) types of situations where Oppression is alleged can be relevant to whether Oppression is made out. A party who wished to assert that a reasonable offer had been made would bear an onus of adducing evidence of the making of an offer, and an onus of persuading the court that it was reasonable, and that because it had been made there was no Oppression. (emphasis added) 48 Campbell JA stated at [242] that there could be circumstances in which a bona fide buyout offer was made and held open for long enough to: …justify a court in concluding that, when ignored or not accepted, any disadvantage that the addressee of that offer thereafter came to be in, concerning the affairs of the corporation to which it related, was not in itself Oppression or the result of Oppression. 49 However, his Honour ultimately concluded at [255] that although there had been "an offer that was reasonable in its terms", this did not mean that there was no oppression. This was because the weight of the offer was lessened by the fact that it was not able to be accepted to constitute a binding contract, because it was submitted on the basis that there might be queries or comments. The situation was a commercially unfair one, even if part of the reason for its existence was the conduct of the plaintiff. CREDIT OF WITNESSES 50 It was submitted by the defendants during closing submissions that it was not necessary for any credit findings to be made in this case. While I agree that it is not necessary to make a credit finding in relation to all of the lay witnesses who were called by the parties at the trial, and who were cross-examined, I consider it necessary to make credit findings in relation to witnesses who were central players in the relevant events and who gave contested evidence about critical facts in issue. 51 Mr McWilliam was the first witness called by Jolan. He gave his evidence in a straightforward and measured manner. He responded directly to questions put to him in cross-examination as well as by the Court. He appeared honest and truthful in the manner in which he gave his evidence and made appropriate concessions. On occasion, it was apparent that he did not recall all of the details concerning events over the past five plus years, but this is to be expected. Mr McWilliam's evidence was generally consistent with the contemporaneous documentary evidence. 52 Mrs McWilliam was the second witness called by Jolan. Mrs McWilliam gave direct answers to questions put to her. Her recollection was better than that of Mr McWilliam. She was businesslike, calm and unemotional. Like her husband, she was willing to make concessions. Her evidence was also generally consistent with the contemporaneous documentary evidence and that of Ms Xia (a broker who was engaged to sell Jolan's shares). The attempts made in cross-examination to paint Mrs McWilliam as an incompetent solicitor who had exaggerated her work history in her affidavit missed their mark. Mrs McWilliam was the most impressive witness called in the trial. 53 That Mrs McWilliam gave her evidence in this way was impressive having regard to the picture which the defendants tried to paint of her in her role as a director of the Company and of her conduct during board meetings. Having regard to the case advanced by the defendants, it is noteworthy that her demeanour and the content of her answers given under sustained cross-examination did not support the defendants' case. 54 For these reasons, the evidence of Mr and Mrs McWilliam ought to be accepted for the purposes of this matter. 55 Mr Hiscock was called by the defendants. Unless otherwise stated in these reasons, all references to Mr Hiscock are to Mr Todd Hiscock, and not to Mr Terence Hiscock who also gave evidence for the defendants. 56 By contrast to Mr and Mrs McWilliam, Mr Hiscock gave answers in a confident and direct manner and then, without demur, changed his evidence just given when shown documents which contained different information. Mr Hiscock's evidence was unreliable for this reason. 57 For example, Mr Hiscock initially gave evidence that he did not intend the 7 December 2020 letter sent by the Company's solicitors to Mr McWilliam to be seen by shareholders or to influence their views. When confronted with a contemporaneous email he sent which indicated to the contrary, he changed his evidence completely, to say he was "just trying to get the facts to the shareholders so they could know what's happening within their company". 58 Mr Hiscock gave evidence that the requirement for Mr McWilliam to get public liability insurance was "a requirement that we used on all our contracts, including Mark White's contract". However, when Mr White's contract was produced, it contained no requirement for public liability insurance, and Mr Hiscock's evidence was again shown to be unreliable. 59 Indeed, Mr Hiscock's lack of reliability as a witness was apparent almost immediately after his cross-examination commenced. In both his affidavit and his brief oral evidence in chief, Mr Hiscock confirmed that he held a small parcel of shares in the Company in his own name. This was incorrect. In fact, these shares were transferred out of his name on or about the first day of trial. When confronted with this fact, he gave evasive evidence, suggesting he could not recall whether or not he had, only a couple of days earlier, asked one of the company secretaries to effect the transfer of these shares and claiming the timing was mere coincidence. 60 Because of these matters, I received the impression that Mr Hiscock was attempting to give evidence which he considered would suit the defendants' case rather than giving evidence of his best recollection of the events that he was asked about. 61 Such an approach even extended to the documentary evidence put before the Court which related to Mr Hiscock. For example, Mr Hiscock's affidavit annexed an "email chain" between himself and Mr McWilliam relating to the JobKeeper subsidy issue ("TH-14"). In the last email from Mr Hiscock, Mr Hiscock makes allegations including to the effect that what Mr McWilliam is proposing to him is unlawful. In his affidavit, Mr Hiscock deposed that Mr McWilliam's email (to which he had responded) was understood by him to suggest that Essential Coffee manipulate or reduce its revenue in order to obtain COVID-19 government subsidies and that "seriously concerned" him. However, Mr Hiscock did not exhibit what was, in fact, the final email in the "email chain" which he had received from Mr McWilliam approximately six minutes after Mr Hiscock's last email, which made plain that Mr McWilliam was not suggesting anything unlawful or unethical. Mr Hiscock did not explain how he still held his concerns notwithstanding receipt of this email from Mr McWilliam. 62 Further, it was put to Mr Hiscock that he was fabricating his evidence or had fabricated his evidence that day. No leave to adduce evidence of any prior consistent statement of Mr Hiscock was sought by the defendants. I infer from this that no such prior consistent statement existed. 63 For all of these reasons, Mr Hiscock cannot be accepted as a reliable witness or a witness of truth. 64 Mr James Cook was also an unimpressive witness. His evidence concerning his involvement in the inertia clause issue (addressed below), and the 7 December 2020 letter to Mr McWilliam (addressed below), was not believable. When answering questions, Mr Cook was evasive and defensive, and I do not regard his evidence as reliable because, like Mr Hiscock, he appeared to be attempting to give evidence which he considered would suit the defendants' case rather than giving evidence of his best recollection of the events that he was asked about. CHRONOLOGY OF RELEVANT EVENTS Events leading to the formation of the Company 65 In early 2016, the second defendant, Mr Hiscock, was working as CEO of Essential Coffee and was tasked with finding a buyer for the business operated by that company. 66 In around January 2016, Mr Hiscock approached Mr McWilliam regarding the purchase of Essential Coffee. Mr McWilliam and Mr Hiscock had studied together at Bond University, and Mr McWilliam regarded Mr Hiscock as a close personal friend who he trusted and respected. Mr Hiscock had attended the wedding of Mr and Mrs McWilliam as a member of the bridal party, and was asked to be godfather to their youngest son. 67 Over several telephone calls between February and June 2016, some of which included Mrs McWilliam, Mr Hiscock proposed (amongst other things) that there be five investors who would each contribute $1 million to the $5 million purchase price, that the five investors would be Mr Hiscock, Mr McWilliam and three of his other friends (two of whom were known to Mr McWilliam from university days) and that as one of the top five shareholders, Mr McWilliam would be entitled to a board seat. 68 One of the matters which Mr Hiscock also told Mr McWilliam in the period between February and June 2016 was that he would get a paid executive position within the business paying $150,000 per annum plus superannuation, five weeks leave and a long notice period. 69 Mr McWilliam was also told by Mr Hiscock during these discussions that that it would be a short term investment with an exit within two years. 70 That Mr McWilliam was told this is consistent with an email dated 2 April 2016 from Mr Hiscock to Mr McWilliam and others in which Mr Hiscock referred to the fact that he "got investors to the table with a view to doubling their money in one to two years". 71 The defendants alleged that Mr McWilliam was told "on a number of occasions" prior to entry into the shareholders' agreement that achieving an "Exit Event" (as defined in the shareholders' agreement) "might take longer than two years". Reliance was placed on particular evidence given at the trial by Mr White, Mr Cook, Mr Christopher Rankine and Mr Hiscock concerning discussions between them and Mr McWilliam. 72 Mr White had worked with Mr Hiscock from 2001 to 2010. Since 2016, Marjul Investments Pty Ltd, of which Mr White is the sole director, has held 700,000 shares in the Company. Marjul Investments Pty Ltd is trustee of the White Family Trust and trustee of the White Family Superannuation Fund. Marjul Investments Pty Ltd became a shareholder in the Company following an approach by Mr Hiscock to Mr White in about January 2016. 73 Mr White was a director of the Company and of Essential Coffee between July 2016 and late 2019. 74 In his affidavit sworn on 19 August 2021, Mr White deposed that: In the first half of 2016 (prior to the acquisition of Essential Coffee) the original intended investors (myself, Todd Hiscock, James Cook, and James McWilliam) had regular telephone meetings to discuss the investment, due diligence findings and the business plan to support the acquisition. Among other things, we discussed in those meetings how long it might take to achieve an exit sale of the company or its business in the future. My view, which I expressed on a number of occasions during those calls, was that achieving an exit event would take at least three years as a best case outcome and could be up to 5 years as a planned exit strategy. James McWilliam was a participant in those telephone calls. …. I recall having a discussion with James McWilliam at the Burleigh Bears Football Club during that trip to Miami on the Gold Coast. James and I, along with Todd Hiscock and James Cook went to the club to have lunch and inspect its coffee services supplied by Essential Coffee. I recall that while we were there James McWilliam asked me questions, including how long I thought it would take to achieve a sale of the company or its business. I told James McWilliam that it would take between three and five years, although I did not give a definitive view as to how long it would take, given the range of uncertainties involved. However, as a plan I considered 3 years best likely outcome and up to 5 years achievable, all things being normal (i.e., no COVID-19 impact). 75 Mr Cook is the current Chair of the board of the Company. He is also a director of the Company and of Essential Coffee. He is a former solicitor, and attended Bond University with Mr Hiscock in around 1991 – 1993. Mr Cook was approached by Mr Hiscock in 2016 to "become involved in a coffee business that he was working in". Mr Cook acquired shares in the Company through his entity, Relative Superiority Investments Pty Ltd. 76 Mr Cook deposed in his affidavit sworn 20 August 2021 that: I recall discussions between the founding directors, including Mark White and James McWilliam, during discussions over Mark White joining the company at which Mark White expressed his view that it would more likely be more than 2 years before the business could be packaged up and sold. This is evidenced in an email chain of which James and Nikola were recipients where Mark White requested options at 24 months and 5 years when discussing remuneration and equity prior to Mark joining the company. …. 77 Mr Rankine is a director and shareholder of the Company. Mr Rankine is a good friend of Mr Hiscock, having known him since university. Mr Hiscock approached Mr Rankine in about early 2016 about investing in the Essential Coffee business. 78 Mr Rankine gave this evidence: The initial intention was for there to be five investors - me, Todd, Mark White, James Cook, and James McWilliam. There were a number of telephone discussions between the five of us from about early 2016. We also all met in person at Miami on the Gold Coast. Although I can't recall when that was, it was while we were all considering the investment. In these various conversations, one of the topics we discussed was how long it might take to achieve an 'exit event'. Although there were some discussions about a two year target, the discussion of that aim was terribly light on at the time. I thought that a two year timeframe was unrealistic and I said so on at least one occasion. Specifically, during the trip to Miami the five of us were out the front of the Surf Club in Miami and I said that in my opinion an exit in five to seven years was far more realistic. It never occurred to me at the time that anybody saw it as something we were welded to, rather that it was a hypothetical mechanism of initiating a planning process. 79 Mr Hiscock gave the following evidence: In the first half of 2016, I had numerous telephone conversations with James McWilliam about the investment in the Essential Brands group and also the separate business Global Coffee which I intended to become part of the business. … However, I told James and others (Mark White, Chris Rankine and James Cook) at a face to face meeting at Piccolo Cafe Miami in the Miami Surf Club in early 2016, that there were no guarantees in relation to returns nor the timeline for a listing or strategic trade sale. Exhibited hereto and marked TH-2 is an email from James McWilliam to me dated 7 April 2016 following an exchange between the initial investors. In the email chain there are references to various possible time frames including a "5yr option". (bolding omitted) 80 The email which is TH-2 is one from Mr McWilliam to Mr Hiscock dated 7 April 2016 with the subject matter "Mark White – Investment Structure". There are no other emails exhibited which indicate the context in which this email was sent. Mr McWilliam gave evidence that the email was not addressing an exit event, but related to share options, which appears to be correct when one has regard to its contents. 81 Mr McWilliam gave this evidence in his second affidavit: At paragraph 8(c)(vi) of the Defence it is alleged that I (along with other individuals who were to become Directors) were involved in discussions about the sale process taking longer than two years prior to the Shareholders Agreement (Shareholders Agreement) being entered into. The topic of how long it would take to sell the Business came up from time to time in phone and email discussions amongst the individuals who were to become Directors, including myself in the period prior to purchase in early to mid-2016. There were a great number of things discussed over the course of a couple of days of meetings on the Gold Coast in early 2016 (the first face to face get together of the individuals who would become Directors). These included the progress of negotiations with the owners of the business, due diligence and capital raising for the purchase. I do not recall the timeline for an exit being specifically discussed or any major emphasis placed on it at the meetings in Miami. In phone calls and emails around this time, Todd said words to the effect that shareholders would double their money in 1-2 years. … I do not recall any other discussions about a five year time frame outside the context of [Mr White's] request for share options. No one said to me at the time that the investment would be five years or more. (bolding omitted) 82 Even if individuals who were to become directors had certain discussions or expressed certain opinions to each other around the timeline within which an "Exit Event" could be achieved, this does not detract from the fact that, by the time that the shareholders' agreement came to be executed, including by Jolan and other shareholders who were not involved in these discussions between the original five proposed shareholders, the shareholders' agreement contained an express contractual obligation in the following terms: Each Shareholder (in so far as it lawfully can do so) undertakes that it will exercise its powers in relation to the Company with the purpose of achieving an Exit Event within a period of two years from the Commencement Date. 83 "Exit Event" was defined to mean, "Share Sale, asset sale, merger or initial public offering involving the Company". 84 By reason of clause 20.4 of the shareholders' agreement, the shareholders' agreement and the Constitution superseded all prior agreements and understandings between the parties. 85 It is plain from the terms of the shareholders' agreement itself that there must have been further discussions about the proposed Exit Event, and that two years was settled upon as being an appropriate timeframe. Support for this is found in the evidence of Mr Cook who stated that: In the original business plan/model, the business plan also involved amalgamation with Global Coffee. This merger was to give instant scale overnight. This planned merger/combined entity is what we aspired to sell within the two-year period and what projected returns were based on. (emphasis added) 86 That the plan to sell within two years is consistent with Mr Hiscock's own evidence as to what he intended (which intention it is likely that he shared, at least with Mr McWilliam) being that his initial desire was to either build sufficient scale and investments in the Company to publicly list it or sell the business via a strategic trade sale within about two years after the acquisition in mid-2016, and that this was "to some extent reflected in clause 11.1 of the Shareholders' Agreement". 87 Importantly, the evidence of the discussions between the original five intended shareholders demonstrates that, even amongst themselves, none of them intended to become shareholders in the Company on an indefinite or long term basis. 88 On 2 July 2016, the Company acquired all of the shares in the subsidiaries, which included Essential Coffee. 89 Importantly and irrespective of whether the Exit Event would be achieved within two years or five years, it is apparent from the evidence referred to above, and from the terms of the shareholders' agreement itself, that the purpose of the Company being formed was to buy the Business (and associated intellectual property) (through the acquisition of the shares in the three companies including Essential Coffee) and then achieve an Exit Event within the short term. The Company was not formed to operate as a holding company of the subsidiaries on an indefinite basis. Nor was it formed for the purpose of achieving an Exit Event at some future time when the majority of the shareholders decided that the best profit could be achieved. Shareholders' Agreement 90 By a document which states expressly that it is an agreement made on 1 July 2016, Jolan and the other shareholders entered into the shareholders' agreement. The Company was also a party to that agreement. By that time, there were (in effect) fourteen shareholders. 91 The original shareholders included Mr Hiscock personally, the third and fourth defendants (which have a connection with Mr Hiscock), Jolan (associated with Mr McWilliam), Marjul Investments Pty Ltd (associated with Mr White), Relative Superiority Investments Pty Ltd (associated with Mr Cook) and Mr Rankine (acting as trustee for the F.A.C. Trust). 92 Another original shareholder was PCH Nominees Pty Ltd (acting as trustee for the PC Hughes Family Trust) which is a company of which Ms Joy Hughes is a director. Ms Hughes also used to work with Mr Hiscock, and he approached her in February 2016 about investing in the Company. 93 The Sheehy Family Trust was also an original shareholder, and Mr Michael Sheehy signed the shareholders' agreement on its behalf. Mr Hiscock deposed that he was aware that Mr Sheehy was looking for a new investment opportunity. I infer from this that Mr Hiscock knew Mr Sheehy personally and that he also approached Mr Sheehy to invest in the Company. Mr Sheehy was not called as a witness at the trial. 94 Another original shareholder was Mrs Patricia Rainey, who is married to Mr Neil Rainey, who used to work with Mr Hiscock. In his affidavit sworn 17 August 2021, Mr Rainey referred to his decision to invest in the Company and referred to himself as a passive investor (through his wife's shareholding). 95 The original shareholders referred to above therefore all had a personal connection with Mr Hiscock and together held over 5.3 million shares in the Company at the date of execution of the shareholders' agreement. 96 By comparison, the other three original shareholders only held 600,000 shares collectively and only one of them held more than 100,000 shares. 97 Of the original shareholders and notwithstanding the previous discussions referred to above, only Jolan proceeded to acquire 1 million shares in the Company at $1 each (which acquisition occurred on 2 July 2016). It became and has always been one of the five largest shareholders in the Company. 98 Mr Hiscock is a director of the third and fourth defendants. He is also a 50% shareholder in the third defendant. The fourth defendant is the trustee of a superannuation fund of which Mr Hiscock is a beneficiary. Each of the third and fourth defendants is one of the five shareholders holding the most shares in the Company. 99 It was common ground at the trial that subsequent shareholders who bought shares in the Company also entered into the shareholders' agreement. 100 The shareholders' agreement contained certain express terms. 101 Certain terms were defined in clause 1.1 as follows: Board means the board of Directors of the Company. Business means the Company's business of food and beverage manufacturing and distribution. Confidential Information means all information of the Company or a Shareholder (Discloser) which is disclosed to or otherwise becomes known by the Disclosee, whether before or after the date of this Agreement, which is in fact or which is reasonably regarded by the Discloser as confidential to the Discloser, including information relating to technology, processes, products, specifications, inventions or designs used or developed by the Discloser, trade secrets and know-how and information of a commercially sensitive nature. … Director means a person appointed or elected to the office of director of the Company in accordance with the Constitution and in accordance with this Agreement and, where appropriate, includes an alternate Director. Exit Event means a Share Sale, asset sale, merger or initial public offering involving the Company. Group means: (a) the Company; and (b) each Subsidiary of the Company (if any). Group Entity means each entity which is a member of the Group. Share means an ordinary share in the capital of the Company. Share Sale means the sale or transfer of all or substantially all of the Shares in the Company. 102 Clause 3 relevantly provided: 3 Business and management of Company 3.1 Conduct of Company's Business Each Shareholder (in so far as it lawfully can do so) must exercise its powers in relation to the Company to ensure that: (a) the Company carries on and conducts the Business in a proper and efficient manner in accordance with sound business practice and for its own benefit and so as to give effect to any business plan of the Company; and (b) the Company performs and complies with all obligations on its part under this Agreement and complies with the restrictions imposed on it by the Constitution. 3.2 Scope of Company Business Unless the Shareholders otherwise agree, the business of the Group will be limited to the conduct, maintenance, improvement and extension of the Business in accordance with any business plans (as amended by agreement between the Shareholders) and budgets approved under clause 4.2. 3.3 General policy determined by Directors Subject to clause 3.12, the Board will be responsible for: (a) the overall direction and control of the management of the Company; and (b) the formulation of the policies to be applied in the conduct of the Business. 3.4 Entitlement to appoint Directors (a) The total number of Directors is 5. (b) Each of the five largest Shareholders, measured by total numbers of Shares owned as a proportion of all Shares is entitled to appoint, and to replace from time to time, 1 Director. (c) If at any time there are less than five Shareholders then each Shareholder is entitled to appoint a number of Directors which bears to the total number of Directors the same proportion as its Specified Proportion. Fractions in the number of Directors are to be disregarded in this calculation. 3.5 Appointment and removal of Directors (a) Every appointment of a Director will take effect when the written notice of appointment is received from the nominating Shareholder and the written consent to act as a Director is received from that nominated individual at the registered office of the Company and every removal of such a Director will take effect when the written notice of removal is received from the nominating Shareholder at the registered office of the Company. (b) If the Specified Proportion of a Shareholder, for the purposes of clause 3.4(b), changes such that the entitlement of that Shareholder to appoint Directors pursuant to that clause changes, the Shareholders must do all things necessary, including causing the resignation or appointment of Directors (as the case may be), to ensure that, at all times, the number of Directors reflects the entitlement of the Shareholder to appoint Directors. 3.6 Remuneration of Directors Unless all the Directors agree otherwise, each Director appointed under clause 3.4 is not entitled to receive directors' fees or other remuneration in connection with their role as Director. … 3.8 Voting and regard to Shareholders' interests Each Director is entitled to one vote. 3.9 Nominee Directors A Director appointed by a Shareholder may take into account the interests of that Director's appointor and may act on the wishes of that appointor in performing any of the Director's duties or exercising any power, right or discretion as a director in relation to the Company, except in any particular case where no honest and reasonable director could have formed the view that, in so doing, the Director was complying with his fiduciary duties including the duty to act in good faith in the best interests of the Company as a whole. 3.10 Board meetings (a) The Directors must meet quarterly or more frequently as requested by any two Directors. … 103 Clause 4.2 provided as follows: 4.2 Annual Budgets and plans (a) At least 90 days before the commencement of each financial year of the Company, the Company must prepare and submit to the Directors for approval a detailed draft business plan together with a detailed draft operating budget for the Group for that next financial year. The budget must be on a calendar month basis and must include estimated major items of revenue and capital expenditure and be accompanied by a cash-flow forecast and a balance sheet showing the projected position of the Group as at the end of that next financial year. (b) The Board must consider and vote on each business plan and budget at least 30 days before the commencement of the financial year to which they relate. The Board may approve a business plan and budget with or without amendment and give conditional or unconditional approval of any item in the business plan and budget. (c) The Company may, if at any time circumstances require it, prepare a revised or supplementary business plan and budget and submit it to the Directors for approval at a meeting of the Board convened at least 30 days before the proposed implementation date of the revised or supplementary business plan and budget. 104 Clause 4.3 provided as follows: 4.3 Financial information The Company must provide to each Director and Shareholder: (a) (unaudited management accounts) as soon as practicable (and in any event not later than 21 days) after the end of each calendar month, unaudited management accounts which must include a detailed statement of financial performance, statement of financial position and cash-flow statement, and such other financial information as the Board may determine from time to time; (b) (annual financial statements) as soon as practicable (and in any event not later than 60 days) after the end of each of its financial years, copies of the unaudited statement of financial position, statement of financial performance and statement of cash flows of the Company (on a consolidated basis if required by any law having application in Australia); and (c) (additional information) any other information the Shareholders may at any time reasonably require as to any matter relating to the business or financial condition of the Company or of any other Group Entity, including Board minutes. 105 Clause 7 relevantly provided that: 7 Transfer and registration of Shares 7.1 Restrictions on Disposal Except as permitted or required by this Agreement, a Shareholder may not Dispose of all or any of its Shares unless it has received the prior written consent of each of the other Shareholders (Remaining Shareholders). … 7.3 Pre-emptive rights applicable on transfer of Shares (a) Unless expressly permitted or provided for in clauses 3 or 8, any Shareholder (Disposer) who wishes to Dispose of any Shares (or shares in any Subsidiaries of the Company) must comply with the procedures set out in this clause 7.3. (b) If a Disposer wishes to Dispose of all or any of its Shares (or shares in any Subsidiaries of the Company) to a third party (Sale Shares), it must first offer the Sales Shares to each of the Remaining Shareholders. Unless otherwise agreed by all of the Remaining Shareholders, the Sale Shares will be deemed to be offered in, as near as practicable, the Specified Proportions of Sale Shares of those Remaining Shareholders. (c) Any offer made by a Disposer in accordance with paragraph (b) must be made pursuant to a written notice (Pre-Emptive Notice). A Pre-Emptive Notice must: (i) specify the number of Shares comprising the Sale Shares and state that the Sale Shares are irrevocably offered for sale in accordance with this clause 7.3 at the cash price stated in the Pre-Emptive Notice (Sale Price); (ii) specify the proportionate entitlement of the relevant Shareholder; (iii) contain the terms upon which the Sale Shares are offered for sale; and (iv) specify the third party or third parties (which must not exceed four in number and all of which must be bona fide and of sound financial standing having regard to the likely future funding requirements of the Company) to whom the Disposer may transfer the Sale Shares pursuant to paragraph (h) (Nominated Third Parties). (d) A Pre-Emptive Notice constitutes an unconditional offer to sell the Sale Shares upon the terms set out in the Pre-Emptive Notice which must remain open for acceptance by the Remaining Shareholders for 30 days after the date of service of the pre-Emptive Notice on the Remaining Shareholders (Notice Period). (e) At any time during the Notice Period, any of the Remaining Shareholders may be written notice to the Disposer (with a copy to be provided to the other Shareholders) accept some or all of the Shares offered to them in a pre-Emptive Notice. If, in aggregate the Remaining Shareholders accept less than all of the Shares the subject of the Sale Shares, the offer in the Pre-Emptive Notice(s) is deemed to have been rejected. (f) Acceptances of offers made pursuant to paragraph (b) must be unconditional other than any necessary Authorisations. (g) If the Remaining Shareholders accept all of the Sale Shares, unless the Pre-Emptive Notice(s) provide otherwise, the transfer of all such Shares must be completed at 10am on the 10th Business Day after the last day of the Notice Period, when the Disposer must sell and the Remaining Shareholders must purchase the Sale Shares at the Sale Price. (h) If acceptances are not received in respect of all of the Shares the subject of the Sale Shares following compliance with paragraphs (b) to (g) (inclusive), the Disposer may, subject to paragraph (i), at any time within 90 days after the expiry of the Notice Period transfer all but not some of the Sale Shares to one or more of the Nominated Third Parties at a price not less than the Sale Price and on terms no more favourable to the purchaser than as set out in the Pre-Emptive Notice. If the transfer of all of the Sale Shares does not occur within that period, the Disposer may not transfer the Shares the subject of the Sale Shares without first complying with the requirements of paragraphs (b) to (f) (inclusive). (i) The Disposer may only transfer Shares the subject of Sale Shares to a Nominated Third Party under paragraph (h) if the requirements of clause 7.7 are satisfied. … 106 Clause 11 provided that: 11 Exit Events 11.1 Achievement of an Exit Event Each Shareholder (in so far as it lawfully can do so) undertakes that it will exercise its powers in relation to the Company with the purpose of achieving an Exit Event within a period of two years from the Commencement Date. 107 Clause 12 relevantly provided as follows: 12 Confidentiality … 12.2 Permitted disclosure Subject to clause 12.3, a Receiving Party may disclose Confidential Information of a Discloser: (a) (consent) with the prior written consent of the Board; … (f) (prospective purchaser) to a genuine prospective or potential purchaser (and their debt or equity financiers and legal advisers and the legal advisers of the potential purchaser's debt or equity financiers) or assignee in respect of the sale of any securities by a Shareholder or of all or a substantial part of the Group's business, provided that the proposed assignee or transferee first covenants and agrees with the Assignor in a form enforceable by each of the other parties that the information will not be disclosed for any other purpose other than in accordance with the terms of the relevant covenant.; … (i) (professional advisers) to professional advisers (except in the circumstances set out in clause 12.3, including legal advisers) and consultants of the Receiving Party whose duties in relation to the Receiving Party or under this Agreement require the disclosure; and … 12.3 Conditions to disclosure (a) Any disclosure under clauses 12.2(c), 12.2(e), 12.2(f), 12.2(g), 12.2(h) or 12.2(i) (other than a disclosure in good faith to the legal advisers of the Receiving Party) may only be made if the Discloser ensures that the person to whom disclosure is to be made keeps the information confidential in accordance with this clause 12. (b) Each Receiving Party must use its best endeavours to ensure that each of its Related Bodies Corporate or employees, officers or agents to whom Confidential Information is or has been disclosed or by whom that information has been observed (each of whom is in this paragraph (b) referred to as a Disclosee) will not improperly disclose or improperly use any of that information contrary to the requirements of this clause 12, either during or after the termination of the Disclosee's employment, office or agency with the Receiving Party or after the relevant company ceases to be a Related Body Corporate of the Receiving Party. Any breach by a Disclosee of any undertaking made by the Receiving Party as to non-disclosure or non-use or any obligation of confidence to which the Disclosee is subject in relation to Confidential Information will be considered to be a breach by the Receiving Party of that undertaking or obligation. (c) Any disclosure under clauses 12.2(e) or (f) may only be made for the purposes of satisfying the person to whom disclosure is made as to the value and commercial viability of the proposed investments, loan or financial accommodation. … 108 Clause 15 relevantly provided as follows: 15 Operation of Agreement 15.1 Shareholders' Agreement to override the Constitution If there is any inconsistency between the provisions of this Agreement and the provisions of the Constitution, then the provisions of this Agreement prevail amongst the Shareholders' to the extent of the inconsistency and the Constitution must be read and construed accordingly. … 15.3 Shareholders to observe and implement Agreement Each Shareholder undertakes with each other Shareholder and the Company to: (a) exercise all its votes, powers and rights under the Constitution so as to give full force and effect to the provisions and intentions of this Agreement; (b) observe and comply fully and promptly with the provisions of the Constitution so that each provisions of the Constitution is enforceable by the parties among themselves and in whatever capacity; and (c) exercise all its votes, powers and rights in relation to the Company so as to ensure that the Company fully and promptly observes, complies with and gives effect to the requirements and intentions of this Agreement and the Constitution. The obligations in this clause 15.3 include an obligation to exercise its powers both as a Shareholder and (where applicable and to the extent permitted by law) through any Director appointed by it and (to the extent permitted by law, subject to any rights it may have under clause 3.9) to ensure that any Director appointed by it (whether alone or jointly with any other person) obtains that matter or thing. Management of the Business prior to late 2020 109 Mr Justin Camilleri has been employed in various roles in the Group since 2008. Since 2016, Mr Camilleri has been employed by Essential Coffee. He is also the joint company secretary of the Company and Essential Coffee. 110 On 2 July 2016, Mr Hiscock sent an email to Mr Camilleri and copied to Mr White, Mr McWilliam and Mr Cook which set out the proposed management structure of the Group. Of the original five who had been party to the discussions in the first half of 2016, four of them were to become members of the "Executive Director Team" and it is apparent that, by the date of the email, they were already engaged in performing management tasks for the Business. 111 The email dated 2 July 2016 stated as follows: I know you have a lot on with the: 1. End of year close; 2. Victorian business integration; 3. Payroll changeover; 4. Budget loading; and 5. The many other Operational matters you deal with. Please don't stress, as we will bed these things down together and get this beautiful business firing as it should. I have attached the Director consents for the new Directors and Officers. The four of us will each be Directors of Essential Investments P/L (the parent company) and the two Australian entities which were acquired – (Essential Brands Group P/L and Essential Brands Franchise Systems P/L). Only James Cook and I will be appointed as Directors of the NZ entity. I am also the Public Officer and Co Sec for Essential Investments P/L. There are also some other roles the Executive Director Team will have as per below: • James McWilliam – Executive Director – Finance and IT. James will also be appointed as the Company Secretary and Public Officer for both EBG P/L and EBFS P/L; • James Cook – Executive Director – Sales and Marketing. Both Rene (NZ) and Michelle (Sales & Marketing) will report to James. James Cook will also be appointed as a Director and Co Sec of EBG NZ P/L, but will also have the NZ business under his wings. • Mark White – Executive Director – Operations. Both Aaron and Tiffany's org charts will point to Mark. 112 Mr McWilliam became a director and secretary of the Company as well as Essential Coffee at or about the date of this email. 113 Mr McWilliam also commenced employment in the role of Director of Finance and Information Technology for Essential Coffee on 3 July 2016. 114 Consistently with the email from Mr Hiscock dated 2 July 2016, Mr Cook and Mr White also took up paid executive positions with Essential Coffee in July 2016. Mr Cook was employed as Director of Marketing and Sales. Mr White was employed as the Executive Director – Customer & Operations (Chief Customer & Operating Officer). Mr Cook and Mr White also became directors of the Company. 115 Mr Hiscock retained his role as CEO, and was also a director of the Company and Essential Coffee. 116 Prior to December 2020, the directors of Essential Coffee and Essential Coffee NZ did not meet to consider and discuss the operations of the Business generally. Rather, they only met to approve financial accounts or to meet statutory requirements. 117 Having regard to the terms of the shareholders' agreement, the directors of the Company were required to be involved in the management of the Business. They were required to consider and vote upon a business plan and budget for the Group (which included Essential Coffee) prior to each financial year. Further and subject to any agreement by the shareholders, the business of the Group was to be limited to the conduct, maintenance, improvement and extension of the Business in accordance with any business plans and budgets approved by the directors of the Company. Subject to clause 3.12 of the shareholders' agreement, the board of the Company was responsible for the overall direction and control of the management of the Company and the formulation of the policies to be applied in the conduct of the Business. 118 On occasion, the directors of the Company were involved in, and made, decisions with respect to the Business such as: (a) the attempted sale of the Business in 2019; (b) the acquisition of a car for the sales representative of Essential Coffee in November 2019; (c) the acquisition of a café by Essential Coffee in March 2020; (d) the acquisition of a supply agreement and business of another company in March 2020. 119 Prior to November or December 2020, the directors of the Company received monthly financial information in relation to the subsidiaries, including the subsidiaries' financials in order for the directors of the Company to approve the monthly consolidated accounts. This included separate profit and loss information, balance sheets and cash flow information for Essential Coffee and Essential Coffee NZ. The directors of the Company also received, on a weekly basis, revenue reports, direct equipment sale reports and senior leadership meeting notes to inform decision making and management of Essential Coffee and Essential Coffee NZ. 120 In addition, the directors of the Company participated in "Monthly Board Finance Briefings" which were briefings provided for the information of the directors at which the financial information relating to the Business was discussed. 121 Mr McWilliam resigned from his employment with Essential Coffee on 8 November 2018 and ceased to be its employee in April 2019, but continued to work as a consultant for Essential Coffee until late May 2019. After May 2019, Mr McWilliam continued in his role as a director of the Company, as nominated by Jolan, and a director of Essential Coffee. 122 In relation to a proposal that Mr McWilliam cease to be a director of Essential Coffee in 2019 (which did not come to pass at that time), Mr Hiscock wrote an email dated 19 October 2019 to Mr McWilliam, Mr Camilleri, Mr White, Mr Cook and Mr Rankine that: James Mc I don't know why these questions are being asked as full transparency has always been provided and as a Director of the Holding Co you are entitled to the Subsidiaries details. By way of example, [Mr Cook] and I are the only Directors of NZ but all Essential Investments Pty Ltd Directors receive the NZ subsidiaries reports, hence: (1) no change [in response to a question as to whether Mr McWilliam will have visibility and access to monthly meetings and financials]; (2) no change [in response to a questions as to whether Mr McWilliam will be part of Board meetings and decision making process] – albeit whilst you would have visibility – you would not be required to sign documents – would not be a de facto board member of that subsidiary. … 123 There was no express restriction in the shareholders' agreement as to the information which a director of the Company is able to disclose to the shareholder which had appointed that director to the board of the Company. To the contrary, clause 3.9 of that agreement enabled an appointed director to take the shareholder's interests into account. That director "may act on the wishes of [the shareholder] in performing any of the Director's duties or exercising any power, right or discretion as a director in relation to the Company" unless "no honest and reasonable director could have formed the view that, in so doing, the Director was complying with his fiduciary duties…". 124 That an appointed director was able to act on the shareholder's wishes demonstrates that, not only could information received by the director be disclosed to the shareholder, but the shareholder could provide instruction to the appointed director as to how he or she should perform their role as a director of the Company. 125 Having regard to these facts, the board of the Company was required to be, and was as a matter of fact, involved in the management of the Company and, through the Company, the Business. This included the management of the subsidiaries. For this reason, Jolan, which was entitled to appoint a director to the board of the Company, was entitled to be (and was in fact) involved in the management of the Company and the Business. Event leading to the resignation of Mrs McWilliam from the board of the Company 126 Between June 2019 and September 2019, Yarra Advisory was appointed by the board of the Company to manage the attempted sale of the Company to a select group of purchasers. Those purchasers included what were described as "Industry Players". These included Merlo, Campos Coffee, Amore Coffee (Qld), Aromas Coffee Roasters (Qld), Allpress Espresso, Genovese Coffee, The Bean Alliance and the Caffe Nero Group. 127 In the Information Memorandum prepared by Yarra Advisory in July 2019, it was stated that Yarra Advisory had been engaged to undertake the sale of 100% of the equity in the Company with its three subsidiaries which conduct the operations and "own the I.P." which makes up Essential Coffee and that "[c]ollectively these entities comprise the entire business of Essential Coffee". 128 On 17 July 2019, Yarra Advisory produced a valuation showing that the equity value of the Company's shares was $2.42 per share, or $4.92 per share after certain initiatives had been implemented. 129 By September 2019, Yarra Advisory was unable to secure any offers to purchase the Business. At this point their engagement lapsed, and no other substantive steps have been taken by the board of the Company to sell the Company since then. 130 Following the unsuccessful sale attempt, Jolan (through Mr McWilliam), Mr White and Mr Cook all expressed interest in selling some or all of their shares in the Company. 131 On 27 September 2019, Mr Cook sent an email to the Company's legal advisors, Cronin Miller Litigation (CML), which was copied to the other directors of the Company, which raised certain questions about clause 7.3 of the shareholders' agreement (which relates to pre-emptive rights applicable on transfer of shares in the Company). The email relevantly stated: Interpretation. Regards the Shareholders Agreement Clause 7.3, is the following the correct strict interpretation: • Each shareholders offers their shares individually with any conditions, defined as Sale Shares via individual pre-emptive notices – per Cl 7.3(b) • The offer of any Sale Share must be accepted in full, otherwise no shares can be sold to existing shareholders – your offer (notice) to existing shareholders is deemed rejected per 7.3 (e) • This then allows you to sell to nominated third parties a. If the above interpretation is correct, the implication of this would be the larger the volume of shares offered to existing shareholders the less chance of selling all shares in full. This would mean you cannot sell any shares to existing shareholders (even if some acceptance of the [offer] occurred) unless all are sold. If all shares are not sold then the seller would via Cl 7.3 (h) have option to sell ALL nominated shares under a notice to a third party. … Clause 7.3(c)(iv): requires the Notice to name the third parties to whom sale shares will be transferred in the event existing shareholders do not take up all of the shares on offer. …Potential external buyers are current unknown and re-starting the notice period for any interested party would cause delay and administrative burden to the company. … 132 By email dated 1 October 2019 from CML to the directors of the Company, CML advised that clause 7.3 of the shareholders' agreement is clear and that the interpretation in Mr Cook's email is correct. It also stated that the processes set out in the shareholders' agreement cannot be altered or amended without a deed of variation being executed by all the parties. This advice was later supplemented by CML in a letter dated 14 July 2020 to the Company's board. Paragraphs 14 and 15 of that letter stated that: Clause 7.1 of the Shareholders Agreement provides that [a Company] shareholder may only dispose of its shares with the prior written consent of each of the other shareholders. Consent of the other shareholders must be unanimous. There is no provision for the Board to veto or vote on the sale of a shareholder's shareholding. 133 From February 2020, Mr and Mrs McWilliam took steps to attempt to sell Jolan's shares in the Company. This included requesting a copy of the non-disclosure agreement (NDA) which Jolan should use in engaging with third parties and issuing the board with a proposed share sale notice. 134 On 3 March 2020, Mr Hiscock provided Jolan with a draft NDA to use "to assist with communications to appropriate parties" with the qualification that the NDA "will need edits, and your own legal review to fit your purposes". 135 On or about 11 March 2020, Mr Cook asked Mr McWilliam to hold off on issuing Jolan's share sale notice so as to allow Mr Cook to negotiate a sale of his shares to a third party purchaser. Mr McWilliam agreed. Jolan did not ultimately issue the share sale notice at that time. 136 On 18 March 2020, Mr McWilliam requested that the item "Sale of business as a whole" be added to the agenda for the March board meeting, but Mr Hiscock, who prepared the agenda, did not include this item. 137 On 31 March 2020, Mrs McWilliam replaced Mr McWilliam as Jolan's nominated director on the board of the Company. 138 Mrs McWilliam is a solicitor who has been in practice for more than 20 years. She is a member of the Australian Institute of Company Directors and a Fellow of the Governance Institute of Australia. In 2008, Mrs McWilliam established her own legal practice called McGrath Legal. 139 Mrs McWilliam attended her first board meeting on the day of her appointment – 31 March 2020. 140 At the 31 March 2020 meeting, Mrs McWilliam raised certain concerns including about directors exercising their powers by proxy. This was because Ms Hughes, who was now a director of the Company, had purported to provide Mr Hiscock with her "proxy" for the board meeting. After Mrs McWilliam raised this concern and requested that the meeting be adjourned, Mr Hiscock telephoned Ms Stacy Miller from CML, who advised the meeting that Ms Hughes' vote by proxy should be counted. (Ms Miller later changed her advice about this after she received further information, stating in an email dated 7 April 2020 to the effect that Mrs McWilliam was correct). 141 Another concern raised by Mrs McWilliam related to the existence of a constitution or shareholders' agreement for Essential Coffee. Mr Hiscock advised that these documents could not be found and inquiries were being made to locate them. Mr Cook stated, with all board members agreeing, that a new constitution for Essential Coffee may need to be drafted. 142 On 2 April 2020, Mrs McWilliam sent an email to the board regarding the concerns she had raised at the 31 March meeting, and suggesting changes to the board's approach to drafting resolutions and the appointment of an independent chair. This then resulted in lengthy emails being exchanged between Mrs McWilliam, Mr Hiscock and Mr Rankine on 2 and 3 April 2020 which were copied to all directors. 143 As noted above, Mrs McWilliam's concern about the exercise of the "proxy" by Mr Hiscock was accepted by the Company's legal adviser. 144 Also on 2 April 2020, Mrs McWilliam executed (on behalf of the Company) an NDA with Sydney Brokerage Pty Ltd (trading as Link business) (Link). Having regard to my findings as to her credit, I accept that Mrs McWilliam executed the NDA on behalf of the Company in good faith and so as to ensure that any information provided to Link in connection with the sale of Jolan's shares remained confidential. The NDA was in substantially the same form as the draft NDA which Mr Hiscock had provided to Mr McWilliam on 3 March 2020. 145 Ms Xia executed the NDA on behalf of Link before any information was provided to her. 146 On 14 April 2020, Mrs McWilliam sent an email to Mr Camilleri, copying Mr Hiscock: (a) providing a copy of the signed NDA with Link; (b) asking Mr Camilleri to provide financial reports for 2017, 2018 and 2019 to be provided to Link. 147 Neither Mr Camilleri nor Mr Hiscock raised any objection to the NDA at that time, including on the basis that Mrs McWilliam had signed it on behalf of the Company. This is important because a complaint was later raised that she had done so, and it forms part of the case alleged against her in the Defence as part of the justification for her removal as a director. 148 For a director of the Company to execute an agreement without a second signature from another director is not unusual. In any event, Mrs McWilliam had not hidden the fact that she had signed the NDA on behalf of the Company and in circumstances where no issue was raised about it, she was entitled to proceed on the basis that she had done nothing wrong. 149 In response to Mrs McWilliam's email of 14 April 2020, Mr Hiscock sent an email to Mrs McWilliam and copying Mr Camilleri on 15 April 2020: Dear Nikola We are happy to release this information provided that Jolan confirm that neither Jolan or its officers or agents will share any of this information with any competitors eg. Coffee companies (Coffee, Equipment, Service) including Cafes Chains) and Slush Companies (Slush, Equipment and Service) given that: (1) these parties would not be approved as potential shareholders by existing shareholders; and (2) the potential damage to the business' ability to compete should our competitors receive this information. … 150 The email from Mr Hiscock, and the approach taken by him, is to be contrasted with the release by Yarra Advisory of financial information concerning the Business to a number of prospective purchasers which operated in the same industry as the Company. 151 Notwithstanding this, to the extent that Ms Xia had inquiries from prospective purchasers who fell within the description of competitors provided by Mr Hiscock on 15 April 2020, Mrs McWilliam instructed Ms Xia not to share confidential information with them prior to her obtaining board approval. 152 On 30 April 2020, Mrs McWilliam raised concerns with Mr Camilleri, the secretary of the Company, regarding the accuracy of the 31 March 2020 board meeting minutes, and expressed interest in reviewing the legal expenses ratified at the 31 March 2020 meeting. The minutes were eventually corrected. 153 Mr and Mrs McWilliam formally engaged Link as their broker on 4 May 2020. While much was sought to be made during cross-examination of the fact that the engagement was by Mr and Mrs McWilliam personally, rather than Jolan, nothing turns on it. Link was likely a professional adviser to Jolan within the meaning of clause 12.2(i) of the shareholders' agreement, and it had signed an NDA. Link received interest from a number of prospective purchasers, including Mr Troy Feng, Coolabah Tree and Sette Café. 154 Link executed an NDA with each of the prospective purchasers before identifying the identity of the company in which the shares were held. 155 On 25 May 2020, Mr Hiscock sent an email to Mr Cook and Mr Camilleri requesting that "a plan to be put forward to the shareholders in attempts to end what is clearly vindictive, vexatious and frivolous conduct via Nikola". 156 In June and July 2020, Mrs McWilliam and the other board members exchanged emails regarding the release of information to Coolabah Tree and Sette Café. 157 On 24 June 2020, Mrs McWilliam sent an email to the board informing it of the names of the prospective purchasers, and seeking board approval to release financial information to them. 158 Jolan's request was discussed at the board meeting on 29 June 2020. Members of the board asked Mrs McWilliam for the name of Jolan's broker. Mrs McWilliam declined to answer on the basis that the identity of the broker was not relevant to whether financial information should be released. Ultimately, the board agreed that Mrs McWilliam would prepare summaries of the financial information (rather than disclosing the reports themselves) for approval via circular resolution. 159 On 13 July 2020, Mrs McWilliam sent an email to the board proposing circular resolutions for the release of the financial summaries to Sette Café and Coolabah Tree. Mr Rankine asked Mrs McWilliam again to disclose the identity of the broker, and Mrs McWilliam maintained that the broker's identity was not relevant. 160 On 14 July 2020, the board received legal advice from CML regarding whether, and in what circumstances, financial records of the Company could be disclosed to prospective purchasers of its shares. The advice: (a) stated that "confidential information such as financial records are able to be disclosed to third parties such as prospective purchasers with the prior written consent of the Board, which should not be unreasonably withheld"; (b) further stated that "[c]lause 12.1 of the Shareholders Agreement provides that 'confidential information' will not be used or disclosed to another person except with the prior approval of [the Company], or pursuant to clause 12.2, with the prior written consent of the Board"; (c) noted that "[t]here is nothing in the Shareholders Agreement which prevents or restricts disclosure of Confidential Information to competitors, or prospective purchasers who may be competitors"; (d) recommended that "subject to appropriate non-disclosure agreements being executed, the Board consents to the disclosure of the Financial Documents." (italics omitted). 161 Nothing in this advice required that Jolan disclose the name of its broker to the board. 162 On 14 July 2020, Mr Hiscock and Mr Cook confirmed that they were "for" the circular resolutions which Mrs McWilliam had proposed. Mr Rankine did not respond. 163 On 15 July 2020, Ms Xia of Link advised Mrs McWilliam that Link needed to respond to Coolabah Tree that day, or the buyer would withdraw its interest. Mrs McWilliam instructed Ms Xia to release the financial summaries. 164 Also on 15 July 2020, Mrs McWilliam prepared a detailed letter which she emailed to CML which disclosed that the financial summaries had been provided and setting out the basis for that disclosure. The email was copied to Mr Hiscock, Mr Cook and Mr Rankine. Mrs McWilliam did not hide the fact that the information had been released. 165 In that letter, Mrs McWilliam, a solicitor, identified the reasons why she disagreed with the CML advice dated 14 July 2020. 166 The letter attached NDAs which had been executed by the prospective purchasers and stated as follows: Non-disclosure agreements Our broker requires any prospective purchaser to sign a non-disclosure agreement (NDA) before the name of the business or any Confidential Information relating to it is released. The owners of Sette Café and Coolabah Tree have signed NDAs (attached). As is customary in these situations, the "Vendor" is not a party to, or defined in, these NDAs for obvious reasons – that would identify the business before the prospective purchaser has signed. In addition to the NDAs between our broker and prospective purchasers, our broker has in turn signed a "Non-Circumvention, Non-disclosure and Confidentiality Agreement" with EI, in a form provided by EI, a fully executed copy of which was supplied to EI in mid-April 2020 (attached). I do not believe that further expense for EI (and delay for Jolan) is warranted by engaging your firm to prepare an NDA or otherwise review and amend (if necessary) the existing NDAs. If anything further is required to enable EI to directly enforce NDAs with the owners of Coolabah Tree and Sette Café, that can be addressed if and when they move to formal due diligence. (emphasis in original) 167 The content of these paragraphs was consistent with Ms Xia's evidence that no information was released to any prospective purchaser unless they had also signed a form of NDA. She also gave evidence that there was a two layer approach to ensuring that information provided to prospective purchasers was kept confidential: Now, a further confidentiality deed would be needed between the – any purchaser – from any purchaser, wouldn't it, if you were giving confidential information to another purchaser?---Yes. We have a procedures to ask all the inquiry to sign the confidential agreement and also to ask to sign the confidential deed of the board provided by the vendor. … …you recall a moment ago we looked at a new confidentiality document that was between LINK and – well, preserving the confidentiality as regards LINK. At about the same time in August 2020, did the McWilliam's, or one of the McWilliam's, provide you with a similar type of confidentiality deed poll to be used for purchases?---I would do both. We do both. We do confidential. We not just direct a gift to the person for the deed of the poll. The reason is because they were disclosure the name of the company, you know. Our purpose is they didn't disclosure any name of the company, if they buy just for the inquiries, you know. So they need to – first thing is to sign a confidential agreement with us. Then, we will go into the next step, you know, to ask who they are, why are their motivations, and then provide the confidential of the deed poll to give to them. So you can see it's two-layer. We are usually just ask them to sign confidential agreement, you know, for our other ..... but this particular situations, we actually provide a two-layer confidential to them. 168 The letter from Mrs McWilliam dated 15 July 2020 concluded as follows: Conclusion It has now been more than a month since Coolabah Tree and Sette Café signed their NDAs and requested some financial information about the business. The release of that information has been unduly delayed by Todd Hiscock and today we were advised by our broker that Coolabah Tree were intending to withdraw their interest due to the lack of information. Given the NDAs that have been signed; the limited, non-competitive nature of the Financial Summary we are disclosing; the fact that we are permitted under clause 12.2(f) of the SHA to disclose Confidential Information to prospective purchasers of our shares (without the consent of the Board); and that there is nothing in the SHA which prevents or restricts disclosure of Confidential Information to competitors, or prospective purchasers who may be competitors; we have provided the Financial Summary previously circulated to the Board, to our prospective purchasers today. (emphasis in original) 169 A complaint is made in the Defence that, by this letter, Mrs McWilliam: (a) made a clear distinction between considerations she made as a director of the Company regarding legal advice provided to the Company ('I', 'my') and conduct that she undertook or caused to be undertaken as a director of Jolan, a shareholder ('we', 'our'); (b) in doing so, Mrs McWilliam improperly used confidential legal advice that had been provided to the Company and which she received as a director of the Company, by communicating that legal advice to Jolan, as shareholder of the Company, without the express or implied approval of the Company to do so. 170 In light of clause 3.9 of the shareholders' agreement, which is addressed above, Mrs McWilliam did not require the consent of the Company to disclose the content of the legal advice received by the Company to Jolan (especially as she was also a director of Jolan anyway). This complaint is without merit, and it was not pursued in any serious way in the defendants' closing submissions. 171 Another pleaded complaint which is without merit and was not seriously pressed in the defendants' closing submissions is that Mrs McWilliam acted "contrary to the legal advice by causing Jolan to release the Confidential Information" in order to gain an advantage for Jolan to the potential detriment of the Company. The basis upon which the disclosure was contrary to the legal advice is not explained and, in circumstances where the potential purchasers had executed two forms of NDA, the potential detriment to the Company from the disclosure is not apparent. The risk that the Company would suffer detriment which arose by reason of the disclosure was not a significant one. 172 A further complaint by the defendants is that Mrs McWilliam permitted the disclosure of the financial summaries to the prospective purchasers and caused Jolan to breach clause 12.2(f) of the shareholders' agreement, because that clause only permitted disclosure of confidential information: to a genuine prospective or potential purchaser… in respect of the sale of any securities by a Shareholder … provided that the proposed assignee or transferee first covenants and agrees with the Assignor in a form enforceable by each of the other parties that the information will not be disclosed for any other purpose other than in accordance with the terms of the relevant covenant;... 173 Security is a defined term in the shareholders' agreement and it means, amongst other things, any security. A share is a type of security within the meaning of the Act: see ss 9 and 92 of the Act. Further, there is no suggestion in this case that the disclosure was made by Jolan to anyone other than a genuine prospective or potential purchasers of Jolan's shares. 174 It is correct that, because there was an NDA between the Company and Link, and a separate NDA between Link and the prospective purchasers, there had not been strict compliance by Jolan with the requirements of clause 12.2(f) because neither Jolan nor the Company were a party to an NDA with the prospective purchaser. However, because of the two NDAs which were in place, it is not the case that there was no form of protection of the Company's confidential information. The information being released was in the form of financial summaries only, and therefore quite limited. Further, the NDA executed with Link contained an indemnity by Link in favour of the Company (clause 5) and Link promised to use the same care in protecting the information as it uses to maintain the confidentiality of its most confidential information (clause 4.1.5). 175 On 22 July 2020, CML sent a letter to Mrs McWilliam: (a) notifying her that, "…the unauthorised release of Confidential Information to a prospective purchaser who has been identified (by you) as a potential competitor of the Company against legal advice provided to you as director of the Company, in circumstances where disclosure of the information was of benefit to Jolan but adverse to the interests of the Company, may constitute a breach of your director duties to the Company"; (b) asking her to confirm the capacity in which her 15 July 2020 letter was written, whether she had authority, on behalf of the Company, to execute the agreement, and the capacity in which she made her decision to disclose the information. 176 As observed above, some of the complaints in this letter (which found their way into the Defence) were without merit and, in any event, were not pressed in any serious way by the defendants at trial. 177 There then followed an exchange of correspondence between CML and Holding Redlich (HR) acting for Mrs McWilliam and Jolan. This correspondence commenced in July 2020 and it is not necessary to set out the content of those exchanges here. 178 After the Company raised its complaints, Jolan also prepared (with the assistance of its solicitors) a Confidentiality Deed Poll which both Link and the prospective purchasers executed. That Confidentiality Deed Poll was executed for the benefit of the Company, Essential Coffee and each subsidiary of the Company from time to time. Yet even this step did not appease the Company, although it should have. 179 There are no instances of Link or prospective purchasers wrongly disseminating any confidential information. 180 On 28 October 2020, CML wrote to HR particularising the basis on which the Company was alleging that Mrs McWilliam had breached her director's duties. 181 That letter was sent despite Mr Hiscock and Mr Cook being aware of legal advice from a barrister that any breach of directors' duties by Mrs McWilliam was technical. That advice was not shared with shareholders of the Company. 182 On 5 November 2020, HR responded to these particulars in detail, denying any breach of directors' duties by Mrs McWilliam. 183 On 6 November 2020, Mr Camilleri issued a notice of a general meeting of shareholders to be held on 27 November 2020, together with a proposed resolution that "Mrs Nikola McWilliam be removed from office as a director of Essential Investments Pty Ltd". 184 Having regard to the timing of the notice, the letter from HR dated 5 November 2020 appeared to receive little or scant attention by the board of the Company. 185 In particular, there is no evidence that the board asked CML for legal advice as to whether the HR response addressed its concerns about Mrs McWilliam. 186 Further, having regard to the facts set out above, there had been no damage to the Company's interests or the Business, and any concerns about non-compliance with clause 12.2(f) of the shareholders' agreement had been addressed by the Confidentiality Deed Poll. As noted above, counsel's opinion had been obtained which indicated that the breaches were technical. 187 I infer from these matters and the email from Mr Hiscock dated 25 May 2020 that, in truth, the board of the Company had already decided that it did not want Mrs McWilliam to remain as a director of the Company and moved against her as soon as the formality of receiving her solicitor's response had passed. 188 In the face of her likely removal at the general meeting, Mrs McWilliam resigned as a director of the Company on 25 November 2020 and Jolan appointed Mr McWilliam in her place. 189 One of the allegations made by the defendants is that Jolan and its directors "baited" the Company to engage in oppressive conduct. However, if that was so, then Mrs McWilliam would not have resigned but would have waited for the Company to remove her, so that Jolan could rely upon that event for the purposes of establishing oppression. Mr McWilliam is then removed as director of both the Company and Essential Coffee 190 After Mr McWilliam's appointment to the board of the Company, the other directors, through CML, moved against Mr McWilliam within a matter of less than two weeks. It was put to Mr Hiscock under cross-examination that, in giving instructions to CML at this time, he was looking to "dredge up things from the past to justify the decision to exclude Mr McWilliam from the board". For the reasons which follow, I agree with this characterisation of what occurred. 191 On 7 December 2020, CML (on behalf of Mr Hiscock, Mr Cook, Mr McGibbony and Mr Rankine) wrote a detailed five page letter to Mr McWilliam to advise that certain conduct engaged in by Mr McWilliam in April 2019 was a breach of a consultancy agreement he had with Essential Coffee, and that the Company was considering whether that conduct, as well as other conduct engaged in between November 2017 and December 2017 concerning the execution of a contract on behalf of Essential Brands Franchise System Pty Ltd, the former name of Essential Coffee, was a breach of his director's duties. 192 The letter also referred to discussions which had been held with Mr McWilliam following his appointment in which he had stated that he did not consider that Mrs McWilliam's conduct to be in breach of her director duties and that he did not consider there to be any issues with her conduct. The letter stated that any reply to the letter should be provided on or before 5.00pm on 21 December 2020. 193 Mr Hiscock gave instructions for the letter to be sent with the intention that it would be seen by and relied on by shareholders. Further, the other directors were copied into the email of Mr Hiscock sent to CML on 7 December 2020 which stated: I just spoke to James [Cook] and then (sic) preference is that it be on your letter head. We consider it likely that this will go to the Shareholders and we want it to be clear that we have not approached all of this without thorough consideration and advice. 194 The letter from CML referred to the fact that Mr McWilliam had been appointed by Jolan as director of the Company and included this paragraph on the first page: You were previously a director of the Company between 1 July 2016 and 31 March 2020. We are instructed that you resigned as a director of the Company following several issues being raised with you by the other directors regarding your conduct as a director and potential breaches of your director duties. Further, that those outstanding matters have not yet been resolved. 195 The letter then stated that "we are instructed that those previous matters, as well as some additional matters, are to be raised with you so that they may now be satisfactorily resolved". 196 Having regard to these statements, the impression that is given is that the letter will address facts which: (a) concerned his previous conduct when he had been a director of the Company between July 2016 and March 2020; (b) had been raised with him by the other directors of the Company as being potential breaches of his duties as a director of the Company prior to his resignation; (c) were outstanding matters which had not been resolved. 197 That the conduct referred to in the letter related to Mr McWilliam's role as a director in the Company is reinforced by other aspects of the letter. For example, at paragraph 7, it stated that Mr McWilliam had been employed by the Company as the Director of Finance and IT on 1 July 2016. That was wrong. Mr McWilliam was employed by Essential Coffee in that role. Mr Hiscock and Mr Cook (at least) knew this. 198 At paragraph 9, it stated that Mr McWilliam had negotiated a consultancy with the Company in or about February 2019. As addressed below, and which seems to be accepted in paragraph 10 of the letter, Mr McWilliam negotiated and performed consulting work for his former employer, Essential Coffee. 199 Paragraphs 23 to 27 of the letter addressed facts relating to Mr McWilliam's conduct in late 2017 but were opaque as to whether Mr McWilliam did these things as a director of the Company. It concluded with a statement at paragraph 28 that the Company "is currently quantifying its own loss and damage associated with loss of customers and business due to your conduct", which reinforces an impression that Mr McWilliam engaged in the conduct which is complained of as a director of the Company. 200 As will be seen, the letter of 7 December 2020 which was sent by CML on the instructions of Mr Hiscock, and with the acquiescence of Mr Cook, Mr McGibbony and Mr Rankine, contained misstatements of fact and was misleading in material respects. The insurance issue 201 This issue was addressed in paragraphs 7 to 22 of the 7 December letter. 202 As noted above, it began with the incorrect statement that Mr McWilliam had been employed by the Company and had then negotiated a consultancy with the Company (which was later "documented" as being an agreement with Essential Coffee). 203 That was incorrect, and was known by Mr Hiscock to be incorrect. This is apparent from an email from Mr Hiscock to Mr Camilleri dated 28 February 2019, copied to Mr McWilliam and others. 204 That email relevantly stated that: Please note that James McWilliam's last day as an employee of Essential Coffee is 8th April 2019. I will forward his Resignation Letter separately so you can process this as per normal process including Annual Leave payable following his final day as an employee. Note – James will still be a major shareholders with a right to continue to hold a board [seat] as per the Shareholders Agreement and the Corporations Legislation. … In order to assist with the Transition James McWilliam has offered to work two days a week in April and potentially May to assist with transitioning projects to you and the new assistant accountant. This would be on a contract rate, similar to his daily rate today and with either party being able to terminate with one weeks notice for convenience. James will provide the Company details which will be contracted for consultancy and provide you with weekly invoices for this work. 205 A draft consultancy agreement was circulated on or before 10 April 2019 which Mr McWilliam did not sign at that time. It was expressed to be between Essential Coffee and Mrs McWilliam's law firm, although Mr McWilliam was identified as being the nominated person who would perform the consultancy work. 206 The draft consultancy agreement contained a requirement that the contractor confirm with its insurer that Essential Coffee is covered by the contractor's professional indemnity and public liability insurance. 207 The receipt of the draft consultancy agreement prompted Mr McWilliam to contact Mr Glen Ryan from Austcover Pty Ltd (Austcover) on or around 10 April 2019 and send him a copy of it on that date. Austcover was an insurance broker. Mr Ryan referred to the insurance requirement in the draft consultancy agreement in an email dated 12 April 2019. 208 The end result of the initial contact on 10 April 2019 and subsequent communications between Mr McWilliam and Mr Ryan was that Mr Ryan emailed Mr McWilliam on 15 April 2019 and stated that, "QBE has confirmed that they have noted your contract/ABN etc onto the existing policy for Essential Brands Group Pty Ltd". 209 It is Mr McWilliam's evidence that Mr Ryan did not do this at his direction, and that all he had done was ask Mr Ryan if it was possible for this to be done. I accept this evidence because it is consistent with an email which Mr McWilliam sent to Mr Ryan on 12 April 2019 which stated: You were going to investigate if there is anyway that I can be covered for contracting Public liability under EC's insurance at no further charge, given I am also director and shareholder. 210 Further, Mr Ryan, who was called by the defendants, did not contradict Mr McWilliam's evidence in this regard. 211 Mr Ryan also gave evidence that the notation on the insurance policy did not result in any additional costs or fee. This was not in dispute at the trial. 212 Mr McWilliam worked as a consultant for Essential Coffee during April and May 2019 for a total of 14 days. No event occurred which gave rise to any claim on the public liability insurance. 213 On 30 May 2019, Mr McWilliam emailed Mr Camilleri (and others) indicating an intention to issue an invoice and reference was made to the email from Mr Hiscock dated 28 February 2019. There was then an exchange of emails around the rate of payment, and, by email dated 3 June 2019, Mr Cook requested that Mr McWilliam sign and return the consultancy agreement for governance purposes. 214 On 5 June 2019, Mr McWilliam sent a modified version of the consultancy agreement to Mr Camilleri which had the insurance clause struck out and which relevantly stated in a highlighted and underlined notation: "QBE has confirmed that they have noted this contract/ABN onto the existing public liability policy for Essential Coffee". The covering email from Mr McWilliam drew attention to the removal of the insurance clause and requested an execution copy. 215 The modified agreement also inserted reference to McGrath Legal Pty Ltd on the execution page instead of reference to Mr McWilliam personally. 216 Under cross-examination, Mr Camilleri agreed that receipt of this email from Mr McWilliam on 5 June 2019 was a matter which caused him to look for emails in Mr McWilliam's work email inbox and which caused him to discover the email exchanges between Mr McWilliam and Mr Ryan. 217 An issue about Mr McWilliam's alleged "misuse of the Company's insurance policy" was raised at a board meeting of the Company on 6 June 2019. There are no minutes for this meeting, which was held by telephone. At the meeting, Mr McWilliam explained the series of events which had occurred with Mr Ryan. 218 On 7 June 2019, Mr McWilliam sent an email to the board which set out in detail his position on the matter. That email stated as follows: … The insurance provisions in clause 3.2 of the Agreement are poorly drafted, generic provisions, not applicable to the circumstances and the services I was providing. They should not have been included in my contract and have been the cause of undue delay in signing as I attempted in good faith to resolve the situation with Justin and Glen Ryan at Austcover. In consultation with Justin, I made some enquiries with Glen Ryan as to whether my services under the Agreement might already be covered under Essential Coffee's existing policies with QBE. I sent Glen a copy of the Agreement so that he could view the Insurance provisions. He then advised me that he had added my Agreement/ABN to Essential Coffee's public liability policy at no extra charge. It's not clear to me whether contractors were already covered by the policy and he had just noted my Agreement/ABN, but in any event it was just for the term of the Agreement which has now expired. For the sake of completeness, I will now ask him to remove my Agreement/ABN from the policy. As Nikola and I explained last night, in circumstances where the services have been completed without any claimable workers compensation or public liability event and in light of the indemnity in clause 10.3(c)(iii), the most sensible way to resolve the matter is to delete the Insurance clause so that I can sign the Agreement immediately and we can all move on. … 219 On 7 June 2019, Mr Camilleri transmitted payment to Mr McWilliam for 14 days at $730 per day plus GST "as per the terms of the unsigned contract sent [on 10 April 2019]". 220 Later that day, Mrs McWilliam emailed Mr Camilleri, copied to Mr Hiscock and others, and referred to the deletion of clause 3.2 in the last draft of the contract returned to him on 5 June 2019. 221 On 10 June 2019, Mr Cook sent an email to Mr and Mrs McWilliam, copied to others, which stated: Dear James and Nikola As the Chairman of the board meeting last Thursday which was solely focused on Plan Quality, the side issue of James's contract and professional indemnity insurance was raised, and the board was keen to ensure all distractions to Plan Quality were resolved. The meeting concluded when the board could not respond to your assertions regarding James's contract and invoicing without taking legal advice. In addition post the Board meeting, the Board became aware that our corporate insurer QBE had endorsed McGrath Legal on Essential Coffee's insurance policy on 15 April 2019 at the request of James without knowledge of the board or CEO. On this issue the board is duty bound to respond for governance reasons. I now respond to you as the Chair of the meeting on behalf of the Board and confirm, that whilst the Board met with you to discuss this on Thursday night, the position presented was not agreed to by the Board and upon taking legal advice the payment remittance reflects the position Essential Coffee agreed. In regard to endorsement of McGrath Legal on the insurance policy, I am instructed that Justin strongly denies the allegations by James that Justin was aware or involved in the addition of your business/ABN to Essential Coffee's insurance policy back in April and was not aware until last week when our contract was returned by you with the insurance clause deletions and amendments. Further, James' emails with the broker and the broker himself do not support the view that Justin was involved either. In any event, even if Justin was involved it would not absolve James of his fiduciary duties in this matter, a matter which the Board is very conscious of ensuring never happens again. Whether intentionally or through oversight our advice is that James has made a decision as a director when he had a material personal interest in the outcome and conflict, which is a direct contravention of his statutory obligations as a director of the Company (sections 180-183). From our perspective our position is clear and we will not be reviewing this further provided James commits to not let a breach of his fiduciary duties occur again. In the interests of supporting Plan Quality it is suggested that an apology to Justin would improve board interaction. (emphasis added) 222 A conversation then occurred between Mr McWilliam and Mr Cook on 10 June 2019, during which, amongst other things, Mr McWilliam told Mr Cook that he considered the allegations in his email to be untrue and defamatory. He asked for the allegations to be withdrawn. It is not surprising that Mr McWilliam was upset and his reaction was not an unreasonable one in the circumstances. 223 Following a further conversation between Mr McWilliam, Mr Cook and Mr White, Mr Cook sent the following email "on behalf of the Essential Coffee board" on 13 June 2019: … I refer to the email communication sent to you on 10 June 2019 at the instruction of and on behalf of the majority of the board. I retract the following from the previous communication: Whether intentionally or through oversight our advice is that James had made a decision as a director when he had a material personal interest in the outcome and conflict, which is a direct contravention of his statutory obligations as a director of the Company (sections 180-183). From our perspective our position is clear and we will not be reviewing this further provided James commits to not let a breach of his fiduciary duties occur again. There will be no further steps taken. However, all directors are on notice that the Board expects that they act at all times in accordance with their statutory obligations and fiduciary duties in the interests of the company as a whole. The Board reminds all directors, that if there is a chance of a perception of, or an actual material interest or conflict then in the interests of transparency the concerned director should disclose the issue and seek guidance. As the matter is finalised, there is no reason for the Board (or individual members) to bring it to the attention of the shareholders. This should alleviate Mrs McWilliam's concern regarding publication of the 'statement' (which has not occurred in any event). We look forward to shifting focus back to more important matters. Regards James Cook (On behalf of the Essential Coffee Board) Director (italics omitted, emphasis added) 224 In the words of Mr Cook, the matter was finalised. Having regard to an email from Mr McWilliam from Mr Cook and the other directors dated 18 June 2019, Mr McWilliam agreed, stating, "Let's all now put this behind us and get on with business". The draft consultancy agreement had never been signed but Mr McWilliam was paid for his consultancy work and that seemed to be the end of it. 225 Mr McWilliam continued in his role as director of both the Company and Essential Coffee, and, having regard to the facts set out above, the issues concerning the insurance policy were not "outstanding" and nor could it be said that they had not been resolved, as stated in the 7 December 2020 letter from CML. 226 Further, the 7 December 2020 letter contained two additional incorrect statements. 227 The first was that "our client has since ascertained" (implicitly after June 2019) that "on a date between 12 April 2019 and 15 April 2019, you directed Mr Ryan to contact QBE (the Company's insurer) to amend the insurance policy for Essential Brands Group Pty Ltd such that the policy included the provision of professional indemnity and public liability insurance for Nikola McWilliam, trading as McGrath Legal". 228 However, the directors in 2019 who were still directors in December 2020 (including Mr Hiscock and Mr Cook) were all aware of the events concerning the insurance policy as at June 2019 and therefore no new information had been "since ascertained". Those directors also knew that no direction had been given to Mr Ryan by Mr McWilliam, and they also knew that the policy did not include the provision of professional indemnity insurance as stated in the letter. 229 The second incorrect statement in the letter was that, at a board meeting held on 21 July 2019, Mr McWilliam had admitted that he had contacted Mr Ryan to request that he amend the Company's insurance policy so that it covered him and Mrs McWilliam, that he admitted he did so without permission or authority of the Company and that he had taken those actions because the requested insurance was cost prohibitive given the duration of the consultancy agreement. 230 However, Mr McWilliam made no such admissions at a board meeting on this date or at any other time. The date of 21 July 2019 was a Sunday. There are no board minutes or any other record of a board meeting being held on this date. The board meeting on this date (and admissions said to have been made by Mr McWilliam) are not referred to in Schedule 13 to the defendants' closing submissions, being a detailed chronology. Nor is the fact that such admissions were made at a meeting on 21 July 2019 pleaded in the Defence. No witness attested to these admissions having been made. 231 Further, as to the insurance issue being raised in the 7 December 2020 letter on Mr Hiscock's instructions: (a) Mr Hiscock knew that the insurance issue had been dealt with in June 2019 and had not been raised since then. Indeed, Mr Cook had stated expressly that it would not be raised with shareholders and Mr Hiscock had been copied in this email; (b) Mr McWilliam had not, as the letter alleged, requested that he be added to Essential Coffee's insurance policy – but rather the insurance broker, Mr Ryan, had made the suggestion and actioned it, and Mr Hiscock knew this because Mr McWilliam told him this in 2019; (c) the inclusion of Mr McWilliam's consultancy on the insurance policy came at no cost to Essential Coffee (or the Company) and involved minimal risk; (d) Mr Hiscock therefore knew that the contents of the 7 December 2020 letter to Mr McWilliam would be misleading for shareholders and were, in some respects, false. The inertia clause issue 232 This issue was addressed in paragraphs 23 to 28 of the 7 December letter. 233 During Mr McWilliam's employment with Essential Coffee, he signed (on behalf of Essential Coffee) an agreement with Finrent Pty Ltd atf Finrent Unit Trust (trading as Finlease) (Finlease) in December 2017 (Finlease supplier agreement). 234 The Finlease agreement had been negotiated by Mr Cook, which negotiations had commenced by at least November 2017. 235 The first involvement of Mr McWilliam occurred when he was copied into an email exchanged between Mr Cook and Mr Green of Finlease on 27 November 2017. 236 Mr Hiscock and Mr McWilliam were then copied by Mr Cook to a further email exchange on 14 December 2017. That email forwarded an earlier email of the same date which contained responses on several points including "inertia" as follows: … c. Inertia • Where client wishes to continue to rent the equipment past the agreed term i. Inertia will apply as set out in the Business terms letter 1. There are options available to meet the market here. ii. The Client may provide a letter of termination for the end of the agreement (then the $1.00 residual would apply) iii. The $1.00 residual would apply when the equipment is upgraded at the end of the term iv. The $1.00 residual is offered to Essential Brands as part of the Finlease Business relationship. … 237 The second email of 14 December 2017 from Mr Cook also stated: … Thanks for your response, again please include James McWilliam in your reply as he will be your point of contact in the company at a management level. If this has already been dealt with today please ignore this correspondence but I have just seen your email. … Please confirm that we are in agreement and you will execute and return a signed the word document Business Terms Letter sent to you for review and the supplier agreement. Our CEO and myself or another director likely James McWilliam will execute on our behalf. 238 Mr Hiscock did not intervene at this point to challenge the proposed inclusion of any "inertia" clauses of the kind described in the first email of 14 December 2017. As Mr Cook had negotiated the terms of the Finlease supplier agreement on behalf of Essential Coffee, it is plain that Mr Cook was also content to proceed with the inclusion of such a clause. 239 These facts demonstrate that, as at December 2017, Essential Coffee did not have an established policy of refusing to enter agreements which contained such clauses. 240 This was so despite Mr McWilliam's personal view (expressed in an email dated 7 November 2017) that such agreements should not contain inertia clauses. This was a view that did not appear to be shared by Mr Cook and Mr Hiscock, having regard to their lack of response to Mr McWilliam's email and their conduct in November and December 2017 as set out above. 241 Indeed, by his affidavit tendered at the trial, Mr Hiscock attested to the fact that the executive team of Essential Coffee (including Mr McWilliam) had "discussions to the effect that any finance or rental agreement or [our] agreement with Finlease should permit us to contact our customers prior to the end of its agreement with Finlease and let it know about the upcoming inertia clause so that they could terminate the lease if they wished to do so (and not blame us for introducing them to a leasing party which locked them into contracts by the use of inertia clauses)". 242 This evidence contradicts the existence of any policy of avoiding inertia clauses in late 2017. Rather, it indicates that Essential Coffee was aware that companies such as Finlease would seek to include inertia clauses but that a term needed to be included to enable Essential Coffee to contact customers to inform them about the clause. 243 By email dated 15 December 2017, Mr McWilliam signed and returned the Business Terms Letter (which formed part of the Finlease supplier agreement) and copied in sales@ebg.com.au. He did this as an "authorised person". 244 Emails sent to that address were able to be accessed at that time by either or both of Mr Cook and Mr Hiscock, neither of whom raised any complaint. The Business Terms Letter contained the following clause on page 3 of 5: Inertia If the client does not notify, 30 days before the end of term the agreement will go into an inertia period and the revenue shared. The share will be based on: - 25% Funder - 75% Balance Shared 50/50 between ESSENTIAL COFFEE The agreement will automatically renew for 30 day periods. ESSENTIAL COFFEE may upgrade at any time for net present value, following the end of term. Competitors need to payout the expiry term payments and services. 245 Mr McWilliam also signed the supplier agreement on behalf of Essential Coffee on 20 December 2017. This agreement was referred to in the Business Terms Letter dated 15 December 2017 as part of the "Documentation". 246 The 7 December 2020 letter from CML to Mr McWilliam stated that it was specifically discussed and agreed in November and December 2017 that finance agreements should not include any inertia clauses. However, there was no such discussion or agreement, and the email exchanges involving Mr Cook demonstrate this to be so. 247 Further, any such discussions and agreement could not have been between Mr McWilliam and others in their capacity as directors of the Company, but that is the impression which the letter seeks to give, especially as it refers to "Company policy". There was no policy of the Company, and Mr Hiscock knew this when he instructed CML to send the letter. Mr Cook knew this also. 248 The 7 December 2020 letter states that, on or about 10 November 2020, the Company became aware, through a complaint made by a customer, that on 20 November 2017, Mr McWilliam executed a contract with Finlease which includes an inertia clause. 249 As to the inertia clause issue being raised in the 7 December letter on Mr Hiscock's instructions: (a) Mr Hiscock and Mr Cook knew that Mr Cook had primary carriage of the negotiations with Finlease, including negotiations which contemplated the inclusion of an inertia clause, but this was not disclosed in the 7 December letter; (b) Mr Hiscock and Mr Cook knew that Mr McWilliam signed the Business Terms Letter with Finlease after receiving an email from Mr Cook (copied to Mr Hiscock) indicating that the Business Terms Letter was ready to be executed; (c) Mr Hiscock and Mr Cook knew that they had not complained to Mr McWilliam at the time when he signed the Business Terms Letter; (d) Mr Hiscock and Mr Cook knew that neither the Company nor Essential Coffee had any established "policy" in November or December 2017 of the kind described in the 7 December letter; (e) Mr Hiscock and Mr Cook therefore knew that the contents of the 7 December 2020 letter to Mr McWilliam would be misleading for shareholders and were, in some respects, false. Expression of opinion about Mrs McWilliam 250 The 7 December letter from CML contains, in paragraphs 29 to 33, a complaint that Mr McWilliam has expressed certain opinions about his wife's conduct which are not shared by the other directors and that therefore the Company "is genuinely concerned". 251 The inference one draws from the letter is that Mr McWilliam was not permitted to have a different opinion from the other directors, or to express that opinion. 252 It is plain that this section of the CML letter of 7 December was designed to taint Mr McWilliam with the allegations which had been made against Mrs McWilliam which, for the reasons set out above, were made with the motivation to have her removed from the board of the Company. Having poisoned the shareholders against Mrs McWilliam, this was the directors' way of diverting some of that poison towards Mr McWilliam. It worked. Events post CML letter of 7 December 2020 253 On 9 December 2020, being only two days after the 7 December letter from CML, Mr Hiscock called an urgent "Special Purpose" meeting of the board of Essential Coffee to be held on 16 December 2020. The two proposed resolutions for the special purpose meeting were: (a) that Mr McWilliam be removed as a director of Essential Coffee; and (b) that Essential Coffee's constitution be amended to allow that company's powers to be exercised by two directors, instead of three. 254 These resolutions were passed at the board meeting on 16 December 2020, and Mr McWilliam was removed as a director of Essential Coffee. 255 As to information concerning Essential Coffee, the Company changed its position in around December 2020, so that directors of the Company were no longer given information relating to the subsidiaries. This was unfair to Jolan, for the reasons explained by Mr McWilliam in an email to Mr How dated 29 March 2021: I note the position that "only the directors of subsidiaries will receive information relating to the subsidiaries and not directors of the holding company" is a recent change from the position the company has taken in the past. A change that coincided with my removal as a director of the main operating subsidiary, resulting in Jolan Pty Ltd being the only shareholder exercising its right to appoint a director to the board of the holding company that does not also have representation on the board of the main operating subsidiary (or have subsidiary information otherwise available to it, as in the case of the CEO). 256 On 21 December 2020, Mr McWilliam responded to CML's letter of 7 December 2020 and requested copies of the documents referred to in the letter, requested forbearance over the Christmas period, and stated that he would respond within 28 days of receiving the documents which he had requested. 257 The documents were not provided. Instead, on 23 December 2020, joint company secretary Mr Mitchell How issued a notice of a shareholders' meeting to be held on 20 January 2021, including a proposed resolution that "Mr James McWilliam be removed from office as a director of Essential Investments Pty Ltd". No supporting documentation was provided to shareholders with the notice. 258 This was unnecessary. There was no good reason why Mr McWilliam could not have been provided with the requested information and documents to enable him to provide a fulsome response to the allegations made against him. In the circumstances, the issue of the notice on 23 December 2020 was not in the best interests of the Company, and only served to further damage the relationship between Jolan and its directors and the Company and its directors. 259 On 15 January 2021, HR wrote to CML and provided a response to the 7 December letter including responding to the allegations concerning the insurance policy issue and the inertia clause issue. Mr McGibbony was on notice, at least from this date, that there was a possibility that the content of the 7 December letter was not accurate. The HR letter stated that "pursuit of these allegations and the proposed removal of Mr McWilliam [is] unjust and oppressive [in] circumstances where Jolan has no alternative director it can now appoint, given the conduct of the Company in seeking to exclude both Mr and Mrs McWilliam". HR requested that the resolution be withdrawn, but that did not occur. 260 On 19 January 2021, the day before the meeting on 20 January 2021 was to take place, Mr How circulated material concerning the proposed resolution to remove Mr McWilliam as a director of the Company. 261 Jolan raised concerns about whether sufficient notice had been given to shareholders to allow them to consider this material. Mr How appeared to agree because the 20 January meeting was cancelled, and Mr How issued a notice of a shareholders meeting to be held on 16 February 2021. The agenda included a proposed resolution that Mr McWilliam be removed as a director of the Company. 262 On or around 16 February 2021, a majority of shareholders of the Company voted to remove Mr McWilliam from the board of the Company. Mrs McWilliam is appointed as a director of the Company who is then removed 263 On the evening of 16 February 2021, Jolan, via HR, requested a copy of the written instrument giving effect to Mr McWilliam's removal, so that Jolan could determine when the removal would take effect. 264 By 19 February 2021, Jolan had not received the requested information, so it obtained an ASIC search of the Company. This showed that Mr McWilliam had been removed from 17 February 2021. Jolan then appointed Mrs McWilliam to the board. 265 Between 17 February 2021, when Mr McWilliam was removed, and the date on which Mrs McWilliam's appointment took effect (and therefore Jolan had no representative on the board), the board passed circular resolutions: (a) approving the payment of past and future legal fees and disbursements incurred by the directors in their individual capacities, regarding directors' duties; (b) approving the removal of Mr McWilliam from the board of Essential Brands Group Pty Ltd; and (c) recommending that the shareholders approve at the next shareholder meeting the purchase of 100,000 shares from existing shareholders at $1.15 per share for the purposes of an Employee Long Term Incentive Plan. 266 On 23 February 2021, Mr How issued a notice of shareholders' meeting which included a proposed resolution that Mrs McWilliam be removed as a director of the Company. 267 On 5 March 2021, Mrs McWilliam received an email from Mr How providing documents which Mrs McWilliam had requested. Mr How's email stated: Please note that these documents are being provided to you in your capacity as a director of EI only and you are not permitted or authorised to be distribute these documents to third parties, including shareholders. As you are aware, Jolan has also requested this information and a separate response has been provided to Jolan. Finally, we note the current allegations of breach of director duties which relate to the unauthorised distribution of information that you received as a director to shareholders, and further that the concerns notice that was issued to Todd was based on confidential Board documents you received, presumably from James, at a time when you were not a director of EI. The Company asks that you please note and comply with your director duties. (emphasis added) 268 This introduced for the first time the notion of a barrier which prevented disclosure of information between the director appointed by a shareholder to the board of the Company and the shareholder itself. 269 In or about March 2021, a purchaser named Mr Egan expressed interest in purchasing Jolan's shares. Mr Egan signed a Confidentiality Deed Poll, and asked to visit the Company's headquarters and meet the CEO, Mr Hiscock. Arrangements were made for this to occur on 10 March 2021. On the day before the meeting, CML advised that Mr Hiscock would not be attending any meeting with Mr Egan. Mr Camilleri and the General Manager of Operations, Mr Aaron Richardson, attended instead. 270 By contrast, when Mr Cook's prospective purchaser, Mr Coventry, expressed interest in purchasing shares, Mr Hiscock met with Mr Coventry on two occasions, and invited Mr Coventry to contact him directly to progress the purchase. The Company also provided detailed financial information and information regarding dividends and customers. 271 On 12 March 2021, Mr Egan requested, via Jolan's broker Ms Xia, the following information: (a) schedule of depreciated assets; (b) schedule (detailed) of employees, wage rates and leave liabilities; (c) report on hardware sales by unit type over last three years; (d) report on consumables sales by type over last three years; (e) report on service revenue for last three years; (f) report on dividends paid for last three years; and (g) minutes of board meetings for last three years. 272 Mrs McWilliam wrote to Mr Camilleri asking him to make the information available as soon as possible. Mr Camilleri responded on 17 March 2021 that the Company was not prepared to disclose the information, because, inter alia, it was not information normally offered to purchasers of a minority shareholding, and was beyond the scope of the material agreed to be provided in the past. 273 Mrs McWilliam reminded Mr Camilleri that Mr Egan had signed a confidentiality undertaking in accordance with cl. 12.2(f) of the shareholders' agreement, and Mr Camilleri advised that the board's position remained the same. 274 Jolan made further requests for the information on 18 March, 23 March and 26 March 2021, but the Company refused to provide the information requested. Mr Egan did not make any offer to acquire Jolan's shares in the Company. 275 The defendants tried to shift the blame for Mr Egan's failure to make an offer upon Ms Xia. I do not agree that Ms Xia was the likely cause of Mr Egan's loss of interest in acquiring Jolan's shares. In any event, the manner in which Jolan was treated in relation to its attempts to sell its shares to Mr Egan is the relevant inquiry. 276 On 18 March 2021, Mrs McWilliam was removed as a director of the Company. Mr McWilliam is appointed as a director of the Company 277 Jolan appointed Mr McWilliam to replace Mrs McWilliam, which took effect on 19 March 2021. 278 On 22 March 2021, CML advised Jolan that the Company was taking legal advice as to whether Mr McWilliam's appointment was effectual. CML advised that for the time being, both Mr and Mrs McWilliam would be copied into circular resolutions and invited to attend board meetings. 279 These proceedings were commenced by Jolan on 1 April 2021. 280 In accordance with the CML advice of 22 March 2021, Mr and Mrs McWilliam both attempted to join the next board meeting on 20 April 2021. At the beginning of the meeting, Mr Cook advised to the effect that he had taken further legal advice, and Mr McWilliam could attend the board meeting but Mrs McWilliam could not. Mrs McWilliam is appointed as a director of the Company but then removed 281 During the board meeting of 20 April 2021, Jolan appointed Mrs McWilliam as its director in the place of Mr McWilliam. The board did not accept the appointment, and both Mr and Mrs McWilliam were excluded from the meeting for part of it. Mr McWilliam was later re-admitted to the meeting. 282 Mrs McWilliam's appointment was subsequently accepted by the Company and registered with ASIC effective from 20 April 2020. 283 At the meeting on 20 April 2021, the board by majority resolved to defer a sale for at least 12-18 months after certain events have occurred as follows: The Board of EI RESOLVES: To approve an EI Investor Strategy, which is to consider going to market to sell EI's businesses/investments via a selective managed process, with a professional corporate advisory firm, approved by the majority of the EI Board once EI's investments (currently being EC Australia & EC New Zealand) have had 12-18 months of trading: (a) NOT materially impacted by Covid19 customer lockdowns, machine closures, café closures, or border closures; and (b) NOT exposed by the yet to be resolved FinLease inertia issues. Eg. Post reaching a resolution with FinLease and its / EC Australia's many impacted customers (in excess of 260 and growing by approx. 3-4 per week) in place for EC Australia (existing &future customer revenue / retention exposures managed) and with a new contract signed that reflects the key criteria which the current agreement should have reflected eg. FinLease to notify EC and Finlease customers introduced to FinLease by EC prior to the rental end of term and removal of inertia clause lock ins and expensive exit payments; and (c) following a satisfactory resolution of Key / Strategic Accounts renegotiations with respect to Minimum Volume Commitments not achieved due to Covid-19 impacts; (d) post resolution of the Jolan Pty Ltd initiated Federal Court Action against EI and post cessation of related legal costs, and with a finalisation of the Jolan Pty Ltd matter satisfactory to EI; and (e) subject to the then prevailing economic market conditions; (Deferral Resolution). 284 On 20 April 2021, the board also passed a resolution to limit the information which could be provided to a prospective purchaser. 285 On 17 May 2021, Mr How issued a notice of general meeting to shareholders of the Company. The notice proposed resolutions to: (a) remove Mrs McWilliam from the board; and (b) make any director who has been removed by shareholders in a general meeting ineligible for reappointment for a period of 12 months from the date of removal (the Exclusion Resolution). 286 On 8 June 2021, a majority of shareholders voted to remove Mrs McWilliam as Jolan's appointed director to the Company and to pass the Exclusion Resolution. 287 They also voted in favour of a resolution to limit the information which could be provided to prospective purchasers of minority shareholdings in the Company. 288 Jolan has not had a director appointed to the board of the Company since 8 June 2021. Jobkeeper issue 289 One aspect of the defendants' case is that Mr Hiscock, in considering whether to issue the notices of shareholders' meeting to remove Mr and Mrs McWilliam as a director of the Company, took into account the fact and content of an email exchange he had with Mr McWilliam on 29 August 2020 regarding the JobKeeper program. 290 This email exchange is referred to above in relation to the observation that Mr Hiscock sought to rely upon an incomplete email exchange as part of his affidavit evidence. 291 Mr Hiscock deposed that he understood that an email from Mr McWilliam dated 29 August 2020 suggested that the Company should manipulate or reduce its revenue in order to obtain JobKeeper subsidies. 292 Mr McWilliam denied that his email encouraged Mr Hiscock to do anything of the sort. The final email in the email chain which was omitted from Mr Hiscock's evidence also showed that Mr McWilliam informed Mr Hiscock on 29 August 2020 that his intention was not to encourage the Company to engage in unlawful or unlawful conduct and that Mr Hiscock had completely misunderstood. 293 Having regard to the content of the (complete) email chain, I accept the evidence of Mr McWilliam. 294 As Mr Hiscock is not a witness of truth, I do not accept Mr Hiscock's evidence regarding his perception of the emails received from Mr McWilliam in relation to the Jobkeeper subsidy or that he had regard to them when deciding to issue the notices to the shareholders. Support for this conclusion is found in the fact that no mention of these emails is made in the 7 December 2020 letter sent from CML to Mr McWilliam. 295 For these reasons, I do not accept that, in considering whether to issue each of the notices, Mr Hiscock took into account the fact and content of the email exchange he had with Mr McWilliam on 29 August 2020 regarding the JobKeeper program. Offers to purchase Jolan's shares 296 The defendants submit that Jolan has received reasonable offers to purchase its shares and so could have exited the Company and realised its capital on fair terms. The offers are listed in Schedule 10 to the defendants' closing submissions. 297 However, having regard to the list of offers, it was not in dispute at the trial that the proposed purchase by Mr Feng in October 2020 did not proceed for reasons which were out of the control of Jolan. It follows that Jolan was unable to exit the Company by reason of this offer. 298 Other offers have been made since 27 April 2021 to purchase some, but not all, of Jolan's shares, but it was reasonable for Jolan not to accept these offers. Having regard to the findings made below concerning the value of Jolan's shares as at 1 April 2021, the offers were not made for a "fair price". Further, apart from the issue of price, one of the advantages of Jolan's level of shareholding is the entitlement to a seat on the board of the Company pursuant to the shareholders' agreement. That advantage would be lost if the shareholding was diminished by the sale of some only of Jolan's shares such that Jolan ceased to be one of the largest five shareholders. 299 On 1 July 2021, an offer was made by a consortium to acquire all of Jolan's shares for 87c a share. Having regard to the findings below about the value of Jolan's shares, this was not a "fair price". Further, there were a number of terms attached to the offer, including a term to the effect that these proceedings cease (and presumably Jolan should bear its own costs) and that Jolan, Mr and Mrs McWilliam and Mr McWilliam's parents provide a full indemnity and release (in unidentified terms) in favour of the Company (and its subsidiaries) and its directors (amongst others, including suppliers and employees). No specific submissions were made by the defendants as to why this offer was a reasonable one which should have been accepted by Jolan. That is not surprising. Objectively assessed, it was not a reasonable offer having particular regard to the requirement that a "full indemnity and release" be provided to a large range of entities and people, including by Mr and Mr McWilliam and Mr McWilliam's parents. 300 On 9 July 2021, the offer made on 1 July 2021 was increased to 90 cents a share "subject to the previous conditions mentioned". For the same reasons as apply to the offer made on 1 July 2021, this offer was also not a reasonable one at a fair price. Whether the oppression arose because of "baiting" 301 The defendants allege that Jolan (by Mr and Mrs McWilliam) have "baited the Company to produce evidence of acts that might be characterised as oppression". 302 However, having regard to the findings of fact set out above, there is no basis for the allegation that Jolan "baited" the Company in order to produce evidence of acts that might be characterised as oppression. 303 Assessed as a whole, the conduct of Mr and Mrs McWilliam in this case is consistent with the conduct of a shareholder trying as best as it can to deal with the unfair treatment at the hands of (in particular) the board of the Company and the refusal of the majority to comply with the terms of the shareholders' agreement. Whether reasons should be published in draft 304 After the last day of evidence on 23 September 2021, closing submissions were made by the parties on 1 October 2021. 305 On 30 November 2021, a further hearing day of the trial was conducted in order to receive further submissions about certain issues relating to the delivery of this judgment, including whether the reasons for judgment should be issued to the parties in draft to enable them to identify any part of the reasons which should be suppressed for reasons associated with confidentiality. This was an issue which had been raised during the trial and, after consideration of the manner in which the trial had been conducted, I wished to receive further submissions concerning the proposition that draft reasons should be issued by the Court. 306 At the hearing on 30 November 2021, it was accepted by the parties that the entire trial had been conducted in open court and that members of the public had watched some parts of the proceedings in the court room. It was also accepted that the experts had given evidence about the value of Jolan's shares in open court. Oral closing submissions by counsel for both parties had been made in open court, and those submissions referred to the experts' evidence concerning the value of Jolan's shares as well as the appropriate price of the shares. 307 The written closing submissions of the parties also referred to that evidence and made submissions as to the appropriate price at which the shares should be ordered to be purchased, should such an order be made pursuant to s 233 of the Act. No suppression order has been sought in relation to either the submissions or the expert reports. Recently, the Company sent an email to shareholders offering to provide any shareholder with a copy of the defendants' closing submissions, and there is no evidence that the submissions would only be provided on a confidential basis. 308 At the hearing on 30 November 2021, there were further exchanges with counsel about the price which might be fixed by the Court for the purchase of Jolan's shares and this also occurred in open court. 309 The defendants cited one authority in which draft reasons have been provided by this Court, being Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 2) (2010) 88 IPR 633; [2010] FCA 1212. In that case, certain limited aspects of the reasons contained confidential information which was not in the public domain and which was subject to express confidentiality obligations. Further, the information was of commercial value and maintaining its confidentiality would not affect the capacity of any reader to understand the reasons for judgment, which her Honour considered to be a fundamental consideration in the administration of justice. 310 That case is different to the one which is before me. The aspects of the reasons which I apprehend are likely to be said to contain confidential information will relate to the value of Jolan's shares and any price fixed by the Court for those shares to be acquired. It is commonplace for such topics to be the subject of published reasons in oppression cases where a buyout of a party's shares is ordered by the Court, as well as (necessarily) any order of the Court which is made for such a purchase to occur. If this information was suppressed in the reasons and in the Order, this will affect the capacity of any reader to understand the reasons for judgment, which is a fundamental consideration in the interests of justice. 311 In any event, the same result as publishing the reasons in draft can be achieved by publishing this judgment to the parties and providing them with a limited opportunity to identify any parts of the reasons which should be suppressed on the grounds of confidentiality. It is therefore not necessary that the judgment be published in draft and I decline to do so. CONSIDERATION Exclusion from management Did Jolan have an entitlement to participate in the management of the Company? 312 Having regard to the terms of the shareholders' agreement, Jolan had an entitlement, as one of the five largest shareholders in the Company, to participate in the management of the Company by being able to appoint a director to the board of the Company. Such entitlement is found in clause 3.4(b) of the shareholders' agreement. 313 Pursuant to the shareholders' agreement, the director appointed by Jolan was required to be involved, along with other members of the board, with the consideration and approval or otherwise of each business plan and budget for the Group in accordance with clause 4.2 of the shareholders' agreement, and the shareholders' agreement required that the business of the Group would be conducted in accordance with those business plans and budgets, subject to any agreement by the shareholders. 314 Pursuant to the shareholders' agreement, the director appointed by Jolan would be one of the members of a board which was responsible for the overall direction and control of the management of the Company and the formulation of policies to be applied in the conduct of the Business. Notably, Business was defined in the shareholders' agreement to mean the Company's business of food and beverage manufacturing and distribution. The reference to Company in the definition of Business was plainly intended to refer to the Group's business, having regard to the structure of the companies in the Group and their respective roles. Group was a defined term in the shareholders' agreement. 315 In summary, by reason of clauses 3.1, 3.2, 3.3, 4.2, 4.3 and 15.3 of the shareholders' agreement and by reason of Jolan's standing as one of the five largest shareholders in the Company, Jolan had an entitlement to participate in the management of the Company and, through the Company, the Business. 316 The submission by the defendants to the effect that the board of the Company was not involved in the management of the Business flies in the face of the express terms of the shareholders' agreement and is contrary to the evidence of the manner in which the Business was actually conducted prior to late 2020. Was Jolan deprived of its entitlement to participate in the management of the Company? 317 The following matters were not in dispute: (a) Jolan is a company which was incorporated for the purpose of acting as trustee and, through that trust, being a vehicle through which Mr and Mrs McWilliam could invest in the Company; (b) Mr and Mrs McWilliam are the two directors of Jolan and Mr McWilliam is the sole shareholder of Jolan; (c) from 6 November 2020, a series of notices have been issued for general meetings to remove Mr and Mrs McWilliam as directors; (d) a majority of the Company's shareholders have, at a series of general meetings, voted in favour of resolutions to remove Mr and Mrs McWilliam from the board of the Company; (e) Mr McWilliam was removed as a director of Essential Coffee on 16 December 2020; (f) a majority of shareholders voted in favour of the Exclusion Resolution; (g) the Exclusion Resolution has the effect that Jolan cannot nominate either Mr or Mrs McWilliam to be a director of the Company, at least at present. 318 The removal and eventual disqualification of Jolan's chosen directors, and the passing of the Exclusion Resolution, has had the effect that: (a) Jolan has been prevented from appointing the director of its choosing in breach of clause 3.4 of the shareholders' agreement; (b) the majority of the Company's shareholders have breached clause 15.3(c) of the shareholders' agreement by failing to exercise their powers to ensure that the Company complies with its obligations under the shareholders' agreement; (c) the Company and a majority of its shareholders have effectively exercised a right of veto over Jolan's power of appointment, which has not been exercised in respect of other appointees; (d) Jolan is prevented from appointing a director to the board of the Company who is also a director of Jolan. This position can be contrasted to that of other major shareholders, who have, or have previously been permitted to have, a director on the board of the Company who is also one of its directors, such as Mr Hiscock as the representative for the third defendant and Mr Cook as the representative for Relative Superiority Investments Pty Ltd; (e) this situation limits Jolan's ability to oversee the activities of the Company, as, since March 2021, the Company has taken the view that information provided to directors of the Company must not be shared with the entities appointing those directors. Accordingly, the only way for Jolan to access that information is by appointing one of its own directors to the Company. 319 Part of the response by the defendants is to say that Jolan's decision not to appoint any director other than Mr and Mrs McWilliam has been a decision of its own choice because: (a) Jolan was and is entitled to appoint any person other than Mr or Mrs McWilliam as a director of the Company and has had, since at least March 2021, the possibility of appointing Ms Karen Jones-Gudmunson as its representative director; (b) despite seeking for Ms Jones-Gudmunson to be appointed as a director, and Chair, of the Company, on the basis that Jolan regarded her as independent and competent, it has refused to appoint her as its representative director of the Company. 320 This argument cannot be accepted, given that Ms Jones-Gudmunson is not, and has never been, a director of Jolan and, because of the restrictions imposed on the sharing of information by a director of the Company with Jolan, any appointment of Ms Jones-Gudmunson by Jolan would not in substance permit Jolan to participate in the management of the Company. 321 Mrs McWilliam explained why she did not consider it appropriate to appoint Ms Jones-Gudmunson, giving the following reasons: (a) Karen Jones-Gudmunson is not and has never been a director of Jolan. …; (b) While I respect Karen Jones-Gudmunson, I do not know her well and she is known to me only as an acquaintance of James and through her involvement in the Company. She also has no financial interest in Jolan; (c) In these circumstances, I do not think it is appropriate to appoint Karen Jones-Gudmunson as a director of Jolan; (d) I am concerned that there would be ongoing issues in the sharing of information between the Company, a Jolan appointed-Director and Jolan, where Jolan's nominee Director is not a director of Jolan. 322 During cross-examination, Mrs McWilliam also gave evidence that she had explained to Ms Jones-Gudmunson that, in terms of the way in which Jolan needed to be represented on the board of the Company, "we have a $1 million investment in the company and [we] want to be actively involved and [the] investment was important to us". This was in circumstances where Mr McWilliam reported that Ms Jones-Gudmunson had informed him that she "couldn't afford the time or effort to represent Jolan in the way they needed to be represented". It would appear, therefore, that Ms Jones-Gudmunson might not have consented to be Jolan's appointed director of the Company even if she had been asked by Jolan to assume that role. 323 Regardless, the facts set out above demonstrate that the entitlement of Jolan to appoint a director to the Company of its own choosing has been interfered with in a manner which is, on any objective analysis, plainly unfair. It is also discriminatory because it is different to the approach which has been taken with the other shareholders which have an entitlement to appoint a director to the board. In these circumstances, it is no answer to say to the effect that the director can be anyone other than Mr and Mrs McWilliam, especially as there can be no assurance that any new person who was appointed by Jolan would not receive the same unfair treatment that was meted out to Mr and Mrs McWilliam. 324 The defendants contended that the removal of Mr McWilliam and Mrs McWilliam was justified because their conduct was not in the best interests of the Company such that if either of them remained as a director, it would harm the Company and prevent it from achieving its corporate aims and prevent it from seeking an external sale. The defendants also contended that the directors issued the notices for meetings to remove Mr and Mrs McWilliam in discharge of their statutory and fiduciary duties to the Company. These contentions are addressed below as part of the consideration of the relevant facts. 325 After she was appointed a director of the Company in March 2020, Mrs McWilliam raised corporate governance issues. This commenced by an email dated 2 April 2020 which is referred to above. Further issues were raised on 30 April 2020. None of the issues raised by her were "vindictive, vexatious or frivolous". 326 Mrs McWilliam was not unduly confrontational or argumentative when she raised these issues. As a director, Mrs McWilliam was not only able to raise valid concerns which she held but she was obliged to do so. However, her input on corporate governance issues was not appreciated by Mr Hiscock who, rather than discuss his concerns about her conduct with Mrs McWilliam, went behind her back, sending the email of 25 May 2020 to Mr Cook and Mr Camilleri and requesting that "a plan to be put forward to the shareholders in attempts to end what is clearly vindictive, vexatious and frivolous conduct via Nikola". 327 Approximately two months later, on 22 July 2020, Mrs McWilliam received correspondence from the Company's solicitors, CML, concerning (amongst other things) the alleged unauthorised release of confidential information to a prospective purchaser. This led to exchanges between CML and HR, as referred to above. These exchanges culminated in a letter from CML to HR dated 28 October 2020 alleging potential breaches of fiduciary duty by Mrs McWilliam. 328 That letter was sent despite Mr Hiscock and Mr Cook being aware of legal advice from a barrister dated 16 October 2020 that any breach of director's duties by Mrs McWilliam was technical and did not appear to have caused the Company to suffer any loss. The advice also stated that the shareholders "must allow Jolan [to appoint another director to replace Mrs McWilliam] as it has a right under the Shareholders' Agreement to appoint one person to the Board". That advice was not shared with shareholders of the Company. 329 The first notice to shareholders to remove Mrs McWilliam as a director of the Company was issued on 6 November 2020. It was sent only one day after a response had been received by CML from HR on 5 November 2020. The HR letter was approximately 11 pages in length, including an annexure which contained a detailed response to 15 allegations made against Mrs McWilliam. An issue was raised in that letter that the pursuit of the allegations by the Company against Mrs McWilliam has been done with a view to remove her from office. 330 The timing of the notice to shareholders on 6 November 2020 tells against any real consideration of HR's response by either CML or the Company's directors. It also tells against any genuine concern about Mrs McWilliam's conduct. 331 Having regard to the findings of fact above, Mrs McWilliam's conduct in relation to the provision of confidential information to Ms Xia and prospective purchasers between April 2020 and October 2020 was not conduct contrary to the interests of the Company so as to make it fair to Jolan to call a meeting of shareholders to remove Mrs McWilliam. 332 This is particularly because: (a) the shareholders' agreement permitted the disclosure of confidential information (as defined) to a prospective purchaser (clause 12.2(f)) and a professional adviser, such as Link (clause 12.2(i)) in circumstances of the kind which were met on the facts of this case. Importantly, no distinction is made in the shareholders' agreement concerning whether a prospective purchaser is a competitor or not; (b) Mrs McWilliam obtained from Mr Hiscock a form of confidentiality agreement which she executed on behalf of the Company in good faith; (c) Ms Xia executed a confidentiality agreement on behalf of Link before any confidential information was provided to her; (d) Mrs McWilliam returned this agreement to Mr Camilleri and Mr Hiscock on 14 April 2020. Mr Camilleri and Mr Hiscock were aware of this agreement and raised no objection to it at the time; (e) to the extent that Ms Xia had inquiries from prospective purchasers who fell within the description of competitors provided by Mr Hiscock on 15 April 2020, Mrs McWilliam instructed Ms Xia not to share confidential information with them prior to her obtaining board approval, notwithstanding what is contained in the shareholders' agreement concerning permitted disclosures; (f) starting on 24 June 2020, Mrs McWilliam took a series of steps to try to obtain board approval culminating in proposing a circular resolution on 13 July 2020, and she secured votes in favour of the resolution from both Mr Hiscock and Mr Cook. Mr Rankine saw Mrs McWilliam's email proposing the circular resolution but never responded; (g) after obtaining the support of Mr Hiscock and Mr Cook, Mrs McWilliam gave instructions to Ms Xia to release information to the two prospective purchasers who fell within Mr Hiscock's definition of competitors; (h) Mrs McWilliam's response to CML's letter of 14 July 2020 did not involve any material misuse of confidential information; (i) after the Company raised with Mrs McWilliam potential problems with the form of confidentiality agreements, Jolan prepared (with the assistance of its solicitors) a Confidentiality Deed Poll which both Ms Xia (on behalf of Link) and prospective purchasers executed, which rectified any remaining issues; (j) there are no instances of Ms Xia or prospective purchasers wrongly disseminating any confidential information of the Company or the Business. 333 Based on the findings of fact set out above, the defendants have failed to demonstrate that Mrs McWilliam's conduct was not in the best interests of the Company or that it justified her removal as a director as was sought in the notice to shareholders dated 6 November 2020. 334 In all of these circumstances, the issue of the notice to shareholders dated 6 November 2020 was on any objective analysis plainly unfair to Jolan. 335 Mrs McWilliam chose to resign and Jolan then nominated Mr McWilliam to be a director of the Company on 25 November 2020. 336 The speed at which the directors of the Company took steps to remove Mr McWilliam, and the bases on which they did so (as addressed above), demonstrates that they were not acting in discharge of their statutory and fiduciary duties to the Company as submitted by the defendants. 337 The directors caused CML to issue the letter of 7 December 2020 alleging potential breaches of fiduciary duty by Mr McWilliam. Mr Hiscock gave instructions for the letter to be sent with the intention that it would be seen by and relied on by shareholders. 338 One aspect of Mr McWilliam's conduct which is sought to be impugned by the defendants, and which was referred to in the 7 December letter, stems from the execution by him of the Finlease supplier agreement which contained the inertia clause. However, based on the findings of fact set out above, the defendants have failed to demonstrate that Mr McWilliam's conduct was not in the best interests of the Company or that it justified his removal as a director. 339 Rather, the facts demonstrate that Mr Hiscock and Mr Cook were not acting in discharge of their statutory and fiduciary duties to the Company when they approved the 7 December letter being sent by CML containing the allegations concerning the inertia clause. 340 Another aspect of Mr McWilliam's conduct which was sought to be impugned by the defendants at trial related to the inclusion of Mrs McWilliam's law firm on Essential Coffee's insurance policy when Mr McWilliam was engaged as a consultant for a limited period during 2019, more than 12 months earlier. Based on the findings of fact set out above, the defendants have failed to demonstrate that Mr McWilliam's conduct was not in the best interests of the Company or that it justified his removal as a director. 341 Rather, the facts demonstrate that Mr Hiscock was not acting in discharge of his statutory and fiduciary duties to the Company when he approved the 7 December letter being sent by CML containing the allegations concerning the insurance issue. 342 Notwithstanding Jolan's nomination of him as its director on the board of the Company, Mr McWilliam was then removed as a director of both Essential Coffee and the Company, and the circumstances around that removal are set out above. 343 To summarise, not only is Mr McWilliam the recipient of the 7 December 2020 letter which alleged incorrect facts concerning both the inertia clause issue and the insurance issue, he is then promptly removed as a director of Essential Coffee a mere nine days later and information about Essential Coffee ceases to be given to directors of the Company in the same month. 344 Mr McWilliam is then removed as a director of the Company on 17 February 2021 by shareholders of the Company who were no doubt misled by the inaccurate statements contained in the 7 December 2020 letter. 345 For these reasons, I reject the defendants' contention that Mr McWilliam did not act in the best interests of the Company such that he should not have been permitted to remain as a director of the Company. 346 In all of these circumstances, the removal of Mr McWilliam from the board of the Company was on any objective analysis plainly unfair to Jolan. 347 Further, the unfairness to Jolan was compounded by the removal of Mr McWilliam from the board of Essential Coffee and the cessation of information concerning Essential Coffee being provided to the directors of the Company. This was plainly unfair and discriminatory against Jolan. 348 Mrs McWilliam was appointed to the board of the Company on or around 19 February 2021. On 23 February 2021, Mr How issued a notice of shareholders' meeting including a proposed resolution that she be removed as a director of the Company. On 18 March 2021, Mrs McWilliam was removed as a director of the Company and Jolan appointed Mr McWilliam to replace her. Mrs McWilliam was then reappointed on 20 April 2021 as director of the Company and removed again on 8 June 2021. By this time, these proceedings had been commenced. Jolan has not attempted to appoint any further director to the Company since 8 June 2021. 349 In the circumstances, Jolan has been deprived of its entitlement to participate in the management of the Company (and by reason of that, the Business). This was, on any objective analysis, plainly unfair and discriminatory against Jolan, which was treated differently to the other major shareholders, who were permitted to appoint their first choice of director to the board of the Company. 350 Further and irrespective of whether Jolan was so deprived, the circumstances surrounding the manner in Mrs McWilliam was treated prior to her resignation as a director in 2020 and the manner in which Mr McWilliam was removed from the board of the Company in February 2021 was, on any objective analysis, plainly unfair to Jolan, as were the subsequent repeated removals of Mrs McWilliam from the board. Failure to provide information 351 There are two key aspects to this complaint. The first is that, by failing to provide certain information, Jolan was impeded in its attempts to sell its shares in the Company. The second aspect is that the Company has failed to provide Jolan with information which is relevant to its participation in the management of the Business and the value of its shareholding. Failure or refusal to provide information and thereby impeding the sale of Jolan's shares 352 In March 2021, Mr Egan was a potential purchaser of Jolan's shares. Despite this, the board refused to provide specific information requested by Mr Egan and Mr Hiscock failed to meet with him. The justification for not providing this information given at the time was that it is "not information that is normally offered to purchasers of minority shareholdings of any company" and "exceeds the information the Board has agree to provide minority shareholders to aid the Share sale". This position seemed to pay no regard to clause 4.3(c) of the shareholders' agreement and appeared to pay no regard to the fact that Jolan had taken steps to ensure that Mr Egan had executed a Confidentiality Deed Poll. While Jolan had some of the information itself, it did not have all of it, and it was not unreasonable for Mr Egan to request to see the information before making such a significant investment in a private company. 353 In the face of the Company's failure to provide all the information requested by Mr Egan, Ms Xia did not respond to his request for some time and subsequently Mr Egan lost interest. It is difficult to see how the provision of this information to Mr Egan, who had signed a Confidentiality Deed Poll and was not associated with any competitor, could possibly have caused any real detriment to the Company. Whatever the internal motivations which lay behind this refusal, it was unfairly prejudicial to Jolan. 354 Further, the stance taken with Jolan and Mr Egan is to be contrasted to the position taken when Mr Cook's prospective purchaser, Mr Coventry, expressed interest in purchasing shares. When that occurred, the Company provided detailed financial information and information regarding dividends and customers. Mr Hiscock met with Mr Coventry on two occasions, and invited Mr Coventry to contact him directly to progress the purchase. 355 On any objective analysis, the treatment of Jolan was unfair and discriminatory. 356 On 20 April 2021, the board of the Company passed a resolution to limit the information which could be provided to a prospective purchaser. The majority of shareholders at a general meeting on 8 June 2021 voting in favour of a resolution to limit the information which could be provided to a prospective purchasers of minority shareholdings in the Company. These resolutions are difficult to reconcile with the express terms of cl 4.3(c) and 12.2(f) of the shareholders' agreement. 357 Further, while these resolutions purport to apply equally to all shareholders, they were passed in the context set out above, in which Jolan was the only major shareholder actively trying to sell its shares in the face of the continued failure of the board and shareholders to achieve an Exit Event, and where Jolan had been excluded from the management of the Company by the unfair removal of its appointed directors. Jolan's access to information about the Business is diminished 358 Jolan has a contractual entitlement to receive certain financial information pursuant to clause 4.3 of the shareholders' agreement along with any other information it may reasonably require as to any matter relating to the business or financial condition of the Company or the subsidiaries, including board minutes. 359 In around December 2020, directors of the Company ceased to receive information relating to the subsidiaries. The timing of this event is significant as it coincided with the removal of Mr McWilliam as a director of Essential Coffee. It had the consequence that Jolan ceased to receive information about Essential Coffee, whether directly through its director appointed to the Company or indirectly through Mr McWilliam in his role as a director of Essential Coffee. This was unfairly prejudicial to Jolan, as well as discriminatory, because Jolan became the only one of the largest five shareholders which did not receive or have access to this information. 360 Further, in March 2021, the Company imposed a restriction on its directors on the basis that they were not permitted or authorised to distributed documents which they received in their capacity as directors to third parties, including shareholders. 361 This conduct only served to compound the commercial unfairness of removing Jolan's appointed director to the board of the Company. Even if it had a director on the board of the Company, it was prevented from keeping an eye on its investment, and it was unable to give advice to that director as to its wishes as contemplated by clause 3.9 of the shareholders' agreement. On any objective analysis, this was unfairly prejudicial to Jolan. Failure by shareholders to exercise powers to achieve Exit Event 362 The effect of clause 11.1 of the shareholders' agreement is that each shareholder undertakes to exercise its powers in relation to the Company with the purpose of achieving a sale of all or substantially all of the shares in the Company, or an asset sale, or a merger, or an initial public offering involving the Company, within a period of two years from the date of the shareholders' agreement. No price range is specified. Irrespective of what some of them might have discussed prior to the shareholders' agreement being entered, the initial shareholders gave clear priority to the timing of an exit over the price of an exit, and there were no qualifying factors attached to the obligation such that a shareholder could avoid its obligation because of market conditions. 363 Clause 11.1 is important because it demonstrates that all of the original shareholders who were parties to the shareholders' agreement became shareholders of the Company on the agreed basis that their investment in the Company, and their status as shareholders of the Company, was not a long term proposition and that when it came time for the shares to be sold, they would all be sold together. 364 The shareholders' agreement was entered more than five years ago. 365 There has been only one active campaign to sell the Company, which was run by Yarra Advisory from about June 2019 to September 2019, at which time its engagement lapsed. There has been no further active campaign the sell the Company. Instead, Mr Hiscock refused to appoint two brokers who approached the Company with potential purchasers for the whole company. 366 On 18 March 2020, Mr McWilliam requested that the item "Sale of the Business as a whole" be added to the agenda for the March board meeting. Mr Hiscock, who prepared the agenda for the board meeting on 31 March 2020, omitted this item from the agenda. 367 By late 2020 and into 2021, Jolan was the only major shareholder seeking to comply with clause 11.1. Ms Xia's evidence was that a lot of buyers were only interested in a controlling position or buying the business as a whole and that she had passed on whole of company buyers to Mr and Mrs McWilliam in March 2021. Mr McWilliam's evidence was that the Company had not pursued these proposed purchasers. 368 Mr Benjamin, the defendants' expert witness, observed that, "it's the kind of business I think does attract buyers as a general proposition. It's not a, you know, a little contracting business or something like that". 369 On 18 January 2021, Mr McWilliam moved a motion at a board meeting to have the Company publicly listed for sale within six months on a "no names basis", which was voted down. 370 At a board meeting of the Company held on 20 April 2021, the Deferral Resolution was passed. 371 The Company and the board's refusal to take active steps to sell has been unfairly prejudicial to Jolan, because Jolan's substantial share capital has been "locked up" in the Company for the foreseeable future, and the only way to release it is to sell its minority stake (thus losing the benefit of the whole of company sale which was originally intended and which formed the basis of its agreement to become a shareholder in the first place). 372 As counsel for Jolan submitted: The substratum of the entire venture was…an express and binding agreement by shareholders to exercise their powers to achieve an Exit Event within 2 years. Jolan did not sign up for a long-term investment. Nor did it sign up to hold its investment for as long as the majority, from time to time, might wish to build up the business and wait for ideal sales conditions. … Further, although Jolan has been making efforts to sell its shares on the open market, this has only occurred since the failure of [the Company] to achieve an Exit Event within 2 years and it is clear from Jolan's conduct that its preference has in fact been for [the Company] to be sold as a whole. 373 I accept this submission. Conclusion 374 The combined effect of the totality of the conduct of the affairs of the Company, as described above, has been oppressive to, unfairly prejudicial to or unfairly discriminatory against Jolan in its capacity as a member of the Company within the meaning of s 232 of the Act. APPROPRIATE REMEDY UNDER SECTION 233 The parties' respective submissions at trial 375 At trial, all parties accepted that the Court has a "wide" or "broad" discretion as to the appropriate relief. Subject to one matter which was raised by the defendants and which is addressed below, the parties then made submissions as to the types of orders which would be appropriate. 376 The defendants submitted that "there is [no] reason in principle why the Court could not, if it considers it appropriate, make an order appointing a receiver to sell Jolan's shares in the Company on the open market". This was in similar terms to the open "offer" which was made by the defendants during the trial. 377 However, no details were provided by the defendants as to who the receiver would be, how this process would be facilitated, whether the pre-emptive provisions in the shareholders' agreement would apply and the nature of the information and assistance which would be provided to the receiver by the Company. This last issue is of particular concern having regard to the Company's conduct in the past. 378 Further, no submissions were made by the defendants about whether the Company would be prepared to bear the receiver's costs, or to support a submission that Jolan should bear these costs. If, for example, the receiver was required to return to Court for assistance in obtaining information from the Company to facilitate a sale, and there was a factual dispute about the Company's conduct, the receiver's costs could prove to be significant. 379 A further problem with the remedy proposed by the defendants is that the publication of this judgment could have a negative impact on the ability of a receiver to find a purchaser of Jolan's shares, either at all or on the price which a purchaser would be prepared to pay. This would mean that Jolan could be prejudiced by reason of its success in this litigation, which would defeat the purpose of the judicial remedy. 380 For these reasons, I do not accept that the remedy proposed by the defendants, being the appointment of a receiver to sell Jolan's shares, is an appropriate one. 381 The defendants also proposed other remedies. 382 For example, it was submitted in the defendants' closing submissions that, if the only oppression that is found is that Jolan's nominated director has been wrongfully removed, then the appropriate relief could be to order that the director be reinstated. However, senior counsel for the defendants also made the oral submission that such a remedy was not ideal. I agree. Such a remedy is not an appropriate one in this case because it would be unworkable, having regard to the past conduct which has occurred at board level. Further, it would not be in the interests of the Company. In any event, the wrongful removal of Jolan's nominated director is not the only form of oppressive conduct which has been found to be established in this case. 383 While recognising that "the aim of any order under s 233 is to put an end to the oppression", the defendants also submitted that: … any relief will need to be tied to the findings of oppression and directed to compensate for that oppression and put an end to that oppression. … [If] the oppression is that the Company has prevented Jolan from selling its shares, then, and only then, would it be appropriate that an order be made, against anyone, for Jolan's shares to be purchased by some-one, whether the Company or any shareholder. (emphasis added) 384 No authority was cited by the defendants for the proposition that, unless Jolan was able to demonstrate the Company had prevented it from selling its shares, it would not be appropriate to order that Jolan's shares be purchased by a member or the Company. 385 Further, the defendants' submission is contrary to authority. 386 In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25, at [174] the majority stated that: If one or more of the grounds identified in s 232 of the Corporations Act is established, the court is empowered by s 233(1) to "make any order under this section that it considers appropriate in relation to the company". Ten species of order are identified — ranging from an order for winding-up to an order restraining a person from engaging in specified conduct or from doing a specified act, or requiring a person to do a specified act. One particular species of order that the court may make (s 233(1)(d)) is an order "for the purchase of any shares by any member". (footnote omitted) 387 The Full Court of the Federal Court in Garraway v Territory Realty Pty Ltd [2010] FCAFC 9 at [81] stated that the "central power" in s 233(1) of the Act "is contained in the chapeau which states: The court can make any order under this section that it considers appropriate in relation to the company, including an order … (d) for the purchase of any shares by any member… (emphasis included) 388 At Garraway at [82], the Full Court continued: The power [in s 233(1)] should not be read in a way that makes implications or imposes limitations that are not found in the express words of the section:… (citations omitted) 389 Further, in Smith Martis Cork & Rajan Pty Ltd v Benjamin Corp Pty Ltd (2004) 207 ALR 136; [2004] FCAFC 153 at [70] the Full Court stated: The authorities make it clear that once the discretion conferred by s 233 of the Act has been enlivened by a finding of oppression under s 232, the court has a wide discretion as to both the appropriate remedy and, if it orders compulsory purchase of shares, as to the mode of valuation of the shares. The authorities are set out in a recent decision of Campbell J in United Rural Enterprises Pty Ltd v Lopmand Pty Ltd (2003) 47 ACSR 514 … at [34] – [38]. 390 The statement by the Full Court in Smith Martis Cork was approved in Shanahan v Jatese Pty Ltd [2019] NSWCA 113 at [120], where Bathurst CJ stated that: The relevant discretion is a wide one, both as to the appropriate remedy and, if a compulsory acquisition of shares is ordered, as to the mode of valuation of those shares: … 391 By their closing submissions, the defendants described Jolan ceasing to have shares in the Company as the "ultimate commercial solution". I agree with this description. The sale of Jolan's shares means that Jolan recovers its investment in the Company, the oppression is brought to an end and the Company can go forward without internal disputes between the majority of the shareholders and Jolan about the Company's direction and whether that conflicts with the shareholders' agreement. 392 In this vein, the defendants submitted to the effect that, given that there may be existing shareholders who wish to purchase Jolan's shares at the price which the Court determines, orders could be fashioned such that existing shareholders have first right at purchasing Jolan's shares at the price determined by the Court. 393 It was also submitted by the defendants that any of Jolan's shares which were not purchased by existing shareholders would then be bought back by the Company at the price per share as determined by the Court (presumably with an appropriate capital reduction). It was submitted by the defendants that this approach would be in the best interests of both the Company and its shareholders. 394 It is Jolan's case that Mr Hiscock and two shareholder companies associated with him (the third and fourth defendants – together having about 22.5% of the voting power) have had a primary role in the oppressive conduct. Jolan submits that Mr Hiscock has instigated and encouraged it, and the third and fourth defendants have exercised their voting power as shareholders to support the oppressive conduct. 395 Jolan therefore submits that the appropriate order in this case is that: (a) the second, third and/or fourth defendants (or their nominees) be ordered to purchase Jolan's shares in the Company for the sum of $1.30 per share within 30 days of the delivery of judgment; and (b) if the purchase referred to in sub-paragraph (a) does not occur within the stated time frame, then the Company be wound up and a liquidator of the Company be appointed. Whether second to fourth defendants should be ordered to purchase Jolan's shares 396 Having regard to my findings concerning Mr Hiscock's involvement in the oppression, and the percentage of shares held by the third and fourth defendants (and their connection with Mr Hiscock), there is strong merit in the proposition that Mr Hiscock along with the third and fourth defendants should be ordered to acquire Jolan's shares. That is because Mr Hiscock has been involved in, instigated and encouraged the oppressive conduct, and the third and fourth defendants have exercised their voting power as shareholders to support the oppressive conduct. 397 However, there are two reasons for not making the order sought by Jolan. 398 The first is that, having regard to Mr Hiscock's conduct, it is self-evident that it is contrary to the interests of the Company that Mr Hiscock and his associated shareholders be ordered to increase their level of shareholding in the Company. 399 The second relates to whether such an order could be complied with in any event. Based on the oral evidence given by Mr Hiscock during the trial and despite my reservations about accepting his evidence, there is some reason to doubt whether the second, third and fourth defendants would have the financial capacity to comply with an order that they acquire Jolan's shares. Jolan appeared to accept this in the written closing submissions of its counsel. 400 Such a matter ought to have been pleaded in the Defence filed by the second to fourth defendants as being a reason why the order sought against them in the Amended Originating Application should not be made: see r 16.08(c) Federal Court Rules 2011 (Cth). This omission might be relevant to the issue of costs. 401 For these reasons, I will not make the order sought by Jolan insofar as it relates to the compulsory acquisition of Jolan's shares by the second, third and/or fourth defendants (or their nominees). Whether the Company should be ordered to purchase Jolan's shares 402 Having regard to the submissions of the defendants (which I accept) and subject to one matter, it is appropriate to order that the Company buy back Jolan's shares with an appropriate capital reduction. Jolan appears to accept that an appropriate order is that its shares be ordered to be purchased (although it disagrees as to the identity of the purchaser, as referred to above). 403 As submitted by the defendants, I agree that existing shareholders of the Company should have first right at purchasing Jolan's shares at the price determined by the Court on the basis any clauses in the shareholders' agreement relating to pre-emptive rights will not apply. 404 I accept the defendants' submission that an appropriate order would also be that any of Jolan's shares which were not purchased by existing shareholders would then be bought back by the Company at the price per share as determined by the Court (with an appropriate capital reduction). Price at which shares should be acquired 405 During closing submissions, I was asked by senior counsel for the defendants to provide a "court ordered solution" and to "fix a value". My impression from this submission was that, on the assumption that oppression was established, the real question to be decided was not the terms on which Jolan would remain a shareholder of the Company, but rather, the terms on which it would cease to be a shareholder and the price which needed to be paid to it for its shares for that to occur. 406 In this case, each side retained an independent expert accountant. 407 Jolan retained Mr Joseph Box who provided a report filed on 11 August 2021 (Box report). Appendix 3 to the Box report identified the sources of information relied upon by Mr Box. It is apparent from appendix 1 of the Box report, and from the body of the Box report itself, that Mr Box reviewed and had regard to the content of documents briefed to him. 408 Mr Box was briefed to provide an opinion as to the value of the shares held by Jolan in the Company as at 1 April 2021 and, to the extent that he was able, a later date as close as possible to the date of his report. 409 There was no challenge at trial by the defendants to the nomination of 1 April 2021 (being the date on which these proceedings were commenced) as being the date on which the share valuation should take place. The date on which the valuation of shares in an oppression case is usually nominated by the Court and can be a date prior to the oppression commencing, the date on which proceedings are commenced or some other date depending on the circumstances of the case, such as judgment. 410 In this case, I am satisfied that 1 April 2021 is an appropriate date on which the shares held by Jolan in the Company should be valued. 411 In arriving at his expert opinion, Mr Box considered it appropriate to value the Company using a "dual approach". That approach was broadly described in the valuation report as "adopting the capitalisation of earnings method in the valuation of the business, and the adjusted book value method for assets and liabilities surplus to the operations of the underlying business". 412 The defendants retained Mr Stuart Benjamin who provided an expert report which was filed on 15 September 2021 (Benjamin report). 413 Mr Benjamin received a letter of instruction dated 24 August 2021 retaining him as an independent expert. 414 According to the letter of instructions, Mr Benjamin was retained by the Company to "provide a critique of the valuation report provided by the Plaintiff's Expert which may include (but need not be limited to) those matters identified at paragraph 10 below". 415 The letter also asked that Mr Benjamin consider whether: "(a) the expert's selection of the year ended 30 June 2019 is the appropriate basis for the determination of future maintainable earnings and, if not, alternate bases available to determine future maintainable earnings which you say in your expert opinion ought be applied and why; (b) as for the expert's adoption of a single multiple of 5.5: (i) whether the expert's adoption, as comparison risk-free rate of return, of a rolling average of the 10 year bond rate, instead of the current bond rate is appropriate; (ii) have all current factors facing the particular industry sector been appropriately taken into account; (iii) whether there is a benchmark or other comparable multiples for this industry sector. (c) the assumption by Jolan's expert that the provisions in the Shareholders Agreement in relation to transferring shares should be discounted is appropriate, and if not, whether in your expert opinion this should increase the lack of marketability and lack of control discounts applied in his report; (d) Jolan's expert has given sufficient consideration to: (i) recent share transactions of the Company; (ii) comparable transactions; (iii) the COVID-19 pandemic (both as at 1 April 2021 and currently, noting the introduction of the Delta strain in May 2021); (iv) the spread of shareholders and diverse shareholding (31 shareholders), with the availability of the pre-emptive sale process in clause 7.3 of the Shareholders Agreement." 416 The Expert Evidence Practice Note (GPN – EXPT) provides as follows: 3.1 Parties and their legal representatives should never view an expert witness retained (or partly retained) by them as that party's advocate or "hired gun". Equally, they should never attempt to pressure or influence an expert into conforming his or her views with the party's interests. … 3.4 Any questions or assumptions provided to an expert should be provided in an unbiased manner and in such a way that the expert is not confined to addressing selective, irrelevant or immaterial issues. 417 In this case, the letter of instruction directed Mr Benjamin towards particular issues which contained a suggestion as to the problems with the Box report. The matters which Mr Benjamin was asked to address were therefore not stated in an unbiased manner and the letter did seek to influence Mr Benjamin as to particular things that he should focus upon when preparing his report. This is unfortunate. 418 The problem with highlighting specific matters that suggest the conclusions that the expert is being asked to draw in the letter of instructions is that the appearance of the independence of the expert is necessarily eroded. 419 A further problem was that Mr Benjamin's report failed in some respects to explain his reasons for reaching his conclusions. 420 The reasons for the conclusions and opinions stated by an expert are required to be included in the body of the report: see, for example, paragraph (3)(e) of Annexure A to the Expert Evidence Practice Note. 421 Compliance with the requirement that an expert expose his reasons is not a matter of form only. If the reasoning of an expert is not exposed, it makes it very difficult, if not impossible, to understand why that expert's opinion should be preferred. 422 That is not to say that in this case Mr Benjamin has not included summaries. However, in many respects, the reasoning for those summaries are absent. 423 Taking into account the content of the letter of instructions, and the lack of reasons given by Mr Benjamin for expressing an opinion on particular issues, I have ascribed less weight to the opinions expressed by Mr Benjamin where they differ from that of Mr Box. 424 Table 1 of the Benjamin report identifies the differences between the experts prior to their conferral and preparation of a joint expert report: 425 Following information received by the experts that a share buy back would not be proceeding, and that Jolan's shareholding would remain at 1,000,000 shares, the experts conferred and prepared a joint expert report which contained the following updated table: 426 The first critical matter on which the experts disagreed related to the calculation of the future maintainable earnings of the Business (which formed one of the integers to calculate the value of the Business). Mr Box's assessment was that the future maintainable earnings, with reference to the adjusted earnings for the year ended 30 June 2019, was $1,763,300. By the time of the joint expert report, Mr Benjamin had assessed the future maintainable earnings, with reference to the average adjusted earnings for the years ended 30 June 2019 to 30 June 2022, to be $1,550,000 (which was an increase from the original $1,500,000 figure in the Benjamin report). 427 Based on matters discussed in [130] – [151] of the Box report, Mr Box addresses why he considered that the earning for the year ending 30 June 2019 (as adjusted) was the best guide to assess the future maintainable earnings. This included recognition by Mr Box that, in addition to negative events which had arisen since 30 June 2019, there have also been positive developments in the Business which were identified in minutes of board meetings and quarterly updates to shareholders such as the acquisition of the Gold Coast master franchise and South Australia territories and the expected improvement in margins, gaining new customer accounts of significant size, increases in equipment sales, strong cash positions and improved results for the Coolangatta café. 428 The Box report also stated as follows: The correct determination of the assessment of future maintainable earnings is the level of profits that, on average, the business can expect to maintain notwithstanding the vagaries of the business cycle. I have reviewed the financial statements of the business for the years ended 30 June 2017 to 30 June 2020, the estimated results for the year ended 30 June 2021 and the budgeted results for the year ended 30 June 2022 and consider a number of adjustments appropriate in the calculation of the future maintainable earnings. My future maintainable earnings calculation is attached as Annexure 1. In my determination of the future maintainable earnings, I have given consideration to the following: (a) Income of the business has increased since the height of the COVID-19 pandemic restrictions with equipment sales returning to pre-COVID-19 levels in approximately July 2020 and consumables sales returning to pre-COVID-19 levels in approximately February 2021. (b) The increase in equipment sales increases the installed base of equipment which in turn drives demand for consumables. Given that customers have not all returned to normal operations, there remains the potential for upside in revenue forecasts. (c) Gross profit margins are expected to increase in FY22 as a full year of operations are recorded in the newly-directly operated territories of Gold Coast and South Australia. (d) Essential Coffee Group has historically pursued options to make strategic acquisitions, although none have been successful in recent years. … (g) FY21 suffered from supply chain and logistical issues together with management time being devoted towards governance issues and shareholder disputes. In the absence of same it would be reasonable to expect an improvement in earnings. After a consideration of the above and the relative turnover and profitability of the Essential Coffee business over the period under review, I consider the year ended 30 June 2019, after taking into account the above mentioned adjustments, to be an appropriate basis for the determination of the future maintainable earnings. On the above basis, I estimate the future maintainable earnings of the business at 1 April 2021 to be $1,763,300. … In considering the future maintainable earnings of the business, I consider the year ended 30 June 2019 to be the most appropriate basis for the assessment of future maintainable earnings as the business has achieved these results historically and given the nature of the changes are likely to be conservative compared to the business' likely future earnings. I have reflected the uncertainty that exists in respect of the above matters [which included the impact of the COVID-19 pandemic] in my assessment of the multiple to be applied to earnings. 429 By comparison, the Benjamin's 'critique' of Mr Box's assessment of future maintainable earnings is found at paragraphs 29 to 32 of the Benjamin report. 430 It is not surprising that Mr Benjamin was critical of Mr Box's selection of the year ended 30 June 2019 as the appropriate basis for the assessment of future maintainable earnings when one has regard to the question he was asked in his letter of instructions: 11. In preparing your critique we ask that you consider whether: (a) the Expert's selection of the year ended 30 June 2019 is the appropriate basis for the determination of future maintainable earnings, and, if not, alternate bases available to determine future maintainable earnings which you say in your expert opinion ought be applied and why. 431 In particular, the Benjamin report states (with annotations in square brackets): My review indicates that Mr Box adopts his assessment of normalised EBITDA for the year ended 30 June 2019 of $1,763,300 as the level of future maintainable earnings. I note that the Box Report estimates the impact of Covid-19 on sales and gross profit for 2020 and 2021. Accordingly, the following table summarises the normalised EBITDA calculations at Annexure 1 of the Box Report to 'reverse' the impact of Covid-19. I note the following regarding the above analysis: 1. I have added Mr Box's assessment of the loss of earnings due to Covid-19 as this results in an assessment of the earnings of the Business 'but for' Covid-19. This is consistent with Mr Box's approach that the impact of Covid-19 is accounted for in the earnings multiple. 2. I note that the 2019 year (on which Mr Box bases his assessment of FME) has the highest level of revenue and EBITDA (both in terms of dollars and percentage) of all of the years under review. 3. In my opinion, the average earnings for 2019 to 2022 (adjusted for Covid-19) is a more reasonable basis for assessing FME because the average captures the inherent variability in earnings over the economic cycle. The earlier years are not included because the Business had not completed its restructure until 2019. 4. In my opinion, it is reasonable to expect that the Business would also have saved some costs as a result of the lower revenue due to Covid-19 therefore the earnings in 2020 and 2021 will be marginally understated. 5. Given the above, and allowing for inflation, in my opinion, a reasonable estimate of the future maintainable earnings of the Business as at 1 April 2021 is $1,500,000. Given the above, in my opinion, the assessment of future maintainable earnings in the Box Report of $1,763,300 per year is materially overstated on the basis a more reasonable estimate is $1,500,000 per year. 432 Mr Benjamin therefore opined that the future maintainable earnings are better represented by taking the arithmetic mean of EBITDA figures for 2019, 2020, 2021 and 2022, with the figures for 2020 and 2021 adjusted to try to exclude the effect of COVID-19. However, it is apparent from the paragraphs of the Benjamin report set out above that Mr Benjamin did not carry out his own analysis to determine the proper adjusted EBITDA for 2020 and 2021, but simply added what he says was Mr Box's "assessment of loss of gross profit due to COVID-19 to the earnings for 2020 and 2021". 433 The numbers used by Mr Benjamin were taken from paragraph [147] of the Box report. In taking this approach, Mr Benjamin failed to take account of what Mr Box says about these numbers, particularly what he says in paragraph [144]: The above analysis only considers changes in relation to automatic coffee machine equipment and consumable sales. There were declines in other areas, such as service income, which also contributed to the overall position. 434 As noted above, by the time of the joint report, Mr Benjamin increased the assessment of future maintainable earnings to $1,550,000. 435 In the joint expert report, Mr Box expressed the following opinions about the approach taken by him as opposed to that taken by Mr Benjamin: Box has assessed the future maintainable earnings with reference to that achieved in FY19 as this year is not impacted by COVID as is FY20 and FY21 and the FY22 Budget. Box considers the impact of COVID will be largely temporary and to assess the future maintainable earnings with reference to financial period where the results are significantly impacted by COVID would be inappropriate. Box notes that while the FY19 year has the highest earnings of the period reviewed this is the result of the impact of COVID as opposed to any seasonal or underlying economic conditions and that prior to COVID the business' management were forecasting FY20 to deliver higher revenues and EBITDA than that achieved in FY19. The Box Report notes numerous comments in the company's Board Reports that indicate the business earnings will improve over that currently being achieved and the likelihood of a substantial consumable revenue upside should the sites return to normal. Based on these Board Reports and the general strategy being executed by the company prior to COVID that revenues and earnings will increase beyond those achieved in FY19 in future periods. Benjamin in his calculation of the future maintainable earnings purports to determine the earnings of the business after reversing the impact of COVID. To do so he relies upon analysis conducted by Box in to the impact of COVID on sales and gross margin, detailed at paragraphs 143 to 147 of the Box Report, to reverse the impact of COVID on the financial results for FY19 and FY20. Benjamin's approach is flawed and does not calculate earnings reversing the impact of COVID, for a number of reasons [including]: • The analysis contained within the Box Report was not intended for this purposes, and as detailed at paragraph 144 was incomplete and potentially conservative in circumstances where there was a return to pre-COVID sales levels and where the new equipment sales drove a further increase in consumable sales; and • The analysis was incomplete as it did not consider income other than equipment and consumable sales, therefore the COVID adjustment in the Benjamin Report does not consider income other than equipment and consumables. 436 In the joint expert report, Mr Box also explained in detail why the updated assessment by Mr Benjamin of $1,550,000 was also deficient and inappropriate including because Mr Benjamin's COVID-19 adjustment to the FY20 and FY21 earnings are understated. In the joint report, Mr Box set out recalculations which demonstrated that, "where an average of FY19 to FY21 is made the earnings assessed [are] not that dissimilar to the normalised FY19 EBITDA and given the nature of the adjustments made and their inherent subjectivity, it confirms the appropriateness of Box's approach to rely solely on FY19 results, which represent the actual results and performance of the business". 437 Mr Box's further analysis in the joint report identifies that if a consistent adjustment approach is undertaken for the purpose of averaging EBITDA over 2019 – 2021: (a) a more realistic adjusted EBITDA for 2020 is $1,630,067; (b) a more realistic adjusted EBITDA (including an adjustment for "Other Sales") for 2021 is $1,630,382; (c) the arithmetic mean of the adjusted EBITDA for 2019, 2020 and 2021 is $1,674,583, which is much higher than Mr Benjamin's figure. 438 Jolan submitted that a further significant depressing factor in the EBITDA figure ultimately adopted by Mr Benjamin is the inclusion of forecast (low) EBIDTA for the 2022 year. Despite this figure being substantially lower than the updated adjusted figures for 2018, 2019, 2020 and 2021, and inherently more uncertain, Mr Benjamin gives this figure equal weight in calculating his average EBITDA. In adopting this approach, Mr Benjamin did not do any analysis of his own of the 2022 budget to test its reasonableness, and did not know why it included higher forecast revenue but lower forecast EBITDA. In cross-examination, Mr Benjamin was unable to explain why these figures were lower. The maker of the budget was also not called to give evidence. 439 Taking into account these matters, I consider that the reasoning process of Mr Box is more detailed and compelling than that of Mr Benjamin. Accordingly, I accept that the 30 June 2019 EBITDA (as adjusted) of $1,763,300 is an appropriate future maintainable earnings figure. 440 The next difference between the experts relates to the EBITDA multiple. 441 In the Box report, Mr Box states that he considered the future prospects of the Business; the history of the Business, its earnings and capital requirements; rates being achieved from virtually risk free investments; the nature of the Business' operations including the level of competition within the geographical area serviced by the business; and the current economic climate. Mr Box then went to consider each of these factors including by reference to the financial and other information which had been briefed to him. 442 For example, Mr Box noted that the Business has "come through the COVID-19 pandemic to date in a strong balance sheet position, with significant cash remaining on hand, having increased its standard operating cash buffer during the COVID-19 impacted period from $400k to $800k then to $600k as the immediate threats receded". Mr Box also noted that the Business operates throughout Australia and also has operations in New Zealand and other overseas companies. He stated that this diversification has benefitted the business in circumstances where some states are subject to lockdown restrictions while others remain open. Mr Box also noted that the Business has "stated in minutes and updates to shareholders that some competitors have closed however competition remains strong as businesses aim to survive". 443 Mr Box expressed the following opinions, having regard to these matters: The determination of a multiple is not an exact science and is highly subjective. The subjectivity arises as there is no formula or mathematical approach to determine an exact figure. Based upon the Writer's experience, I consider the appropriate EBITDA multiple to be applied is in the range of 5.0x to 6.0x before tax. For the purposes of this report I have adopted the midpoint of that range of 5.5x. … In forming my opinion as to the appropriate multiple I have reviewed it for reasonableness. In this regard, I have reviewed the EBITDA multiples implied by transactions involving companies in the same, or similar, industries as Essential Coffee. I have summarised these transactions at Annexure 8 to this Report. 444 In relation to this issue, the letter of instructions to Mr Benjamin asked him to do the following: 11. In preparing your critique we ask that you consider whether: (b) as for the Expert's adoption of a single multiple of 5.5: (i) whether the expert's adoption, as comparison risk-free rate of return, of a rolling average of the 10 year bond rate, instead of the current bond rate is appropriate; (ii) have all current factors facing the particular industry sector been appropriately taken into account; (iii) whether there is a benchmark or other comparable multiples for this industry sector. 445 The evidence of Mr Benjamin was contained in paragraphs 33 to 54 of the Benjamin report. As referred to above, Mr Box observed that the Business had "come through the COVID-19 pandemic to date in a strong balance sheet position". Mr Benjamin merely expressed the view that the "strong balance sheet position" referred to by Mr Box was achieved by ceasing the payment of dividends. This statement was a bare conclusion. No supporting analysis was provided to explain to what extent ceasing the payment of dividends actually had on the balance sheet position. 446 Mr Benjamin also criticises Mr Box's decision to adopt a risk free rate of 2.71% and appears to suggest that the rate of 1.74% should have been adopted. This criticism appears to have been suggested to him by his letter of instructions. 447 However, notwithstanding this, Mr Benjamin then concludes that the difference between 2.71% and 1.74% on an earnings multiple of 5.5x EBITDA is unlikely to be material. In the joint expert report, the expert agreed that the difference between the 10 year bond rate of 1.74% and the risk free rate of 2.71% would have minimal impact on the ultimate assessment of the multiple. 448 The focus of Mr Benjamin's analysis is then upon matters such as: (a) the industries in which the Business operates which Mr Benjamin notes have high levels of competition and therefore investors will require a higher rate of return to invest in the Business; (b) an affidavit of Mr Camilleri which contained information about certain transactions, the majority of which involved the Company acquiring franchises and the multiples used in those transactions. Mr Benjamin opines that these multiples are lower than the Company could expect to achieve in April 2021 and presently as the Business is a significantly larger national operation; (c) the comparable transaction analysis annexed to the Box report which refers to multiples which are significantly higher than the Company could expect in April 2021 and presently as the Business is a significantly smaller operation; (d) a comparable transaction analysis prepared by KPMG Australia (KPMG) (and which was the subject of an affidavit of Ms Christine Oliver) which Mr Benjamin noted was broadly consistent with Mr Box's analysis although there was an additional transaction regarding Lavazza Australia. In the joint expert report, the experts agreement that the appropriate multiple to be applied to the earnings of the Company was greater than the implied EBITDA multiple of 3.87, attributed to the Lavazza Australia transaction in the data provided by KPMG. 449 Having addressed these matters, Mr Benjamin's expresses the opinion that, a reasonable multiple for this Business would ordinarily be 4.5X to 5.5X EBITDA however, due to the impact and ongoing uncertainty of Covid-19 the multiple would not exceed 5.0X EBITDA at 1 April 2021 and presently. 450 During cross-examination, Mr Box accepted that a multiple within the range of 5.0 to 6.0 would be reasonable. 451 Based on the above, I consider that an EBITDA multiple of 5.0 is appropriate and reasonable in the circumstances, as that is the multiple which both independent experts agreed was reasonable. 452 The next issue on which the experts differed was the normalisation of business assets. The joint report acknowledged that the book value of the business assets as at 31 March 2021 amounted to $4,307,500. The issue was that the defendants' solicitors advised that the business working capital was distorted due to the impact of COVID-19 on inventory requirements. Mr Box determined that an appropriate adjustment should be $922,336 whereas Mr Benjamin considered the amount to be $1,130,000. If Mr Benjamin's number was used, this would lead to a higher valuation of the Company as a whole and a higher valuation of Jolan's shares. 453 No submission was made by the defendants' counsel to the effect that the number proposed by Mr Benjamin of $1,130,000 should be preferred to the more conservative number proposed by Mr Box of $922,336. As noted by Mr Benjamin in the joint expert report, "other things being equal, a lower adjustment for excess working capital (e.g. from $1,130,000 to $922,336) would reduce the value of" Jolan's shares. As I prefer Mr Box's evidence generally, for the reasons stated above, I will adopt Mr Box's opinion for the purposes of identifying the number to be used for balance sheet normalisation as appears in Table 1 of the Benjamin report. 454 Based on this lower adjustment of $922,336 and taking into account that the share buy back did not proceed, the total non-operating assets, according to Mr Box, is $402,136: see schedule 2 to the joint expert report. 455 The next issue relates to whether a discount should be applied in fixing the price of Jolan's minority holding. Before addressing this issue, it is useful to revisit some fundamental principles relating to the purpose of granting a remedy in oppression cases. These were succinctly summarised by Derrington J in BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192 at [89] where his Honour stated that: The purpose of granting a remedy between parties in an oppression case is to "to compensate the oppressed shareholder for the oppression which has taken place": Smith Martis Cork & Rajan Pty Ltd v Benjamin Corp Pty Ltd (2004) 207 ALR 136, 146 [72] (Smith Martis Cork). In cases where the relief to be granted is the compulsory purchase of shares, that object is achieved by the Court having a wide discretion to fix a price that "represents a fair value in all the circumstances": Smith Martis Cork (145-146 [70]-[72]). That does not necessitate fixing a price only by reference to ordinary valuation principles: Smith Martis Cork (146 [73]-[78]) and Re Bird Precision Bellows Ltd [1986] 1 Ch 658, 669. The question is to identify the price which should be paid in the circumstances. 456 It is important to keep firmly in mind that the fixing of a price in a buy-out ordered to relieve against oppression is a judicial remedy where the court has a wide discretion as to the mode of valuation and the fixing of the price that should be paid: see Smith Martis Cork, [70] – [78]. As the Full Federal Court in that case stated at [75], "the only restriction on the way in which the price may be calculated is that it must be a proper exercise of judicial discretion". Undoubtedly, these principles apply when a Court is deciding whether or not to apply a discount factor when fixing a price for a minority shareholding in oppression cases. 457 The leading authority in Australia on this specific question is the Full Court decision of Dynasty Pty Ltd v Coombs (1995) 59 FCR 122; [1995] FCA 610. 458 In that case, Mr Coombs had been successful before the trial judge, who had ordered that Dynasty Pty Ltd purchase Mr Coombs' minority interest. The trial judge did not apply a discount when fixing the price for Mr Coombs' minority interest. 459 The Full Court held that the trial judge was correct in not applying a discount factor, stating at 145 – 146: His Honour, in fixing upon a fair price for Mr Coombs' shares, did not apply a discount factor because of there being a minority holding. We believe that his Honour was correct. There are, of course, arguments that properly assert that a minority shareholder, being contractually aware of the provisions of his or her company's articles of association, should be bound by those articles and by any provision that gives pre-emptive rights to other shareholders. In ordinary circumstances a minority shareholder wishing to sell his or her shares should offer them to the other shareholders; if a dispute arises as to value, it is common place for the articles to provide that the auditor of the company shall ascertain the value of the shares. That exercise might well involve a discount factor in the value. But Mr Coombs was not a minority shareholder who was a willing seller; he had been forced into instituting legal proceedings because he had been oppressed. In the United Kingdom, the Court of Appeal in Re Abbey Leisure Ltd [1990] BCLC 342 at 347 explained that an oppressed minority shareholder was not a member of a company who desires to transfer his shares under the pre-emptive provisions of the articles of association. 460 The Full Court went on to cite with approval the decision of Nourse J in Re Bird Precision Bellows Ltd [1984] Ch 419, 430 as follows: On the assumption that the unfair prejudice has made it no longer tolerable for him to retain his interest in the company, a sale of his shares will invariably be his only practical way out short of a winding up. In that kind of case it seems to me that it would not merely not be fair, but most unfair, that he should be bought out on the fictional basis applicable to a free election to sell his shares in accordance with the company's articles of association, or indeed on any other basis which involved a discounted price. In my judgment the correct course would be to fix the price pro rata according to the value of the shares as a whole and without any discount, as being the only fair method of compensating an unwilling vendor of the equivalent of a partnership share. 461 The Full Court then concluded that, "it is not just a question of value; it is a matter of fixing a price that should be paid". 462 The decision of Nourse J was upheld by the Court of Appeal in Re Bird Precision Bellows Ltd [1986] Ch 658. Re Bird Precision Bellows Ltd [1986] Ch 658 was cited with approval in Mopeke Pty Ltd v Airport Fine Foods Pty Ltd (2007) 61 ACSR 395; [2007] NSWSC 153 at [109] in which case Brereton J held (in the context of an oppression suit) that it is "ordinarily inappropriate to apply any discount for non-negotiability or minority interest". Re Bird Precision Bellows Ltd [1984] Ch 419 was cited with approval in Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667 at [64], in which case Black J remarked that "at least where oppression or unilateral exclusion of the minority by the majority is established, it will generally not be appropriate to apply a discount to the value of a minority's shares where shares are ordered to be purchased as a result of oppression". 463 Counsel for the defendant submitted that it was appropriate to apply a discount to Jolan's shares because the Company was not a quasi-partnership. The thrust of this submission was that, except for actual quasi-partnership cases, a minority shareholding is to be valued by taking into account any reduction in value on account of it being a minority shareholding. Counsel for the defendant urged the Court not to follow Dynasty, but to instead follow the decision of Blackburne J in Irvine v Irvine (No 2) [2007] 1 BCLC 445; [2006] EWHC 583 (Ch). 464 That submission is rejected for the following reasons. 465 First, there is nothing (implicit or explicit) in the reasoning of the Full Court in Dynasty which indicates that a court must only value shares without a discount in oppression cases involving a "quasi-partnership". 466 Second, Irvine does not represent the law in Australia. Counsel for the defendant did not cite any cases in which an Australian court has cited Irvine with approval in relation to the proposition contended. 467 Third, it appears that Irvine may not even be representative of the law in the United Kingdom. For example, in the decision of In Re Blue Index Ltd [2014] EWHC 2680 (Ch), Hollington QC (sitting as deputy judge of the High Court) recognised a conflict of authority in the United Kingdom in relation to this area of the law. While it is unnecessary to delve into the detail of that decision, it is sufficient to note that the court in that case concluded that there should be no discount for a minority shareholding even though it was not a quasi-partnership case (unless the shares were acquired at a discount). 468 Fourth, the submission is contrary to the principle that, upon a finding of oppression, the court is not confined to a method of valuation fixed by the articles or to any other basis which involves a discounted price: Smith Martis Cork at 148. 469 Finally, the submission fails to take into account the proposition noted earlier that "the only restriction on the way in which the price may be calculated is that it must be a proper exercise of judicial discretion": Smith Martis Cork at 146. 470 I observe that my conclusion is also consistent with that reached in In Re DG Brims & Sons Pty Ltd (1995) 16 ACSR 559; [1995] QSC 053, in which Byrne J observed at 594 – 595: There is a discernible inclination not to discount for the minority interest in deciding the price in a buy-out ordered to relieve against oppressive or unfair conduct. In such circumstances, the purchase is not a market transaction. It is the judicial remedy. In general, therefore, there seems little to commend such an adjustment where a minority parcel compulsorily changes hands because of unfairness. Moreover, the reasons which ordinarily justify the minority discount have at least diminished application where the purchaser is already a shareholder. The discount reflects the risk a stranger runs in becoming a minority shareholder in a closely-held corporation. The lack of marketability of the shares and the associated vulnerability to the majority affect the value of such an investment. The purchasers are not strangers here. They are shareholders. If they buy in proportion to their holdings, "existing shareholders will simply consolidate their positions. They do not become minority shareholders as a result of the purchase — they are already, as individuals, minority shareholders...". If they do not buy in proportion to existing holdings, the applicants' shares could confer voting control. If John Brims bought them all, he would have more than 50%, and with his family more than 75%, of the shares. A minority discount is not appropriate to a parcel conferring control. The price in this case should reflect a shareholder's proportionate interest in the company as a going concern without a minority discount. (citations omitted, emphasis added) 471 For these reasons, I do not accept the defendants' submission that a discount should be applied in fixing the price of Jolan's shares. Rather, the appropriate basis on which to value Jolan's shares is its proportionate share of the overall value of the shares in the Company as a whole. 472 In conclusion, the enterprise value is $8,816,500 calculated as the future maintainable earnings of $1,763,300 multiplied by a multiple of 5. If total non-operating assets are added to this in the amount of $402,136, the total becomes $9,218,636. There are 7,919,491 shares on issue in the Company. This equates to a non-discounted share value of $1.16 (i.e. $9,218,636 divided by 7,919,491 shares). Jolan holds 1,000,000 shares. 473 Having regard to this value, I will fix the price of Jolan's shares at $1.16 per share or $1,160,000. In my view, $1.16 per share is an appropriate price having regard to the fact that the price of $1.15 is referred to in the resolution of the board on 17 February 2021, and was the subject of the proposed Company buy back on 18 March 2021. Whether the Company should be wound up 474 In making an order under s 233, the Court will endeavour to find a scheme, short of winding up, if possible, which will "put the company back on the rails" and avoid the causes of conflict and oppression, yet will as far as possible allow all members to participate in the business: John J Starr (Real Estate) Pty Ltd v Robert R Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63 at 74. 475 While it is an extreme step, especially in the case of a solvent company, there is no general principle to the effect a court will not order the winding up of a solvent company. In Hillam v Ample Source International Ltd (No 2) (2012) 202 FCR 336; [2012] FCAFC 73, it was stated at [70] that: Although in our view, contrary to the submissions of the appellants, there is no presumption against winding up of the character for which they contended we accept that the warnings given in the authorities, that an order to wind up a solvent company is an extreme step, are warnings which should be borne in mind. We have borne them in mind in the present case, as did the trial judge. An order to wind up a solvent company may often be too extreme a step to take (and therefore not justified or appropriate) but that is very different from proceeding upon any "principle" or assumption that a winding up order of a solvent company is inappropriate. No such implication arises from s 232 or s 233 of the Act, or should be made in those terms. The real question is whether a winding up order was appropriate to deal with and address the grounds for relief which had been established. The answer to that question must be found in the facts of the particular case. 476 In Hillam, winding up was found to be appropriate because there was no realistic prospect of a commercially viable solution involving the acquisition of a shareholder's interest for value (due to a lack of funds). The Full Court, after referring to other factors which the trial judge in that case was entitled to take into account, stated at [80] that: When the order for winding up was made …there was no evidence of any realistic prospect of a commercially viable solution involving the acquisition of Ample Source's interest for fair value. In the circumstances, in our view it was not only reasonably available to the trial judge to order that BMG be wound up, but virtually inevitable that that should happen. A sale of BMG's various interests on the open market not only provided an opportunity for realization of a true market value of BMG's interests, but it also left the parties with an opportunity to participate in that process in any way they wished. 477 At [82], the Full Court said there was no error in the approach taken by the trial judge, which was extracted at [81]: I accept that an order that a solvent company be wound up is an extreme step and it is a less than perfect remedy: the full value of the company with its present interests may not be obtained. But there is no offer to buy the shares of the minority or of the majority at a fair price while the liquidator can sell the assets on the open market and divide the proceeds, absent a sale of the company's assets to one of the disputing parties. 478 In this case, Jolan made the following submissions: (a) Jolan has sought winding up as a valid means of ending the oppression under s 233(a), particularly in light of the concerns about the Company and the shareholders' ability to purchase Jolan's shares; (b) the impecuniosity of the oppressor should not necessarily prevent an order that shares be purchased by him, her or it, at least where the Company is actively trading. However, if there is uncertainty as to whether the defendant would be able to fund the share purchase, this may weigh in favour of winding up; (c) in the present case, Jolan seeks no order for the winding up of the subsidiaries, but of the Company only. A liquidator appointed to the Company would act to sell the business and return capital realised to shareholders; (d) given the uncertainty as to whether a share purchase is a commercially viable solution, Jolan seeks a further order for winding up in the event that the purchase does not occur. Such an order would be appropriate given the majority's persistent unfair conduct, and would address the difficulty of finding a purchaser for Jolan's shares. 479 By their closing submissions, Jolan also submitted that a winding up order could be made pursuant to ss 461(e), (f), (g) and (k) of the Act, which had not been raised before this. Jolan submitted that: Jolan has not placed specific reliance on s 461 of the Act, however the evidence in relation to the failure to progress to an Exit Event, referred to above, is capable supporting a determination that s 461 has been satisfied as set out below. The Court could make orders on this basis having regard to s 22 of the Federal Court of Australia Act 1976. … The classes of conduct which justify the winding up of a company on the just and equitable ground are not closed, and each application will depend upon the circumstances of the particular case. Winding up may be appropriate where it is impossible to carry on the company's business because the "substratum of the company" has failed, or it has become impossible for the company to achieve the purpose for which it was formed. It may also be appropriate where those in control of the Company have persistently disregarded their constitutional or statutory obligations. The manner in which a company has been managed may justify its winding up, even where the company is solvent. … Further, winding up is appropriate in this case because the "substratum of the company" has failed, and it has become impossible for the Company to achieve the purpose for which it was formed. The Company was formed on the basis that it would be a short-term investment, and that the business would be "corporatized" and sold for a profit within 12-18 months (as reflected in cl. 11.1 of the Shareholders Agreement). The majority, by failing to take steps to sell the Company, and resolving not to sell for an indefinite period of time, are operating the Company in a manner inconsistent with the purpose for which it was formed. As Mr Benjamin observed, the Company is now "a different kind of venture": [Transcript, Day 4, Page 555, Line 18]. Accordingly, it is open for the Court to order that the Company be wound up pursuant to s 461(e), (f), (g) and (k) of the Corporations Act. 480 No objection was taken by the defendants to Jolan's closing submissions made in reliance on s 461 of the Act even though they were served on the defendants' solicitors three business days before the oral closing addresses on 1 October 2021 and the defendants' closing submissions were served after, and not before, Jolan's submissions. It was only after I specifically raised the issue of whether there had been a failure of substratum of the Company, and the application of the principles stated in Re Tivoli Freeholds Ltd [1972] VR 445 at 468 – 469 [4], that objection was taken by the defendants on 30 November 2021. However, it is not necessary to decide this issue having regard to the other findings which I have made and the course which I propose to take. 481 As to the prospect of a winding up order being made under s 233 of the Act, which the defendants accepted was within the scope of the case brought against the Company, the defendants submitted as follows: (a) in respect of the possibility of winding up the company, that is a remedy of "last resort" which ought not be granted if some less drastic remedy is available and appropriate. Wallington v Kokotovich Constructions Pty Ltd (1993) 11 ACSR 759 (upheld on appeal: Kokotovich Constructions Pty Ltd v Wallington (1995) 17 ACSR 478) is an illustration of the type of case in which a court might order the winding up of a company. In that case there were only two shareholders (a former de facto couple) and the company's activities were of a very limited nature (its business being limited to renting out a single parcel of land). A winding up order was appropriate "in the absence of a bona fide offer by one side or the other to buy the opponent out at a fair price" (at 770). In that case there was no other apparent option for ending the oppression but to order the winding up of the company; (b) in the present case the winding up of the Company would be an extreme and unnecessary remedy. There is no suggestion that the Company is not solvent. Through its subsidiaries, it continues to operate an active business. Further, the present case is not a quasi-partnership case where a winding up order would only affect the alleged oppressor or a small number of other shareholders. Winding up the Company would affect all numerous shareholders against whom there are no allegations of wrongdoing. Given that there are other available remedies (either sale on the open market or an order that the shares be bought back by the Company), this remedy of 'last resort' is not one which should be adopted in this case. 482 Notwithstanding these submissions, I have formed the view that, having regard to the facts of this case, it is appropriate to order that the Company be wound up in the event that the existing shareholders and the Company do not or are unable to comply with the orders of the Court relating to the purchase of Jolan's shares. 483 In forming this view, I have taken into account that the Company is solvent and trading, and so winding it up is an extreme step. I also recognise that it is a less than perfect remedy. I have also taken into account that the interests of innocent third parties will be affected, such as employees. 484 However, I have also taken into account the following matters which I consider mean that such an order is an appropriate one to be made pursuant to s 233 of the Act having regard to the facts of this case. 485 First, Jolan became a shareholder on the understanding that its investment in the Company was not a long term investment. Further, it understood that when its shares were sold, they would not be sold on their own, but as part of an Exit Event. The understanding was embodied in clause 11.1 of the shareholders' agreement and, having regard to that clause, that understanding was the common understanding of the shareholders at the time that the shareholders' agreement was entered. A liquidator appointed to the Company would act to sell the shares in the Company and return capital realised to shareholders in the manner contemplated by the shareholders as reflected in the shareholders' agreement. 486 Second, a sale by a liquidator of the Company's shares on the open market not only provides an opportunity for realisation of the true market value of Jolan's interests, but it also leaves the parties (including existing shareholders) with an opportunity to participate in that process in any way they wish. 487 Third, while a less extreme remedy under s 233 is available and will be the subject of an order (namely the court ordered purchase of Jolan's shares by the Company), the evidence of Mr Rainey, a chartered accountant and recent director of the Company, was that that he holds concerns about the Company being at risk if ordered to buy back Jolan's shares. This means that the lesser remedy of compulsory purchase of Jolan's shares might prove not to be a viable one and that some further fall-back remedy is required so that all matters in controversy between the parties may be completely and finally determined as is required in accordance with s 22 Federal Court of Australia Act 1976 (Cth). The conclusion that the Company might not be in a position to comply with a compulsory purchase order is reinforced by the recent passing of a resolution to "raise new emergency capital" to provide the Company with contingency funds in the event of an adverse court order in this proceeding. Of course, it cannot be assumed that any capital raising will succeed. 488 Fourth, I have considered and, except in the case of a compulsory buyout, rejected the other lesser forms of relief proposed by the defendants for the reasons stated above. 489 Fifth, the appointment of a liquidator to the Company does not necessarily mean that the Business will not continue to trade. Conclusion as to remedy 490 In the circumstances, the remedy which is the least intrusive and most appropriate is as follows. 491 The existing shareholders of the Company should be given the opportunity to acquire Jolan's shares at the price of $1.16 per share. I will leave it to the parties and to any interested shareholder to make submissions about the appropriate form of order which would enable the existing shareholders to have that opportunity, but any such proposed process cannot be a prolonged one. Further, any proposed order should relieve the shareholders from complying with clause 7 of the shareholders' agreement. 492 If there remains any of Jolan's shares which have not been acquired by any shareholder, then the Company will be ordered to buy back the balance of Jolan's shares which is not otherwise acquired at the price of $1.16 per share, with an appropriate reduction in the share capital of the Company. 493 If, for any reason, Jolan's shares have not been acquired by a particular date, then the Company will be wound up and Mr Anthony Norman Connelly and Mr William James Harris will be appointed as liquidators of the Company. 494 Subject to receiving further submissions, my present view is that the appropriate course is to make the orders appointing the liquidators to the Company, and for an order winding up the Company, but then staying those orders to a particular date to enable the shareholders and the Company to buy all of Jolan's shares. If the acquisition of Jolan's shares is successful (whether by the shareholders and the Company, or just the shareholders) and Jolan ceases to be a shareholder, then the winding up order can then be vacated. 495 On 10 September 2021, the Court made an order noting that the reasons to be delivered in this matter would "indicate the proposed orders which the Court proposes to make to enable the parties, and any other interested persons, to be heard on the form of the final orders to be made". For this reason, I will order that any shareholder of the Company, or any interested person, who wishes to be heard as to the final form of order to be made by the Court may file submissions. 496 However, it is apparent from the Notice of General Meeting which was issued to the shareholders of the Company by Mr How on 5 November 2021, and the email which accompanied that notice, that: (a) the shareholders were made aware of these proceedings at a general meeting of shareholders held on 7 September 2021 (that is, before the trial); (b) the relief claimed by Jolan in these proceedings was explained to those shareholders at the meeting on 7 September 2021; (c) a significant number of shareholders present at the 7 September 2021 meeting indicated that they would be interested in acquiring shares; (d) the shareholders were informed that judgment in this proceeding was expected to be handed down prior to 25 December 2021. 497 It is also apparent from an email from Mr How to the shareholders dated 29 November 2021 that: (a) the shareholders have received updates from Mr Cook about these proceedings; (b) the shareholders have previously been provided with certain court documents; (c) the shareholders were invited to request a copy of the defendants' closing submissions; (d) the shareholders were advised of the hearing on 30 November 2021 and the submissions made by the defendants at that hearing, including that reasons should be delivered to enable, amongst other things, shareholders to participate in any purchase of Jolan's shares; (e) the individual shareholders were advised that they "will need to consider the worst-case scenario regarding their investment should Jolan obtain the judgement it seeks: a buy back of their shares at $1.30 or liquidation (or such other lesser order the Court may make over Jolan's shares or costs)". 498 Having regard to these matters, and the fact that many shareholders (or their representatives) filed affidavits in this proceeding and were witnesses at the trial (such as Mr Hiscock, Mr White, Mr Cook, Mr Rankine, Ms Hughes, Mr Rainey and Mr Terence Hiscock), a period of 7 days from the date of judgment is sufficient time to enable shareholders to make submissions as to the final form of orders which should be made. 499 For the same reasons, and having regard to the information which the shareholders have had about these proceedings, the advice which they were given by the Company and the resolutions which were passed by the shareholders on 29 November 2021, it is not necessary for another general meeting to be held, as submitted by the defendants on 30 November 2021. 500 It is not necessary to have an oral hearing for the purposes of deciding the final form of orders to be made. I certify that the preceding five hundred (500) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes. Associate: Dated: 7 December 2021 SCHEDULE OF PARTIES QUD 101 of 2021 Defendants Fourth Defendant: KANGAROO POINT REALTY PTY LTD ACN 001 917 237