Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 3) [2022] FCA 1302

FEDERAL COURT OF AUSTRALIA Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 3) [2022] FCA 1302 File number(s): NSD 1153 of 2021

Judgment of: GOODMAN J

Date of judgment: 3 November 2022

Catchwords: CORPORATIONS – company formed by three Founders to develop and exploit a product – Shareholders' Deed entered into between the Founders and the associated Founder Shareholders – breakdown of relationship between two of the Founders – whether the relationship between the Founders and their associated Founder Shareholders was governed by an understanding that their respective shareholdings would remain equal and which survived entry into the Shareholders' Deed – held no such understanding established – whether there was oppression of the second plaintiff because of: (1) conduct alleged to have forced out the first plaintiff as CEO and a director of the company – held no oppression of the second plaintiff; (2) the issue and proposed issue of shares and options after the first plaintiff ceased to be involved in the company – held oppression established for some but not all of the impugned conduct

Legislation: Australian Securities and Investments Commission Act 2001 (Cth), s 12CB Corporations Act 2001 (Cth), ss 53, 180, 181, 182, 183, 231, 232, 233, 234, 254D

Cases cited: Ansett Transport Industries (Operations) Pty Ltd v Commonwealth [1977] HCA 71; (1977) 139 CLR 54 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 51; (1982) 149 CLR 337 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688 Hylepin Pty Ltd v Doshay Pty Ltd [2021] FCAFC 201; (2021) 288 FCR 104 In the matter of Anna Bay Resort Pty Ltd [2022] NSWSC 331 Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467 Mackay Sugar Ltd v Wilmar Sugar Australia Ltd [2016] FCAFC 133; (2016) 338 ALR 374 Mackay v Dick (1881) 6 App Cas 251 Morgan v 45 Flers Ave Pty Ltd (1986) 10 ACLR 692 Ngurli Ltd v McCann [1953] HCA 39; (1953) 90 CLR 425 R A Noble & Sons (Clothing) Ltd [1983] BCLC 273 RBC Investor Services Australia Nominees Pty Limited v Brickworks Limited [2017] FCA 756; (2017) 348 ALR 605 Re London School of Electronics Ltd [1986] Ch 211 Re Scientific Management Associates Pty Ltd [2019] NSWSC 1643; (2019) 141 ACSR 115 Tomanovic v Argyle HQ Pty Ltd; Tomanovic v Global Mortgage Equity Corporation Pty Ltd; Sayer v Tomanovic [2010] NSWSC 152 Watson v Foxman (1995) 49 NSWLR 315 Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459 Whitehouse v Carlton Hotel Pty Ltd [1987] HCA 11; (1987) 162 CLR 285 Wilmar Sugar Australia Ltd v Mackay Sugar Ltd [2017] FCAFC 40; (2017) 345 ALR 174