In the matter of QB Foods Pty Limited [2021] NSWSC 1227

Supreme Court New South Wales

Medium Neutral Citation: In the matter of QB Foods Pty Limited [2021] NSWSC 1227 Hearing dates: 24 – 27 August 2021, 14 September 2021 Date of orders: 28 September 2021 Decision date: 28 September 2021 Jurisdiction: Equity - Corporations List Before: Black J Decision: Order to be made for Defendants to buy out Plaintiffs' shares in company. Parties to bring in short minutes of order to give effect to this judgment. Catchwords: Oppression — Members' rights and remedies — Whether conduct is oppressive to, unfairly prejudicial to, or unfairly discriminatory — Where first defendant increased salary without consent — Where first defendant took funds from company and then returned them — Where defendants resolved to issue shares in company in manner that would cause substantial dilution in plaintiffs' shareholding — Where other heads of oppression not made out. Oppression — Members' rights and remedies — Exercise of discretion as to remedy — Whether compulsory buyout orders as to Plaintiffs' or Defendants' shares appropriate in the circumstances — Whether to order company be wound up in oppression — Where relationship between the parties has broken down — Where both parties have contributed to present dispute. Legislation Cited: - Corporations Act 2001 (Cth), ss 232, 233, 461 Cases Cited: - Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325; [2008] VSCA 86 - Asia Pacific Joint Mining Pty Ltd v Allways Resources Holdings Pty Ltd (2018) 125 ACSR 227; [2018] QCA 048 - Boyd v Feeney [2017] NSWSC 1595 - Byrne v A J Byrne Pty Ltd [2012] NSWSC 667 - Camden v McKenzie [2008] 1 Qd R 39; [2007] QCA 136 - Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; (2009) 257 ALR 610; (2009) 73 ACSR 1; [2009] HCA 25 - Craig v Silverbrook [2013] NSWSC 1687 - Dynasty Pty Ltd v Coombs (1995) 59 FCR 122; (1995) 138 ALR 64 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 - HNA Irish Nominees Ltd v Kinghorn (No 2) (2012) 290 ALR 372 - John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 - Jones v Dunkel (1959) 101 CLR 298 - Mair v Rhodes and Beckett [2018] VSC 132 - MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167; [2004] NSWCA 451 - Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 - Munstermann v Rayward [2017] NSWSC 133 - Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 - New South Wales v Hunt (2014) 86 NSWLR 226; [2014] NSWCA 47 - O'Neill v Phillips [1999] 1 WLR 1092; [1999] UKHL 24 - Rankine v Rankine (1995) 18 ACSR 725 - Re a Company (No 00477 of 1986) (1986) 2 BCC 99,171 - Re Bicher & Son Pty Ltd (2020) 147 ACSR 108; [2020] NSWSC 711 - Re Bird Precision Bellows Ltd [1984] Ch 419 - Re Bird Precision Bellows Ltd [1986] Ch 658 - Re Catombal Investments Pty Ltd [2012] NSWSC 775 - Re Global Mortgage Equity Corporation Pty Ltd (2013) 97 ACSR 30; [2013] NSWSC 1586 - Re ICB Medical Distributors Pty Ltd [2018] NSWSC 1315 - Re Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 - Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914 - Re Rectron Electronics Pty Ltd [2013] VSC 384 - Re Scientific Management Associates Pty Ltd (2019) 141 ACSR 115; [2019] NSWSC 1643 - Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724 - Russell v Lee Holdings Pty Ltd (No 3) [2020] WASC 346 - Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324 - Shanahan v Jatese Pty Ltd [2019] NSWCA 113 - Smith v Gould [2012] VSC 461 - Snell v Glatis (No 2) [2020] NSWCA 166 - Societe d'Avances Commerciales (SA Egyptienne) v Merchants' Marine Insurance Co [1924] 20 Ll L Rep 140 - Solanki v Cufari [2014] VSC 345 - Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 - Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310; (2011) 84 ACSR 121; [2011] NSWCA 104 - United Rural Enterprises Pty Ltd v Lopmand Pty Ltd (2003) 47 ACSR 514; [2003] NSWSC 910 - Varma v Varma (2010) 6 ASTLR 152; [2010] NSWSC 786 - Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd (2014) 88 NSWLR 689; (2014) 290 FLR 18; (2014) 101 ACSR 643; [2014] NSWCA 326 - Watson v Foxman (1995) 49 NSWLR 315 - Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68 Texts Cited: - S Brenker & I Ramsay, "Legitimate expectations and the oppression remedy" (2020) 36 Aust Jnl of Corp Law 3 Category: Principal judgment Parties: Adriano Locantro (First Plaintiff) Pino Locantro (Second Plaintiff) QB Foods Pty Limited (First Defendant) Amy Stagnitta (Second Defendant) Gavin Stagnitta (Third Defendant) Representation: Counsel: B May (Plaintiffs) A Ogborne (Defendants)