Zong v Lin [2022] NSWCA 136

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Zong v Lin [2022] NSWCA 136 Hearing dates: 20 July 2022 Date of orders: 2 August 2022 Decision date: 02 August 2022 Before: Gleeson JA at [1] Leeming JA at [93] Kirk JA at [94] Decision: (1) Appeal dismissed. (2) Appellants to pay the respondents' costs. Catchwords: DAMAGES – Quantum of compensation – overvalue purchase of boat – competing valuation evidence – whether judge had regard to extraneous material not in evidence – where judge questioned defendant's expert about "publicly available information" relevant to perception of buyers – where judge's reasons on the valuation issue unrelated to "publicly available information" CORPORATIONS – Directors and officers – where real and substantial conflict between duty as director and interest as shareholder – where director paid company's money to same solicitor retained by company and director in shareholder dispute – whether breach of fiduciary duty PROCEDURE – whether breach of rule in Browne v Dunn – where affidavit evidence of defendant's belief that solicitor retained in the ordinary course of company's affairs and business – where out-of-court representations by the solicitor as to nature of work – where defendant paid company's money to solicitor – absence of cross-examination of defendant regarding nature of work to which payments related – where fair notice given of plaintiffs' case on timing of payments to solicitor CORPORATIONS – Member's rights and remedies – oppression – compulsory transfer order – transfer of oppressor's shares to other shareholder without payment in return – where relief in derivative action did not fully address oppression – where defendant failed to contribute promised skill and goodwill to the company – where company did not commence its intended business – where compulsory transfer order in the nature of recission of shareholder agreement Legislation Cited: Corporations Act 2001 (Cth), ss 232, 233, 237 Uniform Civil Procedure Rules 2005 (NSW), r 42.1, Sch 7 Cases Cited: Browne v Dunn (1893) 6 R 67 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 House v The King (1936) 55 CLR 419; [1936] HCA 40 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; [2009] HCA 49 In the matter of Australian International Yacht Club Pty Limited [2021] NSWSC 586 In the matter of Australian International Yacht Club Pty Limited [2021] NSWSC 636 Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382; [2009] NSWCA 234 Munstermann v Rayward [2017] NSWSC 133 Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; [2009] NSWSC 342 Quinlan v Fiboze Pty Ltd (1998) 14 ACLR 312 Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd [2004] FCAFC 153; (2004) 207 ALR 136 Snell v Glatis (No 2) [2020] NSWCA 166 TAL Life Limited v Shuetrim; MetLife Insurance Limited v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 West v Mead (2003) 13 BPR 24,431; [2003] NSWSC 161 Category: Principal judgment Parties: Jason Zong (First appellant) Zhenhua Tang (Second appellant) J & G Holding Group Pty Limited (Third appellant) Hui Lin (First respondent) Australian International Yacht Club Pty Limited (Second respondent) Representation: Counsel: M W Young SC (Appellants) S A Lawrance SC (Respondents)