Soulos v Pagones; Soulos v Soulos; Soulos v Soulos; Soulos v Pagones; Kristallis v Soulos; Kristallis v Soulos; Kristallis v Pagones [2023] NSWCA 243

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Soulos v Pagones; Soulos v Soulos; Soulos v Soulos; Soulos v Pagones; Kristallis v Soulos; Kristallis v Soulos; Kristallis v Pagones [2023] NSWCA 243 Hearing dates: 4 – 6 April 2023 Date of orders: 13 October 2023 Decision date: 13 October 2023 Before: Ward P at [1]; Meagher JA and Mitchelmore JA at [688] Decision: (1) Grant leave for the filing of the Executors' amended notice of appeal in the Executors' Dennis Appeal. (2) Dismiss with costs the Executors' appeals in proceedings 2022/369112 (the Executors' James Appeal); 2022/369130 (the Executors' Maria Appeal); and 2022/369139 (the Executors' Dennis Appeal). (3) Refuse leave for the proposed amendment of Nick's notice of appeal in the Succession Act appeals. (4) Dismiss with costs the appeals by Nick in proceedings 2022/370862 (Nick's James Appeal); 2022/370852 (Nick's Maria Appeal); and 2022/370837 (Nick's Dennis Appeal). (5) Set aside Orders 1 to 8 made by Lindsay J on 24 November 2022 in proceedings 2021/00108316 (the Oppression Proceeding). (6) Otherwise dismiss the appeal by Nick and John in proceedings 2022/370857 (the Oppression Appeal). (7) Direct that any brief submissions as to costs of the proceedings at first instance be filed within 14 days, to be dealt with on the papers. (8) Direct that any brief submissions as to the costs of the Oppression Appeal be filed within 14 days, to be dealt with on the papers. Catchwords: CORPORATIONS – Members' rights and remedies – Oppression – Where one shareholder has control over family company through management shares and position as Governing Director – Whether no oppression if self-dealing transaction was necessary to bring about acquisition of property accepted to be in the best interests of the company – Whether primary judge erred in finding oppressive conduct in relation to omission of demolition clause in lease by company to entity associated with director – Whether relief granted went beyond that necessary to bring end to continuing effect of oppressive conduct. EQUITY – Proprietary estoppel – Encouragement – Detrimental reliance – Where a property had been purchased by parents for the benefit of their son – Where the son had been promised ownership of the property and had expended time and money renovating the property – Whether sufficient detriment had been suffered to establish an estoppel – Whether the relief granted by the primary judge was proportionate to the detriment suffered. SUCCESSION – Family provision – claims made for provision under the Succession Act 2006 (NSW) by three of the deceased's four adult children – Where the deceased had engendered an expectation in her children that they would share equally in the assets of the family company – Whether provision made for the respective children was proper and appropriate for their advancement or maintenance in life – Where large portion of estate assets held through shares in family company and deceased's last will left all management (voting) shares to one child – Whether primary judge erred in failing properly to take into account financial needs of children or in making good expectations engendered in the deceased's children as to future material wealth. Legislation Cited: Civil Procedure Act 2005 (NSW), s 173 Corporations Act 2001 (Cth), ss 180-182, 232, 233, Ch 2F Probate and Administration Act 1898 (NSW), Pt II, Third Schedule Succession Act 2006 (NSW), ss 59, 60, 66, Ch 3 Uniform Civil Procedure Rules 2005 (NSW), rr 14.26 51.18 Cases Cited: Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker [2010] VSC 59 Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284; (2013) 94 ACSR 199 Angas Law Services Pty Ltd v Carabelas (2005) 226 CLR 507; [2005] HCA 23 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 Australian Securities & Investments Commission v Maxwell [2006] NSWSC 1052; (2006) 59 ACSR 373 Augusta Pool 1 UK Ltd v Williamson [2023] NSWCA 93 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14 Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188 Baba v Sheehan [2021] NSWCA 58 Backoffice Investments v Campbell [2007] NSWSC 161; (2007) 25 ACLC 302 Bisley Investment Corporation v Australian Broadcasting Tribunal [1982] FCA 58; (1982) 40 ALR 233 Botsman v Bolitho (No 1) (2018) 57 VR 68; [2018] VSCA 278 Brown v Brown [2022] NSWSC 1393 Browne v Browne [2019] WASCA 1 Byrne v A J Byrne Pty Ltd [2012] NSWSC 667 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 Chew v The Queen (1992) 173 CLR 626; [1992] HCA 19 Chief Disruption Officer Pty Ltd as Trustee for the McDonald Family Trust v Michel, in the matter of Laava ID Pty Ltd (No 4) [2023] FCA 25 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47 Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39 Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 Doyle v Australian Securities and Investments Commission (ASIC) (2005) 227 CLR 18; [2005] HCA 78 DSHE Holdings Ltd (Receivers and Managers) (in liq) v Potts; HSBC Bank Ltd v Abboud; Potts v National Australia Bank Ltd [2022] NSWCA 165; (2022) 405 ALR 70 Durham v Durham (2011) 80 NSWLR 335; [2011] NSWCA 62 Estate Lioutas; Lioutas v Papasoulis [2018] NSWSC 352 Evans v Braddock [2015] NSWSC 249 Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1; 63 WN 34 Exton v Extons Pty Ltd (2017) 53 VR 520; [2017] VSC 14 Falkingham v Peninsula Kingswood Country Golf Club Ltd [2015] VSCA 16; (2015) 104 ACSR 481 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 Fifteenth Eestin Nominees Pty Ltd v Rosenberg (2009) 24 VR 115; [2009] VSCA 112 Gee v Gee [2018] EWHC 1393 (Ch) Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 Gooze v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; [1937] HCA 58 Hall v Hall (2016) 257 CLR 490; [2016] HCA 23 Hart Security Australia Pty Ltd v Boucousis [2016] NSWCA 307; (2016) 339 ALR 659 Hay v Renwick [2016] NSWSC 1048 House v The King (1936) 55 CLR 499; [1936] HCA 40 Hunter v Hunter (1987) 8 NSWLR 573 In re Sharpe (a Bankrupt); Ex parte Trustee of the Bankrupt's Property v The Bankrupt [1980] 1 WLR 219; [1980] 1 All ER 198, Ch D Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467 Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56 Leary v NSW Trustee and Guardian [2017] NSWSC 1113 Levin v Clark [1962] NSWR 686 Lloyd-Williams v Mayfield (2005) 63 NSWLR 1; [2005] NSWCA 189 Mackay Sugar Ltd v Wilmar Sugar Australia Ltd [2016] FCAFC 133; (2016) 338 ALR 374 Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 Mayfield v Lloyd-Williams [2004] NSWSC 419 Maynard v Maynard [2018] NSWSC 1961 McNab v Graham (2017) 53 VR 311; [2017] VSCA 352 Meres v Meres [2017] NSWSC 285 Mifsud v Campbell (1991) 21 NSWLR 725 Minister for Immigration & Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 Olsen v Olsen (2019) 101 NSWLR 225; [2019] NSWCA 278 Owies v JJE Nominees Pty Ltd (ACN 004 856 366) (in its capacity ATF the Owies Family Trust) [2022] VSCA 142 Parker v Auswild; Bergmuller v Auswild [2022] VSCA 8 Parsons v McBain (2001) 109 FCR 120; [2001] FCA 376 Perpetual Ltd v Barghachoun [2010] NSWSC 108 Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,369 Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4 Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9; [1962] HCA 19 Priestley v Priestley [2017] NSWCA 155 Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; [1986] HCA 7 Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488 Q (A Pseudonym) v E Co (A Pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469 Re a Company (No 002612 of 1984) (1986) 2 BCC 99,453 Re Bright Pine Mills Pty Limited [1969] VR 1002 In the matter of Candy-Vend Pty Ltd [2020] NSWSC 1735 Re Estate Soulos [2022] NSWSC 1507 Re Fulop Deceased (1987) 8 NSWLR 679 Re George Raymond Pty Ltd; Slater v Gilbertson [1999] VSC 460; (2000) 18 ACLC 85 Re Hollen Australia Pty Ltd [2009] VSC 95 Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535; [1994] FCA 579 Re Manormay Investments Pty Ltd [2013] VSC 260 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134 Reid v Bagot Well Pastoral Co Pty Ltd (1993) 61 SASR 165; (1993) 12 ACSR 197 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Robinson v Tame [1994] NSWCA 266 Samaan bht Samaan v Kentucky Fried Chicken Pty Ltd [2009] NSWSC 1265 Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549 Scott v Scott [2022] NSWCA 182 Scottish Co-Operative Wholesale Society Ltd v Meyer [1959] AC 324; [1958] 3 All ER 66 Secretary, Department of Social Security v Agnew (2000) 96 FCR 357; [2000] FCA 59 Sgro v Thompson [2017] NSWCA 326 Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 Singer v Berghouse (1994) 181 CLR 201; [1994] HCA 40 Snell v Glatis (No 2) [2020] NSWCA 166 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610 Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104 Vigolo v Bostin (2005) 221 CLR 191; [2005] HCA 11 Vukic v Grbin [2006] NSWSC 41 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 Wayde v NSW Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68 Webb v Stanfield [1991] 1 Qd R 593 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Wheatley v Wheatley [2006] NSWCA 262 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285; [1987] HCA 11 Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174 Wright v Australian Broadcasting Commission [1977] 1 NSWLR 697 Yates v Halliday [2006] NSWSC 1346 Zong v Lin [2022] NSWCA 136 Texts Cited: H A J Ford, W A Lee, Law of Trusts (4th ed, 2010, Thomson Reuters) J Hudson, "One Thicket in Fraud on a Power" (2019) 39 Oxford Journal of Legal Studies 577 Professor Ben McFarlane, The Law of Proprietary Estoppel (1st ed, 2014, Oxford University Press) Young, Croft and Smith, On Equity (2009, Thomson Reuters) A J Oakley, Constructive Trusts (3rd ed, 1997, Sweet & Maxwell) Category: Principal judgment Parties: 2022/00370857 (Oppression Appeal)