Sweeney v Glenmore Meat Co. P/L & Ors [2004] NSWSC 845

New South Wales Supreme Court

CITATION : Sweeney v Glenmore Meat Co. P/L & Ors [2004] NSWSC 845 HEARING DATE(S) : 02/09/04, 03/09/04, 07/09/04 JUDGMENT DATE : 8 September 2004

JUDGMENT OF : White J DECISION : 1. Amended cross-claim dismissed; 2. Cross-claimant to pay the cross-defendant's costs of the cross-claim; 3. Exhibits to be returned after 28 days unless a notice of appeal or applicaiton for leave to appeal has been filed in the meantime.

CATCHWORDS : Cross-claim heard as separate issue - Claim to enforce alleged oral agreement for transfer of shares after death of shareholder - Issues of credit - No question of principle. CASES CITED : Plunkett v Bull (1915) 19 CLR 544 Watson v Foxman (1999) NSWLR 351 Isabel Hendry Sweeney PARTIES : v Glenmore Meat Co. Pty Ltd & Ors FILE NUMBER(S) : SC 3054/03; 3055/03; 3056/03 COUNSEL : Cross-Defendant: A McInerney & N Owens Cross-Claimant: R D Marshall SOLICITORS : Cross-Defendant: Glasheen & Quilty Solicitors Cross-Claimant: John Walsh & Partners

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WHITE J

Wednesday, 8 September 2004

3054/03 ISABEL HENDRY SWEENEY v GLENMORE MEAT CO PTY LTD & Ors 3055/03 ISABEL HENDRY SWEENEY v GLENMORE MEAT CO PTY LTD & Ors 3056/03 ISABEL HENDRY SWEENEY v GLENMORE MEAT CO PTY LTD & Ors JUDGMENT 1 HIS HONOUR: This is the trial of a cross-claim brought in an oppression suit which was commenced by the cross-defendant as plaintiff in respect of the affairs of two companies called Glenmore Meat Co Pty Ltd and Glenmore Meat Co (Wholesalers) Pty Ltd. 2 The plaintiff is the widow of the late John Grant Sweeney who died on 20 April 2003. She is the Executrix and sole beneficiary of his will. 3 At his death, Mr Sweeney held 47 and a half per cent of the issued shares in each company. The cross-claimants, Mr Frederick George Newton and Fred Newton (Holdings) Pty Ltd, own 47 and a half per cent of the issued shares in those companies. 4 The cross-claimant, Mr Fred Newton, claims that he is entitled to have the shares owned by the deceased transferred to him. 5 On 21 June 2004, Austin J ordered that the cross-claim be heard as a separate issue. 6 During his life, Mr Sweeney was the Managing Director of the Glenmore Meat group of companies. Glenmore Meat Co Pty Ltd carried on and carries on business as a wholesaler and retail butcher and distributor of meat and allied products. It carries on its business from a factory in Glebe which is owned by Glenmore Meat Co (Wholesalers) Pty Ltd. 7 The remaining shareholder in the two companies is Mr George Newton who holds the remaining five per cent of the shares. Mr George Newton is Mr Fred Newton's cousin and an accountant for the companies. He is also a director and company secretary of them. 8 Mr Fred Newton and Mr Sweeney were business partners, in the colloquial sense, for 30 years until Mr Sweeney's death. 9 On 27 May 1992 Mr Sweeney, Mr Fred Newton and Fred Newton (Holdings) Pty Ltd entered into a deed described as a Deed of Pre-Emption to deal with their respective shareholdings in the event of their deaths. The deed is complex. At the risk of over-simplification, it can be summarised by saying that each of Mr Newton and Mr Sweeney agreed to take out and maintain policies of life insurance over the lives of the other. At the time the Deed was made such policies were in place, having been taken out in 1991 with the Prudential Assurance Co Limited. 10 By the Deed, they each agreed not to encumber or dispose of their shares. They each gave an option to the other that in the event of one of them dying before what was defined as the "Benefit Expiry Period" the survivor should have the option to purchase the shares of the deceased, (or Mr Newton and Fred Newton (Holdings) if Mr Newton died first), for a price which equalled the benefits which the survivor received on the life policy. Each of them also made an irrevocable offer to purchase the other's shares which the legal personal representatives of the deceased could accept. 11 The Benefit Expiry Period was defined as: "The date of termination of entitlement to any assured benefit under the Newton Life Policy, namely, the date being the anniversary of the "Policy Commencement Date" as that expression is defined in the Newton Life Policy immediately preceding the attainment by Newton of the age of 75 years".