Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95

Appeal Outcome: Special leave granted by the High Court - 26 August 2008

New South Wales Court of Appeal

CITATION: Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95

HEARING DATE(S): 8 August, 2 October 2007

JUDGMENT DATE: 19 May 2008

JUDGMENT OF: Giles JA at 1; Basten JA at 172; Young CJ in Eq at 224

DECISION: (1) Appeal allowed and cross-appeal allowed in part; (2) Set aside the declaration and orders (1), (2) and (3) made on 29 March 2007 and the judgment for the first plaintiff against the first defendant in the amount of $853,000 given on 13 April 2007; (3) In lieu thereof, order that there be judgment for the first plaintiff against the first defendant in the amount of $850,000 taking effect on 13 April 2007; (4) Appellant pay 90 per cent of respondents' costs in this Court.

CATCHWORDS: CORPORATIONS- Oppression- Sections 232-233 Corporations Act 2001 (Cth)- Share Sale Agreement/Shareholders Agreement/Services Agreement- Whether vendor's conduct in excluding the purchaser of a 50% share in company from the management of the company amounted to oppression- Whether necessary for the oppressive conduct to be continuing at the time of hearing- Whether the trial judge's order of a share buy-out appropriate in light of a provisional liquidator being appointed- (By majority) No order should be made. - MISLEADING OR DECEPTIVE CONDUCT- Whether the vendor's giving of contractual warranty misleading or deceptive- Whether purchaser relied on the alleged misrepresentations- (By majority) Yes- Consideration of proper amount of damages.

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 232, 233 Fair Trading Act 1987 ss 42, 72

CATEGORY: Principal judgment

Abrahams v Federal Commissioner of Taxation (1944) 70 CLR 23 Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 Alati v Kruger (1955) 94 CLR 216 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568 Aloridge Pty Ltd v West Australian Gem Explorers Pty Ltd (1995) 127 ALR 410 Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 Bessounian v Australian Wholesale Mortgages Pty Ltd [2007] NSWSC 35 Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 Cassegrain v CTK Engineering Pty Ltd (2005) 54 ACSR 249 Castlemaine Tooheys Ltd v Carlton & United Breweries (1987) 10 NSWLR 468 Club Hotels Operations Pty Ltd v CHG Australila Pty Ltd [2005] NSWSC 998 Colly Cotton Marketing Pty Ltd v Simmons [2006] NSWCA 134 Concrete Constructions Group Ltd v Litevale Pty Ltd [2002] NSWSC 670 Coombs v Dynasty Pty Ltd (1994) 14 ACSR 60 CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458 Daandine Pastoral Co Pty Ltd v Commissioner of Land Tax (1943) The Valuer vol vii 299 De Tocqueville Private Equity Pty Ltd v Linden & Conway Ltd; Re Linden & Conway Ltd (2006) 59 ACSR 587 E S Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1994) 15 ACSR 536 E W Blanch Pty Ltd v Cooper [2005] NSWCA 217 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 Fitzgerald v Penn (1954) 91 CLR 268 Fox v Percy (2003) 214 CLR 118 Gamlestaden Fastigheter AB v Baltic Partners Ltd [2007] 4 All ER 164 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 Gould v Vaggelas (1985) 157 CLR 215 H T W Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 Henville v Walker (2001) 206 CLR 459 Hewlett Packard Australia Pty Ltd v Siltek Holdilngs Pty Ltd [2005] NSWSC 672 Ho v Powell (2001) 51 NSWLR 572 Hogg v Dymock (1993) 11 ACSR 14 House v The King (1936) 55 CLR 499 Irish Press plc v Ingersoll Irish Publications Ltd [1995] 2 ILRM 270 Jenkins v Supscaf Pty Ltd [2006] 3 NZLR 264 Kent v Commissioner of Taxation (1945) 3 Aust Property LJ 65 Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 Lam v Ausintel Investments Australia Pty Ltd (1989) 12 ATPR 40-990 Manning Shire Council v Caernarvon Pty Ltd [1977] 1 NSWLR 202 March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1 McWilliams Wines Pty Ltd v LS Booth Wine Transport Pty Ltd (1992) 25 NSWLR 723 Minister for Immigration, Local Government and Ethnic Affairs v Dela Cruz (1992) 34 FCR 348 CASES CITED: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 Music Sales Ltd v Shapiro Bornsdtein & Co Inc [2006] 1 BCLC 371 O'Neill v Phillips [1999] 1 WLR 1092 Re a Company [1987] BCLC 562 Re a Company (No 002567 of 1982) [1983] 1 WLR 927 Re a Company (No 00477 of 1986) [1986] BCLC 376 Re a Company (No 008126 of 1989) [1992] BCC 542 Re a Company (No 3017 of 1987); Ex parte Broadhurst [1990] BCLC 384 Re Anti-Corrosive Treatments Ltd [1980] ACLC 40-625 Re Astec (BSR) plc [1998] 2 BCLC 556 Re Baumler (UK) Ltd [2005] 1 BCLC 92 Re Brenfield Squash Racquets Club Ltd [1996] 2 BCLC 184 Re Broadcasting Station 2GB Pty Ltd [1964-5] NSWR 1648 Re Campbell Tube Products Ltd [1976] 1 NZLR 64 Re Charnley Davies Ltd (No 2) [1990] BCLC 760 Re Chime Corporation Ltd; Nina Kung v Tan Man Kou (2004) 7 HKCFAR 546 Re Dalkeith Investments Pty Ltd (1984) 9 ACLR 247 Re Dernacourt Investments Pty Ltd (1990) 20 NSWLR 588 Re H R Harmer Ltd [1959] 1 WLR 62 Re Hailey Group [1993] BCLC 459 Re Jermyn Street Turkish Baths Ltd [1971] 1 WLR 1042 Re London School of Electronics Ltd [1986] Ch 211 Re Meyer Douglas Pty Ltd [1965] VR 638 Re Polyresins Pty Ltd [1999] 1 Qd R 599 Re Richard Pitt & Sons Pty Ltd (1979) 4 ACLR 459 Re Spargos Mining NL (1990) 3 ACSR 1 Re Tivoli Freeholds Ltd [1972] VR 445 Re Westbourne Galleries Ltd [1971] 2 WLR 618 Reid v Bagot Well Pastoral Co Pty Ltd (1993) 12 ACSR 197 Ross v White [1894] 3 Ch 326 Scottish Cooperative Wholesale Society Pty Ltd v Meyer [1959] AC 324 Smith v Moloney (2005) 92 SASR 498 South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191 Taylor v Anstis [1940] VLR 300 Thomas v H W Thomas Ltd [1984] 1 NZLR 686 Transglobal Capital Pty Ltd v Yolarno Pty Ltd [2005] NSWCA 68 Turnbull v National Roads and Motorists' Association Ltd (2004) 50 ACSR 44 Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 Webb v Stanfield [1991] 1 Qd R 593 Yazbek v Aldora Holdings Pty Ltd (2003) 45 ACSR 53 Zempilas v J N Taylor Holdings Ltd (No 6) (1991) 5 ACSR 28