Vadori v AAV Plumbing [2010] NSWSC 274

Reported Decision : 77 ACSR 616

New South Wales Supreme Court

CITATION : Vadori v AAV Plumbing [2010] NSWSC 274

HEARING DATE(S) : 2, 3 and 4 February 2010

JUDGMENT DATE : 13 April 2010

JURISDICTION : Equity Division

JUDGMENT OF : Ward J

DECISION : 1. Declare that the affairs of the first defendant have been conducted in a manner that is oppressive to, unfairly prejudicial to, or unfairly discriminatory against the plaintiff within the meaning of section 232 of the Corporations Act (Cth) 2001. 2. Order the fourth and fifth defendants to purchase the share of the plaintiff in AAV Plumbing Pty Limited for the sum of $190,800.

CATCHWORDS : CORPORATIONS – alleged breach of s 232 Corporations Act – diversion of corporate opportunities – breakdown of business relationship and cessation of trading of company – main business diverted to new company owned by majority of shareholders and directors – oppressive conduct found – majority shareholders ordered to purchase minority shareholder's share in company – principles concerning valuation of shares in oppression suits – consideration of value attributable for goodwill – share valued largely by reference to value of company's claim against directors for breach of statutory and fiduciary duties in diversion of corporate opportunities

LEGISLATION CITED : Corporations Act 2001 (Cth)

CATEGORY : Principal judgment

Addstead Pty Ltd v Liddan Pty Ltd [(1997) 25 ACSR 175 Backoffice Investments v Campbell [2007] NSWSC 161; (2007) 61 ACSR 144 (2007) 25 ACLC 302 Birtchnell v. Equity Trustees, Executors and Agency Co. Ltd. [1929] HCA 24; (1929) 42 CLR 384, Boardman v Phipps [1966] UKHL 2; (1967) 2 AC 46; [1966] 3 All ER 721 Campbell and Another v BackOffice Investments Pty Limited [2009] HCA 25; (2009) 238 CLR 304; (2009) 257 ALR 610; (2009) 73 ACSR 1 Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 Campbell v Backoffice Investments Pty Ltd [2009] HCA 36; (2009) 259 ALR 402; (2009) 83 ALJR 110 Canadian Aero Service Ltd v O'Malley [1974] SCR 592, 40 DLR (3d) 371 Chahwan v Euphoric Pty Ltd [2008] NSWCA 52; (2008) 65 ACSR 661; 245 ALR 780 Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 Colour Control Centre Pty Ltd v Ty [(1996) 39 AILR 4,316 Doyle v Australian Securities and Investments Commission (ASIC) [2005] HCA 78; (2005) 227 CLR 18; (2005) 223 ALR 218; (2005) 56 ACSR 159 Dwyer v Lippiatt; Dwyer v Backpackers R Us, at 355; Drinkwater v Caddyrack Pty Ltd [1997] NSWSC 431 Ehsman v Nutectime Int'l Pty Ltd [2006] NSWSC 887; (2006) 58 ACSR 705 ES Gordon Pty Ltd v Idameneo (No 123) Pty Ltd (1995) 15 ACSR 536 Fexuto Pty Limited v Bosnjak Holdings [2001] NSWCA 97; (2001) 37 ACSR 672; (2001) 19 ACLC 856 Fiduciary Ltd v Morningstar Research Pty Ltd [2005] NSWSC 442; (2005) 53 ACSR 732; 23 ACLC 1100 Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Limited [1964] 2 QB 480; [1964] 1 All ER 630; [1964] 2 WLR 618 Furs v Tomkies (1936) 54 CLR 583 Gemstone Corp of Australia Ltd v Grasso (1994) 13 ACSR 695; 12 ACLC 653 Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1 Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 Industrial Development Consultant Ltd v Cooley [1972] 1 WLR 443 Keech v Sandford (1726) 2 White & Tud LC 706; [1558-1774] All ER Rep 230; (1726) Cas temp King 61; (1726) 2 Eq Cas Abr 741; (1726) 25 ER 223 CASES CITED : Lord Corporation Pty Ltd v Green [(1991) 22 NSWLR 532-4 Maher v Honeysett & Maher Electrical Contractors Pty Ltd [2005] NSWSC 859 Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 Mopeke Pty Ltd v Airport Fine Foods Pty Ltd (2007) 61 ACSR 395; 25 ACLC 254; [2007] NSWSC 153 Mordecai v Mordecai [(1988) 12 NSWLR 58 Natural Extracts Pty Ltd v Stotter [(1997) 24 ACSR 110 Pacifica Shipping Co Ltd v Andersen [1986] 2 NZ LR 328 Peso Silver Mines Ltd (NPL) v Cropper (1966) 58 DLR (2d) 1 Ragless v IPA Holdings Pty Ltd (in liq) [2008] SASC 90; (2008) 65 ACSR 700; 254 LSJS 225 Rankine v Rankine (1995) 124 FLR 340 Re a Company (No 002612 of 1984); Dwyer v Lippiatt; Dwyer v Backpackers R Us.Com Pty Ltd (2004) 50 ACSR 333; [2004] QSC 281 Re a Company (No 002612) (1986) 2 BCC 99,453 Re Baumler (UK) Ltd [2005] 1 BCLC 92; [2004] All ER (D) 139; [2005] BCC 181 (Ch D) Re Bright Pine Mills Pty Limited [1969] VR 1002 Re Hollen Australia Pty Ltd; Holt v Burnside [2009] VSC 95 Re Scottish Co-operative Wholesale Society Limited v Meyer [1959] AC 324; [1958] 3 All ER 66 Regal (Hastings) v Gulliver [1967] 2 AC 134; [1942] 1 All ER 378 Roberts v Walter Developments Pty Limited (1997) 15 ACLC 882 Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549; (1987) 5 ACLC 394 Scottish Co-operative Wholesale Society v Meyer; Webb v Stanfield [1991] 1 Qd R 593; (1990) 2 ACSR 283; 8 ACLC 715 Shelton v NRMA [2004] FCA 1393; (2004) 51 ACSR 278 Short v Crawley (No 30) [2007] NSWSC 1322 Swansson v RA Pratt Properties Pty Ltd [2002] NSWSC 583; (2002) 42 ACSR 313 Thomas v HW Thomas Ltd [1984] 1 NZLR 686, at 694; (1984) 2 ACLC 610; (1984) 2 NZCLC 99,14 Victoria, Spincode Pty Ltd v Look Software Pty Ltd [(2001) 4 VR 501 Wayde v NSW Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459; (1985) 61 ALR 225, at 234 Webb v Stanfield [1991] 1 Qd R 594