George Sassine -v- Ray & Sons Construction Pty Ltd [2012] NSWSC 539

Supreme Court New South Wales

Medium Neutral Citation: George Sassine -v- Ray & Sons Construction Pty Ltd [2012] NSWSC 539 Hearing dates: 20 April 2012 Decision date: 20 April 2012 Jurisdiction: Equity Division - Corporations List Before: Hammerschlag J Decision: Order for referral to a referee to determine the net asset value of the first defendant company Catchwords: PRACTICE AND PROCEDURE - case management - obligation of the court to exercise its powers under the Rules to ensure that the real issues are determined justly, quickly and cheaply Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Civil Procedure Act 2005 (NSW) Category: Procedural and other rulings Parties: George Sassine - Plaintiff Ray & Sons Construction Pty Ltd - First Defendant Charlie Sassine - Second Defendant John Sassine - Fourth Defendant Representation: Counsel: M. Pesman - Plaintiff D. Hawkins - Second and Fourth Defendants Solicitors: HWL Ebsworth Lawyers - Plaintiff City Attorneys - First, Second and Fourth Defendants File Number(s): 2007/257927

EX TEMPORE Judgment 1HIS HONOUR:These proceedings for relief under the Corporations Act 2001 (Cth) for alleged oppressive conduct in the affairs of the first defendant company, have a long, chequered and in some respects unfortunate history. The first defendant company ("the company") owns a valuable property. The proceedings arise out of a dispute between members of the Sassine family, some of whom own shares in the company. There have been numerous interlocutory skirmishes. 2On 16 April 2012 the matter came before me for directions. I took the view that the only way in which the overarching purpose of the Civil Procedure Act 2005 (NSW) and the rules of Court, as described in s 56(1) of that Act, namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings, would be achieved was if I were to fix the proceedings for an early final hearing. 3I listed the matter for hearing to commence on 23 April 2012 for three days. 4At the same time I made directions for the plaintiff to file an Amended Statement of Claim and for the active defendants (which excludes the company which has filed a submitting appearance) to file amended defences. I directed that if those defendants (who were out of time for the service of evidence) wished to rely on any further affidavit or other evidence, they would need to seek formal leave to do so. 5The matter came before me for directions because some of the defendants intended to seek such leave. One of the positive consequences of the directions which I made and the fixing of the matter for hearing was that the lawyers for both sides undoubtedly devoted significant time and effort to ready it. I took the opportunity to examine the amended pleadings which both sides had filed. 6A central allegation made by the plaintiff is that there exists a deadlock between him and the other defendant shareholders. The active defendants admitted this allegation with the consequence, it seemed to me, that it bordered on the inevitable that unless an alternative remedy was appropriate, the company would be wound up. 7The plaintiff sought, as his principal relief, a buy out of the shares held by the defendants. However, although he also sought a winding up order in the alternative, it was communicated to me from the bar table in no uncertain terms that this was a last resort and that the plaintiff wished, if at all possible, to avoid it. 8From the point of view of the defendants, even though a deadlock had been admitted, they too eschewed a winding up. 9The result of somewhat extensive debate this morning was that the parties agreed that there must be relief and that the only real issue remaining live for determination is what the appropriate form of that relief should be. They accepted that there were only three practical alternatives: (a)the second and third defendants buy the plaintiff's shares; (b)the plaintiff buys their shares; or (c)the company is wound up. 10The first two alternatives require an assessment of the net asset value of the company. Value is in dispute, in particular because the parties are in dispute as to the state of loan accounts. The parties accordingly agreed that it is appropriate to refer to an appropriately qualified forensic accountant for inquiry and report, the question as to what is the net asset value of the company. 11I note that the parties are agreed that unless the Court orders a buy-out, the company is to be wound up. I will refer for enquiry and report pursuant to Pt 20 of the Uniform Civil Procedure Rules 2005 (NSW) the question as to what is the net asset value of the company. 12I will stand the matter over for directions before me on Friday 27 April 2012 at 10 am for finalisation of the orders for reference. 13The parties in the meantime are to confer on the identity of an appropriate referee and I will make the usual order as to reference on that day. 14I vacate the hearing of the matter to commence on Monday 23 April 2012. 15I reserve all questions of costs.