LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 129

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: LSKF Holdings Pty Ltd v Shield Lifestone Holdings Pty Ltd [2018] NSWCA 129 Hearing dates: 31 May 2018 Decision date: 20 June 2018 Before: Leeming JA at [1] Payne JA at [50] White JA at [51] Decision: 1. Grant leave to appeal. 2. Direct LSKF Holdings Pty Ltd to file a notice of appeal in accordance with the draft notice of appeal, and otherwise dispense with the rules as to service. 3. Appeal dismissed, with costs. Catchwords: CONTRACT – void or ineffective contract – illusory consideration – uncertainty – shareholders' agreement provided for funding requests to be made to 50% shareholder which was obliged to provide interest-free loans – loans could be recalled for any reason lender reasonably thought fit - whether promise to provide funding illusory because funding request required board unanimity and director who controlled lender could not be compelled to participate in funding request – whether director's discretion unfettered – whether discretion on part of director, and lender's entitlement to early repayment rendered promise uncertain – contract upheld and appeal dismissed Legislation Cited: Corporations Act 2001 (Cth), ss 232, 233, 236, 237, 1324 Supreme Court Act 1970 (NSW), s 68 Cases Cited: Anglican Development Fund Diocese of Bathurst v Palmer [2015] NSWSC 1856 Bailes v Modern Amusements Pty Ltd [1964] VR 436 Crawley v Short [2009] NSWCA 410; 76 ACSR 286 G Scammell and Nephew Ltd v Ouston [1941] AC 251 Giasoumi v Ribbera [2017] VSC 631 Loan Investments Corporation of Australasia v Bonner [1970] NZLR 724 Meehan v Jones (1982) 149 CLR 571; [1982] HCA 52 O'Neill v Phillips [1999] UKHL 24; [1999] 2 All ER 961 Placer Development Ltd v Commonwealth (1969) 121 CLR 353; [1969] HCA 29 Re Neath Rugby Ltd (No 2) [2008] BCC 390 Re Neath Rugby Ltd [2009] 2 BCLC 427 Shield Lifestone Holdings Pty Ltd v LSKF Holdings Pty Ltd [2018] NSWSC 335 Wight v Haberdan Pty Ltd [1984] 2 NSWLR 280 Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 Texts Cited: N Seddon and R Bigwood, Cheshire & Fifoot Law of Contract (11th Aust ed, LexisNexis Butterworths, 2017) Category: Principal judgment Parties: LSKF Holdings Pty Ltd (Applicant) Shield Lifestone Holdings Pty Ltd (First Respondent) Litestone Holdings Pty Ltd (Second Respondent) Feng Ye (Third Respondent) Representation: Counsel: V Bedrossian (Applicant) J J Loofs SC, K J Young (First and Third Respondents)