Dr Leo Shanahan v Jatese Pty Ltd [2018] NSWSC 1088

Supreme Court New South Wales

Medium Neutral Citation: Dr Leo Shanahan v Jatese Pty Ltd [2018] NSWSC 1088 Hearing dates: 15,16,17,22,23,24,28,29 May, 4,5 June 2018 Decision date: 16 July 2018 Jurisdiction: Equity - Commercial List Before: Hammerschlag J Decision: The proceedings are dismissed. Catchwords: CORPORATIONS LAW – OPPRESSION – Corporations Act 2001 (Cth) ss 232-234 – whether the conduct of the affairs of a company, owned as to 43% by the plaintiffs and 57% by the defendants, was contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity – directors appointed by the majority excluded participation of the director appointed by the minority – director appointed by the majority requested and accepted payments contrary to the provisions of a Shareholders' Agreement that directors not receive any remuneration – where there was unjustified delay in accrediting a new surgeon to conduct surgery at the hospital – directors appointed by the majority appointed a voluntary administrator at a time in which the company was not insolvent or likely to become insolvent in the near future; HELD that the affairs of the company were conducted contrary to the interests of the company as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity; RELIEF – plaintiffs' claim compensation on the basis that they were induced to sell their shares to the majority at an undervalued price – appropriate approach to valuation; HELD not established that the shares were sold at an undervalue – entitlement to relief not established. Legislation Cited: Corporations Act 2001 (Cth) Cases Cited: Morgan v 45 Flers Ave Pty Ltd (1986) 10 ACLR 692 Campbell v Backoffice Investments Pty Ltd (2008) 66 ACSR 359 Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 84 ACSR 121 HNA Irish Nominee Ltd v Kinghorn (No 2) (2012) 88 ACSR 427 Re Cumberland Holdings Ltd (1976) 1 ACLR 361 Jenkins v Enterprise Gold Mines NL (1992) 6 ACSR 539 Saykan v Elhan [2004] VSC 83 Saykan v Elhan [2006] VSCA 320 Ubertini v Saeco International Group SPA Societa A Socio Unico (No 4) (2014) 98 ACSR 138 Shelton v NRMA Limited (2004) 51 ACSR 278 Rankine v Rankine (1995) 124 FLR 340 Kizbeau Pty Ltd v WG&B Pty Ltd (1995) 184 CLR 281 HTW Valuers (Central Queensland) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Sellars v Adelaide Petroleum NL & Ors (1994) 179 CLR 332 Category: Principal judgment Parties: Dr Leo Shanahan - First Plaintiff Michael Shanahan - Second Plaintiff Joan Shanahan - Third Plaintiff Dr Stuart Saunders - Fourth Plaintiff Christine Saunders - Fifth Plaintiff