In the matter of Scientific Management Associates Pty Ltd [2019] NSWSC 1643

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Scientific Management Associates Pty Ltd [2019] NSWSC 1643 Hearing dates: 7–10, 14–16 & 24 May 2019, last written submissions 14 June 2019 Decision date: 27 November 2019 Jurisdiction: Equity - Corporations List Before: Rees J Decision: Judgment for the plaintiffs: see [351] Catchwords: CORPORATIONS — Oppression — Where father of plaintiff had business partnerships with defendant — Several American and Australian companies — Defendant had day-to-day control of interests in Australia — Australian shareholdings approximately 50/50 — Father passed away — Heads of Agreement and Shareholders Agreement to govern future management of Australian companies — Long course of non-communication by defendant — Suit prompted by large number of irregular transactions.

CORPORATIONS — Oppression — Conduct relevant to finding of oppression — Failure to provide information in breach of Shareholders Agreement — Failure to appoint plaintiff as director in breach of Shareholders Agreement — Failure to pay dividends declared to plaintiff where defendant's dividends fully paid — Large loans to defendant — Use of company funds for defendant's private ventures — Irrecoverable loans by defendant brought onto the books of the company — Sale of company property at undervalue to related parties — "Adjustments" to defendant's loan account said to reflect undocumented historical payments — Some transactions conceded by defendant as oppressive — Declaration of oppression made.

CORPORATIONS — Oppression — Defences — Construction arguments raised in defence of breach of Shareholders Agreement — Estoppel by convention — Whether necessary to prove detriment — Delay, acquiescence and laches — Relevance of plaintiff's conduct — No defence established.