“It’s not my fault the payments were a pointless waste!”___2 families resolved to develop land through a unit trust: [1], [2]R held a 40% stake. A, and related interests, held the remaining 60%: [2] – [4]At trial, R won an oppression claim alleging A caused the Co’s conduct to be unfairly prejudicial: [6]The Co bought land in 2012 for $3m and sold it for $11m in 2015. The sale proceeds were distributed at A’s direction: [8]The docs for the sale were strange, including A instructing lawyers while withholding the purchase price: [35]After settlement, A finally disclosed the $11m sale price, and $3m in other payments: [47]Apart from costs, legal fees, duties, commission, balance to the Co etc, 3 further payments were made: one to the mortgagee, and two others which R criticised: [100]One of the payments was made to an entity controlled by A’s sibling: [109]The other was “highly unusual… to say the least”, with A’s evidence “very unimpressive”. The amount was large, not owed, and paid to a Co incorporated days before settlement whose Dir and s/h was known to A, with no connection to the land: [111]The sole Dir and s/h of the purchaser of the property was also a Dir of the real estate agent who enjoyed a commission of $1m on the sale: [30], [31]The trial judge found for R, that: (i) A was responsible for the payments, (ii) that the two payments made on settlement were oppressive, and (iii) A’s responses to requests for info were inadequate: [11]A appealed on the basis that: (i) the judge was wrong for finding A responsible for the payments, (ii) R delayed their claim, and (iii) the judge erred re A’s response to R’s enquiries: [13]There was no contest about whether the 3rd party recipients were entitled to receive the two payments. (All agreed they weren’t.) The issue was A causing the payments to be made: [14]The primary judge found A gave the payment directions, was responsible, and should have ensured all payments were properly incurred: [48] – [52], [54]Some payments were a “pointless waste” of Co funds: [53], [56]The trial judge found A’s responses to info requests for information were unfairly discriminatory: [59]The judge found any delay from R had not prejudiced A: [64]A’s subs on appeal were, broadly, that A was a mere intermediary; not responsible: [68] – [88]R said R’s claim was about a breach of duty misunderstood the nature of s 232: [89] – [93]The Court agreed with the primary judge that A was not a “mere intermediary”; mindlessly and powerlessly accepting direction from their sibling: [104], [105]The primary judge accepted A “did not profit personally” from the strange additional payments, though noted an entity controlled by their sibling did: [109], [110]A did not demonstrate an error made by the trial judge re R’s delay, or A’s non-disclosure: [119], [120]Appeal dismissed: [121], [122] ___ Please follow James d'Apice, Coffee and a Case Note, and Gravamen on your favourite platform and podcast provider!
