Coffee and a Case Note

By James d'ApiceEducation

Coffee and a Case Note episodes

November 07, 2021 James d'Apice interview with Brendan Kelso October 2021 - Legalsites Better Law Firm Marketing Podcast
Earlier this year, James sat down with Legalsites' founder and law grad turned legal firm marketer, Brendan Kelso. Hope you enjoy their conversation!
A link to the Legalsites website is here: https://legalsites.com.au/social-media-101-w-james-dapice-facebook-instagram-linkedin-tiktok-and-twitter-which-is-best-for-law-firms/
54 min
November 02, 2021 Crow Inn Pty Limited (No 2) [2020] NSWSC 1749
“Wind up the company that runs this pub!”

___
An uncle, and his Co, (“P” or “the Ps”) sued a nephew and his Co (“D” or “the Ds”) to wind up a Co that operated a pub and the T’ee that owned the land it was on: [1]

Uncle and nephew were the directors of both the Co and the T’ee: [2]

All parties accepted the relationship had broken down. Each blamed the other: [3]

The grandfather - P’s dad - assisted P and D in setting up the business. Later, grandad would swear an affidavit supporting D: [4]

In 2010 grandad and P identified a site in Wagga on which to construct a pub for and P and D to operate: [31]

In 2013 the pub opened with D as general manager. D had never managed a hotel: [79]

From 2015 grandad, a guiding figure in the family, started to recede and a shareholders agreement between the Ds and Ps was discussed: [88], [89]

Pursuant to the shareholders agreement, P would transfer 10% of his shares and pay $1m in consideration for D managing the pub for 5 years: [103]

In 2017, D bought a nearby block to develop a hotel. D did not tell P: [128]

P issued a buy out notice. D resisted: [137] - [140], [246]

D cut the pub’s CCTV cable preventing P from inspecting the pub via remote means: [159] - [161]

D relied on data from the pub to progress his new venture: [165]

D used his pub email address to further his new venture: [167]

D allowed a consultant helping with his new venture to stay at the pub for free, and was then evasive about it in XX: [169], [170]

D stopped keeping P informed of the pub’s business. P often stayed in other nearby hotels due to the pair’s animosity: [180]

In April 2020 P came to the pub, logged into D’s computer, and took photographs of the screen. An “undignified struggle” over the computer mouse ensued: [203]

Despite P and D still being directors, they were unable to conduct a conversation or agree on management arrangements: [215]

In buying the new property and concealing it from P, using his role as general manager to lend credibility to his new venture, using information about the pub - D put his own interests and the pubs and T’ee’s in conflict and was oppressive: [243]

D obstructed P’s means of seeing what was happening at the pub, and obstructed attempts to sell the land and business - all while furthering his own project: [246]

P pressed for just and equitable wind-up but the Court had to firstly consider whether alternative relief was appropriate: [265]

There was no valuation evidence before the Court that might found a buyout order: [271]

D, when pressed, was only prepared to buy out the shares in the pub, not the T’ee. A sale of the pub shares only would not cure the oppression: [272]

The Court found it would be just and equitable wind up the pub and the T’ee: long standing deadlock, broken relationships and oppressive conduct - and D will likely frustrate any action he does not agree with: [287], [288]

A receiver was also appointed to the trust’s assets: [302]
11 min
October 27, 2021 James d'Apice interview with Michael Bromley, Beyond Billables September 2021
James had a chance to chat with the legend, Mike Bromley, from Team BB earlier this year.
You can catch what the Beyond Billables team are up to here: https://www.beyondbillables.com
1 hr 14 min
October 25, 2021 CLE James d'Apice interview with TVED's Susanna Lobez - ss236-237 of the Corporations Act and "derivative actions" September 2021
In September 2021 James d'Apice spoke with Susanna Lobez from TVED about one of James' pet topics: derivative actions.
You can find TVED's content here: https://www.tved.net.au
31 min
October 06, 2021 Gearhouse BSI Pty Ltd [2021] NSWSC 98
"No trust? No confidence? No company."
___
B and G founded the Co and entered into a shareholders agreement.
The Co provided in-car cameras for race cars to be used in TV broadcasts.
In 2015 the Co agreed to provide cameras for 5 years: 2016 - 2020: [6]
B transferred valuable camera equipment (and later loaned other equipment) to the Co for the Co to use: [9], [60]
At the end of 2020 B wanted to terminate, and G wanted to keep it going: [15]
On termination, B and G had rights to buy back equipment from the Co: [16]
B commenced proceedings seeking to wind up the Co on the just and equitable basis, s461(k): [17]
The broadcaster sought EOIs for the next 5 year period and the Co didn’t respond (though B’s parent company did): [63], [64]
After the last race in October 2020 B came to take back its equipment, but G prevented that: [81] - [84]
B’s later requests for info about its equipment were met with no response: [88], [96]
Later in 2020, the broadcaster, having not named anyone else, asked the Co to provide its services for 2021: [89]
G pressed for the Co to do it. B refused: [91] - [102]
B sought confirmation G would not use B’s equipment. Instead, G sent it to racing venues in January 2021 without B’s knowledge or consent: [105] - [112], [122], [208]
B wanted to buyback the camera equipment from the Co to meet its other contractual commitments: [128]
B said the substratum of the Co’s business had failed and so it should be wound up: [187]
G disagreed, saying the Co’s substratum was not limited to 2016-2020, but that it could continue (with an offer on the table): [188]
The Court found the Co couldn’t do what it was meant to do because of the war between the shareholders, meaning the Co’s substratum failed: [192]
Reasons’s included: broadcaster’s offer was a mere agreement to agree, with terms to be worked out later; the loss of trust and confidence meant the prospects of successfully continuing the Co were “so remote as to be fanciful”: [195], [196]
The Court found B had justifiably lost confidence in G: [198]
The Co was solvent, and there was no prejudice to creditors of employees (there were none) if it was wound up: [139], [228]
Due to (i) breakdown in cooperation and trust, (ii) B’s justified loss of confidence in G, (iii) G’s improper deployment of B’s equipment, the Co’s substratum failed meaning it would be just and equitable to wind up the Co in the absence of an alternative remedy: [232]
There being no appropriate alternative remedy (including by way of dispute resolution clauses in the shareholder agreement), the winding up orders were made: [233], [244]
___
If you'd like to contact me my please look for James d'Apice or Coffee and a Case Note on your favourite social media spot - I should pop up right away!
8 min
September 29, 2021 Matrix Global Investment Group [2021] NSWSC 80
“You moved the Co’s money, so let’s wind it up!”

___
The As, spouses and owners of 45% of the shares in a Co, came to Court to try to wind up the Co including pursuant to s461 of the Corporations Act 2001 (Cth).

One of the Rs owned the balance of the Co’s shares, being 55%: [4]

The As, as shareholders, had standing to bring the claim: [10]

They had the consent of a liquidator willing to accept an appointment: [8]

The Co was in the business of finding buyers for new property developments: [13]

The As (one of whom was a director) and one of the Rs participated in the business and took a commission: [14]

In December 2017, one of the Rs orally indicated (though never formalised in writing or with ASIC) that they would “quit” and created a new entity, NewCo: [15]

By Feb 2018, the Rs had ceased to work in the Co’s business: [16], [17]

Through 2018 the As continued to work on the Co’s business, and there were some talks about deregistering: [18], [19]

By the end of 2018, the Co had ceased taking on new business and had no current activities at the time of the hearing. Its bank account remained open to accept any further commissions that might be payable: [20]

In May 2020 one of the Rs represented that they “will quit”. That R’s shares were transferred, but their resignation as director was not registered with ASIC: [21]

In June 2020 the Co received a significant commission, paid into its bank account: [22]

The Rs purportedly (“purportedly” because arguably they had resigned as directors by this time by their earlier “quit” representations) resolved to commence proceedings against the As and remove them as bank account signatories: [23]

Rs in their (purported) capacity as directors met with the relevant A and resolved to pay the commission into NewCo’s bank account: [29]

In fact, the money had already been transferred to NewCo’s account a few days earlier: [30]

A provisional liquidator was appointed at the As’ application: [34]

The Co was ordered to pay the relevant funds into Court: [35]

The Court briefly retraced some fo the law relating to a “just and equitable” windup, noting that circumstances amounting to corporate oppression were not necessary: [41]

The Court was satisfied it was just and equitable to windup the Co including because: (i) complete breakdown in shareholder relations, (ii) majority shareholder transferring Co funds over objection of other shareholders thereby frustrating the Co’s operation, and (iii) the As having tried an alternative less drastic remedy of having funds paid into Court and the Co not complying: [42]

The Court ordered that the Co be wound up: [44]
8 min
September 28, 2021 James d'Apice interview with Jerome Doraisamy - Lawyers Weekly Podcast September 2021
James had the chance to sit down with Jerome Doraisamy in September 2021 to have a fantastic chat about James' views on the profession and his suggestions for other practitioners.
Please check out Laywers Weekly here: https://www.lawyersweekly.com.au/podcast/32455-blending-contemporary-branding-with-traditional-practice-approaches
30 min
September 20, 2021 James d'Apice interview with Anvita Nair - Monash Future Thinkers Podcast August 2021
James had a great chat with Anvita Nair of Monash University's Monash Future Thinkers podcast.
Why not check out what Monash Future Thinkers are up to by heading here: https://www.futurethinkers.org.au
27 min
September 15, 2021 O’Connor v O’Connor [2021] NSWSC 1056
"I didn't agree to sell you shares. I agreed to sell you other stuff!"
___
A successful Co was founded by D and their spouse in the 1970s. At all relevant times, they were its sole shareholders.
Two Ps worked for the Co, and were later appointed directors with D.
In 2005 there was an oral agreement between D and the Ps. Each had a different version what it meant.
The Ps said they paid $150K to each take an 8.33% share in the Co: [5]
D said the Ps paid for 8.33% of the Co’s “plant and equipment” and that, after 10 years, D would make the Ps shareholders in the Co: [6]
(The Court acknowledged the conceptual difficulty of owning a proportion of a Co’s plant and equipment: [45])
There were some failed attempts to negotiate a shareholders agreement over a number of years: [36] - [62]
Later, there were increasingly formal meetings to finalise and record the arrangement: [63] - [81]
(This included a tense meeting where the parties could not agree on the use of a tape recorder: [70])
One of the Ps commenced proceedings in 2014: [11]
In 2015 a big entity offered D $80m for their shares in the Co. D did not disclose this offer to the Ps: [85] - [88]
After negotiations, the parties agreed to settle all the Ps’ claims in exchange for D and the Co paying ~$2m to each to the Ps: [89] - [92]
The D went ahead with the sale of their (and their spouse’s) shares to the big entity for $90m: [95]
The P’s said that D (i) owed them a duty to disclose the offer, and (ii) held their 8.33% stakes on trust and breached trust by buying their shares at an undervalue: [18]
In addition to paying their money, the Ps gave personal guarantees for the Co’s benefit, served as directors, and undertook the Co’s work for some years away from their home state: [80], [100]
The Court found that *if* the Ps were shareholders, then an inference arises that $2m was an undervalue: [97]
The Court considered the well-known principle that where a party seeks to rely on spoken words to found their claim, the Court must feel actual persuasion of those words having been spoken: [108]
The Court felt actual persuasion of D’s version: [112], [113]
The Court considered the Ps’ evidence was plainly coloured by resentment at being excluded from knowledge of the sale: [114]
The value of 8.33% of the plant and equipment as at 2005 was about $150K. The Court found D was too shrewd to have given away a full equity stake for just the plant and equipment cost, ignoring goodwill: [115]
The Ps failed to establish the agreement they contended for, meaning the proceedings were dismissed: [133]
10 min
September 06, 2021 James d'Apice interview with Jahan Kalantar - September 2021
On 2 September 2021, James sat down on a TikTok Live and spoke with the legendary Jahan Kalantar.
To learn more about Jahan, head here: https://www.jahankalantar.com
58 min

About Coffee and a Case Note

From the publisher's feed

I’m Australian lawyer, James d’Apice. Coffee and a Case Note began as a video series where I sip a coffee and chat about recent legal cases. This is the audio version! I hope it brings you value.